N.D. landowners, oil companies deal for slough water

Farm Forum

ROSS, N.D. (AP) — Curt Trulson’s got a good deal going with the oil company putting in 12 wells behind his farm headquarters just east of Ross.

They’ll pump water out of his slough to hydraulic fracture the wells and maybe he’ll get some of his farmland back.

It’s wet up there in Mountrail County and the amount of farmland being swallowed by sloughs and potholes has quadrupled in recent years. Trulson will have to leave half the slough water for wildlife by State Water Commission rules, but that still leaves plenty for the oil industry. And maybe some of the 350 acres of farmland that’s now under water will dry out.

Oasis Petroleum needs in the range of 33 million gallons of water to frack 11 more wells on the two-section spacing unit north of Trulson’s farm headquarters. One lease-holder well was completed a few years ago and now the company is in-filling with two, six-well pads on either end of the unit.

Fracking, an injection process that has a huge appetite for water, will start in June and Trulson’s brimming slough lies conveniently in the middle of it all.

Water is a 6 billion-gallon annual business in the oil patch, and these localized arrangements compete with established water depots and to an extent, with the state-subsidized Western Area Water Supply regional pipeline system.

The pipeline depends on industrial water sales and manager Jared Wirtz told The Bismarck Tribune that the average revenue of $2.7 million a month is enough to repay the state’s loan.

Wirtz said the pipeline project will continue to build water depots along the line, but he recognizes that it’s all about convenience for the oil company and, fortunately for the pipeline depots, some oil patch counties like McKenzie County don’t have much surface water. “There have been a lot of wet years and Mountrail County has a lot of sloughs and potholes. That could change in future years,” Wirtz said.

Trulson has received a 12-month temporary water permit from the State Water Commission and Mountrail County approved a change in zoning, giving the agricultural land an industrial conditional use permit.

The county has recently received such a flurry of requests to sell slough water to oil companies that it put off deciding until it met with the State Water Commission, which it did earlier this month.

Zoning administrator Don Longmuir said the use of slough water for fracking is new to the county and it wants to be careful, especially with more applications pending.

“We’re always only 72 hours away from a drought,” Longmuir said.

But after several wet years, the growing number and size of sloughs in Mountrail County makes the idea of using some of that water for fracking a win-win

“Farmers can regain some of their farmland and it’ll also keep it off the county roads,” Longmuir said. He said the county believes the water commission has a good handle on how much water can be used.

Satellite imagery takes all the guesswork out of it, said Dan Farrell, who manages the commission’s surface water program.

Farrell said imagery shows that the amount of surface water in northern Mountrail County has quadrupled since 2006. There are now 71 square miles inundated with water, compared to 18 square miles then, he said.

“That’s why we’re able to look favorably at these permits,” he said. “We only let them take 50-60 percent and leave the rest for cattle or wildlife.”

The commission gets new satellite images every 16 days and conducts a review every quarter, he said.

Trulson’s permit says he can remove 300 acre feet from the slough, or nearly 100 million gallons, though he expects Oasis pumps to suck about one-third of that. A meter with readings relayed to the commission will allow staff to keep track.

Trulson will get paid for the water, though he doesn’t want to say how much. The pipeline charges 2 cents a gallon, or 84 cents a barrel, Wirtz said.

Another benefit is that Oasis will use pumps and string hose to bring water to the well site instead of a constant stream of tanker trucks hauling the millions of gallons each frack requires.

“The less trucks the better,” Trulson said.

Farrell said slough water belongs to the state of North Dakota, which gets a $200 application fee, but landowners can cut their own deals and keep the revenue.

“They suffer through everything else. They can make a little,” he said.

So far, in less than four months this year, the commission has received 373 applications for surface water and nearly three-fourths of those are for the oil and gas industry, with most others for dust control during road work projects.

In all of last year, the commission received 600 applications for surface water, so demand is clearly up this season.

“And we haven’t even reached road construction season yet,” Farrell said.