Posted by: Patricia Salkin | March 20, 2017

ND Supreme Court Says County was Preempted from Vetoing Commission’s Approval of a Location for an Oil and Gas Waste Treating Plant

The Environmental Driven Solutions, LLC (“EDS”) received a permit from the Commission for a waste oil treating plant in Dunn County, which allowed EDS “to recycle and treat waste crude oil obtained from drilling operations, pit oil, swab oil, acid oil, tank bottoms, oil spills, pipeline breaks, skim oil from saltwater disposal tanks, and other waste crude oil related to oil and gas exploration and production.” After EDS began constructing the treating plant, the County issued notices of “violation and order to abate,” claiming the treating plant could not be constructed on the site because the property was zoned “Rural Preservation,” and “Salt Water Storage Tank & similar facilities” were not an “allowed use.” EDS then applied to the County to rezone the property, but the County denied the application because its Land Development Code required 120 acres to rezone and EDS’s property comprised only 118.58 acres. Next, EDS applied for a conditional use permit, but the County denied the application. Following this denial, EDS brought a declaratory judgment action against the County, and the district court held that the Commission had exclusive jurisdiction to determine the location of the oil and gas waste treating plant and the County’s zoning ordinances were preempted by state law.

On appeal, the County contended that the district court erred because the Commission did not have the power to permit oil waste treating facilities that were barred by a county’s “properly-enacted zoning ordinance and land use comprehensive plan.” The court found, however, that the Commission had the express authority under N.D.C.C. § 38– 08–04(2)(a) to regulate “all other operations for the production of oil or gas,” and a “treating plant” qualified as an “other operation” for the production of oil and gas. Furthermore, the comprehensiveness of the state laws and regulations suggested that the Legislature intended to preclude enforcement of local laws on the siting of waste treating plants. While the County claimed it had “shared jurisdiction” with the Commission over the location of the treating plant based on the permit’s requirement that the treating plant “comply with all applicable local … laws and regulations,” the court determined that the Commission’s order would supersede any county zoning requirements. Accordingly, the court affirmed, holding that the County had no authority through its zoning regulations to veto the Commission’s siting of an oil and gas waste treating plant.

Environmental Driven Solutions, LLC v. Dunn County, 2017 WL 899992 (ND 3/7/2017)

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