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Missouri River study draws objections from royalty owners

Josh Swanson, an attorney representing several families with mineral rights under Lake Sakakawea, testifies at an Industrial Commission public hearing in Bismarck on Tuesday involving the ordinary high water mark of the Missouri River before the construction of Garrison Dam and Lake Sakakawea. Mike McCleary / Bismarck Tribune

BISMARCK—A study that aims to resolve disputes over oil and gas ownership under Lake Sakakawea could lead to even more lawsuits unless a consultant's report is modified, an attorney said Tuesday.

"They're rolling out the red carpet for litigation if they adopt the report as is," said attorney Josh Swanson, who represents several royalty owners.

Swanson was among about a dozen people who commented during a three-hour public hearing on a study of the ordinary high water mark of the Missouri River as it existed before the Garrison Dam, which created Lake Sakakawea.

The study, ordered by the North Dakota Legislature, investigated the accuracy of the 1950s river survey conducted by the U.S. Army Corps of Engineers.

Differences between the corps survey and a survey initiated in 2009 by the Department of Trust Lands have caused multiple parties to claim ownership of the same minerals, in some cases leading to lawsuits.

The legislation, known as Senate Bill 2134, required the corps survey to be presumed as the historical ordinary high water mark of the river unless there is "clear and convincing evidence" otherwise.

The review by engineering consultant Wenck Associates concluded that North Dakota owns 10,402 more acres than the corps survey showed.

"We found clear and convincing evidence there is a difference between our analysis of the ordinary high water mark and what the corps documented," Joel Toso, senior water resources engineer for Wenck, said in an interview.

That's the area of the study that several royalty owners objected to, with Swanson calling it an "unconstitutional taking" of private property.

"If the state decides to relitigate this, they ought to be prepared to open the checkbook," Swanson said.

Kenneth Schmidt of Ray said his wife's family lost 945 acres of land due to the construction of the Garrison Dam, but reserved the mineral acres. Under the Wenck review, the state of North Dakota would own about 750 of those mineral acres, Schmidt said.

"The state's taking it without any compensation," he said.

Nearly 1,500 pages of public comments, including maps and photographs, were submitted on the Wenck review, in addition to verbal and written testimony submitted Tuesday.

Director of Mineral Resources Lynn Helms said the department and the consultant will review the information and make a recommendation to the Industrial Commission, potentially as early as Aug. 29.

Under the legislation, the Industrial Commission may adopt or modify the recommendations. Anyone who then wishes to challenge the findings would have two years to file a lawsuit in district court.

Land Commissioner Jodi Smith said the Department of Trust Lands needs more information before it can make any payments of royalty or bonus refunds. The review does not allocate acreage above or below the ordinary high water mark.

The North Dakota Society of Professional Land Surveyors raised several concerns with the review's methodology and questioned why the consultant didn't use other sources of information.

The Industrial Commission awarded Wenck $249,500 to conduct the review. Wenck was one of two companies that submitted proposals.

The Wenck report, a recording from Tuesday's hearing and written comments that were submitted are available at www.dmr.nd.gov.