North Dakota Saltwater Disposal Enforcement Actions Highlight Key Legal And Social License Risks

Spills or improper disposal of oilfield produced water—which can be more than 10 times saltier than seawater and may also contain heavy metals and other chemicals—can turn even staunchly pro-oil and gas residents against drilling in their area.[1] Improper disposal and spills also can attract serious civil, and in some cases, criminal penalties. Several recent enforcement actions by state and federal authorities in North Dakota suggest a more aggressive regulatory stance toward oil and gas activities that the government believes could threaten groundwater supplies.

Cases Involving Serious Criminal Charges

Nathan Garber, who deceived inspectors by illegally resetting the packer in a saltwater disposal well to make it appear compliant with the law, pled guilty in September 2013 to a Class C felony charge brought by the state of North Dakota.[2] The well illegally disposed of approximately 800,000 gallons of produced water despite the state never clearing it for operation.[3]

Federal charges followed, and Garber pled guilty in September 2014 to 11 federal felony counts related to the well's operation: one count of conspiracy to violate the Safe Drinking Water Act and defraud the United States, five counts of violating the Safe Drinking Water Act, two counts of making false statements, two counts of falsification of records, and one count of concealment or cover-up of a tangible object.[4]

In addition, on April 15, 2014, the North Dakota Attorney General's Office filed criminal charges against truck driver Leo Slemin after a Department of Mineral Resources inspector witnessed him illegally dumping a load of oilfield wastewater on a roadway in February 2014.[5] Slemin subsequently accepted a plea deal that resulted in his being sentenced to three years of probation, plus fines and costs.[6] His employer, Black Hills Trucking, settled for $200,000, after originally facing fines of as much as $2 million.[7]

On August 24, 2015, the federal court in Bismarck, North Dakota, indicted Nathan Garber's former business associate, Jason Halek, on 13 felony charges related to improper and illegal operation of the Halek 5-22 saltwater disposal well near Dickinson, North Dakota.[8] Halek allegedly conspired to inject produced water into the well without first having the state of North Dakota witness a test of the well's integrity, and continued injecting produced water after the well failed a February 2, 2012, pressure test.[9]

Halek also allegedly violated the Safe Drinking Water Act by injecting fluids down the "annulus" or "back side" of the well, in violation of the well's permit, which required that fluids be injected through the tubing. Finally, Halek allegedly instructed Nathan Garber to move the "packer" up the wellbore without first getting approval from the state, after which Garber allegedly gave false information to a state inspector regarding the depth of the packer.

Halek is charged with one count of conspiracy to violate the Safe Drinking Water Act and defraud the United States, four counts of violating the...