North Dakota Lawmakers Push to Shield Mineral Owners from Oil and Gas Company Holdouts

North Dakota Lawmakers Eye Changes to Protect Oil and Gas Royalty Owners A growing number of North Dakota lawmakers are calling for reforms to protect mineral owners from oil and gas companies withholding their earnings. The issue has been a contentious one, with some lawmakers previously rejecting proposals aimed at addressing the problem. According to data from the North Dakota Department of Mineral Resources, in 2024, oil and gas companies deducted an estimated $1.3 billion from royalty payments owed to mineral owners. This represents a significant portion of the state's total oil and gas revenue, which totaled $5.6 billion that year. The controversy centers on the practice of deducting costs associated with extracting oil and gas from mineral owners' shares. While companies argue these deductions are necessary to ensure profitability, some lawmakers and mineral owners claim they are excessive and unfair. One company at the center of this debate is Continental Resources, a leading producer in North Dakota's Bakken shale formation. In 2024, Continental deducted $234 million from royalty payments owed to mineral owners, according to data from the North Dakota Department of Mineral Resources. Industry experts point out that oil prices have been volatile over the past few years, making it challenging for companies to maintain profitability. "The oil and gas industry is a high-risk business," said Tom Rolfstad, president of the North Dakota Petroleum Council. "Companies need to be able to deduct costs associated with extracting oil and gas to ensure they can continue operating." However, some lawmakers are pushing back against this argument. "We've heard from mineral owners who feel like they're being taken advantage of by these companies," said Rep. Mike Lefor (R), a sponsor of a bill aimed at protecting royalty owners. "It's time for us to take a closer look at how these deductions are being made and ensure that mineral owners are getting a fair shake." The proposed legislation would require oil and gas companies to provide more transparency around their cost deductions, as well as establish guidelines for what costs can be deducted from royalty payments. While the bill has gained traction in recent weeks, its prospects remain uncertain. "We're still in the early stages of this process," said Lefor. "But I'm hopeful that we can work together to find a solution that benefits both mineral owners and oil and gas companies." As the debate continues, one thing is clear: the fate of North Dakota's oil and gas industry hangs in the balance. With an estimated $1.3 billion at stake, lawmakers will need to carefully weigh the competing interests of mineral owners and oil and gas companies. Future Outlook The outcome of this legislation will have significant implications for both the oil and gas industry and mineral owners. If passed, the bill could lead to increased transparency and accountability in the industry, potentially benefiting mineral owners who feel they are being taken advantage of by companies. However, some argue that such regulations could stifle investment in the industry, leading to decreased production and economic growth. "We need to be careful not to overregulate an industry that is already facing significant challenges," said Rolfstad. As lawmakers continue to weigh their options, one thing is certain: the fate of North Dakota's oil and gas industry will be shaped by the decisions made in the coming weeks and months. *Financial data compiled from Propublica reporting.*