The North Dakota Supreme Court today ruled in favor of the North Dakota Industrial Commission, Oil and Gas Division (OGD) regarding a case seeking a civil penalty plus costs and expenses from Black Hills Trucking (BHT) for illegally dumping saltwater in 2014.

The Commission sought $950,000 in penalties from BHT for illegally releasing saltwater from a truck on three different occasions on a Williams County road in February 2014. One occasion was witnessed by an OGD field technician.

“We are pleased with the Supreme Court’s opinion to uphold the District Court decision and rule in favor of the Commission penalty,” says Division Director Lynn Helms. “The outcome of this case was vital in maintaining the jurisdiction of the Commission on complaint cases.”

BHT argued the Commission had no jurisdiction to issue a fine because the incident took place on a road, not a well pad.

They argued off-site jurisdiction fell to the North Dakota Department of Health, who had already assessed a penalty.

The Supreme Court agreed with the Commission argument of broad statutory authority over oilfield waste and disposal from the point it was generated to the point it is disposed.

Legal Counsel for BHT has 14 days to file a petition for rehearing with the court, otherwise the opinion is considered final.

Two excerpts from the North Dakota Supreme Court decision follow. The first describes the infraction; the second cites the N.D. statute giving jurisdiction.


On March 3, 2014, the Commission confirmed through lab analysis that the soil sample from the February 8 incident contained elevated levels of electrical conductivity and chlorides consistent with saltwater. On the same day the Commission received another report of a Black Hills truck improperly dumping fluids. Employees at the same well site observed the truck unloading saltwater and exiting, leaving a trail of saltwater from the disposal well, continuing off the well site and onto a county road until it intersected a highway. One of the employees confirmed that the discharged fluids contained saltwater. On March 6, 2014, the Commission received the lab analysis of the samples related to the February 14 incident which also indicated high levels of electrical conductivity and chlorides consistent with saltwater. Black Hills did not file a spill report, test to determine the extent of contamination, develop a remediation plan or take any further actions to clean up or remediate the areas affected by the improper discharge of saltwater from the three incidents.

On March 13, 2014, the Commission issued an administrative complaint against Black Hills for the three incidents and requested penalties in the amount of $950,000 and costs and expenses of $1,526. Counts one through three of the complaint claimed violations of N.D. Admin. Code § 43-02-03-19.2 for dumping the produced fluids on three occasions. Counts four through six alleged violations of N.D. Admin. Code § 43-02-03-30.1 for allowing the fluids to infiltrate the soils on three occasions.

Counts seven through nine alleged violations of N.D. Admin. Code

  • 43-02-03-30.1 for failing to properly remove the discharged fluids from the roads.

Count 10 sought the Commission’s investigative costs and expenses under N.D.C.C.

  • 28-32-26. The Commission sought fines of $12,500 per day for each violation. The vast majority of the Commission’s proposed fine related to the violations alleged in counts seven through nine.

The actual statute conferring NDIC’s regulatory authority to act stated:

“The Commission has the authority:

* * * *

(2) To regulate:

(a) The drilling, producing, and plugging of wells, the restoration of drilling and production sites, and all other operations for the production of oil or gas.

(b) The shooting and chemical treatment of wells.

(c) The spacing of wells.

(d) Operations to increase ultimate recovery such as cycling of gas, the maintenance of pressure, and the introduction of gas, water, or other substances into producing formations.

(e) Disposal of saltwater and oilfield wastes.

(1) The commission shall give all affected counties written notice of hearings in such matters at least fifteen days before the hearing.

(2) The commission may consider, in addition to other authority granted under this section, safety of the location and road access to saltwater disposal wells, treating plants, and all associated facilities.”

Read the full N.D. Supreme Court Decision here.

Read the Oil & Gas 360 Special Report: The Crucial Importance of Water Handling in Oilfield Operations

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