by Jacob Orledge, North Dakota Monitor, photography by Sarahbeth Maney, ProPublica

This article was produced for ProPublica’s Local Reporting Network in partnership with the North Dakota Monitor. Sign up for Dispatches to get our stories in your inbox every week.

One morning in February 2023, a small group of mineral owners arrived at the North Dakota Capitol on a mission. They had traveled from across the state and other parts of the country to explain to lawmakers how the powerful oil and gas companies had been chipping away at their income.

It’s not easy to recruit people to testify during the winter months of the legislative session. Ranchers are busy with the calving season. Snowbirds have relocated to warmer climates. It’s a more than three-hour drive for those living in the Bakken oil field.

But those who made it to Bismarck lined up at a podium to share details of their own experiences and the broader concerns affecting the estimated 300,000 people who receive money from the industry in exchange for the right to their underground minerals. For nearly a decade, they had grappled with companies withholding significant portions of their royalty payments without explaining how they determined how much to deduct, as the North Dakota Monitor and ProPublica reported last week.

Now they were at the Capitol for a specific reason: They wanted legislators to require companies to provide more information so owners could discern if they were being paid correctly, and to impose penalties if companies failed to comply.

Shane Leverenz, who manages income his extended family receives from numerous oil wells, read aloud email responses from companies to illustrate the lack of cooperation mineral owners face when they request information. “We are not obligated to mail each owner a calculation as to how their interest was calculated,” one company wrote.

“There is no transparency,” Leverenz told the legislators. Leverenz, whose great-grandfather homesteaded in North Dakota and had his property deed signed by President Theodore Roosevelt, has helped organize royalty owners on this issue in recent years. Leverenz grew up in Epping, a town of fewer than 100 people in the northwest part of the state, and traveled to North Dakota from Texas, where he now lives, to testify.

After input from Leverenz and others, lawmakers decided to create a new state program that they hoped would address conflicts between royalty owners and companies. In particular, mineral owners had mounting concerns over postproduction deductions, the money companies withhold to cover the costs of processing and transporting minerals after they are extracted and before they are sold. Companies say they are allowed to pass on a share of those costs, while royalty owners say they shouldn’t bear that responsibility because in most cases lease agreements don’t mention those expenses.

The state’s “postproduction royalty oversight program” had the support of the industry, but it was far less than what Leverenz and other owners wanted. In the two years since its creation, the program has not lived up to its name and has not alleviated owners’ concerns over deductions or transparency, an investigation by the North Dakota Monitor and ProPublica found. The program has resolved 69 cases so far, and none have involved postproduction deductions, according to documents obtained under a public records request. A case can represent a complaint or question from a royalty owner.

“The legislative intent was supposed to be addressing the issue of the postproduction costs that they were hitting people with,” said Rep. Don Longmuir, a Republican from Stanley, in the northwest corner of the state.

The newsrooms’ investigation found that the program has focused on other issues. It has instead helped owners resolve complaints about companies withholding payments entirely and failing to pay interest on late royalty payments, records show. Some mineral owners said in interviews........

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