ND Industrial Commission: Unprofitable oil is not economic waste

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Despite oil prices and production down across the state, North Dakota’s Industrial Commission ruled Tuesday unprofitable oil will not be classified as economic waste.

The decision comes after a hearing in May, in which just three parties testified out of 45, in support of state intervention.

Many landowners and tribal leaders testified that the state should not get involved, and the free market should be allowed to repair itself.

After brief discussion, the board unanimously voted to deny the determination of waste.

“This is probably the best way to go, and let’s let the private sector hammer out some of these things and where government can assist and intervene we’ll do so, but it’s probably best if we don’t go down this road,” said North Dakota Agriculture Secretary Doug Goehring, a member of the Industrial Commission.

The head of the state’s Mineral Resources Department, Lynn Helms, spoke to the commission Tuesday afternoon, recommending they deny the request.

He told KX News the testimony in May did not support the idea that waste was occurring in the state.
Helms says he thinks the commission made the right decision today.

“Rather than the market and the productivity of the well determine what their royalty check was going to look like, or what the tax revenue to the state was going to look like, the Industrial Commission would be dictating what each individual well was able to produce and that would limit everyone’s royalty check and it would limit the tax revenues to the state,” said Helms.

Those who disagree with the decision have 30 days to appeal in district court, but that’s not expected to happen at this time.

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