Legislative Wrap: Policy Changes and the People to do it.

If you learn one thing during a Legislative session, it is how quickly things change. You have to stay alert. It starts early in the session, when bills are being introduced. For the N.D. DMR, this is why.
By Alison Ritter | August 20, 2015

If you learn one thing during a Legislative session, it is how quickly things change. You have to stay alert. It starts early in the session, when bills are being introduced. Dozens of bills come out every day and get scheduled for hearings. As a state agency, you can’t afford to miss one of them that may pertain to you.  Every bill has to be read and prioritized based on how much it could affect the agency.

During the 64th Legislative session, the North Dakota Department of Mineral Resources tracked 65 bills that impacted the agency in one way or another. Many bills centered on Human Resources related issues, such as sick-leave or qualifications for retirement, but there were also many bills that related to policy decisions or regulatory functions. Twenty-eight bills were of particular interest to the department because they would impact our day-to-day regulatory work. As the session progressed, those 28 bills were whittled down to nine bills, with four being of major significance to our department.

One of the most important oil and gas bills to come out of the session was House Bill 1358. A “super bill” of sorts, it compiled the best concepts of all the energy bills that had been introduced and combined them into one.

The first crucial part of this super bill appropriates $1.5 million per biennium towards clean-up of oil field related issues that occurred prior to Aug. 1, 1983. The department has begun assessing potential projects that will then receive funding based on the priority list laid out in the bill. The funding list is to reclaim land that was abandoned or was left in an inadequate reclamation status before Aug. 1, 1983, and for which there is not any continuing reclamation responsibility under state law.

Another part of HB 1358 appropriated $500,000 to conduct a pilot project for remediating salt contamination from soil. Sites of particular interest relate to the use of evaporation pits in the north central portion of the state between 1951 and 1984.

Other parts of the bill include the ability of the surface owner to petition the Industrial Commission to hold a hearing before considering extending the temporarily abandoned status of a well if that well has been temporarily abandoned for more than seven years. The commission may now also release spill information for a well that has spilled more than 10 barrels of fluid off of the location even if the well is on confidential status.

The remaining piece of House Bill 1358 expands the Oil and Gas Division’s regulatory authority over gathering pipelines.  The division was first given limited authority over gathering infrastructure by the 2013 Legislature, when it began requiring operating companies to submit when, where and how the pipeline was constructed and placed into service. Due to the passage of House Bill 1358, the division is authorized to require bonds on gathering pipelines, as well as request pipeline engineering design drawings, a list of independent inspectors, and the inspector’s pressure testing certificate now must be filed within 60 days of performing the test.

HB 1358 also allocates funding for research into the best available pipeline monitoring technologies available. With more than 40,000 miles of gathering infrastructure expected to be laid in the state, it’s crucial that these lines are equipped with the best available technology in order to minimize environmental impact in the event a spill would occur. The division is then required to write feasible, cost-effective pipeline monitoring rules necessary for improving pipeline safety and integrity based on the results of the study.

The adoption of House Bill 1358 once again represents the state of North Dakota expanding regulations into uncharted territory. We were the first state to implement gathering pipeline rules (Colorado soon followed) and it continues to set the bar for other oil producing states. But the one question that generally follows the discussion of policy changes is do you have the people to do this?

The answer is yes. House Bill 1014 authorized a total of 22 new full-time-equivalent (FTE) positions for the DMR. Of these new positions, eight will be instrumental in getting the full Pipeline Regulatory program off the ground. The program envisions a pipeline program supervisor, three pipeline field inspectors and four support staff. The department also received a reclamation specialist position to assist in oversight of the reclamation projects that will take place as a part of House Bill 1358.

Other positions provided in HB 1014 will assist in day-to-day department activities as well as increased field inspection and enforcement. The Legislature has always been careful not to overstaff the department and has used a proven method of contingent positions in past sessions. This method was once again applied due to the recent downturn of oil prices. The department will receive one additional field inspection position should the rig count return to 140 and one additional position for each 15 rigs up to 200 rigs. This would provide a total of five additional inspection staff members, as needed. 

House Bill 1014 not only provided funding for additional staff, but it also appropriated $13.6 million towards a much-needed expansion of the Wilson M. Laird core library on the campus of the University of North Dakota in Grand Forks. The core library is home to thousands of feet of core samples used for studies by students and industry. Core samples are essential to a scientist’s understanding oil and gas formations, regardless of age. The more core that is available for study, the easier it is to recognize the subtle changes in the rock that can lead to new exploration targets or completion techniques. The expansion of the core library provides enough space for another 30 to 65 years of sample collection and additional lab space for research.  The architect for the expansion has been hired and demolition will begin this summer so as not to interfere with the school year. Construction is expected to be finished in late 2016 or early 2017.

Other bills the department watched closely include Senate Bills 2015 and 2343. Senate Bill 2015 allocates much needed rental housing assistance for state employees living and working in western North Dakota. Senate Bill 2343 requires the department to supply fiscal notes to the budget section of the legislature when rules, orders, or policies of the NDIC impact state revenues by $20 million or more.

Finally, the division watched for the outcome of House Bill 1032, which expanded funding to the state’s Abandoned Well Plugging and Site Reclamation Fund, or AWPSRF. This fund is unique to North Dakota and has taken on many important funding roles. A portion of the gross oil and gas production tax feeds the fund up to $7.5 million a fiscal year, with a total cap of $100 million. This fund was started as an insurance policy to assist in clean-up of “orphaned” sites when no responsible party can be found. It has now been expanded to assist in funding for the North Dakota Department of Health’s environmental clean-up fund and will also fund a pilot program under the North Dakota Department of Agriculture to connect landowners and tenants experiencing pipeline reclamation and restoration issues with an independent ombudsman to assist them in working with pipeline companies.

It took a team of several Mineral Resources staff members to keep up with the rapid pace of the 64th Legislative session.  Team members meet weekly to report on, discuss, understand and attend legislative hearings.  This approach will likely continue for the department as the next legislative session is likely to once again bring rapid change and excitement.

Author: Alison Ritter
Public Information Officer
N.D. Department of Mineral Resources