Getting a leg up on oil impact in North Dakota

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DUNN CENTER - Daryl Dukart started thinking his fellow Dunn County men and women should band together not against oil development, but in response to it.

He hunkered down at the oak table in his two-story farmhouse, got on the telephone and started calling friends and neighbors.

There has never been oil development in Dunn County like there is now and will be in years to come. The Little Knife Oil Field is more than 20 years old, and that only affected the western edge of the county.

In this new oil rush, most of the county is being leased up, clear over to Halliday and Dodge.

Six companies are operating 12 rigs in the county, setting up on new, two-section spacings nearly overnight.

Suddenly, the face of the county is changing, with semi trucks chasing up and down the gravel roads. Some people are poised for new wealth and others are poised to share mainly in the dust, traffic and other problems. Oil production from the county is already twice what it was a year ago, after holding steady at 70,000 barrels a day for years.

Dukart's calls sparked a small grassroots fire, and in the past weeks as many as 60 county residents have met and formed the Dunn County Energy Development Organization, or DCED for short.

Land and minerals owners are welcome to join for $50 a year.

The group elected officers and plans to meet once a month.

The idea is to share information so people know, for example, what leases are going for, so that people can negotiate with oil companies in fuller knowledge.

Casey Fredericks, who has ranch land north of Dunn Center, said development is happening all around, but people need to know more.

"We're kind of in the dark," Fredericks said. "We don't know what's going on."

One thing they are facing is the oil-old division of property owners and mineral owners. In most cases, the oil minerals have been long sold away from the property. The law says mineral rights are primary and a landowner can't prevent oil development.

Monte Schmalz, of rural Dunn Center, said he's been offered $1,500 an acre, or $9,000 so the oil company would have lifetime use of six acres of his land to drill a well.

'That's equivalent to buying an upper-end big-screen television," Schmalz said.

He said it would be more fair to pay him for years of lost cropping on the land, perhaps on an annual rental basis, rather than a one-time fee.

He said he doesn't want a "war," he just wants to be treated fairly.

Dukart said the new group has to come from behind, because a lot of people have already signed leases.

Leases are just the beginning. Dunn County landowners "will be dealing with people constantly," for pipeline and electrical easements to take oil and natural gas from wells to collector and treatment sites, Dukart said.

The men say they're concerned with the impact on the county's roads and aquifers and guess that in three years the county will look much different than it does now.

Reinhard Hauck, Dunn County auditor, said the county's road budget will go to $2.5 million next year from $2 million this year, with less than half coming from the county's share of the oil production tax.

Oil revenue is slow to come, even though new roads to new wells are going gangbusters, with the county required to blade and gravel them.

"We're struggling with funds and how long we can survive," Hauck said.

Fredericks said the group is new and just finding its legs.

"We're not saying we don't want energy development," he said. "We're just asking, 'What about responsible development?'"

The Dunn County Energy Development Organization will meet again at 7 p.m. Wednesday at the Dunn County City Hall. The fire trucks will be moved out of the hall to make room, if necessary.

(Reach reporter Lauren Donovan at 888-303-5511 or lauren@; westriv.com.)

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