January 23, 2017

Osage Agency blasted during federal committee meeting


PAWHUSKA, Okla. – Osage County residents, ranchers and petroleum professionals took aim at the Bureau of Indian Affairs Thursday and Friday during a monthly federal committee meeting.

Established as part of a $380 million settlement of a federal lawsuit alleging mismanagement of the Osage Nation’s 1.4 million acre mineral estate, the Osage Negotiating Rulemaking Committee is part of a two-year process to review and update the policies concerning oil and natural gas drilled within the Osage Nation’s boundaries in northern Oklahoma. Its members include representatives from the Osage Minerals Council, the Bureau of Indian Affairs, the Bureau of Land Management and the Department of the Interior.

Managed by the BIA, the tribe’s $4 billion mineral estate is the largest single-owner mineral estate in the country. In addition to the duties assigned to any other BIA agency office, the Osage Agency is also responsible for processing and issuing drilling permits to oil and natural gas producers attempting to do business in Osage County.

The office, which currently does not have any form of electronic reporting available for producers, has taken up to 70 days to issue a drilling permit, creating an administrative backlog and delays for oil and natural gas exploration companies attempting to do business in Osage County.

Those delays led to an Osage County judge issuing a temporary restraining order Jan. 18 to prohibit Chaparral Energy from drilling horizontal and disposal wells along Skiatook Lake on the restricted property of two Osage Nation citizens. In his decision, Associate District Court Judge David Gambill specifically blamed the Pawhuska Agency and its sloppy administrative processes.

“They are escaping review over there at the Agency,” Gambill said. “They have to follow the rules like everyone else. And if they’re not going to, I will restrain them.”

Several petroleum producers and professionals shared similar frustrations with the committee Thursday and Friday, contending that the agency’s history of mismanagement isn’t entirely in the past.

“The BIA simply can’t keep up with the demands,” Tulsa-based petroleum geologist Bob Jackman said. “They’re understaffed and under-qualified. You’ve got a superintendent making all of these permit decisions without a backstop to help guide those decisions. The lack of geological professionals in the office is crippling.”

Rhonda Loftin, acting superintendent of the BIA’s Pawhuska Agency, has said that her staff is working to streamline the approval process and reduce the backlog. Electronic reporting options are among the policy changes being discussed by the committee, but would not be implemented for at least six more months.

In addition to permit application issues, several land owners aired their grievances over the lack of environmental and safety enforcement at and around well sites. With the Osage Mineral Estate under the management of the BIA, state-provided protections afforded to land owners in other parts of Oklahoma are largely unavailable to Osage County residents.

“Our main issue is that we’re having to police production sites,” Osage County Cattlemen’s Association president Jeff Henry said. “That means a loss of our time and our money.

“We don’t resent the oil field being here, but we have got to work on building a better relationship.”

The cattlemen’s association members account for more than 1 million acres of Osage County’s 1.475 million acres of ranch and grazing land. Ninety-eight percent of its members’ properties have at least one oil and natural gas production site.

“Human health and safety is our primary concern,” said Bob Hamilton, director of the Tallgrass Prairie Preserve, located in northern Osage County. “The recent drilling of three horizontal wells on the preserve has created a serious threat – hydrogen sulfide gas.

“Last summer, two of our researchers experienced respiratory problems while working in the vicinity of a flare stack on the preserve. In both instances, medical attention was sought and there are concerns that the illnesses were due to exposure to the flaring emissions.”

Also known as a flare stack, flaring is the practice of burning off excess natural gas released by pressure relief valves and creates hydrogen sulfide gas as a byproduct. Exposure to the gas can cause dizziness, nausea, headaches, eye irritation and breathing problems within a few breaths.

“There aren’t any regulations on the books regarding hydrogen sulfide emissions,” Henry said. “There isn’t anyone out here trained with how to deal with it when or if it causes a fire, which means it will most likely be a rural fire department answering that call. What do you think is going to happen when those boys come out here in their cowboy boots to answer that call?”

Along with hydrogen sulfide emissions, several ranchers and landowners are also dealing with salt water running off from drill sites into drainage ponds and freshwater wells.

“For 37 years, I’ve tried to get the BIA to enforce their policies as written and they never have,” said Nona Roach, a land owner and independent oil and gas accountant from Avant. “I’ve had 10 ponds fill up with salt water from drill sites, making it to where we couldn’t even use our own land.

“I have to wonder: will the BIA and DOI enforce these new policies when they’ve failed this far to enforce their old ones?”

“Without adequate action, this will get worse,” University of Tulsa environmental engineering professor Kerry Sublette said. “Right now, you’re basically in a race to the bottom in terms of environmental quality, as Osage County has one of, if not the worst oil and natural environmental record in North America.”

Although BIA head Michael Black offered reassurances that attendees’ comments did not fall on deaf ears, several were less than enthusiastic about the lack of a concrete plan at the close of Friday’s meeting.

“I’m not picking on you guys, but you heard their concerns,” Osage Mineral Council member Dudley Whitehorn said to the federal representatives. “Are we going to take action any time soon? We have some real problems up here that can’t be ignored or swept under the rug.”