When an Oil Company Profits From a Pipeline Running Beneath Tribal Land Without Consent, What’s Fair Compensation?

A Marathon Petroleum subsidiary was ordered to pay $187 million for trespassing, but in January a Trump official reduced the judgement to $4 million. Now, Biden wants another look.

By Judy Fahys
Inside Climate News

Tribal landowners tried for years to get fair compensation for an oil pipeline that cuts across the Fort Berthold Reservation in North Dakota, only to see officials and the courts dismiss their concerns. 

But now, thanks to new leadership at the Department of Interior, the federal government is taking a fresh look at their claims. Some see it as a sign that, not only might their voices finally be heard in this case, but also that a turnaround has begun in the nation’s long history of injustices toward Indigenous people.

For Mandan, Hidatsa and Arikara (MHA) Nation members with land allotments at Fort Berthold, an encouraging signal came earlier this month. That’s when the Department of Interior’s Acting Secretary Scott de la Vega scrapped the Trump administration’s decision to reduce a $187 million penalty assessed against the oil company that owns the Tesoro High Plains Pipeline for trespassing on the reservation for seven years after its contract lapsed.

“Today’s action will allow us to review the matter and ensure the Interior Department is upholding its trust and treaty obligations in accordance with the law.”

-The Department of the Interior said in a statement

Days before leaving office in January, a Trump official had cut Tesoro’s penalty to less than $4 million. Then, on March 12 de la Vega ordered the Bureau of Indian Affairs to revisit the case and provide a “full and fair opportunity” for due process. “It does not appear that the parties had a full, fair and reasonable opportunity to be heard,” he wrote. 

The ruling puts the tribal allottee’s claims “back in play,” said Reed Soderstrom, the attorney handling the cases of 80 landowners who’ve been pressing for fair compensation for years. “Finally, we hope that we can get some traction and get to the merits of the case.”

Federal, Tribal Relations Begin A New, Historic Era 

Although de la Vega’s order was issued the week before Interior Secretary Deb Haaland took office, it’s one of several recent moves by the department that oversees the nation’s mineral resources and tribal trust lands that is inspiring a new sense of hope among Indigienous peoples. 

Members of the nation’s 574 registered tribes are eager to see Haaland, a New Mexican from the Laguna Pueblo and the first Indigenous U.S. cabinet secretary, bring greater understanding to tribal rights and sovereignty. They hope she can help end a long history of exploitation of their land and natural resources without compensation or consultation.

Another reason for optimism came on March 19, when Interior’s new top attorney, Robert T. Anderson, reversed another controversial Trump era ruling affecting the MHA Nation. Anderson’s order restored long standing mineral rights along a stretch of Missouri River riverbed to the tribe, a reversal of former Solicitor Daniel Jorjani’s declaration last year that those rights belonged to the state of North Dakota.

“Today’s action will allow us to review the matter and ensure the Interior Department is upholding its trust and treaty obligations in accordance with the law,” the department said in a statement. 

Heather Tanana, a research professor with the Stegner Center at the University of Utah law school, said she thinks the Biden administration is trying to live up to his campaign promise to Native Americans. 

A Navajo and member of the Navajo Nation Bar, she also noted that the president has directed federal leaders to include Indigenous people in day-to-day decisions. This “consultation,” as it’s called, is both a legal standard for federal-tribal relations but also a moral one that arose from the long history of federal relocation, exploitation and even extermination of Indigenous people.

“It’s rooted in an acknowledgement that tribes are sovereign entities, and the government relationship to tribes is a government to government one,” she said, adding that the federal trust role means tribal community members are given a meaningful opportunity to understand the actions being considered.

The High Plains pipeline gathers crude oil along 700 miles from the Williston and Bakken areas of North Dakota and Montana and transports it underground to the Tesoro Logistics refinery in Mandan, North Dakota, according to the website, Global Energy Monitor Wiki. In 2015, the pipeline was expanded to carry 90,000 barrels per day, and three years later, the nation’s sixth largest oil company, Marathon Petroleum Co., bought the High Plains pipeline as part of a $23 billion acquisition.

Marathon spokesman Jamal Kheiry said in an emailed statement that the oil giant hadn’t received word about Interior’s ruling on the Fort Berthold trespass case, “and we do not have any comment on it at this time.” 

Guided by our values of integrity, respect and collaboration,” the statement concluded, the company “remains committed to respecting the rights of the MHA Nation and its members as we work with them to resolve this matter.”

‘New Sheriff in Town’ at the Interior Department 

Back at the Fort Berthold Reservation, where Soderstrom circulated news about the trespass case, there’s lots of talk about a “new sheriff in town.”

Tex Hall, a former high school principal and basketball coach who now leads the Fort Berthold Land and Mineral Allottee Association, is thrilled to see Haaland leading the Interior Department because she understands the U.S. government’s legal responsibility to consult tribes.

“She knows about land ownership, and she knows about the [U.S. Bureau of Land Management’s] trustee role looking out for the best interests of the landowner,” said Hall, who has served two terms as chairman of the MHA Nation’s governing Business Council. “So when she hopefully gets the time to look at our case, she will see the injustice that we’ve endured.”

“In any place other than a reservation, that pipeline company would have been shut down,” he said, referring to a pattern of injustice that has historically plagued U.S. relations with sovereign tribes. “But I think Deb Haaland knows that.”

Tara Sweeney, an Alaska Native who served as the last assistant secretary for Indian affairs during the Trump administration, failed to demonstrate that ethic, he said, when she took control of the Fort Berthold trespass case twice in the past year and made a final decision on Jan. 4 to settle the trespass case for $3.9 million.

She knows about land ownership and she knows about the [U.S. Burea of Land Management’s] trustee role looking out for the best interests of the landowner. So when she hopefully gets the time to look at our case, she will see the injustic that we’ve endured. In any other place other than a reservation, that pipeline company would have been shut down. But I think Deb Haaland knows that.

-Tex Hall, who has served two terms as chairman of the MHN Nation’s governing Business Council

“She never even asked us,” he said. “I can only guess and speculate that politics played a role.”

Hall said he organized the allottees group four years ago after learning that current leaders of the Three Affiliated Tribes, as the MHA Nation is also called, had negotiated lucrative trespass and right-of-way deals with the oil company on the side. The company agreed to pay more than $2 million an acre for right of way over 25.65 acres of tribe-owned land. But for more than 300 individuals who owned allotments on the remaining 90.85 acres of right of way, negotiations started as low as $200 an acre, he said.

The allottees first took their complaints to federal court, with one group of allottees working with Soderstrom and another working with a different attorney raising the same issues. But judges dismissed the cases, saying the proper starting point for addressing the issues was the Interior Department’s Bureau of Indian Affairs and then, if necessary, moving through Interior’s multi-step administrative appeals process.  

In July the BIA’s Great Plains Regional Director, Timothy LaPointe, ordered the Tesoro High Plains Pipeline Co. to pay allottees a total of $187 million. Part of the payout was for using the pipeline for seven years after the previous right-of-way agreement lapsed in 2013, which amounted to trespassing on the tribal land. Some of the penalty covered the company’s earnings from the pipeline during that time, and those amounts were tripled as allowed by federal law.

Tesoro shut down the pipeline and appealed. Then, in August, Sweeney took over the appeal, threw out the $187 million settlement and directed a new appraisal based on “fair market value” of the allottees’ land. 

That assessment came up with the figure of $85,000 per acre—significantly less than the $2 million-per-acre value tribal leaders had secured for the tribe-owned allotments—and it included no penalties or interest for nearly eight years of trespass. 

Some of our clients, they’re mad about it. But then it’s not terribly surprising.

-Debra Hoffarth, an attorney working on the Fort Berthold case

On Jan. 19, the day before President Joe Biden’s inauguration, Sweeney mailed out an order finalizing the $4 million award. The Interior Department’s Board of Indian Appeals also dismissed a request by the allottees to reverse Sweeney’s rulings as a “manifest error or injustice.

“Some of our clients, they’re mad about it,” said Debra Hoffarth, an attorney working on the Fort Berthold case with Soderstrom. “But then it’s not terribly surprising.”

But de la Vega’s March 12 order finally provided the reset of the process for which the tribal members had been fighting.

Now, Soderstrom is looking forward to the discussions that his clients have been pressing for all along: developing a factual record, adding up the money Tesoro has earned using the pipeline while it trespassed through the reservation and talking about damages.

And tribal members are looking not only at a fair settlement for past trespasses, but a future in which sovereign tribal nations may be able to prevent new violations.

Judy Fahys

Reporter, Mountain West, National Environmental Reporting Network

Judy Fahys has reported on the West for decades from Washington, D.C., and Salt Lake City. After covering the environment, politics and business at the Salt Lake Tribune, she fell in love with audio storytelling as the environment and public lands reporter for NPR Utah/KUER. Previously, she spent an academic year as a Knight Science Journalism fellow at the Massachusetts Institute of Technology. Her work has appeared in the New York Times, the Washington Post, High Country News and Outside magazine and aired on NPR. She serves on the board of the Society of Environmental Journalists.

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