Federal Overreach Threatens Economic Viability of the Osage Nation

by Tripp Parks, Policy Analyst on April 20, 2015 - 7:40am

Osage NationRegulatory uncertainty can have a drastic effect on local communities, as recent events in Osage County, Oklahoma demonstrate.

The Osage Nation purchased all the land and mineral rights in the county in the 19th Century, and maintains those rights in coordination with the Bureau of Indian Affairs (BIA).  The county holds significant recoverable reserves, but BIA mismanagement and a recent lawsuit filed in response to BIA’s actions has brought production in the county to a halt. 

The decline in production is a direct result of a lawsuit filed in 2014 which claims BIA had not properly applied the National Environmental Policy Act to Osage County. For more than thirty years, producers in Osage County relied upon a 1969 declaration by BIA that production in the area would not have a significant impact on the environment, and as a result did not require Environmental Impact Statements. A local landowner filed suit last summer, claiming BIA’s declaration was insufficient. Within weeks of the filing, BIA reversed its longstanding policy via an “executive direction” which declared the 1969 declaration to be deficient.

The 2014 lawsuit and the subsequent policy reversal by BIA almost immediately shut down all new drilling in the county. Since oil and natural gas development is a major driver of Osage County’s economy, the impact was swift and negative. Instead of the regular pace of 500 new wells a year, only 24 have been drilled since last August, according to Rob Lyon of the Osage Producers Association.

Given the uncertainty surrounding the merits of the lawsuit and the swift expansion of environmental impact requirements in the county, it is no surprise development immediately ground to a halt. Furthermore, regulatory uncertainty does not impact just the oil and natural gas industry; the decline in development in Osage County has had a major impact on local communities that rely on the industry for employment and tax revenues that support vital services like health, education, public security and infrastructure.

This is one example of many across the country where the federal government has put in place obstacles to development on public and Indian lands. Rather than defending long-standing policies that benefit tribes and local communities, the Interior Department has reversed course, often in response to lawsuits, and is making it more difficult to development energy.  

Image source: Facebook.com/OsageNation