ND panel mulls extra review of state oil leases

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BISMARCK, N.D. (AP) — A proposed policy for inviting reviews of North Dakota state-owned lands that are prospects for oil drilling should allow comments from hunters, environmentalists and people who hike and ride trails, state officials say.

A Sierra Club spokesman said Friday the reviews should allow for permanently excluding some land from being leased for oil exploration. The policy now leaves that decision up to the state Industrial Commission, which oversees North Dakota regulation of oil and gas production.

“I would rather see them not lease certain areas, because their value for wildlife and recreation outweigh the benefits of development,” said Wayde Schafer of Mandan. “In most cases, oil development and wildlife and recreation are mutually exclusive.”

The Industrial Commission is reviewing the policy, which is also being vetted by the Game and Fish Department and the state Department of Trust Lands, which sells rights to explore for oil and gas on state property.

It requires the Game and Fish Department to compile a list of tracts of state land that are prospects for oil development — and considered “essential habitat areas” for mule deer, bighorn sheep, sage grouse and other wildlife.

The draft policy also requires North Dakota's parks department to review state land holdings to find whether oil exploration would affect bike and hiking trails, parks and other recreational facilities.

If state property is considered important wildlife habitat, it could still be leased, but companies could be required to keep less equipment at the site and use less intrusive exploration techniques.

The Game and Fish Department would also explore ways to make up for wildlife habitat that is lost because of oil exploration, the policy says.

The trust lands agency manages the rights to explore for oil beneath 2.5 million acres of property, and holds periodic auctions to sell those rights.

Most of the income from oil exploration and production on state land goes into a trust fund that benefits North Dakota's schools.

In North Dakota, a tract of land's “surface rights” and “mineral rights” can have separate owners. Most of the Department of Trust Lands’ mineral rights are beneath land owned by someone else, and surface rights owners must allow oil companies access to explore beneath their property.

Agriculture Commissioner Doug Goehring said he thought the proposed land-review policy could be intrusive for landowners who have to accommodate oil exploration, even though they do not benefit directly from it.

The Game and Fish Department should not require private landowners to find ways to make up for lost wildlife habitat, Goehring said.

Lynn Helms, director of the state's Department of Mineral Resources, said the policy was intended to let oil companies know about potential development restrictions on state property beforehand.

“To let them lease it, under the assumption that it will be treated like any other piece of property, could lead to an investment of many millions of dollars, and then problems at the end,” Helms said. “That's what we're trying to avoid.”

Goehring, Gov. Jack Dalrymple and Attorney General Wayne Stenehjem make up the Industrial Commission, which oversees regulation of North Dakota's oil and gas industry.

Dalrymple and Stenehjem said the policy outlines a process that already occurs informally.

“We have always been careful about where we permit the siting of a well,” Stenehjem said. “I think part of the concern we have is to make sure (leasing) is done so that the minerals can be developed ... but still be sensitive to the environmental concerns that there are.”

The policy was drafted at the behest of the state Board of University and School Lands, which oversees the state trust lands agency. Dalrymple and Stenehjem are members of both the land board and the Industrial Commission.

In February, the land board ordered about 3,800 acres withheld from a scheduled lease auction after the Game and Fish Department and the North Dakota chapter of the Wildlife Society protested, saying the property included wildlife habitat and environmentally sensitive land.

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