By Ernest Scheyder
TOWNER North Dakota (Reuters) - North Dakota's biggest oil producers have picked a side and put money into an obscure election for the state's agriculture commissioner, hoping to ward off a rising Democratic challenger who could limit development of new wells and pipelines.
With a legislature that meets only every two years, North Dakota has given an unusual amount of power to the agriculture commissioner and two other members of the state's Industrial Commission, charging the triumvirate with oversight of permitting and other issues critical to the oil industry, which hopes to drill 35,000 new wells within 15 years.
North Dakota produces 1 million barrels of oil each day - more than any state except Texas and even some OPEC members - affording Agriculture Commissioner Doug Goehring, a Republican, outsized influence over energy development thanks to his seat on the commission alongside the governor and attorney general.
Now, Goehring, armed with donations from executives and political action committees at Continental Resources Inc, Whiting Petroleum Corp, Marathon Oil Corp and other companies active in the state's Bakken shale oil formation, is in the fight of his political life.
His opponent in the November election, Ryan Taylor, is a rancher and former Democratic state senator who threatens to impose stiffer regulations on an industry used to operating with little intervention in what is typically a conservative state.
"We want the oil, but we also want productive land when it's all done," Taylor said in an interview on his 2,900-acre ranch, dotted with scores of quietly grazing cows. He went on to say that if elected, "I'll probably be looking at things in a more critical eye."
At veterans halls and church suppers around the state, anecdotes abound of cattle escaping when energy workers forget to lock gates, of crops damaged by the saltwater waste byproduct from hydraulic fracturing, and of contractors not repairing land after laying pipeline. Such stories are shared by residents who are proud North Dakota is helping the United States achieve greater energy independence, but wary of what comes next.
Taylor, whose cattle are sold as beef to Whole Foods Markets Inc and other organic grocers, has made those concerns his rallying cry.
Goehring, by contrast, says it is not a zero-sum game.
"I think agriculture and energy can coexist in North Dakota," he said in an interview at the state's skyscraper capitol in Bismarck. "It can be a win-win scenario."
The state's Democratic party recently touted a study that found Goehring and Taylor in a tie, with nearly a third of voters undecided.
Political scientists at the two largest universities in the state of 700,000 have labeled the race too close to call.
"There's a little bit of wariness about the oil boom that wasn't there even two years ago," said Kjersten Nelson, a political science professor at North Dakota State University. "I think that wariness is getting an outlet in this race."
Nelson estimates about 40 percent of North Dakotans are Republicans, 20 percent are Democrats, and the rest are independent.
MONEY RACE, POLICIES
Goehring has raised about $87,000 more in campaign contributions than Taylor, according to state records. Continental, the state's largest oil producer, called Goehring "a staunch advocate for agriculture and oil and gas."
Marathon declined to comment. Other producers did not return calls seeking comment.
Goehring has received contributions from at least ten oil companies or their executives. Taylor has received none; his prominent supporters include U.S. Senator Heidi Heitkamp and Sarah Vogel, the state's agriculture commissioner from 1989 to 1997, according to state records.
None of the oil industry donations to Goehring exceeded $5,000, though some executives have donated to his campaign more than once.
"Goehring has done a good job of balancing the concerns of the agriculture and oil industries, and I'm proud to support him for another term," said a board member of a large North Dakota
oil producer who asked not to be identified in case Taylor wins.
If reelected, Goehring said the energy industry should expect a "balanced approach to the all issues, including regulation." He lost the agriculture commissioner's race in 2004 and 2006 to a Democrat before winning with 68 percent of the vote in 2010.
Taylor, meanwhile, has laid out a campaign manifesto filled with specific proposals for tightening regulation over the energy industry, most of which oil companies oppose.
For instance, he says flaring, or the wasteful burning of natural gas from wells not linked to pipelines, should be banned within 1,320 feet of homes. The current rule is 500 feet.
Taylor also wants pipeline companies to use flow meters to better monitor leaks, an increasingly popular proposal after an underground pipeline leaked 1 million gallons of saltwater over the July Fourth holiday weekend.
Goehring, who grows wheat, corn and other crops on his 2,600-acre farm, opposes Taylor's flow-meter proposal, saying the new technology is not ready to be used widely. He supports annual pressure testing, claiming it would better detect leaks.
"We're making these companies clean up these saltwater spills," Goehring said.
Taylor, should he win and propose tighter regulations, could be outvoted on the commission by the governor and attorney general, both Republicans. But having the seat, supporters say, would give Taylor a bully pulpit for their concerns.
Goehring faces another obstacle to reelection: putting behind him an investigation last year that found he had asked a female staff member to step on his sore back to crack it and labeled women in his office his "harem."
Goehring apologized, took a sexual harassment course and was cleared of misconduct by the state's Department of Risk Management.
The "harem" comment was in poor taste and didn't reflect his true feelings, Goehring said. "I want my record to stand for itself."
After the incidents were made public, the powerful North Dakota Farm Bureau threw its support behind a primary challenger to Goehring at the state Republican convention. While the primary challenge failed, the bureau has since decided not to endorse any candidate in the election, a rebuke to Goehring, who used to work at the trade group.
Gov. Jack Dalrymple, whose term ends in 2016, and Attorney General Wayne Stenehjem told Reuters they support Goehring.
Amidst the investigation and unease about the oil boom, political scientists believe the race for the $95,000-per-year job could very well be won by Taylor.
"Taylor's got this charisma thing that I think will work in his favor," said Robert Wood, a professor and pollster at the University of North Dakota. "He's the only Democrat I would give a chance to this fall."
(Reporting by Ernest Scheyder; Editing by Terry Wade and Alden Bentley)