Meager gas-oil revenue upsets Utes

ROOSEVELT — The oil and gas industry is posting excellent returns these days, but the Ute Indian Tribe isn't enjoying the benefit.

And because of that, neither are Duchesne and Uintah counties.

Former Ute tribal officials and commissioners from the two counties say tribe policies enacted under the leadership of financial adviser John Jurrius caused their downturn in oil and gas revenue. They have asked Sen. Bob Bennett, R-Utah, to conduct a formal investigation into possible improprieties by Jurrius and Chet Mills, superintendent of the Uintah-Ouray Indian Agency of the Bureau of Indian Affairs.

Royalties from oil and gas production on Ute land make up most of the tribe's budget. The royalties are paid by the oil and gas companies before taking into account costs — leasing, exploration, drilling, operations and production. Severance tax paid by the oil and gas companies on Uintah Basin production helps not only the tribe but Duchesne and Uintah counties.

More than a year ago, then-Ute Tribe Chairman Floyd Wopsock wrote a letter to Bennett expressing his concern over the lack of development on the tribe's naval oil shale reserve lands. In his letter Wopsock said that, at the time the tribe agreed to give Jurrius authority as the tribe's financial adviser, Wopsock did not realize the tribe would be kept from being a partner in oil and gas development and that other companies would have a larger share of the reserve than the northern Ute Tribe. The dispute is over deposits that have not yet been tapped beneath the oil shale reserve.

In August, about two months before Ute Tribe business committee member Luke Duncan was expelled from office by the governing board, Duncan wrote Bennett expressing dismay over the tribe's inability to "provide an environment that is conducive to the development of the extensive minerals resources."

According to Duncan, oil and gas companies are frustrated and pulling out of the reservation because of costly delays and unexpected contract changes unilaterally imposed on them by Jurrius or the people working for him.

"Oil and gas prices are high, but we are broke," Duncan wrote.

For many oil operators on the reservation, the tribe's demands for "throughput" fees are the last straw. The fees force oil companies to make additional payment for every cubic foot of gas put through pipelines they have built and paid the tribe for rights-of-way across trust lands.