NYT’s Latest Hit Piece on N.D. Oil and Gas is Pretty Silly
Randy Hildreth co-authored this post
The New York Times rolled out another “in depth” series on oil and gas development this past week — this time, setting its sights on the energy renaissance taking place right now in North Dakota, home to the nation’s strongest economy, lowest unemployment rate (2.8 percent!), and highest “well-being” ranking anywhere in the United States, according to Gallup.
According to the Times, the two-part report took nine months to assemble and drew on “dozens of interviews.” But, despite the significant time and resources that went into it, the series follows a now well-established pattern from the paper of tendentious reporting on oil and gas development – an ideological orientation to the issue that even the Times’ own public editor felt compelled to call-out as one-sided in a series of columns that ran a couple of years back.
Meanwhile, back up in North Dakota, Rob Port of the Say Anything Blog has already conducted a full field-dressing of the Times series – an evisceration that was so good, and so thorough, that a spokeswoman from the Times felt compelled to send him an email about it. The North Dakota governor weighed in on the series as well, telling a reporter from the Bismarck Tribune that the stories “do not include very important facts about how we regulate oil and gas.”
Building off that strong in-state spade work, below we attempt to highlight a few other things that the Times reporter gets wrong, leaves out, and otherwise mangles as part of this series.
Apples-and-oranges on spill data comparison
For all of its interactivity and sophistication, the database constructed by the Times to accompany its stories on North Dakota oil and gas development is seldom referenced in the articles. And when it is, the way in which it is cited tends to raise more questions answers.
For example, the Times story states that:
“(A)ll told, the number of wells is up 200 percent and spills 650 percent since 2004.”
Now, to a layman, this would probably seem a perfectly reasonable comparison – especially if one assumes that each well drilled produces roughly the same volume of oil, and thus carries roughly the same risk in terms of potential for spillage, accidents, etc. Of course, though, that’s not how things work up there (or anywhere, actually) at all: all wells are not, in fact, created equal.
A better and more relevant comparison is looking at the number of recorded spills alongside the number of barrels of oil that have been produced in the Bakken over the past 10 years. According to figures from the EIA, oil production in North Dakota increased by 908% from 2004 to 2013. This means that the number of spills per barrel of oil produced actually went down by 25.6%–using the Times own figures for spills.
Contrary to the narrative that the Times reporter is trying to advance, the reality is that, as Bakken production in North Dakota has continued to advance to historical levels year after year, the number of spills and other related incidents has continued to decline on a per-barrel basis.
Criticism of North Dakota’s regulatory approach
The Times’ inclusion of tendentious spill data provides the framework the reporter needs to advance the “industry is out-of-control” narrative, which is fundamental to the piece. But the story wouldn’t be complete – or all that compelling, really – without positing some sort of explanation for how this apparently flawed system came into existence in the first place, and how it’s allowed to continue today.
For that, she needed to generate some good data points and anecdotes that put North Dakota regulators in the worst possible light – pairing up the “industry is out-of-control” storyline with the familiar “and state regulators are even worse” theme.
But, here’s the inconvenient truth about that: North Dakota’s oil and gas regulations are among the strongest in the country, and continue to get stronger by the day. Consider: from 2012 to 2014, more than 70 new rules and regulations were issued by state regulatory agencies specific to oil and gas – with nearly 50 of those coming directly from the state’s Department of Mineral Resources, which is the primary regulator of the industry in the state.
Of course, activity isn’t quite the same thing as achievement – so let’s take a look at how N.D.’s regulatory approach stacks up to other oil-and-gas producing states. According to a study issued in 2013 by the left-of-center, D.C.-based think tank Resources for the Future, North Dakota ranks at the top of the list, or at minimum among the leaders, in the strength, depth and specificity of regulations covering everything from casing, cementing, and water withdrawal, to setback restrictions, fracturing fluid disclosure, and well plugging and abandonment. Just to name a few.
Naturally, none of this information found its way into the Times story. So what did the reporter focus on instead? In North Dakota, regulators often will decide to suspend a portion of a fine that may be issued to a company in connection with an incident so long as that company produces an action plan demonstrating how that accident will be prevented in the future, and then actually executes it successfully, without further incident.
If a company fails to do that, it gets stuck with the whole fine – and probably more. It’s an enforcement approach that’s used by regulators across all industries, all across the country – and it’s not difficult to see why: The fact that operators seldom—if ever—incur the same penalty twice shows that the system is producing the intended results. Unfortunately, to the Times, this regulatory and enforcement policy is held up as “Exhibit A” to support the reporter’s contention that regulators in North Dakota don’t know what they’re doing.
Corral Creek and Unitization
The primary objective of the second Bakken-related Times story is to attack from every angle the basic concept of unitization, with a special focus on slamming the creation of the Corral Creek Bakken Unit in 2011. But here’s the funny thing about unitization: it’s a process that even many environmental groups support because of its ability to encourage efficient drilling and production and minimize impacts to land, water and the surrounding environment. Bottom line: Unitization allows companies to produce more energy from fewer wells drilled, and do so in a way that reduces significantly the amount of land that is disturbed on the surface.
The process of developing and constituting a “unit” for these purposes is overseen by Department of the Interior’s Bureau of Land Management (BLM) when it comes to federal land, and the North Dakota Industrial Commission for acreage that belongs to the state and private interests. BLM summarizes unitization thus:
“Unitization provides for the exploration and development of an entire geologic structure or area by a single operator so that drilling and production may proceed in the most efficient and economic manner.”
In the case of the Corral Creek Bakken Unit, unitization consolidated nearly 31,000 acres in and around Little Missouri State Park, and provided a good bit of added flexibility for operators to minimize impacts to the park and keep wells out of the Little Missouri floodplain. Writing in the Grand Forks Herald at the time that unitization was being considered, North Dakota DMR director Lynn Helms expanded on the benefits of the policy:
“The Corral Creek Unit will result in the landowners, royalty owners, producers and the general public enjoying the greatest possible good from these vital natural resources by reducing the number of well pads, roads, truck traffic and facilities while controlling where well pads can and cannot be located.”
Obviously, anything resembling balanced reporting on this matter would have at least taken a minute to explain the clear upsides related to unitizing a property – and maybe also mentioned the fact that it’s happening all across the North Dakota right now, and, indeed, all throughout oil-and-gas producing regions of the United States.
Instead, the Times decides to characterize unitization as (essentially) legalized theft – aided and abetted by complicit state regulatory agencies, and with no benefits whatsoever to be realized for the local land- and mineral-owners whose property was appropriated.
Isn’t there an “upside” to N.D. oil and gas development?
Bakken development has brought jobs, rising incomes and economic opportunity to North Dakota. While the Times may have focused on the “downside of the boom,” North Dakotans, the ones living near oil and gas development, tend to have a much different perspective.
In fact, polling has shown that “80 percent of North Dakota voters favor more development of U.S. oil and natural gas resources,” which isn’t much of a surprise when one considers that the state’s GDP growth grew by double digits over the past couple years. Also noteworthy is even more recent polling data showing that North Dakotans overwhelmingly support the construction of the Keystone XL pipeline.