Utah oil field leaves a mixed legacy for members of the Navajo Nation

Montezuma Creek • Every other morning at dawn, just before the sun rises over Sleeping Ute Mountain, Marilyn Holly takes her eight goats out to graze. With the help of a sheepdog, she guides the herd through the clumps of greasewood and rabbitbrush near her home, fattening them on the desert vegetation of the northern Navajo Nation.

Holly, who is vice president of the Navajo Nation’s Red Mesa Chapter and chairwoman of the San Juan County Democratic Party, has a permit to graze the animals on an allotment extending northeast from her homesite to the San Juan River that she utilizes on the days she doesn’t feed them grain.

But for most of Holly’s life, the land around her home has also been leased for another purpose. The small community of Montezuma Creek sits atop the Greater Aneth oil field, the most historically productive oil reserve in Utah.

The field was discovered in 1956, a few years after Holly was born. As a child, her brothers used to climb on the bobbing pump jacks and ride them like carnival attractions. Over 430 million barrels of oil have been extracted from the region over the past 60 years, and although production has declined in recent decades, the signs of the industry are everywhere.

Walking the 100 yards from Holly’s front door to her goat pen requires stepping over three aboveground pipelines that crisscross through her neighborhood. Some of the pipes lie broken and abandoned. Others, still in use, hum with flowing crude oil or natural gas.

In places, gullies have eroded from underneath the rusting pipelines where they sag unsupported. Evidence of small past ruptures are apparent, both in the repair patches that have been put on the lines, and in the oil-stained ground underneath.

A significant spill, which Holly said likely occurred in the 1960s, is visible near an oil and gas separation facility only 750 feet from her house. She believes the spill was capped with uncontaminated soil at the time, but it has since been eroding back to the surface: outcroppings of dark dirt in the otherwise light gray soil.

After over 8,000 gallons of crude oil spilled from a ruptured pipeline west of Montezuma Creek last year and containment ponds washed out in a flash flood, some oil reached the San Juan River. (The vast majority of the oil was later recovered by cleanup crews.) Holly said another four line breaks and cleanup efforts occurred on her small grazing allotment in 2019.

The history of spills is concerning, but the worst part, she said, is “the stench.” Odorous gases that escape from the pipes and valves — or that are intentionally released through flaring and venting — flood her home multiple times a day.

Warning signs on the facility near her home caution that hydrogen sulfide may be present, a gas with the smell of rotten eggs that, according to the Centers for Disease Control and Prevention, can irritate the respiratory system and cause “dizziness, headache, weakness, irritability, insomnia ... stomach upset.”

Residents living in the active oil field receive $400 each year as a nuisance fee, Holly said.

“That’s the only thing [the company does] is the $400, and then, of course, they give a ham or a turkey on Christmas to every house,” she said. “But we live with all these smells and all this stench and whatnot year-round. Our dads and our moms used to complain about it, too, but they died without any resolution.”

Sam Dee, a member of the Navajo Nation who lives not far from Holly, said many locals suffer from health issues. The potential presence of harmful emissions have long been a concern, but they’ve taken on a new urgency in the time of the coronavirus pandemic, which has hit the Navajo Nation harder than any other part of Utah with numerous cases in Montezuma Creek.

“The flaring and the venting need to be controlled to protect the community members out here,” Dee said. “Community members are suffering from asthma, nausea. ... People, they complain about headaches and dizziness and all that.”

For most of his 40-year career, Dee, like many area residents, found employment in the oil fields, working his way up from a technician to field superintendent before he became a community liaison. He’s mostly retired but now works as an environmental consultant with groups like the Environmental Defense Fund, the Sierra Club and Diné Care to lobby for stricter rules on emissions of methane, a potent greenhouse gas.

Rotating ownership

More than a dozen companies have moved through the area since the 1960s, including Exxon, Texaco, Chevron, Phillips and Mobil.

In 1978, hundreds of Navajo workers and activists occupied a Texaco complex to demand better labor and environmental protections. Operators agreed to most of the group’s demands, but, by 1997, tensions once again reached a breaking point. Local leaders blocked a Mobil facility, accusing oil companies of water and soil contamination as well as discriminatory hiring practices.

In recent decades, the major oil companies have sold their assets in the field. The Australian-owned company Elk Petroleum Inc. paid $160 million for majority ownership of the Aneth field in 2017, buying it from Resolute Energy. In 2019, the company filed for Chapter 11 bankruptcy. The current majority owner of the field, Elk Petroleum Aneth, LLC, exited bankruptcy last fall and is now controlled by the private equity firm AllianceBernstein.

Monica Brisnehan, Elk Petroleum Aneth’s chief financial officer, said the bankruptcy proceedings and change of ownership didn’t have much impact on employment or operations on the Navajo Nation. And although the worldwide drop in oil prices this spring led the company to temporarily suspend production from a few uneconomic wells, she said it likely had less of an impact on Elk than on many other operators.

It’s been decades since any new wells have been drilled in the Aneth field, and the company injects water and carbon dioxide underground to keep production flowing, which requires less capital than drilling new wells.

With regard to the spills, Brisnehan said she is less familiar with the environmental activities of past owners, but she defended Elk’s environmental record. “Since we have owned the asset, we’ve had very few minor incidents that we’ve worked pretty diligently to mediate very quickly and [they] didn’t cause any significant environmental concern to the area,” she said. The company also works to flare gas as little as possible, she added, including by working out a deal with a gas plant near Moab this spring to reduce the need for flaring near Montezuma Creek.

“We view [our work with the Navajo Nation government] as a strong partnership, and really, it’s very symbiotic,” Brisnehan said, noting that the tribe’s Navajo Nation Oil & Gas Co. has ownership of one third of the total working interest in the Aneth field. “We put a lot of money back into the nation through royalties ... and a very large percentage of our employee base at the field is [from the] Navajo Nation.”

The majority of the royalties from the production flow to the Navajo Nation government in Window Rock, Ariz., and 37.5% go into the Utah Navajo Trust Fund, an account that is set aside for development and education funding for the Utah portion of the Navajo Nation.

The fund has a history of mismanagement by the state, which agreed to pay $33 million in a settlement deal in 2010. It was reformed in 2015 and is overseen by a three-member board, which doesn’t currently include any members of the Navajo Nation, with input from a nine-member Navajo advisory committee appointed by the governor.

Last year, the fund grew by $5 million, bringing the total in the account to over $80 million. Around $1.5 million was spent on chapter projects and educational assistance for residents of the Utah Navajo strip, a number some residents would like to see increased.

‘A level of injustice'

In most of the United States, oil and gas regulations are overseen by state governments, which don’t have enforcement authority on tribal lands. The U.S. Environmental Protection Agency oversees “minor source” air quality emissions on the Navajo Nation, which includes oil and gas wells, but the nearest office is in San Francisco, said Jon Goldstein, director of regulatory and legislative affairs for the Environmental Defense Fund (EDF).

“There’s certainly a problem here with a level of injustice in terms of how these problems are being handled on tribal lands,” he said. Goldstein noted methane pollution and waste are 65% higher on the Navajo Nation compared to the national average, according to an EDF analysis.

“We estimated that oil and gas companies on the Navajo Nation emit about 13,000 tons of methane per year, which is about 1.1 billion cubic feet of natural gas,” he said. “If that were being captured and brought to market, that natural gas would be worth about $3.4 million and an additional $850,000 a year in tax and royalty revenue to the tribe.

“Methane is a very powerful greenhouse gas and it leads to very serious air quality problems that exacerbate the problems that folks see when they contract the coronavirus,” Goldstein added.

“There are a lot of lessons to be learned from the tragedy playing out in Montezuma Creek,” said John Ruple, a professor at the University of Utah’s S.J. Quinney College of Law. “Native Americans deserve more of the revenue from energy development impacting their lands, we should demand more frequent inspections of oil and gas infrastructure, and Congress should require operators to post reclamation bonds to ensure that people … don’t continue to suffer from tragedies like this.”

Brisnehan said that when major producers who originally developed the Aneth field sold their assets in the Aneth area, they set up an escrow account to fund future retirement obligations. “It is funded on a regular basis,” she said, “[and] is scheduled to cover all of the costs of retirement of those assets whenever they do retire.”

But Dee is concerned the remediation efforts won’t be thorough enough, citing abandoned pipelines that have yet to be removed and a water well he used to drink from as a young man that has since been contaminated. Even simple issues, like a collapsed barbed wire fence around an active valve system, have gone years without being addressed, according to Dee.

“I’m afraid [the companies] are just going to throw the key on the table and leave,” he said. “The companies that left need to be responsible for the cleanup.”

There has been a recent push to bring more regulatory powers to the Navajo Nation government. Last year, Navajo Nation Vice President Myron Lizer testified before members of the House Committee on Natural Resources and proposed the nation take over minor source permitting and enforcement authority from the EPA for air quality issues, which would be a first for a tribal government. The move would put more enforcement authority in the hands of local Navajo Nation staff instead of the federal EPA.

Holly wants Elk Petroleum Aneth to schedule regular meetings with community members to hear their concerns. Dee is advocating, among other things, for excess gas be injected back underground instead of being vented into the air or burned off in flares. And both would eventually like to see full remediation of the field.

But for Dee, it’s disappointing to realize the billions of dollars in revenue have been generated by fossil fuel extraction over the decades have yet to build the sustainable economic foundation he wants for Montezuma Creek.

“This place should be a town now, right? There should be a big supermarket, a used-car dealership, car washes, tire services, a hotel or motel ... a boating dock on the San Juan River, restaurants,” Dee said, naming services that don’t currently exist in the community.

He pointed to a giant propane tank behind the elementary school and explained it has to be trucked in from elsewhere. The natural gas from the area is put in pipelines for export beyond the Navajo Nation.

“It’s not right,” Dee said.

Zak Podmore is a Report for America corps member and writes about conflict and change in San Juan County for The Salt Lake Tribune. Your donation to match our RFA grant helps keep him writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.