Kinda makes you wonder who’s actually running North Dakota, doesn’t it?
On first reading the email seems innocuous enough.
It’s a quick little ditty from Brady Pelton, the North Dakota Petroleum Council’s general counsel and director of government affairs, to Lynn Helms, director of the N.D. Department of Mineral Resources, titled, “Bakken Restart Idea.”
But that seemingly harmless missive set off a flurry of cooperative activity between the state and the oil industry that ultimately led to recommendations from the N.D. Industrial Commission and N.D. Emergency Commission to use $16 million in CARES Act funding for grants to oil companies. In lockstep and on cue, the N.D. Legislature’s GOP-controlled Interim Budget Section approved the use of CARES Act funds for that purpose. That was October 2020.
Let’s repeat the words of the Petroleum Council’s own lawyer about using the CARES Act to fund the oil fracking grants –
“I question its appropriateness.”
Nevertheless, several oil companies subsequently applied for and received $200,000 grants to continue the environment-degrading, climate-crisis-compounding practice of hydraulic fracturing, a.k.a. “fracking,” to break up underground geological structures and suck oil out from under the state.
The state argued, disingenuously in IV Words’ judgment, that the grants really constituted a jobs-creation program.
It was fairly clear even then that the oil industry was driving the pandemic-relief-diversion effort. As I wrote at the time in “More CARES Act Funding for Oil Companies? What the Frack!” –
“The North Dakota Department of Mineral Resources seems little more than a taxpayer-funded industry cheerleader, and its leader, Lynn Helms, the patently biased liaison to other government agencies and leaders. The state leaders, especially the all-Republican members of the North Dakota Industrial Commission and the Emergency Commission, have in turn demonstrated repeatedly that they are little more than rubber stampers for fossil-fuels interests.”
But it wasn’t until the attorney for Dakota Resource Council* and North Dakotans for Public Integrity wrote to the all-Republican N.D. Industrial Commission and N.D. Emergency Commission requesting the release of communications and other information that the public was able to see how everything went down.
J.J. England of the Braaten Law Firm wrote, “This letter first explains the legal problem with these expenditures both under the North Dakota Constitution and the CARES Act itself. This letter then explains why additional transparency regarding the use of these funds is needed. Finally, in the interest of transparency, this letter requests records from NDIC and the Emergency Commission.” (Read the full letter here.)
England explained that the first part of the legal problem has to do what’s called the “Anti-Gift Clause” in the North Dakota Constitution.
“The state, any county or city may make internal improvements and may engage in any industry, enterprise or business, not prohibited by article XX of the constitution, but neither the state nor any political subdivision thereof shall otherwise loan or give its credit or make donations to or in aid of any individual, association or corporation except for reasonable support of the poor, nor subscribe to or become the owner of capital stock in any association or corporation.”
The other is the first criteria for the use of CARES Act funds as laid out by the U.S. Department of the Treasury. IV Words highlighted the criteria back in May 2020 when the state used CARES Act funds to plug oil wells – “Pouring coronavirus stimulus funds down a hole. Literally.”
“The CARES Act requires that the payments from the Coronavirus Relief Fund only be used to cover expenses that 1) are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19).”
Are fracking grants for oil companies “necessary expenditures” in the context of the pandemic? No. Obviously. But rather than allocating those CARES Act funds to helping the state’s people and small businesses, North Dakota used the money to bail out the oil industry, anyway.
The state’s willingness to indulge the oil industry’s wishes regarding the oil-fracking grants is questionable at best. IV Words applauds the efforts of DRC and NDPI to shine more light on how money meant for helping people impacted by the pandemic wound up helping rich oil companies, instead.
It’s unclear what the organizations will do next about, if anything. These are not industry-funded organizations that can afford lengthy and costly litigation, and at the moment the DRC has more pressing issues to attend to. The Legislature is in session, which means DRC is busy opposing various fossil-fuel-coddling bills introduced by GOP representatives and senators.
Regardless, the Petroleum Council email to Helms was only one of dozens of documents released by the Industrial and Emergency Commissions in response to the DRC/NDPI request. They add credence to the assertion that the GOP-controlled state government is not run by elected officials so much as it is by coal, gas and oil companies and interests.
In the meantime, whatever is pulled out from under North Dakota will be burned somewhere, exacerbating what is already an existential climate crisis. That makes the Republican-to-oil-industry communion a lethal one for the citizens of the state and the world.
Image of thieves via Shutterstock.
* Dakota Resource Council is a sponsor of the IV Words blog.