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Lake Tschida Rant Follow-up PDF Print E-mail
Written by Chet   
Tuesday, 14 February 2012 13:41


[Updated in Red X 1]

Yesterday I wrote about how the North Dakota Land Department -- a state agency under the direct control of Governor Dalrymple -- is quietly pimping North Dakota's recreational areas to oil companies, and how North Dakota's greenhorn, Republican cheerleading-media-types are watching like deer in so many headlights, clueless as to what's going on. This is leaving North Dakota's population only dumber than ever before regarding what's really happening here. You can read yesterday's rant by clicking here.  

Last night it dawned on me that I really need to follow up yesterday's rant with some more of the story about the Lake Tschida public lands mineral rights leasing, that I didn't write about yesterday that I should have. That's why I'm writing a follow-up today; to fill in some blanks.

You should probably know a little bit about who held the auction last week.  The auction was held by the Department of ND Trust Lands.  That department is subordinate to "The Board of University and School Lands," a board created by Article IX, section 3 of the North Dakota state constitution.  The Board includes Gov. Jack Dalrymple, Sec. of State Al Jaeger, Supt of Public Instruction Wayne Sanstead, Incompetent State Treasurer Kelly Schmidt and Attorney General Wayne Stenehjem. Like most of the governing bodies in North Dakota, the Land Board has a Republican super-majority. The Board has unbridled control over virtually everything the Department of Land Trusts does.

The Department of Land Trusts has a number of different divisions under it, including (but not limited to) a "revenue compliance" division, an "information technology" division, a "minerals management" division and a "surface management" division.  There are a few other divisions, as well, but these are the important ones for purpose of this discussion today. 

The head of the "Mineral Management" Division is a fellow named Drew Combs. I spoke with Mr. Combs last week about the auctioning of state-owned mineral rights around Lake Tschida earlier in the week. He seemed like a nice enough guy. I asked Drew how the mineral rights came to be included in the auction sale. Combs told me the company that ultimately got the rights to most of those lands -- "Land, Oil and Gas, LLC" (I'll come back to this later) -- had simply called and asked that they be included in the sale. In much the same way there was no evaluation of the appropriateness of leasing the mineral rights in the pristine areas of the Badlands, there was similarly no assessment of the appropriateness of leasing the mineral rights around Lake Tschida. There was no effort to talk to North Dakota Game & Fish about the appropriateness of leasing mineral rights under the Heart Butte Dam or the camping and fishing area on the spillway side of the dam.  There was no consultation with Grant County to see if the folks there feel ready for oil development or have any concerns about any of these areas being developed. There was no phone call made to the Grant County Job Development Authority, the governmental body that administers the cabin areas that would be impacted by oil development around the lake. Nobody checked in with the Mayors in Glen Ullin or Elgin to see if the towns are ready for an oil boom. Nobody talked to the U.S. Department of the Interior, Bureau of Reclamation to see whether the Dam's caretaker has any concerns about oil development under the 60+ year old earthen dam itself. Nobody checked with the National Guard, which owns a camp near some of the mineral acres and on the lake, or the Boy Scouts of America, who camp on the lake for scouting events. Nobody asked for input from the Farmers Union, who have a kids' camp not far from some of the land where these mineral acres were leased. There were no hearings held where area hunters, fishers, campers, cabin owners, etc., had an opportunity to talk about their thoughts on oil wells on the wildlife habitat.  Nothing.

One phone call to the Land Department, and all these mineral rights around Lake Tschida got put on the auction block and sold for $1 to $2 per acre.

How can this be?

When Sen. Ryan Taylor, a candidate for Governor, was in town on Saturday, he mentioned a promise made by Gov. Dalrymple to oil industry executives at a meeting in Denver last year. Here's what Dalrymple said to the oil company executives:

“Folks, we are in there hustling along with everyone else in western North Dakota who is working hard to develop this great resource. We’re doing our very best to keep up.  And although I can’t promise we can keep up with you every step of the way, I can promise that we will be faithful and long-term partners in your efforts to develop the Bakken shale. And most of all, I can promise that you will have direct access to our state government at the highest level.

AreaVoices.com (emphasis added)

Dalrymple has promised oil company executives "direct access" to the Governor.  That's kind of a sweet deal.

Ryan Taylor contrasted this promise to the way Dalrymple has treated American Crystal Sugar workers who have tried, repeatedly, to meet with the Governor.  Dalrymple's staff has consistently told the sugar workers he's "too busy" to meet with them.

Meanwhile, oil company executives are promised "direct access" to him.

See... this Lake Tschida public lands mineral rights leasing auction is a microcosm of how Dalrymple will continue to treat every issue: "Oil companies tell us to jump and we'll jump.  Oil companies want us to jump higher or faster, just say so and we'll do it.  The rest of you?... meh."  

Taylor, in his stump speech, says he'll listen to the American Crystal workers, too.  I took that as a more broad statement that Taylor will listen to regular people, too; not just oil company executives.  Sure, he'll consider the interests of the oil companies, but he'll also listen to hunters, fishermen, campers, county and city employees, conservationists, surface rights owners, cabin owners, Game & Fish... and labor unions before auctioning publicly owned mineral rights for one dollar, or taking other action on behalf of the people of North Dakota.  He won't have an "open door" policy for oil company executives and an "I'm too busy" policy for the rest of us.

I said I'd get back to "Land Oil & Gas LLC" ("LOG").  I don't know a lot about this company, but here is what I can tell you.  LOG was formed in March of 2011 and has as its registered agent "Dakota Fusion, Inc.," both of which share a home office address of "1168 12th St NW, POB 13458, Grand Forks, ND  58208-3458," according to information on the ND Secretary of State's website.  LOG -- like Dakota Fusion -- appears to be one of the several "Brown Corporations" owned by Grand Forks entrepreneur [Link Fixed], Randy Brown.  Looking through campaign contributions over the past several election cycles, it appears Randy Brown is a big John Hoeven donor/supporter and Americans for Prosperity benefactor. Translation: He appears to be a mini-Koch Brothers-esque Teabagger. If we had any real journalists in North Dakota, they'd poke around in this. They'd call Drew Combs and ask him whether all it really takes to get these mineral rights sold for a dollar at auction is a single phone call to the State Land Commissioner's office from an Americans for Prosperity donor/Hoeven supporter.  A real journalist might ask what steps were taken by the Land Commissioner to ensure North Dakota Century Code section 15-02-15.1 was complied with, and that a "highest and best use" analysis was done.

But our local reporters really aren't interested in this.

Journalism, Schmournalism.

Laws, Schmaws.

This is oil country. We don't need no steenkeeng badges.

Comments (4)add comment

big jake said:

Thanks Chet for the additional information. As I suspected, the information provided raises more questions than it answers.

Is there a clear statutory provision for placing said lands up for lease? Is there a clear policy directive to implement the law and if the law is either silent or vague, it would seem to me that a public policy directive would be appropriate and necessary.

I have no way of finding our if other leases are going on in this area and what is the price being paid. It is relevant. Acutually, if we had open and honest government in place, they would consider it a responsibility to make sure that the public had knowledge---sunlight is the best disinfectant.

By virtue of the new oil company, this really stinks. It appears that this is just crony captitalism of the worst kind. It appears that in this instance, the Gov. knew or should have known about this activity. This goes to the integrity of this whole crowd. On a political note, it is a huge and legitimate campaign issue. What kind of good ole boys do we want? Is our state fast becoming a playground for the elite of our State? Whose interest is Dalrymple representing and where is the proof?

We did not get here overnight. It has been slowly but surely advancing even before Eddie took office. As the power and influence of the Democratic party has declined, Hoeven, Berg, Carlson, and Dalrymple have exponentially gained more. It is not possible to have good government under these circumstances.

We must do better and soon!!!!!!!!!!!!!!!
February 14, 2012
Votes: +3

disgusted said:

Questions: How many of the plots auctioned off in the whole sale went for $1? How many plots were sold with only one bid? How is it that an oil company can request specific plots be added to the sale and then buy them for $1. This smells! Is our state government actually looking out for the people's welfare or are they doing the bidding of the oil companies? How does one find the answers to these questions?
February 21, 2012
Votes: +0

What the Heck said:

Follow up to what I stated before: there will be development in that area and south into SD. Landowners, attorneys and various groups are holding meetings discussing topics such as leasing, fencing section lines for roads, and plans the state and county have for widening and resurfacing roads. Land values are increasing rapidly and small towns are beginning to see interest in real estate.

Time will tell. 40 years ago my parents leased land in that area to an oil company for more than $1 per acre. It seems odd our state would lease for that little, land on a known oil sands formation, even if the size of the formation is much smaller than the Bakken, given the price of oil...well, we can all do the math.
February 21, 2012
Votes: +0

Chet said:

To "disgusted"
I haven't counted the exact number of plots that went for $1. If you want to count them you can do so by clicking here and getting the full list from the Land Dept website. You'll have to hand count them if you want an exact number.

I copied and pasted part of the Grant County plots leased to a Google Doc. I'd ballpark the number of $1 plots at about 150 (ish). You can look at that google doc by clicking here. I have no idea how many acres it is.

Side note...

I don't know the significance of this, but if you look at that Google Doc link, you'll see Linda Butts -- a deputy director at ND DOT, ND GOP activist and friend of Mike Cantrell (the Continental Resources consultant and big oil NDGOP buyer/donor) -- got in on some of the action in a little area southwest of New England, ND. Maybe she was just walking through the legislative wing as the sale was going on and had some money burning a hole in her pocket. Or maybe she knew something. Who knows?
February 21, 2012
Votes: +0

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