A One-Act Play

Act 1, Scene 1

Tuesday afternoon, January 28, 2014

Stage is dark, we hear the sound of a cell phone ringing, ringtone music: “Take the Money and Run.

Man’s Voice: Hello, this is Jack.

Hi, Jack, Harry Hamm here. Boy it sure is nice to have the Governor’s private cell phone number so I don’t have to go through all the trouble of bothering your girl out front there.

No problem, Harry, it’s important for us team members to stay in touch. What’s up?

Well, a few of the boys are in town, and we thought we might get together for steaks and scotch tonight, and we thought you might enjoy a little getaway before your big Industrial Commission meeting tomorrow. Seven o’clock in the ballroom at the Radisson?

You bet, I’ll be there.

Scene 2

Tuesday evening, January 28, 2014

Ballroom, Bismarck Radisson Hotel

Well, Hi there, Jack, did the limo driver I sent for you have any trouble finding us?

Nope, just fine Harry. Gosh that was nice, I remember when the Governor used to have a limo and a driver, back before that last Governor from Casselton moved in here and scrapped it for his old beat up Suburban. Thanks for the ride.

No problem there, Jack. Say, there’s a few of the boys here you haven’t met, thought you might like to. I know you got stuff in the mail from them, little notes with those big checks they sent, heh, heh, but they thought they’d like to just get a little better acquainted before that big Industrial Commission meeting tomorrow, where that lawyer friend of yours from across the hall is going to bring some silly old policy to you which would really get in the way of how these boys like to do business.

This here’s old Dale Behan from Fort Worth, you might remember he kicked in $27,500 for your campaign a couple years ago, even beating my $20,000 check. Stepped right up there, he did, looking out for you in that tough campaign against that cowboy.

Oh, and look over here, this here’s Don Bottrell from Billings, Diamond B company, big player out there in the oil patch. You remember his $10,000 check, don’t you? And he’s talking to Corbin Robertson, you might remember his $25,000 check. Old Corbin, he’s got Quintana Minerals down there in Houston, big player out in western North Dakota here now. Tell ya what, Jack, looks like these boys have got themselves lined up to greet you, let’s just start down the line here, I’ll let them introduce themselves, where they’re from , and remind you how much their check was for. Those checks got you that big win two years ago, you know.

Lenny Behm, Behm Energy (Me and my two sons kicked in $10,000. Howdy, Governor.)

Chris Anderson International Western Co., Williston $10,000. Good to see you again, Jack.

Dan Borgen US Development Group, Houston, $8,000

Mike Armstrong,. Dickinson, Armstrong Operating (Me and my boy put in $14,000)

Dean Anagost, Kadrmas, Lee and Jackson, (Guys from our company must be up in that $15,000 range by now.)

Michael Forman, I’m a lawyer from Texas who works for a lot of oil companies, $5,000

Thomas Nusz, Oasis Petroleum, Dickinson $7,500

John Earley, Peak Energy Durango, CO,  $4,000

Clarence Cazalot, Marthon Oil, $5,000

Tracy Turner, Armada Pressure Control, Williston, $8,000

John Barry, Las Vegas, $25,000

Mark Johnsrud, Badlands Power Fuels, Watford City, $8,000

Donald Kessel, Murex Petroleum, Humble, TX, $5,000

Loren Kopseng, Rainbow Gas, Bismarck, $6,600

David Roberts, Marathon Oil, Houston, $5,000 (and my PAC kicked in another $5,000)

Chris Anderson, International Western Co., Williston, $17,500

Tony Hauck, Missouri Basin Well Services, $6,620 (and my bosses, Jim and Jody Arthuad, put in another ten grand, besides that $10,000 check to the North Dakota Republican Party)

Bob Mau, Eagle Operating, Kenmare, $26,000

John Schmitz, Gainesville, TX, $15,000

Wow, that was quite a lineup there, Harry, and I’m sure grateful for all that campaign help.

Well, Jack, there’s a few more on the other side of the room—see that line over there? They’d like to shake your hand too. Why don’t you start down that line while I get you another one of those scotches?

Well, hi there, Governor, I’m Michael Moore, just a country lawyer from down there in Fort Worth, Texas, but I know what a pain in the ass us lawyers can be when we go and get ourselves elected Attorney General, and I know you’ve got some important business to look out for us there tomorrow at that Industrial Commission meeting. Oh, by the way, I sent a check your way for $2,500. You can just start down the line here if you want.

Hi, Governor, Mike Ames, Trenton, ND, $1,000

Kent Beers Billings, MT, $1,000

David Bole, Houston, $1,000

Dale Branson Williston, $2,000

Michael Brunstein, Denver $1,500

Eileen Campbell, Marathon Oil, Houston, you met some of my partners over there. I sent $2,500

Robert Clark, Beartrack Energy, $2,500

Elizabeth Claude, Victor Pipeline, Houston, $500

Fred Evans, Stanley, $2,000

Richard Fairservis, Casper, WY, $2,000

Jeff Farstad, Minot, $2,500,

Mike Fitzmaurice, Tri Star Minerals, Minot, $2,000

James Huffman, Williston, $1,000

Ray Kuntz, Helena, MT, $1,000

Michael Lou, Oasis Petroleum, Houston, $1,000

Lee McIntire, Denver, $1,000

Neil McMurry, Casper, WY, $1,000

Stephen Mercer, Northern Plains Energy, Evergreen, CO, $1,500

Kathleen Neset, Tioga (I gave $1,250 and I’d be interested in being on the North Dakota Board of Higher Education in my spare time, if you have any openings)

Cody Ortowski, S&S Directional Drilling, Gainesville, TX, $2,500

Thomas Powers, Williston, $2,000

Lois Scheele, Williston, $3,500

Craig Slawson, Greenwood Village, CO, $1,000

Todd Slawson, Denver, $750

Robert Solberg, Texaco, Houston, $2,000

James Volker, Whiting Petroleum, Greenwood Village, CO, $2,500

Andrew Wambsganss, Southlake, TX, $2,500

John Washabaugh, United Energy, Highland Ranch, CO, $1,000

Martin White, MDU Resources, $2,000

Newton Wilson III, Houston, $2,500

Ronnie Witherspoon, Nabors Petroleum, Houston, $2,500

Paul Yale, Kingwood, TX, $1,000

Frank Bavendick, Bismarck, $3,000

Mike Fitzmaurice, Minot, $3,750

Ray Hunt, Dallas, $1,000

Bruce Hunt, Dallas, $1000 (Yeah, Governor, we’re from THAT Hunt family)

Raymond Plank, Apache, Clearmont, WY, $1,000

Bill Schriock, Gravel Products, Minot, $5,000

Todd Feid, Oasis Petroleum, $2,000

Todd Ballantyne, Ballantyne Oil and Gas, Westhope, $6,000

Mike Cantrell, Continental Resources, Ada, OK (I was wondering if my boss Harry was ever going to send you around. He leaned on me pretty hard to write that $5,000 check. Hoping my good faith effort results in a little $5,000 bonus at the end of the year.)

Lawrence Bender, Bismarck $5,000 (I’m from right here in Bismarck, Governor, but a lot of my clients are in the oil business. Pretty much all of them, in fact)

Well, there you are governor, almost got lost with this glass of scotch in this big crowd of friends of yours. Now, let’s see, where’s Ron Ness? I’m guessing he sent a lot of PAC checks your way. Oh, there he is. Hey, Ron, remind the Governor here about those oil company PAC checks you sent.

Well, sure, Governor, let’s see, there was that $10,000 check from my own PAC, North Dakota OilPAC, and then there was

Chesapeake PAC, Oklahoma City, $6,000

Denbury Resources PAC, Plano, TX, $6,000 (a drop in the bucket, Governor, when you add up to all the money they spent on cleaning up their spills and paying their fines)

Exxon Mobil PAC, Irving, TX, $2,000

YPAC, Los Angeles, $5,000

MDU Resources Group PAC, $3,800

Newfield PAC, Denver, $2,000

Oneok Empoloyees PAC, Topeka, KS, $1,000

QEP resources PAC, Denver, $2,000

Tesoro Petroleum PAC, Mandan, $1,000 (They’d have given more, Governor, but they were saving up in case they had to clean up a big spill up near Tioga or something.)

WPX Energy Inc., PAC, Washington, DC, $5,000

Whiting Petroleum PAC, Denver, $1,000

Conoco Philips, $1,000

Exxon Mobil, $600

Marathon, $10,000

Hess, $25,000

NuStar, San Antonio, TX, $2,500

OXYPAC, Los Angeles, $500

QEP North Dakota PAC, Denver, $1,000

Well, that was quite a little trip around the room, eh, Governor? You know, I had one of my girls add all those checks up that came to you to help with that little old campaign of yours, and it came to about $430,000. Now, how about you and I take a little walk back to that limo and have a little conversation about that Industrial Commission meeting tomorrow morning. You know, there really isn’t much all that special about those special places, is there?

Scene 3

Wednesday, January 29, 2014, 11:30 a.m.

North Dakota Capitol Building

Well, As the Governor and chairman, I’ll call this meeting of the North Dakota Industrial Commission to order. My friend Attorney General Wayne Stenehjem has a little idea for shutting down the oil industry here in North Dakota, so I’m going to suggest he make a motion to postpone (for a long time, I hope) making a decision on his list of what he calls “special places.” Don’t want to stifle free enterprise, you know. All in favor? Motion carries.

 

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Here’s The Map North Dakota Leaders Didn’t Want You to See

Well, I don’t want to always be the bearer of bad tidings, but it is good to know what is going on in the world around us. In the words of British philosopher Sir Francis Bacon, “Knowledge is power.” The Dakota Resource Council has brought us some knowledge this week about bad things happening around us, namely oil industry spills.

The DRC has helped to publicize a map that leaders in North Dakota state government didn’t want you to see.

It is a map of all the oil, saltwater and other hazardous materials spills in North Dakota’s oilfield since 2000. It is ugly. It makes me sad. You can look at it here. It is an interactive map. You can zoom in and out, and click on any of the thousands of little dots that denote a spill and it will take you to a link with the North Dakota Health Department’s oil incident report for that spill. See a dot next to the farm you grew up on? Click on it and find out what happened. It’s that easy.

What you get from this map that you don’t get from the Health Department’s  hazardous material spill website is a sense of the magnitude of the problem and a look at “hotspots” where so many spills have occurred in a small area that it is obvious there is a problem that needs to be addressed by environmental authorities. For example, go to the map and look at the small area south of Marmarth, in the extreme southwest corner of the state, where the map shows more than 200 saltwater spills, 150 oil spills(although most of them small), and 50 “other” spills which included things like the solvent methyldietthanolamine (MDEA), emulsion, drilling mud, oil mist and source water. These spills are outside the Bakken and occurred mostly before 2011, in an area where there was a mini-boom, headquartered in Bowman, in the early part of this century, before all the rigs were pulled out and sent north to the Bakken when that play became so profitable.

But there are plenty of hotspots in the Bakken. You can zoom in on this map right down to individual sections, and there’s a section of land northwest of Tioga , section 7, Township 158N, Range 95W, (on the map it’s at the intersection of 77th St. NW and 107th Ave. NW) where eight saltwater spills have occurred in the past few years. The land in that section must be just toasted.

And the concentration of spills along the shoreline of Lake Sakakawea (from which most of us in central and western North Dakota get our drinking water) is very troubling. (There’s a reason why Wayne Stenehjem included Lake Sakakawea on his list of “Special Places.”) I know that the Health Department is monitoring these, to the extent their resources allow, but they are stretched pretty thin.

But zooming out to see the big picture is pretty scary. Eight thousand dots on this map provide a visual picture of the Health Department’s list. And they’re not all there, at least not yet. For instance, the big 865,000 gallon spill at Tioga last September is not on the map. I’m not sure why, but it might be because the Health Department has taken that spill report off its Oilfield Environmental Incidents list and moved it to its General Environmental Incidents list, and the map is drawn from the Oilfield Incidents list. I don’t know why, they just have. So maybe the mapmaker didn’t find it.

The mapmaker, by the way, is a young fellow out in Montana by the name of Josh Gage. He’s good. He said he just got a new “platform” for his GIS business and wanted to try it out, and so he thought he would make a map like this of his home state, because he had heard of a lot of spills in the eastern part of Montana. Unfortunately, he learned, the Montana records are slips of paper in a file cabinet, not an online database like North Dakota’s. North Dakota’s database, incidentally, is brand new, put there late last year after that massive oil spill at Tioga called our attention to the fact that there were thousands of spills occurring and no one was notifying the general public.

So in the absence of a Montana database, he decided to make a map of North Dakota spills. He called the State Health Department here and asked if he could get access to the database so it would be a simple matter of downloading it and plugging it into his GIS system. He was told “No.” He would have to submit a FOIA request to get that. Well, Josh decided he didn’t have the thousands of dollars or the thousands of hours it would take to make that happen, so he just went to each individual page of the website and copied and pasted all 8,000 entries, 17 per page, one page at a time.

The other thing he couldn’t get from the North Dakota Health Department were the GIS coordinates (latitude and longitude, for us laymen) of the spills, so he could only make the map accurate down to the township, range and section, instead of the exact location of the spills. So each dot on the map is in the proper section of land, accurate to within one mile, not right down to the exact location within that section.

Josh had nothing bad to say about the Health Department. He just told me, when I asked, what would have made his job easier.

Last year I was told by someone who knows, when the Health Department website first went online in early December, that there were three things missing that could be helpful—a map, a downloadable database and GIS coordinates. Young Josh the mapmaker confirmed that for me. There’s no reason those things couldn’t be available, but someone at the Health Department, or, as I said in an earlier post, someone at a higher pay grade, doesn’t want them there. My conversation with Josh confirmed that those are the three things missing.

I asked Josh if he would be willing to contract with the Health Department to put his map on their website and keep it updated. He said “Sure.” That would be a user-friendly thing for the Health Department to do, and pretty inexpensive, too.

But for now, that’s not happening. If you hear about a spill, you can look up the legal description of it on the Health Department website, then go to Josh’s map, which you have bookmarked somewhere else on your computer, and go searching  for it. Looking at it another way, right now you can click on any dot on Josh’s website map and get a link to the Incident Report for that spill, but you can’t click on an Incident Report on the Health Department’s website and get to the map. Wouldn’t that be a nice, convenient, handy feature. At almost no cost?

The Health Department did build a map that would do that, by the way, the map that was vetoed. The Health Department may even be using it internally. But people who have seen that map and this one say this one is much better. So here’s my request to the Health Department:

Dear Health Department: Would you please call Josh Gage at 406-570-1060 and make a deal with him to link your spill site to his map to make your site easier for all of us to use? Thanks.

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A New Approach To “Special Places”

The last thing anyone expected at Wednesday’s North Dakota Industrial Commission meeting was a motion made by Wayne Stenehjem, a second by Agriculture Commissioner Doug Goehring, and a unanimous vote of approval by the two of them and Jack Dalrymple. But that’s what happened. Nor was the motion quite what we expected, but for now, it’ll do.

The meeting was called to discuss Stenehjem’s “Special Places” proposal—his idea to draft an administrative rule developing a list of places where we need to be more careful when we site oil well facilities, and directing oil companies to work with state agencies in the siting process. It was a hastily called meeting and no one was really sure what to expect. Although we didn’t expect anything dramatic, because Agriculture commissioner Doug Goehring was in Africa and could only participate by phone.

I’ve got to say, the Attorney General made a lot of us nervous when he started the discussion, and it appeared he was backing away from his proposal. Turns out he was being a practical politician. Politics is the art of compromise, the art of the possible. Wayne’s been around the capitol since 1976, having been elected to the Legislature at the ripe old age of 23, while he was still in law school. He knows how North Dakota government works, and he knows and understands the players.

So he started out by saying there’s a difference between a formal administrative RULE and a formal agency POLICY, and that perhaps we would be better off adopting a formal policy as to how oil drilling permits would be issued. Stenehjem’s idea, reinforced by Dalrymple, would still include the adoption of a list of those what he calls “extraordinary places,” and as each drilling permit application came in, it would be the job of someone in the Department of Mineral Resources, serving as a sort of “ombudsman” to look at each one, and if one of them was in or near one of these places, it would get some extra attention from state government. The ombudsman would send the application to someone in one of our agencies who would work with the company to determine the best location of the well pad and the roads to it, and measures the company could take to mitigate any potential disturbance in the area as the result of the well. As Dalrymple pointed out at a meeting last month, that happens a lot now, but we don’t have a formal process to GUARANTEE that it happens. That’s what Stenehjem’s proposal would do.

All the time Stenehjem was explaining his idea, Dalrymple was nodding in assent. When it came time for Dalrymple to speak, Stenehjem was nodding as Dalrymple said “What you have brought to us is worthwhile.”

And Dalrymple seemed almost eager to get a motion on the table, asking Wayne to do so. Wayne did. They waited for Goehring, on the phone, to make a second. No response. “Doug, are you there?” he asked into the speakerphone of an Agriculture Commission half a planet away.  “You have to take your phone off mute.”

“I’m here,” Goehring finally replied.

“I thought maybe my voice had put you to sleep,” said Dalrymple. Somebody behind me muttered “Jack’s voice always makes me sleepy.”

“I’ll second the motion,” Goehring said from Africa. Unanimous vote. How about that?

Then details were discussed a little bit. Wayne’s staff will work out a formal document for the group to consider at a future meeting, maybe even as soon as next week, but more likely next month. We’ll see if Dalrymple and Goehring like Stenehjem’s wording. If so, game on, an ombudsman is hired (to be honest, it’s probably going to really take a small staff of 2 or 3 to get this all done in a timely manner so the oil companies don’t feel like they’re being  delayed—not that there’s anything wrong with that) and the process begins.

So, how do people who have been supportive of Stenehjem’s idea feel about this change in course? Well, I haven’t had much discussion, although I suppose I will, but I can weigh in. It’s my blog. As soon as the meeting was over, I walked over to talk to Ron Ness, head of the North Dakota Petroleum Council. “Well, does this get rid of the need for litigation?” I asked. “Well, that’s where it was headed,” he replied.  “Fire the lawyers,” I said as we parted company.

Nobody, including me, has really wanted to talk about that, but it’s been in the back of a lot of people’s minds the past month or so. There’s been the threat that once a rule was promulgated, the oil industry would file a lawsuit to block it from taking effect, and that could take months, maybe years, to settle in the courts, and the Industrial commission would go right on approving 200 or 300 drilling permits a month, with no formal process in place at all dealing with these special places. It’s already been a year since Stenehjem first broached this idea at last January’s Industrial Commission meeting, and we’ve issued a few thousand drilling permits since then with no review process in place. With a lawsuit holding up this process, we’d issue a few thousand more.

We’ve had a good sense something like that is coming because a Bismarck law firm, no doubt on behalf of a client in the oil industry, has filed an open records request asking for all of Wayne’s correspondence and e-mails regarding this special places proposal. So somebody’s getting ready to sue somebody, most likely the Industrial Commission, in an effort to stop these new rules from taking effect if the Commission were to adopt them. (Disclosure: they’re going to find an e-mail in there from me saying, in some idle chat, that I voted for Wayne, so I might as well get that out there right now so my Democrat friends aren’t surprised.)

Adopting a policy, which might have some flexibility, instead of a rule, which has the force of law, might mollify the industry enough to get them to back off and even support this idea. I hope so. Wayne’s not trying to stop anyone from drilling a well and getting their minerals. Jack is certainly not going to let him do that. He’s in too deep with the industry to let that happen. But providing a process by which the industry could use the expertise of our state agencies to help them find the best places to put their oil wells just makes so much sense that I can’t understand why anyone would be against it.

But then, I’ve been tilting at windmills all my life, some of my friends say. I’m for universal, single payer health insurance too. So what do I know?

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Two Stories: A Phony “Landowners” Group And A Chickens**t Radio Show Scheme

“Landowners protest plan” screamed the big headline across the top of the front page of The Bismarck Tribune today.

I stand in awe of how well the oil industry’s public relations team does its job. I spent a lot of years in the PR business in my career, but I was never as good as this bunch. Of course, I never had the kind of money they have at their disposal. But still.

The fact they were able to sell the Bismarck Tribune on that headline, although not surprising given the way the Tribune is written and put together these days, gives Ron Ness and the North Dakota Petroleum Council an A+ for PR work in my book. Damn, they’re good. I am so envious. Landowners? This is no landowners’ group. This is a straight–on PR arm of the oil industry, funded by big bucks from the industry’s biggest player in North Dakota, Harold Hamm’s Continental Resources. Don’t believe me? Look at their membership page, here. Not a single North Dakota landowner there. Not even a single North Dakotan.

President: Julie Musselman, “Royalty Owner.” Royalty owner? Really? Take a look at this. “Julie S. Musselman manages oil and gas properties for JMW, LLC, and the Trust of Raleigh W. Shade in Tulsa. Musselman previously worked as a landman for Houston Oil & Minerals, Blocker Petroleum and ZG Exploration.”

Secretary: Candice Brewer, “Royalty Owner.” Really? Take a look at this. “I manage the mineral and royalty interest owned by the (Arizona State University) foundation,” Brewer said. “Our assets surpass about $96 million right now. The foundation receives monthly royalty revenue from oil, gas and other minerals in 16 West Texas counties.”

Director: Bill Sinclair, “Royalty Owner.” Really? Take a look at this. “Sinclair is currently the founder and CEO of Agelio Networks, Inc., a software development company which provides web-based solutions for the oil and gas industry. Its flagship product, MineralFile, released this past February, helps mineral and royalty owners better manage their assets through its patent-pending web-based land and revenue management system.”

Director: David Sikes, “Royalty Owner.” Really? Take a look at this. “David is a native Oklahoman and the third generation of his family to work in the energy industry. David earned his Professional Certified Mineral Manger status from NARO in 2006.”

The remainder of the group’s board of directors represent Apache Corporation, Continental Resources, Inc., Devon Energy Corporation and Newfield Exploration Company, Inc., the same four companies which fund the organization.

The Tribune’s story under the bigheadline, similar to one written by a Forum Communications reporter for all four of the company’s newspapers (Dickinson, Fargo, Jamestown and Grand Forks) was reasonable, but neither took a look at who this organization really represents. It represents the oil industry, and the industry is spreading its scare tactics about a proposal by Attorney General Wayne Stenehjem to develop some reasonable guidelines for drilling oil wells near sites on a list of important scenic, cultural, historical or recreational landmarks. The industry’s press release from which the story was drawn is total bullshit. Here’s how it starts:

“Attention royalty owners, leaseholders, farmers/ranchers, property owners and North Dakotans! Your property rights and royalty checks are at serious risk!

“If you think your property and the decisions about how and when to use it belong to you, then you should think again. Nearly a million acres of private land across the Peace Garden State may soon be restricted or even condemned. If you thought a royalty check was coming your way, your wells may not be drilled.

“Out-of-state interests are pushing their anti-development agenda in Bismarck all in the name of protecting so-called “Extraordinary Places,” places that are ALREADY protected by existing regulations!”

“Out of state interests!” Are you kidding me? This press release from an organization based in Oklahoma with no North Dakota members? Damn, these guys got balls.

You can read the whole press release here.

Meanwhile, let me tell you another interesting story.

A week ago, I got a call from Jayne Solinger, a producer at Minnesota Public Radio, asking me to appear on an hour-long daily radio program called “The Daily Circuit,” which airs statewide in Minnesota and drifts a little bit into the North Dakota side of the Red river Valley through transmitters in Moorhead, Fergus Falls and Thief River Falls. It’s MPR’s morning public affairs show. Outside the Valley, you can listen to it by going to their website and clicking on “Listen Now.” The producer said the hosts wanted to do a show on the oil industry in North Dakota, and I had been recommended to her as a good guest to talk about that. I said sure, I’d be glad to do that. Then she said “Who would you recommend we put on this show to represent the other side.”

I responded that I don’t think there are really “sides” in this story—that we all are excited about the good things the oil boom had brought to us, but that some of us are more cautious about the pace of development. I said any show dealing with the oil industry ought to include Ron Ness, executive director of the North Dakota Petroleum Council, the man who knows more about the oil industry in North Dakota than anyone else. After confirming that the show would air Thursday, Jan. 24, at 10 a.m., she said she would call Ron and see if he could join the show. Later in the day she called me back to tell me Ron had a conflict on Thursday, but was available Wednesday, and could we reschedule? Sure, I said. 10 a.m. Wednesday works for me.

Fast forward to this morning, when I opened the paper and saw that the North Dakota Industrial Commission had scheduled a special meeting for Wednesday (tomorrow) at 11 a.m. to discuss Stenehjem’s proposal. Uh oh.  I sent an e-mail to Jayne, with a copy to Ron, asking if we could reschedule, because I was pretty sure that both Ron and I would want to be at that meeting. She responded that she would try to have the show done by 10:30 or 10:45 so we could both get to the meeting. I said fine.

But then I got another e-mail from Jayne that said she would be calling me about 10:30 to go on the air. WTF? I thought the show started at 10. So I called her to inquire about details of the show, why the change in schedule. Well, she said, Ron doesn’t want to be on the air with you, so we’re going to talk to him first, and then after he hangs up we’re going to talk to you.

WTF? Jayne, I was the one who recommended that you put Ron on the show with me. You really are saying that now he won’t go on the air with me? Yep. I almost told her where she could put her show, but that would serve no good purpose, so we arranged for me to actually get on the phone, with my microphone shut off, while Ron is talking, so I can listen in, and then when he leaves, to get up to the Capitol for the meeting, they would turn on my microphone. For 15 minutes or so. So be careful what you say, Ron,  because even though it’s not broadcast here, I’ll be on the phone listening. And I get the last word.

I guess I’ll do it from a coatroom, or some empty corner of the Capitol, so I won’t be late for the meeting. I don’t want Ron to get a better seat than me. I’ll probably sit down beside him and tell him what he missed after he left. And then we’ll sit through the meeting and see if his phony “landowners” group is successful in scaring Jack Dalrymple away from supporting Wayne Stenehjem’s proposal. I hope it doesn’t work. Dalrymple is pretty close to the oil industry, but I think he’s smart enough to see through this scheme.

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K.C. Clarke: Two Years Missing

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SATURDAY AFTERNOON UPDATE

U.S. Attorney Tim Purdon announced Saturday afternoon that James Henrikson was arrested in Mandan on federal firearms charges, namely being a felon in possession of firearms. Purdon said Henrikson was arrested by agents from Homeland Security Investigations and the Bismarck-Mandan Area Narcotics Task Force. The FBI, The North Dakota Bureau of Criminal Investigation and the McKenzie County Sheriff’s Office were also involved in the investigation and capture of Henrikson. We reported here earlier that Henrikson’s home near Watford City was searched earlier this week and agents found firearms there. Purdon said Henrikson was arrested without incident. In addition to the firearms charges, Henrikson is suspected of being involved in the December murder of Douglas Carlile, one of Henrikson’s business partners, although there was no mention of that in the press release by the U.S. Attorney’s office. We’ll have to wait and see if Henrikson is charged in that case. I think a lot of people can sleep better tonight.
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Here’s my report from earlier today:

Just one more update—actually more background than update—on the murder-for-hire story involving the Spokane businessman and his business partner from Watford City, and then we’ll wait until the police and FBI do their jobs, because when that happens, the media will take over here and do its job, I’m sure. Uh huh.

Right now it’s pretty much a non-story here, although I watched KFYR news at 5 last night and I’d have sworn I heard the reporter say authorities are looking for James Henrikson in connection with the case. There is much speculation that Henrikson, of Watford City, hired a fellow named Timothy Suckow out in Spokane to kill Henrikson’s business partner, Douglas Carlile. But when I went to the KFYR website this morning, that line was missing from the story, and no one else seems to be reporting it. Maybe I was just hearing things.

The story has revived hope for the family of another Washington state man who went missing almost two years ago from the North Dakota Oil Patch. Henrikson is suspected of foul play in the disappearance in February 2012 of Kristopher “K.C.” Clarke, 30 years old at the time.

“K.C.” Clarke

Clarke was an employee of Henrikson’s and sources who knew them both say there was some bad blood between them. Clarke supposedly left work one day for a two-week vacation from his job in Mandaree and disappeared.

By the end of May, no one had heard from K.C. for more than three months, and K.C.’s mother, Jill Williams, also from Washinton state, started a Facebook page to search for her son. Here’s part of what she wrote:

Nickname-K.C.
30 year old white male.
About 140-155lbs and 5’10″.
Brown hair and eyes.

            K.C. is a funny, loving, generous, hardworking and kind guy. Always there to help someone in need. He is smart and always cracking jokes and living life to the fullest. He loved photography and “tried to take a picture of and look for beautiful things every day”-a sunset, the landscape around him, flowers and animals. He is a Christian.
Missing since: Feb. 22, 2012. 

She provided a short timeline of K.C.’s travels leading up to the disappearance:

*October 2011-K.C. leaves Texas with James Henrickson-they go to North Dakota to work together for Blackstone trucking in Mandaree, ND. K.C. is made operations manager. Blackstone is run by Sarah Creveling and James Terry Henrickson on property owned by Tex Hall in Mandaree. 
*At some point K.C.’s job as operations manager is taken from him and given to someone else. K.C. is dissatisfied with Blackstone, it’s owners and his wages. He decides to leave Blackstone to go work for Running Horse trucking.
*K.C. tells several people to contact his family if anything happens to him. Carries his gun everywhere, tells a friend that he needs to practice, to get better with his gun-feels that he is in danger. I have been told that he had arguments with James H.
*Feb 22, 2012 K.C. is last seen in Mandaree, North Dakota at Blackstone trucking. We are told that he was wearing grey sweat pants and black puma athletic shoes.
* Last cell ph. call-in the vicinity of Blackstone in Mandaree, no more calls were ever made or answered by K.C. on Feb. 22, 2012 after his trip to Blackstone. Nor was he seen again. He was not seen leaving Blackstone and it is unknown whether he ever left there alive. Others have said that K.C. and James argued that day. Calls go directly to voicemail after that.
*No contact with anyone, no sightings, no bank account or cell phone activity, etc. since 2/22/2012
*End of Feb-beginning of March 2012 K.C.’s grandpa calls the Montana police to report K.C. missing-they tell grandpa that K.C. is an adult, that they can do nothing. They are not very helpful.

Sometime around June 1, 2012, police discovered Clarke’s pickup abandoned in Williston, with his belongings inside. By then, everyone suspected foul play, and that’s when the police investigation began. It is ongoing. But off the news media radar until this week.

Meanwhile, postings by Clarke’s mother and others about Henrikson and their suspicion that he was involved in Clarke’s disappearance, and a number of accusations by Clarke’s mother, led Henrikson to file a slander suit against her. That suit continues. Clarke’s mother has filed bankruptcy in the face of legal bills for attorneys to defend her.

James Henrikson

You can look at pages from the complaint filed by Henrikson and his wife, taken from the Facebook page, here, from Henrikson, and here from his wife, also a plaintiff in the slander suit.

There have been a few searches in northwest North Dakota, but no trace of Clarke has been found. In October, 2012, Clarke’s mother posted the following on Facebook:

An anonymous donor has put up a $10,000 reward! To receive the reward, you must lead us to K.C. or his body AND the person responsible for his disappearance and info to substantiate that that person is guilty. You may remain anonymous.

               Well, as most know by now, we spent last Friday-Sunday in North Dakota. We made progress and are hard at work following leads. We will find K.C.! I plead with anyone who has information-PLEASE contact me, write me an e-mail, call me, send a pm through the page, drop an anonymous note in the mail-something please, to tell us what happened to K.C. You have my solemn promise to keep you anonymous if asked to. I am not interested in revenge- I just need to know what happened and where my son is. I can understand how someone might have the answers we need, but be afraid to come forward. Please don’t be afraid, I won’t put your message here, I won’t tell anyone, including the police who you are. I will do everything in my power to protect you from harm by the person who is responsible. If you know what happened or were there, it will help you to come forward-to ease the guilt and have the opportunity to bargain with the police and have less devastating consequences should the authorities find out (not by me) who you are. And if you are the person responsible-please, just tell me what happened, please give me some peace by letting me know where my K.C. is. I understand that things happen, people get mad, things get out of control. I’m guessing that someone didn’t actually mean to kill K.C. (if he is gone), but that things got out of control and unexpectedly took a turn that no one expected.

            You have no idea the Hell I live in, the agony I am going through (unless you have been through something similar), not knowing where my boy is. You cannot imagine, what we went through in North Dakota, walking miles searching, picking up bones (wondering if they might be part of my baby), ripping out thistle bushes with my bare hands to look beneath them, as my husband and our friend, on their knees, dug with hands, machetes and a camp shovel in the dirt, desperately trying to find K.C. Picking up rocks to take home, so that I had a piece of the last town(s) where my son was. Barely sleeping or eating because we were too busy trying to find my son. I try to be strong to do what needs to be done, but when the special agent wheeled my son’s belongings into the room and put them all in a row on the table, when I had to sign for those things, when they swabbed my mouth for the DNA test- I could not hold back the tears anymore. You cannot imagine the agony of leaving the state without my baby, leaving people who have helped me and become family to me-who I have come to love. I left part of my heart in North Dakota and I hurt everyday, my spirit is tugged and tormented with the need to go back to North Dakota to find my boy and see the people who now hold a piece of my heart. I feel like I let K.C. down because I left the state without finding him. Please help me bring K.C. home before the holidays-which will be no joyous season this year without him.

Not much has transpired in the ensuing 14 months. There was another search in Northwest North Dakota last summer, but nothing turned up. Friends and supporters raised money to help pay legal bills. Clarke’s mother advertised her jewelry for sale on Facebook to get money for the lawyer. But the story has been revived now with Carlile’s murder and its ties to Henrikson.

If, and when, Henrikson is apprehended and charged in Carlile’s murder, more may emerge. It seems unlikely that Suckow will take the rap alone for the murder. Police can find no connection between Carlile and Suckow that would provide a reason for the murder. But police can connect Suckow to Henrikson through a telephone number in Suckow’s phone contacts. And police know that Henrikson spent a night at Carlile’s house last year, knew the layout of the home, and knew where the hidden spare key was. And the story from the night of the murder is that Carlile and his wife arrived home, and Suchow was already inside the house waiting for them (so he may have found the spare key), and shot Carlile.

And the events surrounding Carlile’s death in faraway eastern Washington have added more chaos to an already tumultuous Watford City crime scene. This week the police chief advised his city council he wants to resign as chief and go back on the beat because he doesn’t feel he has enough actual experience to head up the towns’ police force in the face of what is going on there, and McKenzie County hired its first-ever full time State’s Attorney to prosecute the growing number of cases facing the court system there.

Life in the Oil Patch.

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Murder-For-Hire Followup: Weapons seized in North Dakota

Well, it appears that other than the Spokane Spokesman-Review and a couple Spokane television stations there’s not much interest in the apparent murder-for-hire of a Spokane businessman last month, a crime for which a murder arrest was made earlier this week. The Spokane police keep talking about a North Dakota connection, but have not arrested the North Dakotan (actually a transplant from Florida named James Henrikson) who is believed to be behind the murder of his business partner, Douglas Carlile. If you missed yesterday’s story about all this, you can  read it here.

Henrikson’s home, apparently somewhere just outside Watford City, was searched by the FBI this week, and according to news reports, agents seized vehicles, documents and weapons found at the residence. But Henrikson, from what I can learn, has still not been arrested. The news reports from Spokane media say that police are claiming “legal reasons” for not arresting Henrikson, or even going so far as officially naming Henrikson  as a suspect. But Henrikson’s name shows up more than 50 times in the 12-page charging document I posted here yesterday. If you didn’t look at it, you can by clicking here.

The Bismarck Tribune has been reprinting the Spokesman-Review’s stories the last two mornings, and it looks like they have now assigned a reporter to the story, but no other North Dakota news media outlet that I can find is covering the story, except for the weekly Watford City paper, the McKenzie County Farmer, which is digging into the story but doesn’t publish again until next Wednesday. The paper sent a photographer out to Henrikson’s rural home yesterday to shoot a photo (a ballsy thing to do, I thought, and kind of scary, too, a friend of mine out there told me) but they didn’t see any activity at the house.  No one seems to know if Henrikson is even around right now.

The Tribune’s stories are going to be a day late, but the two Spokane TV stations are doing a pretty amazing job of covering this, so I’m going to provide links to their stories. Be sure and watch the videos—you’ll see what big city news operations can provide. The KX people here in Bismarck often do a pretty good job, but this is real television journalism. The photo of Henrikson with this post is from one of the TV stations, which carried a “rogue’s gallery” of about a dozen of what looked like police department booking photos on its website. They show a youthful, athletic-looking young fellow with a crew cut, and there are shots with at least three different shirts on, so my guess is they were arrest photos from earlier days—Henrikson’s record is a mile long, according to the stories I saw yesterday, and includes arrests for rape, assault, criminal trespass, burglary, theft, unlawful use of a weapon and sexual abuse.

Out in Spokane, meanwhile, the alleged murderer, Timothy Suckow remains in jail, and local police are running ballistics tests on a weapon they found yesterday which belonged to Suckow and may be related to the murder of Carlile.  They should have the results of those tests pretty soon.

Here are some links with more info. I’ll try to keep you posted on this stuff.

KREM TV

Another KREM TV

KXLY TV

Spokesman-Review

 KHQ TV

One more KHQ story naming Henrikson

 

 

 

 

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Murder For Hire And A Plot To Kill Tex Hall

The lawlessness, big money and complex business dealings of the North Dakota oil fields likely prompted the shooting death of a South Hill man in his home last month, according to investigators. Spokane police detectives stitched together an intricate web of speculative business deals by Doug Carlile, who solicited hundreds of thousands of dollars each from several investors to get in on the ground floor of a piece of Indian reservation land with the potential to produce billions of dollars worth of crude, according to one speculator. Carlile was found dead of a gunshot wound in his home at 2505 S. Garfield Road the evening of Dec. 15.”

–Spokane Spokesman Review, Page 1, Wednesday, January 15, 2014

The last trace of the age of innocence in the North Dakota Oil Patch trickled down the drain this week amid charges of a likely murder-for-hire scheme and an unfulfilled assassination plot on legendary Three Affiliated Tribes Chairman Tex Hall.

Got your attention now? Well, this story sure has mine. Tuesday morning I saw what looked like an innocent, but interesting, Facebook post from an old acquaintance (and Facebook friend) of mine, Calvin Grinnell, who’s a tribal elder and historian, and the curator of the Three Affiliated Tribes Museum at New Town. It was a link to a website called the Ripoff Report, which is a fairly sophisticated site that is designed to Help you, the consumer…Search the Ripoff Report before you do business with retail stores with bad return policies, checking & credit theft, rebate fraud or other unscrupulous business policies such as phony auto repairs, auto dealer bait-and-switch tactics, restaurants with bad service or food, corrupt government employees & politicians, police corruption, home builders, contractors, unethical doctors & lawyers, online stores that sell non-existent products, dead beat dads & moms, landlords & tenants, fraudulent employment & business opportunities, and individual con artists who scam consumers.”

I know, that covers some big ground, but it really is a very credible site. Consumers are invited to write reports about companies that have ripped them off, and submit them to the Ripoff Report, and they are posted to help other consumers. Here’s what was on the page that Calvin sent the link to:

BRIDGEWATER ENERGY AND JAMES HENRIKSON

            Bridgewater Energy,Blackstone Crude and its affiliates are trucking, construction and service companies in the oil industry located in North Dakota. These companies are owned by James Terry Henrikson and his wife Sarah Creveling. James and Sarah are con-artists and thieves and should be considered extremely dangerous. James is a convicted felon with dozens of arrests including fraud, theft, drug trafficking and rape. They currently owe millions of dollars to vendors, former employees and investors whom they refuse to pay and may be involved with the “disappearance” of an employee and the murder of a business partner.

            This post is dedicated to protecting the people of North Dakota, especially those who work in the oil industry, from dangerous people like James and Sarah . . . In this website you will find a timeline of James’ criminal history and the fraud that he and Sarah are perpetrating in North Dakota, especially on the Fort Berthold reservation. There are also several court documents included. At the bottom will be a list of contact information for the various courts and/or probation offices where James’ criminal history can be verified.

            Our goal is to expose the fraud that James Henrikson (he goes by the alias Henricksen) and his wife Sarah Creveling have committed in North Dakota in an effort to prevent them from stealing from honest companies and harming innocent people working in the oil industry in this great state, and to keep our people safe from these dangerous convicts and con-artists (Robert Delao, a manager at Blackstone and James’ right hand man, was convicted of double homicide for killing two rival gang members in cold blood – and he’s working in the Blackstone office on the Fort Berthold Reservation!)

            Let’s get these people out of North Dakota so they can’t continue their crimes here. 

            Well, okay, I thought, I’ll bite. So I read the report. Indeed, the first few paragraphs had summed it up well. You can read the whole thing by going here. I was kind of intrigued, so I Googled around a bit, but I didn’t find much more, so I moved on to writing a story about the pinochle game I had played the night before.

Then Wednesday morning I was back on Facebook and a couple of people, including my friend Jeff and the folks at Bakken Watch, had a link to another story that sounded interesting, titled “Bad blood, black gold and the death of Doug Carlile.”

Well, I thought I recalled seeing the name Doug Carlile in Tuesday’s Ripoff Report posting, so I checked back to see if I remembered correctly, and sure enough, I found this in the timeline history of James Henrikson:

An intruder broke into the home of Douglas Carlile at 2505 S. Garfield Road, and killed Douglas Carlile in what the police are calling a”targeted” killing which may be “linked to a business dispute involving the victim’s dealings in North Dakota.”

            Well, sure enough somebody at the Bakken Watch, another public service website (from their website: “Bakken Watch is a group of citizens from North Dakota (and around the world) who are keeping an eye on oil and gas development in North Dakota and all the issues associated with it: health, infrastructure, surface rights, and other topics.”) had made the connection between a murder in Spokane and the oil fields of North Dakota. The reason Douglas Carlile’s murder was included in James Henrikson’s record in the Ripoff Report is because the two were business partners, and Henrikson may be a suspect in Carlile’s murder.

Well, now I was fully engaged, thanks to “social media” and the two websites, so I started looking further. Here’s what I found.

A wealthy Spokane businessman, Douglas Carlile, opened the door of his house in a trendy Spokane neighborhood last December 15 and was greeted by a man with a pistol who shot Carlile numerous times in the head, killing him instantly. After some very good detective work by Spokane police, Tuesday, almost a month to the day after the murder, they arrested 50-year-old Timothy Suckow and charged him with the murder. Suckow is in jail in Spokane. Here is the lead sentence from the lead story on the front page of Wednesday’s Spokane Spokesman-Review newspaper:

The lawlessness, big money and complex business dealings of the North Dakota oil fields likely prompted the shooting death of a South Hill man in his home last month, according to investigators. Spokane police detectives stitched together an intricate web of speculative business deals by Doug Carlile, who solicited hundreds of thousands of dollars each from several investors to get in on the ground floor of a piece of Indian reservation land with the potential to produce billions of dollars worth of crude, according to one speculator.

            “Carlile was found dead of a gunshot wound in his home at 2505 S. Garfield Road the evening of Dec. 15.

            “Police used DNA evidence from a leather glove left at the scene to arrest Timothy Suckow, 50, on a first-degree murder charge early Tuesday”.

Pretty much everybody who knows anything about the case believes Carlile’s death was a murder for hire, and that Suckow was hired by Henrikson to do the job. Henrikson denies any involvement. As far as I know, Henrikson still lives in Watford City, and has not been charged.

There’s more:

Henrikson also is a suspect in the 2012 disappearance of Kristopher “KC” Clarke, who had worked as an operations manager for one of Henrikson’s companies, according to court records.

            “And federal investigators are investigating Henrikson for bilking an energy company run by the Native American tribes for millions of dollars, according to police.”

            The reference to an energy company run by the Native American tribes likely refers to a company named Maheshu Energy LLC, owned by current Three Tribes chairman Tex Hall.

Tuesday, Spokane television station KXLY reported that a witness whose identity is being protected by Spokane police, but is likely a North Dakota employee of Henrikson’s, told him in mid-September 2013 that Henrikson had approached a fellow employee, Eric Guerrero, “to see if he knew anyone that could kill Tex Hall, the elected leader of the MHA Nation.”

The TV station reported that Henrikson and two others who had done work for Hall’s company are under federal investigation for defrauding Hall’s company out of millions of dollars.

Henrikson is also suspected of hiring someone in early 2012 to kill one of his employees, Kristopher D. Clarke, who may have been his partner in a drug operation in Texas before coming to North Dakota with Henrikson. The Ripoff Report says this:

            “Blackstone Employee Kristopher D. Clarke, Nickname-K.C., disappeared after an argument with James Henrikson. KC was a long-term friend of James and may have been involved with James in the Texas drug manufacturing operation. KC was owed $600,000 by James Henrikson, who refused to pay him, so KC decided to quit working for Blackstone (one of Henrikson’s companies). KC was leaving to work for another company and was taking Blackstone’s subcontractors with him. KC was last seen in an argument with James at the Blackstone office building. James is a suspect and was questioned by BCI Special Agent Steve Gutknecht, but he refused to take a lie detector test. Currently, there is no concrete evidence linking James to KC’s disappearance.”

But KXLY TV reports:

Henrikson has been interviewed by detectives investigating Carlile’s murder, but authorities have not said whether or not he is a suspect or a person of interest in the killing. However, he is a person of interest in the February 2012 disappearance of Casey Clark, the one-time operations manager for Henrikson. (emphasis added)

            “Detectives were tipped off by an individual who was roommates in North Dakota with Robert Delao, a known criminal in Spokane with a long history of offenses including theft and assault. Delao would often receive visits from a man identified as Todd Bates, who Spokane Police know is a friend of Delao’s.

            “On one occasion the witness said he overheard Henrikson and Bates talking about a job from February 2012 and that “this job would pay the same as the last job.” The witness speculated the last job was Casey Clark, and that Bates, who court documents confirm has multiple convictions in Alaska for assault, was an enforcer for the company, who would beat up or intimidate people who caused Henrikson problems.

            “The witness, concerned for his safety, left the company and moved home to Texas.

            Clark simply disappeared in February of 2012, and his body has not been found, but his relatives told television station KREM in Spokane that they think Henrikson had him killed.

That’s about what I can figure out reading newspaper and television reports and the Ripoff Report. I didn’t call information to see if there is a phone listing for James Henrikson in Watford City, but I’m guessing lots of people there know him. He’s not exactly a low profile person. I also didn’t call Tex Hall to ask him how he feels about being targeted. But Tex is a pretty big boy. He can generally take care of himself.  Still, this is another ugly North Dakota Oil Patch story, reinforcing casual observers’ image of North Dakota as the “Wild West.” Not the Legendary wild west of North Dakota tourism advertising, but the real deal. I think you’ll be seeing more about this whole episode on TV and radio and in North Dakota newspapers. For everyone’s safety, I hope so.

(Update: The Bismarck Tribune picked up the Spokesman-Review’s story and ran it Thursday morning. Also Thursday morning, Bakken Watch carried a link to a Spokane TV station KXLY story reporting that FBI agents raided Henrikson’s home in Watford City Wednesday, looking for evidence to link him to Carlile’s murder.)

Here are some links to story details:

Ripoff Report

KXLY TV

Today’s KXLY TV Update

KLEM TV

This morning’s Spokane Spokesman-Review story

Another Spokane Review

One more Spokane Spokesman-Review story

And here’s a link to the complete police report from the Spokane PD that led to Suckow’s arrest.

 

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Undefeated

Jim 5. Ladies 2-2-1.

No, that’s not a marriage scorecard, although if it was, it would be pretty close.

Instead it is the results of last night’s pinochle marathon with Lillian, her mom, Marian, and her aunt, Junette.

It was an evening long in the planning, and the first, I hope, of many this winter. If I get invited back.

See, I am quick to acknowledge that I am the worst pinochle player in the family. It’s a function of not starting to play until late in life, and having a short attention span. The ladies are in the expert class, if there is such a classification system in pinochle. A bit about them. Aunt Junette is 90, lives alone, drives her own car, and baked a pie for us to eat after the game, which was at her house. Her little sister, Marian, Lillian’s mom, is 81, and also lives independently. Lillian is, well, younger. They’re all from Rhame, where pinochle pretty much started right after baptism at the Silbernagel sisters’ homes, so they’ve all been playing a long time. Marian spent much of her life right on the Bad Lands ranch where she was born, and raised Lillian there. Junette married a rancher just down the road and spent her years before widowhood there. She was like a “second mom” to Lillian. In the last few years, all three of them have ended up in Bismarck-Mandan, and they see each other often, and the love among them is an amazing thing to watch. And these winter card nights are giving me an opportunity to observe and share in that love.

We arrived at Junette’s at the appointed hour, 7:00. Marian was already there, impatiently shuffling cards, wondering why it was taking us so long to get our coats off. Lillian sat down beside her. I asked where I should sit (where you sit, you see, depends on who your partner will be). Lillian said I should be her mom’s partner, obviously designating Marian, at that moment, as the best player at the table, and therefore the one who should be handicapped by having me as a partner. Marian took it as a compliment, but inside that wise head of hers she was thinking “Well, that means I won’t be on the winning side tonight.”

“Cut,” was what she said, slapping the cards down in front of Lillian. No cut was needed. She had been shuffling them for 15 or 20 minutes, I’m pretty sure.

Okay, long story short. In the first hand, Marian got a double pinochle. In the second, a thousand aces. Both of those pretty much guarantee you are going to get to 150 before your opponents. We did. Marian and Jim 2, Lillian and Junette, 0. Then, without speaking a word, Marian and Junette stood up and switched places. I tried to guess what each was thinking. Marian: “Well, we got lucky. Now, with Lillian as a partner, I should win two more games.” Junette: “Oh, well, winning is not so important. We’re having fun.”

But the cards kept coming. Junette and Jim easily won the next two games. Jim 4. Marian and Junette (ahem—enjoying the benefit of being my partner) 2 each. Lillian 0. (Not that anyone, except me, was keeping score.) But then Marian stood up and indicated I should take her place, across from Lillian. I think the score in that game was something like 152 to 30, in favor of Jim and Lillian. That made it Jim 5, Junette 2, Marian 2, and Lillian 1. At which time Junette, the spryest 90-year-old I’ve ever known, literally flew from her chair to the kitchen. “Who wants cherry pie?”

It was 9:30. Game’s over. Where did the time go? That was the fastest 2 and a half hours I’ve ever known. God, winning is fun. The cherry pie was delicious. Like I said, I hope I get invited back. I’ll keep you posted.

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Oil Makes Things Possible

Cold days are good for reading and writing, and I’ve been reading stuff written by some of my old friends—four of them, to be exact—as they hunker down inside their warm houses and offices waiting for above-zero days. Four thoughtful men, and they’re thinking about the future of our state, and writing about it from informed positions, since they’ve all been part of our past and our present. And interestingly, they’re all thinking about it in the context of our present-day oil boom, and all the things—good and bad—that have come with it.

Lloyd Omdahl, our former Lieutenant Governor, who still writes one of the best weekly columns in the state, and who is celebrating his 82nd birthday today (Happy Birthday, Lloyd), began his column this week with this:

“Economists at North Dakota State University have calculated the annual economic impact of the Bakken Field development and came up with $13 billion for 2009 – and a lot of growth has occurred since then. For a people used to dealing in thousands, and sometimes millions, talk about billions is impressive.”

Impressive indeed, and that new-found wealth, and what we should do with it as we head into the year in which we are going to celebrate 125 years of statehood, has gotten a couple of my other friends writing this week.

“This is North Dakota’s moment,” wrote Mike Jacobs in the Grand Forks Herald’s editorial Saturday morning. “Put as plainly as possible: Oil makes things possible. With revenue from oil, North Dakota can build the institutions and the infrastructure that will carry the state forward with and then past the age of oil.”

“Oil makes things possible.” Mike and I first heard that phrase more than twenty years ago from a Bad Lands rancher, in response to our question about why a stretch of gravel road was paved over in front of a ranch we were driving by. Oil money from a well drilled on the edge of a pasture during our first oil boom, back in the1970’s, let that rancher keep the dust down from passing traffic on dry, windy North Dakota days. Oil money made that paved road possible.

The possibilities are much bigger now, although certainly paving roads is still one of them—just longer stretches of them, in much busier places than Bad Lands ranching country.

Writing about plans for the state’s Quasquicentennial (get used to that word—you’re going to hear it a bunch this year—it’s what a 125-year anniversary is called), which kicks off Monday with a press conference in Bismarck, Mike wrote: “We’ll have to wait to see what the state’s historians and political leaders have in mind. Much emphasis will be on the past, of course. That’s the nature of anniversary celebrations. But the future can’t be ignored. There needs to be a discussion about how to spend the Bakken wealth, for example, so that prosperity is shared at home rather than exported elsewhere.”

How to spend the Bakken wealth. Mike is right. Those six words ought to dominate the thoughtful discussion in North Dakota this year. To be sure, we’ve started on it. We’re investing hundreds of millions of dollars in infrastructure to try to keep up with the demand this unprecedented growth in North Dakota has precipitated. In Mike’s back yard, we’re building a new medical school at UND. In my front yard, we’re about to unveil our new $50 million Heritage Center addition. Dickinson State University is going to build a $15 million Theodore Roosevelt Presidential Library, most of it with state funds. A new Outdoor Heritage Fund which, although drastically underfunded, is supposed to help us build new parks, protect wildlife and enhance our outdoor quality of life, will make its first round of grants this week.

Clay Jenkinson echoed some of the same themes in his thoughtful column in Sunday’s Bismarck Tribune. “We have more money in our state coffers than we know what to do with. Our public institutions are more generously funded than ever before in our history. After many decades of barely getting by, North Dakota suddenly has enough money to fund a wide range of desirable initiatives, with money to spare.”

Higher education, Clay argues, ought to be a top priority as we plan for our future in this Quasquicentennial year. On the surface, it’s not as sexy as many other things we North Dakotans could put on our “bucket list” for the state, but, Clay wrote,  “This is the time to redouble our efforts to create the best-educated citizens of America–in faraway North Dakota, seemingly so distant from MIT, Yale, and Cal Tech. We should do this here in North Dakota because for the first time we can really afford it, and because every study indicates that the twenty-first century is going to belong to the societies that invest deeply in education at every level. If we invest the windfall wisely, we could become one of the most attractive places to live in America by 2050, and we could overcome the 20th century ‘problem of North Dakota,’ that there is not enough within our borders to convince our children to make their lives here, not enough to lure new families who had the misfortune to be born elsewhere.”

Clay’s right, of course. We have enough money to build the best higher education system in America, and still have plenty left over for almost anything else we could want. A few years back, Clay and I, and a couple others, were having supper with the president of one of our North Dakota universities, and the conversation got a little high-minded, as it often can do when you put Clay and a university president together, and I proposed that one way we could make that happen would be to announce that we were immediately going to double the salaries of every college professor in North Dakota, and at the same time, open up every position on every campus, and let current faculty compete for those positions at double their present salary. We wondered if we could attract the top professors in America to North Dakota, and with them, the top students in America, seeking the best affordable education available at public institutions in our country. And we also wondered how many of the current faculty members at North Dakota universities would support such a program. We didn’t answer those questions, but this might just be the time to open the financial faucets of our higher education system and see what happens.

Beyond that, though, we need to use this year, as both Mike and Clay argue, to figure out a way to deal not just with the new-found wealth, but with the problems associated with this boom. Clay again: “The best way to celebrate our birthday would be to create a new North Dakota social contract, a twenty-first century mission statement, so that we can direct the economic miracle that has come to North Dakota rather than be, in the end, merely overwhelmed and damaged by it.”

Direct the economic miracle. Those are the four most important words Clay wrote. Now that we mostly understand what is happening to us, after sitting back and just letting it happen for the last few years, probably  the most important thing we could do now is to take charge, to thank the oil industry and this great American capitalistic system that has let this happen here, and say “We are happy you are here, and we are happy you are bringing us this great wealth, but we’d like to remind you that we are North Dakotans, and we are in charge here, and here are the new rules by which we’re all going to play.

In Lloyd Omdahl’s words: “Our euphoric daze should not blind us to the reality of oil development. The oil industry is not in North Dakota because it saw a state in need of an economic boost. Neither is it here because our tax revenue has always been short. And it is not here to provide new jobs and more population for a sparsely-populated semi-arid west. The oil industry is here because it can make billions of dollars mining our resources. And let us not forget that while North Dakota is prospering from the oil development, the oil industry is profiting even more. When oil exploration and production ceases to be profitable, the oil industry will pack up and leave us with the consequences, whatever they may be.”

We saw one of those consequences just in the past week. The vision of the huge fireballs erupting over the countryside on the outskirts of Casselton brought home to us that we are not in charge here right now. Frankly, no one’s in charge. The Bakken Boom has taken on a life of its own, a bigger, more dramatic life than we’ve ever seen here on the northern prairie. That’s dangerous. We are not a people accustomed to, or comfortable with, chaos, yet chaos rules the day in North Dakota right now.

The derailment and explosion in North Dakota brought us the realization that we are living dangerously by shipping most of our oil by rail in unsafe tanker cars. During this chaotic period the state granted drilling permits as fast as we could, to keep the industry happy, and when we got to the point we were producing more oil than we could ship by truck or pipeline, well, glory be, the railroads stepped up to the plate and said “Give it to us. We’ll haul it.” Our officials breathed a deep sigh of relief and turned them loose. All kinds of rules were bent to accommodate the oil companies and the railroads, but then there were three really big, fiery crashes. And now we’ve realized things are out of control.

But what can be done? If the government moves to pull the unsafe cars hauling unsafe products out of service, the oil doesn’t move. That’s unacceptable. The oil has to move, or the boom stops.

One solution came from my old friend Fred Schumacher, a thoughtful expatriate who has been watching all this happen from a distance. Fred suggested a way to begin to take control: Build our own fleet of oil tank cars. As I wrote here the other day, the one thing private industry has refused to do is upgrade their tanker cars to make them safe. It would be costly and it would take time, and the oil doesn’t have time—it is coming out of the ground and needs to be moved. One solution is to undertake a “war effort” like we did at the beginning of WWII, this time to build safe oil tank cars. I suppose a massive effort, with enough steel and enough money, could crank the cars out pretty fast. Fred says we have the money, and there is precedent.

When the province of Alberta, Canada, realized it wasn’t able to move all of its grain to market a number of years ago, it used oil tax money from its Heritage Fund (sound familiar?) to build its own fleet of covered hopper cars to move the grain. It loaded those hopper cars full, and the railroad just pulled in with a couple of locomotives, hooked up, and took the grain where it needed to go, mostly coastal markets.

“Alberta conservatives (who ran the provincial government at the time) weren’t stupid, and they realized that oil was a one-time harvest and taxes had to be collected to be set aside for the future. Alberta’s Heritage Fund grain hopper cars are a model for what North Dakota could do,” Fred wrote to me this week. “We need a special session of the Legislature. They should look at what the Alberta Tories did to institute their Heritage Fund and use that money to fund mitigation for oil development and double-wall tanker cars to lease to the railroads as Alberta did with grain hopper cars.” Take a look at the hopper cars here.

Well, Fred’s right. We could do that. There’s precedent here. We have a state-owned bank, and a state-owned mill and elevator, and there’s no reason we could not react very quickly to build a fleet of safe oil tankers and require that railroads use them to move oil through our state. Or at least threaten to do that. That might get the private sector to move forward with a massive effort to build safe oil tanker cars. (Although secretly, I’d like the state to do it instead.)

Another big idea. I hope our leaders will follow the advice of Lloyd and Mike and Clay and Fred, big thinkers, all of them. We’ve got problems to solve. We’ve got the money to solve them. And we’ve got the raison d’etre—a Quasquicentennial—to do it.  Let’s use this year to take charge of our future.

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Another Day, Another Fireball: Surprise–Heeeeeere’s Warren Buffett!

A few weeks ago, I had a chance to spend an hour with Professor Debra Dragseth’s Business Ethics class at Dickinson State University. It was their last class of the semester, just two days prior to their final exam. The students were attentive and polite, but mostly unenthusiastic, as students will be in the waning days of a semester.

The subject of my “lecture” was the ethics, or lack of them, of the oil industry in North Dakota. I told them, among other things, what I had learned about the transport of oil by rail out of North Dakota, mostly that the oil tank cars carrying the oil were old and vulnerable to rupture in a derailment, with the result of those ruptures being the gigantic explosions and fires like the one that killed 47 people in Quebec and the one that polluted a wetland in Alabama last summer. I told them that the greed of the oil companies was evident in their refusal to upgrade their car fleet or retrofit the existing cars to make them safer, and that we are going to see more of these incidents of the magnitude of the Quebec disaster.  Those are the kind of incidents that make national news, and the news reports always say “the cars were carrying oil from the Bakken oil field in North Dakota,” continuing to give North Dakota a black eye.

Well, now there’s a third, and it happened right here in North Dakota. A train carrying a hundred or so tankers of oil almost made it out of the state, but just 20 or so miles before it crossed the Red River into Minnesota, it derailed and exploded just outside Casselton, sending up spectacular towering fireballs and huge dense black smoke clouds that caused the evacuation of the town that’s home to Governor Jack Dalrymple and is the former home of Governor George Sinner. (If you haven’t seen the fireball video yet, take a look here. I’ll guarantee you’ve never seen anything like this in your life.)

Those three made the national news—yesterday’s blaze at Casselton was on the NBC Nightly News within just a few hours of when it happened—but there were more than seven dozen rail accidents involving crude oil in the U.S. and Canada in 2012, most of which got only local notice, and the 2013 tally hasn’t been added up yet, but you could probably make a little money betting it was higher than in 2012.

The problem is not just confined to railroads. Because of the massive expansion of the oil industry in the Bakken Oil Field of North Dakota, Montana and Saskatchewan, and the tar sands development in Alberta, the movement of crude oil from inland well sites to coastal refineries has put incredible pressure on railroads and pipeline companies. Safety practices so studiously observed at well sites are seemingly absent from transportation facilities, both railroads and pipelines. Here’s a brief story from Grist.org about two incidents you probably didn’t read about:

Last Wednesday, (March 27, 2013) a southbound train carrying Canadian oil derailed in Minnesota, spilling about 15,000 gallons of tar-sands crude . . . Two days later, (March 29, 2013) an ExxonMobil pipeline carrying tar-sands oil burst beneath a suburban neighborhood in Arkansas. The exact size of the spill hasn’t yet been determined, but ExxonMobil says it’s preparing to be able to clean up 420,000 gallons, though it doesn’t believe the spill is that large. The oil flooded yards and streets and led to the evacuation of 22 homes in  Mayflower, a small community about 20 miles northwest of Little Rock. (You can see some pretty amazing video here.)

And then, of course, there was the massive 865,000 gallon leak in a Tesoro pipeline near Tioga, ND, a few months ago.

Who’s to blame, and what can we do about it? Those are the two questions that must be answered right now. The railroad explosions were all the result of derailments of trains carrying crude oil. One of the biggest problems is that many of the cars used to transport the oil—those greasy, grimy black cylindrical tankers you see passing through your home town in 120 car unit trains if you live along the BNSF’s main line, which parallels Interstate 94 through North Dakota—are not designed to carry flammable Bakken crude oil. They are not safe. Critics point out that old tank cars can puncture easily, and that trains carrying heavy oil loads can wear down railroad tracks, according to a report in the Toronto Globe and Mail. The result: derailments and explosions.

That paper is doing a tremendous job of investigating the oil transport industry. Excerpt from a recent story:

“In the rush to capitalize on one of the world’s biggest oil booms, questions about the potential hazards of shipping Bakken crude by rail took a back seat. When railways were chosen to supplement a pipeline shortage, the modern boom quickly stretched the limits of a century-old transportation network and regulatory system designed for safer goods such as grain and lumber.

Much of the oil moved around the U.S. and Canada is shipped via an aging tanker model known as the DOT-111. These cars, the subject of repeated warnings from the U.S. National Transportation Safety Board, have a thin metal skin that’s easily punctured in the event of a derailment.”

The story pointed out there are about 92,000 of the old DOT-111 tank cars and of these, about 78,000 cars should be retrofitted to be made safer or phased out, according to a spokesman for the Association of American Railroads (AAR), the industry group whose members include the BNSF and the Canadian Pacific, the two major shippers whose rail lines run through North Dakota.

The changes the industry wants, which are meant to prevent explosions like we saw in Casselton Monday, should include a steel jacket, thermal protection and pressure relief valves. An AAR spokesman said recently even cars built since October 2011, when the rail industry brought in its latest design standards (about 14,000 of them are being used right now), will need modifications.

“It’s time for a thorough review of the U.S. tank car fleet that moves flammable liquids, particularly considering the recent increase in crude oil traffic,” said AAR President Edward Hamberger, according to the Globe and Mail: “U.S. and Canadian railway laws require shippers, railways and even buyers to ensure hazardous goods such as petroleum are properly classified so they are carried in sufficiently sturdy cars. But interviews with rail officials and exclusive access granted to a Globe reporter to the North Dakota crude facility that loaded the Lac-Mégantic train indicate that the makeup and flammability of Bakken oil is not always tested.(emphasis added to point out a black eye to North Dakota)

So who’s responsible for making sure the oil going into these cars is tested? Well, likely the people who own the tanker cars. The thing is, the railroads don’t own the cars. Who does? The Globe and Mail:

Railways themselves don’t own the tanker cars, they just hitch their locomotives to a train of leased cars and away they go. The shale oil boom has been great for third-party vendors such as Procor Ltd. in Canada and Union Tank Car in the U.S. As an aside, both outfits are owned by Berkshire Hathaway, Warren Buffett’s holding company, which is seeing big bets on rail pay off, such as buying Burlington Northern Sante Fe in 2010.”

Well now. Ain’t that something? Warren Buffet (no relation, by the way, to Jimmy Buffett, mayor of Margaritaville) owns the railroad running through North Dakota. But his railroad doesn’t own the tank cars. Instead, another company owned by Buffett owns them. But before you blame Buffett for any explosions, remember that he leases them to the oil companies who own the oil. It’s the oil companies seeking to maximize every penny of profit, who certify, before the train leaves the transloading facility in North Dakota, that the product inside is safe for transport in those old cars.

Still, it is Buffet who owns those old cars (he can’t be happy when he sees them burning up, and making a mess of the tracks he owns), which really should be scrapped or retrofitted—this boom is not going away any time soon, and the cars are going to be needed for a good many years. Problem is, the cost of bringing those cars up to the standards required in new cars, including steel jackets and pressure relief, could exceed $40,000 per car, according to the Rail Supply Institute. The Globe and Mail reports that at that rate, just the cost of refitting the 78,000 old cars would top $3-billion, although some of those old cars will be retired if the AAR proposals are taken up.

Well, hell, just $3 billion? Old Warren’s got that much, and more. And all he’d have to do to recover it is up the price of leasing the cars to the oil companies.

But the problem there, I’d guess, is the pressure on the railroads and Warren to keep those cars in service just the way they are, safety be damned. Because the state of North Dakota just keeps signing drilling permits as fast as Lynn Helms can replace the ink cartridges in his pen.

Well, can’t government regulatory agencies do something about this? Uh huh. They could. If they wanted to. According to a report I came across earlier, the source of which I can’t find right now, the “U.S. National Transportation Safety Board has issued safety guidelines on the widely used, cylindrical tank cars known as DOT-111s, including a recommendation that all tank cars used to carry ethanol and crude oil be reinforced to make them more resistant to punctures if trains derail. The new guidelines, put forward in March 2012 but which have not yet been adopted by the Department of Transportation agency that oversees the sector, stem from a deadly ethanol train derailment and explosion in Illinois in 2009.” (emphasis added as a hint to the DOT that it is time to take some action)

What’s become obvious is that oil companies will take advantage of any regulatory lapse they can find. In the Quebec incident, for example, the oil in the tank cars was mislabeled, certified as safe for transport in those old cars. Certified by the oil industry person who loaded them in New Town, North Dakota. 47 people are dead. That person ought to go to the pokey. Meanwhile, what started out as an incredible success story about North Dakota is turning into a public relations nightmare, the most recent bad dream being Monday’s fiery crash. Here’s what one Toronto newspaper story said recently:

As oil output soared, so did hazards. Workplace accidents increased so dramatically that North Dakota now has the highest rate of job fatalities in the U.S. – 12.4 per 100,000 workers, or four times the national rate. Gas pipelines are in such short supply that 30 per cent of natural gas isn’t properly harvested and is instead burned off. From satellite cameras, North Dakota looks like a birthday cake with thousands of glowing candles . . . What should have been an economic miracle for North Dakota has instead been a logistical nightmare. Since 2009, the state has been producing oil faster than it can be shipped to refineries. The bottleneck is so bad that market prices for Bakken crude are at times heavily discounted, falling as much as 28 per cent below benchmark prices in early 2012. Existing pipelines winding through the state were already operating at full capacity. As a result, more than a third of the state’s production was being shipped out on trucks by 2007, according to the North Dakota Pipeline Authority. The trucking frenzy was chewing up roads, driving accident rates to record highs and infuriating local residents. What happened next was the largest surge ever in rail shipments of hazardous goods. By last month, more than 400,000 tank cars were carrying crude oil through Canadian and U.S. towns and cities. In 2009, the number was 8,000.”

So, back to my original questions: Who’s to blame, and what can be done about it?

After reading this, you can form your own conclusions about who’s to blame. As for what can be done about it, well, maybe it’s time to just slow the fuck down.

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