Indians Seek Control Of Tribal-Land Resources

ENERGY DEVELOPMENT

FOR decades, American Indians have relied on non-Indians to develop their energy resources. But in the past few years, more than a dozen tribes from Arizona to Montana have taken control of mineral wealth on their reservations.

The move toward tribal control increases employment on reservations and allows tribes to control their land base - a fact that is of critical importance, says David Lester, executive director of the Council of Energy Resource Tribes (CERT) in Denver. ``As Indian nations, these tribes should be making the decisions about how and when their resources are developed,'' he says.

With 6 percent of the nation's oil and gas and 30 percent of its strippable coal on reservations, Mr. Lester says native Americans could play a key role in domestic energy policy. But their contribution has been limited because they have been forced to rely on non-Indians to develop energy resources.

``As long as the tribes stayed as just the royalty owner, the value-added activities [such as refining or processing] happened off the reservation, outside of tribal economies,'' Lester explains.

Founded in 1975, shortly after the Organization of Petroleum Exporting Countries sharply reduced oil production, CERT was originally touted as the ``Indian OPEC.'' While the 57 member tribes - 53 United States and four Canadian tribes - do not have the same influence as OPEC ministers, they have brought jobs and increased revenue to reservations. Some tribes have formed independent production companies; others have entered into joint ventures or production-sharing arrangements.

The Southern Ute tribe of southwestern Colorado has been a leader in the move toward tribal control of energy resources. Last month, the tribe completed an $87 million deal to acquire and operate a pipeline and gas-processing facility. The facilities will allow the tribe to upgrade gas production and processing. Red Willow Production Company, the tribe's energy company, has some 35 billion cubic feet of gas reserves. The tribe operates or has interests in 169 gas wells on its reservation.

The Jicarilla Apaches of northwestern New Mexico are another success story. Thurman Velarde, the Jicarillas' oil and gas administrator, says the tribe got into the business because companies shut down marginal wells and left the reservation. Marginal wells produce five to 20 barrels of oil per day, and many large oil producers prefer to plug them rather than operate them.

``We were losing royalties,'' Mr. Velarde says. ``The companies that had the wells had high operating costs. The tribe could operate them and still make money on them.'' Launched in 1980 with five wells, tribally owned Jicarilla Energy Company later acquired four more wells and drilled seven more on tribal land. Velarde says the tribe is eager to expand.

``We are looking to buy existing production or drill more wells,'' he says. However, lack of capital hampers the tribe. Drilling plans have been put on hold because the tribe lacks money to drill new wells, which can cost several hundred-thousand dollars each.

David Harrison, an Albuquerque, N.M.,-based consultant to energy-producing tribes, is encouraged by the activity. He says tribes are pursuing joint ventures with outside energy companies because ``they want to share in the greater profits of mineral development.'' But the member of the Osage tribe of Oklahoma adds that a capital shortage and the downturn in the domestic energy business have slowed progress. More jobs, he notes, have been lost in energy in the last 15 years than in the steel and auto sectors combined.

The weakness of the domestic energy business has hurt tribes seeking increased energy independence. ``It takes a viable industry around them to make this work,'' Mr. Harrison says. ``The industry itself has been in such doldrums since the mid-'80s.''

While some tribes are looking for increased drilling activity, others are pursuing different goals. The Navajo tribe is building a high-powered electric line that will connect the four-corners region of Arizona, Colorado, New Mexico, and Utah with cities in central and southwestern Arizona. It is also looking at solar power and other alternatives that may prove useful to rural tribal members. The Blackfeet tribe of Montana, which also produces oil and gas, is analyzing its wind-energy potential.

CERT's goal is to use tribal energy resources to develop viable tribal economies while preserving tribal values. Toward that end, the association provides members with technical, geological, and financial help. Also, it sponsors scholarships to Indian students attending college in business and technical fields.

Education is the key to continued development of tribal energy resources, Lester says. ``We have to develop tribal people with technical and professional skills,'' he says, ``so we can eliminate our technical dependence on others.''