Opinion: Southern Ute Tribe sees success in energy industry

Amidst all the negativity one often reads about the predicament of indigenous communities worldwide, particularly with reference to extractive industries investments on their land, it is important to consider some ingredients of successful stories as well. The Southern Ute Indian Reservation in southwestern Colorado presents some cause for optimism about how extractive industries — in this case coal-bed methane (or coal-seam gas as it is called in Australia and the UK) — can potentially serve a constructive purpose when handled with care and good governance.

The reservation covers an area of 1,059 square miles, with the tribal headquarters located in Ignacio, Colorado. The Tribe is relatively small, with only slightly more than 1,400 tribal members, 1,000 of whom reside on the reservation. Unemployment is lower than the national average for Native residents of reservations, and at $20,400, per capita income is sharply higher than the national Native reservation resident level of $11,400. Half of the 1,500 tribal government employees are enrolled Southern Ute tribal citizens.

This remarkably innovative community is among the most successful tribal natural resources developers, estimated in 1994 to produce 82 percent of the nation’s coalbed methane gas within the borders of the Tribe’s southwestern Colorado reservation.108 In leveraging their role as both mineral titleholder and regulatory authority, the Southern Ute have cultivated “thick” internal capacity and diversified their business interests. Deliberate financial forethought and independent leadership have solidified a degree of “financial sovereignty” yet unrealized by any other major extractive tribe; the self-created Growth Fund and Permanent Fund are reported to have had combined unrestricted cash and investments as of 2012 of $1.88 billion, with a AAA rating by Fitch Ratings.

Such extraordinary success is by no means formulaic. The leadership of Chairman Leonard Burch, who, when first elected, was the youngest leader to hold that office, set a vision and laid a path by which the Southern Ute were able to transition from a passive relationship with the federal agencies in which the Tribe acted merely as a mineral lessor for tribal trust minerals. The alternative path taken by Southern Ute has been to be the active and authoritative force in the development of reservation resources, a force that private companies have come to respect and work with to build long-term, mutually beneficial relationships. As noted by High Country News, “The Southern Ute have achieved cultural, environmental, and economic self-determination through energy self-determination—a feat rarely accomplished, whether by Indians or non-Indians”.