North Dakota and the developer of the Dakota Access oil pipeline settled a lawsuit over the Texas company’s ownership of ranch land in the Plains state where corporations aren’t allowed in the farming industry.
The deal awaiting a judge’s approval involves a business structure that technically keeps the land tied to Energy Transfer Partners. However, Attorney General Wayne Stenehjem told The Associated Press on Thursday that the setup is “proper and legal” and he is not opposing a recent motion filed by ETP attorney Lawrence Bender to dismiss the case.
“The corporation has divested itself of the land in question, and so there is no longer a complaint to be had against them,” Stenehjem said.
ETP subsidiary Dakota Access LLC in September 2016 paid an undisclosed price for about 12 square miles of private ranchland in an area where thousands of pipeline opponents gathered to protest in 2016 and 2017. The company cited the need to protect workers and help law officers monitoring the demonstrations against the $3.8 billion pipeline that’s now moving North Dakota oil to a shipping point in Illinois.
A Depression-era law in North Dakota prohibits large corporations from owning agricultural land in order to protect the state’s family farming heritage, with certain exceptions.
ETP denied violating the law and said it planned to transfer ownership of the land once the pipeline work was done. It reached a deal with Stenehjem that allowed it to keep ownership until July 2018 to help maintain the safety of pipeline workers. When the deadline passed and ETP still owned the property, Stenehjem sued , asking the court to fine ETP at least $25,000.
In March, the developer formed the 1806 Ranch family farm limited liability company to hold legal title to the property, Bender said in court documents. ETP vice president Greg Mcilwain is listed on the warranty deed as the 1806 Ranch president.
Bender said in court documents that the structure complies with an exception to the farming law that allows for corporations or limited liability companies to comply. That exception requires at least one person with the company to live on or operate the farm. A federal judge last year in a separate, unrelated lawsuit ruled the operator need not live on the property but could manage from afar.
ETP did not respond to a request for comment on how the land will be used. The company has said previously the land has been leased for agricultural purposes.
Stenehjem said the company has several options, including leasing out the land, hiring people to operate a farm or ranch, or leaving the land idle and “just let the pheasants reside there.”