North Dakota Requires Compensation for Surface Owners

North Dakota requires compensation for surface owners

As reported in the Western Livestock Journal, February 1, 2013 

Recognizing the concerns of surface owners who do not own the minerals, North Dakota law has been modified through the years to offer the surface owner more property protection rights; the key legislation at this time is the Surface Damage Compensation Act, which defines two categories of surface damage. The first category is damage and disruption and the second is loss of production. The legislation includes examples of compensable damages, such as lost land value, lost use of and access to land, and loss value of improvements.

The mineral developer must provide the surface owner a notice of planned activities (seven days for activities that do not disturb the surface and 20 days for oil and gas drilling operations) and a written offer to compensate for damages through a surface compensation agreement. If the surface owner does not accept the agreement the parties can proceed in court.

However, in an effort to reduce the number of court proceedings, the North Dakota Legislature has directed the Department of Agriculture to provide mediation service for the surface owners and mineral developers. This statute also states that these payments are intended to compensate the surface users, such as a farm tenant.

The anticipated network of pipelines that is intended to reduce truck traffic and gas flaring is leading to a need for pipeline easement. Executing the easement is an opportunity for a surface owner to thoughtfully specify what rights are being granted….

Surface users and mineral owners may be told when they are offered a lease, compensation agreement or document to create an easement that states “this is standard language” or that it is “a standard document.” However there is no such thing as a standard document.

Mineral owners and landowners should not feel obligated to accept the first offer. They should take their time and review the document, consider their situation, assess whether the document addresses their needs and concerns, and seek outside council if they so desire…

David Saxowsky, North Dakota State University, prepared this article in the Western Livestock Journal. Professor Saxowsky teaches Farm and Agribusiness Management and related subjects, and maintains the ND Oil and Gas Law site at this site.

Tagged as: disturbances, fracking, impacts, landowners, natural gas, oil, pollution, shale drilling