Gas Prices a Windfall for Tribes With Oil

Suburbia’s angst is Ina Blackfeet’s godsend.

The great-grandmother and elder in the Northern Arapaho tribe is among the thousands of Native Americans who receive a monthly income-- generally minimal--from oil leases on tribal land. As the rest of the nation suffers sticker shock at the gasoline pump, that same price rise has fueled a 25% increase in monthly royalty checks to each member of the Arapaho and Shoshone nations, the two impoverished tribes that share this windy plateau.

As capital gains go, the extra $25 or $50 a month per person doesn’t qualify as a gusher, but around here a little goes a long way.

“We can get ourselves out of debt a little more,” Ina Blackfeet said.

Her “family” is an example of the trickle-down benefit of the rising prices. She lives with her late brother’s four granddaughters and his great-grandson. When the children--who range from twentysomethings to an infant--were orphaned, Blackfeet took them all in. Now she collects a tiny Social Security check, and to make ends meet they all pool their monthly oil royalty checks--even 4-month-old Messiah--and live off that cumulative income.

On this barren high plains reservation, where unemployment has long been stuck at 65%, those checks represent a modest windfall for members of the Northern Arapaho and Eastern Shoshone tribes. Although there are about 28 oil-producing Native American tribes around the country, the Arapaho and Shoshone are in the top 10 in terms of income, according to officials with the Bureau of Indian Affairs, which monitors energy and mineral leases on all tribal land. Officials say that oil gleaned from all tribal land accounts for less than 3% of domestic oil production, but even the scant income from the leases is welcome on the reservation.

Down the street from the Blackfeet home, Odelia Sitting Eagle presides over a home brimming with in-laws, cousins and stray children. As many as 13 people live here at any given time, contributing their royalty checks to the family pot. Reservation businesses report that the infusion of cash is mostly being used to purchase groceries and children’s clothes.

“We live with extended families, so every little bit helps,” said Al Addison, chairman of the Arapaho, whose royalty checks have risen to $100 per month from $75 in the last three months. The Shoshone, who share the reservation land and the oil royalties, are now receiving $200 per person, up from $150.

The royalties from the 200 oil leases spread across the bare 2.2-million-acre reservation in central Wyoming are, for many, the sole source of income in a place where the poverty rate is three times the national average and per capita income is $4,340. Although the royalty increases are relatively small, in this context their impact is not.

“You are talking about an increase of $400 a month in some cases, for the entire family,” said Wes Martel, who manages leases for the Shoshone tribe. “People here don’t realize how big a role OPEC plays in their lives. But what happens there [in the Middle East] has a lot to say with our lives out here.”

Oil prices are thus closely watched by some on the reservation and serve as an indicator of each family’s general financial health. As prices rise, as everyone here knows, royalty checks will likewise increase. But riding out the cyclical nature of oil prices makes budgeting precarious.

“In the ‘70s we were getting $238 apiece--all of a sudden it dropped to $30,” said Harold Smith, an Arapaho who was born on the reservation in Ft. Washakie. “You can’t rely on it. Your quality of life goes up and down. Used to, a lot of people had nice vehicles. They’ve since disappeared.”

The price of a barrel of oil has tripled in the last year, and that increase is being felt on the reservation. The leases here, held by an array of multinational and independent oil firms, brought $1.2 million to the tribes last month, according to Perry Baker, area superintendent for the Bureau of Indian Affairs. The income is more than double the projections made a year ago.

The royalty money is split equally between the Arapaho and Shoshone. Each tribe allocates 85% of its monthly allotment to individual members and puts 15% into a tribal governmental fund. Because there are twice as many Arapaho, their individual payout is less than for the Shoshone.

Despite efforts to diversify income and attract investment, the tribes are nonetheless all but dependent on the oil royalties. Richard Wilson of the Bureau of Indian Affairs, who manages the energy and mineral leases for all American Indian tribes, said that while private enterprise has been adjusting to the shrinkage in the mineral industry in the last two decades, the dozens of tribes that have mineral leases depend on the income.

He told of checking on a cloud of toxic chemicals coming from a well in New Mexico. “I went to a cluster of hogans downwind of the site,” he said. “I told the men, ‘I may have to shut down that well in order to keep you safe.’ The Navajo just looked at me and said, ‘Why don’t you just shoot us? That’s all we have to live off.’ That stopped me dead cold. I can’t close that well.”

Still, Wilson notes that the Wind River Reservation is doing a good job of exploring other mineral deposits and encouraging oil and gas exploration before existing reserves are exhausted.

The tribes are negotiating with outside firms that will mine travertine, gypsum and bentonite on tribal land. Fields of coal bed methane have been identified, but environmental concerns have put up roadblocks to further exploration.

Until then, not only do the tribes depend on the oil royalties, they too can feel the impact of high oil prices.

Wesley Bentley, who negotiates leases for the Shoshone, said he is trying to come up with ways to insulate the reservation from the vagaries of OPEC. “As owners of the resource, we can take the oil in kind, refine it ourselves and sell it cheaply,” he said.

And even though the average price for a gallon of gas is lower in Wyoming than in the rest of the country, the distances consumers must travel to get to major shopping areas here are far greater.

“Billings is five hours away. It’s nothing for us to get into the car and drive five hours,” Smith said. “The distances here are pretty great and we are pretty isolated.”