The New Indian Wars
Energy, Water, and Autonomy
The energy crisis of the 1970s affected western reservation Indians more than any other event in the recent past. According to a report in 1976, Indians owned about 3 percent of the nation's total reserves of oil and natural gas or approximately 4.2 billion barrels of oil and 17.5 trillion cubic feet of gas. Reservations also contained from 100 to 200 billion tons of coal or from 7 to 13 percent of American reserves and a large proportion of uranium reserves. 1
As energy prices rose, tribes learned belatedly that their previous contracts were disastrous. Peabody Coal, for example, had negotiated leases with the Navajos and Hopis in 1966 in the Black Mesa area. Company representatives at the time informed the Navajo council that its oil and natural gas reserves were nearly depleted and that nuclear power would soon make coal obsolete. Peabody added that it was doing the Indians a favor by undertaking the massive strip mining project. Neither tribal council understood the environmental damages involved or the impact upon local residents displaced by the operation. John S. Boyden, the Hopi tribal attorney at the negotiations, was listed in a professional directory as a legal representative of Peabody. Although severe criticism of the Black Mesa contracts made them notorious by the early 1970s, they were not invalidated. 2
Several early coal leases called for flat-rate royalties. Instead of a percentage of the market value of coal mined, eight of the eleven early contracts provided for a set sum (typically 17.5 cents) per ton. The Omnibus Mineral Leasing Act of 1938 allowed contracts to continue unchanged as long as minerals were found in paying quantities. As coal prices soared from $4.40 per ton in the 1950s to $17.00 in 1974, Indian royalty rates rose only 35 percent. Obviously, companies holding flat-rate contracts could afford to pay more, but their response to Indian complaints was to make the best of a bad bargain. 3
Clearly much of the blame for the inequitable contracts belonged to the Bureau of Indian Affairs (BIA). The agency staff did not understand that regional population growth since World War II had greatly increased the value of coal and reduced such earlier handicaps as transportation costs
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Publication information: Book title: Indians and the American West in the Twentieth Century. Contributors: Donald Lee Parman - Author. Publisher: Indiana University Press. Place of publication: Bloomington, IN. Publication year: 1994. Page number: 169.