The Other Bakken Boom: America's biggest oil rush brings tribal conflict

  • An old church, painted with an arrow -- and a smiley face -- pointing toward a pumpjack at the edge of the Fort Berthold Indian Reservation in North Dakota.

    Sierra Crane-Murdoch
  • An oil rig stands below a North Dakota thunderhead near the town of Parshall on the Fort Berthold Indian Reservation.

  • "Nobody knew there were billions of dollars in value under Fort Berthold," says Theodora Bird Bear, a tribal member and land and mineral-rights owner. "How do you believe that if you've been poor all your life?"

    Sierra Crane-Murdoch
  • Horses shake off the dust as a backhoe and other heavy equipment dig a trench for a gas pipeline.

    Sierra Crane-Murdoch
  • Truck drivers fill up at the Cenex station in New Town. Most oil workers have come from off the reservation, some from as far away as South Africa and Brazil.

    Sierra Crane-Murdoch
  • Crime has risen since the start of the boom, and Fort Berthold's 13 officers struggle to keep up, hindered by laws that prevent them from pressing criminal charges against non-Indians. Pictured are Kelly Hosie, who has since left the force, and Dustin Krueger.

    Sierra Crane-Murdoch
  • Trucks drive the highway east from New Town. Roads on Fort Berthold were not built to withstand heavy loads, and many have turned back to dirt.

    Sierra Crane-Murdoch
 

Fort Berthold Indian Reservation, a lilting swath of prairie in western North Dakota, was once a quiet place. Though thrice the area of Los Angeles, it had only 5,000 residents. Even New Town, a more populous district east of a reservoir called Lake Sakakawea, looked sparse and ephemeral. There was a granary, a fire station, a Gospel Tabernacle and a Jack & Jill grocery. A brick federal Bureau of Indian Affairs office marked the beginning of town, and the few squat buildings on the main street were largely unoccupied. It was rare, here, to see a stranger, and even rarer to see so many gathered at the civic center one November morning in 2007.

Theodora Bird Bear worked across the street at the New Town News, and knew from a flier that the BIA planned to hold an auction for the reservation's oil and gas rights. That afternoon, she went to investigate. She recognized a few people in the dim, crowded room. BIA officials sat in the front and members of her own Three Affiliated Tribes in the audience. But of the rest she later recalled, "I had never seen a single one of them before, and they already seemed to know everything about Fort Berthold." The land near the reservation's center earned the highest bids. There, in a district called Mandaree, she noticed her own mineral rights were up for lease.

Though the BIA facilitates the leasing of Indian-owned minerals, owners must agree to the terms. After the sale, companies continued to compete for Bird Bear's favor. She ignored them. Even in the spring of 2008, when an old classmate, hired as a broker, approached her with the best offer yet, she hesitated. "People were signing left and right," she said. "I needed the money, but I couldn't bring myself to do it." But when her brother fell sick and she couldn't afford to visit him, she leased 320 of her acres, retaining a small parcel beneath her house. Her brother died before she saw a check. When it came -- a $320,000 bonus -- she paid for his funeral and her credit card bills, bought a car and a couch, and quit her job at the paper.

Such a financial windfall was once unheard of on Fort Berthold. Apart from livestock grazing, there were few sources of income. Unemployment hovered at 40 percent and the poverty rate was four times the national average. It was the sort of hardship that shrinks one's frame of reference. A few hundred dollars was a lot; billions, unfathomable. Even the energy industry, which had suspected for decades that a shale formation beneath western North Dakota contained a vast sea of oil, lacked the technology to tap it. Then it found a way. By combining hydraulic fracturing with horizontal drilling, rigs could bore miles deep, navigate laterally along narrow seams of oil-laden rock, and pump in water and chemicals to create fissures and release the hydrocarbons. According to the most recent, and perhaps overly conservative, federal estimate, the Bakken Formation holds roughly 4 billion barrels of recoverable oil, enough to supply the United States for seven months; nationally, only Alaska's North Slope holds more. By some measures, Fort Berthold sits over the deepest pool.

But the reservation has been at a marked disadvantage in the rush to tap the resource. All Indian minerals are managed in trust by the U.S. Department of Interior, a task mostly delegated to the BIA, and companies must endure a bureaucratic gantlet so costly and slow that many avoid it altogether. On Fort Berthold, tribal members feared the boom would leave them behind. By 2009, they had pushed the BIA to lease all of their acreage; but while landowners off the reservation earned thousands of dollars an acre, those within, except for Bird Bear, generally saw only a few hundred. The disparity strained the already delicate relationship between the BIA, which approved the offers, and the tribe and its members, who accused the agency of violating its mandate to "maximize" Indian mineral owners' economic benefits. Why, people wondered, had they not waited for better?

Regardless, the money has been substantial since the boom hit fully in 2010. At the start of this year, Fort Berthold's 172 wells produced 2.5 million barrels a month. Altogether, they have generated more than 26 million barrels, earning the tribal nation roughly $330 million, two-thirds of which has gone to individual mineral owners. Industry will drill a thousand more wells in the next five years, with payouts in the billions -- more than any Western Indian nation has seen in that short a time. "We are of the firm belief we will become more sovereign by the barrel," Tribal Chairman Tex Hall told the North Dakota Legislature in January 2011. This was the tribe's chance, he said, to break free at last from its reliance on the federal government.

The question is whether it can do so before the boom ends. Rapid development has aggravated old problems -- homelessness, crime, poor infrastructure -- and as the tribe wrestles with the effects, it has struggled, too, to reap the rewards. "My biggest fear is that when the industry leaves, the reservation is in worse shape than before," said Mark Fox, the tribe's tax director. "We're sitting on billions of barrels of oil. Twenty years from now, if we do it right, we should have things that last us forever. But if we have worse unemployment, worse health, worse poverty, worse crime, then we've failed. We were better off leaving it in the ground."

Neil H Parsons
Neil H Parsons
Apr 16, 2012 01:27 PM
"THE RAIN FELL SO HARD on Fort Berthold one night that trucks rested on roadsides and brittle grass softened and flattened onto fields. At an intersection of asphalt and dirt, a horse hung it's head over a barbed-wire fence. Apumpjack nodded with steady complacency, and a flare burned without a hiss. Potholes filled with mud, and scoria roads dampened to a deeper, bluer red, like veins popping beneath the skin." Wow... Indians and the beautiful lands left them, can be so 'bloody' colorful!