Re-Drawing the Map in Oklahoma

By Will Quish*

In November 2017, the 10th Circuit ruled on an Indian murder case that could completely redraw the tribal and state lines in Oklahoma[1]. The case, Carpenter v. Murphy (formerly Royal v. Murphy), was granted certiorari and the Supreme Court will rule on whether or not a murder took place on tribal or state land.[2] If the court affirms the decision of the 10th Circuit and says the land is tribal, Oklahoma’s will look radically different.[3]

National Congress of American Indians (NCAI) believes that if the Supreme Court upholds the 10th Circuit’s ruling, tribal land would increase dramatically, allowing 43% of Oklahoma land to become tribal land.[4] This redrawing of state and tribal lines would have a large impact on oil and gas regulation in the state. If the land remains with the state, companies have to follow state regulation. If the land rights shift over to the tribes there is a mishmash of state, tribal, and federal regulation that will have to be followed. The stricter federal guidelines and the general confusion of tribal and federal regulation would be a dramatic change in Oklahoma. If state and tribal lines are redrawn, environmental rules would stricken, and tax implications would injure both the state of Oklahoma and private oil and gas companies.

Oklahoma typically has had some of the United States’ lightest oil and gas regulation.[5] During the Obama administration, then Oklahoma attorney general Scott Pruitt sued the Environmental Protection Agency (EPA) fourteen times.[6] These suits were generally Oklahoma claiming the EPA’s actions were too stringent or overstepped their authority.[7] For example, in 2014, Oklahoma joined federal lawsuits to oppose the EPA’s Clean Power Plan.[8] While Oklahoma has recently enacted some regulations to limit fracking, this was driven by a dramatic tick in earthquakes directly correlated to fracking and not a concern for environmental impact. [9]

Despite this regulation, Oklahoma law still remains in favor of the oil and gas industry. This is evidenced by the Oklahoma Independent Petroleum Association filing a brief amicus curie in Carpenter v. Murphy in favor of the state, not wanting their industry to fall under tribal regulation.[10] They say, “Oklahoma’s oil and gas industry has prospered under a stable, well-developed, and state-wide regulatory regime overseen by the Oklahoma Corporation Commission (“OCC”), which has been vested ‘with exclusive jurisdiction, power and authority’ over oil and gas development in the state.[11]

Tribal regulation of Oil and Gas becomes an assortment of federal and tribal law. Up until the Energy Policy Act of 2005 was passed, tribes could not enter into agreements for any sort of mineral development deal without the express consent of the federal government.[12] The government would do an Environmental Impact Study (EIS) and then make an determination whether the deal was in the best interests of the tribe.[13] These agreements could also be limited by other statutes and regulations such as the Omnibus Indian Mineral Leasing Act, the National Environmental Policy Act of 1969 (NEPA),  and sections of the Surface Mining Control and Reclamation Act of 1977.[14]

Title V of the Energy Policy Act of 2005 removed the federal government step in allowing deals between energy companies and tribes.[15] This allowed for greater tribal autonomy in deciding who would be allowed on their land and what regulation should look like.[16] That is not to say there is no federal regulation or oversight currently in tribal lands. There is an environmental review process that must provide for the identification and evaluation of all significant environmental effects, and incorporate that into the agreement. [17] In addition, the Tribe must inform the public and allow for sufficient time for them to comment on the environmental concerns. The Tribe must also have the capability to carry out the environmental review process and allow the Tribe to ensure the other party in any deal is following the environmental regulation on the deal and applicable federal environmental law.[18]

The effect of nearly 50% of Oklahoma having to go through the tribal process has a twofold effect. One, at the very least now all new fossil fuel exploration would have to go through federal law. A Tribe could choose to enact stricter regulations than the federal government, but at the very least they would need to comply with federal regulation. Federal regulation is quite different than Oklahoma’s and would require all who now find themselves on tribal lands to conform to an entire set of standards.[19] If states lines shift to tribal lines, moving under federal regulation may actually be the best case for the oil and gas industry. In reality, Oklahoma would most likely move to a patchwork quilt of State, Federal and Tribal regulations with everyone scrambling to figure out to what they need to conform to.[20]

The tax consequences of a shift would also be severe. Current facilities could find themselves having to pay either both state and tribal taxes or just tribal taxes.[21] Tribes could now find themselves except from state taxes when getting into the oil and gas industry.[22] This would lead to less money going to the State of Oklahoma and give tribal initiatives a leg up on the competition.

Confusing regulation and more of it, difficult taxation questions and land ownership questions. The Carpenter decision has the potential the shake up the oil and gas industry through Oklahoma and usher in a new era in the oil and gas industry in the state.

*Will Quish is a Junior Editor on MJEAL. He can be reached at wquish@umich.edu.


The views and opinions expressed in this blog are those of the authors only and do not reflect the official policy or position of the Michigan Journal of Environmental and Administrative Law or the University of Michigan.
[1] Monica Welker, Carpenter v. Murphy: A Matter of Life and Death for Tribal Sovereignty (October 14, 2018), https://uclawreview.org/2018/10/14/carpenter-v-murphy-a-matter-of-life-and-death-for-tribal-sovereignty/#_ftnref17.

[2] Id.

[3] Id.

[4] National Congress of American Indians, VAWA 2013’s Special Domestic Violence Criminal Jurisdiction (SDVCJ) Five-Year Report 56 (Mar. 20, 2018), http://www.ncai.org/resources/ncai-publications/SDVCJ_5_Year_Report.pdf.

[5] John S. Kiernan, 2018’s Greenest States, Wallet Hub (April 17, 2018), https://wallethub.com/edu/greenest-states/11987/.

[6] Margaret Talbot, Scott Pruitt’s Dirty Politics, New Yorker (April 2, 2018), https://www.newyorker.com/magazine/2018/04/02/scott-pruitts-dirty-politics.

[7] Id.

[8] Robinson Meyer, Trump’s EPA Pick it Skeptical of more than Just Climate Change, Atlantic (December 8, 2016), https://www.theatlantic.com/science/archive/2016/12/trumps-epa-pick-is-skeptical-of-more-than-just-climate-change/509960/.

[9] David Wethe, Oklahoma Toughens Oil Fracking Rules after Shale Earthquakes, Bloomberg (February 28, 2018), https://www.bloomberg.com/news/articles/2018-02-27/oklahoma-toughens-oil-fracking-rules-as-shale-earthquakes-climb.

[10] Brief amici curiae of the Oklahoma Independent Petroleum Association, p. 1-18, Carpenter v. Murphy (2018).

[11] Id.

[12] Andrea S. Miles, Tribal Energy Resource Agreements: Tools for Achieving Energy Development and Tribal Self-Sufficiency or an Abdication of Federal Environmental and Trust Responsibilities? 30 Am. Indian L. Rev. 461-467 (2005/2006).

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Energy Policy Act of 2005, Pub. L. No. 109-58, 119 Stat. 594, 772 (2005).

[18] Id.

[19] Brief amici curiae, supra note 9.

[20] Id.

[21] Id.

[22] Id.

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