Commentary: Government orders Tesoro Pipeline to shut down, pay landowners millions
In a long-awaited, yet surprising turn of events, the federal government recently ordered the Tesoro High Plains Pipeline in North Dakota to shut down and pay a group of landowners on the Fort Berthold Reservation millions of dollars for trespass violations.
A mediation was being scheduled in August between representatives of Tesoro and American Indian landowners given years of failed negotiations and two federal lawsuits. But, on July 2, the U.S. Interior Department’s Bureau of Indian Affairs preempted the meeting and served a formal notification of trespass to Tesoro officials.
“The BIA has determined that a pipeline owned and utilized by Andeavor/Tesoro Pipeline is encroaching on trust lands without an approved right of way, resulting in trespass,” wrote Tim LaPointe, regional director for the BIA.
The Tesoro pipeline trespass includes 44 tracts of land totaling 90 acres belonging mostly to individual landowners on Fort Berthold. The tribe owns 10 tracts. The July notice was sent to Tesoro regarding 23 land tracts, which comprise 50 of the 90 acres in question. The owners of those tracts are to be paid $187 million within 30 days.
Lawyers representing two class-action lawsuits filed suit against Tesoro in North Dakota and Texas. Both cases were dismissed after rulings that tribe-related legal remedies needed to be exhausted. Mainly, the ball was in the BIA’s court. After seven long years of mostly idly standing by, the BIA and leaders of the Three Affiliated Tribes did little to assist landowners.
Tesoro has been trespassing on individual landowners’ tracts at Fort Berthold since June 2013. The $187 million represents only a fraction of the seven years of profit made by transporting oil across Native lands to the Marathon Petroleum Mandan Refinery in Mandan, N.D.
Meanwhile, tribal leaders of the Three Affiliated Tribes, also known as the Mandan, Hidatsa and Arikara Nation, made their own secret deal to secure a contract while allowing the trespass to continue. Landowners had no say nor any representation then from the BIA or the tribe.
I own an undivided interest in two tracts of land on which Tesoro runs its pipeline. Without our tribal and federal government officials to help us, we’ve had to seek outside legal sources to assist in negotiations with the multibillion-dollar international corporation.
I sat in the Three Affiliated Tribes tribal council chambers in the fall of 2013 when Tesoro representatives asked the tribe to renew a right of way. By then, the right of way had already expired, yet oil never stopped flowing through the pipeline.
LaPointe, in his July 2 notice, detailed several key dates associated with the trespass. On Jan. 30, 2018, the BIA issued a 10-day Show Cause Order to Tesoro, an order that arrived nearly five years into the trespass. By this time, the Tesoro Corp. had taken on the new name of Andeavor.
On Feb. 7, 2018, Andeavor-Tesoro notified the Bureau of Indian Affairs that it was engaged in good-faith negotiations. But that was never the case. As landowners, we knew Tesoro had negotiated upward of $2 million per acre with leaders of the Three Affiliated Tribes. The company never came close to making us the same offer. By fall the same year, Marathon Petroleum Corp. and Andeavor merged in a $23.3 billion deal.
Fast forward to May 22 this year when Andeavor-Tesoro responded to another 10-Day Show Cause Order. Fort Berthold landowners then received another contract to renew the Tesoro High Plains Pipeline’s expired right-of- way. We were also asked to accept a “past use” agreement without the company acknowledging its trespass. Again, the low-ball figure was rejected.
Finally, the BIA intervened last week to say that good-faith negotiations had failed. “Due to the length of time it is clear that negotiations are not in good faith and it is not in the best interest of the landowners to allow Tesoro to continue to benefit from this trespass,” LaPointe wrote in his notice.
Even now, the $187 million offer made to landowners owning the majority of land tracts is still unconscionably low. The figure represents 70 days of crude oil throughput. The fact is crude oil has passed through the pipe for 2,571 days. The value of that oil amounts to nearly $7 billion.
The crude oil traveling to the Mandan refinery takes on a much higher value after refinement.
Representatives of the multi-billion dollar Marathon-Andeavor corporations have 30 days to pay the bill and to cease and desist use of the pipeline. They can appeal to the Interior Board of Indian Appeals or promptly pay American Indian landowners on what appears to be a sweetheart deal for them. It’s time for Marathon to stop breaking the law on Indian land.