Sovereign Mineral Rights and Wrongs, Part II

In the Lair of the Black Snake.

President-Elect Donald Trump is proposing a solution to the “problem” that Indian reservations are only two percent of U.S. land area (Indian land being claimed as part of the U.S.) but contain about 20 percent of the oil and gas reserves. His plan is to “privatize” tribal lands that have oil, and it is alleged that this scheme was the brainchild of Trump’s Native American Affairs Coalition, chaired by Rep. Markwayne Mullin (R-Oklahoma), and comprised of 27 tribally enrolled Trump supporters.

In the Trump campaign press release announcing the coalition on October 30, Mullin declared, “The daily flood of new federal regulations keep Indian country from becoming self-sufficient. Local tribal decisions, not federal bureaucrats, are the best way to improve our communities.” This dovetails nicely with Trump’s promise to repeal environmental regulations that slow down or prevent the full exploitation of fossil fuels.

Ironically, Trump became President-elect in the midst of the fight over running an oil pipeline out of the Bakken shale in North Dakota through the Standing Rock Sioux water supply. Tribal governments and individual Indians from all over North America have come to support the Standing Rock Sioux. The primary legal weapons the Indians have relied upon in opposing the Dakota Access Pipeline are federal environmental regulations.

Reuters reported on December 5 that Trump’s plan to pull back environmental regulations in Indian country is to “privatize” Indian trust land, taking it out of federal ownership. Because the Department of the Interior has to sign off on leases covering trust land, eliminating the trust would remove a layer of bureaucracy in the same sense that shooting your dog would get rid of ticks. Among the many details left hanging in the Reuters report is who would be the “private” party that would own the trust land?

The members of the Coalition are Indians, so they surely know that Congress and the President could end the trust relationship with the stroke of a pen, leaving the land owned by individual Indians or by tribal governments, as the case may be. This would be so simple to accomplish that it is hard to believe that is all they mean by “privatization.”

Simple or complicated, they have not said what they mean by that word. And surely they understand the fraught history of oil on tribal lands?

The creation of Oklahoma in 1907 violated the promises in the removal treaties that the lands involuntarily traded for tribal homelands would never be part of a state without tribal consent. At the same time, the Dawes Act allotted tribal land to individual Indians. Interior had a duty to oversee the leasing of trust lands even after allotment unless the allottee got a court order finding him or her competent to own the land in fee simple.

When the determination of competency was a federal matter, blood quantum was an important proxy for competence. It’s only fair to the colonists to note that Indians wanted to be found competent so they could sell their allotments and it’s only in the historical rearview mirror that we see how those individual decisions destroyed tribal economies.

When the federal process proved unsatisfactory to the oil companies, they prevailed on Congress to farm out the issue of whether an Indian was competent to sell his allotment to Oklahoma courts. The state courts stepped up the speed of processing competency applications and it became unlikely that an Indian would be found incompetent to sell his land for any reason short of a permanent vegetative state. The land passed out of Indian hands and the oil went with it, excepting in the Osage Nation, which kept its mineral rights, and the only reservation that still exists in Oklahoma.

By the time the oil company “landmen” came around looking for land to put under lease, most of the dealings were with white men because most of the original Indian allottees had sold out as soon as the courts allowed it. It’s fair to disclose that “original Indian allottees” who “sold out as soon as the courts allowed” include my grandfather, my great-grandfather, and numerous aunts and uncles.

Oklahoma law allowed mineral rights to be split off from surface rights and the Osage Nation did so as an act of tribal government. Few if any individual Indians made any special provision for mineral rights when they sold their allotments. While stripping away its minerals made the land less saleable, the Indian sellers could have insisted on splitting the mineral interest with the buyers — if they had had lawyers to tell them it was possible and then prepare the deeds.

The Osage Reservation is coterminous with Osage County, Oklahoma, some 1,475,000 acres where the Osage Nation collectively owns all the mineral rights. It would seem the Osage would have made out like bandits. Their reservation was floating on a sea of oil and their tribal government had the foresight to protect it.

Under tribal law, non-Osage persons were allowed to inherit “headrights,” the sums allocated to each tribal citizen from mineral royalties. Non-Osage married into the tribe in droves, and Osage spouses, as a group, suddenly had diminished life expectancies in spite of their wealth.

In 1994, Washington Post journalist Dennis McAuliffe published the results of his investigation of the conflicting stories surrounding the death of his grandmother, Sybil Bolton, at age 21. McAuliffe’s book, The Deaths of Sybil Bolton: An American History, sets out the reign of terror that gripped the Osage Nation in the 1920s.

Between 1921 and 1925, approximately 60 Osage Nation citizens were murdered, a figure that included only obviously unnatural deaths. Osages claim there were lots of “accidents” taking the lives of people, particularly women. Life in northern Oklahoma was particularly hazardous to Osage who owned headrights.

One Congressional response was to enact a law requiring all Osage of half blood or more to have legal guardians. The result was a lawyer feeding frenzy and wholesale swindling of Indian wards. Sybil Bolton was the ward of her white stepfather, A.T. Woodward, who was a lawyer. Woodward had four other Osage wards who also died young.

Another legal response to the death toll from oil money on the Osage Reservation did a bit more good by ending inheritance of Osage headrights from persons of one half or more Osage blood by persons not Osage.

The Five Tribes lost their land and the oil under it when the Oklahoma courts rubber-stamped applications for tribal citizens to be declared competent to sell their allotments. The Osage severed the mineral rights when their land was sold. The difference was between theft and homicide, and the vast majority of Oklahoma Indians found the black gold too slippery to grasp.

While Oklahoma Indians were getting theft and homicide tailored to their situations, tribes that still had land bases were separated from their oil rights by other legal means. In a case arising from the Navajo Nation, the Supreme Court decided that the Department of the Interior could not be sued for failing in the responsibility all trustees have to their beneficiaries to get the best price available. The Navajos failed to notice the part of trust law that said “except Indians.”

An even harder blow against tribal opportunities to profit from mineral rights was a 1989 Supreme Court case, Cotton Petroleum Corporation v. New Mexico. The Court gave states the authority to stack a severance tax on minerals from tribal land on top of a tribal severance tax.

The Trump campaign’s Indian advisors, we are told, agree with the oil companies that excessive federal regulation renders oil on Indian land not competitive with that on an adjoining tract of private land.

The clearest explanation of the why Indian oil is not competitive with oil from off the reservation is by David Blackmon, an oil company consultant with experience developing leases in Indian country. Writing in Forbes on December 6, Blackmon points out, correctly, that the biggest obstacle to Indian oil in competition with oil off the reservation is the double taxation on it that the Supreme Court has allowed by state and tribal governments when it decided Cotton Petroleum.

The second biggest obstacle is the Endangered Species Act. While Blackmon says environmental regulations in general and the Endangered Species Act in particular represent “the highest degree of added complexity,” these federal laws are not peculiar to Indian land.

Blackmon puts “privatization” in quotes because the meaning of the word in Trump’s policy shop is unclear. He speculates it means only “operational independence from the federal government” for tribal governments. If that is the meaning, Trump’s “privatization” will get more opposition from environmental organizations than from tribal governments.

As a matter of straightforward language, though, moving regulatory powers from the federal government to tribal governments is not privatization unless you strip tribal governments of sovereign powers and sovereign immunity from lawsuits and render them equal to corporations or labor unions. Shorn of governmental powers, tribes might then be considered “private.”

All of the members of Trump’s Native American Affairs Coalition who have made public statements so far have disclaimed any intent to make his presidency the second coming of termination. Nor do they mean to apportion mineral income to individual Indians without regard to tribal laws.

The first coming of termination, federal policy from the Forties to the Sixties, was an economic catastrophe for Indians, but it did allow access to Indian land for extractive industries, primarily minerals and timber. Could the Trump administration be offering another termination of tribal governments traveling under the name “privatization?” Could there be 27 Indian quislings who would recommend that sort of privatization?

Trump has a history with Indian sovereignty that sheds some light on this “privatization,” going back to when he was running casinos in competition with Indian casinos. Back then, he favored privatization imposed by simply declaring the war over assimilation to be ended.

Contemporary Indians, after all, don’t look like Indians to him. If modern Indians are assimilated and no longer “in a state of tutelage,” he argues it is time to repeal any law that gives an advantage to Indians because it denies white folks equal protection of the law. This scorched-earth destruction of tribal sovereignty is as credible as any other speculation on how President Trump intends to “privatize” oil found on what is now Indian land.

What happened to Indian people in the path of a gold rush could not happen in our times, or so we are told.

A gold rush or an oil boom is supposed to be a good thing, but neither was a good thing for Indians in the past. Gold on Indian land has been played out, but the black gold remains and more of it will be recoverable with hydraulic fracturing (fracking). Whether black gold will do more good for Indians than the yellow stuff did cannot be known until the oil companies, tribal governments and the Trump administration quit using slippery words and start speaking to each other in a common language.

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