Posted on 07/06/2015 2:21:59 PM PDT by Osage Orange
Osage County feeling pinch of administration's anti-fossil fuel mindset
by The Oklahoman Editorial Board
Published: July 5, 2015
REGULATION of energy production has long been the province of state governments, but under the Obama administration there’s been a concerted push to transfer more power to the federal government. To view the decidedly negative outcome of such a transition, look no further than Osage County, Oklahoma.
Osage County is unique because members of the Osage tribe hold mineral rights under a federal treaty. Tribal shareholders are paid a percentage of the revenue from oil and gas production on the county’s 1.4 million acres. Thus, the U.S. Bureau of Indian Affairs oversees much regulation of energy production in the county, unlike other areas.
In 2011, the federal government reached a settlement with tribal officials in a long-running lawsuit concerning federal mismanagement of oil revenues. The government paid tribal shareholders $380 million to settle the lawsuit, and announced the BIA would draft new regulations regarding oil and gas development.
The outcome of that rule-making process, according to the Osage Producers Association, is a system where fewer wells will be drilled or maintained in Osage County — and fewer dollars will go to tribal members for mineral rights.
The prior Code of Federal Regulations for Osage County leases ran 18 pages. The new version runs 155 pages. Previously, the bonding requirement for producers was $5,000 per quarter section (roughly 160 acres); now it will be $5,000 per well. Instead of having 12 months to terminate non-producing wells, producers will have 120 days.
Lonnie Hudgins, whose family has been in the oil business since the 1950s, told the Tulsa World the new regulations, strictly interpreted, could also require upgraded wiring and new valves for each well site.
The cumulative effect of the regulations could add tens of thousands of dollars to production costs. James Sicking, an attorney for the OPA, told the World the cost of compliance could easily exceed profit. Many stripper wells average less than a barrel a day, which yields net profit of roughly $130 per month at current oil prices.
Producers who don’t comply with the new regulations could face fines of up to $500 a day. The Osage Producers Association and the Osage Nation are challenging the proposed regulations in court.
“I have the feeling,” Hudgins told the World, “that the new regulations are designed to get rid of us and drive us out of the county.”
Hudgins is probably right. Yet that outcome is typical of the anti-fossil fuel, anti-economic growth mindset of federal regulators under the Obama administration. And that outlook hasn’t been confined to energy producers in one Oklahoma county.
Consider the Obama administration’s “Clean Power Plan,” which imposes a new raft of environmental regulations on power plants. This is supposedly to clean the air, but the more obvious intent is to force closure of coal-fired power plants.
The regulations are expected to dramatically increase consumer costs and create system reliability problems while generating virtually no meaningful environmental benefit.
Even Laurence Tribe, a liberal Harvard law professor, has argued the power plan involves “federal commandeering of state governments” that “defeats political accountability and violates principles of federalism that are basic to our constitutional order.”
That’s par for the course with this administration. As Osage County officials are learning, the Obama administration’s idea of a properly regulated energy market is one where no one can afford to bring energy supply to the market.
Petro Ping.
Yet, Osage County is rife with Obama/Biden stickers, especially among tribal members.
Naw...that's not true...
Actually, I've not seen one for a long time.
That said..it's a Pubbie county..overall.
And that being said it is a fact...many Natives unfortunately vote "D".....
I do not.
thackney is a resource here.
I talked to a guy here the other morning...He told me of a guy who had a lease...that he drilled two holes. Only bringing...1/2 a barrel a day of oil. Even if oil was at $100 a barrel...he ain't making any money!! Lot's of stripper wells in the Osage.....
But that is pathetic.....
Lot of wells got drilled in the last 5-6 years....We shall see how many get capped going forward.
I know a guy that bought a lease...who now has to pony up $40k to comply with the Feds...Not sure it's going to be worth it..for him.
The Feds just keep turning the screws...................
“the cost of compliance could easily exceed profit. “
Which is the entire point of the regulations.
You take the words out of my mouth. The Osage are getting a dose of whup em’ from Obama, the scourge of capitalism.
Most leases are owned by non-natives....
FWIW-
Don’t pay the fees. Tell the Feds to go eff themselves.
And these new rules are what the Feds are doing to the driller's....
And ultimately to the Osage Nation.
Which...I agree...most tribal members seem to be Dem's.....
Yep!!
Ha!!
You know I think that quite often....IOW, don't pay my quarterly tax.
But my interests need me...and I have other obligations.
So I keep paying...
Good thing Jefferson, Adams, and Madison didn’t have “other interests”
Just sayin’.
L
Thanks, Osage. My sons were born in Pawhuska. We spent over four years there. They wore the orange. I can’t say I liked the Indian mystique, but the neighborhood is bloody rich in sweat and history, oil, horses, money, crime, mystery and politics. Fabulous history.
There are / were oil companies in the Osage called Rock Oil. The wells were / are covered with a rock and they go by every few days and pump off what manages to bubble up far enough to pump.
You first.
Forth paragraph down.....
I know some folks in Pawhuska..that their families surely were involved..way back when.
Pretty good old movie.....
At one time in history...the Osage were the richest people in the world...per capita.
Pawhuska was quite the city once....Now the only thing keeping it alive..is it's the tribal seat..and the county seat.
Never heard of that...but not surprised.
Back in 2012 I was dealing with the Nez Perce Tribe in Idaho. We had reached an agreement in principle but we had to put it on hold because the tribal elders were all attending the Democratic National Convention.
My question to the Osage nation is why don’t you invoke your sovereign nation status and tell the feds to go pound tar sands! That’s what you do to the state, county and local governments!
Something tells me the tribal agency/tribal member who was in charge of negotiating the new regulations got a pretty nice payoff.
Very old reply...but you are most likely correct.
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