Why Big Oil Just Spent More Than $1 Million Fighting A North Dakota Ballot Measure

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The oil and gas boom has hit North Dakota and a state ballot measure is trying to determine what to do with the revenue windfall. Measure 5, otherwise known as the “North Dakota Clean Water, Wildlife and Parks Amendment,” looks to redirect five percent of the state’s oil extraction tax revenue toward conservation activities such as improving water quality, natural flood control, fish and wildlife habitat, and land acquisition for parks and outdoor education. Supporters of the measure estimate that five percent would amount to around $130 million a year for the next 25 years.

“Big things are happening in North Dakota,” Steve Adair, campaign chairman for Measure 5, told ThinkProgress. “This measure will help prevent negative habitat changes, keep valuable grassland from being lost, and support important nesting waterfowl, amongst other things.”

The fossil fuel industry is vehemently fighting the measure and the American Petroleum Institute, a Washington, D.C.-based oil industry lobbying group, has spent over $1 million, nearly half of the total raised, on opposing the measure. The oil industry would appear to want to use state revenue to help build the infrastructure they need to maximize profit in the near-term with little consideration for the long-term health of the state.

“About 16 percent of the oil tax revenues are not already earmarked, therefore, there’s a limited amount of funds that are discretionary,” Ron Ness, president of the North Dakota Petroleum Council, told E&E News in an email. “Now is not the time to divert these oil tax dollars elsewhere on a permanent basis with no plan. We need to prioritize getting this money back to the communities to get caught up on infrastructure.”

The requirement would also likely make it more difficult for the industry to lower oil and gas production and extraction tax rates in the future. After having tried to roll back the state’s extraction tax from 6.5 to 4.5 percent last year, industry lobbyists will likely try again during the next session.

Adair said the state has enough money to deal with schools, roads, and other services — and also to stash something away from the environment. He said the oil industry’s intense opposition has surprised him because in crafting the measure they worked with the industry to address their concerns. He said none of the money would be able to be used for litigation against the industry or for environmental lobbying efforts.

“For all we can tell the American Petroleum Institute is running this like a U.S. Senate campaign,” said Adair. “They flew in a bunch of field operatives and are calling almost every phone number in the state.”

The emergence of hydraulic fracturing has vastly altered the environmental and economic landscape of North Dakota. The state now ranks second behind Texas in oil production, having accounted for over 11.5 percent of total U.S. crude oil production in 2013 — a 177 percent increase since 2010, primarily driven by fracking in the Bakken formation. Earlier this year the state surpassed the one million barrels per day (bpd) mark, a number this is expected to continue to grow steadily at a rate of about 18,000 bpd each month through 2019, according to a recent study by the state legislature. This bursting at the seams has caused the state a lot of trouble when it comes to monitoring environmental issues, tracking greenhouse gas emissions such as leaked methane, and keeping up with infrastructure demands like roads and pipelines.

Last year more than 20,000 barrels of crude oil spilled from a pipeline and soaked a wheat field in Tioga, North Dakota. After this massive spill, for which cleanup is ongoing, the Associated Press conducted an investigation that found that nearly 300 oil spills and 750 “oil field incidents” had occurred in North Dakota since January 2012 — none of which were reported to the public.

“The Bakken formation is one of the biggest in the entire world,” said Adair. “And we are just getting started.”

He said there are over 30 spills a week of salt water and oil, and that if the state is going to avoid long-term water quality impacts it needs to put buffers and retention barriers in place. Measure 5 would provide the means to accomplish this.

The money from Measure 5 would be kept in a savings account overseen by a commission comprised of the governor, attorney general and agriculture commissioner. A 13-member citizens panel would be appointed for three-year terms to review grant applications and make recommendations to the commission. The law would be revisited in 25 years.

Evan Nelson, president of the Environmental Law Society at the University of North Dakota, wrote an op-ed endorsing the measure on the society’s behalf. He states that even though they prefer “to live a world with less laws, not more,” they are unanimously endorsing the measure because “it is the fiscally conservative way to conserve.”

Nelson states three main reasons for endorsing Measure 5: It doesn’t raise taxes, it is a local and state solution that doesn’t involve the federal government, and it ensures the state can only spend money that it already has.

“We all agree North Dakota needs to protect its natural beauty and resources,” he writes. “We support Measure 5 because it is the most direct and responsible way to do this.”

Amending the constitution through voter approval with proposals like Measure 5 is one of the few ways that Democrats and progressives can assert influence in a Republican-dominated state such as North Dakota. Another measure on the state’s ballot, Measure 4, wants to remove this option by prohibiting constitutional amendments that make a direct appropriation of funds for specific purposes — which would mean things like Measure 5 would no longer be allowed on the ballot.