Tribe aims to cut high rate of flaring in half

NEW TOWN, N.D. – Reducing natural gas flaring on the Fort Berthold Indian Reservation has more hurdles than the rest of the state, but a tribal task force says flaring can be cut in half within five years.

The reservation flares about 48 percent of its natural gas due to a lack of adequate pipelines and other infrastructure, said Carson Hood Jr., director of the Mandan, Hidatsa and Arikara Nation Energy Division.

“In the beginning, industry had not developed the infrastructure to accommodate future wells,” said Hood, one of three people heading the tribe’s flaring task force.

Overall natural gas flaring in North Dakota is lower than the reservation, most recently at 36 percent.

But the reservation has additional challenges, including working through lengthy processes with federal agencies to secure rights-of-way for pipelines, Hood said.

Other challenges include the characteristics and topography of the land at Fort Berthold and the impediment Lake Sakakawea presents to reaching transportation corridors.

“There’s more to it than off reservation, no question,” said Jim Glenn, senior land manager for Halcon Resources, which operates four drilling rigs on the reservation.

Despite the challenges, the task force has recommendations to reduce flaring at least by half within five years, the group said this week during the MHA Nation’s Oil and Gas Expo.

The group is working to coordinate with the North Dakota Industrial Commission’s efforts to reduce flaring, including requiring gas capture plans as recommended by the commission.

One of the tribe’s recommendations is for the Bureau of Indian Affairs to approve Fort Berthold rights-of-way applications from Denver, where it is easier to find staff to catch up to the backlog of applications, Glenn said.

Other recommendations include establishing energy corridors and creating a tribal pipeline authority to better coordinate and streamline the placement of pipelines.

“Anything to streamline permitting and putting in pipe is what needs to be done,” said Glenn, co-chairman of the task force.

The tribe also is looking into a natural gas processing plant on the reservation and the potential of a power plant, Tribal Chairman Tex Hall said.

“We have all this fuel and we don’t want it to be flared up into the atmosphere,” Hall said. “We want to capture it.”

The task force has allowed for good communication between the industry and tribal officials, which is key to solving the problem of flaring, said Claryca Mandan, the MHA Nation natural resources administrator.

“We have to do it collaboratively,” said Mandan, co-chairwoman of the task force.

Sen. John Hoeven, R-N.D., and two senators from Wyoming introduced federal legislation last month aimed at reducing natural gas flaring.

The Natural Gas Gathering Enhancement Act would expedite the federal permitting process to issue rights-of-way for natural gas gathering lines on federal and Indian lands.

Oil revenue way up for tribes; money going to roads, other infrastructure

Three Affiliated Tribes Chairman Tex Hall speaks Wednesday, April 23, 2014, during the Mandan, Hidatsa and Arikara Nation’s Oil and Gas Expo in New Town, N.D. Amy Dalrymple/Forum News Service

NEW TOWN, N.D. – In less than one year, the Three Affiliated Tribes have collected $184 million in oil tax revenue, nearly equal to the amount collected during the entire 2011-13 biennium.

The jump in revenue is primarily due to increased oil production at Fort Berthold, which now produces more than 270,000 barrels per day and accounts for nearly 30 percent of North Dakota’s oil production.

Tribal Chairman Tex Hall said Wednesday if the Fort Berthold Reservation were a state, it would be the No. 7 top oil producing state in the country.

“That’s how fast we’re moving,” Hall said during the Mandan, Hidatsa and Arikara Nation’s Oil and Gas Expo.

But the oil development comes with impacts for the reservation, and Hall outlined several major initiatives the tribe has planned to address them.

The tribe plans to spend $100 million to improve roads on the reservation that have taken a beating from heavy truck traffic, Hall said.

In addition, the tribe is planning $100 million for a proposed bridge project and $65 million in housing for medical staff as its clinic expands to a 24-hour ambulance service in response to an increased number of accidents, Hall said.

“These are all critical parts of the infrastructure needs,” Hall said.

During all of 2011-13, the Three Affiliated Tribes collected $188 million in oil tax revenue, according to the Office of the State Treasurer. Since July 1, the tribe has already collected $184 million in oil tax revenue.

In addition to the gain in revenue from increased oil production, the tribe is now getting a larger share of oil tax dollars resulting from a new tax agreement with the state.

Previously, the state received 80 percent of some of the oil tax revenue while the tribe received 20 percent, which Hall called “totally unfair.” An agreement reached at the end of last year’s legislative session changed the split to 50-50.

The tribe was projected to receive at least $80 million more in 2013-15 as a result of that agreement. However, with income from oil tax revenues running ahead of projections, Senate Majority Leader Rich Wardner said he estimates the tribe will gain at least $100 million.

Wardner, who spoke during Wednesday’s event along with Senate Minority Leader Mac Schneider, said it was “music to his ears” that the tribe is spending the additional tax dollars on roads.

Negotiations between state and tribal leaders were at times tense a year ago when some legislators wanted to stipulate in the agreement that the oil tax dollars be spent on roads. Tribal leaders objected to state government telling the sovereign nation how to spend its money.

Wardner, R-Dickinson, called for the state and the tribe to work more closely together to address issues such as natural gas flaring, handling of oilfield waste and drug trafficking.

“Their issues are our issues,” Wardner said.

One of the major initiatives the tribe is working on is a ¾-mile bridge to cross the Little Missouri River to provide easier access to the Twin Buttes area, Hall said.

The Charging Eagle Bridge, estimated to cost $100 million, would cut a 115-mile commute from Twin Buttes to the rest of the reservation in half, providing better access to health care, education and jobs, Hall said. Many oil companies have said there could be another 100 to 200 wells in Twin Buttes if they could access the area with a bridge, Hall said.

The tribe is holding public meetings on the proposal and has received concern from Twin Buttes community members about the potential for increased crime, Hall said.

In addition, the tribe plans to spend $50 million on a rail spur and site development for a rail-loading facility and diesel refinery near Makoti.

Thunder Butte Petroleum Services CEO Richard Mayer said the rail-loading portion of the project is expected to be complete in September with the refinery scheduled to open in spring of 2016.

Faces of the Boom: Connection to land drives tribal member’s activism on energy

Theodora Bird Bear, pictured Friday, March 7, 2014, near Mandaree, N.D., carries a camera with her so she can document oil and gas development on the Fort Berthold Indian Reservation. Amy Dalrymple/Forum News Service

MANDAREE, N.D. – Testifying before a legislative committee, holding a picket sign and posting to a blog are not things that come naturally to Theodora Bird Bear.

But the member of the Three Affiliated Tribes is so concerned about the impact of oil and gas development that she’s stepping out of her comfort zone and speaking out.

“When you’re connected to this land, like an intimate connection to this land, you will stand up for it no matter what,” Bird Bear said.

The 62-year-old grandmother devotes much of her time to monitoring oil and gas development, keeping people informed through the Facebook page This Is Mandaree. She frequently participates in meetings on and off the Fort Berthold Indian Reservation and is chairwoman of the Dakota Resource Council’s oil and gas task force.

“It can take over your life if you’re not careful,” said Bird Bear, who spent 19 years working for Indian Health Services and now works part time doing bookkeeping for a church.

Bird Bear began raising concerns about impacts of energy development on the reservation years before the Bakken oil boom, when the Three Affiliated Tribes first proposed a refinery.

Her opposition to the refinery, which initially proposed to process Canadian oil sands but later changed to Bakken crude, led to an increased awareness of energy impacts as oil activity ramped up in North Dakota.

Bird Bear lives in rural Mandaree along a busy highway for oil and gas development. She bought a digital camera and started carrying it with her to document spills she would observe while driving to and from town.

“I thought, ‘I’m going to document these impacts because no one else is,’ ” Bird Bear said. “I don’t see anybody out there monitoring or enforcing anything, so I just took it upon myself to do that.”

She sent photos to the Bureau of Indian Affairs and the Bureau of Land Management. When she didn’t get a response, she began posting photos to social media.

“I don’t think the feds or the state are really responsive to the people,” Bird Bear said. “So you get your word out however you need to.”

Bird Bear attended her first legislative hearing last year and testified for a bill that would have required oil wells to be drilled farther away from homes.

She also testified in public hearings to preserve the Killdeer Mountains, once against an oil drilling proposal and recently against a proposed transmission line for the area. Bird Bear continues to oppose the refinery, holding a picket sign last year outside the tribe’s groundbreaking ceremony and oil and gas expo.

“It’s not easy to do that when all the pressure is to go forward with this big industrial development,” Bird Bear said. “But it’d be hard to sleep, I think, to know that you didn’t do what you could.”

Charles Hudson, a tribal member who lives in Oregon and follows Bird Bear’s postings on Facebook, said he admires that she speaks up for what she believes in and focuses on attacking issues, not people.

“She’s a hero to me,” Hudson said.

Bird Bear said she can’t always see the impact her efforts are having. But she thinks concerns she and others have raised about radioactive oilfield waste played a role in the North Dakota Department of Health’s decision to hire an independent consultant to study the material.

Bird Bear signed a lease in 2007 for some minerals she owns on the reservation, which will be drilled later this year. She said she had misgivings about it, but had a family member ill at the time and needed the bonus check.

She believes the minerals were undervalued because she and other tribal members weren’t used to the idea of negotiating.

“Most people signed whatever they were given,” she said.

While oil development is bringing millions in new revenue to the reservation, Bird Bear said she worries about the long-term effects for her grandchildren, including her 6-year-old grandson, Russell, whom she babysits and sometimes brings with her to public meetings.

“What’s he going to be dealing with in 20 years when he’s an adult?” Bird Bear said. “What is going to be left here for him? I want him to have the same connection to this land that I do.”

Elders back tribal chairman; call attorney insubordinate

NEW TOWN, N.D. – Tribal elders here defended Chairman Tex Hall on Thursday and requested the tribal attorney be suspended for what they called unethical behavior and insubordination toward the chairman.

The Mandan, Hidatsa and Arikara Elders Organization brought a resolution to the Tribal Business Council seeking a 30-day suspension of Damon Williams, the attorney for the tribe.

Three Affiliated Tribes elder Ramona Two Shields said Williams was disrespectful in a Jan. 31 meeting when he got into a verbal confrontation with Hall during a discussion about amendments to an ethics ordinance.

Elders said Williams wrongly advised a few council members that an emergency existed with the tribal ethics ordinance, which allowed discussion of the amendments without the proper public notice procedure.

The amendments, which were approved, related to defining conflicts of interest for public employees, an issue Hall has received criticism for after his company, Maheshu Energy, was linked to a criminal investigation.

The elders also questioned other incidents involving Williams, including a letter he wrote questioning the results of a federally certified election without consulting Hall.

No member of the Tribal Business Council made a motion to support the elders’ resolution, so the effort did not move forward. However, Two Shields said the group may pursue other avenues.

Hall said he was glad the elders shed light on the need to establish a process when there is a divide on the council.

In an interview later Thursday, Williams said he considered the exchange between him and Hall to be natural dialog, not a confrontation.

“I take great pride in my professionalism,” Williams said. “I was just doing what I was told by my client, which is the entire Tribal Business Council.”

Also at the Jan. 31 meeting, a resolution to suspend Hall and investigate a contract involving the tribe and a company associated with James Henrikson, who is charged with felony weapons charges and linked to a murder-for-hire case in Spokane, Wash., was defeated by the Tribal Business Council.

In interviews, members of the MHA Elders Organization, which has representation across the Fort Berthold Reservation, said they support Hall’s leadership.

“He is looking out for everyone,” said Donna Morgan, chairperson of the group. “These other ones (council members) are looking out for themselves only.”

Elder John Danks said he applauds Hall and the council members for establishing what is known as the People’s Fund to sustain the tribe in the future.

“The tribe’s financially solvent and the Tribal Council manages our resources,” Danks said. “Our oil resource is what has generated this revenue. This resource is finite and we must put some aside.”

Danks said Hall owned the oilfield service business when tribal members elected him, and Hall doesn’t give up his right to engage in economic activity because he’s on the council.

Another Tribal Business Council member, Mervin Packineau of Parshall, also is listed on the tribe’s list of certified Indian contractors as owner of U.S. Sand LLC, which sells sand for hydraulic fracturing.

The specific changes to the tribe’s ethics ordinance approved by the council were not available Thursday because the resolution was approved but had not been signed, said Glenda Baker-Embry, spokeswoman for the tribe.

Majel Russell, an attorney who does some work on probate and enrollment issues for the tribe, told the Tribal Business Council she is interested in serving as a special prosecutor to handle ethics complaints, a position that had been advertised but not filled.

But Russell said the ethics ordinance would first need revisions to be more transparent, establish how a hearing process would work and define a protocol for a separate body to hear complaints that relate to the Tribal Business Council.

FBI says New Town shooter acted alone, had meth in system

NEW TOWN, N.D. — The Federal Bureau of Investigation has concluded its investigation into the November 2012 shootings deaths of a woman and her three grandchildren.

In a statement issued today, the FBI said Kalcie Eagle, 21, who had been identified as a person of interest, acted alone during the shootings in New Town and had methamphetamine in his system, according to autopsy and toxicology reports.

Eagle used a hunting rifle on Nov. 18, 2012, to kill Martha Johnson and her grandchildren Benjamin Schuster, 13, Julia Schuster, 10, and Luke Schuster, 6, in their home, the FBI said.

Eagle made statements to witnesses who were interviewed by the FBI admitting his responsibility for the killings. He also made statements to witnesses interviewed by the FBI that confirmed his possession of the hunting rifle.

Eagle died by suicide later the same day in the neighboring community of Parshall by cutting his throat with a knife.

Both towns are on the Fort Berthold Reservation in northwest North Dakota.

J. Christopher Warrener, special agent in charge of the Minneapolis division of the FBI, said in the statement that investigators conducted extensive interviews and collected numerous pieces of physical evidence.

“Many investigative hours were dedicated to this investigation in order to ensure that no additional threats to the community existed,” Warrener said. “We hope the conclusion of this investigation brings some closure to family members and the community.”

FBI spokesman Kyle Loven said investigators were unable to determine a motive for the shootings.

It took the FBI 11 months to issue the statement because investigators wanted to complete all aspects of the investigation to rule out whether Eagle received any outside assistance, Loven said.

“We wanted to make certain that there were no other parties that may have been involved in these killings,” Loven said.

Tribe breaks ground on refinery

Three Affiliated Tribes Chairman Tex Hall shakes the hand of Bernice Larson on Wednesday, May 8, 2013, near Makoti, N.D., during a groundbreaking ceremony for a refinery owned by the tribe. Larson sold the land to the tribe. Standing between them is Thunder Butte Petroleum Services CEO Rich Mayer. Amy Dalrymple/Forum News Service

MAKOTI, N.D. – As the Three Affiliated Tribes blessed the ground Wednesday where a refinery will be built, one tribal council member called it a new day for the Mandan, Hidatsa and Arikara.

“It’s really an important time for our people. It’s exciting,” said tribal representative Ken Hall. “But we have to be mindful going forward to not lose our culture.”

The tribes held a ceremonial groundbreaking for the Thunder Butte Petroleum Services Refinery, which will be constructed in four phases over two years. It will have the capacity to process up to 20,000 barrels per day of Bakken crude that is produced on the Fort Berthold Reservation.

Construction is expected to begin in August on the first phase, a truck-to-rail crude oil transloading facility that later ties into the refinery, said Rich Mayer, CEO of Thunder Butte Petroleum Services.

The transloading facility, which involves building storage tanks and a connection to a Canadian Pacific line near the property, would load and ship one 120-car train every four days, said Kurt Swenson, vice president of Corval Group, a consultant involved with engineering on the project.

The rail facility will be operational by early 2014 while the refinery is being constructed.

The tribe is finalizing a contract with a company called Chemex LLC, which will construct a modular refinery in Bakersfield, Calif., and ship it to North Dakota to be assembled.

Once the contract is finalized, construction is estimated to take 18 to 24 months, Mayer said.

Initially the refinery will produce diesel and sell the byproducts. After the final phase, the refinery will have the ability to refine more diesel and also some gasoline, Mayer said.

The refinery will provide 300 local construction jobs and 75 to 100 full-time jobs after it’s operational, officials said.

“I’m just amazed at how big the impact is going to be on these communities,” Mayer said.

Three Affiliated Tribes elder Tony Mandan, left, blesses the land where a refinery will be built during a ceremony Wednesday, May 8, 2013, near Makoti, N.D.

The refinery is off of Highway 23 on 469 acres northwest of Makoti the tribe bought from Bernice Nelson of Minot, who used to farm on the property with her husband. Makoti, which had a population of 154 in 2010, is about 35 miles east of New Town.

The tribe has contributed $40 million toward the transloading facility portion of the project.

The approximate $450 million total cost will be financed with bonds, said Daniel Eastman, managing director of private investment banking firm John W. Loofbourrow Associates Inc., who traveled from New York to attend the ceremony.

Tribal members and others at the event praised Tribal Chairman Tex “Red Tipped Arrow” Hall for having the vision to pursue a refinery, a plan that began 10 years ago before the Bakken oil boom. Initially the proposal called for refining Canadian tar sands, but in 2008 the plans switched to refine the tribe’s own Bakken crude.

During the celebration, Hall reflected about his ancestors.

“We grew up poor. We were lucky if we had a pair of clean overalls,” Hall said. “But our parents made sure we went to school and got educated. They did the best they could for us. They didn’t know we’d have this oil and gas resource, but now we do. It’s our responsibility to manage it and we are.”

Three Affiliated Tribes officials are talking to other tribes about inter-tribe commerce agreements to distribute diesel from its refinery. Representatives from several tribes, including the Spokane Tribe of Indians, attended the event and are interested in distributing the diesel.

“They want to buy all of it,” Hall said. “I have to slow them down.”

Members of a group called Save Our Aboriginal Resources, who protested the tribe’s oil and gas expo this week and the groundbreaking, said the refinery should have been put to a vote of tribal members.

Marty Young Bear of New Town called the refinery “another money pit.”

Theodora Bird Bear of Mandaree said she worries about the effects on the reservation’s air and water.

“They can’t regulate it (oil development) now, so I can’t see how they can handle a refinery,” Bird Bear said.

The tribal project is one of three refineries being developed in North Dakota.

MDU Resources Group broke ground in March on a diesel refinery near Dickinson that is expected to be complete in late 2014. It will have the capacity to refine 20,000 barrels of Bakken Crude per day.

Dakota Oil Processing proposes a diesel refinery near Trenton. CEO Chester Trabucco said Wednesday the project is in final stages of financing and officials plan to make an announcement soon.

The Tesoro refinery in Mandan recently expanded to refine 68,000 barrels per day.

North Dakota produces nearly 800,000 barrels of oil per day.

Tribe says oil tax changes don’t go far enough

Three Affiliated Tribes Chairman Tex Hall speaks Tuesday, May 7, 2013, at the Oil and Gas Expo in New Town, N.D. Amy Dalrymple/Forum News Service

NEW TOWN, N.D. – A new tribal oil tax agreement is a “huge improvement” but still contains bad language that doesn’t recognize tribal sovereignty, Three Affiliated Tribes Chairman Tex Hall said Tuesday.

“I do not believe the state of North Dakota has regulatory jurisdiction over the tribe,” Hall said during the first day of the Mandan, Hidatsa and Arikara Nation Oil and Gas Expo, prompting applause from the crowd.

North Dakota lawmakers approved House Bill 1198 on Friday that establishes guidelines for the governor to renegotiate an agreement with the tribes that would split oil tax revenues equally, sending more money to the Fort Berthold Reservation.

Currently, the state collects 80 percent of some of the oil tax revenue and the reservation receives 20 percent.

Gov. Jack Dalrymple signed the bill Monday, but he still needs to meet with tribal leadership to renegotiate the 2008 agreement.

Hall said in an interview Tuesday he’s not sure if he will sign the agreement if some of the language he objects to can’t be renegotiated.

“There are some serious misunderstandings by state legislators who think this is their tax money,” Hall said. “It’s our oil that you’re taxing and then nothing’s coming back.”

During the expo, Tribal Vice Chairman Fred Fox said the new agreement is progress, but he still thinks the tribe should get more tax revenue.

“It’s something that we’ll take inch by inch, but we’re not satisfied,” Fox said. “I think we should be getting 100 percent of that tax, not 50 percent.”

The expo, with the theme, “Sovereignty by the Barrel,” continues today and will conclude with a groundbreaking ceremony for the tribal-owned Thunder Butte Refinery near Makoti.

Protesters gather Tuesday, May 7, 2013, in New Town, N.D., to show their opposition for the Mandan Hidatsa and Arikara National Oil and Gas Expo. Amy Dalrymple/Forum News Service

About 20 people protested the expo, with neon signs such as “Get the frack out of here,” “Tribal members need homes” and “Opposed to refinery.”

Juliane Gillette of New Town, a member of a group called Save Our Aboriginal Resources, said she and others worry about effects on the environment and object to how tribal leadership is managing the oil development.

“They’re representing the oil companies right now and they’re not representing the people,” Gillette said.

Accountability for tribal oil taxes still an issue

BISMARCK – An amendment to a bill that includes parameters for a new oil tax agreement with the Three Affiliated Tribes moved forward Friday, but legislators indicated it may get more scrutiny at a future hearing.

Members of the state Senate adopted several amendments Friday to House Bill 1234, an oil bill that includes an amendment that would equally divide oil taxes generated on the Fort Berthold Reservation between the tribes and the state.

Sen. John Andrist, R-Crosby, requested to consider the tribal tax agreement separately from other amendments in the bill.

“I hear a lot of talk about there’s no accounting for the money they’re getting right now,” Andrist said. “I think this should have more daylight.”

Andrist withdrew his request after other legislators suggested it could be dealt with at a future hearing. The bill will be discussed by the Senate Appropriations Committee on Monday.

Other amendments adopted Friday include an elimination of a tax loophole for some wells in the same area as low-producing wells, known as stripper wells.

The elimination of that tax exemption is estimated to bring an additional $104 million in revenue during the next biennium. Currently, a productive oil well in the same spacing unit as a low-producing well can qualify for the same tax exemption as the weaker wells.

While the loophole will close for some wells, others may now fall under the definition of a low-producing well and be exempt from taxes.

Another amendment would change the criteria for Bakken and Three Forks stripper wells from those that produce fewer than 30 barrels to fewer than 40 barrels. That would mean a projected loss of $13.5 million in state revenue.

Sen. Jim Dotzenrod, D-Wyndmere, said he’s concerned that changing the definition of a stripper well could cost the state significant future revenue.

Sen. Dwight Cook, R-Mandan, said the cost of drilling an oil well in the Bakken has risen 20 percent since 2008, so he feels the change is good way of encouraging continued oil exploration.

“I think it’s justifiable when you look at the cost of drilling out there,” Cook said.

Another amendment includes a tax incentive to encourage companies to drill in formations other than the Bakken and Three Forks.

In addition, the bill would withhold taxes on royalty payments to non-North Dakota residents, generating an estimated $4.2 million for the state.

State, tribal leaders work on new oil tax agreement

NEW TOWN, N.D. — Oil drilling on the Fort Berthold Reservation could be in danger if state legislators and tribal leaders can’t reach an agreement on how to share the oil tax revenue.

Leaders of the Three Affiliated Tribes are working with state legislators to amend a 2008 agreement that Chairman Tex Hall says is unfair to the reservation.

A proposal would send more money to the reservation, but Senate Majority Leader Rich Wardner said it has an “uphill climb” in the state Legislature if it doesn’t include a stipulation that the tribes spend a portion of the tax dollars on improving roads.

Hall and tribal leaders strongly object to the state telling the tribes how to spend their money and trying to exert jurisdiction over trust lands. One proposal called for the tribes to use 10 percent of new revenue for infrastructure, but the state has not committed to do the same with dollars generated on the reservation, Hall said.

“Why doesn’t the state be accountable for $314 million?” Hall said, referring to the amount of tax revenue the state has collected from oil wells on the reservation. “Why don’t they do 10 percent? It works both ways.”

The issue is critical for the entire state because tribal leaders have indicated in negotiations that they would break the existing agreement if a compromise isn’t reached, Wardner said. That could result in the tribes charging a tax on top of the state’s tax, making it too costly for companies to drill on the reservation.

“If the oil companies stop drilling, we all lose,” Wardner said.

The major oil companies that operate on the reservation have signed a letter supporting the tribes.

“We want more of our dollars going back to the tribal entities to address issues on the reservation,” said Ron Ness, executive director for the North Dakota Petroleum Council, an industry trade group.

Prior to the 2008 agreement, there had not been a well drilled on Fort Berthold trust lands in 27 years because of the unstable and unpredictable tax and regulatory structure, Ness said.

In 2008, the state and tribes agreed to have one tax structure with oil companies paying a 6.5 percent extraction tax and a 5 percent production tax, the same taxes that companies pay in the rest of the state.

For wells drilled on trust lands, that revenue is divided equally between the state and the tribe.

On fee lands, which are privately owned lands on the reservation, the state receives 80 percent of the production tax and the tribes receive 20 percent of that tax.

The agreement has a five-year exemption on the extraction tax on fee land, with the state receiving 100 percent of that tax after the exemption expires. Because the agreement is about five years old, the state is just starting to collect extraction tax on fee lands, Wardner said.

Under the new proposal, that five-year tax holiday would be eliminated and the state and tribes would equally split the extraction and production taxes on fee lands.

A projection by the North Dakota Tax Department estimates the tribes would receive an additional $81 million in 2013-15 and nearly $232 million in the 2015-17 biennium under the proposal.

The state is estimated to gain $6 million in 2013-15 but lose nearly $76 million in 2015-17 compared to the current agreement, according to the projections.

Legislators are in favor of dividing the tax revenue equally, but they want to see a portion of the dollars targeted for improving roads, said Wardner, R-Dickinson.

“The roads are shot up there,” Wardner said, referring to the reservation. “It (the proposal) will not pass muster in these chambers unless there’s some accountability.”

Hall said he’s asked the state to account for how it spent oil taxes generated on the reservation and didn’t get an answer.

“If you ask us how we spend our money, we get to ask you,” Hall said.

Hall points out that the reservation is not eligible to apply for state energy-impact grants, even though the reservation generates oil revenue and is experiencing the same impacts that other Oil Patch communities are.

“That’s a slap in the face,” Hall said.

Wardner said the city of New Town is eligible for the grants but has never applied.

The industry is following the negotiations closely because companies could not afford to operate on the reservation if the tribes and the state can’t agree on a single tax structure, Ness said. Already companies have additional costs to drill on tribal lands, Ness said.

“The costs become pretty much prohibitive as you add potential additional taxes on top of that,” Ness said.

House Bill 1234, which deals with several oil issues, includes a recommendation to split the oil tax revenue equally, but it does not include a requirement for the tribes to spend money on roads, Wardner said.

The Senate Finance and Taxation Committee voted 7-0 to give the bill a do pass recommendation Thursday. The amendments will be discussed on the Senate floor today, and then the bill will go to Senate Appropriations next week, Wardner said.

If the bill is approved, it will give Gov. Jack Dalrymple some parameters to work with and he will meet with tribal leaders to renegotiate the agreement, Wardner said.

Hall said tribal leaders also want to remove a clause in the agreement that gives the state jurisdiction to regulate oil and gas activities on the reservation.

If a compromise cannot be reached, the issue would come back to the tribal council and leaders would decide whether they can live with it or they could vote to terminate the agreement with the state, Hall said.

Fort Berthold had 28 drilling rigs operating during the most recent monthly update from the state Department of Mineral Resources.

Heitkamp says reservation housing problems ‘extreme’

U.S. Sen. Heidi Heitkamp, D-N.D., signs autographs Wednesday, April 3, 2013, for Head Start students in New Town, N.D., during a tour of the area. Amy Dalrymple/Forum News Service

NEW TOWN, N.D. – American Indians are often a forgotten population in Washington, U.S. Sen. Heidi Heitkamp said Wednesday.

Heitkamp, D.-N.D., told members of the Mandan, Hidatsa and Arikara Nation she is working to elevate issues from reservations, with a particular focus on addressing the housing crisis.

Although many North Dakota communities say their No. 1 issue is housing, the housing shortage is more pronounced on American Indian reservations, she said.

“You are probably extreme in your housing difficulties,” Heitkamp said during a meeting with tribal elders.

On the Fort Berthold Indian Reservation, which Heitkamp toured Wednesday, it’s common for three or four generations to live in the same house, Heitkamp said. Often those residents are making good salaries, but they’re forced to live in cramped conditions because there is no other option, she said.

Representatives of Fort Berthold Housing Authority told Heitkamp their stock of housing is from the late 1960s and early 1970s with infrastructure that is failing.

“People cannot live like this,” Heitkamp said.

Heitkamp said her visit to Williston earlier this week attracted several housing developers, but they weren’t interested in talking to her about developing housing on the reservation. She said she wants to work to identify impediments to private investment on the reservations.

Reba White Shirt-Bruce, who attended a meeting with Heitkamp, suggested that North Dakota recruit out-of-work architects and housing developers from other parts of the country to build housing on the reservation.

One challenge to solving the housing crisis is that many federal programs are based on rental prices and wages rates that are too low for western North Dakota, Heitkamp said.

Heitkamp said she is positioned to bring the unique housing issues to Washington through her appointments on the Indian Affairs Committee and the Banking, Housing and Urban Development Committee in the Senate.

Heitkamp is scheduled to be in Valley City today and Fargo on Friday.