North Dakota Landowners Sue Fossil Fuel Companies Over Wasted Natural Gas

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Nearly 30 percent of natural gas drilled in North Dakota is intentionally burned off, or flared, resulting in an approximately $1 billion loss, and releasing greenhouse gases equivalent to nearly one million new cars on the road. Now, some North Dakota landowners are fighting back.

Mineral owners from multiple states are suing ten oil and gas companies for millions of dollars in lost royalties for flared natural gas. They claim companies are burning off more gas than is allowed by the North Dakota Industrial Commission, disposing of valuable resources mineral owners should be getting paid for.

The cases filed Wednesday sought class-action certification, and an amount in damages to be determined by trial, based on future flaring and flaring that occurred in for the six years prior.

Since oil is 30 times more valuable than natural gas, companies are rushing to pull it out of the ground fast, while prices are high. Building the infrastructure to capture the natural gas that’s part of oil drilling would take time and money, and companies aren’t willing to wait or pay.

Baumstark Braaten Law Partners, one law firm involved, said in a news release that the lawsuits are an attempt to create a “compelling economic incentive for producers to reduce and eliminate the wasteful practice of flaring.” Derrick Braaten, of that firm, said the state could make a case for owed taxes against the companies as well.

Flaring is better than simply releasing the natural gas into the air, but it still has serious climate and air quality impacts. In 2012, natural gas flaring in North Dakota alone emitted 4.5 million metric tons of carbon dioxide, and may release a variety of air pollutants, including benzene and formaldehyde, and over 60 more that have been detected downwind from flares. And flaring has become so intense in North Dakota that its brightness rivals that of many major population centers.

The North Dakota Petroleum Council announced a task force to reduce gas flaring the same day the lawsuits were filed, a coincidence according to a statement from spokeswoman Tessa Sandstrom. The news release noted the industry has invested more than $6 billion in the necessary infrastructure to trap natural gas.

The World Bank-led industry-government coalition, the Global Gas Flaring Reduction Partnership, was supposed to have a report out in 2012 detailing the extent of natural gas flaring for the year, using National Oceanic and Atmospheric Administration (NOAA) satellite data, but the automatic budget cuts to NOAA known as the sequester have delayed its release. And during the recently-ended government shutdown, NOAA’s site displaying daily maps of flaring was unavailable.

But while the 29 percent of gas North Dakota flared in August is down from the high of 36 percent in September 2011, the overall volume flared has increased as production in the state’s Bakken formation has boomed.

(H/T The Forum of Fargo-Moorhead)