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Oklahoma AG joins BIA squabble

Oklahoma Attorney General Scott Pruitt has joined in the fray between Osage County land owners and the Bureau of Indian Affairs over proposed revisions to the regulations that govern oil-and-gas leasing on Osage Reservation lands.

In comments filed with the BIA, Pruitt expressed opposition to the new federal rules which have been proposed. Pruitt asked that the Department of Interior and BIA allow the Oklahoma Corporation Commission to assume regulatory duties over the oil-and-gas development in Osage County — just as it does in all of the other counties in the state.

“The State of Oklahoma, not the federal government, is best equipped to design, administer and enforce laws and regulations related to oil and gas development,” Pruitt said in the filing. “State regulatory programs have been carefully designed to address state-specific issues and are applied consistently, regularly reviewed, and continuously subjected to thoughtful administrative oversight unlike the federal program that is notorious for frequent and prolonged delays.”

Pruitt added: “The BIA should start over with the rulemaking process in order to address these issues.”

With his last statement, the state official echoed sentiments that were recently conveyed in a group letter signed by officials with the Osage Producers Association, the Osage County Cattlemen’s Association and the Osage Minerals Council. Dated Sept. 12 and addressed to BIA Assistant Secretary Kevin Washburn, the letter asked that the review process be re-started.

“Collectively, we are in agreement that the … process was flawed,” the letter continued, adding that parties with the most at stake were not adequately represented — “specifically, oil and gas producers, a majority of Osage shareholders, oil and gas marketers and non-operators whose economic livelihoods in Osage County are directly dependent on oil and gas drilling and production activity, along with landowners who have suffered from impacts to their health, livestock and property rights were not included … and their concerns about the Draft Rules were largely ignored.”

The county consortium requested formation of a 25-member committee “with representation of all the aforementioned shareholders” to study the regulatory revisions. It also asked that the committee be allowed two years for completion of its work.

A similar but separate request was sent to BIA officials by OCCA President Jeff Henry, who cited “severe deficiencies” in the rulemaking committee’s draft “with respect to protections for public health, safety, the environment and property rights.”

Henry said a primary reason for the rulemaking deficiencies stemmed from the process being rushed through “without any formal involvement of the landowners the Draft Revision is supposed to protect.” The OCCA called for a re-start of the process and specifically asked for official involvement by “landowners who have suffered health problems, pollution of air, water and land, and loss of property due to oil and gas development.”

The cattlemen’s association recommended that the Department of the Interior engage STRONGER (State Review of Oil and Natural Gas Environmental Regulations, Inc.) to conduct a comprehensive review and audit “of the Osage Oil and Gas Rules and the Bureau of Indian Affairs.”

In his comments, AG Pruitt pointed to U.S. governmental admissions about past federal mismanagement of the Osage Nation’s oil and gas, and mineral estate. He urged them to amend the regulations “so that they properly recognize the State of Oklahoma’s primary and exclusive role in environmental regulation of oil and gas exploration and production activities in Osage County as well as the (state’s) right to regulate the waters within its borders.”

The executive director for the Oklahoma Water Resources Board, J.D. Strong, expressed similar thoughts in comments he addressed to the BIA. Strong suggested rules that would give the Osage Nation control over all water in the county. He said the rule that is currently being proposed “places jurisdiction in the BIA that the agency does not possess and could result in shortages of stream water for those who are properly permitted under Oklahoma law.”

“The State of Oklahoma, and not the federal government, is best equipped to design, administer and enforce laws and regulations related to oil and gas development,” Pruitt said, adding that state regulators have greater experience with certain issues and needs, and that they can respond to emergencies and issue permits in a timely manner.

“This stands in stark contrast to a federal program that is notorious for frequent and prolonged delays and persistent staffing challenges,” the attorney general concluded. “These problems will likely intensify once budget cuts are combined with onerous and unnecessary new federal rules and requirements.”

The unique arrangement that exists between the Osage Nation and federal government is traceable to agreements made by the tribe prior to Oklahoma statehood.

Oil and gas developers have complained repeatedly in the last few years about the failure of local BIA officials to issue drilling permits in a timely manner. Agency responses to recent environmental problems also have caused concern.

Earlier this year, BIA delays in obtaining necessary allowances caused one local oil rig to shut down temporarily — at an estimated $40,000 cost to its owner. The shutdown also forced the rig owner to vent oil into the air, resulted in numerous public complaints and health concerns.

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