When the oil boom came to North Dakota around 2008, it also came to the Fort Berthold Indian Reservation. The reservation had long endured high levels of poverty, and drilling offered much needed relief in the form of tax revenue and royalties for those with oil on their land.
“My grandmother was told she was going to be one of the richest elders on Fort Berthold,” said Lisa DeVille, a member of the Dakota Resource Council, who has lived on the reservation her whole life.
For DeVille’s grandmother, however, the promise of wealth would ultimately go unfulfilled. She signed a lease, but amid the rise and fall of oil prices, the term expired before her land was drilled.
While the influx of oil did bring new money to the reservation, it also left the Mandan, Hidatsa and Arikara tribes vulnerable to the boom and bust cycle of oil and gas, which they felt acutely after production crashed in 2014 and again last year when the coronavirus pandemic crippled demand for fossil fuels.
As lockdowns took effect, state and local governments saw their tax streams slow to a trickle. With people driving and flying less, governments earned less revenue from airports, hotels, toll roads and, critically, gasoline sales. Some states are facing projected declines upwards of 20 percent.
But for the Mandan, Hidatsa and Arikara (MHA) Nation, the situation was far more dire because the tribal nation earns 90 percent of its revenue from royalties and taxes on oil and gas development. In 2020, its revenue declined by 70 percent, according to Mark Fox, chairman of the MHA Nation.
“We had to dig into reserve capital and borrow money and things like that to just keep the doors open,” Fox said. The shortfall forced the tribal nation to delay needed investments in infrastructure, education and health care, he said.
Fox blames the federal government for not doing more to help keep the tribal nation afloat. Last year, the MHA Nation received around $40 million in CARES Act money, not nearly enough to cover their lost revenue, estimated at more than $130 million.
The MHA Nation’s current predicament has deep roots. The three tribes once roamed freely across the western stretch of present-day North Dakota, but in 1851, the federal government set up a boundary around their land, confining them to an area a little smaller than West Virginia. That territory would grow progressively smaller over time, as bits and pieces were carved off for railroads, white settlers and other tribes, until it had been shrunk down to an area about the size of Rhode Island.
For a time, the three tribes managed on the remaining lands that comprised Fort Berthold Indian Reservation. They built farms and raised livestock along the Missouri River, but in 1947, the Army Corps of Engineers began work on the Garrison Dam downstream, with predictable results. The dam flooded the reservation, displacing hundreds of families and destroying 94 percent of their farmland.
Some tribal members left the reservation. Those who remained were moved to higher ground, where the soil was poor and water was scarce. The tribal nation struggled, Fox said. The land was difficult to farm, but it did have one notable virtue – buried deep underground, under a layer of hard shale rock, was a trove of oil and gas.
“My grandmother used to tell me when I was a little girl that oil is here, but they don’t know how to get to it because there’s so much rock,” DeVille said.
That changed when new advances in drilling – namely, fracking – finally allowed companies to access the vast reserves of oil and gas that make up the Bakken oil formation.
“It wasn’t until energy came along in 2008 or 2009 that the tribe finally said, ‘Great. We can start restoring our economy,” Fox said.
Oi and gas companies dug hundreds of new wells, and production surged. At one time the reservation churned out more than 300,000 barrels of oil a day, which generated millions in tax revenue. Money from drilling paid for new schools, new houses, new roads and new water projects, Fox said. New oil development also promised a source of income for those who could lease their land.
But the oil boom also brought pollution. Busted pipelines spilled oil and fracking chemicals. In the summer of 2014, a broken pipe leaked a million gallons of saltwater, threatening to contaminate supplies of drinking water. Toxic gasses also leaked from drilling sites. Locals complained of nosebleeds and asthma, spurring calls for stronger regulations on wells.
Delvin Rabbit Head Sr. worked on an oil rig from 2008 to 2012, trucking in fracking chemicals. He said the pay was good, but not good enough to keep him working on the rig. He left in the lead-up to the first crash, disturbed by pollution from oil and gas development. He recalled how flares at drilling sites changed the landscape, which is famously flat and grassy.
“Before they used to say that in North Dakota, you can see a dog run away for days,” said Rabbit Head, now the president of Fort Berthold Protectors of Water and Earth Rights. “You look at the Bakken oil patch, and you see all the orange. They say you can see it from the space station. It looks like a Christmas tree, all the orange.”
Rabbit Head, who plans to retrain as a solar installer, hopes the tribal nation will invest in clean energy. North Dakota has enormous potential to build out renewable power, particularly wind, and create jobs that would be less vulnerable to booms and busts than jobs in oil and gas.
Rabbit Head said he was also unsettled by the violence that came with the boom. As oil and gas workers set up “man camps” in rural areas where there was little to do, those areas saw an influx of meth and heroin, and a rise in murders, assaults and human trafficking. Native women and children were especially vulnerable. Across the Bakken region, Native Americans were two and a half times as likely as white Americans to be the victims of violent crimes at the height of the oil boom.
Oil and gas development has enriched the state of North Dakota tremendously. The state takes a sizable cut of the tax revenue from every well on Fort Berthold, between 20 and 80 percent, depending on where and when the well was drilled, earning the state more than $1.3 billion since 2007.
And the tax rules are sometimes lopsided. If someone drills a well on the reservation that is drawing oil from off the reservation, the state and the tribal nation split the tax revenue. But if someone drills a well off the reservation and extracts oil from under the reservation, the state collects all the tax revenue.
Fox believes the state should have done more to bail out the tribe. In July, North Dakota devoted $66 million of CARES Act money to plugging 400 abandoned oil and gas wells, though none on the reservation. The clean-up effort came to an early end with the onset of winter, leaving the state with $16 million in plugging funds leftover. All that money had to be spent before the end of the year, but rather than use the money to bail out the tribal government, for instance, the state provided grants to oil and gas companies for additional fracking.
“I could think of better ways to spend the money, to be honest with you,” said Fox.
A spokesperson for the governor’s office said that the tribal nation took part in a task force that sought ways to use CARES Act money to support the oil and gas industry. Fox said the MHA Nation was only cursorily involved in the program, which was primarily directed at production off the reservation.
The American Rescue Plan, recently signed into law by President Biden, includes $20 billion in relief for Tribal governments. It’s unclear how much the MHA Nation will receive. The Department of the Treasury did not respond to a request for comment. Fox has low expectations after last year’s response.
“When it came down to it, we learned a hard lesson,” Fox said. “When something like a pandemic occurs, we’re going to be among the last ones they are going to help, if they’re going to help at all.”
Ed Hall, an 87-year-old tribal member who served in the Marine Corps and spent years working in the Bureau of Indian Affairs, is particularly disappointed with the federal government, which he said has repeatedly failed the three tribes over their history, including during the oil boom. Hall said that drilling could have been good for the MHA Nation, but it was ultimately just one more bad deal.
“It’s a rip-off,” he said. “I think that there is quite a story that needs to get out there about how we lost our land, our culture, everything.”