North Dakota owns mineral rights near water, court says

North Dakota defeated a bid for control of mineral deposits along navigable waterways by landowners who claimed the rights are worth millions of dollars in the second-biggest oil-producing U.S. state.

The ruling by Williams County District Court Judge David W. Nelson resolves for now an almost year-old court battle over who controls access to, and development of, subterranean resources that riparian landowners have claimed between the typical high and low watermarks.

“The court understands that its decision is not necessarily the final word on this title question,” Williams wrote in his three-page decision dated Jan. 28.

North Dakota ranks second among U.S. states in oil production with more than 21 million barrels of crude being produced in November, according to U.S. Energy Information Administration data.

The oil, extracted from the Bakken shale formation, has spurred an economic boom that has put the state at the top of Bloomberg economic health data for its increasing employment rates, personal income and tax revenue.

The Bakken formation is part of a geologic region called the Williston Basin, centered beneath the city of Williston, where Nelson heard arguments over the mineral rights issue on Dec. 17.

Shore Zone

While the oil in question is about two miles below the surface of what the parties called the “shore zone,” its extraction is performed by horizontal drilling, or fracking, plaintiffs’ lawyer Jan Conlin told the court then.

Conlin contended that the state relinquished title to the strata when it set the boundary for its own riparian rights at the low water mark when it entered the union in 1889.

Assistant Attorney General Charles Carvell disputed that argument. State Attorney General Wayne Stenehjem’s office had previously argued in court papers the land had public value beyond that found in its resources.

“We believe the district court decision correctly determined the status of the law in this important case,” Stenehjem said yesterday in an e-mailed statement. “Still, this was only the first step. We hope to have this matter presented to the North Dakota Supreme Court as expeditiously as possible. They will likely have the final word in the matter.”

Conlin, in a phone interview yesterday, said her clients would appeal.

“We’ve always said the judge’s ruling would be the first step in getting this issue before the Supreme Court,” she said. “We’re moving ahead.”