North Dakota’s Supreme Court on Thursday struck down key portions of a state law that a landowners group argued amounts to the unconstitutional taking of private property rights.
The so-called pore space law passed the 2019 Legislature after supporters sought clarification on the use of voids or cavities in underground rock formations. Pore spaces are used when the petroleum industry injects saltwater from oil and gas production underground for permanent storage or for enhanced oil recovery.
The Northwest Landowners Association sued the state, arguing the law deprives them of their right to be compensated for the use of their pore space.
A state district judge last year ruled the law unconstitutional because it gives the landowners’ value from pore space to the oil and gas industry for free.
Justices, in their unanimous opinion made public Thursday, largely agreed.
“In summary, we conclude that several parts of (the law) have been shown to be unconstitutional on their face,” the opinion said.
Derrick Braaten, a Bismarck attorney who represents the landowner group, said, “This is a big win -- I mean, there is nothing in this opinion that we are not absolutely thrilled about and don’t agree with 100%."
Under the law, landowners couldn't be compensated for pore space when it was used for saltwater disposal or enhanced oil recovery, unless they had an existing contract. Landowners adjacent to a disposal well also could not make a claim that saltwater, a byproduct of oil production, had migrated into their pore space, nor could they sue for trespassing.
The Supreme Court struck down those provisions.
“North Dakota law has long established that surface owners have a property interest in pore space,” justices said. "Surface owners have a right to compensation for the use of their pore space for disposal and storage operations.
“Government-authorized physical invasions of property constitute the ‘clearest sort of taking,’" the opinion said.
North Dakota’s oil industry pushed for the law and Republican Gov. Doug Burgum signed it, despite strong objections from landowners. It was one of the most controversial measures of the 2019 Legislative session.
North Dakota's Industrial Commission, headed by Burgum, said in a statement Thursday that it is "committed to ensuring that underground saltwater injection wells are managed for the benefit of landowners as well as the oil and gas industry.”