​Gray eminence: the power behind Dakota Access

By C.S. Hagen

cshagen@gmail.com

The true power behind the Dakota Access Pipeline extends beyond the private sector and into state leadership. This gray eminence – or power behind the proverbial throne – rivals the story books, both ancient and modern, truth and fiction.

In North Dakota, politicians have been bought by big oil and gas lobbyists, according to statesmen and analysts. Some have invested heavily in Bakken oil interests, declaring profits for the good of North Dakota’s infrastructure.

“We are where we are…and having difficulties today because only one side has been able to really participate in the decision making in North Dakota, that’s totally dominated by the oil industry,” Don Morrison, executive director of the Dakota Resource Council, said. “So what’s happened is our elected officials – every single one of them – is supported by the oil industry.”

Ten years ago, most people in North Dakota supported responsible growth in the Bakken Formation. Today, however, an unhealthy environment has emerged, of you are either for or against oil, with no room in between, Morrison said.

“The power of the oil industry in so many ways sets the agenda of North Dakota. It’s what they do,” Morrison said. “They dominate. They’ don’t listen to anyone else’s opinion. Why? Because North Dakota elected officials have decided that’s the future of North Dakota, and that they don’t want to fight the oil industry.

“Every time questions are raised about this, people are accused of wanting the oil industry to go away. And it’s been designed by the politicians to do the bidding of the oil industry.”

Recently, the “Commission,” or North Dakota Industrial Commission, Oil and Gas Division, a government agency established in 1919 to manage certain utilities, currently comprised of Governor Jack Dalrymple, Attorney General Wayne Stenehjem, and Agriculture Commissioner Doug Goehring, pushed Big Oil’s agenda by attempting to ban the public sector from testifying, or having any input at Commission meetings. Only “interested parties,” which would have included project owners and landowners, would have been allowed to testify, if the suggestion had been ratified.

Open processes are difficult, Senator Erin Oban said at the April 11, 2016 hearing about new rules for state oil regulation, but they are necessary.

“It would have been easier, I suppose, to limit that process and to only allow a select few to testify,” Oban said. “But my job as a public servant is not to make things easier for me, it’s to make it open and accessible to the public.”

President of the labor advocacy group North Dakota AFL-CIO, Waylon Hedegaard, attended the same meeting, and said big oil has cozied up to North Dakota politicians, affecting legislation and twisting policy to their collective wills.

“I believe everything we do has to be done to the best of our abilities,” Hedegaard said. “Our government has to regulate to the highest degree, achieve the highest quality, we have to hire the most skilled craftsmen, the most skilled people, and our government has not regulated the oil field nearly to the extent it should have.”

The lack of regulation concerning oil drilling, fracking, waste disposal, and crude transportation has caused the perception that all construction in the Bakken region is about bad players putting poor pipes into the ground, Hedegaard said. Hedegaard also asked the Commission to strike the amendment from the proposed rules.

“The essence of democracy is that everyone who thinks they are a stakeholder in something comes together vocally, or gets their opinion out there, and then argues over it and we come to a compromise,” Hedegaard said. “It is not democracy when there’s another group of people limiting who has interest in a certain thing. Democracy is a messy thing.”

Rocks, according to retired correctional officer Eric Thompson, are the only disinterested party to big oil interests.

“If a party drinks water, oil and gas developers could take a minute to make them an interested party,” Thompson said at the hearing. “If a party breathes air, oil and gas developers could take a minute because air is a requirement for life.”

During recent legislative processes, oil companies have frequently opposed changes, and continue to do so stating the “crackdown” is too expensive and that the timing is bad – oil price decline has caused steep inactivity in drilling in North Dakota. No oil companies stepped forward to oppose the “interested party” amendment, according to Commission records.

North Dakota, the second-biggest oil producing state in the U.S., and among the ten largest oil patches in the world, has historically been lackadaisical about instituting stricter regulations. A spirit of leniency toward oil companies has been fostered in North Dakota, analysts said. Criticism over lowering fines for oil and saltwater spills has mounted. In January 2016 the Commission agreed to scrutinize the issues, but behind closed doors.

Some of the state’s top politicians are chairmen or members of regulating agencies governing big oil and Native American interests. Additionally, big oil supports the political campaigns of Governor Dalrymple, Senator John Hoeven, Senator Heidi Heitkamp, and Rep. Kevin Cramer, making their voices, according to some, tainted.

• Congressman Kevin Cramer, R-N.D., is a member of the House Energy and Commerce Committee, where some of the biggest legislative battles regarding oil regulation are fought. Cramer is also a member of the Subcommittee on Oversight and Investigations (Energy and Commerce), and a member of the Subcommittee on Environment and the Economy, and has served on the North Dakota Indian Affairs Committee. Cramer’s largest campaign contributor is the oil and gas sector with a total of USD 138,500, Xcel Energy contributed USD 12,000, and Tesoro Corp. contributed USD 11,000.

• Senator John Hoeven, R-N.D., is on the United States Senate Committee on Energy and Natural Resources, and also a member of the U.S. Senate Committee on Indian Affairs. Hoeven is a member of the Subcommittee on Energy, the Subcommittee on Energy and Water Development, Subcommittee on Public Lands, Forests, and Mining, and the Subcommittee on Rural Development and Energy. Hoeven’s largest campaign contributor is the oil and gas sector with a total of USD 327,963, including Continental Resources, Inc. and its CEO, Harold Hamm, who collectively donated USD 18,200. ExxonMobil contributed USD 10,000, and Whiting Petroleum Corporation contributed USD 2,750. Energy Transfer Partners donated USD 5,000 to Hoeven’s 2016 campaign.
• Governor Jack Dalrymple, R-N.D., a long-time advocate of oil interests, chairman of the Commission, is also the chairman of the North Dakota Indian Affairs Commission. The top supporter of Dalrymple’s most recent campaign is the oil and gas sector with USD 467,290 in donations, and Hamm personally donated USD 20,000, while Hess Corporation’s CEO John Hess gave USD 25,000.

• Senator Heidi Heitkamp is a ranking member of the Subcommittee on Rural Development and Energy, and a member of the U.S. Senate Committee on Indian Affairs. The tenth-ranking supporter for Heitkamp’s campaign is the energy and natural resource sector, according to Vote Smart, and the oil and gas sector is the third-largest contributor to Heitkamp’s 2016 campaign, with a total of USD 258,379, according to Open Secrets. Hess Corp donated USD 19,600, BP contributed USD 17,750, Continental Resources, Inc. donated USD 17,500, American Petroleum Institute donated USD 13,250, and Xcel Energy donated USD 13,000.

• Chase Iron Eyes has raised USD 82,127 in 2016, running as the challenger for District 1 as a Democrat. Iron Eyes has no support from oil and gas or energy and natural resources sectors, and his largest contributing sector is casinos and gambling. Ho-Chunk Nation is top supporter with a donation of USD 5,400.

• Kelcy Warren, the main force behind the Dakota Access Pipeline, founder of Energy Transfer Partners, is worth USD 7.3 billion, according to Bloomberg, Dakota Access Pipeline quietly purchased 6,000 acres last week of private ranch land near to Camp of the Sacred Stone – the historic Cannon Ball Ranch, which begs the question of how the purchase was made possible. Energy Transfer Partners donated USD 304,200 in 2016 and USD 581,300 in 2014 to political campaigns.

• Harold Hamm, Bakken fracking mogul and Continental Resources CEO, long-time financial supporter of North Dakota’s politicians, and worth approximately USD 13.8 billion, according to Forbes, is currently the campaign energy advisor to Republican presidential candidate Donald Trump, and is a candidate for energy secretary of the United States if Trump is elected in 2016.

• Top national recipients of support from Continental Resources, Inc. 2016
  • 3rd Place: Heidi Heitkamp – USD 11,300
  • 4th Place: Donald Trump – USD 10,928
  • 5th Place: John Hoeven – USD 10,200
  • 14th Place: Kevin Cramer – USD 5,000
  • In 2014, Continental Resources donated USD 6,200 to Heidi Heitkamp, and USD 3,500 to Kevin Cramer

• Top national recipients of support from Hess Corp. 2016
  • 2nd Place: John Hoeven – USD 20,800
  • 8th Place: Kevin Cramer – USD 10,000
  • 19th Place: Heidi Heitkamp – USD 3,500
  • In 2014, Hess Corp donated USD 15,600 to Heidi Heitkamp and USD 2,600 to Kevin Cramer

• Top national recipients of support from BP 2016
  • 5th Place: Heidi Heitkamp – USD 15,700
  • 100th Place: John Hoeven – USD 1,000
  • In 2014, BP donated USD 2,000 to both Heidi Heitkamp and John Hoeven

• Top national recipients of support from Energy Transfer Partners 2016
  • 6th Place: John Hoeven – USD 5,000
  • In 2014, Energy Transfer Partners donated USD 1,500 to both Kevin Cramer and Heidi Heitkamp

These financial statements were made available by Vote Smart and OpenSecrets Center for Responsive Politics – the statistics do not reflect Dark Money groups, or educational or membership building donations.

Every day, 1,027,131 barrels of oil are produced in North Dakota, and a total of 1,662,917 thousand cubic feet of natural gases are produced from 13,248 wells, according to the North Dakota Industrial Commission, Department of Mineral Resources.

Since January 2016, more than 100,900 gallons of crude oil, waste oil, bio solids, natural gas, and brine were spilled in North Dakota and surrounding areas, according to the North Dakota Department of Health records. Approximately 50,000 gallons of slaked lime solids slid into the Missouri River in June, causing unknown impacts, according to the North Dakota Department of Health.

Few companies involved in the spills have been fined. In January, the Commission reviewed six outstanding spill cases with fines totaling USD 600,000, according to the Bismarck Tribune. Additionally, past spills are still being cleaned up around the state, such as the Tesoro Corp. spill of 2013, the XTO Energy, and the Oasis Petroleum Inc. spills of 2014 and 2015, according to Bill Suess, Spill Investigation Program manager of North Dakota Department of Health.

Spills occur on a daily basis, Suess said, the cleanup is costly, and companies are rarely fined.

“Not everyone gets fined,” Suess said. “Usually we hold off as long as we can on the fines because it is a motivator to get them cleaning it up.”

The North Dakota Industrial Commission’s policy on levying fines for damaging spills is unclear, and is usually negotiated, then settled for a fraction of the initial fine. The Commission did not release information on fines against oil companies for 2015 and 2016 by press time.