Minerals Council

Chief, Minerals Council members discuss TERA during first 2021 OSA meeting

The Osage Shareholders Association held its first quarterly meeting of 2021 by videoconferencing to hear updates related to the group and Minerals Council members.

Interim OSA Chairwoman Julie Malone called the virtual meeting to order on Feb. 21 and acknowledged the recent February passings of fellow shareholders Andrew Yates, who was Osage Minerals Council Chairman, and former OSA Chairwoman Lou Phillips. Malone said the OSA sent a $100 donation to veteran-focused Coffee Bunker where Phillips volunteered for the Tulsa nonprofit and flowers were sent to Yates’s funeral service, adding “may they all rest in peace.”

Malone noted the next OSA officer and board of director elections will be held in November and encouraged members “to be thinking about how you can be more involved in our organization, it’s 100% voluntary, and all the help we can get is appreciated. Also, we may disagree from time to time with our Osage Minerals Council, but we are not adversaries by any means. We can get a lot more done by trying to work with them, support them and having respect when we do disagree, we all want our Osage Minerals Estate to be successful.” 

Malone told attendees that she spoke with other OMC members who said they would not be attending the day’s OSA meeting while they continue a mourning period for Yates who passed away Feb. 16 and his funeral was held that following weekend.

Principal Chief Geoffrey Standing Bear attended the meeting and expressed continued support for the Osage Minerals Council toward potentially pursuing a Tribal Energy Resource Agreements (TERA) with the federal Department of Interior. First approved in 2005, a Tribal Energy Resource Agreement between a tribe and the DOI allows a tribe to review, approve and manage leases, business agreements and rights of way for energy development on tribal land without having to go through the Secretary of Interior every step of the way. 

Regarding TERA, Standing Bear said: “What we need to do to stop the historical practice of bureaucrats from outside of our Osage country running our business and our property, we have to stay within the rules of the Secretary of the Interior, not BIA necessarily, that is why I have been excited for some years about the new TERA and how that opens up possibilities because it’s done within the federal rules, it’s consistent with the 1906 Act if you stay within the Secretary of Interior’s authority ... In the meantime, we have to recognize federal law and treaty do apply.”

Standing Bear noted the OMC and his office have not yet signed an application to begin negotiations of a TERA. “That I hope will be coming soon. If the Minerals Council or the Congress of the Osage do not want to pursue that path, then the second road related (to a TERA) doesn’t make sense and that second road is the Indian Self-Determination Act of 1975 that allows tribes to contract federal programs of the Bureau of Indian Affairs Department of Interior for use by the tribe under the supervision of the (DOI Secretary) … The real action occurs in the funding agreements ... in a compact or contract mode ... but the key in this is a multi-year funding agreement. Now we have one at Osage, we also have a compact on our Indian Health Service (Wah-Zha-Zhe Health Center) that we did in the last few years, so we’ve been running the clinic under the Self-Determination Act.”

For the other tribally-run entities, Standing Bear said “we have been contracting under the multi-year funding agreement a lot of programs (from the BIA) for years – our police is something that’s notable, our social services, our real estate services... the only thing left that has been for several years is the Minerals department, what’s left of it, and the Probate Department... We have an opportunity if the Minerals Council wants to try and be the responsible entity for our Minerals Estate – subject to the trust authority of the Secretary of the Interior – to go ahead and take these programs that they describe in the TERA agreement... But you must go to the vehicle which is the multi-year funding agreement. In that regard, the Minerals Council has appointed three members of the (OMC) to join my staff when we do our normal negotiations for the operation of the (BIA) programs... If (the OMC) doesn’t want to do this, we’ll just continue to go on like we are.”

As far as federal funding goes, Standing Bear said “there won’t be enough money to do what you want to do and that is true for our police, social services, every single program that we operate through the Self-Governance program and we go to the Osage Congress every year for the supplemental funds that we think we need to run these programs and millions of dollars of the casino money goes to supplement these (BIA) programs that we operate. So, when we come to this Minerals Estate, it’s critical that the Council determine what is the budget to run this Minerals Estate even after the funding of these (BIA) positions ... What does the Minerals Council and its consultants think, what does it take to run this properly? Then you have to justify it just like any of our (departments and programs) because you’ve got to go to the Osage Congress (as part of the annual tribal government budget process).”  

“What the Minerals Council needs to do is figure out where they want to go with TERA and figure out where they want to go with self-determination and the (multi-year funding agreement),” Standing Bear said, noting the TERA is time-sensitive with any proposed new positions needing to be factored into the Nation’s annual government operations budgets which are considered and approved annually each September for the next October-September fiscal year by the ON Congress. Standing Bear added his administration is on track to submit budget information by June for the budget process to start for the 2022 fiscal year.

OMC Councilman Paul Revard said he is in favor of pursuing a TERA after further study noting he understands the Nation would be funding proposed positions not covered by federal funding as part of the tribal budget consideration/ approval process. “We want to be professional, we need to do it right and that means we have to have the right people. We may have to relocate our offices to where we can get a lot of people to come work. Maybe not everyone we hire away (from large oil/ energy companies) would want to relocate to Pawhuska. But maybe we can provide an office somewhere around Bartlesville or Tulsa,” he said.

OMC Councilwoman Susan Forman thanked Standing Bear for his TERA comments, adding the TERA task force is still working on completing the application. She described reviewing the application process as “complicated, it’s involved, it takes many, many hours to dig through just writing the application. What I want to remind everyone is just getting BIA money they have right now for a TERA operation – and the ON Congress – are not all the sources of revenue that we are looking at... The Osage Minerals Estate’s ability to generate revenue is way higher than our casinos, all seven of them, when we’re up and running and drilling 200-300 wells a year, we have the ability to generate a half a billion dollars in revenue for the economies of Oklahoma, Osage County, the Osage shareholders, so that’s significant. Ever since we did the 25-year strategic plan by the tribe, the majority of people want to see the Nation create an oil/ gas company ... The TERA task force is talking about multiple different kinds of funding, it’s the long vision, it’s not going to happen overnight, but we’re looking at multiple things to bring in money besides just the Congress appropriating us some money.”

As part of exploring what a TERA would look like, Forman said the TERA task force has drafted an organizational chart and estimated start-up costs and what an annual operating budget would look like showing BIA functions currently being conducted and additional positions “that we feel are needed in order to properly manage our Minerals Estate.” She added the proposed position salaries, equipment and office furniture could total $4 million per year as an estimate. 

“I am very excited about the possibility of doing a TERA, I know it’s controversial, I know it is not favored by a lot of folks, but the alternative is to keep things the way they are,” Forman said. “So to let the BIA continue understaffed, underfunded and under-skilled to run a $13 billion Minerals Estate, this is so serious ... we don’t have the processes and procedures to properly administer and manage and develop our Minerals Estate and the TERA will allow us to do that and I take this very seriously as far as getting the right people in place ... (Oil and gas accounting) is complicated, it’s important to catch how things are measured, how things are produced ... and you really need oil/ gas professionals that know what to look for.”

Malone said the second 2021 quarterly OSA meeting is scheduled May 16 at 1 p.m. and will be held both virtually and in-person at the Skiatook Osage Casino Hotel. This will be the first in-person meeting for the OSA since the COVID-19 pandemic hit in 2020 sidelining public and social functions globally.

For more information on the OSA, email: osageshareholdersassociation@gmail.com