An Oil Well On A National Wildlife Refuge?

Sometime late this week, some dedicated staff people at the North Dakota Game and Fish Department are going to decide whether or not it would be a good idea for an oil company to drill an oil well in the middle of a national wildlife refuge in western North Dakota.

When they decide, they are going to tell the North Dakota Trust Lands Department their decision. Then someone at the Trust Lands Department (formerly the State Land Department, for you old-timers like me) is going to decide if they agree.

If the Game and Fish Department and the Trust Lands Department decide it’s okay, then in a couple weeks, the Trust Lands Department is going to offer to lease 160 acres of mineral rights in the middle of Stewart Lake National Wildlife Refuge out in Slope County on the edge of the North Dakota Bad Lands. An oil well likely would soon follow.

If they both think it is a bad idea (which is what I am guessing they will do) then the Trust Lands Department might just make a call to a company called Empire Oil Company, which wants to lease those 160 acres in the middle of that refuge, and say “Sorry, we think that is a bad idea. Maybe you should go lease minerals somewhere else.”

Or more likely, they’ll tell Empire Oil Company they can lease the minerals, but if they want to drill for oil under that land, they’ll have to put the well somewhere outside those 160 acres and go in and get the oil horizontally. Which the oil company probably could do. We’ll see how bad they really want the oil under that National Wildlife Refuge.

Here’s the deal. I’ve written about this process before. Four times a year, the Trust Lands Department holds a mineral acre lease auction. They lease the rights to drill for oil under land they own, or which they used to own but now own only the mineral rights under it. The list of parcels of state-owned land on the sale bill is made up of requests, called “nominations,” by oil companies who have spotted some state-owned minerals that are not currently leased to anyone and which those companies would like to get their hands on, with the ultimate goal of drilling an oil well there.

Once the oil companies have made their nominations, the Trust Lands Department puts a list of all those tracts nominated on their website. Then people like me, who don’t have anything better to do with their time, pore over the list to see which state lands are being offered up. I do this, as do other people, because in the past, the Trust Lands Department has put some pretty sensitive lands on that list, and if we catch it in time, sometimes they can be persuaded to remove those tracts from that list. You might remember that was the case a couple years ago with some state-owned land on the west side of Bullion Butte, and after some publicity on that land, the company which was wanting to lease that land withdrew its request.

In fact, after that fiasco, the Trust Lands Department adopted a new policy: other people in state government were going to pore over that list too, to see if there are any sensitive lands on the list. Right now, this week, the state’s archeologists, paleontologists, historians and wildlife managers are going through the list, and if they find any land that might need some special precautions, they’ll tell the Trust Lands Department about it, and, hopefully, the Trust Lands Department will put some stipulations in the lease to protect any archeological, paleontological, historical or wildlife resources that might be threatened if an oil well was drilled there.

What the Game and Fish Department is going to find is that 160 acres of state-owned minerals on the list is indeed inside the Stewart Lake National Wildlife Refuge, and they are going to have to make a recommendation on what to do about that. Steve Dyke, the Game and Fish Department’s Conservation Section Supervisor, told me his experts will make their recommendation this week. And then he’ll pass it along to Drew Combs, who manages the minerals for the Department of Trust Lands, and who will decide what to do next. In past lease sales, Combs has put restrictions on leases, telling companies they can lease the minerals but can’t drill a well there. The stipulation is called “no surface occupancy.”

A little bit about Stewart Lake National Wildlife Refuge. The photo on the left was taken this week by my wife Lillian. It sits in the shadow of Black Butte (in the background in the photo), North Dakota’s second-highest butte, so if you want to find it, look for Black Butte. The refuge itself is pretty small, as refuges go, about 2000 acres, of which the U.S. Fish and Wildlife Service owns just 640 acres and leases the rest from private landowners. It is located about 10 miles southwest of Amidon, the county seat of Slope County, and just a couple of miles off U.S. Highway 85. It was established in 1941, after the government built a small dam during the WPA years for use by local ranchers on a creek for which I cannot find a name. The lake behind the dam covers about 200 acres in a normal year, and the wetland behind the dam “serves as breeding, brooding, and migration habitat for migratory birds and other wildlife,” according to the Fish and Wildlife Service. The FWS also says “Large wetlands are not typical in western North Dakota and Stewart Lake serves as an oasis in a generally well-drained landscape. The uplands surrounding the impoundment are characterized by short- to mid-grass prairie and planted wildlife cover. Stewart Lake was once a popular gathering place for picnicking, swimming and fishing activities. The Service does not allow hunting or fishing at Stewart Lake National Wildlife Refuge.”

There’s no fishing there anyway because the lake is not stocked by the state game and fish department. But over the years it has served as a popular recreation place. Lillian, who grew up near there, says her family picnicked there many times when she was a girl. Her mother, Marian, said that her dad, Lillian’s grandpa, helped build the dam, and that she and her siblings fished (bullheads) and swam there all the time as youngsters. She said there was a nice swimming area with a diving board, and a picnic area with rock shelters built by the CCC.

The refuge doesn’t have an on-site staff. Todd Gallion, the manager at the Lake Ilo Wildlife Refuge north of Dickinson, a hundred or so miles away, keeps an eye on it, and visits a few times a year. When I talked to Gallion this week, he was not aware that there was a request to lease the minerals inside the refuge, but promised to check on it. He wasn’t keen on the idea of a well inside the refuge, and said he would be surprised if the state folks would not work with him to prevent that. One problem is, much of the rest of the land inside the refuge is privately owned, and likely so are the minerals. I haven’t been able to find out who owns the rest of the minerals and whether they are leased, but I’d guess Todd would start checking on that now that he is aware there’s oil interest in the area.

So what about Empire Oil Company, the firm that wants to lease the minerals? According to their website, they are a mineral leasing company headquartered in Williston, but they are not an actual oil well drilling company. Apparently they buy mineral leases, and then collect royalties on them if they find an oil company that wants to drill a well there. I think that’s how that whole system works. Their website says ”We are staffed by a skilled group of Landmen and support personnel with high levels of experience and expertise. We realize that the most difficult decision one encounters in business is developing a sense of trust. Empire Oil Company is committed to serving clients with the highest degree of integrity, confidentiality, and professionalism.”

Well, we’ll see. Their company president is named Bill LaCrosse, and he put his e-mail address on his website, so I sent him an e-mail asking him what his intentions are, but I haven’t heard back from him. I do know he’s making a big move into southwestern North Dakota, outside the edges of the Bakken. He has nominated a total of about 18,000 acres of state school land minerals for lease in Slope County alone at the upcoming sale, which is set for August 6 in Medora. I don’t know if any more of it is critical wildlife habitat, or has any historical, paleontological or archeological value, but that’s what our state experts get paid to find out, so I’ll be interested when the final list is issued in a couple weeks to see if any stipulations have been added to the leases up for auction. I might even go to the sale just to see what LaCrosse is up to. And whether this tract even ends up finally being on the sale list. Medora’s a pretty nice place to go to in August.

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One Response to An Oil Well On A National Wildlife Refuge?

  1. Treehugger says:

    I have noticed in the past that a lot of these state tracts get leased for $1-2 per acre for five years. Is there really any competition for these tracts or do speculators like Empire Oil simply nominate a tract and then bid the minimum $1/acre knowing nobody else will be bidding? It seems the state could be losing a lot of money by having such a low minimal bid and allowing oil companies and speculators to determine which state school tracts are up for leasing. No private landowner in his right mind is going to lease his mineral rights for $1/acre.

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