Providing coverage of Alaska and northern Canada's oil and gas industry
June 2015

Vol. 1, No. 5 Week of June 14, 2015

Penalties and reduced payments come with greater explanations

Gov. Jack Dalrymple wants a sense of greater transparency from the North Dakota Industrial Commission regarding fines imposed on oil and gas operators.

At a June 10 meeting of the commission, the state’s Department of Mineral Resources presented its fourth quarter 2014 report outlining 22 complaints it has issued and accompanying fines and collections. While some of the complaints are tied up in court in order to collect the penalties imposed, many operators paid a percentage of the penalty with a greater amount suspended for one or two years to keep the operators in compliance, which DMR Assistant Director Bruce Hicks says is working well.

“We do not have these operators violating the same rules down the road because they have that suspended amount of money that could be imposed if we have a similar violation,” Hicks said, “so we believe this is the proper way to go.”

Dalrymple felt that the public may still negatively interpret the suspended fines so he requested DMR to include in future reports what actions an operator took that allowed the suspended penalty.

“Otherwise, it just looks funny when you propose a big penalty and they pay a small fraction and there’s no explanation,” Dalrymple said.

Dalrymple serves on the NDIC with Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring and they also felt the suspended penalty model works well to change behavior and Stenehjem said it’s good to “always have a substantial penalty of some sort over their heads.”

- Maxine Herr

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