Oil royalties tied up in alleged state land grab

The following is my article "Oil royalties tied up in alleged state land grab," which appeared in Vol. 109, No. 12, of the McKenzie County Farmer for Wednesday, Oct. 5, 2016

North Dakota may be claiming billions of dollars of mineral rights under Lake Sakakawea in an alleged land grab that would be the largest attempted in state history. 

Statoil and other oil companies have held oil royalties in escrow for federal and private mineral rights owners under the reservoir until various lawsuits are resolved. 

Meanwhile, the North Dakota Petroleum Council issued a Sept. 14 memo stating its belief that the state is using a court case regarding river title to trigger a precedent laying claim to all of Lake Sakakawea's lake bed and ultimately the reservoir itself. 

"The argument for such a precedent is legally flawed, flies in the face of the federal government's takings of the lake bed and contradicts the state's long history (unbroken until now) of claiming ownership only to the submerged riverbed within the lake bed," the NDPC memo said. 

North Dakota has commissioned a survey to determine an ordinary high water mark, something the federal government claims as its jurisdiction as the U.S. Army Corps of Engineers built the Garrison Dam which created Lake Sakakawea in 1954. 

North Dakota originally had mineral rights between the ordinary low water marks of its navigable rivers, including the Missouri and Yellowstone rivers in the oil-rich Bakken region. 

A 2013 ruling by the North Dakota Supreme Court extended the state's title to the ordinary high water mark between the river's shores, yet now the state is reportedly claiming federal and private mineral rights between the ordinary high water marks of Lake Sakakawea, the NDPC memo said. 

The state has also protested Bureau of Land Management resurveys of four townships in 2014, claiming, "these maps are not an accurate reflection of the (ordinary high water mark)," then-state engineer Todd Sando and state land commissioner Lance Gaebe wrote to Jamie Connell, a BLM director, alleging the BLM claimed state parcels. 

The state has also not told attorneys of private lake mineral rights owners where it owns minerals as the BLM and other federal agencies deny its newly commissioned survey. 

"We have personally attempted to talk to the Attorney General's Office," attorney Dennis Johnson said. "They wouldn't even let us make an appointment to make an appointment to visit with them about this. 

"We have one simple question: Are you claiming that the new high water mark is the shore of Lake Sakakawea? They won't say yes. They won't say no. That concerns us as their unstated purpose is to say that Lake Sakakawea's shoreline is the new ordinary high water mark." 

Johnson added such a land grab would be the largest attempted in state history, and "the taking of private property rights without due process is wrong." 

Tessa Sandstrom, NDPC spokeswoman, said the council feels any such claim by the state goes against the original boundaries of the Missouri River, acquiring minerals that should still be owned by the original mineral rights owners. 

Liz Brocker, Attorney General's Office spokeswoman, declined to comment Friday, Sept. 23. 

"We are not able to comment on that issue," she said. "We do not comment on ongoing litigation." 

State engineer Garland Erbele also declined to answer questions. 

"I'm not going to answer anything," he said. "We are under litigation right now so it's really inappropriate for me to respond to any of the questions." 

Johnson said the Missouri River and Lake Sakakawea are separate bodies of water, the latter formed from the federally constructed Garrison Dam. 

Moreover, the federal government acquired over 340,000 acres of land for the project by purchase or eminent domain. 

Many private landowners whose land was flooded still own mineral rights under the reservoir. 

About 350 wells exist under Lake Sakakawea, and as the state has not commented on its mineral rights, "no one's getting paid," Johnson said. 

One case now on appeal, Wilkinson v. Board of University and School Lands, concerned the state claiming the river between U.S. Highway 85 and Montana as original river, but the land and water east appears uncertain. 

"Through recent court filings and oral arguments in the Wilkinson case, it became clear the attorneys for the state were not only claiming title to the bed of the Missouri River based on current conditions of the river from the Montana state line to the Highway 85 bridge, but the state is actually seeking to claim title to the entire Lake Sakakawea lakebed," the NDPC memo said. 

For almost two years, Johnson and other attorneys have attempted to ask the state to indicate where its minerals are. 

However, state legal counsel have made comments suggesting where North Dakota's mineral rights lay, the NDPC memo said. 

"Lake Sakakawea and the Missouri River are indistinguishable bodies of water under the law ... simply because the Corps dams up a river, and backs up water and gives that water body a new name, it does not mean the water body did not exist at statehood," one state oral argument said in the Wilkinson case this year. 

"Our office believes that this is a case where the federal courts should have jurisdiction and not the state," Johnson said. 

The historic Missouri River channel comprises all of McKenzie County's northern boundary. 

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