By Chester Dawson
WILLISTON, N.D.--For most of the years since wildcatters began
tapping the prairies here for oil, energy companies have existed
peacefully with the farmers and ranchers who still dominate the
state's economy.
But now a dispute has broken out between the two groups over
pipeline spills, not of oil but of salty wastewater. The latest
such leak came last week, when some 220,000 gallons of brine leaked
on an Indian reservation. In particular, agricultural interests are
frustrated that oil drillers and pipeline companies haven't agreed
to use technology that farmers say could quickly detect brine
leaks.
"There's probably nothing more toxic to land than salt water,"
said Troy Coons, a farmer and chairman of the Northwest Landowners
Association, an agriculture group. Farmers don't want to stop oil
production, he says, noting that many receive payments for wells on
their land, but want tighter rules to prevent spills.
Briny wastewater is a byproduct of oil production, surging up
from underground with the crude and natural gas. Energy companies
separate it from the petroleum products and then must dispose of
it, usually by pushing it down special wells drilled for that
purpose.
Getting the billions of gallons of brine to these special wells
often involves small pipelines. Traversing thousands of miles of
rough and remote areas, sometimes under a blanket of snow, some of
these pipelines have been plagued by leaks.
Despite a recent drop in drilling activity due to lower oil
prices, at least 11 brine spills have been detected so far this
year in western North Dakota. That includes an Oasis Petroleum Inc.
pipeline leak earlier this month that state officials say involved
some 630,000 gallons of brine spilled on grazing land into a
tributary of a lake. But the catalyst for agricultural opposition
was a record leak discovered in January that had allowed nearly
three million gallons to spill here before it was discovered.
The six-month-old pipeline involved had a monitoring system to
detect leaks, but nobody turned it on amid a boom-fueled rush to
lay more pipe, according to both state officials and an executive
with the company that owns the line, Summit Midstream Partners LLC
of the Woodlands, Texas.
"We have laid so much pipe and had turned on so many sites that
we just hadn't gotten to that yet," said John Millar, a vice
president at Summit in charge of developing and managing
pipeline.
That spill didn't pose a threat to public health or drinking
water, but state officials say it killed vegetation and may have
affected fish and wildlife. Rick Sorenson, a cattle rancher who
leases land nearby, said he worries about his cows eating
brine-contaminated grass.
The energy industry has long argued that pipeline-monitoring
systems aren't foolproof and opposed legislation that would require
their use. The Republican-controlled legislature, which has
attempted to balance the concerns of energy producers and
landowners, so far has resisted efforts to mandate specific
technology such as flow meters on smaller pipelines.
"Industry always gets concerned about more regulation," said
State Sen. Kelly Armstrong, a Republican who represents a district
near Dickinson, also in western North Dakota. Adding specific
technology to the state's regulatory code "means that's what you
have to use and we don't want to be limited to those things," he
said.
Two years ago, North Dakota legislators abandoned an initiative
that would have mandated the use of pipeline monitoring systems.
Instead, the North Dakota Industrial Commission, which both
regulates and promotes the energy industry, was left in charge of
overseeing the rapid spread of small pipelines.
The state began requiring companies to report data on the
construction and location of small pipelines in April 2014. Last
July, regulators received funding to hire the first state pipeline
inspectors, but didn't fill the jobs until earlier this year--after
the Summit pipeline had leaked.
Public outrage over the Summit spill prodded the legislature to
pass a bill to strengthen reporting and monitoring rules, which
Gov. Jack Dalrymple signed on April 20. The new law requires plans
for leak detection and monitoring, third-party inspections and
increased disclosure of engineering plans.
It also obligates the Industrial Commission to come up with new
pipeline-safety rules. That policy will be based on conclusions of
a $1.5 million technology-focused study to be completed by a
University of North Dakota research center.
"With this bill's passage, North Dakota will require
significantly more from pipeline builders and operators," Gov.
Dalrymple said.
The new regulations will be burdensome, said Alexis
Brinkman-Baxley, government-affairs manager at the North Dakota
Petroleum Council, an industry lobby. But, she added, "We're
pleased the rules will be based on research and sound science."
Critics say the new law doesn't go far enough, and point out
that violators will be subject to fines limited to $12,500 a day.
North Dakota levied a $82,500 fine on the company responsible for a
million-gallon brine spill in 2006, but suspended collection until
the cleanup of the affected site is finished.
The most recent leak on the Fort Berthold Reservation involved a
pipeline installed in 2010 and operated by Crestwood Midstream
Partners LP, which also owned a brine pipe that spilled more than a
million gallons on the same reservation last July. "There are
substantial problems with that [pipeline] system," said North
Dakota Department of Mineral Resources Director Lynn Helms.
Mr. Helms said investigators are looking into the material those
pipelines are made of and whether that is "suitable for North
Dakota."
Brine is too corrosive to ship long distances using metallic
pipelines, so typically wastewater pipes are made from plastics,
and often are reinforced on the outside by other materials such as
fiberglass or steel. It is unclear what the Crestwood pipelines
were made of, but the pipe involved in the Summit leak was made by
Fiberspar Corp., a division of Houston, Texas-based National
Oilwell Varco Inc. specializing in fiberglass-reinforced pipe.
Representatives for Fiberspar were unavailable for comment.
Some officials here say that unless the state cracks down on
brine spills, farmers may take steps that would crimp the energy
industry. "The farmers are the ones who know best about what's
happening to their land and they say things aren't being done
right," said Williston Mayor Howard Klug. "They no longer want to
give right-of-way permission to pipeline companies to cross their
land because of what's happened."
Write to Chester Dawson at chester.dawson@wsj.com
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