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Mineral Lease Auction Impacting Lake Tschida Recreation Areas PDF Print E-mail
Written by Chet   
Monday, 13 February 2012 13:39

(Corrected/Updated in Red X 3)

The other day I was reading the latest outstanding issue of the Great Plains Examiner and saw a North Dakota state map showing where all the state-owned mineral acres are that were leased at the State Land Department's auction earlier this week.  When looking at the map I noticed that some of the mineral acres leased were in the neighborhood of Lake Tschida, a reservoir on the Heart River about half-way between Dickinson and Bismarck, 15 to 20 miles south of Interstate 94 in Grant County.  I contacted the Great Plains Examiner, and they've given me permission to use their map graphic so you can see what I was looking at.  Here's the map...

State Minerals - Feb2012

I know. That map is hard to read. Without cities/towns, lakes, rivers, highways, etc., on it, it's kinda hard to read.  (It might be a little easier to read if you right-click on it and open it in a new tab.) But what you need to know is that the green specks are the locations of all the school trust land mineral acres auctioned last week by the State Land Department.  If you didn't have a map like this -- or, preferablly, a map BETTER than this -- you'd never know where the Land Department was leasing mineral rights last week. Unless, of course, you're a land man or an attorney or realtor or GIS expert who deals with this stuff all the time, and you spent some time figuring it out.

It's hard to see, but if you know where Grant County is and if you know where Lake Tschida (Heart Butte) is, you can see there are a number of little green spots in the area of Lake Tschida, on this map. For those who don't know, Lake Tschida is a man-made reservoir about half-way between Bismarck and Dickinson, and then maybe 20 miles south of the Interstate.  (Click here for a Google map.) It's half-way between Glen Ullin and Elgin, along Highway 49. I looked at this map (above) and decided to dig a little further.  Here is what I figured out:  The State Land Department auctioned mineral acres last week, around Lake Tschida, including the blue shaded areas in this aerial photo...

Tschida Mineral Leases

This aerial photo might not mean anything to people who have never been to Lake Tschida, but I've been there, so I'll explain what you're looking at here. The upper-most blue square is right at the intersection of Highway 49 and the Crappy Creek (yeah, I know) turn-off gravel road. The blue square furthest to the right/east is basically the fishing area just below the Heart Butte dam and the hill to the North of the fishing area. It's the spillway area and apparently includes the spillway itself, and the public camping area. The other stuff is on the access road to the south-side (Elgin) trailer area, and on either side of a creek that runs into the lake near that trailer area. There are cabins within a couple hundred yards of some of these leased mineral acres.

There was a story in the Dickinson Press yesterday about a bicyclist who's filed a petition to stop oil rigs and wells from being put up near the Maah Daah Hey Trail.  Here's an exerpt from that story:

“Nobody’s going to want to come to the North Dakota Badlands and ride around oil well locations,” Landblom said.

Landblom, who works as a mountain bike outfitter along the trail, has mounted a petition drive to urge federal and state officials to protect public lands in the Badlands from drilling.

Dickinson Press

I wonder how cabin owners around Lake Tschida would have reacted if they'd known -- before the auction -- that mineral rights were about to be leased by the State Land Department for $1 per mineral acre last week. I wonder how many cabin owners realize the mineral acres leased last week included areas near their cabins and that they drive through to get to their cabins. I wonder how many people who fish at the Heart Butte Dam spillway realize mineral acres were leased in their fishing area last week, for $1 per acre. I wonder how many cabin owners would sign on to a petition like the one Mr. Landblom is pushing for the Badlands.

Now, let me point out a few things that might not be so obvious: private land owners in the area could sell or lease the mineral rights to land all around the lake, if they wanted. I'm guessing none of them would sell for $1 per acre. So part of what's troubling about this is that the companies that leased these mineral rights at the state auction now have a virtually free location on which to construct their well pads and set up their drilling rigs and where they can put their waste pits. Some of the mineral acres leased last week in other parts of Western North Dakota went for over $11,000 per acre. But these Lake Tschida mineral acres all went for $1 per acre. (Correction: One parcel was leased for $2 per acre.)  Also, if drilling rigs start popping up in the Lake Tschida area, the cabin access roads will surely be used by thousands of well service company trucks to haul water, equipment and people in and out of the area. Though not "pristine," this area is an area where lots of families drive in and out all summer to get to camping areas, to get boats in and out of the water. In the summertime, the community around the lake is kind of like a small town.

Here's a little bit of "full disclosure" for you folks:  My family has had a cabin on Lake Tschida since I was in Kindergarten. I grew up on Lake Tschida, at least in the Summers. When I was a kid -- maybe 3 or 4 years old -- my parents had a friend who owned a cabin there. We went there to visit several times. Then (I think) the family friend moved away and sold the small, one-room (plus one outhouse) cabin to my parents. It's been in my family ever since. (It's leased from the federal government, FYI.) I was -- and am -- a lake kid. I have a personal stake in this story, and I felt it appropriate to disclose that here.  So, if you want, you can accuse me of being selfish or acting out of NIMBY interest.  I'll accept that criticism. 

So you might say to me, "Chet. If you cared so much, why didn't you go lease those mineral acres -- or find other "lake people" and pool your resources to lease those acres -- if you cared so much?" Well, that's what I really wanted to talk about...

I didn't know.

I had no idea.

The State Land Department failed me. The media failed me. They failed all of us. All the press attention to the land auction centered around pristine areas around Bullion Butte and the Badlands.  I had no idea mineral rights were being leased all around Lake Tschida.  (Did you?) No. The media didn't tell us. The Land Department didn't tell us.  They also haven't told us what other recreational areas had mineral acres leased for cheap in other parts of western ND.

Sure... they'll come out and say, "We posted legal descriptions for the land where those mineral rights are on the internet and in the newspaper somewhere.  It's not our responsibility to generate a map to show you where these mineral rights actually are. "  

Well, okay. You got us all there, technically speaking. You held a sale and you gave us the legal descriptions. They looked like this (minus the "Lease No," "bidder" and "Bonus $" columns):

Lease No. Twp Rng Sec Description Bidder Mineral Acres Bonus $/Acre
OG1200350 135 88 36 SW4 LAND OIL & GAS LLC 160.00 $1.00
OG1200351 136 88 16 NE4 LAND OIL & GAS LLC 160.00 $1.00
OG1200352 136 88 16 NW4 LAND OIL & GAS LLC 160.00 $1.00
OG1200353 136 88 16 SE4 LAND OIL & GAS LLC 80.00 $1.00
OG1200354 136 88 16 SW4 LAND OIL & GAS LLC 80.00 $1.00
OG1200355 136 88 20 NE4 LAND OIL & GAS LLC 160.00 $1.00
OG1200356 136 88 20 NW4 LAND OIL & GAS LLC 160.00 $1.00
OG1200357 136 88 20 SE4 LAND OIL & GAS LLC 80.00 $1.00
OG1200358 136 88 20 SW4 LAND OIL & GAS LLC 80.00 $1.00
OG1200359 136 88 36 NE4 LAND OIL & GAS LLC 160.00 $1.00
OG1200360 136 88 36 NW4 LAND OIL & GAS LLC 160.00 $1.00
OG1200361 136 88 36 SE4 LAND OIL & GAS LLC 160.00 $1.00
OG1200362 136 88 36 SW4 LAND OIL & GAS LLC 160.00 $1.00
OG1200363 136 89 13 NE4 ADVANTA RESOURCES LLC 80.00 $2.00
OG1200364 136 89 15 SE4 LAND OIL & GAS LLC 80.00 $1.00
OG1200365 136 89 15 SW4 LAND OIL & GAS LLC 80.00 $1.00
OG1200366 136 89 16 SE4NE4 LAND OIL & GAS LLC 40.00 $1.00
OG1200367 136 89 16 SE4NW4 LAND OIL & GAS LLC 40.00 $1.00
OG1200368 136 89 16 E2SE4 LAND OIL & GAS LLC 80.00 $1.00
OG1200369 136 89 16 SW4 LAND OIL & GAS LLC 160.00 $1.00





And great. Thanks for that. That really helped regular taxpayers know where you were going to be leasing mineral acres for $1.

Quiz: (1) Who can look at that list and -- without doing any research -- tell me which of those parcels is on or near Lake Tschida?  Answer:  Nobody can.

         (2)  Without googling it, who has the resources and know-how to figure out which is/are on or near Lake Tschida (or where any of these are)?  Answer: Maybe one or two of you.

Take-away:  They're trying to do this stuff on the down-low. They are and were doing this stuff in such a way that it stays below the public's radar.  If the folks in the Land Department were doing there job, they would have made an easily readable map, or a map for each county, and they would have put it online.  If the folks in our local media were doing their jobs, they would have asked the Land Department to do this BEFORE the auction. Or they would have made maps themselves.  

So I called the Land Department last week to ask for a copy of any map they had put together to show where the land to be auctioned was located. They got back to me this morning (Monday) to tell me they had never put such a map together. They told me they might be able to have someone from their IT department put something together, but they'd need to know my name, first.  What amazes me about that -- what bothers me about that -- is that the top map in this blog post was given to the Great Plains Examiner by the Land Department some time last month.  The Land Department DID put a map together. And they lied to me, and I'm just a little upset about it. I'm also upset because I was told they needed my name. North Dakota's open records laws say they cannot make me give them my name in order to provide requested records.  It's almost as if they were trying to hide something from the public.

And I believe they were.  And are.

I'm still upset. I don't like being lied to. I don't like when my government is sneaky and corrupt. I don't like when they hide things from me. And I'm upset with the press around here for dropping the ball.  (Except for the Great Plains Examiner, which at least did something.) I look forward to watching cabin owners react when they start seeing drilling rigs pop up around Lake Tschida.  And other cabin areas.  With no meaningful advance notice.

I deserve better.  We all do.

(By the way:  If you want to figure out where the other leased mineral acre lots are located, use this list (click here, go to Feb 2012 sale info) from the Land Department, and use this online GIS mapping system (click here) to match county, township, section and range to the legal descriptions on the Land Dept list.  I wish it was easier, but it is what it is.)

(For some additional background on this story, click here to read the follow-up I wrote the next day.)


Comments (13)add comment

LoriAnn said:

boomtimes..
Oh ya.. the "boom" is here... the state administration is lowering the boom on all of its citizens ! Not only are they giving "oil country" away to the lowest bidder but its being done undercover,under the table and on the cheap! What are they recieving in return for this bounty of cheap leases?? The tax payers will be the last to know no matter what!
 
February 13, 2012
Votes: -1

big jake said:

...
Several questions arise out of your post. First, how many other acres/tracts were auctioned of by the State at this sale? When and where did this take place?

Has there been other activity in that area on private land and if so, do we have any idea what the price was? Way back, $1 per acre was standard but the bonus was where the money was. I do not understand a $1 per acre bonus at all. I presume that this was a standard 5 year lease. Standard outside of a known production area.

It seems to me that the location of these acres should be made available openly and in a very simple, explainable fashion by the SLD to the public. Anything short of that is not acceptable. We should not have to do our own research here. Maybe they have nothing to hide, maybe not. It is the attitude that really bothers me. Open government is how we can obtain honest government. These guys are our public servants--they work for us. This really stinks in an already stinky enviroment.
 
February 13, 2012
Votes: +1

What the Heck said:

....
Not only has the state sold us out, but cheap too. $1 per acre? Isn't that land on the Tyler Formation, the next area to be exploited?
 
February 13, 2012
Votes: +0

Marty said:

...
Blissful days at the lake don't support the education of Lance Gaebe's kids and grandkids.
 
February 13, 2012
Votes: -1

What the Heck said:

Tyler Formation
Here's a link to a map of the Tyler Formation. Now, someone please tell me why our state would decide to lease acreage in the next oil hotbed for only $1 per acre. This clearly isn't in the best interest of taxpayers. Those mineral rights are worth MUCH MUCH more. As a private citizen, I would have LOVED the opportunity to acquire them for $1 and then later sell the leases for many thousands times that.

Here is is: http://www.inforum.com/event/i.../Location: Tyler Formation/
 
February 14, 2012
Votes: -1

Dan said:

Probably not going to drill there.
The leases are auctioned. That was the highest bid, which means that that area probably isn't going to be drilled anytime soon. If it was, the bids would have been higher.
 
February 14, 2012
Votes: +3

What the Heck said:

...
Perhaps the state should have required a minimum bid or not lease until later. I disagree that they're not going to drill there. They will eventually drill anywhere and everywhere they can hit oil. That area is already feeling the effects of speculators as property values around Lemmon, SD and south are increasing rapidly. Vacant homes are being purchased and landowners are being approached for leases. Lowball and speculative for the most part, but the boom will spread and speculators will do well.
 
February 14, 2012
Votes: +0

Chet said:

My point...
My point is this: If somebody's going to put in a test well somewhere to see where the outter boundaries are of the productive areas, and they want to keep their expenses low (and they do), where better to do it than on land where they got the mineral rights for next to nothing?

And let's get real: These people don't spend thousands of dollars to tie up the mineral rights to these fairly significant areas because they are 100% certain there's no oil; they tied it up because there's probably oil under some of it.
 
February 14, 2012
Votes: +0

You don't get it... said:

...
First off...There are not going to be "wells" popping up all over. This area is underproduced and the reason they leased for so low a price is probably because in the next five years, they want to put an (meaning ONE) experimental well up. The State HAS to do something with these mineral acres within a 20 year frame or they risk losing them. Which could also explain why they were paid so little for a lease. No drilling company is going to come to Lake Tschida and spend millions of dollars (that's right...millions, not just 'thousands') putting up an experimental well that may or may not produce when they can put one up in Williams County and KNOW it is going to produce. The drilling companies were probably just helping the State out so they can hold onto their minerals. It is most definitely not a "hot bed" area. Talk to people in williston if you want to whine, now THAT is something worth complaing about.
And another thing---the State has owned these minerals since President Taft signed a patent to them in the 1900's. The minerals belong to the State and they definitely know what they are doing with them. More so than you think you know what to do with them. You said some leased for $11,000 per acre?? Well, the State owned those minerals too and they obviously must have figured out that that area was FAR better than Grant County. So no, the State hasn't 'sold you out." They play a huge beneficial factor to ND in the sense that we are the only state in the US not completely debt-ridden. I apologize for getting a bit miffed, but I can not abide ignorance.
 
February 14, 2012
Votes: -1

D Narnya Troll said:

You don't get it doesn't get it.
The State doesn't "own" these mineral rights. The State has title to these mineral rights "in trust" for the people of the State of North Dakota.

The State doesn't have to drill to hold mineral rights. If the State doesn't have title to the surface rights, all it has to do is periodically file a statement of claim in the County Recorder's office.
 
February 14, 2012
Votes: +1

What the Heck said:

to 'you don't get it'...
Have you looked at the Tyler Formation map? The formation that is estimated to hold 4.8 billion barrels of oil? The formation that Helms has said will be tapped within the next 5 years?

I bet 5 years ago no one ever thought western ND would become what it is today. How can you be certain wells are not going to 'pop up' everywhere, including Grant County? Grant County is smack in the middle of the Tyler formation, which reaches to Bismarck and south.
 
February 14, 2012
Votes: +0

You don't get it... said:

...
In time, yeah wells may pop up everywhere, but not before going into Montana and South Dakota as well. Right now, oil companies in ND are putting out rigs as fast as they can--in areas that make sense to put them in EX: the Bakken NOT the Tyler formation. This is the same pool that spreads southward toward South Dakota (which produces 1.6 million barrels of oil per year...what ND, or the Bakken, produces in 4 days.) I am not saying that maybe in like 10-20 years down the road, you could see activity in Grant County, but to completely come unglued and to picture some weird post-apocolyptic wasteland Lake Tschida could turn into is absolutely ridiculous.

You are aware that there are actually wells producing under/around/ near Lake Sakakawea? A place my family has had a cabin by for years and years and although there are more than fifty wells in this area,it is still as peaceful as ever? Oh but you're right...on the way to our lake house, I see a rig off in a distant crop taking up a space of about 50 sq. feet...miles from my cabin and the lake. Weekend ruined! You all just need to settle down. The State knows what its doing and yes, they do in fact OWN these minerals. They may own them on behalf of the people in North Dakota, much like an Attorney in Fact is responsible for making the legal decisions for a person, but its usually because that person is unaware of what is going on. Don't think the "State" is after you for something they have been doing since the 1900's. Man their are some paranoid people on here. The Bakken moves down the state more towards the West side (despite what your Google maps suggest), was anyone aware that in the State sale in Oct. of last year, ND leased out 80 acres in BILLINGS COUNTY for $14,000 per acre? The State was smart enough to realize that the most productive area of the Bakken right now is definitely to the West of Range 91.
Another thing--"D Narnya Troll"----you are thinking of the Federal Land Bank FKA Agribank in ND which is in charge of 13 different trusts (from schools, business, hospitals, etc) NOT the state.
I do know what I am talking about, but I can see it is pointless. Good luck with your vacationing in Tschida, I am sure it will be fine.
 
February 14, 2012
Votes: +0

d narnya troll said:

Sorry, I lost my bearings
My free-market polestar was obscured by fog. The State auction of oil and gas leases is socialism, pure and simple. The State should divest itself of all real estate interests, including mineral rights, except for sites of government facilities, e.g., the state capital. The State shouldn't auction leases, it should auction title to the mineral rights themselves.
 
February 16, 2012
Votes: -1

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Last Updated on Tuesday, 14 February 2012 14:12