Native Sun News: Class action filed over BIA mineral leasing

Wednesday, August 31, 2011  

The following story was written and reported by Evelyn Red Lodge. All content © Native Sun News.

WASHINGTON, DC -- A class action suit was filed late last week charging that the Bureau of Indian Affairs systematically protected oil company interests – when they approved extremely low land and mineral leases.

Two prominent Native American women filed their complaint in the United States Court of Federal Claims. Mary Louise Defender Wilson and Ramona Two Shields of the Standing Rock Sioux Tribe seek to hold the United States responsible for actions by the BIA for the years 2006 - 2008, according to a press release.

“The BIA systematically protected oil company interests, rather than the interests of Native Americans when approving Bakken oil shale mineral interest leases on the Fort Berthold Indian Reservation,” they allege.

According to www.geology.com, the Bakken Formation is roughly centered where the Northern corners of North Dakota and Montana meet with roughly one-third of the formation going into Canada.

“The 2008 USGS assessment estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in the U.S. portion of the Bakken Formation, elevating it to a ‘world-class’ accumulation. The estimate had a mean value of 3.65 billion barrels,” according to the Department of Interior website.

The Bureau of Indian Affairs approved payments of only $50 to $100, or sometimes $400 an acre for mineral interests on 42,500 acres of individual Native American mineral interests – the same acreage which Williams Companies eventually obtained from oil company middlemen for an estimated $10,000 an acre.

In 2010, Williams Companies paid $925 million mainly for control of 86,000 acres of Bakken oil shale formation leases. That is estimated at $10,000 an acre.

The BIA holds these leases in trust, and as trustee approves every aspect of the leasing process. That includes all leasing form provisions, the amount of the lease sale payments, and even receiving the lease money which it then turns over to the individual owners.

Ken McNeil, the lead trial lawyer for lead counsel firm Susman Godfrey, said, “The 185 billion barrels of estimated oil reserves on the Fort Berthold Reservation is equivalent to 30 percent of the size of the entire U.S. Strategic Petroleum Reserves.”

The class action alleges this is the latest in a long line of “land grabs” of valuable mineral resources without adequate compensation to individual Native Americans.

Shawn Raymond, another partner at Susman Godfrey, notes that “The Bureau of Indian Affairs has a fiduciary duty to protect individual Native Americans when it comes to leasing their oil and gas mineral interests. The regulations require they maximize the interests of the individual Native American. Here, the Bureau of Indian Affairs has failed to do its job.”

Attorney Mario Gonzalez, also representing the plaintiffs, said that “The Bureau of Indian Affairs rubberstamps each lease with the statement ‘in the best interest’ of the Individual Indian land owner. How can it be in their best interest to approve leases of $50, $100, or $400, which were ultimately transferred to an oil company subsidiary of Williams Companies for an estimated $10,000 an acre?”

The Kelsch law firm and John Olson in North Dakota are also counsel to the plaintiff’s class action lawsuit.

(Contact Evelyn Red Lodge at welakota@yahoo.com)