American Indian Reservation Reaping Big Benefits From Oil Drilling
February 24, 2010 - 9:34 AMAn oil boom on American Indian land has brought jobs, millions of dollars and hope to long-impoverished tribal members in North Dakota.
In little more than a year, oil companies have put dozens of money-producing rigs on remote rolling prairie and sprawling badlands that are home to small cattle ranches and scattered settlements of modular housing. Although other tribes around the nation have oil interests, industry officials said none has likely experienced a recent windfall of this scale.
The reservation is occupied by the Mandan, Hidatsa and Arikara tribes, known as the Three Affiliated Tribes, who were placed in west-central North Dakota by the federal government in the 1800s -- long before anyone knew of the oil.
"If they knew there was billions of barrels of oil here, they would never have put us here," said Spencer Wilkinson Jr., general manager of the Four Bears Casino on the reservation.
"There is probably more opportunity here than people have had in their lifetimes," said Marcus Levings, chairman of the Three Affiliated Tribes. Roads are now sometimes clogged with traffic, including Hummers and expensive pickup trucks. The local casino is buzzing with free-spending locals. And tribal members who had moved away to find work are now moving back for the abundant good-paying jobs.
Tribal officials say the oil has helped right a wrong done to the tribes in the 1950s, when more than a tenth of the reservation was flooded by the federal government to create Lake Sakakawea, a 180-mile-long reservoir.
Oil companies are now drilling beneath the big lake, using an advanced horizontal drill technique. Recently completed regulatory paperwork removed the last obstacle.
Since the boom began, lease payments of more than $179 million have been paid to the tribe and its members on about half of the reservation land, tribal record show. Millions of dollars more in royalties and tax revenue are also rolling in.
Levings said the tribe will use its money to pay off debt, and bankroll such things as roads, health care and law enforcement.
The reservation contains portions of six counties, covering more than 1,500 square miles. It lies atop a portion the oil-rich Bakken shale formation, which the U.S. Geological Survey estimates holds 4.3 billion barrels of oil that can be recovered using current technology. The agency said the Bakken was the largest oil deposit it has ever assessed.
In addition to the oil money, the tribes get $60 million to $70 million in federal aid annually from the federal government.
"This is an opportunity for us to help ourselves as much as we get help," Levings said. About 4,500 of the approximately 12,000 tribal members live on the reservation, one of about 300 in the United States.
State demographer Richard Rathge said 28 percent of people on the reservation were living in poverty in 2000, the latest figures available. More than 40 percent did not have a job at that time.
The opening of the casino in the 1990s added about 200 jobs. But oil's impact has been huge. "Anybody who wants to work can work," said Levins, with jobs available on rigs and in support industries such as oil supplies and trucking.
The reservation was the last area to be targeted by companies in the state's oil patch because of onerous federal requirements. But a 2008 tax agreement standardized the rules for oil drilling.
Dozens of wells have been drilled and more than 500 could be operating within five years.
Lovina Fox hopes at least one winds up on her land near Mandaree, a town of about 500 on the reservation. Lights from nearby drill rigs and flares burning off excess gas already illuminate her home.
"Everybody knows everybody here," she said. "If people are getting rich they're not saying anything and keeping it hush-hush. But it's not hard to figure out who's getting money -- it's the people who have haven't worked in years and all the sudden, they're driving new vehicles."
Tribal member Rose Marie Mandan, who admits to earning "a nice little cushion" from oil payments, said she moved away from the reservation more than 50 years ago to find a job, then returned after retiring. "In the 1950s there were no jobs here," said Mandan, 80. Now she's seeing tribal members moving to the reservation for work.
Chuck Hale worked as a roughneck in other states before returning to his home near New Town to take a good-paying oilfield job. "It's tough work and it's damn cold," Hale said. "But it's worth it."
Mandan worries about the effects of the instant wealth. "It can be good but only if people know how to use the money," she said.
Wilkinson Jr., the casino general manager, said casino revenue jumped from $4.5 million in 2008 to $7.2 million in 2009.
He said he had advised tribal elders "to have fun at the casino but don't spend it all there. I've told them to invest it in something useful, like ... their house and kids and grandkids, and send them to college."
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