BIA reg revision draws heavy criticism

Robert Smith
Pawhuska Journal-Capital

SKIATOOK -- Representatives of the Osage Nation, the Osage Minerals Council and the oil production community spoke up unanimously in opposition the evening of Feb. 8 to a proposed Bureau of Indian Affairs regulatory revision.

The BIA held a comment meeting Feb. 8 at the Osage Casino and Hotel at Skiatook regarding a proposed thorough revision of the basic regulation that has governed oil and natural gas production in Osage County for decades. BIA representative Eddie Streater reviewed the proposed regulatory changes point by point at the beginning of the comment meeting. April Lockler, of the Office of Natural Resources Revenue, provided a review of digital forms that would be used for data submission and payments under the updated regulatory regime.

Then, beginning with Osage Nation Principal Chief Geoffrey Standing Bear, the feds received a wave of criticism. Standing Bear said he was concerned that the proposed new regulation would be “too long, too detailed and too complicated” and would have a counterproductive effect in a mature oil and gas field dominated by small producers.

Paul Revard, a member of the Osage Minerals Council, blasted the BIA for even publishing the proposed rule change rather than agreeing to meet with the Minerals Council to negotiate a mutually satisfactory regulatory framework. Other members of the Council – Chairman Edward Waller, 2nd Chairman Joe Cheshewalla, Myron Red Eagle, Talee Redcorn and Anthony Shackelford – all spoke in opposition to the BIA proposal.

Echoing Chief Standing Bear’s remarks, Revard said the BIA’s proposal is “way too cumbersome, way too involved.”

“It’s not digestible,” Revard said.

The BIA took the position that the regulation governing production of oil and natural gas in Osage County has not been revised in more than 40 years and does not reflect modern oil and gas production within the county, let alone elsewhere. The BIA also expressed the view that the existing regulation is inconsistent with industry standards, and is inconsistent with regulations governing oil and gas production in the rest of Indian Country.

Chief Standing Bear and members of the Osage Minerals Council countered that the Osage Minerals Estate doesn’t really compare with anything else in Indian Country; that it has been and remains a unique entity. More than a century ago, the Osage people agreed to allow the allotment, or division, of the surface property of their reservation but insisted on maintaining as communal property the subsurface mineral resources. The mining of those mineral resources has been a long-term source of income for annuitants, who hold what are known as “headrights” or portions of those headrights.

This is not the first time the BIA has attempted to revise the basic regulation for oil and gas production in Osage County. The Bureau’s most recent attempt ended up in federal court, and onlookers Feb. 8 were of the opinion that this latest effort will also be litigated.

Nona Roach, of Avant, who handles BIA reports for some small-time oil and gas producers in Osage County, commented that the government’s approach to digital reporting is aimed at a population that really is not computer literate.

“These guys don’t do computers,” Roach said. “It’s ridiculous. They can’t do this. This is a burden that nobody should have to bear in Osage County.”

Melinda Carter, speaking for the Osage Producers Association, voiced a similar concern. She also hinted at the probability of litigation to come.

“I will take you under my wing and I will take you to that courthouse myself,” Carter said, offering assistance to small producers who might otherwise feel intimidated by the BIA’s proposed regulation.

Minerals Council member Talee Redcorn referred to another aspect of the situation – declining income for Osage headright owners as a result of declining oil and gas production in Osage County. Redcorn said the Minerals Council hears from tribal members whose personal finances are threatened by declining revenue.

Revard indicated that the continued wrangling over regulation of oil and gas production in Osage County is deterring new generations from taking an interest in the business.

“My children? They don’t want to be a part of this,” Revard said.