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Winter 2014

Capital Losses
Property Crime on the Rise in the Bakken
by Alan Erickson

Certainly when considering issues of safety, the human costs of injuries and fatalities pile far higher than any monetary value in medical expenses or legal settlements can state.  But for any company, safety is also a matter of economics; not just in protecting its employees, but in protecting its property as well.

Capital losses from equipment theft and vandalism affect an operator’s bottom line in ways they often don’t anticipate.  Though long term operations in the coal mining industry seem firmly on top of security issues, the newest operations of the oil and gas play in North Dakota are seeing a rise in capital losses.  In many cases, especially with smaller companies, their operational budgets tend to forget the provision for adequate expenses for both protecting their long term investments and for replacement costs in the event of theft and vandalism.

Despite the low unemployment numbers in North Dakota, the promise of quick cash in the form of turnarounds of stolen heavy equipment is on the rise.  Skid steers are the most commonly pinched product as such items are easy to repaint and resell on the black market or even, in some cases, at legitimate auctions out of state.  A September article from two years ago from the Associated Press featured an interview with Williams County, ND, Chief Deputy Verlan Kvande who made the issue clear: “part of the problem is oil companies are so busy they don’t have the time or personnel to properly secure their own property.

Easy Targets
Blame is certainly to be placed at the feet of the criminals, but with easy pickings at dozens upon dozens of work sites that have no surveillance or manned security, it’s obvious why property crime rates rose in North Dakota from 2011 to the end of 2012 by 19%.  (The numbers for 2013 were not yet available at the time of press). Property crime (burglary, larceny, and thefts combined) accounted for 90.2% of criminal offenses reported in North Dakota in 2012.  These numbers from the North Dakota Bureau of Criminal Investigation’s “Summary of Uniform Crime Report Data” paint an obvious picture.  Some $22 million dollars in property was stolen in 2012 alone… only 26% of it was recovered by law enforcement.  Though this number includes all of North Dakota (no Bakken specific data could be located), based on the evidence, it is a sure bet that the Bakken area led the numbers.  That sum, $22 million dollars in losses, reflects a staggering property loss incident increase from 2011 of over 37% and a total of 85% increase in property loss value from 2010 when the total value of property stolen in North Dakota was $11.9 million dollars. 

The 2012 jump to $22.2 million in losses has some in law enforcement fearing that out of state organized criminal theft rings may now be operating in the region. The only good news is that the rate of actual burglaries, the unlawful entry into a structure to commit a felony, was down by 1.2%.  But what this means then is the skyrocketing increase of property crimes has been driven by theft. 

Of course, why break and enter a structure when millions of dollars of property are laying unguarded outside?  Also included in the rise of property crime was vehicle theft.  A total of 1,031 vehicles were stolen in 2012 versus 763 in 2010 in North Dakota equalling a total two year increase of 35%.

It seems the increasing numbers won’t stop.  The Dickenson Press reported in November 2013 that construction site theft of tools, trailers, and heavy equipment is on the rise.  Authorities believe some thieves are selling the property for drug habits though this has not been verified.

Worse, not all Police departments have been reporting their data to the State’s Bureau of Criminal Investigation’s “Summary of Uniform Crime Report Data”.  The Bowman County Sherriff’s Department as well as the Tioga Police Department have not reported crime data for two years.  With these areas heavily dotted with oil rigs, the real numbers of property crime are certainly higher.

Vandalism
Whether mischievous teens, angry former employees, or rival companies, vandalism at a typical construction worksite is understood as something that comes with the contract.  But the rise in vandalism in the oil fields of Canada and Colorado are making authorities look at the emerging offender group of the environmental activist.  The Weld County Call in Northern Colorado reported last year that in one incident alone, vandals caused nearly 1 million dollars in damage while releasing “large amounts” of oil and gas from 17 separate sites owned by separate companies including Noble Energy.  Just last summer, the Online Swift Current of Canada reported that “Thieves and vandals are targeting oilfield sites in western Saskatchewan.”  Heavy equipment as well as specialized equipment is being targeted in organized efforts.  At an unmonitored well, 8,000 gallons of oil were released sometime between July 9th and 16th… they aren’t certain when due to lack of monitoring.  Though North Dakota has yet to see this type of widespread vandalism, it is indeed seeing damage done at its oil field sites in increasing numbers.

The single most important safety issue at any energy worksite deals with the employee.  But if a company is losing hundreds of thousands of dollars in property, the safety of the company’s bottom line and its ability to perform the work it needs to do to keep its employees working is jeopardized.  

 

By Eric Sharpe, Editor, Energy Ink Magazine. January 1st, 2014.

 
 
 
 
 

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