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Landowners frustrated by long wait for well site to be restored

Robert "Bud" Griffin is still looking at the abandoned equipment from his home's dining room window. The well was closed due to environmental considerations (Tom Stromme, Bismarck Tribune)1 / 3
Regulators chained and locked the Halek 5-22 saltwater disposal well near Dickinson in 2012. The North Dakota Industrial Commission plans to plug the well but is waiting for a federal restitution hearing before proceeding with the work. (Tom Stromme, Bismarck Tribune)2 / 3
Landowners Laura and Robert “Bud” Griffin are frustrated that the well, tanks and other equipment have remained on site more than five years after regulators put chains and padlocks on the wellhead equipment. (Tom Stromme, Bismarck Tribune)3 / 3

DICKINSON, N.D. — Five years after regulators shut down an oilfield waste disposal well due to environmental violations, the landowners are still looking at the abandoned equipment from their dining room window.

"We're sick of the mess," said Laura Griffin, who lives southwest of Dickinson.

Well operators Jason Halek and Nathan Garber were sentenced last week in federal court for violating environmental laws while operating a saltwater disposal well in late 2011 and early 2012.

Landowners Laura and Robert "Bud" Griffin are frustrated that the well, tanks and other equipment have remained on site more than five years after regulators put chains and padlocks on the wellhead equipment.

"We want the site cleaned up and put back to its original state, and the state isn't enforcing it," Laura Griffin said.

Department of Mineral Resources Director Lynn Helms said the Environmental Protection Agency has information from its investigation that might affect how state regulators plug the abandoned well. Helms said his agency has requested the information from the EPA but has not received it.

In addition to the wellhead, the equipment that remains on site includes a sign identifying the Halek 5-22 saltwater disposal well, a trailer where crews worked and saltwater storage tanks. A barrel of flammable chemicals labeled paraffin inhibitor remains on site within a berm that surrounds the tanks. One piece of equipment has been knocked over, possibly by cattle that graze there in the summer.

"We want it gone," Griffin said.

The Griffins' attorney sent a letter to the state Oil and Gas Division in September of 2016 that requested the agency's assistance and supervision on the abandonment and reclaiming of the well site. Griffin said her attorney never received a response from the state.

Department of Mineral Resources spokeswoman Alison Ritter said state statutes require the agency to restore the surface of the site at the same time they plug the well. The only exception is if there's a risk of pollution or threat to human health and safety, which Ritter said that site does not pose.

"Until everything is wrapped up, we can't start the whole process," Ritter said.

An inspector from the Oil and Gas Division visits the site about once a month on average, according to a log of field notes from state inspectors.

State regulators do not plan to begin any reclamation work until after a federal judge holds a restitution hearing, which is scheduled for Feb. 16 in U.S. District Court in Bismarck.

Court records show it will cost an estimated $135,000 to plug the well and restore the site. Prosecutors have indicated in court records they are requesting $115,000 in restitution from Halek and Garber after taking into account a $20,000 bond that was confiscated.

Work could begin before the state receives the full restitution amount, using dollars from a state fund for restoring abandoned well sites, according to Ritter, who said the state also is finalizing the confiscation of equipment at the site and may be able to sell some of it.

Federal court records do not indicate a request for restitution for the landowners, who said they spent more money on attorneys than they earned from having the well on their property.

"They've cost us a lot more money than they've paid us," Griffin said.

Halek Operating originally drilled an oil well on the property, targeting the Lodgepole Formation, which is above the Bakken, but the well was unsuccessful.

Halek Operating then proposed to convert the oil well to a saltwater disposal well. In April of 2011, the Griffins sent a letter to state regulators opposing the conversion of the well. One of the concerns they cited was allegations from the U.S. Securities and Exchange Commission against Jason Halek that he scammed $22 million from 300 investors for oil and gas projects in Texas.

Later, the Griffins reached an agreement with Halek Operating and withdrew their opposition, documents show. Under the agreement, the couple was to receive at least $1,200 a month for the saltwater disposal well.

"If they would have been honest, the saltwater disposal well would have made us money," Griffin said.

The couple declined an offer from Halek Operating to be an investor in the well.

"We weren't born yesterday," she said.

Halek, who federal prosecutors say directed the illegal operation of the well that put drinking water sources at risk, was sentenced last week to serve up to one year in a halfway house and three years of supervised release. Halek, 44, Southlake, Texas, also was sentenced to pay a $50,000 fine.

Prosecutors argued for 2.5 years in prison, while Halek's defense attorney emphasized that there is no evidence that the environment was harmed.

U.S. District Court Judge Daniel Hovland said during last week's court hearing that Halek's total liabilities, which includes paying back investors from the SEC case, are $71 million.

Garber, 48, Kalispell, Mont., was sentenced to three years of supervised release. In court, Garber said he invested money with Halek for an oil well in Texas that was unsuccessful. Halek then offered Garber a job, despite his lack of oil and gas experience, so he could recoup some of the money he lost.

State regulators estimate that 1.8 million gallons of saltwater, a waste byproduct of oil production, were injected into the well that did not meet regulations designed to protect groundwater.

It's not clear from court records what environmental monitoring the EPA has conducted at the site. A U.S. Department of Justice spokesman said federal officials could not answer questions about the case until after the restitution hearing.

The Griffins have had water samples from a nearby water well tested in 2010, 2011 and 2013 that did not show any contamination.