North Dakota Industrial Commission Needs To Defend Their Approach To Oil Spill Fines
Before the holidays I interviewed Attorney General Wayne Stenehjem – who, as you know, is running for governor – and one of the questions I asked him was about criticism of the state’s handling oil and salt water spills in the oil patch.
“I’m actually very pleased and satisfied with what it is we’re doing,” he told me.
“Sometimes we don’t get the message out good enough,” he added.
Stenehjem is no mere observer of this policy. As Attorney General he is one of three member of the North Dakota Industrial Commission which oversees the oil and gas industry in the state, and so are Governor Jack Dalrymple and Agriculture Commissioner Doug Goehring, all Republicans.
He’s clearly right about not getting the message out, because clearly the folks in Williams County – home to Williston and the epicenter of the state’s oil boom – don’t seem to have heard it.
[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]To hear local elected officials in the oil patch complain about it in an official way – the Williams County Commission is sending a letter to the Industrial Commission opposing a fine reduction for a recent spill at Blacktail Creek – should serve as a wakeup call for Stenehjem and the other members of the Industrial Commission.[/mks_pullquote]
“I don’t know how to describe the state’s attitude toward spills,” Williams County Commissioner Dan Kalil told reporter Renée Jean before the holiday. “They have a penalty system in place and usually settle them for a small percentage of the penalty. As we all know, things have changed in the state. This is a moment in time when we need to re-examine that attitude, that leniency.”
What Kalil is referring to is a practice of the state announcing big fines for spills and then later reducing them, something that has drawn all sorts of fire. But typically that fire comes from far-left environmental activists and national media outlets.
To hear local elected officials in the oil patch complain about it in an official way – the Williams County Commission is sending a letter to the Industrial Commission opposing a fine reduction for a recent spill at Blacktail Creek – should serve as a wakeup call for Stenehjem and the other members of the Industrial Commission.
They have got to do a better job of explaining why they’re reducing fines. Because it’s perfectly defensible policy if you recognize that the top priority when it comes to addressing spills is the cleanup.
There are some who, for ideological reasons, see the oil and gas industry as the enemy and spills as an opportunity to attack them. But the North Dakota Industrial Commission has, for years now, taken the position that it is better to use fines as leverage to ensure that the oil and gas industry cleans up the messes they make and treats the people who own the land fairly.
[mks_pullquote align=”left” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]We all want to stop spills. Working to understand how they happen, and how they can be prevented, is a lot more important than how big the fines are after the fact.[/mks_pullquote]
The belief is that automatically slapping any given company with a big fine after a spill leaves that company with little incentive to be cooperative when it comes to making things right with the environment and property owners.
That, again, is perfectly sound and defensible policy if you believe that the goal is an efficient and thorough clean up.
Some might argue that reducing the fines removes deterrence for spills in the first place, but I’m not sure that’s true. Given all the bad press that goes along with any given spills – not to mention the tens and sometimes hundreds of millions in losses due the spill itself and the resulting cleanup – I think there is plenty of deterrence for spills.
What we need to work on is ensuring that spills don’t happen in the first place. That’s something the Energy and Environmental Research Center and the University of North Dakota is working on. John Harju, a VP at the EERC, said in December that his organization is working on getting more information about spills to understand better how and why they happen but they’re often stymied because the official reports contain little data about the causes of spills.
“If we don’t learn from our mistakes, how do we learn?” he asks. That’s a fair question, and something the NDIC and other state policymakers should work on.
Certainly work on the preventative side of spills is going to bear more fruit than upping post-spill fines.
We all want to stop spills. Working to understand how they happen, and how they can be prevented, is a lot more important than how big the fines are after the fact.
