Oil company, landowner attorney collaborate on bill to avoid court battles in North Dakota
Landowners are compensated for the area needed for oil well pads, but there are sometimes disputes about the amount of compensation. (Kyle Martin/For the North Dakota Monitor)
Bismarck attorney Derrick Braaten says clients have paid him millions of dollars for court battles against oil and gas company Continental Resources over surface damages in North Dakota.
But a conversation between Braaten and a lawyer representing Continental Resources could lead to fewer court battles, something Braaten says benefits the company and his clients.
A result of that conversation is Senate Bill 2335, which would add a mediation step in negotiations between mineral resource developers and landowners in an effort to resolve disputes without a lawsuit. The bill has received support from Continental Resources, the North Dakota Petroleum Council and the Northwest Landowners Association, which Braaten represents.
Litigation only benefits the lawyers, Braaten said during a hearing before the House Energy and Natural Resources Committee earlier this month.
In these disputes, the developer has already leased the minerals. But, under North Dakota law, developers must pay the landowners reasonable compensation for damage to the land, such as putting in a well pad.
'Neither the landowners nor the developers are benefiting from litigating over every darn well pad,' Braaten said. 'I've got better things to do.'
Under the bill, if a landowner rejects a compensation offer from an oil and gas developer, the landowner can choose an appraiser to determine the value of the land being affected and present it to the developer. The developer pays for the appraisal, and after receiving it, has 30 days to make a new offer.
Braaten said the appraisal provides a third-party number that at least provides a starting point for negotiations.
'The best thing that can happen here is we figure out how to make landowners and operators come together and come to private agreements,' Braaten said.
William Hauser, an attorney for Continental Resources, said the value of the property is at the heart of the disputes. 'The appraisal helps both sides see the realistic value sooner in the process,' Hauser testified.
If there is no agreement, the case can still end up in court, though the appraisal is not admissible.
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Ron Ness, president of the North Dakota Petroleum Council, said currently, talks stagnate after the initial offer.
'The landowner is just unhappy and there's no communication,' Ness said.
Troy Coons, chair of the Northwest Landowners Association, called the bill an 'excellent compromise.'
The bill received unanimous approval in the Senate, and the House committee gave it a unanimous do pass recommendation last week.
Two other landowner rights bills went before the House Energy and Natural Resources Committee.
Senate Bill 2321 would require that companies developing infrastructure projects such as pipelines reimburse legal fees for landowners, even if the company abandons or changes the project so that the landowner is no longer involved. It is awaiting committee action.
Senate Bill 2379 originally required that land surveyors get written permission from landowners before stepping onto a property. This bill has received pushback from some water resource development groups, saying it would add to water pipeline costs and slow the projects down.
The bill was amended to require providing written notice. The committee voted 9-4 Friday to give it a do-pass recommendation.
The North Dakota Supreme Court last year ruled against landowners in a survey access case involving carbon dioxide pipeline developer Summit Carbon Solutions.
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