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Leaders hope water compact will spur development

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FORT BELKNAP, Mont. - Tribal leaders on the Fort Belknap Indian Reservation hope a pending water compact with the state and federal governments will help fuel a variety of business projects, including a potential ethanol production plant.

Fort Belknap's Assiniboine and Gros Ventre tribes approved the compact in early 2001, and the Montana Legislature and Republican Gov. Judy Martz gave the agreement their blessing later that year. The complex and contentious talks with the state Reserved Water Rights Compact Commission, technically a branch of the Montana Department of Natural Resources and Conservation, began in 1986.

The compact, which was formally opposed by the upstream Blackfeet Tribe, quantifies federal reserved water rights for the tribes on and off the 652,000-acre reservation, sets allocation strategies and authorities, and provides a blueprint for the development of new impoundments and diversions.

Completion at the state level opened the door for federal negotiations over other related issues, including financial compensation for natural resource damages and losses, former Assistant Secretary of the Interior for Indian Affairs Thomas Fredericks, now a contract attorney for the Fort Belknap Indian Community, said at a recent tribal forum on economic development issues.

Part of the damages stem from the federal Bureau of Reclamation and the BIA taking land for nearby Dodson Reservoir without consulting the tribes, Fredericks said, and the government also entered into a treaty with Canada that gave away Fort Belknap water without compensation.

According to Fredericks, federal negotiators at this point maintain the damage claims only total about $100 million. But the Assiniboine and Gros Ventre tribes argue that compensation actually should be about $200 million. The argument, at least in part, is based on the number of irrigable acres that are potentially available for use on the reservation and what quantity of water from the Milk River Basin would be needed to adequately irrigate that ground.

The basic premise for determining federal reserved water rights was established in 1908, when the U.S. Supreme Court issued its ruling in Winters v. United States, a Fort Belknap Reservation water claim case. The high court said that when the president or Congress sets aside public domain lands for specific purposes such as Indian reservations, national forests, national parks and other designations, water is set aside and reserved to satisfy that federal purpose. The priority date for use was determined to be the date the reservation or other entity was created, and non-use of the water is not deemed to be reason for the right to be lost.

According to Fredericks, it may be determined that the Blackfeet Tribe holds a joint water right with their downstream Fort Belknap neighbors.

The Fort Belknap Indian Irrigation Project, now largely in disrepair, was constructed by the federal government to provide water to both Indian and non-Indian landowners in the area. But subsequent studies have shown that "we had more land than water," Fredericks explained.

While no one can predict when the federal settlement negotiations will be completed and when Congress would review the final agreement, tribal leaders are looking ahead at ways to use the pending financial windfall to strengthen their economy. Before being finalized, the compact must also survive a referendum vote by the Fort Belknap membership.

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A main focus right now is on whether an ethanol plant utilizing agricultural products grown in and around the reservation would be a proper use for at least some of the money. The current concept is for the plant to potentially be integrated with an enclosed stock-growing operation that creates enough manure to generate the complex.

Michael Utter a Bozeman-based consultant and co-founder of the nonprofit Rural Community Innovations group, told the gathering that this model can potentially trim 30 cents a gallon off traditional ethanol production costs, of the lowest rates in the country.

Utter said he has spent the past several years working with PRIME Technologies LLC, a Nebraska and South Dakota-based firm, on a similar project to add value to grain and cattle products outside Pierre, S.D. The proposed facility there is being designed to produce about 20 million gallons of ethanol a year, he explained, and would include a feedlot containing about 27,000 head of cattle. Since the operation would be self-contained and recycling nearly all of its byproducts, there will be no toxic water discharges and only a small quantity of emissions into the air, Utter said.

According to Utter, a consortium of interests got the project moving, but the Lower Brule Sioux Tribe, which is already active in agricultural ventures, is now looking at the possibility of owning and operating the plant. So far, between $5 and $8 million has been spent to get the $65 million project ready for construction. Once completed, he said, the plant could directly provide more than 60 jobs, contribute about $2.6 million a year in payroll alone, and annually use about 10 million bushels of locally grown grain. An additional 215 spin-off jobs could be created in the process.

"We believe this project has great potential to help the regional economy," Utter said, adding that this type plant could be a perfect fit for the Fort Belknap tribes.

"I think this can work," Fredericks added. "We're not building a widget and competing with Chicago. We're adding value to our existing agriculture."

The Fort Belknap council has thus far approved a resolution to look further into the ethanol plant proposal, and funding is now being sought for an independent feasibility study.

"There's no money on the table yet, and we're trying to get money on the table," Utter said in a later telephone interview. If the plant is deemed worthy of pursuit, he added, "The only way they're going to build this is with capital from the settlement."

In Montana, the state commission has also completed compacts with the Chippewa Cree Tribe of the Rocky Boy's Reservation, the federal Bureau of Land Management, the U.S. Fish and Wildlife Service, the National Park Service, the Northern Cheyenne Tribe, and the Assiniboine and Sioux Tribes of the Fort Peck Reservation.

State negotiations are ongoing with the Confederated Salish and Kootenai tribes, the Blackfeet tribe and with the federal government over water at the Charles M. Russell/UL Bend National Wildlife Refuge on the Upper Missouri River, the Bowdoin National Wildlife Refuge and the National Bison Range.