Senators see threat to mineral rights

U.S. Sens. Jim Inhofe, R-Oklahoma,  and James Lankford, R-Oklahoma,  sent a letter to Department of the Interior Sec. Sally Jewell expressing concerns about the Bureau of Indian Affairs’ (BIA) management of Osage Nation’s oil and gas mineral estateion Osage County, Oklahoma.

In the letter, the senators state, “Oil and gas production in Osage County is at the heart of what sustains the livelihood of thousands of Osage Nation tribal members. Osage Nation is unique among the Oklahoma tribes in that it retained a substantial mineral estate following statehood. In recent years, oil production in Osage County has reached nearly 500,000 barrels per month, generating millions of dollars in revenue for the tribe’s headright owners. The ongoing economic vitality of the tribe and its members is directly linked to the long term success and productivity of the Nation’s mineral reserve. This is a significant resource and should provide decades of opportunity and prosperity for the Nation.”

On May 11, BIA finalized new regulations that would increase the cost to produce oil to the point it would put Osage Nation’s operations out of business. The Osage Minerals Council and the Osage Producers Association responded by filing lawsuits against BIA, which cites significant concerns with the regulations to include forcing expensive updates to equipment, requiring producers to pay royalties that will run up to $5 a barrel higher than the price producers receive in Osage County, and increasing the bond amount that a producer would have to take out on a lease.

“The new regulations that were recently finalized will not solve any of these problems,” the senators continued to state in the letter. “In fact, it is our view that they will actually make the problems worse. We are pleased the Federal Court for the Northern District of Oklahoma blocked the implementation of the regulations until an August 10 hearing date; however, we believe it is imperative, particularly in light of your fiduciary duty to the Osage Mineral Council, that you further suspend any plans to implement or enforce the regulations. We request that you instead meet with us and other relevant stakeholders to craft a solution that is legitimately workable.”