<\/p>\n
Bob Zahradnik became an employee of the Southern Ute Indian Tribe as the reservation was on the brink of an energy renaissance, which was the spark that contributed to the tribe\u2019s multi-billion dollar net worth.<\/p>\n
But after 28 years of facilitating great strides in energy resource development and investments for the tribe, the Southern Ute Growth Fund<\/a>\u2019s operating director is retiring.<\/p>\n In 1988, Zahradnik was a senior engineer for Exxon in New Orleans when he was told he would be transferred to \u201cthe worst place on earth:\u201d west Texas.<\/p>\n Instead, he left for Durango, where he had spent most of his free time when he worked in a Farmington oil field years ago.<\/p>\n Zahradnik planned to work as a freelance writer, pitching articles to Runner\u2019s World and outdoor magazines, but found that pursuit was neither consistent nor profitable.<\/p>\n But the tribe was hiring, and he became its first engineer.<\/p>\n \u201cIn the late 80s, it (the boom) was coming,\u201d he said. Reserves that had been harvested since the early 1950s were nearly depleted, but methane-rich coal seams presented new opportunities as new technology emerged.<\/p>\n With this knowledge, the tribe began to buy back leases, with no help from skeptical investors. Zahradnik developed a plan of action for Red Willow<\/a>, the tribe\u2019s oil and gas development company, which was established in 1992 with an initial investment of $8 million.<\/p>\n Zahradnik subsequently launched an initiative to assemble an extensive geologic database detailing resources throughout the reservation. It was the tribe\u2019s gateway to successful extraction.<\/p>\n \u201cThe key to success is information,\u201d Zahradnik said. \u201cWe had better information than our competitors. It allowed the tribe to negotiate knowledgeably with our competition.\u201d<\/p>\n Red Willow\u2019s inception laid the groundwork a plan to launch the Growth Fund in 2000. Separate from the permanent fund, which pays tribal government and tribal members, the Growth Fund is dedicated to investments in energy and real estate.<\/p>\n As the Growth Fund expanded its reach and wealth, late former tribal chairman Leonard Burch told The Wall Street Journal in 2003, \u201cOne day, we might wake up and say there\u2019s no income from oil and gas. People say, \u2018We need more money.\u2019 We say, \u2018No, you don\u2019t. You need to invest.\u2019\u201d<\/p>\n Today, Zahradnik said there remains a disconnect between tribal values and its business empire. In the same Wall Street Journal article, he claimed to be \u201ca capitalist working for a bunch of socialists.\u201d<\/p>\n \u201cThere are a lot of government-owned oil companies that are unsuccessful,\u201d Zahradnik told The Durango Herald, pointing to Petrobras, Brazil\u2019s petroleum giant scrutinized for corruption. \u201cThe key thing about the Growth Fund is that Tribal Council had the courage and confidence to set it up.\u201d<\/p>\n The Tribal Council approves Growth Fund business plans and projects, but does not micromanage day-to-day activity, Zahradnik said. The entities meet jointly twice monthly and the Growth Fund is audited annually.<\/p>\n The Growth Fund employs about 550 people, 10 percent of whom are tribal members and another 10 percent non-tribal local natives, such as Navajos. Seven entities report to Zahradnik \u2013 Red Willow, Aka Energy Group<\/a>, natural gas gathering and treating company Red Cedar<\/a>, the real estate branch, private equity, Southern Ute Alternative Energy<\/a> and the tribe\u2019s Department of Energy<\/a>.<\/p>\n But over the past two years as extractive resource development has been scaled back and oil and gas prices sank, \u201cmass amounts\u201d were cut from the capital budget. Zahradnik declined to provide specific figures about the fund\u2019s net worth, profits and losses.<\/p>\n Meanwhile, the tribe is in the early stages of developing a supplemental environmental impact statement to allow fracking on four shale formations on the reservation and up to 1,500 wells.<\/p>\n \u201cI don\u2019t know if there\u2019s going to be a fourth chapter,\u201d Zahradnik said, referring to another boom. \u201cThe key thing with the shale revolution: There is almost limitless gas in Ohio and Pennsylvania, and they\u2019re very close to the markets, so it\u2019s hard to compete with that.<\/p>\n But Zahradnik won\u2019t be around for that venture; he expects to leave his position before July. He\u2019s eyeing a future filled with trout, not extractive resources, with plans to spend retirement fishing.<\/p>\n \u201cBob Zahradnik has been absolutely essential to the success of the Southern Ute Indian Tribe, and has helped carve our place as a leader in Indian Country and a model for tribal economic development,\u201d Tribal Council Chairman Clement Frost said in a statement.<\/p>\n \u201cIt would be hard to overstate the impact of his contributions to the tribe and its membership. That the tribe is a cornerstone of the economy in Southwest Colorado is due in large part to Bob\u2019s leadership. The tribe is extremely grateful for his contributions and years of service.\u201d<\/p>\n