Army Corps says industrial users must pay
BISMARCK – It takes a torrent of water to keep the oil flowing in North Dakota’s oil fields.
Drilling a well consumes an average of 3 million gallons of water – most of it hauled by fleets of trucks that pound roads and highways, clog traffic and belch diesel exhaust.
In fact, of the 1,200 truckloads required to drill a single well, more than a third, 450, are filled with water, vital for pumping oil.
Water is mixed with chemicals and pumped deep underground to free oil from shale formations, a process called hydraulic fracturing, or “fracking.”
But an immense source of water lies strategically in the heart of the booming Bakken Formation in western North Dakota – Lake Sakakawea.
If tapped, water from the reservoir on the Missouri River could help reduce truck traffic and serve as an alternative to drawing down aquifers.
Yet that source of water is off-limits to oil and gas development.
Alarmed by the rapid growth in the water-intensive petroleum industry, the Army Corps of Engineers has placed a hold on issuing water-use permits for the reservoir.
The corps is studying long-term water demand and supply to ensure no shortage develops from the thirsty oil and gas industry.
The corps’ position, still under review: Industries that use water from Lake Sakakawea must pay.
The freeze and proposed water fee, which surfaced in summer 2010, drew angry protests not only from the oil and gas industry but from North Dakota’s political leaders.
They see the move as the latest in a litany of setbacks over decades that have largely thwarted the state’s efforts to tap its most valuable water resource.
Consider that the total combined yearly flow of North Dakota’s other major rivers – the Red River at Fargo, the Sheyenne River at Valley City, the James River at Jamestown and the Souris River in Minot – equal about 4 percent of the Missouri River’s yearly flow at Bismarck.
“The Missouri River is a virtually untapped resource that presents a unique opportunity for development and use in the state’s future,” the State Water Commission stated in a position paper.
The key word is future.
Massive farm irrigation projects, as well as municipal and industrial water supply, were promised in return for North Dakota’s sacrifices to enable two major dams on the Missouri River.
North Dakota landowners lost 550,000 acres, land set aside for Garrison Dam’s Lake Sakakawea, which begins 75 miles north of Bismarck, and the reservoir for the Oahe Dam in South Dakota.
A massive permanent flood came with the reservoirs. In return, North Dakota has received millions of federal dollars for municipal, rural and industrial water supply.
But the state still waits for water projects that were to be the keystone payoff for Garrison.
After waiting for more than five decades for Missouri River water to augment local supplies in times of prolonged drought, Red River Valley communities such as Fargo and Grand Forks still wait for a project to be approved.
Meanwhile, a project to carry Missouri River water to the Minot area is stalled, held up by a Canadian lawsuit alleging environmental harm would result in the Souris River watershed.
Oil and gas, the roaring engine driving North Dakota’s robust economy and job growth, have now joined the list of users waiting for Missouri River water.
The rationale for the corps’ proposal to make users pay for water drawn from Lake Sakakawea is that it costs money to store water in the reservoir. It calculates the cost at $2 million a year.
North Dakota officials find that argument galling.
The state asserts that the water that would be drawn from Lake Sakakawea flows naturally in the Missouri River, so no stored water would be tapped.
“We have a right to the natural flows,” says Todd Sando, the state engineer for North Dakota.
“There’s enough natural flow that we should be able to take the water out,” he adds.
A 2010 report for the North Dakota Petroleum Council, the voice of the industry, said water the oil and gas industry would take from the Missouri River is miniscule.
It estimated the maximum amount of water consumed per year for oil development would equal about one-tenth of 1 percent of the Missouri River’s daily flow past Bismarck.
Also, a series of congressional acts stemming from the 1944 law that provided for Garrison Dam have recognized North Dakota’s right to Missouri River water and the state’s need for water development, state officials argue.
The corps ended up agreeing with that argument, state officials note, when it concluded last June that a water project in Emmons County was authorized by a 1986 law reauthorizing the Garrison Diversion Project.
Therefore, the corps’ policy of charging for stored surplus water didn’t apply – a decision North Dakota officials contend should extend to the Lake Sakakawea dispute.
The issue is significant because only 79 miles of free-flowing Missouri River remain in North Dakota.
The rest of the river runs within Lake Sakakawea and Lake Oahe, where access to the water is controlled by the corps.
“We need to get to the Missouri River, and our federal government is blocking us,” Sando says.
More is at stake than oil and gas development.
Almost half of the Lake Sakakawea water used in the past two decades has been for farm irrigation, Sando says.
But many of the easements allowing the use of that water expire in the next 10 years, meaning those farmers then could be charged $20.91 per acre-foot of water – an amount Sando says would have “tremendous impacts to our agricultural economy.”
The corps adopted the storage fee policy in 2008 – just when North Dakota’s Oil Patch really started to boom, state officials note – but didn’t move to impose the fee until two years later.
The possibility that North Dakota users would have to pay almost $1 billion over time for Lake Sakakawea water, Sando’s estimated total, is an outcome he finds bitter.
That would be many times the $59 million the corps paid property owners in relocations, land purchases and damage costs when the dam was built in the early 1950s.
All for Missouri River water the state points out exists regardless of whether any of it happens to be stored by Garrison Dam.
One large water supply project is charging ahead in North Dakota’s Oil Patch despite the feud over access to Lake Sakakawea.
West Area Water Supply, with a price tag of $150 million, is on the fast track to deliver Missouri River water to four northwestern counties starting in 2013.
The pipeline project is backed by $110 million in financing from the state, but ultimately will be paid for by delivery fees charged to the petroleum industry.
The project can proceed because it will draw water from the intake for the city of Williston, which taps the free-flowing Missouri River, and therefore is not under the control of the corps.
Pipelines branching from the Williston water treatment plant, which will double in capacity, will deliver water to locations in McKenzie, Williams, Mountrail and Divide counties.
“We’ve always considered water to be an economic development piece,” says Gene Veeder, economic development director for McKenzie County, which includes Watford City.
Homes, ranches and businesses dotting the region’s semi-arid rangeland often rely on groundwater, usually high in minerals, that must be treated.
But the need for water suddenly became urgent with the oil boom.
In fact, the rapid growth – as oil field roustabouts, construction workers, truck drivers and others flock to the area – makes it difficult to predict how much residential water will be needed, Veeder says.
“It’s one of those things, it’s growing so fast we’ve underdesigned everything for the past three years,” he says.
Once operating, West Area Water Supply will help reduce the heavy truck traffic in the Oil Patch.
The corps acknowledges the environmental benefit of reducing truck traffic by using a water pipeline.
The rapid and unpredictable growth in oil development, however, is the corps’ justification for a detailed study of the petroleum industry’s future water demand.
State oil and gas officials predict 2,500 new oil wells will be drilled yearly for the next 15 to 25 years.
The state estimates the Oil Patch’s annual water demand to be the equivalent of a lake 1 foot deep spread over 22,400 acres.
Lake Sakakawea, with a surface covering 368,000 acres, can hold 24 million acre-feet of water.
Alone, it holds almost a third of all of the water in the chain of six Missouri River dam reservoirs.
So far oil drilling has gone unhindered by the squabble over Lake Sakakawea water.
The unusually wet weather, which produced the historic flood of 2011 on the Missouri River, has made more surface water temporarily available from ponds and sloughs.
The State Water Commission has issued permits allowing oil firms to tap water from those sources.
In a few cases, with careful monitoring, water officials have allowed oil firms to tap aquifers in northwest North Dakota.
“Aquifers in that western part of the state are very limited,” says Bob Shaver, a hydrologist and head of the state’s water appropriations. “They’re basically little, small bank accounts.”
Aquifers were formed by glacial melt waters thousands of years ago.
Excess pumping can deplete an aquifer or degrade the water quality by drawing in water from surrounding bedrock.
“We have to develop it in increments, and we have to monitor it,” Shaver says. “It’s a conservative approach to water development.”
Piping or hauling water from Lake Sakakawea would be a far better solution, he adds.
“The oil companies will pay for it,” Shaver says. “That’s not a show stopper.”
Ron Ness, president of the North Dakota Petroleum Council, agrees the industry will be able to find water.
“I don’t think it slows development,” he says. “What it does is, it creates a lot more truck traffic and a lot more impacts.”
Of Lake Sakakawea, he adds, “If you were able to tap that water, it’s less than an inch a year off that lake.”
The corps, originally expected to make a decision before the Missouri River flooded last summer, still is weighing public comments before making a final decision.
Ness isn’t the first to note the irony of the dispute coinciding with a time of catastrophic water surplus – some of which ended up in homes in places like Bismarck during the flood.
“If they want to charge us for storing water in Lake Sakakawea,” he says, “maybe we should charge them for storing it in our basements.”
Readers can reach Forum reporter Patrick Springer at (701) 241-5522