SB 164 – “Words matter.”

The hearing is happening right now, and Stockgrowers, Dakota Rural Action, and the Farmer’s Union testified for the bill. Steve Willard for the American Petroleum Institute testified against.

His first statement was that “words matter.” I think his point in saying that was that the ‘devil’ in this bill is in the details. Meaning, he does not like the additions of compensation for lost use of land and lost access to land. In his words, you “cannot put a dollar value on lost use or lost access.”

I beg to differ. I think landowners in Harding County put a dollar value on that every year, when they run fewer livestock on their land. I think they know the exact dollar value. And to be frank, Ken Luff and Steve Willard know that dollar value, as well as Continental Resources. It is clear they just do not want to pay for what they are really removing from landowners. That much is clear.

Mr. Willard also said that this bill would deter developers from coming in to drill in South Dakota, that it would be “substantially discouraging” to the oil lobby. Again, I disagree. I think this would be discouraging to bad actors, of which we know there is at least one rummaging around in Harding County. Good companies should have no problem – no problem at all! – compensating landowners for their lost production.

According to Mr. Willard, Luff Oil has paid $860,000 to landowners in compensation. In his testimony, he said that was for about 216 acres. That comes out to about $3,982 per acre. If you look at that over 20 years, that is about $200 per year per acre (wells tend to be on land for far longer than 20 years). When landowners deal with loss of production, loss of access, trash, roads, pipelines, fewer livestock, trucks driving over their land, inadequate land reclamation, and countless other hassles, $200 per year per acre is hardly adequate compensation. Particularly when you note that that is an absolute minimum amount.

Sen. Vehle asked how oil development could prevent access to land. Mr. Murphey from the Stockgrowers responded to that with the fact that dust could cover food for the sheep. Mostly he said he was not sure. I’ve seen the roads that cross some of the land in Harding County. It is very easy to see how you could lose access to your land: if a road cuts in a certain way, livestock is cut off from certain parts of a pasture. Sen. Maher clarified further to say than when you have trucks driving over those roads you do lose access to pasture. Some of these things should be quite clear.

Sen. Lucas made a motion to defer the bill to Tuesday, because it would not pass today. Sen. Rhoden substituted to defer it to the 41 day – in essence, a way to kill the bill. He said that there have been two days of discussion. This bill did not come out of the summer study. He said that aside from the mediation aspect of the bill (which this bill is not really about), he objects to the bill. He thinks $2,800 is more than enough compensation for an acre (though he does not take the period of time those acres are lost into consideration). He believes the landowners are better off with the roads crossing their land (though he did not clarify whether he would be happy having miles and miles of roads ruining his land).

Sen. Omdahl made a simple statement: “I do not want to inhibit oil development in this state.”

Sen. Rampelberg and Sen. Ewing like the bill. They just want it cleaned up – and are not in favor of deferring to the 41st day.

Sen. Krebs feels it was hastily put together. She wants to see it cleaned up. Over the next year. Not this one.

The bill was deferred to the 41st day.

Next year.

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Comments

  1. Karen Englehart says:

    Here is another example of our elected officials caving in on issues that would help protect surface owners, especially those that cannot benefit from the resources beneath the surface, while their surface productivity is measurably deminished by mineral development, be it drilling or mining.

  2. Frank James says:

    And South Dakota continues to put business interests in front of citizens interests and property rights. Not surprising but disappointing.

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