The implications may take years or decades to sort out, but last week’s U.S. Supreme Court decision recognizing about half of Oklahoma as Native American reservation territory could raise complicated regulatory and tax questions for the fossil industry.
While the ruling doesn’t affect property rights, attorneys in the state “said it has regulatory and tax implications within reservation lands of the state’s ‘Five Tribes’—the Cherokee, Chickasaw, Choctaw, Creek, and Seminole,” Reuters reports. “Oklahoma was the fourth-largest U.S. crude oil producer last year, accounting for about 5% of production, according to government data.”
“You’ll see the Five Tribes make arguments perhaps that they have taxation authority,” said Taiawagi Helton, a law professor at the University of Oklahoma. “It’s possible you could see some slight increases in taxation,” and “for pipeline approvals, tribes will expect to have a broader consultative role.”
Oklahoma energy attorney A.J. Ferate said the case suggests Oklahoma tribes would have regulatory authority over oil and gas, even if they chose not to exercise it right away. “Do I suspect anybody is going to get their existing production taken away? I think that would be a very extreme issue,” he said. But “we’re in a whole new world here in Oklahoma as to how do all of these pieces fit together and how do we move forward,” with the prospect of “decades of litigation and questions” ahead.
Mike McBride III, chair of Indian law at Tulsa law firm Crowe and Dunlevy, told Reuters there may also be implications for wind energy, electricity transmission, and water sales.
The Petroleum Alliance of Oklahoma wasted no time putting in its pitch for no change in regulation. “It is critical for continued investment in Oklahoma that the state maintain primacy with regard to the regulation of oil and gas operations, and that issues of title with regard to real property remain unaffected,” the organization said in a prepared statement.