North Dakota Land Commissioner Jodi Smith comments on the recent news stories involving oil and gas companies across the state who, according to the Department of Trust Lands, have fallen behind on payments to the state public schools trust fund.
Smith gives an update on the situation from operators discussing payments with the state to bankruptcy notices to pending law suits.
“We do have, I believe it is three operators who were on that original list that are now in bankruptcy court,” Smith said. “Whether or not we receive repayment is up to the court to determine.”
Smith points out there are two sides to this issue. The natural gas side and the oil side.
“Continental (Resources) brought litigation against the state as related to the deductions they’ve been taking for transportation costs for both oil and gas,” Smith said. “In Newfield it’s just gas, Continental is oil and gas.”
She continued laying out some timelines in regards to payments, interest and court dates.
“With Continental that litigation, on this day, has never gone to court,” Smith said. “That was brought against us in December of 2017. So we are coming up on the three year mark and never even been to district court.”
Smith continued explaining how some of these law suits are connected and the Continental example would not see a court date for six years or so.
“Then it (Continental example) needs to go through the system,” Smith said. “So it becomes one of those lawsuits that takes a decade to get through the court system at the state.”
Host Jason Spiess asked Smith about the issue of the schools. Education and schools have been used as the attention grabber for this issue. Spiess asked how and why these labels have become positioned as such in the headlines.
“The majority of the funds we collect go to pay for education in the state and most of those funds go into the common schools trust fund,” Smith said. “So this upcoming year we pay for $1500 of the $10,000 it costs for every child to go to public schools in the state of North Dakota.”
Spiess asked Smith about North Dakota Petroleum’s Ron Ness public comments regarding price of oil and lawsuits. Smith offered her interpretation to the industry’s comments.
“Not to put words in Ron’s mouth, but what I think he is going at is the state was giving sections of land upon statehood and any resource that comes off that like oil, ten-percent of that tax goes into the common schools trust fund,” Smith said. “It’s always our goal to get as much money in and as much revenue for those trusts, it just can’t be at the expense of it on the back end. It’s not an ‘either or’ to us. It’s an ‘and’ to us.”
The interview also touched on how this story has created public relations issues and negative undertones against oil and gas and whether there was potential precedents being set if payments were made to the state.
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