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The Potential Impact of McGirt v Oklahoma on Oil and Gas Operations

The Potential Impact of McGirt v Oklahoma on Oil and Gas Operations

In McGirt v. Oklahoma, (1) the United States Supreme Court ruled that a large portion of eastern Oklahoma is included in the Creek Nation Reservation. Therefore, this land is subject to tribal or federal criminal law instead of Oklahoma state law, even though most of it is now owned by non-tribe members. 

The federal government conveyed the reservation to the Creek tribe with the promise that  the lands would “never be embraced or included within, or annexed to, any Territory or State,” and would “be forever set apart as a home for [the] Creek Nation.” Subsequently, pursuant to the Creek Allotment Agreement, the majority of the reservation was conveyed in fee to individual tribe members in 160-acre parcels. These tribe members were later free to sell their land to Native Americans and non-Native Americans, and today, many of these tracts are owned by persons unaffiliated with the tribe. Nevertheless, in McGirt, the Court held that the reservation was not dissolved by the allotment, and therefore remains subject to the tribe’s laws.   

McGirt considered whether federal or state criminal law applied when a tribe member was accused of committing a crime against another tribe member on land originally included in the reservationThe dissent vocalized concern that the decision creates significant uncertainty for the [s]tate’s continuing authority over any area that touches Indian affairs, ranging from zoning and taxation to family and environmental law.” Although the case concerned events which took place in Oklahoma, the decision extends to oil and gas operations in other states with large Native American reservations where borders are no longer apparent, like North Dakota and Wyoming 

Law Governing Non-Tribe Members on Reservation Lands 

McGirt involved a crime committed by one tribe member against another. The scope of tribes legislative jurisdiction vis-à-vis non-members was determined by Montana v. United States (2) and its progeny. Generally, Native American “tribes do notpossess authority over non-Indians who come within their borders.” (3) In Montanathe Supreme Court recognized two exceptions where tribes may exercise civil jurisdiction over non-members:  

1.A tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements; and  

2. A tribe may also retain inherent power to exercise civil authority over the conduct of non-tribe members on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, economic security, health or welfare of the tribe. 

The Montana exceptions only apply to the extent they are necessary to protect tribal self-government or control internal relations. 

Montana’s Application to Oil and Gas Law 

IPlains Commerce Bank, the Court held that tribal law “may be fairly imposed on nonmembers only if the nonmember has consented, either expressly or by his actions.” Later, in Kodiak Oil & Gas (USA) Inc. v. Burr, the 8th Circuit Court of Appeals held that the Montana exceptions do not apply to contractual disputes involving unpaid oil and gas royalties. While oil and gas leases constitute consensual relationships with tribe members, they are mediated by the federal government, and do not necessitate action to protect tribal self-government or  control internal relations. The court noted that tribal laws relating to public health and safety or environmental protection may sometimes fall within the second Montana exception outside of contractual disputes. Therefore, drilling on tribal land may place an operator under tribal jurisdiction. 

Potential Impact of McGirt on Oil and Gas Operations 

Tribal law or federal law may govern oil and gas operations on land previously included in a Native American reservation which was later conveyed to a non-tribe member, if the operations fall into one of the two Montana exceptions. These laws may directly affect operations or ancillary issues, like production taxes or water use. For example, 25 CFR § 211.48(a) prohibits drilling operations on Indian lands without the Secretary of the Interior’s written approval of a mineral lease or permit. In Merrion v. Jicarilla Apache Tribe, the Court confirmed a tribe’s ability to impose taxes on non-tribe members conducting business on a reservation. 

Congress may react to McGirt by explicitly dissolving or withdrawing all reservations. Tribes generally allow states to govern certain issues on tribal lands, and states may negotiate with tribes in an effort to balance sovereign interests and tribal self-government. Without concrete Congressional guidance or legislation defining the law which governs oil and gas in Native American territory after McGirt, oil and gas companies must make an uncertain determination as to the correct regulatory scheme to follow. 

Kuiper Law Firm, PLLC specializes in oil and gas issues; if you have any questions about how McGirt may apply to you or your operations, do not hesitate to contact us.  

The content of this publication and any attachments are an advertisement and are not intended to be and should not be relied upon as legal advice or to create a lawyer-client relationship. 

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  1. McGirt v. Oklahoma, 140 S. Ct. 2452 (2020).
  2.  Montana v. United States, 450 U.S. 544 (1981).
  3. Plains Commerce Bank v. Long Family Land & Cattle Co., 554 U.S. 316, 328 (2008); see also Montana at 565.
  4. Kodiak Oil & Gas (USA) Inc. v. Burr, 932 F.3d 1125, 1136 (8th Cir. 2019). 
  5. Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 137-38 (1982).