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POLITICS: PennAve

Stakes are high in fracking debate on Indian reservations

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Interior,North Dakota,PennAve,Energy and Environment,Fracking,Zack Colman,Native Americans,Oil,Natural Gas,Sally Jewell

For Native Americans, the debate over fracking on reservations is not much different from the arguments elsewhere. But the stakes are vastly higher.

For many tribes in the United States, allowing hydraulic fracturing to drill for fossil fuels offers an economic boost in areas that have few options. But concerns about the damage it may do to the environment are compounded by centuries-old ties to the land.

Lisa DeVille, 39, first learned about the issue when she was going door-to-door collecting signatures to save the post office in her hometown of Mandaree, N.D., on the Fort Berthold Indian Reservation.

As it turned out, her neighbors were more concerned about oil and gas development on the reservation, so she began logging their complaints instead. She now has serious concerns about fracking, in which water and other chemicals are injected deep into the ground to bring natural gas and oil to the surface.

"I don't want no oil company telling us everything's OK and that they've got it handled because they'll lie to us," DeVille said. "We're supposed to be keepers of the Earth, and that's what I've been taught since I was a little girl. That's our story. That's what we came from."

Despite such concerns, many tribes are moving ahead. Federal fossil fuel royalties awarded to U.S. tribes hit $971 million last fiscal year, more than double the $404 million disbursed in 2010.

It's a progression that tracks the fracking boom generally, and it has tribes around the country looking to tap into potential shale in their backyards. For a population that, according to census data, is nearly twice as likely to live in poverty compared to the rest of the country, that money is even more important.

Nowhere is that more apparent than in North Dakota. The Three Affiliated Tribes — the Mandan, Hidatsa and Arikara — that call the Fort Berthold Indian Reservation home have been flush in new money, though federal records don't say exactly how much each tribe receives from royalties.

But it appears the three tribes are doing well enough, as they are building a bond-financed $450 million refinery in nearby New Town, N.D., that will be able to process 20,000 barrels of oil per day.

"Our experience working with the tribes have been positive," Rick Rymerson, field manager of the Bureau of Land Management's North Dakota office, told the Washington Examiner. "They totally understand it. It's obviously a huge boon to the economy up here."

But the development also brings environmental concerns, which surfaced last month when an oil pipeline spilled 1 million gallons of salt water, a byproduct of oil and gas production, at Fort Berthold. Crestwood Midstream Partners, a Houston company that owns the pipeline and is leading the cleanup, told the Examiner that the spill damaged a 200-yard stretch of grass, brush and trees.

Crestwood is working on the cleanup with the tribe, which didn't respond to multiple requests for comment. But some residents are wary, contending that the tribal government is currying favor with drillers and that it squandered royalties on a helicopter and a 149-passenger casino yacht.

Still, there is room for more oil and gas development on tribal lands, drilling advocates say.

About 25 percent of the nation's onshore oil and gas reserves rest underneath tribal lands, but those lands account for roughly 5 percent of U.S. production, according to the National Congress of American Indians. Those resources are worth more now than ever, as revisions to mineral valuations the U.S. Interior Department announced in June could mean an extra $20 million in revenue annually for the tribes.

"These updated regulations we’re announcing today will not only help protect and fairly value Indian energy assets but encourage exploration and development and ensure consistency with current federal oil and gas valuation rules," Interior Secretary Sally Jewell said when the changes were announced.

The energy rush creates a conundrum for tribes, which must balance the need for revenue in some of the country's most economically distressed communities with social and cultural customs that emphasize land and nature.

Congressional hearings on the fracking boom have included testimony from tribal leaders who are overjoyed about their economic prospects but equally wary about fracking's environmental effects, chiefly from groundwater contamination that some environmental and public health groups say results from the process.

"I believe that it is still an issue, because whatever chemicals they are using are not disclosed," Levi Pesata, president of the Jicarilla Apache Nation, told the Senate Indian Affairs Committee during a hearing in February 2012. The New Mexico tribe has a history of drilling and is looking into developing the Mancos Shale in the state's northwest San Juan Basin.

Generally, tribal governments have pushed for fracking, said Alexis Bonogofsky, who manages tribal partnerships with the National Wildlife Federation from her base in Billings, Mont.

Fracking is a source of new revenue for impoverished communities that are high on unemployment and low on skilled workers. Oil and gas development can produce a lot of jobs within a reservation, but varying property and leasing guidelines among tribes make it difficult to gauge financial gains for residents.

While tribal governments often favor drilling, opinions range among residents, Bonogofsky said. Environmental concerns are one thing, but drillers often bring in workers from the outside the reservation, and tribes don't have the infrastructure — housing, sewage systems, roads — to accommodate them. Social and cultural differences can lead to tension.

"It's been a nightmare in terms of crime," Bonogofsky said of Fort Berthold. "Violence against women and drugs that's hitting a community that's not prepared to deal with that."

The Three Affiliated Tribes began lobbying Congress on energy development in 2009 through Washington law firm Drinker Biddle & Reath LLP, according to lobbying disclosure forms. The tribes spent $60,000 lobbying Congress that year and in 2010, but ended their affiliation with the firm after that.

Other tribes are beginning to show more interest in energy development. The Jicarilla Apache Nation, along with the Southern Utes, Ute Mountain Utes and Navajo Nation, are growing increasingly interested in the Mancos Shale.

But it takes patience and practice to deal with the bureaucracy that oversees drilling on federally controlled land, said Paul Moorehead, principal in the Indian tribal governments group at Powers Pyles Sutter & Verville PC and a former attorney with Drinker Biddle & Reath.

It costs $6,500 to process applications for drilling on federal land, and some tribes are concerned about another layer of regulation when Interior completes long-awaited fracking rules for federal lands. Waiting on the federal green light for drilling also takes time — Rymerson, the BLM field manager, said such decisions typically take two to four months. The Interior Department also has acted as executor of tribal leases, as it maintains an advisory role for tribal oil and gas development contracts that some tribes say is no longer necessary.

"The Southern Ute Indian Tribe long ago surpassed the capabilities of the Department of the Interior to advise the Tribe regarding its business decisions and often seeks waivers of the appraisal requirement for various tribal projects," Mike Olguin, acting chairman of the Southern Ute Indian Tribal Council, said in written testimony at a Senate Indian Affairs Committee hearing in April.

Republicans and some Democrats say all that bureaucracy has contributed to a drilling drop-off on federal lands under President Obama. Indeed, fossil fuel sales from production on federal and tribal lands dropped 7 percent in 2013, according to the U.S. Energy Information Administration. Between 2003 and 2013, federal and tribal fossil fuel sales declined 21 percent, while production on state and private land jumped 34 percent.

Momentum is building for removing some drilling restrictions on tribal lands. The House passed legislation last fall to remove some permitting requirements. The Senate Indian Affairs Committee in May advanced a bill by Sen. John Barrasso, R-Wyo., that would clarify the leasing and drilling process on tribal lands. Moorehead said he is working to get both measures to the floor for a vote before this session ends.

"I think for the tribes that have excelled in energy production, it is an impressive achievement because, for a lot of communities — tribal or otherwise — the development decision is often one that's difficult to make," said Moorehead, a former chief counsel on the Senate Indian Affairs Committee. "And it is not just a matter of having bountiful resources. It also requires a sophisticated tribal apparatus to deal with the agencies in Interior to get the required permits and approvals to launch a project."

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