In the summer of 2015, I stood along a rural highway in Caddo County, Oklahoma, with a young Kiowa allottee. He showed me the allotment that had been in his family for generations — ever since Congress, with the endorsement of the Supreme Court, had violated the Medicine Lodge Treaty and subdivided tribal lands. At the edge of the property line was a marker for a natural gas line — a large, 26-inch distribution line that crossed his family’s allotment for a quarter mile. The line had been installed under the terms of an easement that expired 15 years ago. Years after the easement had expired, the gas company offered the landowners an easement renewal at below market value, which they rejected. Remarkably, the superintendent surreptitiously approved a 20-year renewal over their objection. The landowners were able to successfully overturn that approval as illegal, but the pipeline remains to this day. Its owner continues to generate substantial profits from the use of their lands. The U.S. Bureau of Indian Affairs has done nothing. His family has never been paid.
The story this young man relayed was one with which I was already too familiar. All across Indian Country are expired easements, many of them oil and gas easements, on allotted and tribal land. The pipelines generate billions of dollars in revenue for their owners, but often nothing for those whose land is used to generate that profit. The owners of the pipelines are trespassers, illegally utilizing Indian resources. But the problem with superintendence by the federal government of oil and gas easements in Indian Country is reflective of a more systemic issue — the U.S. Department of the Interior is unable to effectively manage Indian resources in accordance with its trust duties, particularly where that management requires specialized knowledge and expertise. The loser from the DOI’s lack of oversight and expertise is the Indian beneficiary.
Oct. 4, 2017, will be the first meeting of the DOI’s reestablished Royalty Policy Committee. The committee, chaired by Vincent DeVito, counselor to the secretary for energy policy, consists of representatives from states and tribes with oil and gas resources and the oil and gas industry, academics and a lobbyist. Its purpose, according to Secretary of Interior Ryan Zinke, is to “come up with solutions for modernizing the management of public and American Indian assets, while building greater trust and transparency in how we value our nation's public mineral resources[.]”
The goals of the committee are honorable. But with respect to the management of Indian trust assets, they are reflective of prior promises of reform that have gone unfulfilled. More than eight years ago, then Secretary of Interior Kenneth Salazar explained that while progress had been made in improving the management of Indian trust assets, “our work is not over.” He therefore entered Secretarial Order 3292 on Dec. 8, 2009, establishing the Secretarial Commission on Indian Trust Administration and Reform to address DOI’s “future responsibility for management and administration of trust assets maintained for individual Indian trust beneficiaries.” The secretarial commission’s Dec. 10, 2013, final report recommended “sweeping reforms” of the trust system and identified a continuing need for substantial improvement in the DOI’s trust administration services. But those sweeping reforms have never been seriously initiated and the assurances of change have once again proven empty.
The reestablishment of the Royalty Policy Committee has not been without its detractors. Both Representatives Grijalva and Lowenthal have expressed surprise over the large concentration of members from the fossil fuel industry. This has engendered concerns that a goal of the committee is to reduce federal regulations in order to allow greater access to federal lands for energy companies. However, in the case of those lands held in trust by the federal government for individual Native Americans and tribes, those regulations were initiated for a reason — to prevent the oil and gas industry from exploiting Indian lands, which it had historically done. And unfortunately, despite these regulations, that industry has continued to do so through the ineffectiveness of the federal government as trustee.
As the Royalty Policy Committee considers streamlining the regulation of federal oil and gas resources, in the case of those resources held in trust by the federal government for individual Native Americans and tribes it needs to examine the other side of the coin as well — how do you bolster the ability of the DOI to manage those assets for its beneficiaries and protect them from misuse? The committee needs to encourage the DOI to take a good hard look at itself. The problems that pervade Indian Country, as the tribal representatives on the committee are well aware, are legion. With respect to the management of oil and gas resources, the committee should take note of the following:
- The DOI remains unable to efficiently and effectively identify records reflecting the ownership and use of Indian lands. In a recent case, it took the government almost two years to collect the leases, easements, assignments and title status reports for a handful of landowners on the Fort Berthold Reservation. If the DOI is unable to effectively retrieve essential documents to understand the contractual agreements affecting Indian lands, it cannot realistically manage those lands.
- If the DOI has no access to the documents essential to understanding the Indian lands it manages, it goes without saying that neither do its Indian beneficiaries. Particularly in areas of the country with substantial oil and gas development, individual Native Americans and tribes often have no access to the leases, easements and other agreements affecting their lands. Without that access, it is not possible for any trust beneficiary to review and question the production activity and income generated.
- Prices received by Indian beneficiaries for the use of their land and resources are typically well below those received by non-Indians and the federal government. In the case of easements, it is not uncommon to see prices for easements six to eight times higher on non-Indian lands. Oil and gas royalties, too, are often markedly lower for Indian landowners than the general public. In fact, it is common for the purchaser of an oil and gas lease on Indian lands to flip it to another operator at a substantial profit. The DOI has to take a look at the way in which it values and markets Indian resources.
- The DOI lacks an effective method to insure compliance with existing contracts on Indian lands. In the case of easements, the DOI has no record of when they expire, resulting in long periods where oil and gas companies continue to operate on the land, but beneficiaries receive no revenue. In the case of oil and gas leases, there is little supervision after execution of the lease. In fact, oil and gas leases frequently remain dormant, with no effort by the DOI to ensure compliance with their terms, resulting in drainage of the leased property by adjoining landowners.
- The DOI fails to abide by the existing federal regulations put in place to protect Indian lands from exploitation by oil and gas companies, unknowingly or intentionally violating federal regulations such as those limiting the terms of oil and gas leases.
- The DOI lacks the expertise or willingness to effectively monitor and evaluate drainage of oil from Indian lands. As a consequence, this resource is being depleted, often in favor of adjacent non-Indian landowners.
- Environmental contamination plagues Indian Country. An oil spill on land held by a private landowner is addressed immediately. An oil spill on Indian land goes years with no attention.
- The DOI does nothing to monitor the oil and gas removed from Indian lands to be sure that landowners are being fully paid. As a result there are inexplicable discrepancies between what is reported as being extracted and what Indian landowners actually receive.
Indian Country faces real problems in the management of its oil and gas resources. Those problems go beyond excessive regulation. They go to the heart of the DOI’s duties as trustee. Indian Country has gone long enough watching its resources being depleted at the expense of Indian landowners, who are often some of the poorest people in this country. It is important for this committee — particularly those industry members who have faced the greatest criticism for potential bias — to use this position as an opportunity to reengage efforts to improve the federal government’s management of Indian trust resources — efforts that have too long been dormant.