State law and Industrial Commission practices vesting promotion of oil development and oil regulation in the same person must change, lawmakers say

(BISMARCK, ND) – North Dakota Democratic-NPL legislative leadership called on the state Industrial Commission today to separate the oil regulation and promotion responsibilities of the Director of Mineral Resources. The lawmakers also pledged to introduce legislation to permanently codify this change.

North Dakota Senate Dem-NPL Leader Mac Schneider (District 42 – Grand Forks) and House Dem-NPL Leader Kenton Onstad (District 4 – Parshall) sent a letter to the members of the state Industrial Commission (Governor Jack Dalrymple, Attorney General Wayne Stenehjem, and Agriculture Commissioner Doug Goehring) highlighting a series of high-profile incidents that confirm the public is ill-served by a Director tasked with both regulating and promoting oil development. These incidents include:

• Tioga Oil Spill. The public and legislators were originally kept in the dark about the existence of the pipeline leak that spilled more than 20,000 barrels of oil near Tioga in September. Schneider and Onstad say that Director of Mineral Resources Lynn Helms stayed publicly silent for too long on the matter even though it was later revealed, under an open records request, that Helms discussed details of the spill’s cause in private email to a relative. North Dakota Democrats write: “Perhaps fearful that [revealing this information] would detract from his statutory duty to promote oil development, Director Helms stayed silent.”

• Volitility of Bakken Crude. Weeks before the explosive December 30, 2013 train derailment near Casselton, Director Helms stated that he was working on a white paper that would “dispel this myth that [Bakken crude] is somehow an explosive, really dangerous thing to have travelling up and down rail lines.” The North Dakota Democratic legislative leaders write: “This lays bare the moral and actual hazard of vesting both the promotion and regulatory functions in the Director position.”

• Ross Oil Drilling Waste Pit. Under the Industrial Commission’s authority, Director Helms sited an oil drilling waste pit above the underground water supply for the community of Ross. North Dakota Democrats write: “While we understand Director Helms has pled human error with regard to siting these waste pits, we believe the chances for such human error would be significantly diminished if the role of promoting oil development were separated from the regulation of such development.”

Representative Kenton Onstad says that many of his constituents and other residents in western North Dakota are angry with Director Helms, but that their anger should really be directed at the Industrial Commission.

“Lynn Helms is only doing what Governor Dalrymple, Attorney General Stenehjem, and Agriculture Commissioner Goehring are telling him to do. The buck doesn’t stop with Helms. It stops with the Industrial Commission.” Onstad adds: “Dalrymple, Stenehjem, and Goehring should share the heat with Helms for these failures.”

The North Dakota Democrats say the current dual responsibility arrangement is no longer viable and unnecessarily invites the possibility of an increased regulatory role by the federal government.

“The same Industrial Commission that says that North Dakota knows best how to regulate development is the same Industrial Commission that’s dropping the ball,” says Onstad. “The Industrial Commission is more focused on setting production records than on public safety. That concerns me.”

The North Dakota Democrats announced they are proposing legislation for introduction during the 2015 legislative session that would permanently separate these responsibilities by amending Chapter 38-08 of the North Dakota Century Code, which prescribes powers over oil regulation to the Industrial Commission and allows for broad delegation of these powers to the Department of Mineral Resources. In the near term, the North Dakota Democrats are asking the Industrial Commission to use its authority to divest the promotion of oil development from its regulation.

Schneider said North Dakota’s development policies with regard to lignite coal in the 1970s should serve as a model for policymakers charged with protecting the public while maximizing benefits from the oil boom.

“Our state has had the debate between whether we protect our land and health or encourage development. We made our minds up long ago that we can do both,” says Schneider. “However, by failing to meaningfully separate the promotion and regulation roles of the Director of Mineral Resources, the Industrial Commission unnecessarily undercuts North Dakotans’ faith that we can achieve this goal.”

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Letter to Industrial Commission – 1-14-14

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From: Dem-NPL News