WILLISTON BASIN, N.D. – Steve and Jacki Schilke spent six years searching for their dream home, a 160-acre ranch here in northwestern North Dakota. It wasn’t much to see – an old farmhouse, a few rundown outbuildings and a slice of prairie. But for the Schilkes, it was a chance to return to country life.
“We came across this place and it was a dream come true,” said Jacki, remembering the day in 2006 when they bought the spread. “We didn’t ask for much. All we wanted was a little place for our cattle.”
But it wasn’t long before noisy drilling rigs, clogged roads and the chaos of the oil boom found the Schilkes and their piece of paradise.
The Williston Basin is no stranger to oil booms. There has been about one a decade since oil was struck in 1951 on land owned by a farmer named Henry Bakken. In the years that followed, wells sipped from a vast reserve locked in a shale formation two miles underground that stretched from eastern Montana across western North Dakota and all the way to southern Canada. The field was called the Bakken formation.
But this boom was different. About the same time the Schilkes settled into their ranch, a controversial new drilling technique began to unlock far greater amounts of the oil in the Bakken formation. The resulting boom has reshaped the economy and environment of this once-peaceful state.
The transformation started slowly in 2004, not far from where Henry Bakken first struck oil. An Oklahoma company drilled two miles down an existing vertical well and then turned and went horizontal. The technique brought new life to the old field and sparked a frenzy among companies eager to take advantage of rising crude prices.
The real breakthrough came two years later at a well in nearby Parshall. For the first time in the state, horizontal drilling was combined with a method called fracking, in which a mixture of chemicals and water is pumped with great force into the well to flush oil out from shale.
The results got everyone’s attention. “The production rate required a comma,” said Lynn Helms, the head of North Dakota’s Department of Mineral Resources. “It was the first North Dakota well that truly had the wow factor.”
Predictions were off the charts. The U.S. Geological Survey estimated that the 15,000-square-mile Bakken formation contained 4 billion barrels of oil. Some geologists estimated that a deeper formation, called Three Forks, could hold another 20 billion barrels. The total of the two fields could eclipse the reserves of the Arctic National Wildlife Refuge in Alaska.
The results have gone from steady to spectacular. North Dakota now has 6,200 wells producing 488,000 barrels of oil a day. The state is on track to have more than 30,000 wells and become the nation’s second-largest oil producer after Texas. But the dramatic growth has come at a cost for the Schilkes and many other residents, raising questions about the impact on the environment and about whether North Dakota’s small government can cope with the biggest domestic oil discovery in 40 years.
Pits filled with waste water from fracking have overflowed, polluting the land and threatening the water supply. Animals have fallen ill, and so have people. Two-lane highways and gravel roads, which were once sparsely traveled, are clogged day and night with trucks hauling water, oil, drilling equipment and the thousands of workers who are transforming the landscape faster than state regulators can keep up.
The numbers tell the story: The number of wells producing oil has nearly doubled during the past eight years, but the number of inspectors has gone only from 12 to 17. And those inspectors have to inspect not only the new wells but the depleted wells and the waste pits that are the hazardous byproduct of fracking.
Helms, the top regulator, said the state is doing an adequate job inspecting the new wells. But he acknowledged that inspectors have struggled to keep tabs on producing wells, saltwater wells and nearly 900 waste pits that dot the state’s landscape. State officials are considering a new rule that would eliminate waste pits 30 days after oil wells are finished, although they would still be permitted to store solid waste.
Oil companies can’t keep up either. They can’t reclaim waste pits as fast as they drill new wells, leading to more and more of the unsightly pits about the size of swimming pools. One year ago, the state had 500 waste pits, and that number climbed to 882 by the spring of this year. When 50 of them overflowed during heavy spring flooding, the state slapped 20 companies with fines for failing to heed warnings to shore up dikes around the pits. The pits have proven deadly to wildlife and several oil companies have been charged with federal crimes for failing to cover the pits with netting, which resulting in the killing of migratory birds that mistook the pits for ponds.
The state is also considering new rules to deal with the high number of pipe failures in oil wells that use only two layers of steel pipe. Wells with two layers of pipe have a failure rate of .2 percent; but those with three layers have had no blowouts in North Dakota. And with 2,000 wells being drilled in the state this year, even a half-dozen blowouts – where the well spews frack fluid, oil and water until the well is fixed – can cause considerable damage.
“Our goal is to get that to zero but there’s always human error in these things,” Helms said.
Under the proposed rule, companies that don’t use a third layer of pipe would have to do extensive testing of the pipe and cement barrier and publicly disclose the chemicals they use to frack the well.
Helms said state regulators find that the cementing is inadequate in one out of every 10 wells, requiring another layer of steel pipe to be used or the pumping of new cement to avoid accidents.
According to North Dakota Health Department records, 614 oil spills were reported by companies last year, and this year marked the first time oil spilled into the state’s largest lake, Lake Sakakawea, and the Missouri River.
Another environmental issue is that the Bakken doesn’t just produce oil, it produces natural gas. Each barrel of Bakken oil contains about $80 worth of oil and $6 worth of natural gas. And since the state doesn’t have the infrastructure needed to gather, process and sell all of the gas, about 30 percent is burned off in fiery flares that light up the North Dakota skyline.
North Dakota allows operators to flare the gas indefinitely if they show it isn’t economical to bring the gas to market. Consequently, some flares have burned for years. The industry has promised to invest $3 billion in infrastructure to capture the gas, but in the meantime, an estimated 2 million tons of carbon dioxide are being released into the atmosphere annually – enough to heat a half-million homes.
Helms said the state has allowed more than the normal amount of flaring for the first few years of the oil boom to give the industry time to catch up. In a couple more years, he said, the state will crack down on the waste.
Storage tanks on Bakken oil well pads also emit a startlingly high amount of hydrocarbons in vapors – on par with a large processing plant – to the point where some exceed the federal threshold requiring a federal air quality permit.
This boom is not just fueling the nation’s insatiable desire for oil, it’s also fueling a billion-dollar surplus in North Dakota’s budget and it’s a big part of the reason the state prospered during the Great Recession. The state should rake in $2 billion in oil tax revenue over the next two years. Some say that’s why state regulators don’t crack down on oil companies as much as they should.
“The legislators have whored out the state,” said Peter Skedsvold, who raises buffalo near the town of Alexander and is concerned about the oil boom’s affect on the state’s groundwater. “If I were governor, I’d look at tax revenue by farmers – what we pay in 100 years, they pay in one year. But even so, we’re crapping in our cage.”
Derrick Braaten is a Bismarck lawyer who represents landowners. He said the state doesn’t have enough inspectors and those they have “just don’t seem to care.” According to Braaten, one inspector refused to walk down a coulee to check out an oil spill, saying, “I really don’t want to get involved.”
State employees are overworked and understaffed and often won’t respond to landowner complaints unless a lawyer gets involved, Braaten said. Inspectors also tend to favor the oil industry by taking samples from “weird locations” and minimizing problems, Braaten said. When one of his clients asked for a closed-loop system rather than a waste pit, the regulator asked why he should make the oil company spend more money.
“Right now it’s just like the wild west,” he said. “It’s just like the gold-rush mentality.”
Helms disagrees, saying North Dakota has one of the strictest regulatory environments in the nation and has more inspectors per well than any other state. He cites according to a study by the Western Organization of Resource Councils that found North Dakota had more inspectors per well than any other state.
Helms recently met with the top regulator for Pennsylvania – where fracking of natural gas wells has become a national controversy – to offer some advice. Helms said North Dakota regulates oil well fracking 10 times better than Pennsylvania.
But for a landowner dealing with Big Oil, it can be an uphill battle: Most oil and gas lawyers in the state have been hired by energy companies. Braaten’s law firm originally focused on agricultural law but expanded its practice because of heavy demand.
Although North Dakota officials say they have had no proven cases of groundwater contamination, Braaten disagrees. Based on the stories he hears from farmers and ranchers, Braaten says the contamination is “rampant.”
“It’s easy to say we don’t have any documented cases, but documenting it is nightmarishly impossible,” Braaten said. “You almost have to have an expert there (when it happens).”
One rancher Braaten knows was feeding his cattle on the Fort Berthhold Reservation in February when he noticed cattle drinking from an area of a creek where the ice had melted, and he noticed the water was discolored. The creek is at the bottom of a ridge; at the top, an oil well had just been fracked.
Twenty-two cows started convulsing and dropped dead, the rancher later told Braaten. Oil company representatives said the rancher must have had open batteries or spilled farm chemicals in the pasture, he said. The rancher didn’t want to take on the oil company.
Home-Grown Environmental Movement
Oil fuels the combine Donny Nelson uses to harvest his durum crop on the 7,500-acre farm homesteaded by his grandfather.
Eighteen miles west of New Town, Nelson is in the heart of the oil boom, and it’s not his first time. His parents helped form a “prairie watchdog group” that evolved into the Dakota Resource Council during the Williston Basin’s first oil boom in the 1950s. One day in 1953, Nelson’s father drove up a hill and discovered an oil well on his land. He didn’t own the mineral rights, so he hadn’t been forewarned.
The Nelsons worried about oil spills and property rights and hydrogen sulfide – a dangerous gas that smells like rotten eggs, corrodes fences and sickens cattle. According to Nelson, it nearly killed his uncle, too. While the Bakken doesn’t produce much hydrogen sulfide, there are new concerns.
“Now we have different issues because of the fracking,” Nelson said. He often speaks out about environmental issues, even though this time around his family is making money off the boom.
Nelson said people live in western North Dakota for a reason – the solitude and rugged beauty. But he worries that the oil boom is changing all that. “It’s too much, too fast. The state should slow it down. The oil is gonna be there.”
He said if farmers spill diesel or store more than 1,300 gallons of fuel, the government will clamp down on them, but inspectors don’t seem to have the same tenacity when it comes to oil companies.
Nelson is also concerned about the millions of gallons of water – about 4 million per well – it takes to frack wells in semi-arid North Dakota. That’s 500 truckloads of water for each well. Freshwater goes in, unusable saltwater comes out.
“Once you use it for fracking, it’s gone from the cycle, it doesn’t come back in the cycle – it’s not like irrigation,” Nelson said. That’s why he’s pushed for the oil industry to use surface water from Lake Sakakawea instead of groundwater.
“That isn’t solving the problem, but it’s a better avenue than depleting our aquifer,” he said.
Nelson also worries that fracking could contaminate groundwater. “With this deep frack, who knows what’s going on?” he said. “All it takes is one faulty drilling operation and it can contaminate an aquifer.”
Energy companies say the risks are minimal because miles of bedrock separate aquifers from the Bakken shale. As for the well that penetrates all the layers, the steel pipe is encased in concrete to keep the fracking fluid and oil and gas sealed in. But sometimes, things go wrong.
Dale Henry is a retired petroleum engineer from Texas who worked on cementing and drilling jobs all over the world until starting his own company. Henry said energy companies have been using hydraulic fracturing for 50 years, and the current media frenzy over the technology is misguided because fracking isn’t a problem as long as wells are properly cemented. According to Henry, it’s only when the wells aren’t cemented and cased correctly, that things can go wrong.
“The horse is already out of the barn when you get down to the stage of fracturing the well,” Henry said. “I don’t think putting chemicals in the ground is going to hurt us – it’s when we take chemicals back out.”
Before a well is fracked, cement is poured between the well and layers of earth to keep the oil, gas and fracking mixtures sealed in. But if the proper amount of cement isn’t used to seal the space between the drill pipe, or if the cement isn’t good quality, or if it’s mixed incorrectly, fluids can escape and contaminate aquifers.
He said state regulators need to supervise drilling and cementing to make sure companies don’t take short cuts to save money, but most states don’t have the manpower to do that. And government workers generally work day hours, while oil workers are on the job 24/7. Casing is often done at night, he said.
Henry has seen companies cut corners. At one time, he said, “To make a living I had to do what the operator wanted me to do as long as it was somewhat legal. If they told me to pump a half-a-million gallons of fluid, that’s what I pumped. But I might have known that a half-million was a quarter-million too much, or too little. They were the ones writing the paycheck.”
Now, his calling has changed. His new mantra is: “Get rid of shortcuts. Do it right. Protect the environment.”
Skedsvold fears North Dakota is not being vigilant enough about regulating cementing of the wells. He said a Texas oilman told him North Dakota officials are much more lax than Texas regulators. He said if workers have circulation problems during cementing on a well in Texas, they have to stop and call the state regulators within 24 hours. But when his crew had trouble cementing on a job near New Town and called North Dakota officials, their response was, “Why are you calling us?”
Kris Roberts, an environmental scientist with the state Health Department, said North Dakota has not had a confirmed case of drinking water contamination by fracking fluid.
“So far, there has been no direct impact from fluids used in hydrofracking of water supplies in North Dakota,” he said. “Our wells that are being fractured today are two miles below surface.”
But as America now knows well, accidents happen: Cement failure contributed to the worst offshore oil spill in U.S. history — British Petroleum’s Deepwater Horizon drilling rig explosion last year in the Gulf of Mexico that killed 11 oil workers and released millions of gallons of oil into the gulf. Federal investigators recently recommended that a standard procedure be developed to test cement barriers.
Back At The Ranch
Steve and Jacki Schilke understand oil: Jacki said she worked on drilling rigs in oilfields for seven years in the 1980s and Steve spent most of his life working in the oil business in Alaska and Canada. “There was no doubt in my mind that this was safe,” she said. “I’m familiar with the process from beginning to end.”
Until, one by one, their animals started getting sick after an oil well was drilled on a hill about a half-mile away from their ranch.
First, Oasis Petroleum wanted to drill a well across the road from the Schilkes’ farm on a neighbor’s property. When workers started, they discovered the water level was too high, so they approached the Schilkes.
The Schilkes don’t own the mineral rights below their ranch, but were offered $10,000 to put a well pad on their property. Still, they declined.
“I have 160 acres and cattle – we don’t have a square inch to spare and they want four, five acres,” Jacki said.
So Oasis went to the neighbor to the west, just across the property line. Not long after the oil company started drilling in the summer of 2010, the Schilke’s 5-year-old dog, Blue, got sick and died. A few days after the wells were fracked, Jacki walked outside to work on a corral, and her lungs started burning. She ended up in an emergency room. She says tests showed high arsenic and germanium levels in her blood and urine.
One of Jacki’s four Yorkies fell ill – coughing up “yellow, foamy stuff” and producing diarrhea with blood. The veterinarian said it was an intestinal infection.
“The vet thought he got poisoned,” Jacki said. “We don’t have any poison on the place – not even mouse poison.”
After that, her cows, a pet goat, and a bull “went lame.” One of the cows died. Some of the animals went blind.
“My vet was getting sick of us,” she said. “We were there constantly. They couldn’t figure it out.”
Jacki began noticing that she felt sick when she went outside – she’d get lightheaded, dizzy and have trouble breathing. She saw local doctors for almost a year and they couldn’t pinpoint her problem.
At times, the normally spry 53-year-old suddenly can’t walk without a cane, can’t drive or breathe easily. She hasn’t worked for a year.
“I was so sick last winter I thought I was gonna die,” she said.
She contacted the U.S. Environmental Protection Agency in Denver, and they referred her to the state health department. But the health department employee told her it was “probably just diesel fumes.” But she didn’t smell diesel.
“There was no smell to it, that was the scary part,” she said.
One day she walked outside to pump water for her cattle, and the water came out bubbling.
“It was just like 7Up. I stood there and I looked at it and I thought what the hell?”
She filled up a five-gallon bucket of water and watched it bubble. She says it continued to bubble for three days. She took the water to Williston and had it tested in a lab, which found a high number of bicarbonates, total dissolved solids, sulfates and sodium.
The ranch had good well water – hard, rusty North Dakota groundwater – when they moved in. Now, sometimes the kitchen faucet spews black water, and she showed a visitor a jar as proof. Jacki’s doctor recommended the Schilkes not use the water anymore, so they go to a Laundromat 50 miles away and shower at the homes of friends in town. They haul drinking water from town in plastic jugs.
Kris Roberts, from the state water division, is skeptical of claims that water wells can be contaminated by oil activity. Roberts says the much-publicized natural gas fracking problems in Pennsylvania are primarily related to disposal of flowback water in municipal sewage systems. And despite many press reports indicating natural gas fracking has contaminated water wells, he says, “I’m going to keep an open mind on that until we see some good scientific papers showing it.”
Asked whether it’s possible that fracking could contaminate someone’s water, he conceded that it was possible. But then he continued, “that’s not happening.”
Roberts said that he and other staffers have visited the Schilke ranch, and so far, they’ve not found any environmental link to the Schilkes’ problems.
He said water samples showed no link to oilfield activities, and air tests only showed “ammonia-like compounds” inside her house and in one of the outbuildings. He said the only extreme readings came from cracks in the walls of her basement. State employees have covered a square mile with the instrument that checks air quality, he said, and detected no oilfield odors.
Jacki’s version of events differs sharply: She says a state worker tested the air with a handheld device he had never used before and didn’t know how to calibrate. She said he stuck it in a manure pile at one point and couldn’t get it to go off.
Jacki says her own air quality tests showed benzene, methane, chloroform, butane, propane, toluene and zylene. Some of those chemicals are found in cigarettes, vehicles with combustion engines, oil wells and pipelines. Her water tests found magnesium, maganese, boron and strontium and sulfates.
Roberts says Jacki has never sent him the results of her tests. “I’ve done as much as I can,” Roberts said.
Finally, Jacki saw a glimmer of hope when an EPA toxicologist said that based on her medical records and blood tests, it’s likely an air quality problem. However, the EPA official said, North Dakota has jurisdiction. The EPA suggested Jacki call a lawyer.
So she did hire a lawyer and began to work on a strategy for leaving town.
Jacki now leaves her windows open year-round – no matter how far below zero the temperature drops – and bought a carbon monoxide detector and explosive gas alarm. She says if she closes her windows, the monitors chirp.
“They chirped for nine days straight in the winter when it was 20 below,” she said.
She’s spent $3,800 on water tests and nearly $9,000 on air tests. She has taken two trips to see a Detroit doctor and one at Mayo Clinic in Minnesota. She figures she’s spent almost $30,000 total on tests and doctors in the past year.
She called the owner of the oil well, Oasis Petroleum, and was told her problems were probably caused by farm chemicals. She is appalled that the oil company blames the farmers.
Oasis Petroleum representatives did not respond to repeated requests for comment.
Dale Henry, the expert on fracking and cementing, said oil companies always take that position. “They’re going to defend their position from the very start,” he said.
The Schilkes and Oasis couldn’t even agree on basic facts when a heater treater, which separates oil, water and solids, blew out at the well on Dec. 30, 2010. Oasis initially estimated one gallon of fluid from the flare pit was released. Jacki said it was much more than that.
Strange things keep happening at the Schilkes’ farm. The creek didn’t freeze, despite frigid North Dakota temperatures and some days it bubbled with warm water. Another day it was covered with white foam.
She believes the cows got sick from something in the creek, so the Schilkes fenced it off and trained the cows to drink the well water.
According to state drilling records, when the Oasis well was fracked, about 4.7 million pounds of “frac sand” were detonated underground to open up cracks and allow the oil to flow. The oil industry says this “frac sand” is 90 percent water, 9.5 percent sand and .5 percent chemicals the industry refuses to disclose.
State records show that when the well up the hill from Schilkes was being drilled, drillers ran into circulation problems 102 to 158 feet below the surface.
Henry said the records indicate the drillers hit an area with high permeability and poor porosity.
“You already know from drilling the hole you’ve got problems at that depth,” he said. “When you run the casing and get ready to do cement, if those problems already exist, you better try to take care of them because the same problem will (occur) when you put cement (down). The possibility of losing way more fluid is even higher.”
Henry thinks that’s how the Schilkes’ water may have been contaminated.
Erik Schlenker-Goodrich, director of the climate and energy program at Western Environmental Law Center, said the pace of an oil boom often outpaces the scientific understanding of the environmental impacts.
“A lot of times it’s not well known precisely what the impacts are, but the production goes ahead anyway,” Schlenker-Goodrich said.
Today, wells, drilling rigs, compressor stations, water stations and trucks carrying oil and water pock the prairie in the oil patch around Williston. Farmland is crisscrossed with pipelines to move oil.
“I have gone from living in an agricultural community to living in an industrial area,” Jacki said. Now, two oil pumpers bob up and down relentlessly on the hill and another oil well was recently fracked to the east of their home. Trucks regularly rumble by on the gravel roads, which crumble in places, strained by the weight, and kicking dust into the Schilke farmyard.
That’s also how Schlenker-Goodrich describes an oil patch: like a big factory spread across thousands of acres.
Steve Schilke, a burly man of fewer words than his wife, says the Bakken boom has just been “too much, too fast,” without enough supervision and regulation.
Steve and Jacki don’t intend to wait around for the state or science to catch up with the boom: They found a piece of property about 100 miles away in Montana and started packing in February. Their attorney is negotiating with Oasis on a possible purchase of their property.
“It’s out of the Bakken,” Jacki said. “There is no activity there. Nobody has done mineral leasing around there. They’ve got clean water and clean air.”
-Deena Winter is a North Dakota native who now works as an investigative reporter for NebraskaWatchdog.com. This story was made possible by a grant from the George Polk Grants for Investigative Reporting.