North Dakota Supreme Court sides with Oil Patch landowners in dispute over 'pore space' law
A group of Oil Patch landowners argued a 2019 law illegally stripped away their property rights by allowing oil companies to avoid paying them for the use of underground rock cavities on their property.
BISMARCK — The North Dakota Supreme Court has ruled in favor of a group of landowners in a complex dispute over the oil and gas industry's use of underground rock cavities.
The unanimous ruling released Thursday, Aug. 4, upheld critical parts of a lower court's decision to strike down a state law that prevented some landowners from receiving compensation for the use of underground cavities on their property.
The Republican-held state Legislature and Gov. Doug Burgum approved the industry-backed legislation in 2019, setting the stage for a lawsuit brought by the Northwest Landowners Association.
The cavities, known as “pore space,” can be used by oil producers for the disposal of salt water or for the injection of carbon dioxide to boost production from declining oil wells.
The landowners argued the 2019 law illegally stripped away their property rights. The state contended the law fell within the state's authority to coerce property for the public good. Continental Resources, a major oil producer, intervened in the case and joined the state's side.
A district court judge struck down the whole law in a 2021 ruling, but the Supreme Court's decision Thursday restored some pieces of the law that Northwest Landowners' attorney Derrick Braaten said weren't of much consequence to his clients.
The Supreme Court concurred with the lower court that the disputed section of the law allowing oil producers to use pore spaces without paying landowners violated clauses in the U.S. and state constitutions that prohibit the public "taking" of private land without offering fair compensation.
Braaten said the landowners felt "vindicated and elated" after the high court's ruling.
A joint statement from the state Industrial Commission, which was a defendant in the case, said, "Although the Supreme Court ruling struck down portions of Senate Bill 2344, the remaining portions of the bill that the court upheld are a victory for both landowners and industry."
The Industrial Commission consists of Gov. Doug Burgum, Attorney General Drew Wrigley and Agriculture Commissioner Doug Goehring.
An attorney for Continental Resources did not immediately respond for comment on the ruling.