US: June 3, 2008


CROW AGENCY, Montana - For many decades the rival neighbouring American Indian Crow and Northern Cheyenne tribes have suffered high unemployment and poverty in a remote area of one of the most remote US states.


Now the Crow are starting to develop the energy riches on their reservation -- including billions of dollars worth of coal, oil and gas -- in an effort to end poverty, while the Northern Cheyenne say widespread extraction of coal or other natural resources could threaten their reservation.

"We don't agree with the Northern Cheyenne," said Carl Venne, chairman of the Crow Nation, in an interview. "If they want to stay the same, they can stay the same. I'm taking my tribe in a new direction."

"They have a lot of resources and they choose not to use it. I can't go back to the tepee and to the loin cloth."

Located in south-eastern Montana on the Wyoming border, the Crow estimate their coal reserves at 15 to 19 billion tons, and say beneath their 2.2 million-acre reservation lies a lot of oil, gas and other natural resources that should be mined.

Directly to the east in Montana, the state with the nation's largest coal reserves, the Northern Cheyenne Nation share the rich geology whose value has steadily increased as energy prices have soared.

Yet the tribe of 4,135 residents on the 444,000-acre reservation has shunned energy development to overcome poverty that includes battered wooden outhouses for some families and a 70 percent unemployment rate.

"My concerns are about water," said Northern Cheyenne President Geri Small, saying she fears energy exploration would impact the arid region's ground supplies. "For the Northern Cheyenne water is life -- without water we cannot survive."

Her sister, Gail Small, director of Native Action, an environmental group based in the reservation's main town of Lame Deer, Montana, takes pride in the tribe's focus on tradition and environment over money.

"Our tribe and the Crow are very different," she said.

"There is nowhere else where you can find people sitting on all this wealth and just saying 'no' when we could be millionaires," she added proudly.

Despite common economic hardships and opportunities, the two tribes have a long history of animosity.

Northern Cheyenne elders often recount the 1876 Battle of the Little Bighorn, when Cheyenne Indians helped defeat the US Cavalry led by George Custer. In that battle, Crow fought on the losing side with the US Cavalry.

Politics still divide the leadership of the two tribes.

The Crow adopted Sen. Barack Obama into their tribe in a recent ceremony. The leader of the Northern Cheyenne endorsed Sen. Hillary Clinton and some members scoff at the thought of the Crows adopting an outsider so readily for political gain.


AIMING TO BE MAJOR PLAYERS

The Crow are aiming high in their efforts to capitalize on high energy prices and are employing high-priced consultants and an undisclosed Wall Street investment bank to advise them.

Donald Laverdure, the chief Crow legal counsel, said the tribe intends in the coming weeks to bid on five coal mining operations Rio Tinto is selling in Montana and Wyoming, although they are principally interested in the two Montana sites. The Crow are seeking to leverage their coal reserves to raise more than $100 million for such a deal, he said.

"We have some energy funds we are working with," Laverdure said, adding that he was also talking to rich US tribes which had made millions from casino gambling.

Some observers are sceptical that the tribe will succeed in using its coal reserves to raise money because of uncertainty over future environmental rules. But tribal leaders think a bold approach to their business can work.

"We need to be a player and we need to own the company," said Crow Chairman Venne. "We don't just want royalties."

He sees coal development as a patriotic cause and says reclamation after coal strip mining often leaves land in even better condition. "Why do we have to depend on that guy in Venezuela? They've got us over a barrel," he said.

At the same time, the tribe is expanding lease deals for others to mine their resources.

The Crow are allowing Westmoreland Resources, a venture of Westmoreland Coal Co and partners, to extend their Absaloka coal mine onto Crow reservation territory for the first time, with production expected to begin next year in the region estimated to have 88 million tons, officials say.

At present Westmoreland mines coal next to the reservation where the Crow own the mineral rights but not the land. They pay the tribe between 22 to 24 percent royalties, or a total of $15 million a year, Venne said. Most of that goes to the tribal budget, but individuals receive checks of a few hundred dollars a few times a year from those funds.

Another company will be drilling 50 oil and gas wells on a different part of the reservation this summer.

The Crow Tribe is also hoping to play an important role in any future coal-to-liquid plant, a pet idea of Montana Governor Brian Schweitzer. Supporters say such development could help allay public concern about the environmental impact of coal.

Chairman Venne could also benefit personally from Crow tribe energy deals. He said he owns land above 45 million tons of coal, but said he does not personally negotiate on tribal deals involving this property.

Many members of the next door Northern Cheyenne stress the need for caution, lest they get stuck with another in a long history of bad deals with the white man or new problems, such as crime, that could accompany change.

"Our ancestors fought long and hard to preserve this reservation," said Conrad Fisher, 50, a tribal historic preservation officer, referring to what locals call Custer Battle. "Our ancestors died to secure a piece of property for us." Energy exploration is "not going to be a quick fix."

Northern Cheyenne residents voted in a November 2006 ballot to embrace coal, but tribal leaders have done little since to manifest such public support. "We are a desperate community, but we are not desperate enough to develop a consensus opinion on energy development," said Clara Caufield, the assistant to the Northern Cheyenne president.

(Editing by Jim Marshall)


Story by Adam Tanner


REUTERS NEWS SERVICE