... over at the Bakken Shale Discussion Group. Bob Finley is most recent to contribute and he offers great information.
This thread is permanently linked over at my "Data Links" page, as well as the good discussion regarding overlapping 2560-acre spacing.
DebraG Comment: I posted a discussion on the Bakken Shale Discussion Group entitled, "Well Spacing: When did the Commission hold a hearing on its 'Development Plan'?" I am looking for feedback and thoughts from others on points that I may have overlooked. Thank you.
ReplyDeletehttps://groups.google.com/forum/?fromgroups#!topic/bakken-shale-discussion/N9LHl0NuMeY
As you know, I don't own any minerals.
DeleteThe first question I would need to answer regards the mandate of the NDIC: what is their mandate? You have probably answered that (or someone has) in the thread over at the Bakken Shale Discussion Group but that would be the crucial question. I honestly don't know what the mandate(s) is/are for the NDIC.
Completely unrelated but my reasoning is this: at the national level, the Fed (Ben Bernancke) is getting a lot of grief about his quantitative easing (risk of inflation, etc) but the Fed has a dual mandate: a) combat inflation; b) bring down unemployment.
Likewise, I assume the NDIC has more than one mandate. If so, the mandates might occasionally work at cross purposes. I agree that the NDIC needs to be an open forum but I hope folks are willing to abide by NDIC decisions (like the Texas Railroad Commission which has jurisdiction over Texas oil industry). If lawyers and/or the legislature get involved, the consequences could be severe.
On a completely different subject, but as an example, you may have noticed the ND legislature will consider (and probably will pass) legislation reducing the one-year limitation on flaring to six months. There are pros and cons and I think some mineral owners are going to be very, very disappointed on the outcome, regardless of how it turns out. It is counter-intuitive that reducing the time period could hurt some mineral owners, but it (most likely) will. I will post something on that somewhere down the line perhaps if there seems to be enough interest.
This blog does not get many comments, but I will post any that have comments regarding the issue of a "Development Plan."
Thank you for taking time to visit this blog.
I appreciate your comments Mr. Oksol. A review of your posts discloses your pragmatic intellect sprinkled with witticism. You have a potpourri of knowledge on subjects that are generally beyond my comprehension, but you have a knack of making things both understandable and enjoyable to read. Thank you very much for your blog.
DeleteThe Commission’s mandate with regard to state control of oil and gas resources is established by the State Legislature and is set forth in the first section of the enactment, N.D.C.C. Chapter 38-08. The Commission is responsible for carrying out legislative intent to prevent waste (as “waste” is defined by statute), and to provide for the operation and development of oil and gas properties in such a manner that will obtain the greatest possible economic recovery of oil and gas, and in such manner that fully protects the correlative rights of all owners.
The Commission is not allowed to disregard the explicit provisions of the law under the guise of pursing the spirit of the law. Furthermore, the State (by and through the Commission) may not exercise its police powers in a manner that violates individual rights secured by our state and federal constitutions. A statutory scheme that is constitutional on its face may be rendered unconstitutional in its application.
The Commission and the Producers/Lessees formulated a Development Plan that consists of establishing oversized spacing units, which have nothing to do with spacing of wells over the common source of supply, in order to allow Lessees to secure their leases and hold them by production from a single well and to do so without requiring the Lessees to actually develop the oversized units by drilling the additional wells necessary to produce the recoverable oil. This Plan does not prevent waste (it encourages waste); it does not provide for the greatest possible economic recovery of oil and gas; and it does not fully protect the correlative rights of mineral owners. I believe the Commission has failed with respect to all of its core mandates.
Again, thank you for the Million Dollar Way blog. It is a font of information for those of us who seek it out.
Thank you for our kind comments. It looks like the mandate of the NDIC, similar to "the Fed's" mandate is a dual mandate.
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