A series of class action lawsuits filed by a lawyer who has, in the past, done extensive work for left-wing activist groups like the Dakota Resource Council and the Sierra Club is supposedly about protecting mineral owner rights who are being hurt by the waste of valuable gas when it is flared instead of captured.
But can that be true? It’s important to understand that flaring is a by-product of oil production in North Dakota, and while oil producers are doing the best they can to capture and sell as much of the gas as possible (the amount of gas captured has roughly tripled since 2010), infrastructure limitations and the low price of natural gas in general has made it impossible, at worst, and unprofitable at best to capture all the gas produced in North Dakota.
If these lawsuits are successful in roadblocking flaring – which, to be clear, is a problem which merits debate – it would be devastating for mineral rights owners as it would also block the production of the oil that comes up with the gas.
Ron Ness, head of the North Dakota Petroleum Council, explains to the Williston Herald:
“It’s rather confusing,” he said. “You have mineral owners who get benefits on terms of 80-to-1 on oil production from those wells and, ironically, if you don’t allow those wells to produce, you don’t produce the oil.”
Meanwhile, the lawyer bringing the lawsuits continues to insist this is about protecting mineral rights owners:
A statement from Bismarck attorney Derrick Braaten, who represents some of the plaintiffs, called Bakken natural gas some of the most valuable in the country due to its density.
“The lawsuits seek to force operators to comply with state law and pay royalties to mineral owners on the value of flared gas, and by so doing create a compelling economic incentive for producers to reduce and eliminate the wasteful practice of flaring,” Braaten said.
The key to understanding this lawsuit is recognizing that gas production in North Dakota is largely a by-product of oil production. The gas produced only has valuable for mineral rights holders if there is infrastructure to capture it, and profit to be had by selling it. If oil producers have to wait until those things are true before they can make a well produce, there will be serious delays in production, and maybe no production at all. Which I have to think is sort of the goal for a lawyer who has, in the past, represented the Dakota Resource Council and the Sierra Club in other lawsuits.
If Braaten gets his way, North Dakota mineral rights owners would get less from their property, not more, both in the long and short term.