ndert2
Follow us on Facebook

Latest Comments

ND Outdoors Sites

FishingBuddy
NoDakOutdoors

Featured Link

Meanwhile

Login Form



Support NorthDecoder

Search This Site

Loading

Amazon Search Widget

Feature Stories

Personal
The Low Road

Amazon Search

JoomlaWatch 1.2.12 - Joomla Monitor and Live Stats by Matej Koval
ND State Treasurer Kelly Schmidt: The Imprudent Investor, Part 2
Written by Chet   

ShrineI am not a financial advisor. I'm just not. As such, I do not have access to the kinds of tools a financial professional should have available for analyzing investments. That said, because of her track record, I still think North Dakota veterans would be well advised to scrutinize what North Dakota State Treasurer Kelly Schmidt is doing with money the legislature has set aside for some basic services for veterans.  

Last week Wednesday, Kelly Schmidt issued a press release gloating about the return on investment for the Veterans Postwar Trust Fund. She apparently claims "credit" for that return.  Here's part of her press release:

State Treasurer Kelly Schmidt announced the earnings of nearly $576,000 from the Veteran’s Postwar Trust Fund for the 2011-13 biennium.  The Veterans Post War Trust Fund provides income which is used to provide grants and other benefits to North Dakota veterans.

Schmidt Press Release (August 21, 2013) [emphasis added]

I'm not the only one who struggles with math, apparently.  Schmidt screwed up the numbers in that press release.  She issued a second press release the following day, Thursday, last week. Here's what the corrected press release said:

State Treasurer Kelly Schmidt announced the earnings of over $315,000 from the Veteran’s Postwar Trust Fund for the 2011-13 biennium. The Veterans Post War Trust Fund provides income which is used to provide grants and other benefits to North Dakota veterans.

Schmidt Press Release (August 22, 2013) [emphasis added]

Oops. She was only off by a quarter of a million dollars. That's only 5% of the total corpus of the fund. It's just a quarter of a million dollar difference.  What's a quarter mil between friends, right?

Okay, so maybe that's another sign of Schmidt's incompetence. Maybe it isn't. Maybe it was just a typo. $576,000 is right next to $315,000 on my keyboard, too.

But I think there's a bigger question that should come out of this.  Let's talk about that.

According to the press release (and you might want to cross-check this against Schmidt's Veterans Postwar Trust Fund (VPWTF) spreadsheets online (2012) and online (2013) because there seem to be some discrepencies there, too), the starting balance for the fund at the beginning of the biennium was somewhere in the neighborhood of $4,235,000.  

(NOTE:  $4,235,000 is the $4.8 million end balance she talks about, minus $250,000 added by the legislature and $315,000 in earnings from her press release. There are other expenses that should arguably be subtracted out, but I'm going to leave them in. If one of you is smarter than me, you can re-do my math and explain why doing so is more or less fair to readers' search for the truth.)

If my abacus is working correctly $315,000 in earnings on $4,225,000 is roughly a 13.4% return on investment.  If you were to compare the Trust Fund's return to one of the major indexes (Dow, S&P, etc.), I think you'd see that those funds earned closer to 20% during the same period.

DowSP-1

(Source)

Side note:  The Dow gaining 20% in two years is indisputable proof of what Barack Obama is:  Worst. Socialist. Ever.

Let's look at some of Kelly Schmidt's other numbers, too, while we're at it.  Over the two years, Schmidt paid "managed fee expenses" of $60,151.53 ($25,425.02 in 2012 plus $34,726.51 in 2013). That looks like a fee to Kelly's friend, Troy, at the retail brokerage firm -- Edward Jones -- of about 19% of the return on investment (ROI). (I know nobody pays fees based upon the ROI. But, still…) That's an investment management fee of 1.55% of the principal. [Correction: Maybe it's only 1.4%].  I think that’s equal to 1.55 basis points.  [or 1.4].  If memory serves, she (on veterans' behalf) was paying the North Dakota State Investment Board (SIB) .33 basis points when it was managing the VPWTF.  

In fairness to SIB, and in its defense, I should note that Schmidt is also on the SIB, and her investment skills and input have likely impacted their performance, as well. With all her help, the State Investment Board probably isn't doing much better than she's doing.  And they're likely continuing to pay irresponsibly high basis points for the high-risk investments they dabble in.  Keep in mind, too, that auditors have described Schmidt's investment strategies as having "taken on more risk than a prudent investor would be willing to take on."  (Source)  Schmidt's investment performance outcomes should surprise nobody.

Bottom line is this: It appears Kelly Schmidt has smartly invested money for veterans' benefits in a high-risk fund, that's paying 6 or 7 percentage points less than the money would have earned in a conservative index fund, and she's paying nearly FIVE [or four] times more in fees to get that brilliant bargain.

Again, I'd invite someone smarter at this stuff to explain what I'm missing.

If I'm close, Schmidt issued a press release to brag about the return on investment she's helping veterans earn, even though their money would have done significantly better if she'd put it in a conservative index fund or maybe even if she'd left it at SIB.

What am I missing?

It seems like Schmidt's office should be due for another audit report from the State Auditor's Office soon.  Maybe they'll look at this stuff and explain this better. Or maybe they won't.

(Click here for Part 1)

 
Big One?
Written by Jill Denning Gackle (BHG News Service)   

VanHook003

Agencies make plans for potential big spill

(Reprinted with permission from BHG News Service and Jill Denning Gackle)

A fresh water tank near an oil drilling rig less than one mile from Lake Sakakawea ruptured in mid-June, spewing 374,000 gallons of water into and near Lake Sakakawea.

Fresh water into fresh water doesn't sound alarming, but Ryan Newman, lake manager for the U.S. Army Corps of Engineers, said it's just a matter of time before a catastrophic oil spill impacts Lake Sakakawea.

“It's not a matter of if, it's when,” he said.

He said the goal of the oil industry partners – federal and state agencies – is to be prepared.

“Let's get organized for when the big one comes,” he said.

IMG_0783Wake up call

A spill in December at Van Hook was an eye opener for many in the region. More than 66,000 gallons of oil and brine misted over a stubble field. The ice covered lake was mostly spared because of the time of year and the winds were mild and headed the right direction.

“Fortunately there wasn't a lot of wind. We kept it largely confined to the pad and that field,” Newman said. He said if the spill had occurred between April 1 and Aug. 30, a prime piping plover nesting area would have had chicks, eggs or birds covered in an oil sheen. The endangered species of birds would have required a costly cleanup effort, Newman said.

“That spill opened a lot of eyes. If there is a diamond in the rough, it's that everyone became a lot more aware of what could happen,” he said.

“Industry experts say: start planning for it, it is going to happen. We need to start looking at this lake and work together.”

The fresh water spill June 12 near Mandaree was one of dozens of spills so far this year. In 2011 there were 1,100 spills statewide reported and last year there were 1,494 spills statewide reported, according to the Corps. Spills are any quantity of water, brine water, oil or anything that impacts soil or water, according to Alison Ritter of the N.D. Department of Mineral Resources.

Newman said the Corps isn't always made aware of spills. Eight days later someone notified the Corps about the June water spill.

“Somebody said, 'Oh, maybe we should call the Corps,' Newman said.

Since the spill was on private land, adjacent to Corps land, the violator is not legally required to call the Corps. But the water flowed “straight to the reservoir,” Newman said.

The Van Hook oil spill in December was learned by the Corps from TV news reports when pictures of the scene showed the lake in the background. Newman said, “I saw that and thought we gotta get over there.”

The Corps is working hard to be at the table with the state and federal agencies to be partners in preparing for the worst case scenario. He said the Corps needs to be intimately involved because they can be helpful with access and elevation information.

“Flowing water is far different than a reservoir. We can tell them where the boats and the pumper trucks can go in,” he said.  The EPA is currently working on a response plan in the event of major spill action, according to Newman.

Oil lines run under lake

Lake_oil_gas_aerial_picture

Newman said the oil companies often avoid the volume of paperwork that is required to put a rig on federal land and instead place a rig just outside the Corps' boundary. Horizontal drilling creates 237 legs from the oil well snaking under Lake Sakakawea, buried at least two miles deep, according to the Corps' records mid-July. Today there are 13 lines 6-12 inches in diameter that convey crude oil, CO2, natural gas or gasoline across the lake, according to Newman. All of those 13 lines are in shallow trenches on the lake bed except for a gasoline line that is suspended on the Hwy. 23 New Town Bridge, Newman said.

The Corps promotes pipeline crossing corridors for the purpose of keeping pipelines grouped in the same region, Newman explained. He said spill detection and access to a spill will be easier.

Concerns have been raised about the age of some of the lines that run across Lake Sakakawea. He said Hess Corporation, the owner of many of the lines, is testing the walls' thickness and looking for anomalies, Newman said.

“They're doing their due diligence,” and finding that some of the lines are in good shape and some aren't. Some are gas lines that will be repurposed for oil, Newman said.

Beginning about three years ago the Corps started to require that all lines be bored 70-100 feet under the lake bed rather than just laid and sunk to rest on top of the lake bed.

Multiple requests come in, as often as weekly, to lay pipes on the lake bed or to drill on Corps property or to learn about how to drill on Corps property, he said. They say, “What's it take to get a line across Lake Sakakawea?” he said.
“Now the whole world's changed. We get requests weekly,” he said.

The change is disconcerting for some.

An industry expert who was a leader in the Exxon Valdez oil spill in Alaska cleanup guided the Corps during a training exercise this spring, Newman said. He said, “Make sure you're organized. It will happen. We were like great, that's what we want to hear.” (The industry expert declined to be interviewed for this story.)

The result, though, is planning.

“Let's get organized for when the big one comes,” Newman said.

Ritter said the N.D. Department of Mineral Resources agreed. She said, “Obviously state leaders and emergency responders do know there is a potential threat. Being prepared is the most important thing. The state and the operators are taking steps to be prepared.”

A group of 10 oil companies formed Sakakawea Area Spill Response LLC to share equipment, training and resources in the event of a spill.

Ritter said preparation by the state and industry leaders will help to minimize the impact. Newman agreed and hoped she's right.

[Photos courtesy of Jill Denning Gackle, BHG News Service.]

[Chet's Note: In visiting with the reporter I learned that the aerial map/graphic in her story was obtained by BHG from the USACOE and is from late in 2012. I've taken the liberty of obtaining a current, similar graphic of the same area from the North Dakota GIS Hub (see below).  You might want to right-click on both the graphics, open them in "new tabs" and compare the two graphics. There are now significant more laterals under the lake.]

BigLake002

 
Hoeven and Corporate Campaign Contributions
Written by Chet   

Have you ever eaten at Maxwell's restaurant in Fargo? Enjoyed your steak and shrimp? If so, maybe you asked to be added to their email list?  If you are on their email list, one week ago right about now (Monday of last week) you received a "mailchimp.com"-generated email from Maxwell's, inviting you to the Cass County Republicans' event called "Harvest with the Hoevens." 

HoevenHarvest001

Maxwell's didn't care what your political affiliation is or was; if you're on Maxwell's email list, you got the partisan political email promoting a Republican fundraiser.

The event was Tuesday night.  (Sorry, you missed it.)  Maxwell's also advertised it on their website, as well. (Let me know if they pull the ad. I've PDFed it and will post that if they pull it.)  According to the website, if you donated enough money ($50) to the Fargo area Republican organization, Maxwell's gave you a $25 gift card for their restaurant.

Who cares, right?

Well... I suppose that depends. I suppose corrupt people don't care. People who don't care about corruption in politics probably don't care. Despite that, the use of a mailing list is generally considered an "in-kind" contribution. Maxwells is a Limited Liability Company, one of the types of businesses barred from making political contributions.  

I'd also suggest to you that giving $50 GOP donors a free $25 Maxwells gift card -- a sort of donation rebate -- is a $25 in-kind contribution to the NDGOP. Are the Cass County Republicans paying Maxwells $25 for every $50 donation they get?  I kind of doubt it.  (It'd be money-stupid for them to do that, don't you think? They'd make more money on a $40 contribution than a $50 contribution if they are.)

Are the Cass County Republicans paying Maxwell's for the advertisement on Maxwell's web page?  Advertisement is also generally considered an "in-kind" contribution.  If so, maybe there's no big deal.  If not, then there might be a problem. Possibly a criminal problem.

According to the North Dakota Secretary of State's website, Maxwell's is a "trade name" owned by M Foods Group, LLC.  M Foods Group is a corporation.  The domain name for Maxwell's website is registered to a fellow named "Michael Marcil, 1380 9th Street East, in West Fargo, ND."  

Despite what everyone might think of the Citizens United case, corporate campaign contributions "for a political purpose" still appear to be illegal here in North Dakota.  The North Dakota Century Code still includes this sentence:

A corporation, cooperative corporation, limited liability company, or association may not make a contribution for a political purpose.

NDCC 16.1-08.1-03.5(1)

Violation of that provision appears to be a Class A misdemeanor.  (NDCC § 16.1-08.1-07)

I'd suggest to you that a donation to the Cass County Republicans fundraiser would be a contribution "for a political purpose."

So all of these donations to the Cass County Republican Party by Maxwells -- the free use of their email list, the advertising on their website, the ad on Maxwells website (and maybe some or all of the catered food and/or drink) -- appear to be illegal campaign contributions. 

My experience is that police don't investigate apparent crimes like this at all.  But if they do, they only do if someone complains about it. Maybe someone in Fargo should consider filing a complaint about this.  

Also, keep in mind that John Hoeven was involved with this.  It shouldn't surprise anybody one bit if Hoeven just got some dupe to forge a check to Maxwells to pay for the apparent illegal campaign contributions.  It certainly wouldn't be the first time the corrupt senator had a dupe do that to cover for him.

But will anybody step up and notify the authorities in Fargo?

And, if they do, will "law enforcement" enforce the law against the political party that runs North Dakota state government?

Waiting patiently.

 
The Clueless National Republican Congressional Committee
Written by Chet   

BergChris1A couple days ago, the National Republican Congressional Committee (NRCC) posted a video clip on its official blog and YouTube page.  The caption under the video on YouTube says this:

Published on Aug 21, 2013

A local TV news anchor ripped Collin Peterson yesterday for not responding to multiple interview requests. He said that Peterson may think he owns the seat, but he works for the people.

YouTube.com

The video is of Fargo's ValleyNewsLive right-wing opinion blow-hard Chris Berg criticizing Minnesota Representative Collin Peterson because he didn't return calls from the right-wing opinion blow-hard's secretary. The NRCC thought this was worthy of their NRCC Communications page so they posted it on the series of tubes.

But the NRCC's description of the video clip, and the description, are just stupid. The title they put on the video is this:

KXJB-TV – Local News Anchor Rips Collin Peterson: “Guess What? You Work For The People”

So what's the problem?

The problem is that Chris Berg isn't a "Local News Anchor."  ValleyNewsLive has all five of their anchors listed on their website, and Berg ain't one of them. 

You might remember Chris Berg's name from when he arbitrarily started comparing North Dakota's Democratic House candidate, Pam Gulleson, to Hitler last year. Yeah, he's a special breed of crackpot; the kind of guy you're justified in never calling back if someone from his show calls you.  So that guy is obviously not someone to be taken seriously, and he's also clearly not a "news anchor."

There's a subtle difference between "news anchor" and "right-wing opinion blow-hard."  You'd think a communications professional working for the NRCC would understand the difference.  

Calling Chris Berg a KXJB "news anchor" is like calling Baby Ruth the star of the movie "Caddyshack."

 
1972 Dolphins: What is Wrong With These People?
Written by Chet   

DolphinsHelmetCan we talk?  I mean, seriously.  Can we talk?  

The President of the United States invited the undefeated 1972 Miami Dolphins football players to come to the White House to be honored.  Three players declined.  Why? 

"We've got some real moral compass issues in Washington," Hall of Fame center Jim Langer told the Sun-Sentinel's David Hyde. "I don't want to be in a room with those people and pretend I'm having a good time. I can't do that. If that [angers] people, so be it."

"I'll just say my views are diametrically opposed to the President's," Manny Fernandez said. "Enough said. Let's leave it at that. I hope everyone enjoys the trip who goes."

And former offensive lineman Bob Kuechenberg added: "I want to be careful, because mom said if you have nothing good to say about someone, then don't say anything," he told the newspaper. "I don't have anything good to say about someone. … I just don't believe in this administration at all. So I don't belong. Anyone on the left or the right has to respect one man's opinion. …

"I don't belong there, I'll tell you that," Kuechenberg continued. "Without being critical, I can just tell you I don't belong. It would be hypocritical of me to be there. I don't want to do that. I just don't believe in this administration at all. So I don't belong. Anyone on the left or the right has to respect one man's opinion."

CBSSports.com

So your views are "diametrically opposed" to the person who holds the office of "President of the United States," and that means you can't shake the office holder's hand, be cordial, and accept the honor?

Seriously?!?

Where do people learn this kind of behavior?  From their parents?  Listening to Reince Priebus?  Watching Fox News?  Reading about John Boehner?  Where?!?

I thought George W. Bush and his administration should have been investigated for possible war crimes. I did. I thought (and think) waterboarding was torture and a violation of international treaties and laws. But Bush was President of the United States, too. Reagan violated U.S. law and traded arms for hostages. He did. He should have been investigated too.  Maybe even prosecuted. I'm not a fan of the Obama administration's drone policy, their domestic surveylance policy, the continued use of Gitmo, FISA Courts, etc., etc., etc... Believe it or not, I'd support an investigation or two there, too.

But I respect the office. I do. If the person holding the office of President of the United States invites me to the White House for coffee, to discuss domestic policy, to receive an honor from that office, or to have a beer...  I'm there.  I don't care who it is. Nixon. Bush. Reagan. Obama. Respecting the office does not mean respecting the office holder. Respecting the office is not an endorsement of the office holder.  If he invited me to a fundraiser and asked me for money, that'd be a different thing entirely. But inviting me to seek my opinion or give me an award?!?  I'm so there. 

In my job I deal with people I disagree with every day. I suspect that's true in lots and lots of occupations/professions. But at the end of the day, I can (and do) walk over to an "opponent," shake his/her hand, smile, tell them I disagree with them but respect their position and invite them to have a nice evening.  

Why?  

Because I'm not an idiot zealot, teabagging moran.

Apparently three people on the 1972 Miami Dolphins football team are.

 
The Best Energy Reporter in North Dakota...
Written by Chet   

IMG_6037Sm... Lives in Washington, D.C.?  And he's certainly not "great." But North Dakota newspapers have to rely on him to uncover a story about oil development in North Dakota because... journalism is hard?  Or there are no journalists here?

What's this about?

There's a story on the Dickinson Press -- a Fargo Forum Communications newspaper -- website today about an apparent/alleged scheme and/or fraud with a lot of North Dakota connections.  Here's a morsel.

A little-known company called Halek Operating ND LLC is facing the largest fine North Dakota has ever levied against an oil and gas producer — $1.5 million — for jeopardizing drinking water near Dickinson.

But even before the company drilled its first well in North Dakota, federal officials say the man behind it had swindled $22 million out of 300 investors in a Texas oil and gas project.

The odd facts of the case show that the state officials overseeing the nation’s oil and gas boom might need to look beyond promoting development and monitoring groundwater and keep their eyes open for plain old fraud.

The Dickinson Press

Go read the rest of that story. It's long. Ironically, it reads more like a blog post than a news story. But it's in the Dickinson Press.  And it's newsy.  And interesting. 

The story's author, Mike Soraghan, doesn't work for the Dickinson Press.  He doesn't even live in North Dakota. A wild guess I'm going to make is that he's never been here. That's fine. Soraghan apparently lives in Washington, D.C., and works for "Energywire.com," a product of E&E Publishing, LLC."  In the past, Soraghan's work has also been published in the New York TImes, "The Hill," The Denver Post and "The Sun News." (Source)  

It appears that what's likely happened is that Soraghan's blog post newspaper story was originally published on Energywire.com on Wednesday, somebody from the ForumCom empire saw it, and they thought it was worth reading. And they obviously don't have a journalist at any ForumComm newspaper who's qualified to write a fairly-well-researched, probing, in-depth blog post newspaper story like that, so they got (or bought?) permission to republish Soraghan's four-day-old  blog post newspaper story in its entirety.  I guess that's fine, too.

Again, go read it. It's pretty good.

But Soraghan's work isn't perfect. He missed some stuff.  One of the things he missed is something any NorthDecoder reader would have caught.  It's this:

On April 1, 2011, Halek Energy filed for Chapter 11 bankruptcy in Texas. And that's about when the trouble started in North Dakota. On April 6, 2011, the pit at one of the company's two wells overflowed from snowmelt. The liquid, with a sheen of oil on top, flowed into a drainage.

Halek Operating ND faced more than $588,000 in potential fines, but the company caught a break from state officials. All but about 10 percent of the fine was suspended. However, the company had to pay a $20,000 cash bond against potential future contamination.

EnergyWire.com (emphasis added)

Regular NorthDecoder readers will remember the "$3 million" in snowmelt overflow fines.  They will Remember Those Huge Fines Imposed On ND Oil Companies.  They'll know getting a fine reduced by 90% isn't "catching a break" for a North Dakota oil company; it's par for the course.  Imposing fines at 10% the rate first declared in an Industrial Commission press release is what Jack Dalrymple, Wayne Stenehjem and Doug Goehring do every day.  Most of the 19 other companies fined along with Halek received the exact same "break."  A thing isn't a "break" if everybody gets it.  It's normal.

Anyway... I mostly just wanted to draw your attention to this blog post newspaper story from the Dickinson Press, because there is some stuff in it that's worth knowing.  And it's interesting to see that one of the newspaper cartels around here is perhaps starting to acknowledge none of its writers have the objectivity, ability and/or skill to dig deep and write worthwhile expository news stories about the state they live in.

 
The Industrial Commission Has A List. What Next? How About A Breather?
Written by Jim Fuglie   

IMG_6279b

(Cross-posted, with permission, from The Prairie Blog)

Well, okay, now there’s a list. On paper. Well, at least on a computer screen. It’s a list that the North Dakota Industrial Commission is “considering for at least one Commission member to tour” as they look at protecting places that have particularly sensitive archeological, paleontological, historical, recreational or environmental characteristics. That’s a start.

I wrote about this before. Back in May, the Industrial Commission, at the urging of Attorney General Wayne Stenehjem, decided to make a list of special places and go on a tour to see what makes them special. And then this group of three important state officials, who issue all the oil and gas drilling permits in the state, would decide if any of those areas should be protected from oil development. The list, which you will find below, “is tentative and is being revised as scheduling is worked on.”

Okay, so what next? Actually, the better question is, what has happened recently? Since the Commission decided to do this, with much ballyhoo and great media coverage, probably 500 or more drilling permits have been issued to oil companies with no regard to the places on this list, at least as far as I can tell. Who knows how many of them are in, or on, or next to, the places on this list? Nobody, to my knowledge.

Then, at their last regular meeting, the Commission decided not to take a group tour, but to try to get to see as many of them individually as possible when their travels took them to western North Dakota. When will that be? Of course, nobody knows. Meanwhile, the Commission keeps on issuing drilling permits—at last count, as of Friday afternoon, 137 of them so far this month. And the month is just half over.

Is the list a complete list of places that ought to be considered “off limits” to oil activity? Not by a long shot. It’s a pretty good compilation of state and national parks, important historic sites, roadless areas treasured by hikers and hunters, and some wildlife habitat areas. But there’s a lot missing from this list. For example, there are about 30 North Dakota Wildlife Management Areas—places set aside to help provide wildlife habitat to our game and non-game species—in the area known generally as the “Oil Patch.” Only six of them are on the list. There are about ten National Wildlife Refuges in the same area. Only three are on the list. Hunters, birders and hikers ought to be pretty concerned about that.

We’ve got serious wildlife problems already out west, especially among mule deer, antelope and sage grouse populations. Those species are not making babies like they used to. They’re finding it pretty hard to get romantic with oil trucks running through their bedrooms.

I’m not even sure where this list came from. I asked officials at affected state agencies today if they had seen it, and none had. So those state agencies—Parks, History and Wildlife—haven’t even had any input yet. That seems strange. You’d think the Industrial Commission would want their paid experts to weigh in on this. I’d sure like to hear what they have to say.

So back to my question: What’s next? Here’s my suggestion.

Using this list as a starting point, bring in the state agency experts, add the wildlife areas and any missing significant cultural and recreational sites, and then hire someone to sit down with a map and a computer and make a database of the legal descriptions of all these places. That shouldn’t take more than a few weeks. The list isn’t that long.

Then every time a request for a drilling permit comes in, run the legal description against the database. If you get a match, set the application aside and have a good discussion, at an open meeting, with all interested parties present, about whether that permit ought to be issued or not. If it’s in a sensitive wildlife area, bring in Terry Steinwand’s folks and see what they think. If it’s an Indian burial ground, bring in Merl Paaverud. You get the idea.

Meanwhile, until the list is updated and the database is completed, I suggest we issue a moratorium on any further drilling permits. I guarantee they would get that database done in a hurry if they did that.

I’m dead serious about this. Like I said, it shouldn’t take more than a few weeks to decide on a list and make the database. Until then, just stop issuing drilling permits. That won’t shut down the oil industry. It won’t even slow it down. There are plenty of undrilled permits out there right now. The drillers will be plenty busy. They’ve probably got work stacked up for a year into the future, or longer, right now.

But it’s a good idea in any kind of game to stop and take a breather once in a while. This is the kind of breather we could all use right now—putting some thought into where oil wells should be located, instead of this mad frenzy we’ve been going through the last few years. It would show that the state is serious about protecting special places. After all, Jack Dalrymnple, Wayne Stenehjem and Doug Goehring said they were serious about it back in May. But nothing has happened since then. It’s time to make this happen. Otherwise, many more months, maybe years, are going to go by, and many hundreds, maybe thousands, of drilling permits are going to be issued, with no regard to this list of special places. That just seems goofy to me.

Here’s the list. What would you add?

Antelope Creek Wildlife Management Area

Black Butte

Bowman Haley Dam and Recreation Area

Bullion Butte

Chalky Buttes

Custer Campsites

Davis Dam

Deep Creek Bottoms

Ft. Dilts

Fort Union National Historic Site

Hofflund Wildlife Management Area

Initial Rock south of Fryberg

Kendley Plateau or is it spelled Kinley Plateau

Killdeer Battlefield

Killdeer Wildlife Management Area (Primitive Area)

Lake Ilo National Wildlife Refuge

Lewis and Clark State Park

Little Missouri River State Park

Lone Butte

Long X Divide

Lostwood National Wildlife Refuge

Medicine Hole on the Killdeer Mountain

Och’s Point Wildlife Management Area

Ponderosa Pine

Pretty Butte

Schnell Recreation Area

Sheyenne Grasslands

Square Butte

Stewart Lake National Wildlife Refuge

Strom Hanson IRA

Sulllivan Wildlife Management Area

Sully Creek State Park

Theodore Roosevelt National Park—North, South and Elkhorn Units (Elkhorn Ranchlands)

Tracy Mountain

Trenton Wildlife Management Area

Twin Buttes

White Butte

Writing Rock south of Alkabo

All Little Missouri River National Grassland Roadless Areas

 
Oil Patch Update. Careful, This Could Ruin Your Day.
Written by Jim Fuglie   

Slawson Well

(Cross-posted, with permission, from The Prairie Blog.)

Cancel The Industrial Commission Tour Bus

After a couple of dustups over whether or not to grant oil and gas drilling permits on Killdeer Mountain and next door to the Elkhorn Ranch, the North Dakota Industrial Commission announced with great fanfare last Spring it would take a tour of oil country and begin making a list of important places in the oil patch where drilling should not be allowed.

The North Dakota news media jumped all over that.

The Forum: “North Dakota looks to protect ‘culturally important’ places”
The Tribune:  “Industrial Commission making a list”

And on, and on, in the state’s other newspapers, all over the radio and television news broadcasts, across the blogosphere. Great publicity, lots of backslapping, coffee klatch chatter like “these guys really do care.”

The Bismarck Tribune editorialized that an Industrial Commission tour of the oil patch “will give the members a better idea what kind of ‘view protection’ might be involved.”

Yeah, well, forget about it. Call Harlow’s and cancel the tour bus. It’s not going to happen.

At the very end of their meeting last week, the members of the Industrial Commission decided their schedules are just too busy for that. More important things to do. Can’t squeeze it in.

Instead, if the members—Jack Dalrymple, Attorney General Wayne Stenehjem and Agriculture Commission Doug Goehring—happen to get out west, they’ll take a look around and see what they can see. Stenehjem said he’s already been doing that. I believe him. Not too sure the other two will get much looking around done.

As for the “list,” well as I said here earlier, “That list pretty much already exists. Jack, just call in Merl Paaverud, Mark Zimmerman and Terry Steinwand, three of your cabinet members you probably don’t see very often, and have them bring in their lists of historic sites, parks, and wildlife areas in western North Dakota. There you go.

What’s bothersome is that there was much ballyhoo about the Industrial Commission actually getting their “boots on the ground” and reacting to citizen alerts on special areas of the state that should not be drilled. And then making a big new list of places they are not going to allow any new oil wells (maybe even including some wildlife refuges–see the next paragraph). And then not a mention of it in the news media when they say “Never mind.” That’s just the way those politicians want it to happen. Couldn’t have written the script better myself if I was a government media flack.

Leasing A Wildlife Refuge

One thing the news media did report, kind of, is the lead-up to yesterday’s State Trust Lands mineral lease auction in Medora. What you read in the papers is that the Game and Fish Department was recommending the Trust Lands Department take care not to jeopardize critical wildlife habitat when offering leases in areas their experts were concerned about. I also wrote about it a couple of times before the auction. You can read those stories here and here.

What really happened yesterday is that the Department of Trust Lands went ahead and leased the right to drill for oil and gas right in the middle of two National Wildlife Refuges, in spite of the fact the Game and Fish Department recommended that they advertise that if someone really wanted to lease that, they wouldn’t be able to put an oil well there.

WTF?

Instead of putting a “No Surface Occupancy” restriction on the land, as the Game and Fish Department recommended, the Land Department put a stipulation that whoever leases the land will have to get permission from Game and Fish and the U.S. Fish and Wildlife Service before they can drill a well there. At a glance, that looks like it accomplishes the same objective—if Game and Fish is recommending no well, then they probably will not give permission for one when the lessee comes around asking. But there’s no guarantee that will happen right now. Right now, Empire Oil, for example has leased the right for one of its clients to drill for oil and gas in the middle of a National Wildlife Refuge in Slope County. What happens down the road is up in the air.

Empire didn’t pay much for the lease–$25 an acre for 160 acres—so all that’s at risk is $4,000. Not much of a gamble in the oil patch. I asked Bill LaCrosse, president of Empire, what would happen if the wildlife agencies tell him they won’t allow a well on the refuge. LaCrosse, a serious man who runs a small land leasing company in Williston, spent much of the afternoon Tuesday with one ear glued to a cell phone, connected to the client—an oil company—he was there to represent, and the other responding to the auctioneer’s call for bids. He said he really didn’t think the client for whom he was bidding on the leases was interested in drilling in a refuge, and would probably find a way to get to the oil under the refuge by drilling in horizontally or diagonally from outside the refuge. That was reassuring. LaCrosse is not a driller, nor is he someone who, as I mistakenly said in an earlier blog, a speculator or “flipper” who buys minerals and then tries to resell them. Instead, he’s paid by oil companies to represent them in negotiations for mineral leases. His expertise is in finding the minerals and getting the rights to them. The oil company’s expertise is getting them out of the ground. He’s been around a while, and watched the industry grow, and he says the industry is much more environmentally responsible today than in past years. They have to be. They’re being scrutinized much more than in the past.

No oil company in its right mind would want a story to appear in the paper about one of their wells being in the middle of a national wildlife refuge. Unless, of course, they had gotten permission from the politicians, who appoint the agency officials, who make the rules. You know, the politicians who say they’re going to take a tour of sensitive places, like wildlife refuges, and make a list of places not to put oil wells . . .

Depends On What The Definition of “Immediately” Is

I reported here last week that the Industrial Commission had levied the largest fine in its history, a $1.5 million hit on Halek Operating, for illegally dumping 800,000 gallons of wastewater down a well. In reading through the order by the Commission, I found that it said “The sum of the fines listed in paragraphs (2) through (5) of the above order is $1,525,000 and Halek Operating ND, LLC shall make payment immediately to the Industrial Commission, Oil and Gas Division.” (emphasis added)

So I waited a couple of days and then contacted the Industrial Commission to see if “immediately” meant they’d gotten their check, and I also asked if the order signed by the Commissioners was the final step in the process, or if are there further court proceedings to follow the issuance of that order.

The response: “A party aggrieved by a Commission order can request reconsideration by the Commission and can appeal the order to the district court.

I guess, with a million and a half dollars on the table, Halek could be expected to do that. But let’s take a look at the Order approved and signed by the Commission. Halek was charged with four counts of violating the North Dakota Administrative Code. From the Order:

“Halek admits to Count One of the complaint . . .”

“Halek admits to Count Two of the complaint . . .”

”Halek admits to Count Three of the complaint . . .”

“Halek admits to Count Four of the complaint . . .”

Therefore . . .

“Based on the evidence . . . it is established that the violations admitted by Halek are amongst the most egregious violations ever pursued by the (Industrial) Commission in a complaint action.” (emphasis added)

”The evidence and Halek’s admissions prove the violations. The evidence further shows that these are egregious violations causing considerable risk of contaminating underground sources of drinking water in North Dakota. Moreover, there is evidence of deception, concealment, and intentional or willful violation of Commission rules, the Commission’s injection permit, and the Commission’s Order No. 17801.” (emphasis added)

“The Commission believes the maximum penalty allowed by law is appropriate under the circumstances.”

Well. There. When someone uses the word “egregious” twice, it certainly doesn’t get more definitive than that, does it? Let’s see if Halek “requests reconsideration by the Commission” or “appeals to the District Court.” That ought to be interesting. Especially since the Industrial Commission just said their fine is “appropriate.”

Oh, and I also asked where the money goes, once the check has been written. Whose account does it get deposited in? The answer: “As of July 1 (pursuant to HB 1333) fines are deposited in the Abandoned Oil and Gas Well Plugging and Site Reclamation Fund of the state treasury. These funds are used to reclaim well sites when all other sources of collection from the operator have been exhausted.”

The nice secretary at the Industrial Commission has asked the Oil and Gas Division staff to notify me when the checks come in. I’ll pass that information along to you.

Somebody fibbed?

Over at the North Decoder website, Chad has posted a followup story about an oil well blowout last December up in the Van Hook neighborhood of Lake Sakakawea. You need to go read this. It is an excellent case of reporting, something the North Dakota news media could use a few lessons on.

Everybody that reported on it when it happened last December quoted the State Health Department and Oil and Gas Division officials saying it was really no big deal. “No threat to the public or the lake.”

Everybody except a Game and Fish Department employee, who went up and took a look for himself. He reported in an e-mail to his superiors “It (the oil, gas and brine water mist) goes out onto the lake approximately 4,100 feet . . . It is a lot worse than has been reported on radio and print media.”

That e-mail was sent December 19, 2012, six days after the blowout. It went to Terry Steinwand, Game and Fish Department Director, whose agency has a state wildlife management area next to the well. It said there was an official from the State Health Department along with the group that observed what the e-mail writer observed. It is now almost 8 months later, and no one has reported the scope of the blowout or subsequent cleanup (coverup?) efforts. You need to go read this story. Here.

Well. Have a nice day.

[Note from Chet:  The photo at the top of this page of is the well pad near Van Hook where the blow-out occurred in December.  The photo was taken by me near the end of June. I wanted to see what the area looked like after the burn-off and clean-up. And, yes, I'd been sitting on the story since the end of June.]
 
ND Republican Chairman Supporting Democrats in 2014?
Written by Chet   

The title of this blog post probably surprised you.  I'll make no bones about the fact that this question surprises me, too.  But it's a legitimate question.  Let me explain why.

If you have a pulse and live in North Dakota, you've met lots and lots of disgruntled former Republicans. I can't tell you how many people I know (though it's a lot) who have parroted these words: "I did not leave the North Dakota Republican Party; the North Dakota Republican Party left me."  The North Dakota Republican Party is full of cray cray.  The offensive categories range from "corporate sell-out" to "morbidly manipulatable sheep" to "American Taliban."  And everything in between.  So the masses are leaving the Republican Party.  Some are becoming politically disengaged.  Many are signing on with the Democratic-NPL.  (Welcome!)  Some aren't signing on, but they're still supporting Democrats in North Dakota.  It's all very interesting to watch.  

But something I heard about this past weekend kind of surprised me.  North Dakota Republican Party Chairman Bob Harms attended a $250 per supporter (recommended contribution) riverboat cruise last week on the Missouri River in Bismarck/Mandan.  The event was held for supporters of the Democratic-NPL Party state Senate Caucus.  

When I heard about this I did not believe it. I said, "Show me a picture and I might believe it." Well, I got pictures this morning. Here's one showing GOP Chairman Harms at the Democratic-NPL senate caucus supporter's cruise:

photo_4

Now, you might be saying to yourself, "Chad; isn't having Harms -- the NDGOP chairman -- at a Dem-NPL meeting like inviting the fox into the henhouse?"  Or, "He must have stuck out like a turd in a punchbowl." I would beg to differ. As more and more Republicans abandon the NDGOP and support Democratic-NPL candidates because of the level of crazy in the Republican Party, why not have the Republican Party chairman show his support for Democratic-NPL candidates?  

From my perspective, by showing his support for Democratic-NPL candidates in the North Dakota senate race, Harms is trying to represent the views of the tens of thousands of disenfranchised former North Dakota Republicans who have completely abandoned their crazy party. He's thumbing his nose at the religious zealots and teabaggers, many of whom hold all the other leadership positions in his party, and telling them there is at least one person -- and only one -- in a North Dakota GOP leadership position who will bow to most of their nutbaggery, but not all of it.

I was glad to hear Democrats welcomed Chairman Harms to the event. It's good to see the Republican Party chairman supporting all the solid candidates the Democratic-NPL Party is offering up to serve the state in the North Dakota Senate.

 
<< Start < 1 2 3 4 6 8 9 10 > End >>

Page 6 of 253