American Oil and Gas Reporter - July 2016 - 17

IndustryDigest
on the hook for $4.4 billion in tax
refunds, TIPRO notes.
While that would have exacted a
short-term budget hit, the Alliance says
a Perryman Group analysis concludes
the state would have reaped long-term
benefits-in the form of more overall
production-that would have outweighed
the short-term costs. ❒

N.D. Supreme Court
Rejects Appeal Claim
On Flared Gas Royalties
BISMARCK, N.D.-The North
Dakota Supreme Court has ruled against
a mineral owner who claimed she was
owed royalty payments for natural gas
flared in violation of state rules.
The decision in Sarah Vogel v.
Marathon Oil Corp. affirms a district
court ruling. Vogel sued the company in
2013, one of 14 lawsuits filed in state
court against oil companies involving
allegations of owed royalty payments.
Thirteen of the lawsuits were moved to
federal court, court documents state.
Those cases were dismissed when the
judge ruled the mineral owners had not
exhausted their administrative remedies
through the North Dakota Industrial
Commission (AOGR, June 2014, pg.
18).
According to court documents, Vogel
owns mineral interests for the
Marathon-operated Elk USA 11-17H
well in Montrail County, N.D. The well
began production in 2011, and Vogel
filed suit in October 2013, seeking
declaratory relief as well as money
damages for failure to pay royalties on
flared gas.
The documents state Vogel's appeal
argued her claims should not be
dismissed because she had a private
right of action for violations of state
statutes and she was not required to
exhaust her administrative remedies.
Vogel later amended her complaint,
alleging she also had a private right of
action under the state's Environmental
Law Enforcement Act (ELEA).
Marathon moved to dismiss the
complaint, saying state laws on flaring
gas did not expressly provide for a
private right of action for damages, and
ELEA also did not contain a private
right of action. The company also
argued Vogel failed to exhaust her
administrative remedies with the North

Dakota Industrial Commission, court
documents indicate.
The district court granted Marathon's
motion to dismiss, agreeing the
commission had broad authority to
regulate and administer oil- and gasrelated activities, and Vogel had not
exhausted her administrative remedies.
According to the state Supreme
Court ruling, legislative history doesn't
support Vogel's claim for private right
of action for damages, and any remedies
provided by ELEA do not replace
statutory or common law remedies. The
ruling notes that the court has
consistently required remedies be
exhausted before the administrative
agency as a prerequisite for legal action,
saying that requirement recognizes the
agency's initial decision-making
responsibility and allows the agency to
use its particular expertise in resolving
disputes. ❒

Offshore Air Quality
Rules Aren't Necessary
Associations Contend
WASHINGTON-There is no
demonstrated need for new offshore air
quality regulations proposed by the
Bureau of Ocean Energy Management,
a coalition of industry associations
contend in comments filed in June.
BOEM published its proposed air
quality control, reporting and
compliance rule in the April 5 Federal
Register after announcing in March its
plans to target emissions of volatile
organic compounds, oxides of nitrogen,
sulfur oxide, carbon monoxide and
particulate matter in the Western and
Central Gulf of Mexico, and the Arctic
(see "BOEM Proposes New Air Quality
Rules," AOGR, April 2016).
Comments filed by the Independent
Petroleum Association of America,
National Ocean Industries Association,
American Petroleum Institute, Offshore
Operators Committee, Offshore Marine
Services Association, and the
International Association of Drilling
Contractors "focus on the pre-emptive
nature of the rule as regional air quality
studies that should inform the rule (still)
are being conducted," according to
IPAA.
NOIA points out that in 40 instances,
the proposed rule solicits comments on
provisions that have not yet been fully

developed or defined. "Ultimately,
BOEM's proposed changes could result
in the agency disapproving an
operator's exploration plan,
development and production plan, or
development operations coordination
document that otherwise would have
been approved," the association worries.
In addition to noting the incomplete
air quality studies, the joint comments
contend:
* BOEM has not demonstrated the
revised rules are needed.
* BOEM is not authorized to
regulate emissions from mobile support
craft.
* The agency's proposed
consolidation of facility emissions is
unnecessary and unjustified.
* Recertifying existing facilities is
unnecessary.
* BOEM's emission reduction
credit program is not fully developed
and its regulatory impact analysis
underestimates the cost of credits.
* BOEM must maintain the point of
National Ambient Air Quality Standard
compliance at onshore locations.
* The costs of the proposed rule
outweigh the benefits.
* The proposed rule is incomplete.
The joint industry comments may be
found on IPAA's website at
www.ipaa.org under "Issues & Policies"
and then "Letters and Comments." ❒

Louisiana Supreme Court
Deals Another Blow To
St. Tammany Project Foes
BATON ROUGE, LA.-Antidevelopment activists determined to
stymie a well project proposed by Helis
Oil & Gas Company may be running
out of options after the Louisiana
Supreme Court in mid-June refused by
a 4-3 vote to hear an appeal to a lower
court's decision barring St. Tammany
Parish from using its zoning regulations
to block a drilling project.
In the most recent legal decision on
the matter, Louisiana's 1st Circuit Court
of Appeals on March 9 upheld a district
court ruling that sided with Helis
(AOGR, April 2016, pg. 22).
Press accounts note that the company
holds a permit to drill a vertical well on
undeveloped land northeast of
Mandeville, La., but that the locality
filed a lawsuit in June 2014 to halt the
JULY 2016 17
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