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KATIE ZERR: Are we prepared to take on Big Oil?

Has Walworth County regulated itself out of South Dakotas energy market with its restrictive setback ordinances?
If Big Oil comes into our area to extract sweet, light crude that some say lies not far below the surface in this area of the state, will landowners have to watch as those outside of Walworth benefit from the industry.
The oil industry is a cut throat business in which some companies simply ignore regulations and prefer to pay fines after they have reaped the benefits of oil extraction. One only has to do a bit of research about what happened in North Dakota early on in the oil boom to find out just how far some in that industry will go to make maximum profits.
In the case of West River oil development, some say Mobridge will be a casualty of the industry with a handful of residents reaping unbelievable wealth, while others see their town and their livelihoods destroyed by people experienced in running over state, county and community leaders that are not prepared.
In North Dakota, where the good and bad of the industry is on display daily, the deals between the state and oils players changes constantly.
In her column this week, Governor Kristi Noem touts wind, sun, and other renewable energy resources advancement and the industries job creation in local communities.
For Walworth County, a place where tax generating industry, outside of Ag and tourism, is something that doesn’t exist, what the governor proposes is regulated out of our reach.
Noem said in her column “Whether it’s energy from coal, natural gas, the sun, wind, or other renewable sources, we need policies that support and encourage a diversified approach to meeting our state’s energy needs. Working toward a balanced energy mix enhances our national security and helps us avoid price spikes associated with any one resource.”
Our governor is looking to the future for energy development. Is she also watching what is developing to our north as the state of North Dakota and the state’s tribal governments sign deals that change the balance of tax revenue generated from oil extracted from reservation land?
According to the Bismarck Tribune, North Dakota’s governor and tribal leaders signed an agreement that maintains the current tax rate on oil and gas production and extraction within the Fort Berthold Reservation, while changing how the state and tribe share tax revenue from new oil and gas activity on trust and fee lands.
The compact changes the current 50-50 tax revenue split so that 80 percent of the production and extraction tax revenue from new wells on tribal trust lands would go to the tribe and 20 percent would go to the state. On fee land, 80 percent of the revenue would go to the state and 20 percent to the tribe.
It would mean about $33.6 million more annually in tax revenue will now go to the tribe. It is the highest percentage split of its kind between state and tribal government in the industry.
This is a win, win for the tribal government and in the long run will benefit the state.
With the behind the scenes deal making, mineral rights purchases and tribal land consolidation on West River reservations, can oil development in South Dakota be in our future?
Is the state of South Dakota prepared if suddenly there were multitudes of companies, that have already secured mineral rights on tribal lands, begin to push their way into the state?
We will follow what North Dakota has done in their dealings with the oil industry or we will have regulations that will be road blocks to oil and gas extraction in our state.
Some in the oil industry say that Perkins and Corson County will be ground zero in an oil boom in our state, with Dewey County in the mix. This new deal between N.D. and the Native community will set a precedence for deals with Standing Rock and Cheyenne River Tribes.
The State of South Dakota needs to prepare for a barreling train of industry that will either run the government over or will be slowed by a system that has been prepared to handle what Big Oil can bring along with tax revenue.
Does what we have on the books prepare us for an industry like Big Oil or are we again regulating ourselves out of tax revenue?
These are the questions government officials will have to explore if the national government’s policy of “Drill, baby, drill,” pushes the oil industry into our state.
Gov. Noem wants to prepare us for taking advantage of our natural energy resources. Is she also going to prepare us from being taken advantage of by an industry known to take advantage of every possible government weakness in order to increase their profits?
Some industry insiders are saying with the deal in North Dakota a barrier has been removed for oil and gas development on reservation lands in southwestern N.D. and northwestern South Dakota.
Will we be prepared to slow that train and make sure it stays on track or will we be run over because we weren’t prepared to deal with it?
It is time the South Dakota Legislature spends less energy on trying to push a climate change denial curriculum and research how the oil industry could change South Dakota’s environment.
– Katie Zerr –