The Ute Paradox: Billlion-Dollar Business

A Small Colorado Tribe Takes Control of its Energy And Becomes A Billion-Dollar Business- BUT Has It Gone Too Far?
By Jonathan Thompson
From the July 09, 2010 issue of High Country News

Then-Interior Secretary Dirk Kempthorne flashed a big grin as he opened the Minerals Management Service’s Lease Sale 206 in the Louisiana Superdome on March 19, 2008. Eighty-five oil companies were vying for the chance to drill in the Gulf of Mexico. With oil selling for over $100 per barrel, the Superdome hadn’t seen such a frenzy since Beyoncé kicked off her tour here a year earlier.

High bids totaled more than $3.5 billion, a new record, for access to more than 28 million acres of sea-bottom. BP, the international energy giant, paid $34 million for the 5,760 acres known as Mississippi Canyon block 252 — a disastrous purchase in retrospect, since the well that was eventually drilled there was the one that exploded and caused the current mess in the Gulf.

Also bidding for block 252 was Red Willow Offshore, LLC, with a $14 million offer that came up short. The company has made a splash in the Gulf of Mexico in recent years, typically partnering with others on deepwater endeavors. But Red Willow Offshore is not your average international oil company. It is the wholly owned subsidiary of a small American Indian nation — the Southern Ute Tribe in southwestern Colorado.

Less than a century ago, the Southern Utes were barely hanging on, squeezed onto an unremarkable sliver of reservation land, a new and foreign way of life thrust upon them. Even as late as the 1950s, many had no running water or noticeable income. But today, as the bidding at the Superdome showed, the once-impoverished tribe is a financial powerhouse. With tribal businesses in 14 states, ranging from Gulf crude to upscale San Diego real estate, the 1,400 or so tribal members are, collectively, worth billions.

They didn’t strike it rich on casino gambling. Instead, the Southern Utes built their empire slowly, over decades, primarily by taking control of the vast coalbed methane and natural gas deposits that lie under their land. They’ve achieved cultural, environmental and economic self-determination through energy self-determination — a feat rarely accomplished, whether by Indians or non-Indians.

“The Southern Ute Indian Tribe is unique,” one tribal Web site says matter-of-factly — a statement few would argue with.

In the process, however, the Southern Utes have gone far beyond self-determination. These days, the tribe’s oil and gas operations extend to other reservations as well as to private land, sometimes to places whose own residents oppose it. The tribe’s influence reaches to Washington, D.C., affecting federal energy policy. And some observers can’t help wondering: Where does the tribe stop and the corporate giant begin?

At least seven bands of Utes roamed a huge expanse of present-day Colorado and parts of Utah and New Mexico as far back as eight or nine centuries ago. They held off the Spanish colonizers that swept north from Mexico in the late 1500s, but had less success against the U.S. onslaught in the late 1800s. In 1895, members of the Mouache and Capote bands finally accepted allotments — essentially Indian homesteads — on the slice of high desert called the “Ute Strip.”

The rest of the strip was opened up to white homesteaders, laying the foundation for today’s Southern Ute Reservation: a 75-mile-long by 15-mile-wide checkerboard on which whites still own roughly half the land, bordered on the south by New Mexico and on the west by the Ute Mountain Ute Reservation, where those who refused allotments ultimately settled.
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Writer Jonathan Thompson lived his first 40 years within the original Ute territory. His maternal ancestors homesteaded in land taken from the Utes by the Brunot Treaty. And his paternal ancestors homesteaded on the Ute Strip, within today’s reservation boundaries. He owned and ran newspapers in Silverton, Colo., and was High Country News editor-in-chief from November 2007 to April 2010. He recently moved with his family to Berlin.

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