North Dakota royalty owners accuse oil firms of pocketing millions through transport deductions
Mineral owners across North Dakota say monthly checks have shrunk by as much as half since 2015 as producers subtract pipeline and processing costs not spelled out in decades-old leases.
Jacob Orledge reports for the North Dakota Monitor in partnership with ProPublica.
In short:
- Royalty statements provided by 18 households show companies withholding 20% to 50% of owed proceeds, adding up to hundreds of millions of dollars each year.
- While state-owned minerals are protected by no-deduction clauses, bills to give private owners the same safeguards have died under heavy industry lobbying.
- Oil producers contend that post-production costs boost market prices for everyone and say dissatisfied owners should resolve disputes in court, not the Legislature.
Key quote:
“It’s a matter of fairness. We didn’t get any say in it. They just up and changed it. You feel like you’re being cheated. It’s not right.”
— Diana Skarphol, North Dakota mineral owner
Why this matters:
North Dakota’s tight-oil boom delivered record state revenues but also baked in a quiet wealth transfer from rural landowners to multinational drillers. When royalty checks shrink, families lose money they count on for mortgages, college, and farm repairs, while the state still shoulders flaring, water contamination and truck traffic tied to production. Because private minerals cover most of the Bakken, the dispute affects tens of thousands of households and sets a precedent for shale regions nationwide: Who pays to curb methane leaks, pipe gas and meet climate rules — the producer that profits or the neighbor living with the rigs? Without clear oversight, the cost lands on residents least able to audit billion-dollar companies.
Related: Keystone oil pipeline leaks again in North Dakota, adding to long list of failures
