JurisdictionUnited States
Natural Resources Development in Indian Country
(Nov 2005)


Thomas H. Shipps
Maynes, Bradford, Shipps & Sheftel, LLP
Durango, Colorado

Thomas H. Shipps is a partner in the firm of Maynes, Bradford, Shipps & Sheftel, LLP located in Durango, Colorado. The firm serves as general counsel for the Southern Ute Indian Tribe and special counsel for the Ute Mountain Ute Tribe. Tom joined the firm after receiving his law degree from the University of Houston (J.D. 1979, President, Order of the Barons) and his undergraduate degree from Fort Lewis College (B.A. 1976, summa cum laude).

Mr. Shipps' practice is devoted in large part to Indian natural resource development, mineral leasing and lease compliance, and tribal economic development. He assisted in the formation and development of the Southern Ute Indian Tribe's natural gas operating company, Red Willow Production Company, and Red Cedar Gathering Company, a gas gathering joint venture in which the Southern Ute Indian Tribe is the majority owner. He was also the lead counsel for the Southern Ute Indian Tribe in the seminal case involving ownership of coal bed methane gas on federal and tribal lands. Amoco Production Co. v. Southern Ute Indian Tribe, 526 U.S. 865 (1999). He is also currently the legal advisor to the Southern Ute Indian Tribe Growth Fund, a tribal division that oversees diversification of tribal investments throughout the United States.

Tom has served as a member of the Royalty Management Advisory Committee and the Royalty Policy Committee under the Clinton and both Bush administrations, and he was a key participant in the Department of Interior's negotiated rulemaking regarding Indian gas royalty valuation. He has participated as a lecturer in a variety of programs sponsored by the Rocky Mountain Mineral Law Foundation, the American Bar Association, and the Federal Bar Association and is recognized for his work on Indian energy matters.


This paper addresses two statutes that underpin Federal Indian policy, the Nonintercourse Act 1 and the Indian Contracts Statute, 2 and considers them in relation to natural resource development on Indian lands. By necessity, the status of the law on any subject requires a review of current statutory phrasing and terminology, but an understanding of the historical events and legislative responses leading to the crafting of such language aids in its interpretation and application.

The Nonintercourse Act remains unchanged since its enactment in 1834, and its history evokes considerations of Indian policy during periods before and after the American Revolution. Because it invalidates conveyances of tribal lands not undertaken in conformity with congressional authorization, application of the Nonintercourse Act also requires some review of Federal statutes that authorize such conveyances. The Indian Contracts Statute, initially enacted in 1872, has been modified on several occasions, most significantly in 2000. Both statutes reflect a policy of Federal protection of Indian tribes against those who might otherwise take unfair advantage of the Nation's "wards," 3 or, alternatively, against the tribes themselves.

During an era in which many Indian tribes are increasingly engaged in sophisticated commercial activity, it is not surprising that the tension between Federal protection and Indian self-determination would find its way into contemporary enactments. Some provisions in the Energy Policy Act of 2005 4 reflect potential and guarded relaxation of Federal protection in tribal energy development, but other provisions of the same act suggest that Congress may choose to exercise unilateral control over certain land-use decisions in Indian country in favor of competing national interests and in possible disregard of tribal decisions or desires.

Because the Nonintercourse Act, the Indian Contracts Statute, and recent legislative developments all involve the exercise of congressional power over Indian affairs, a brief review of the Constitution and the power of Congress in these matters provides a useful backdrop and point of beginning.


The relations between Indians and colonists before the American Revolution were marked with difficulties associated with the occupation of native lands and the intermingling of distinct cultures. 5 The unsuccessful efforts of colonial governments to regulate relations with Indians led Great Britain to impose a centralized system of regulating trade with Indians that also proved ineffective. 6 European nations, which asserted legal title to the lands they had discovered in the New World, formally recognized the right of Indians to remain on the lands they occupied, subject to the colonizing entity's ultimate power of disposition. 7 In order to avoid warfare with hostile Indians, Great Britain made treaties with Indian nations that included purchases of aboriginal lands and recognition that Indian nations possessed the right to determine their internal affairs without interference. 8

During and immediately following the Revolution, the Continental Congress wrestled with the question of Indian affairs. In the Articles of Confederation, the Continental Congress designated the regulation of trade with Indians as a matter within the jurisdiction of the central government and attempted to establish territorial boundaries separating the lands of the member States from Indian country. 9 The settlement of lands within State boundaries remained a matter of State jurisdiction, but the power to treat with Indians outside of those boundaries was a matter delegated exclusively to the central government. Not all States accepted this distribution of power, and in some cases States attempted to negotiate their own treaties with Indian nations. 10 The central government entered into treaties with Indian nations both before and after the signing of the Peace of Paris treaty with Great Britain on September 3, 1783. 11

The Constitution maintained the primacy of the national government over Indian affairs. While commentators have cited several provisions of the Constitution as supportive of the national government's exclusive jurisdiction over Indian affairs, the treaty-making power 12 and the Indian commerce clause, 13 which specifically empowers Congress to regulate commerce "with the Indian tribes," are widely viewed as the principal express authority for that power. 14 "Generally speaking, primary jurisdiction over land that is Indian country rests with the Federal Government and the Indian tribe inhabiting it, and not with the States." 15


A. Historical Background

Following adoption of the Constitution Federal Indian policy could have followed several different paths. As one commentator explained:

The first consideration was peace. To achieve and maintain it, two means were possible. The first was renewed military engagement against the hostile tribes, attacks carried on with vigor enough to effect a smashing victory; by absolute conquest the Indians could be destroyed and subdued. Such a policy was rejected by President Washington, Secretary of War Knox, and other responsible leaders -- though it would appeal to frontiersmen for decades to come -- for all-out war was simply impossible. The country, precariously perched among the sovereign nations of the world, could not stand the expense and strain of a long drawn-out Indian war. Nor would such a brutal undertaking accord with the high dictates of humanity and justice demanded by the national character of the United States. The alternative, which had already been frequently propounded in the days following the Revolution, was conciliation of the Indians by negotiation, a show of liberality, express guarantees of protection from encroachment beyond certain set boundaries, and a fostered and developed trade. This program the nation set about to accomplish. Having waived the right of conquest, it determined to compensate the Indians fairly for lands given up and to protect them in lands they still retained. The Indians' wants would be cared for by a government-fostered trade, and presents would be freely used when necessary to smooth the road toward solid friendship. 16

In furtherance of the non-military approach, Congress enacted the first statute addressing trade and intercourse with Indian tribes on July 22, 1790. 17 The first intercourse act created a licensing system for Indian traders, to be administered by the President, and made it a crime for persons to engage in trade or possess "such merchandise as are usually vended to the Indians" without such a license. 18 Section 4 of the first intercourse act provided as follows:

And be it enacted and declared That no sale of lands made by any Indians, or any nation or tribe of Indians within the United States, shall be valid to any person or persons, or to any state, whether having the right of pre-emption to such lands or not, unless the same shall be made and duly executed at some public treaty, held under authority of the United States.

Congress moved somewhat cautiously in passing the first intercourse act and limited the life of the act to a two-year period. Through a series of subsequent acts, the basic provisions of the first intercourse act were extended and embellished. 19 This process culminated with passage of the permanent Act of June 30, 1834. 20

The Act of June 30, 1834 contained thirty separate sections, a number of which remain in the United States Code. The first five sections addressed different aspects of a strict licensing system applicable to trading with Indians. Section 6 imposed special passport restrictions upon foreigners entering Indian country. The seventh through ninth sections prohibited persons from obtaining tools from Indians, hunting on Indian treaty...

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