Osage Producers Association takes aim at BIA over lack of drilling activity

Mike ErwinJournal-Capital

In the wake of its recently defending Osage County oil lease operators against new federal leasing regulations, the Osage Producers Association is now suing federal officials for allegedly hindering drilling activity.

OPA filed a lawsuit last week against the Bureau of Indian Affairs, which it blames for sharp recent declines in the drilling of oil and gas wells.

There have only been 39 wells drilled in Osage County since last summer, when the BIA announced a requirement for environmental assessments to be conducted prior to the issuance of drilling permits. According to the suit, there were 135 wells drilled during the same time period for the previous year.

Additionally, there are more than 400 drilling applications currently pending with the BIA, the OPA suit said. Some of those applications were made more than a year ago without any response from the agency, the lawsuit stated. In addition to new drilling activity, the suit claims there also is a major backlog of “work orders” needed to restore production of existing wells.

During the recent hearing on the revised regulations, it was pointed out that the average Osage County well produces less than one barrel per day. OPA attorneys stressed that the typical profit margins for producers in the county make it economically unfeasible for requiring environmental assessments at each well site.

Previous rules allowed for the drilling permits to be issued based on the same assessment for most of the county.

The OPA’s previously lawsuit resulted in the federal judge delaying implementation of the new federal regulations over lease agreements within the former Osage Indian Reservation. Producers had argued that the new regulations would force them to cease their drilling operations in present-day Osage County.

Jamie Sicking, an attorney/member of the OPA, said the organization is simply continuing its efforts “to get our members back to work.”

The OPA spokesman also said the BIA is not fulfilling its fiduciary responsibility to the Osage Nation under its obligations related to the Osage Mineral Estate. Those obligations are traced back to a 1906 federal act which provided for tribal members to retain ownership of subsurface minerals following allotment of the reservation property prior to Oklahoma statehood.

Interestingly, with regard to the creation of Osage County in 1907, the United States government has never actually taken a position on whether or not the Osage Reservation was dis-established.

NOTE: Contrary to a previous report in the Journal-Capital, the three members of Osage County Commissioners were not all present at the federal court hearing at which U.S. District Judge Greg Frizzell ruled to delay implementation of the new regulations proposed by the BIA.

Commission Chairman Scott Hilton and District 3 Commissioner Darren McKinney attended a portion of the Aug. 10 hearing, but District 1 Commissioner Bob Jackson was not at the Tulsa hearing. Later, Jackson did express satisfaction with the ruling, however.