A Collaborative Approach To Regulating The Oil Industry. Yeah, Right.

In North Dakota, if you’re an oil field company and you violate laws or regulations, you sometimes get fined for your misdeeds. Sometimes the fines are as much as $200,000. Sometimes they’re only $50,000, or $10,000. No matter. No one ever pays them. Because the philosophy of the North Dakota Industrial Commission, and its chairman, Jack Dalrymple, our state’s Governor, is “let them off with a warning.” So if a fine is ever actually levied (often they are completely suspended), the violating company only pays ten per cent of the amount fined. The other 90 per cent is that “warning.”

In the words of Dalrymple’s chief “enforcer,” Lynn Helms, director of the Industrial Commission’s Oil and Gas Division, “We can hold a large suspended penalty over their heads for one to five years and they agree to pay immediately with no court process if they violate again. We don’t see much recidivism this way.”

Indeed, a reporter for the Center for Effective Government wrote last year “It turns out that it is a common practice for state regulators to collect only 10 percent of the original fine, suspending the remaining 90 percent for a year. If the company does not commit the same violation during that time, the remaining fine is forgiven. Lynn Helms, Director of the North Dakota Department of Mineral Resources, told The New York Times that this is part of a “collaborative approach” to regulating drilling. He believes it provides an incentive for industries to improve their practices and fosters a trusting relationship between industry and regulators.”

Maybe a little too “collaborative.” Maye a little too “trusting.” Helms says if you violate again you’ll face the consequences. Except no one ever does. Face the consequences, that is. Take Oasis Petroleum, for example. Please. Take them. Far away.

They’ve been all over the news this week. Oasis Petroleum has “killed” an oil well which blew out last week, spreading an oily mist over the White Earth River, which runs into Lake Sakakawea. The blowout released more than 100,000 gallons of oil and more than 75,000 gallons of poisonous saltwater brine before it was brought under control. State Health Department officials are on the scene this week assessing the damage to surrounding land, the river and aquatic species, and watching carefully to see if any of the brine or oil reaches Lake Sakakawea, from which much of western North Dakota draws its drinking water. According to a Reuters news story, a light sheen of oil was spotted on the White Earth River, and at least 16 absorbent booms had been installed in an attempt to keep the oil from moving downstream toward the lake.

That’s the news today. Let’s talk about that “recidivism” Helms mentioned earlier. Here’s the news for the last year or so.

September, 2014:   The North Dakota Health Department reported an oil and frac water spill at an Oasis Petroleum well site 11 miles northeast of White Earth in Mountrail County (about 25 miles from the incident reported this week). 125 gallons of oil and 15,000 gallons of frac water were released due to a tank overflow.  Here’s the North Dakota Health Department’s Environmental Incident Report.

October 2014:  A well site owned by Oasis Petroleum in western North Dakota released 31,000 gallons of brine, according to the North Dakota Department of Health. The spill occurred 11 miles northwest of Arnegard, in McKenzie County. Oasis said the leak was the result of a corroded pipe connection. Release of production water ran off location and down a grassed ravine to a tributary of Timber Creek, which runs into Lake Sakakawea, from which much of western North Dakota draws its drinking water. The Health Department determined that groundwater was significantly impacted by the salt brine as well. Here’s the North Dakota Health Department’s Environmental Incident Report.

December 2014:  The North Dakota Health Department reported a spill at a saltwater disposal well owned by Oasis Petroleum north of Powers Lake in Burke Count. Almost 4,000 gallons of oil and more than 20,000 gallons of saltwater were released as the result of an equipment malfunction. According to the Health Department, the oil and brine were sucked up, and contaminated soil disposed at solid waste disposal. Here’s the North Dakota Health Department’s Environmental Incident Report.

January 2015:  The North Dakota Department of Health reported that more than 20,000 gallons of oil and nearly 15,000 gallons of brine were released from a well owned by Oasis Petroleum in western Williams County as a result of a tank overflow. The Department reported that spray was visible to the southeast onto a tilled field, extending  a distance of more than 500 feet. The Department said in its incident report “Area reported (by Oasis) as impacted appears to be underestimated.” Wow, that’s a surprise. Who woulda suspected that? Here’s the North Dakota Health Department’s Environmental Incident Report.

March 2015: The North Dakota Department of Health reported more than 15,000 gallons of brine leaked from a pipeline owned by Oasis Petroleum in Burke County. There’s a very sketchy Environmental Incident Report which says the brine reached a nearby slough and the oil company was pumping the slough dry to get rid of the brine.

May 2015:  The North Dakota Department of Health reported more than 45,000 gallons of saltwater leaked from a pipeline owned by Oasis Petroleum in northwest North Dakota near Powers Lake, and that some of it reached Schmisek Lake via a tributary. A Health Department investigator visiting the site a few days after the leak occurred reported that crews were working throughout the Smishek Lake tributary with vacuum trucks on location “dewatering the creek.” Uffda. Fish samples were taken from Schmisek Lake to determine if there were any impacts to fish. The lake is a well-known local fishery for walleyes, perch and pike. The Department reported 15 fish samples were taken–5 northern pike, 5 Yellow Perch, 2 Bluegill and 3 Walleye. The samples were frozen and shipped to a qualified lab. There are no results from the lab tests on the Health Department’s website. I’ve asked the North Dakota Game and Fish Department if there has been any follow-up, but have not heard back from them yet. Here’s the North Dakota Health Department’s Environmental Incident Report. This one actually made national news, contributing to North Dakota’s national reputation. Here’s a story from the Seattle Times. Y’know if we’re not careful, some big television stars are gonna start taking after us.

And then there‘s this:

January 2015: Two employees of Riverside Welding, based in Williston, were badly burned at an Oasis Petroleum well site near Ross in Mountrail County. The men, Kyle Stipcich, 27, and Jonathan Henderson, 30, were working inside an oil treater when it caught fire. Jenni Dale of the Mountrail Sheriff’s Department said in a statement, “Henderson was reported to have jumped into a snow bank to extinguish the flames, and Stipcich was put out by three individuals that were nearby.” Stipcich was burned on the lower half of his body and Henderson was extensively burned on his upper body, including his face and head. Both men were wearing flame-resistant clothing at the time. Henderson was admitted to Trinity Hospital in Minot and Stipcich was flown to the Regions Hospital burn unit in St. Paul, Minnesota. I don’t have any information on their conditions today. I hope they are recovering.

So, Jack, and Lynn, how’s that “recidivism” thing working out? That “collaborative approach?” I didn’t go back any further than last September in the Health Department’s records, but anybody want to bet that the Oasis record for the previous year was just as bad? And the one before that? One thing I did learn is that on the Health Department’s website, under the category “Oilfield incidents that occurred within the last 12 months which were not contained,” Oasis was responsible for every single incident in which the amount spilled was more than 500 barrels. Every major spill was an Oasis spill. And I can’t find any evidence that Oasis ever paid a fine. Ever. Maybe I just don’t know where to look.

Oasis is a bad actor, but they’re just one of many bad actors in the oil field. Do you think, maybe, a little enforcement might help?

Footnote: I did a little Google search as part of my research for this story, and I found some interesting websites you might want to take a look at.

• A website called Bakken.com actually maintains an Oasis Petroleum Archives page. And it’s got a lot of stories about Oasis spills.
• There’s a website called Oil Spill Daily which reports on—you guessed it—Oil Spills. Daily. North Dakota makes the front page pretty frequently.
• And one of my favorites, a site called “No Fracking Way,” which keeps a list of what it calls “Frackastrophes.”

Somebody out there is watching. It‘s just not the North Dakota state regulators, or the North Dakota news media.