MINOT, N.D. — I'm going to begin this column with some convoluted back story.

Stay with me, because the point this leads to is an important one.

This week, after years of litigation that reached the state Supreme Court, a district court judge in McKenzie County sided with the state's oil and gas industry against the State of North Dakota (operating through the Board of University and School Lands, also known as the Land Board) in a dispute over royalties.

Newfield Exploration, the plaintiff in the case, won a take-nothing judgment, with Judge Robin Schmidt awarding the State of North Dakota no damages (click the link to read the opinion).

The dispute was over royalties paid on state-owned oil and gas minerals. The Land Board collected the improper amount from many oil and gas companies for decades. When the error was finally noticed, the Land Board, acting through former Commissioner Jodi Smith (who, interestingly enough, resigned the same week this opinion was issued, and just months after being re-appointed), was draconian in its efforts to collect the underpaid royalties.

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North Dakota Land Commissioner Jodi Smith listens during a Land Board meeting in March 2019. 
Forum News Service file photo
North Dakota Land Commissioner Jodi Smith listens during a Land Board meeting in March 2019. Forum News Service file photo

The state issued demand letters asking for decades worth of royalties to be paid on a short timeline with exorbitant interest rates at threat. Smith, meanwhile, took to the news media to erroneously paint the oil industry as a bunch of scofflaws who were denying funding to school children. The courts have ruled that the royalties must be paid, but the grownups in the Legislature stepped in to put a limit on the amount of royalties to be paid and how much interest could be charged.

In a last belligerent gasp, the Land Board asked the courts to declare that legislation unconstitutional (despite Gov. Doug Burgum, a member of the Land Board, having signed the bill into law), but Judge Schmidt declined to do so in a previous opinion in the Newfield case.

In summary, this was a big loss for the Land Board. They picked a fight with the oil and gas industry, and then the Legislature, and they lost on all fronts.

This loss comes after another big loss for the Land Board in a dispute over the ownership of oil and gas minerals under Lake Sakakawea. That's a man-made lake. The people who owned the land under the lake in many instances sold their surface property rights to the government, but not their mineral rights. In a completely misguided and quixotic legal action, the Land Board tried to grab those minerals from its owners, arguing that the state owns the minerals that are under navigable waters.

That's true, as far as it goes, but, again, this lake was made by the government. The government can't just flood your land, and then expropriate the minerals under that land, without compensating the owners. That legal dispute commenced in 2012, and carried on for the better part of a decade until the state Supreme Court, in Wilkinson vs. Land Board, found that the Land Board had no claim on the minerals.

A drilling rig is pictured near Lake Sakakawea near New Town, N.D., on Thursday, Sept. 8, 2016. Some fear that uncertainty about who owns the minerals under the lake will deter oil development in the area. Amy Dalrymple/Forum News Service
A drilling rig is pictured near Lake Sakakawea near New Town, N.D., on Thursday, Sept. 8, 2016. Some fear that uncertainty about who owns the minerals under the lake will deter oil development in the area. Amy Dalrymple/Forum News Service

Again, we're talking about roughly eight years of litigation, paid for by the taxpayers, and a significant portion of it coming after the Legislature, again, stepped in to make it clear that the state would not try to rob the private mineral owners of their assets and royalties.

These two cases, Newfield and Wilkinson, represent an enormous waste of taxpayer resources with essentially nothing to show for the endeavor.

Who is going to take responsibility for this?

The Land Board is made up of elected officials, currently including Gov. Burgum, Attorney General Wayne Stenehjem, Secretary of State Al Jaeger, Superintendent Kirsten Baesler, and Treasurer Thomas Beadle.

Baesler, Stenehjem, and Jaeger, specifically, have all been in office throughout this litigation.

The board, generally, and these three members, in particular, owe the public an explanation for the time and resources expended on these fruitless legal disputes. These legal strategies were pursued with little in the way of messaging to the public justifying them.

That's wrong.

Stenehjem, even more so than any other member of the board, should take ownership of these losses. It was his office, after all, that provided the lawyers involved in these disputes. Not only was Stenehjem a vote on the Land Board, but he was acting as the Land Board's lawyer as well, a problematic conflict of interest on its own.

North Dakota likes to bill itself as a place that's friendly for business, and that's respectful of individual rights. But in these two cases, we see the Land Board taking an excessively acquisitive view of private property and cultivating a needlessly acrimonious posture with one of our state's most important industries.

These matters shouldn't just fade from the headlines.

Someone needs to own them, and that someone, first and foremost, should be Stenehjem.

To comment on this article, visit www.sayanythingblog.com

Rob Port, founder of SayAnythingBlog.com, is a Forum Communications commentator. Reach him on Twitter at @robport or via email at rport@forumcomm.com.