Does McGirt extend to oil and gas affairs too?

  • Will oil & gas be affected by the McGirt case?

OKLAHOMA CITY – The U.S. Supreme Court decision that the Muscogee (Creek) Nation reservation was never disestablished by Congress has widened from the criminal realm into the domain of regulatory affairs.

A decision by a majority of the Oklahoma Corporation Commission, claiming that the state agency retains jurisdiction over oil and gas exploration and production within the historic boundaries of the so-called Five Civilized Tribes, has been appealed to the Oklahoma Supreme Court.

Also, the Seminole Nation recently informed oil/ gas exploration/production companies that they are subject to tribal taxes in the tribe’s “jurisdictional area.”

In response, state Attorney General Mike Hunter last week asked the tribe to cease and desist, and indicated that the tribe was attempting to intimidate energy producers.

“Sending letters to every single operator in Seminole County, regardless of whether the Seminole Nation has specific grounds for asserting jurisdiction over that operator, can be seen as an attempt to intimidate those engaging in productive economic activity within the county to pay taxes and fees that the Seminole Nation has no jurisdiction to levy,” Hunter wrote in a letter sent Friday to a tribal official and to Seminole Nation Chief Greg Chilcoat.

The Corporation Commission issue stems from applications filed April 29 by Calyx Energy III for multiunit horizontal wells, well location exceptions, increased well density and pooling, plus an exception to spacing requirements, on land in Hughes County. Canaan Resources X lodged a protest in each of the 11 applications two days later.

Calyx Energy III is based in Tulsa and engages in oil and gas exploration and production in Oklahoma, Texas and Kansas; Barnes Law firm of Tulsa represents Calyx. Canaan Resources X is an oil and gas producer based in Oklahoma City, records indicate; Canaan is represented in the appeal by Oklahoma City attorney Anthony J. Ferate.

The U.S. Supreme Court announced on July 9 in the case of a child molester, McGirt v. Oklahoma, that Congress never dissolved the Creek Reservation it established in 1832.

Canaan filed a motion July 17 urging the Corporation Commission to dismiss the Calyx applications for lack of regulatory jurisdiction, noting that Hughes County is among the 11 counties in eastern Oklahoma that comprise the tribe’s reservation.

Administrative Law Judge Connie Moore recommended that the commission deny Canaan’s motion, and a majority of the commission concurred. Commission Chairman Todd Hiett and Commissioner Dana Murphy declared on November 25 that the Corporation Commission “does have jurisdiction” over the Calyx applications. Commissioner Bob Anthony did not sign the document.

Congress “granted jurisdiction to the State of Oklahoma over restricted lands of the Five Tribes, stating ‘all restricted lands of the Five Civilized Tribes are hereby made subject to all oil and gas conservation laws of Oklahoma.’”

The U.S. Supreme Court’s McGirt decision “did not extend beyond application of the Major Crimes Act,” the commissioners wrote. And in a separate case, the nation’s highest court “held that tribal jurisdiction to regulate affairs within a reservation does not extend to regulating the activity of non-tribal members on land that is not owned by the tribe,” the commissioners noted.

The commission further decreed that “maintaining jurisdiction of the Commission over the regulation of oil and gas interests ... does not involve a consensual relationship with the tribe or the regulation of commercial dealings or other arrangements involving the tribe which might justify tribal regulation.” Further, the commissioners wrote, “it does not threaten or have a direct effect on the political integrity, economic security or health and welfare” of the Muscogee (Creek) Nation.

Canaan Resources X filed its appeal in the state Supreme Court on December 8, and the next day Chief Justice Noma Gurich filed an order which decreed, “[T]his matter is retained for disposition in the Supreme Court of Oklahoma.”