Big Oil, Bad Air

Published — July 21, 2014 Updated — July 25, 2014 at 11:41 am ET

Energy influence in North Dakota is expanding — so what?

A Q & A with reporter Nicholas Kusnetz about the oil and gas industries’ growing influence in North Dakota


With so many interesting stories related to energy, and North Dakota in particular, how did you come up with this story, about the expanding influence of oil and gas in state politics?

I actually did my first reporting on the oil boom in late 2011. I have continued to keep an eye on the state and during that period it was becoming big national news. All of the stories talked about the sheer scale of development, both the positives and the drawbacks as well as the social impacts and infrastructure of development.

But the one thing I noticed is that oil and gas were able to basically operate how they wanted. What really struck me, one of the most noticeable things was the steep rise in the amount of money given to politicians in North Dakota.

North Dakota is a small state. Running a political campaign is comparatively cheaper, and people know each other, campaigning there is very different than most places in the country. For 2012 there was more than twice as much money than in previous elections and it really seemed to start changing politics in the state.

North Dakota has seen similar booms in the past. In the 1970s it was coal mining and in the 1980s it was an oil boom. How do those periods compare to what is going on now?

Critics of what’s happening now point to those periods as examples of a more responsible way to do things. In the 1970s, they passed extraction taxes and laws to ensure that after mining was done, the companies cleaned up and the state benefited from it. In the 1980s they raised the oil tax to 11.5 percent.

People think now it’s a different attitude, it’s ‘let’s not pay attention to a lot of these issues and let’s just get what we can from the boom when we can get it.’

Why should people outside of North Dakota care about this story?

The oil and gas boom going on in North Dakota is arguably the biggest thing going on in the U.S. energy scene today, and to a large degree, is responsible for the record surge in domestic energy. What was interesting to me is that this is happening in people’s backyards. It was time to close the loop on that, and see how our policies impact real people.

Where are the environmental voices in North Dakota?

They are few and far between. A lot of people in the state do support the oil and gas industry and drilling, and that’s worth noting. But more and more people are starting to question the way things are going, in particular the issue of flaring. People in the state are really getting fed up with this.

Some national environmental organizations are starting to get involved, the Environmental Defense Fund hired a local lobbyist who I actually interviewed because he is a Republican who previously worked for the energy industry. He is one of those people who saw this flaring issue and felt he had to get involved.

In the article, the chairman of the North Dakota Petrolium Council, Ron Ness, says the industry doesn’t always get its way, can you think of an example of that?

There’s really only one that people pointed out to me, and that’s cutting the oil taxes. North Dakota doesn’t have the highest taxes, but they are pretty high at 11.5 percent, plus various incentives. The industry has been pushing to cut that and a tax cut was pushed last session that the Senate passed. But Democrats who are a minority in both the Senate and House, characterized the cut as a reckless squandering of public money, and the public outcry was enough that the House didn’t pass it.

That was pretty much the only major example I would say. None of the tighter regulations passed without being amended or gutted of their original intent.

One of those is the “extraordinary places” example, when the attorney general proposed a buffer zone around certain places, where the Industrial Commission can solicit public input about drilling. The industry asked not to allow it on private property and to restrict the buffer in public places, and the commission pretty much did what the industry asked.

Is there any concern for accidents?

There are a lot of spills. The state says most of the spills are contained, and that may be, but a lot of those are not contained. Last year there were 1,700 spills of wastewater and oil. The state points out major spills were contained, but wastewater from wells is very saline — and very harmful. The only option is to dig out land and replace it. There are cases where it hasn’t been cleaned out for years yet, and there are farmers who have lost chunks of their property.

Another concern is air quality. A lot of people who live near flares have reported health issues, very similar to what was reported in Texas, and the state hasn’t done any testing of local issues like that, so there’s no way to know whether that is related to flares. The state has air quality monitoring network — eight to ten around the state, but only one in the heart of the drilling area. If I have a well 700 feet from my home and there’s a flare on it, there’s no monitoring it at the local level.

How has the boom influenced other parts of North Dakota, beyond politics and the environment?

Back when I decided to do this story about oil and gas in the state, I wanted to take a look at what influence if any that has in civil society, beyond politics. A lot of sources were mentioning big gifts to museums and this state Heritage Center, and I started to look and saw that a lot more money had been introduced to these institutions.

The University of North Dakota, for example, received $10 million from Continental Resources and their CEO Harold Hamm, and in return they renamed their geology department the Harold Hamm School of Geology and Geological Engineering.

At North Dakota’s Heritage Center, the state approved a $52 million revamping of the center and said $12 million must come from private donations. At least $6.5 million came from energy companies based on gifts that were made publicly.

You see these names everywhere. It’s not that the oil industry is buying direct influence. It’s not like they are controlling the exhibits, but I talked to a professor of anthropology at the University of North Dakota who talked about trying to team up with other professors to study air and water quality and he couldn’t find one professor that would partner with him. They all said, ‘that would be interesting, but I don’t want to get into it.’ It’s not wanting to bite the hand that feeds you.

What questions remain?

In a more general sense, over the last several years, what some have seen as the chaos of development, the deteriorating roads, the thousands of spills, the burning off a third of the gas, some officials have said this is part of the early stages of development and that things will get better. So the question then is, is this true and will things get better?

Flaring is a good example of that. Nearly a third of the gas that wells produce gets burned off, the companies have said they were not really prepared for how much gas was going to come out of these wells. The state has just introduced a new set of rules to limit flaring, so we are still waiting to see if these rules are going to be effective or not.

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