North Dakota Fails to Collect Fines for Fracking Violations
by Amanda Starbuck, 11/25/2014
Last June, North Dakota’s oil industry hit a new milestone, reaching a production volume of 1 million barrels per day. The current oil boom has brought new jobs and wealth to its largely agricultural economy. But the boom has also caused an increase in oil accidents and spills that harm workers and the environment. A recent New York Times article maps these spills and underscores the need for improved enforcement of fracking violations in the state.
One out of every six wells had an incident of environmental damage in 2013.
The authors collected data from the North Dakota Department of Health on oil-related accidents. These include well incidents (spills and fires) as well as pipeline breaks and oil train derailments. They found a shockingly high rate of accidents with minimal penalties to industry:
- From 2006 to early October 2014, more than 18.4 million gallons of oil and chemicals were released into North Dakota’s environment, polluting farmland and drinking water.
- During the same time period, 5.2 million gallons of nontoxic substances were also released. Most of this was water, which can carry contaminants.
- One out of every six wells had an incident of environmental damage in 2013. This is a huge increase from 2006, when one out of every 11 wells had an incident.
- North Dakota has only collected $1.1 million in incident fines since 2006, despite the alarming number of incidents. Compare this to Texas, which produces four times the volume of oil and collected $33 million in fines.
- Continental Resources has reported more environmental incidents than any other oil company drilling in North Dakota. From 2006 to August 2014, they reported 937 incidents involving 1.5 million gallons of spilled fluids. But the company has paid only $20,000 in fines for these damaging incidents.
This approach does not appear to be improving the safety records of the worst offenders – nor is it protecting North Dakota’s environment and citizens from oil spills and accidents
The data show that environmental incidents are on the rise, despite industry assurances that fracking is safe. It turns out that it is a common practice for state regulators to collect only 10 percent of the original fine, suspending the remaining 90 percent for a year. If the company does not commit the same violation during that time, the remaining fine is forgiven. Lynn Helms, Director of the North Dakota Department of Mineral Resources, told The New York Times that this is part of a “collaborative approach” to regulating drilling. He believes it provides an incentive for industries to improve their practices and fosters a trusting relationship between industry and regulators.
But companies may not improve safety measures if they know they can delay paying fines or avoid them altogether. Continental Resources, for instance, has avoided paying another $200,000 in issued fines, yet the company has had nearly 1,000 accidents since 2006. This “collaborative approach” does not appear to be improving the safety records of the worst offenders – nor is it protecting North Dakota’s environment and citizens from oil spills and accidents.
The Fox Guarding the Henhouse
Helms has been criticized for his ties to the oil industry. He was a petroleum engineer who worked for both Hess and Texaco prior to becoming the Director of the Department of Mineral Resources – the agency responsible for overseeing North Dakota’s oil and gas development.
North Dakota’s oil and gas laws require the department to simultaneously monitor activities and promote oil development.
North Dakota’s oil and gas laws require the department to simultaneously monitor activities and promote oil development. Other states like Texas have a similar structure where chief regulators are also the main promoters of the industry. Such structures may weaken oversight and lead to a regulatory climate that favors industry over public health and safety.
The Industrial Commission (housed within the Department of Mineral Resources and responsible for many state decisions on fracking) includes three elected officials with their own ties to oil companies: the governor, the attorney general, and the agricultural commissioner, each of whom has received campaign contributions from the oil and gas industry. They’ve enabled unbridled development of the Bakken shale formation, allowing the industry to grow faster than the infrastructure can keep up. Small towns triple or quadruple in size in a matter of years, traffic accidents increase, and crime and sex trafficking rises. And oil incidents are par for the course, injuring workers and rendering cropland unusable for years. The New York Times reports that not a single oil and gas motion that went through the Industrial Commission since 2011 has failed to pass.
There is no question that the North Dakota economy has grown due to fracking. The state’s unemployment rate is 2.8 percent and has consistently been the lowest in the nation since 2008. But the state also has the highest workplace fatality rate in the country, and its rate has more than doubled since the boom began.
Stronger enforcement of fracking violations is needed to safeguard workers in the field from the many dangers associated with oil drilling. Improved monitoring and increasing fines often lead to a reduction in oil-related incidents. And a recent poll shows that the vast majority of American voters favor tougher enforcement of regulations.
Unless North Dakota’s regulators prioritize the health and safety of its citizens over economic benefits, these incidents will continue and the once idyllic lifestyle of western North Dakota may become a distant memory.
Image by flickr user Tim Evanson, used under Creative Commons license.