CHAPTER 6 ACCESSING INDIAN LANDS FOR OIL AND GAS DEVELOPMENT
| Jurisdiction | United States |
(Feb 2008)
ACCESSING INDIAN LANDS FOR OIL AND GAS DEVELOPMENT
Davis Graham & Stubbs LLP
Denver, Colorado
Constance J. Rogers
Davis Graham & Stubbs LLP
Denver, Colorado
I. Introduction.
Because of the often complex ownership status of Indian lands and the always complex nature of Indian law, oil and gas development on these lands frequently requires authorization from multiple entities in order to access the targeted resource.1 These complexities present industry actors working in Indian Country with unique challenges. There is another side to those challenges, however, because development in Indian Country can also present unique opportunities. In an era where regulation of Federal lands is increasingly burdensome, Indian tribes now have authority to simplify regulatory complexities on Indian lands.
This paper presents an overview of access issues confronted by oil and gas developers operating on Indian lands, highlighting challenges and special opportunities that are unique to Indian lands. The following section provides an overview of the Indian law framework necessary to understand the various types of Indian land tenure. The next section describes the statutory and regulatory requirements for gaining access to Indian lands and minerals. The fourth section discusses recent Congressional action regarding rights of way and valuation in Indian Country and offers three proposals for structuring negotiated solutions to access issues.
II. General Legal Principles and Land Tenure in Indian Country.
A. Reservations, Indian Country and Restraints on Alienation.
Competing federal, state, and tribal laws can affect all aspects of operations on Indian lands. Determining which governmental authority has jurisdiction often depends upon determining whether the given location is within "Indian Country." The term "Indian Country" generally refers to those areas of land for which Congress has deemed primary control rests with the federal government and the resident tribal government.2 Generally speaking, Indian Country encompasses all lands within the original boundaries of an Indian reservation and many lands held in trust for an Indian tribe or individual regardless of location.3 In certain circumstances,
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Indian Country includes land held in fee by non-Indian individuals or non-Indian governmental entities as well as land held in trust for a tribe or Indian individual. Although non-Indian land within Indian Country is frequently subject to federal, and sometimes tribal, regulatory control, authorization for access to that land is also controlled by the non-Indian entity owning the land.
An examination of federal and tribal jurisdiction over such non-Indian lands within Indian Country is beyond the scope of this paper, but operators should be aware that regulatory jurisdiction exercised by federal and tribal authorities can significantly affect their operations on these lands once access is gained. Further information on this subject can be found in previous foundation papers.4
Lands held in trust for a tribe or individual Indian are subject to restrictions on alienation and interests in trust land may only be conveyed as authorized by Congress.5 Typically access to trust land requires authorization from the Indian owners and approval from federal authorities. As discussed below there are certain circumstances under which operators may pursue condemnation or under which federal approval without concomitant authorization from the Indian owner is sufficient.
B. Tribal Self Government and Tribal Sovereignty.
Since the Nixon administration, the federal government has followed a policy of encouraging tribal self-government.6 This policy is reflected in federal statutes controlling development of tribal natural resources.7 This policy which creates an opportunity for tribes to develop and exercise regulatory control of Indian lands. Recent legislation explicitly authorizes tribes to assume certain federal regulatory programs affecting energy resources.8 Moreover, all federal agencies with jurisdiction over natural resources development in Indian Country follow a policy calling for a government-to-government relationship with federally recognized Tribes.9 Under this policy, federal agencies are to grant to tribal governments the "maximum administrative discretion possible" and to respect tribal self-government.10 As a practical matter
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this often means that federal agencies will defer to tribal decisions regarding Indian lands and resources. Tribal governments then play a significant role in influencing the exercise of federal regulatory authority on Indian lands. Good relationships with tribal governments can provide operators with important leverage in dealing with federal land managers.
Tribal sovereignty is the foundation for the self-government policy. Early Supreme Court decisions characterized Indian tribes as "domestic dependant nations" with sovereign governments.11 Modern decisions expanded that notion, concluding that tribes retain those aspects of authority which have not been withdrawn or surrendered by treaty, reduced by statute, or as a necessary implication of a tribe's dependant status.12 This sovereign authority includes power over tribal land, tribal members, and in certain instances non-members.13 Tribal sovereignty plays an important role in business transactions with tribes, including arrangements providing for access, because it provides tribes immunity from suit, unless the tribe explicitly waives such immunity.14 Although a full explanation of the law concerning tribal sovereign immunity is not appropriate here, when seeking access agreements with tribes operators should be aware of the issue; with the right economic incentives in most cases, tribes are willing to exchange limited waivers of their sovereign immunity to promote mineral development.
C. The Federal Government's Trust Responsibilities.
The United States has repeatedly recognized that it has a fiduciary relationship with Indian tribes and individual Indians.15 This relationship creates trust responsibilities for federal agencies with authority over property held in trust for tribes or individuals. The federal government can be held liable for damages resulting from a breach of these trust responsibilities, including the mismanagement of natural resources held in trust.16 These trust responsibilities constrain agency decision making that affects any trust resource. This includes decisions affecting access to and use of Indian lands.
D. Land Tenure in Indian Country.
Legal history pertaining to Indian lands is long, inconsistent, and in many cases counterintuitive. Not only did this history lead to Indian reservations and the above-discussed concept of Indian Country, but as in other areas of the West, it created complicated split-estate issues. In Indian Country, the split-estate issue reaches new dimensions. Each tribe and
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reservation has its own unique history, and this history must be explored in each case to understand the land tenure picture and resulting jurisdiction and access issues. A hypothetical tribal land situation is created below to demonstrate this complexity and to explain the origin of the split-estate issues on Indian lands.
Indian Tribe ("Tribe") has a reservation in a Western state ("Reservation"). The Reservation was created by a Treaty in 1859.17 In 1862, pursuant to the Western States Railroad Act, Congress conveyed some sections within the Reservation railroad, including the surface and mineral estates and changed the Reservation border to exclude these parcels. Some of these lands were later sold to third parties; in most cases the railroad reserved the minerals.
In 1887, Congress passed the General Allotment Act authorizing the President to allot tribal lands to tribal members and to open up the remaining "surplus" lands for disposition under the homestead acts and other laws.18 A special Act of Congress was enacted in 1889 implementing the General Allotment Act for the Reservation, beginning the checkerboard pattern of land ownership within and adjacent to the Reservation. Between 1889 and 1934, lands within the Reservation were allotted to individual Tribe members and subsequently some of these lands were sold by allottees to non-Indian owners. Portions of the Reservation were opened for entry under the homestead and other land disposition laws. Much of the land disposed through the homestead laws was subject to federal mineral reservations. In 1882, the Reservation was expanded by Executive Order. In 1907, the Reservation was again adjusted by Executive Order, removing some lands from the Reservation. In 1910, another Executive Order restored some lands and added others to the Reservation.
In 1934 Congress halted the practice of allotment, restoring all remaining surplus lands to tribal ownership, and allowing the Tribe to establish a formal government to govern its Reservation. In 1936, the BIA approved the Tribe's constitution and restored all public domain lands and all severed federal minerals within the Reservation boundary in trust to tribal ownership. Prior to restoration to the Reservation, some of the public domain lands were leased by the federal government to third parties for mineral development and grazing. The federal government maintained ownership of the leased minerals and surface.
In an effort to provide the Tribe with a larger land base to shore up its economy, in the 1970s Congress authorized the re-purchase of railroad grant lands still in possession of the railroad to place in trust for the Tribe. Some of these sections were within the Reservation and some were near, but outside of the Reservation boundary. The conveyance from the railroad to the Tribe severed and reserved the minerals to the railroad, many of which were sold...
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