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Supreme Court gives Oklahoma’s Indian tribes a say over oil wells and pipelines

About a quarter of Oklahoma’s recent oil and gas wells and around 60 percent of its refinery capacity now lie within the territory of five tribes — the Cherokee, Chickasaw, Choctaw, Creek and Seminole.

Perhaps more importantly, the network of pipelines pumping crude to and from Cushing, Okla. — a crucial oil terminal for the Keystone XL — spider-web across the redrawn reservation borders.

Instead of dealing with business-friendly regulators from the state of Oklahoma, oil producers may soon have to contend with both tribes and the federal government, which often manages land for Native Americans.

“The reality is that there’s something potentially that could be very detrimental to the oil and gas industry,” said Dewey Bartlett, a former Tulsa mayor who runs Keener Oil & Gas Company, a five-person oil and gas production and exploration firm with most of its wells now in Indian country.

With Americans driving and flying less during the viral outbreak, U.S. oil prices have dropped by a third since the start of the year. Oklahoma’s shale fields, where extraction costs are relatively high, are among the hardest hit during the pandemic. One of the state’s biggest energy firms, the fracking pioneer Chesapeake Energy, has already declared bankruptcy.

The 5-to-4 decision, written by Justice Neil M. Gorsuch and joined by the court’s liberals, ostensibly deals with criminal law for the ancestors of those forced to march the 19th century Trail of Tears into present-day Oklahoma.

But the majority opinion writers acknowledge the ruling raises big questions over taxation and the enforcement of environmental rules across those 3 million acres — ones that may take years to settle.

“In reaching our conclusion about what the law demands of us today, we do not pretend to foretell the future and we proceed well aware of the potential for cost and conflict around jurisdictional boundaries, especially ones that have gone unappreciated for so long,” Gorsuch wrote in McGirt v. Oklahoma. “But it is unclear why pessimism should rule the day.”

In a teleconference organized by the Petroleum Alliance of Oklahoma trade group soon after the July 9 decision, Oklahoma Attorney General Mike Hunter (R) sought to reassure oil producers that their business wouldn’t be upended and the state would keep their interests in mind.

Robert Sullivan Jr., an independent Tulsa-based oil producer who once served as Oklahoma’s energy secretary, took comfort in Hunter’s comments. “Oklahoma has been a very good place to do business,” he said.

Still, after having dealt with federal restrictions to protect an endangered beetle while drilling in Indian country, which could hold him up for months at a time, he says his big fear now is federal regulation.

“One of the things we were concerned about in the McGirt aftermath is that we, being Oklahoma producers, would lose the source of regulation from one place, the Oklahoma Corporation Commission, and start getting…

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2020-07-17 18:33:00

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