State agencies clash over review of proposed 1280-acre well unit near Killdeer

By Sid Pranke

Killdeer, ND area map

When it comes to historical preservation concerns over proposed drilling at a 1,280-acre Little Knife leasing unit near the Killdeer Mountains, oil development trumps cultural and archaeological interests, because the state follows an 1988 Attorney General precedent.

Issued on Oct. 3, 1988, by North Dakota Attorney General Nicholas J. Spaeth, the precedent known as “Attorney General’s Opinion 88-23” can be viewed online at ag.state.nd.us/Opinions/1988/Formal/88-23.pdf.

The opinion was given at the request of James E. Sperry, who was then superintendent of the N.D. State Historical Society.

An excerpt of the opinion reads: “It is my further opinion that the Board of University and School Lands may deal with historical, archeological, paleontological artifacts and sites without supervision of the State Historical Board, when such supervision would conflict with the Land Board’s fiduciary responsibilities to trust property.”

A more commonly-used name for the “Board of University of School Lands” used today is the North Dakota Department of Trust Lands.

The opinion ends with the following statement: “This opinion … governs the actions of public officials until such time as the question presented is decided by the courts.”

Rancher Loren Jepson, who opposes drilling near his property, as well as lease operator Hess Corp., have both hired attorneys to represent their interests in the matter, but it’s too soon to tell if the precedent will be tested in court over this case.

A recommendation by the state is expected at a Industrial Commission meeting in Bismarck sometime in December.

Attorney Chuck Peterson of Mackoff Kellogg Law Firm in Dickinson, who represents Jepson, said the protection of cultural interests in the area are a concern, since many Native American artifacts have been found in the area.

At the initial Oct. 24 IC Oil and Gas Division hearing, Hess Corp. legal counsel John Morrison of Crowley Fleck objected to Jepson’s claims of artifacts in the area, saying Jepson wasn’t an archaeologist or paleontologist.

In a Nov. 6 interview, North Dakota Director of Archaeology and Historic Preservation Fern Swenson said a thorough review of the 1,280-acre site has not been done, and that it would take her department at least a month to do that, given current staffing levels at the agency.

In addition, Swenson said in the past, the state has used federal grant money from the National Park Service to fund a survey of state fands such as the Killdeer area land. To receive the grant money, her department “would come up with a scope of work. We would identify some areas that needed to be surveyed,” Swenson said.

According to North Dakota State Land Commissioner at the N.D. Department of Trust Lands Lance Gaebe, neither what Swenson describes as a “thorough review” or a federally-funded survey of the land are remotely likely to take place.

When asked to comment on the information Swenson provided during an interview, Gaebe stated that it appears that he and Swenson are not on the same page.

“I guess that there’s a whole new threshold they’d (the State Historical Society) like to put in place is something that I have to evaluate,” Gaebe said. “I guess I believe that we (his department) have made those allowances based on the correspondence and the recommendations we’ve already gotten (from the Historical Society).”

Gaebe said if the State Historical Society were to make a formal request that the department needs more time to look at the Killdeer-area site, “I would say we would sure try to facilitate that review. We do site inspections and they can sure join us in those reviews. I don’t have the luxury of time in a lot of cases.”

Given the rapid pace of drilling in the state, Gaebe said he has “pressure every day from (oil) operators that want this done yesterday. Because they’ve leased these things on time frames and if they don’t have drilling activity by the end of leases, the leases go away.”

Though he dismisses the possibility of a more lengthy or federally-funded review for the Little Knife leasing unit, Gaebe defends what his department has recommended.

“We’re away from the known battlefield as far as we’re able to be and still be on the spacing unit. We’re as far away from those sites that the Historical Society identified and we’re on some of the flattest ground on that particular spacing unit,” he said. “Not to say there couldn’t be a week’s long inspection, but my point is we’ve taken great pains to avoid all the areas that we are aware of.”

Jepson’s attorney, Chuck Peterson, said his client is asking Hess Corp. to move its planned wells to a different location that is less disruptive and safer, citing traffic and dust concerns along with historical and cultural ones. Peterson said Hess Corp. needs to “address more factors than ‘this is just the easiest place’ to drill their wells. They need to consider the impact their plans have on all the people that live in the area, as well as the public who use these last remaining public lands in this area.”

Hess Corp. officials provided a comment regarding the proposed well controversy, but then retracted its statement after learning The Drill’s policy of providing specific attribution to comments. Hess Corp. wanted to attribute its comments to a “company spokesperson.”

New York-based Hess reported estimated third quarter profits of $557 million, up 87 percent from $298 million during the same period in 2011. The increase was credited to resumed operations in Libya and growing production from the Bakken. Production from the Bakken oil shale play in North Dakota increased to 62,000 barrels of oil equivalent per day, up from 32,000 in the third quarter of 2011.

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