The Ute Paradox

A small Colorado tribe takes control of its energy resources and becomes a billion-dollar corporation — but has it gone too far?

  • Tradition meets modern glam in the parking lot of the new Sky Ute Casino on the Southern Ute Reservation in southwest Colorado.

    Paul Pennington
  • An eight-member delegation from the Ute Tribe, including Ouray, fourth from the right, traveled to Washington, D.C., in 1868 to sign the Kit Carson Treaty, granting the Utes 1.5 million acres of land in southwestern Colorado. Ouray would spend the rest of his life trying to get the U.S. government to honor the terms of the treaty.

    Western History/Genealogy Dept., Denver Public Library
  • Pumpjacks dot the landscape of the Southern Ute Reservation in southwest Colorado -- home to one of the richest gas deposits in the country.

    Paul Pennington
  • The Southern Utes developed the Three Springs "new urban" project outside Durango, and donated land for the Mercy Regional Medical Center.

    Paul Pennington
  • The new Southern Ute Growth Fund headquarters, gives tiny Ignacio, Colorado, a worldly look. The Growth Fund's mission: "... to provide economic prosperity for the Southern Ute Indian Tribe by managing the Tribe's businesses effectively, building new businesses prudently, and investing its money wisely."

    Paul Pennington
  • Orville Hood and James Jefferson say off-reservation energy-development projects are bad for the tribe. The two head up an effort to recall the tribal council.

    Paul Pennington
  • Southern Ute Tribal Chairman Matthew Box, right, tours the Solix plant near Ignacio, where the tribe is a partner in an effort to create biodiesel from algae.

    Jerry Mcbride/Durango Herald

Page 3

"That really is the crux of the issue," says Josh Joswick, a former La Plata County commissioner in southwest Colorado who became an oil and gas watchdog and found himself dealing with these "sticky issues" when the tribe's company took over gas wells on non-Indian land. The county was in danger of losing its ability to tax those wells, which meant a huge loss of revenue. Ultimately, the tribe entered into an in-lieu-of-taxes compact with the county and the state to ease the pain of the lost taxes. "It is from sovereignty that everything else flows," Joswick says. "And sovereignty is very difficult to define, because it continues to change as assertions are made as to what it is."

The corporate/government distinction also can affect the way tribal corporations operate, and how outsiders respond to the tribe's actions. As governmental entities, the tribe's corporations don't have to answer to the short-term-profit-hungry stockholders, says Lester, so they're less likely to cut corners the way BP did prior to the Gulf disaster. On the other hand, if Box is regarded as a corporate CEO, then the tribe's lobbying in Congress -- to the tune of between $150,000 and $400,000 per year -- and his tribe's federal tax exemption look a bit more cynical. Instead of being a means for tribal economic development, the tribe's off-reservation ventures, particularly the energy-related ones, begin to resemble old-fashioned corporate resource exploitation.

Last year, the tribe's Red Willow Great Plains company leased nearly 18,000 acres of mineral rights on the Fort Berthold Reservation in North Dakota, joining the huge leasing rush on the Bakken Oil Formation. Kandi Mossett, an organizer with the Indigenous Environmental Network and member of the three affiliated tribes that live on the Fort Berthold Reservation, says the onslaught of the drilling rigs has been catastrophic, and she is not comforted by the fact that one of the drillers is another tribe. In contrast to the Southern Utes' cautious response to the 1970s boom, the Fort Berthold government is trying to speed up leasing in order to reap monetary benefits, and it's trying to partner with an outside company to build a refinery. That's been expedited by an experiment of Sen. Dorgan's -- centralizing all of the tribal development permitting agencies into a "one-stop oil shop," which would be expanded nationwide under his new bill. (Thus far, Red Willow has only drilled one well on the reservation, and it came up dry.)

The Southern Utes also support legislation that would turn the National Environmental Policy Act process on Indian land over to the respective tribes, and perhaps reduce non-tribal public input. (One of the hurdles to development on tribal land is the fact that every transaction -- even a proposal for just one well -- must go through the NEPA process, whereas no such process is required for private land.) Mossett and other activists believe her tribe lacks the capacity to handle that responsibility.

The Southern Utes -- along with the Council of Energy Resource Tribes as a whole -- gave explicit support to the Ruby Pipeline, a 675-mile El Paso Energy project that will stretch from Wyoming to Oregon. That's despite the fact that environmentalists say the pipeline will destroy sage grouse habitat, and that several Nevada tribes -- particularly the Summit Lake Paiutes -- oppose it, saying it will wreck lands that are sacred to them. The project will open up more markets to natural gas producers in the Interior West, making it appealing to energy-producing tribes. It received federal approval in April.

Still, Sarah Krakoff, a University of Colorado professor who specializes in Indian law and has written about the nexus of environmental justice and tribal sovereignty, warns against going too far with the comparison to conventional corporations. "If we were moving toward the day that we could critique Indian governments the same way that we critique other entities, that would be a good thing. It would mean we've removed some barriers to equality," she says. But we're really not there yet, despite the Southern Ute success. "Our history makes things very complicated in this country."

Indeed. And because of that history, the notion of Southern Ute Chairman Box as a corporate giant is incomplete. His tribe's fight is not yet over. Federal policy remains paternalistic and sometimes directly at odds with tribal self-determination. Today's Supreme Court is openly hostile to Indian rights. And the conventional American vision of what Indians and their culture are and should be is still in direct contrast to what the Southern Utes have shown themselves to be. No matter how wealthy the tribe becomes, we can't divorce the Southern Utes' current incarnation from all that came before. All this requires a delicate balancing act, one in which we consider the tribe as both corporation and government, and one in which we deal with the complex nature of tribal sovereignty and its relationship to environmental justice.

It's a balancing act that we may be forced to broaden as more tribes build wind farms, install fields of solar panels, start drilling companies and build refineries. If they do so, that is. It's not yet clear that the Ute model can be duplicated, or that other tribes have what it takes to take control of their resources. Even Lester has his doubts. "There's no investment in tribal capacity building right now," he says. "Everyone is just looking for a project. Everyone wants to harvest, but no one's planting, and then they wonder why the harvest is so slim."

Jurrius, the financial adviser who has based his career on helping tribes take ownership of their resources, has found that "the tribe itself is often the biggest hurdle to overcome. You have to allow yourself to succeed. If you let political infighting get in the way of commerce, it will be the downfall of commerce." He pauses for a moment, then adds, "I'm not sure the Indians are as strong as the parasites that have made a living off of them for a long time. Most tribes focus on the travesties of yesterday. I tell them to focus on the opportunities of today and tomorrow."

The Southern Utes continue to do just that. And they still see opportunity in the Gulf of Mexico, where they hold rights to drill nearly 50,000 acres, some of it in "ultra-deep" sea bottom more than 5,500 feet below the surface. On March 17, Red Willow Offshore was one of the bidders at another auction of offshore opportunities -- Lease Sale 213 -- in the Louisiana Superdome. This time, they won, paying $3.8 million for right to drill 3,857 acres in three blocks in the now oil-soaked gulf.

Writer Jonathan Thompson lived his first 40 years within the original Ute territory. His maternal ancestors homesteaded in land taken from the Utes by the Brunot Treaty. And his paternal ancestors homesteaded on the Ute Strip, within today's reservation boundaries. He owned and ran newspapers in Silverton, Colo., and was High Country News editor-in-chief from November 2007 to April 2010. He recently moved with his family to Berlin.


Southern Ute Indian Tribe Web site

Southern Ute Growth Fund

Southern Utes' AKA Energy Group, LLC

Red Willow Offshore, LLC -- example of partnering with BP and others in Gulf of Mexico

Council of Energy Resource Tribes

Sarah Krakoff -- University of Colorado Law School

Indigenous Law and Policy Center -- Michigan State University

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