[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
 IMPACTS OF THE BUREAU OF LAND MANAGEMENT'S HYDRAULIC FRACTURING RULE 

                  ON INDIAN TRIBAL ENERGY DEVELOPMENT
=======================================================================


                           OVERSIGHT HEARING

                               before the

                       SUBCOMMITTEE ON INDIAN AND

                         ALASKA NATIVE AFFAIRS

                                 of the

                     COMMITTEE ON NATURAL RESOURCES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                        Thursday, April 19, 2012

                               __________

                           Serial No. 112-106

                               __________

       Printed for the use of the Committee on Natural Resources



         Available via the World Wide Web: http://www.fdsys.gov
                                   or
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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
             EDWARD J. MARKEY, MA, Ranking Democrat Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      Betty Sutton, OH
Scott R. Tipton, CO                  Niki Tsongas, MA
Paul A. Gosar, AZ                    Pedro R. Pierluisi, PR
Raul R. Labrador, ID                 John Garamendi, CA
Kristi L. Noem, SD                   Colleen W. Hanabusa, HI
Steve Southerland II, FL             Paul Tonko, NY
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Jon Runyan, NJ
Bill Johnson, OH
Mark Amodei, NV

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
                Jeffrey Duncan, Democrat Staff Director
                 David Watkins, Democrat Chief Counsel
                                 ------                                

            SUBCOMMITTEE ON INDIAN AND ALASKA NATIVE AFFAIRS

                        DON YOUNG, AK, Chairman
                 DAN BOREN, OK, Ranking Democrat Member

Tom McClintock, CA                   Dale E. Kildee, MI
Jeff Denham, CA                      Eni F.H. Faleomavaega, AS
Dan Benishek, MI                     Ben Ray Lujan, NM
Paul A. Gosar, AZ                    Colleen W. Hanabusa, HI
Raul R. Labrador, ID                 Edward J. Markey, MA, ex officio
Kristi L. Noem, SD
Doc Hastings, WA, ex officio

                                 ------                                


                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, April 19, 2012.........................     1

Statement of Members:
    Boren, Hon. Dan, a Representative in Congress from the State 
      of Oklahoma................................................     4
        Prepared statement of....................................     5
        ``Hydraulic Fracturing on Public Lands: Tribal 
          Consultation Sessions, Agenda'' submitted for the 
          record.................................................    14
    Lamborn, Hon. Doug, a Representative in Congress from the 
      State of Colorado..........................................    45
        Prepared statement of....................................    46
    Markey, Hon. Edward J., a Representative in Congress from the 
      Commonwealth of Massachusetts..............................     6
        Prepared statement of....................................     7
    Young, Hon. Don, the Representative in Congress for the State 
      of Alaska..................................................     1
        Prepared statement of....................................     3

Statement of Witnesses:
    Cuch, Hon. Irene C., Chairwoman, Ute Tribal Business Council, 
      Ute Indian Tribe of the Uintah and Ouray Reservation.......    28
        Prepared statement of....................................    30
    DeCoteau, Larry, District 4 Tribal Council Representative, 
      Turtle Mountain Band of Chippewa Indians...................    55
        Prepared statement of....................................    56
    Groen, Wilson, President and CEO, Navajo Nation Oil and Gas 
      Company....................................................    63
        Prepared statement of....................................    64
    Hall, Hon. Tex G., Chairman, Mandan, Hidatsa and Arikara 
      Nation of the Fort Berthold Reservation....................    20
        Prepared statement of....................................    22
    Martel, Hon. Wesley, Co-Chairman, Eastern Shoshone Tribe, 
      Wild River Reservation.....................................    51
        Prepared statement of....................................    53
    Olguin, Hon. James M. ``Mike,'' Vice Chair, Southern Ute 
      Indian Tribal Council, Southern Ute Indian Tribe...........    40
        Prepared statement of....................................    42
    Russell, Hon. Scott, Vice President, Rocky Mountain Region, 
      National Congress of American Indians......................    57
        Prepared statement of....................................    59
        National Congress of American Indians Resolution #ECWS-
          12-005 submitted for the record........................    61
    Show, Hon. T.J., Chairman, Blackfeet Tribal Business Council, 
      Blackfeet Nation...........................................    35
        Prepared statement of....................................    36
    Spisak, Tim, Deputy Assistant Director, Minerals and Realty 
      Management, Bureau of Land Management, U.S. Department of 
      the Interior...............................................     8
        Prepared statement of....................................    10




  OVERSIGHT HEARING ON THE IMPACTS OF THE BUREAU OF LAND MANAGEMENT'S 
     HYDRAULIC FRACTURING RULE ON INDIAN TRIBAL ENERGY DEVELOPMENT.

                              ----------                              


                        Thursday, April 19, 2012

                     U.S. House of Representatives

            Subcommittee on Indian and Alaska Native Affairs

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to notice, at 11:04 a.m., in 
Room 1324, Longworth House Office Building, Hon. Don Young 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Young, Boren, Kildee, and Markey.
    Also Present: Representative Lamborn.
    Mr. Young. The Committee will come to order. The Chairman 
notes the presence of a quorum, which under Rule 3 is two 
Members. The Subcommittee on Indian and Alaska Native Affairs 
is meeting today to hear testimony on ``The Impacts of the 
Bureau of Land Management's Hydraulic Fracturing Rule on Indian 
Tribal Energy Development.''
    Under Committee Rule 4(f), opening statements are limited 
to myself and the Ranking Member of the Subcommittee, and we 
hope to hear from the witnesses quickly.
    However, I ask unanimous consent to include any other 
Members' opening statements that are submitted to the Clerk by 
close of business today.
    Hearing no objection, so ordered.
    Mr. Young. I also ask unanimous consent that the gentleman 
from Colorado, Mr. Lamborn, be allowed to join us on the dais 
when he shows up and participate in the hearing.
    Without any objection, so ordered.

 STATEMENT OF THE HON. DON YOUNG, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF ALASKA

    Mr. Young. Today's hearing was scheduled in response to 
violations of the Department of the Interior's tribal 
consultation policy instituted by Secretary Ken Salazar.
    Pursuant to this policy, an agency within the Department 
must undertake comprehensive and meaningful consultation with 
tribal leaders whenever the agency proposes a rule or takes any 
action that affects the lands, rights or interests of the 
tribes they represent.
    The policy was not scribbled on the back of an envelope. It 
was not a suggestion or an aspiration.
    It is a formal policy established by the Secretarial Order 
following a lengthy ``consultation on consultation,'' which was 
launched by President Obama in 2009 when he issued the White 
House Memorandum on Tribal Consultation. It expands on the 
Executive Order issued in 2000 by President Bill Clinton.
    To develop the trial consultation policy, more than 200 
Federal officials participated in regional consultation 
sessions in seven cities with 300 tribal representatives.
    Based on these extensive meetings, a draft consultation 
policy was given to the tribes for their review and comment in 
January 2011.
    At that time, Secretary Salazar said ``We must have a 
policy that embodies the best consultation practices available, 
responds to the needs of tribal leaders to be more engaged in 
policy development and promotes more responsible decision 
making on issues affecting American Indians and Alaskan 
Natives.''
    When the final policy was installed on December 1, 2011, 
the Secretary noted that ``The new framework institutionalizes 
meaningful consultation so that tribal leaders are at the table 
and engaged when it comes to the matters that affect them.''
    Indeed, the significance of the consultation policy was 
such that it was a central feature of the third White House 
Trial Nations Conference, where President Obama remarked ``You 
have an Administration that understands the challenges that you 
face, and most importantly, you have a President that's got 
your back.''
    Unfortunately, in light of the testimony I reviewed prior 
to this hearing, I have to say that while the Department of the 
Interior earns an ``A'' for promises to consult with tribes, it 
gets an ``F'' for promises actually kept.
    For while tribes were told they would have a seat at the 
table with Federal agencies, the Bureau of Land Management 
excluded them from the process of drafting a rule with a 
potentially devastating impact on their sovereignty and 
economies.
    Tribes were not afforded an opportunity to provide input or 
even time to analyze the draft rule. In fact, it is my 
understanding that this rule may be at OMB today for a final 
review, again, without tribal leaders at the table.
    The draft rule concerns a common well stimulation technique 
used by the oil and gas industry known as ``hydraulic 
fracturing.''
    The rule will impose duplicative paperwork, red tape, 
additional delays and costs beyond what tribes and oil and gas 
operators already endure when Indian land is developed for oil 
and gas production.
    It is a rule that wrongly treats lands held in Trust for 
the exclusive use and benefit of Indians as public land.
    This is not a minor issue. It is a violation of tribal 
sovereignty. In terms of dollars alone, the rule will be 
dramatic because the fossil fuel industry in Indian Country 
cold rival that of Indian gaming.
    A number of Indian reservations suffer jobless rates, as we 
all know, from 50 to 80 percent. Oil and gas leasing can make a 
positive dent in these horrible numbers.
    New jobs, especially year round, high wage jobs available 
in the oil and gas industry, can and will have a dramatic 
effect on reducing unemployment and poverty on Indian 
reservations.
    If the BLM rule goes in effect, kiss those tribal jobs 
goodbye. Many reservations are checkerboarded, so oil and gas 
operators can move a few feet across the reservation boundary 
line to private and state lands where the rules do not apply, 
thanks to the Department of the Interior, while non-Indian land 
owners will prosper, the tribes will lose, again.
    This would be nothing less than another breach of the 
United States' Trust responsibility to Indians.
    I look forward to our witnesses today, and I can say one 
thing, this is what I have been trying to do in this Committee 
with the Ranking Member, trying to straighten out this 
gobbledy-gook, saying this is self determination, and have our 
country put rules in that do not affect other lands.
    This is wrong, it is inappropriate, and we hope to solve 
this problem.
    With that, I recognize the Ranking Member for five minutes 
for any statement he may have.
    [The prepared statement of Mr. Young follows:]

            Statement of The Honorable Don Young, Chairman, 
            Subcommittee on Indian and Alaska Native Affairs

    Today's hearing was scheduled in response to a violation of the 
Department of the Interior's tribal consultation policy instituted by 
Secretary Ken Salazar.
    Pursuant to this policy, an agency within the Department must 
undertake comprehensive, meaningful consultation with tribal leaders 
whenever the agency proposes a rule or takes any action that affects 
the lands, rights, or interests of the tribes they represent.
    The policy was not scribbled on the back of an envelope. It is not 
a suggestion or an aspiration.
    It is a formal policy established by Secretarial Order following a 
lengthy ``consultation on consultation,'' which was launched after 
President Obama in 2009 issued a White House Memorandum on Tribal 
Consultation. It expands on an Executive Order issued in 2000 by 
President Bill Clinton.
    To develop the tribal consultation policy, more than 200 federal 
officials participated in regional consultation sessions in seven 
cities with 300 tribal representatives. Based on these extensive 
meetings, a draft consultation policy was given to tribes for their 
review and comment in January 2011. At the time, Secretary Salazar 
said, ``We must have a policy that embodies the best consultation 
practices available, responds to the needs of Tribal leaders to be more 
engaged in policy development and promotes more responsible decision-
making on issues affecting American Indians and Alaska Natives.''
    When the final policy was installed on December 1, 2011, the 
Secretary noted that, ``The new framework institutionalizes meaningful 
consultation so that tribal leaders are at the table and engaged when 
it comes to the matters that affect them.''
    Indeed, the significance of the consultation policy was such that 
it was a central feature of the third White House Tribal Nations 
Conference, where President Obama remarked, ``You have an 
administration that understands the challenges that you face and most 
importantly you have a president that's got your back.''
    Unfortunately, in light of the testimony I reviewed prior to this 
hearing, I have to say that while the Department of the Interior earns 
an ``A'' for its promises to consult with tribes, it gets an ``F'' for 
promises actually kept.
    For while tribes were told they would have a seat at the table with 
federal agencies, the Bureau of Land Management excluded them from the 
process of drafting a rule with a potentially devastating impact on 
their sovereignty, and their economies. Tribes were not afforded an 
opportunity to provide input on, let alone the time to analyze, the 
draft rule. In fact, it is my understanding this rule may be at OMB 
today for a final review--again, without tribal leaders at the table.
    The draft rule concerns a common well stimulation technique used by 
the oil and gas industry known as hydraulic fracturing. The rule will 
impose duplicative paperwork, red tape, and additional delays and costs 
beyond what tribes and oil and gas operators already endure when Indian 
land is developed for oil and gas production. It is a rule that wrongly 
treats land held in trust for the exclusive use and benefit of Indians 
as public land.
    This is not a minor issue. It is a violation of tribal sovereignty. 
In terms of dollars alone, the rule will be dramatic because the fossil 
fuel industry in Indian Country could rival that of Indian gaming.
    A number of Indian reservations suffer jobless rates ranging from 
50 to 80 percent. Oil and gas leasing can make a positive dent in these 
horrible numbers. New jobs--especially year-round, high wage jobs 
available in the oil and gas industry--can and will have a dramatic 
effect on reducing unemployment and poverty on Indian reservations.
    But if the BLM rule goes into effect, kiss these tribal jobs good-
bye. Many reservations are checkerboarded, so oil and gas operators can 
move a few feet across the reservation boundary line to private and 
state lands where the rule will not apply. Thanks to the Department of 
the Interior, while non-Indian landowners will prosper, the tribes will 
lose.
    This would be nothing less than another breach of the United 
States' trust responsibility to Indians.
    I look forward to hearing the testimony of tribal leaders today to 
discuss the impact of the draft rule, and what steps we can take to 
address it.
                                 ______
                                 

 STATEMENT OF THE HON. DAN BOREN, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF OKLAHOMA

    Mr. Boren. Thank you, Mr. Chairman. First, let me thank our 
witnesses that are here today to discuss the topic of hydraulic 
fracturing and the Bureau of Land Management's consultation 
process.
    I look forward to hearing all of their testimonies.
    There is no doubt that the United States is in great need 
of natural gas reserves that are spread across this nation. It 
is a cleaner, cheaper fuel source that can fulfill our energy 
needs for the next 100 years and beyond.
    Advances in hydraulic fracturing technologies have opened 
up development capabilities while minimizing the impact on 
surrounding lands.
    This technology has spread to our tribal neighbors, 
enabling them to fight high levels of unemployment and poverty 
with energy development.
    Recently, the Bureau of Land Management held a series of 
meetings with tribes about hydraulic fracturing and possible 
regulation.
    Chairman Young and I wrote a letter dated February 8 that 
expressed our concern over the process and requested more 
information.
    As we stated, I strongly believe that placing additional 
undue barriers for tribal energy development is unwise, it is 
also counterproductive.
    Because of the nature of the Government to Government 
relationship, we must be especially cautious to consider the 
tribal land rights in all decision making.
    It is our duty to provide assistance in sharing best 
practices, but we must be careful about impeding on sovereign 
rights.
    After reviewing the documents provided by the BLM per the 
Chairman and my request, I became deeply concerned that tribes 
had little to no input in the regulatory process.
    As stated in Secretary Salazar's Executive Order No. 3317, 
and I quote, ``Consultation is a process that aims to create 
effective collaboration with Indian tribes and to inform 
Federal decision makers.''
    We are here today to ensure that the Government has created 
effective collaboration. If, as I suspect, the BLM has not made 
the effort to involve tribes to the extent necessary, we must 
open a dialogue today between tribes and the Administration to 
begin a cooperative review of hydraulic fracturing before any 
rulemaking proceeds.
    From the written testimonies, it is clear that no two 
tribes have had a similar experience when it comes to energy 
development. Thus, we must ensure that the consultation process 
is extensive enough to address the individual needs before 
moving forward.
    Again, I look forward to learning more about the BLM's 
process from both the Department's perspective and those of the 
tribes.
    Again, I would like to thank our witnesses, and I look 
forward to hearing from each and every one of you on this 
important issue.
    [The prepared statement of Mr. Boren follows:]

         Statement of The Honorable Dan Boren, Ranking Member, 
            Subcommittee on Indian and Alaska Native Affairs

    Thank you Mr. Chairman. First let me thank our witnesses that are 
here today to discuss the topic of hydraulic fracturing and the Bureau 
of Land Management's consultation process. I look forward to hearing 
your testimonies.
    There is no doubt that the United States is in great need of the 
natural gas reserves that are spread across the nation. It is a 
cleaner, cheaper fuel source that can fulfill our energy needs for the 
next hundred years and beyond.
    Advances in hydraulic fracturing technologies have opened up 
development capabilities while minimizing the impact on surrounding 
lands. This technology has spread to our tribal neighbors, enabling 
them to fight high levels of unemployment and poverty with energy 
development.
    Recently, the Bureau of Land Management held a series of meetings 
with tribes about hydraulic fracturing and possible regulation. 
Chairman Young and I wrote a letter dated February 8th that expressed 
our concern over the process and requested more information. As we 
stated, I strongly believe that placing additional undue barriers for 
tribal energy development is unwise and counterproductive.
    Because of the nature of the government to government relationship, 
we must be especially cautious to consider the tribal land rights in 
all decision making. It is our duty to provide assistance in sharing 
best practices but we must be careful about impeding on sovereign 
rights.
    After reviewing the documents provided by the BLM per the Chairman 
and my request, I became deeply concerned that tribes had little to no 
input in the regulatory process. As stated in Secretary Salazar's 
Executive Order Number 3317, ``Consultation is a process that aims to 
create effective collaboration with Indian tribes and to inform Federal 
decision-makers.''
    We are here today to ensure that tribes believe the government has 
created effective collaboration. If, as I suspect, the BLM has not made 
the effort to involve tribes to the extent necessary, we must open a 
dialogue today between tribes and the administration to begin a 
cooperative review of hydraulic fracturing before any rulemaking 
proceeds.
    From the written testimonies, it is clear that no two tribes have 
had a similar experience when it comes to energy development. Thus, we 
must ensure the consultation process is extensive enough to address the 
individual needs before moving forward.
    I look forward to learning more about the BLM's process from both 
the Department's perspective and those of the tribes. Again, I'd like 
to thank our witnesses here today and I look forward to learning more 
about this important issue. I yield back.
                                 ______
                                 
    Mr. Young. I thank my Ranking Member and thank him for 
being on time today. I deeply appreciate that.
    [Laughter.]
    Mr. Young. Anyway, the first panel we have now is Tim 
Spisak, Deputy Assistant Director----
    Mr. Markey. Would it be possible for me to make an opening 
statement?
    Mr. Young. No. I am kidding. Go ahead.

   STATEMENT OF THE HON. EDWARD MARKEY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. Thank you, Mr. Chairman, very much. I would 
like to welcome the tribal leaders joining us today.
    Advances in horizontal drilling and hydraulic fracturing 
are dramatically reshaping America's energy equation, shale 
formations that once seemed impossible to tap and now yielding 
oil and natural gas, helping to reduce imports and creating a 
competitive advantage for U.S. manufacturing and chemical 
industries.
    Some of these newly accessible shale formations are below 
tribal lands, including parts of the enormous Bakken shale in 
North Dakota and Montana.
    Oil and gas development is already benefitting parts of 
Indian Country, and development of tribal shale resources will 
provide further economic opportunities.
    The development of these resources does have risks though. 
Hydraulic fracturing requires large amounts of water, a serious 
challenge in arid parts of the country.
    The process can create air and water pollution that puts 
drinking water and public health at risk. In fact, today, we 
will hear from Shoshone Co-Chairman Wes Martel about the 
contamination of the groundwater supply for the Town of 
Pavilion, Wyoming.
    The EPA has detected benzine, methane, and synthetic 
chemicals consistent with hydraulic fracturing fluids in the 
town's aquifer.
    Although the investigation is still ongoing, the loss of 
Pavilion's drinking water supply should raise concern for all.
    As we can see from Pavilion's experience and from the 
report that Congressman Holt and I issued documenting drilling 
violations on Federal lands, the status quo is not working.
    We found that over a 13 year period, starting in the 1990s, 
335 oil and gas companies committed more than 2,000 violations 
that endangered health, safety and environment.
    For all of these violations, they were fined just $273,000. 
That is an average of only $135 per violation.
    Companies were drilling without adequate cement to protect 
water sources, without blow out preventers that would halt 
catastrophic spills, and in at least one case, a company dumped 
fluids directly from the rig into a nearby river.
    Rules that govern oil and natural gas production on public 
and tribal lands have not been updated since 1982.
    Furthermore, hydraulic fracturing was exempted from key 
parts of seven major Federal environmental laws designed to 
protect public health, air and water by the oil companies back 
in the 2005 Energy Policy Act.
    Even as that legislation tried to promote tribal energy 
self determination through the Indian Energy Title, it 
undermined the protections from pollution from hydraulic 
fracturing.
    To ensure adequate protections are in place for hydraulic 
fracturing, which now occurs on 90 percent of wells drilled on 
public and tribal land, the Bureau of Land Management is 
working to update these rules.
    Examining the current best practices, BLM is striving to 
ensure that hydraulic fracturing can be done safely and 
economically.
    Given its Treaty obligations and Trust responsibility, the 
United States must consult with tribes on a Government to 
Government basis when developing Federal policies with tribal 
implications.
    President Obama has underscored the importance of tribal 
consultation. Tribes must be at the table for any new 
regulatory proposal that affects their lands, including any 
plans BLM is proposing for hydraulic fracturing operations.
    At the same time, Federal regulations of energy and 
resource development on Indian lands is tied closely with the 
Federal Trust responsibility.
    I know the tribes have the best interest of their people in 
mind when engaging in energy development on their lands.
    The Federal Government's Trust responsibility also requires 
that we ensure basic protections are in place in order to meet 
our obligations.
    I hope today's hearing can foster the cooperation between 
tribes and the Federal Government that will lead to energy 
development that supports Indian economic development and 
protects the health of tribal people and their lands.
    Mr. Chairman, I thank you for the courtesy of allowing me 
to make an opening statement, and I yield back.
    [The prepared statement of Mr. Markey follows:]

     Statement of The Honorable Edward J. Markey, Ranking Member, 
                     Committee on Natural Resources

    Thank you, Mr. Chairman. I'd like to welcome the tribal leaders 
joining us today.
    Advances in horizontal drilling and hydraulic fracturing are 
dramatically reshaping America's energy equation. Shale formations that 
once seemed impossible to tap are now yielding oil and natural gas, 
helping to reduce imports and creating a competitive advantage for the 
U.S. manufacturing and chemical industries.
    Some of these newly accessible shale formations are below tribal 
lands, including parts of the enormous Bakken Shale in North Dakota and 
Montana. Oil and gas development is already benefiting parts of Indian 
country, and development of tribal shale resources will provide further 
economic opportunities.
    The development of these resources does have risks though. 
Hydraulic fracturing requires large amounts of water, a serious 
challenge in arid parts of the country. The process can create air and 
water pollution that puts drinking water and public health at risk. In 
fact today we will hear from Eastern Shoshone Co-Chairman Wes Martel 
about the contamination of the groundwater supply for Wind River 
Reservation town of Pavillion, Wyoming. The EPA has detected benzene, 
methane and synthetic chemicals consistent with hydraulic fracturing 
fluids in the town's aquifer. Although the investigation is still 
ongoing, the loss of Pavillion's drinking water supply should raise 
concerns for all.
    As we can see from Pavillion's experience and from the report that 
Congressman Holt and I issued documenting drilling violations on 
federal lands, the status quo is not working. We found that over a 13-
year period starting in the 1990s, 335 oil and gas companies committed 
more than 2,000 violations that endangered health, safety and the 
environment. For all of these violations they were fined just $273,875. 
That's an average of only $135 per violation. Companies were drilling 
without adequate cement to protect water sources, without blow-out 
preventers that would halt catastrophic spills and, in at least one 
case, a company dumped fluids directly from the rig into a nearby 
river.
    Rules that govern oil and natural gas production on public and 
tribal lands have not been updated since 1982. Furthermore, hydraulic 
fracturing was exempted from key parts of 7 major federal environmental 
laws designed to protect public health, air and water by the oil 
companies' Republican allies in the 2005 Energy Policy Act. Even as 
that legislation tried to promote Tribal energy self-determination 
through the Indian energy title, it undermined protections for all 
Americans from pollution from hydraulic fracturing. To ensure adequate 
protections are in place for hydraulic fracturing, which now occurs on 
90 percent of wells drilled on public and Tribal land, the Bureau of 
Land Management is working to update their rules. Examining the current 
best practices, BLM is striving to ensure that hydraulic fracturing can 
be done safely and economically.
    Given its treaty obligations and trust responsibility, the United 
States must consult with tribes on a government-to-government basis 
when developing federal policies with tribal implications. President 
Obama has underscored the importance of tribal consultation. Tribes 
must be at the table for any new regulatory proposal that affects their 
lands, including any plans BLM is proposing for hydraulic fracturing 
operations.
    But at the same time, federal regulation of energy and resource 
development on Indian lands is tied closely with the federal trust 
responsibility. I know that tribes have the best interests of their 
people in mind when engaging in energy development on their lands. The 
federal government's trust responsibility also requires that we ensure 
basic protections are in place in order to meet our obligations. I hope 
today's hearing can foster the cooperation between tribes and the 
federal government that will lead to energy development that supports 
Indian economic development and protects the health of tribal people 
and their lands.
    I look forward to the testimony of our witnesses today and I yield 
back.
                                 ______
                                 
    Mr. Young. The gentleman is welcome.
    At this time, we will draw our first witness, Mr. Tim 
Spisak, Deputy Assistant Director, Minerals and Realty 
Management, Bureau of Land Management.
    You are up.

 STATEMENT OF TIM SPISAK, DEPUTY ASSISTANT DIRECTOR, MINERALS 
        AND REALTY MANAGEMENT, BUREAU OF LAND MANAGEMENT

    Mr. Spisak. Mr. Chairman and members of the Subcommittee, 
thank you for the opportunity to discuss the Bureau of Land 
Management's development of hydraulic fracturing rules and 
their application on Federal, tribal, and individual Indian 
Trust lands.
    The BLM administers over 245 million surface acres and 
approximately 700 million acres of onshore Federal mineral 
estates.
    Together with the Bureau of Indian Affairs, we also provide 
permitting and oversight services on approximately 56 million 
acres of Indian Trust minerals.
    The development of the energy resources from BLM managed 
lands will continue to play a critical role in meeting the 
nation's energy needs and fueling our economy.
    In Fiscal Year 2011, onshore Federal oil and gas royalties 
exceeded $2.7 billion, approximately half of which was paid 
directly to the states in which the production occurred.
    Tribal oil and gas royalties exceeded $400 million with 100 
percent of those revenues paid to the tribes and individual 
Indians owning the land.
    Oil and gas production from shale formations scattered 
across the United States has grown considerably and is expected 
to continue in the coming decades.
    Factors contributing to this success include technological 
advances in hydraulic fracturing when combined with horizontal 
drilling.
    This rise in production and advances in technology are 
dramatically evident on the Fort Berthold Indian Reservation, 
for example, which lies in the heart of the Bakken oil and gas 
region in North Dakota.
    At Fort Berthold, applications for permits to drill have 
increased from zero in 2007 to 175 last year.
    Royalty payments from production from Trust minerals has 
increased from $4.5 million in 2009 to approximately $117 
million this last year.
    At Fort Berthold earlier this month, Secretary Salazar 
unveiled initiatives to expedite safe and responsible leasing 
and development of domestic energy resources on public and 
Indian Trust lands.
    As part of the BLM's ongoing efforts to ensure efficient 
processing of oil and gas permit applications on both Indian 
Trust and public lands, the agency will implement a new 
automated tracking system across the Bureau that could reduce 
the review time for permit applications by two-thirds.
    This initiative comes as part of the Department's efforts 
to continually meet increased demands for oil and gas 
development on public and Indian lands across the country.
    The BLM estimates that approximately 90 percent of the 
wells drilled on public and Indian lands are stimulated by 
hydraulic fracturing techniques.
    The increasing use of hydraulic fracturing has raised 
concerns about the potential impacts on water availability and 
quality, particularly with respect to the chemical composition 
of fracturing fluids in the methods used.
    The BLM recognizes that some but not all states have taken 
action to address hydraulic fracturing in their own 
regulations.
    The BLM's proposed rulemaking is intended to provide 
consistent protection of the important Federal and Indian 
resource values that may be affected by the use of hydraulic 
fracturing.
    The BLM's draft rule contains three key provisions; 
disclosure of the chemicals used in hydraulic fracturing 
operations with appropriate protections for trade secrets; 
assurance of well bore integrity to minimize the risk of 
fracturing fluids leaking into nearby aquifers; and water 
management requirements to apply to the fluids that flow back 
to the surface directly after hydraulic fracturing has taken 
place.
    The development of this hydraulic fracturing rule will 
include tribal consultation of the Department's consultation 
policy. This policy emphasizes trust, respect, and shared 
responsibility by providing tribal governments an expanded role 
to inform the Federal policy that impacts Indian lands.
    In January 2012, the BLM conducted a series of meetings in 
the West where there was significant development of Indian and 
oil and gas resources.
    Nearly 180 tribal leaders were invited to attend these 
meetings held in Tulsa, Billings, Montana, Salt Lake City, and 
Farmington, New Mexico.
    As the agency continues to consult with tribal leaders 
throughout this rulemaking process, responses from these 
representatives will inform our actions and define the scope of 
acceptable hydraulic fracturing rule options.
    Mr. Chairman, thank you for the opportunity to testify. I 
would be happy to answer any questions that you might have at 
this time.
    [The prepared statement of Mr. Spisak follows:]

Statement of Tim Spisak, Deputy Assistant Director, Minerals and Realty 
 Management, Bureau of Land Management, U.S. Department of the Interior

    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to discuss the Bureau of Land Management's (BLM) 
development of hydraulic fracturing rules and their application on 
Federal, Tribal, and individual Indian Trust lands.
    The BLM, an agency of the U.S. Department of the Interior 
(Department), is responsible for protecting the resources and managing 
the uses of our nation's public lands, which are located primarily in 
12 western states, including Alaska. The BLM administers more land--
over 245 million surface acres--than any other Federal agency. The BLM 
manages approximately 700 million acres of onshore Federal mineral 
estate throughout the Nation, including the subsurface estate overlain 
by properties of other Federal agencies such as the Department of 
Defense and the U.S. Forest Service. The BLM, together with the Bureau 
of Indian Affairs (BIA), also provides permitting and oversight 
services under the Indian Mineral Leasing Act of 1938 on approximately 
56 million acres of land held in trust by the federal government on 
behalf of tribes and individual Indian owners. The BLM works closely 
with surface management agencies, including the BIA and Tribal 
governments, in the management of the subsurface mineral estate. We are 
mindful of the agency's responsibility for stewardship of public land 
resources and the public and Indian trust oil and gas assets that 
generate substantial revenue for the U.S. Treasury, the states, and 
Tribal governments and individuals.
Background
    The Obama administration is committed to promoting safe, 
responsible, and environmentally sustainable domestic oil and gas 
production as part of a broad energy strategy that will protect 
consumers, human health, and the environment, and reduce our dependence 
on foreign oil. Secretary Salazar has made clear that as we move toward 
the new energy frontier, the development of conventional energy 
resources from BLM-managed lands will continue to play a critical role 
in meeting the Nation's energy needs and fueling our Nation's economy. 
In Fiscal Year (FY) 2011, onshore Federal oil and gas royalties 
exceeded $2.7 billion, approximately half of which were paid directly 
to states in which the development occurred. In FY 2011, Tribal oil and 
gas royalties exceeded $400 million with 100% of those revenues paid to 
the tribes and individual Indians owners of the land on which the 
development occurred.
    The BLM is working diligently to fulfill its part in securing 
America's energy future. Combined onshore oil production from public 
and Indian lands has increased every year since 2008. Production of oil 
from Indian lands has increased by more than 95% since 2008. Production 
of gas from public and Indian lands has remained nearly stable despite 
increasing industry interest in development of natural gas on private 
lands in the eastern United States. In 2011, conventional energy 
development from public and Indian lands produced 14 percent of the 
Nation's natural gas, and 6 percent of its domestically-produced oil.
    Gas production from shale formations scattered across the United 
States has grown from a negligible amount just a few years ago to 
represent a significant share of the total U.S. natural gas production, 
and this share is expected to increase further in the coming decades. 
There has also been a significant and growing increase in oil 
production from shale formations. Significant factors contributing to 
these increases include technological advances in hydraulic fracturing 
and horizontal drilling.
    One example of this rise in production and advances in technology 
is dramatically evident on the Fort Berthold Indian Reservation which 
lies in the heart of the Bakken oil and gas region in North Dakota. At 
Fort Berthold, applications for permit to drill have increased from 
zero in 2007 to 175 in 2011. Royalty payments from production from 
trust minerals have increased from $4.5 million in 2009 to 
approximately $117 million last year. The BLM works closely with the 
BIA to help ensure that drilling and oil and gas production activities 
on Fort Berthold are permitted efficiently and conducted in a safe and 
responsible manner. BIA completes NEPA compliance, cultural and 
biological surveys, and development of surface mitigation measures.
    Notably, on April 3, 2012, at Fort Berthold, Secretary Salazar 
unveiled initiatives to expedite safe and responsible leasing and 
development of domestic energy resources on U.S. public and Indian 
trust lands. As part of the BLM's ongoing efforts to ensure efficient 
processing of oil and gas permit applications on both Indian trust and 
public lands, the agency will implement a new automated tracking system 
across the Bureau that could reduce the review period for drilling 
permits by up to two-thirds. The new system will track permit 
applications through the entire review process, quickly flagging 
missing or incomplete information, and greatly reducing the back-and-
forth between the BLM and industry applicants, which is currently 
needed to ensure that applications processed by the BLM are complete. 
This initiative comes as part of the Department's efforts to 
continually meet increased demands for oil and gas development on 
public and Indian lands across the country.
Hydraulic Fracturing Technology
    Recent technology and operational improvements in extracting 
hydrocarbon resources, particularly shale gas, have increased oil and 
gas drilling activities nationally and led to significantly higher 
natural gas production estimates for the coming decades. Hydraulic 
Fracturing, or ``fracking,'' is a common technique that has been used 
in oil and gas production operations for decades. Fracking involves the 
injection of fluid under high pressure to create or enlarge fractures 
in the rocks containing oil and gas so that the fluids can flow more 
freely into the well bore and thus increase production. However, the 
increasing use of hydraulic fracturing has raised concerns about the 
potential impacts on water availability and quality, including concerns 
about the chemical composition of fluids used in fracturing.
    The number of wells on BLM-managed public lands and on Indian 
lands, as well as on private lands, that are stimulated by hydraulic 
fracturing techniques has increased steadily in recent years as oil and 
gas producers are developing geologic formations that are less 
permeable than those drilled in the past. The BLM estimates that 
approximately 90 percent of the wells drilled on public and Indian 
lands are stimulated by hydraulic fracturing techniques.
Hydraulic Fracturing Rulemaking
    In November 2010, Secretary Salazar hosted a forum, including major 
stakeholders, on hydraulic fracturing on public and Indian lands to 
examine best practices to ensure that natural gas on public and Indian 
lands is developed in a safe and environmentally sustainable manner. 
Subsequently, the BLM hosted a series of regional public meetings in 
North Dakota, Arkansas, and Colorado--states that have experienced 
significant increases in oil and natural gas development on Federal and 
Indian lands--to discuss the use of hydraulic fracturing on the 
Nation's public lands.
    During the Secretary's forum and the BLM's public meetings, members 
of the public expressed a strong interest in obtaining more information 
about hydraulic fracturing operations being conducted on public and 
Tribal lands. Questions about the composition of the fluids that are 
being used were highlighted frequently as were concerns about these 
fluids potentially leaking into aquifers or causing spills on the 
surface. Additionally, the BLM recognized through review of its rules 
that existing regulations on well stimulation operations on public and 
Indian lands (last updated in 1982) needed to be updated to reflect 
significant technological advances in hydraulic fracturing in recent 
years and the tremendous increase in its use.
    The BLM recognizes that some, but not all, states have recently 
taken action to address hydraulic fracturing in their own regulations. 
The BLM's proposed rulemaking is not intended to duplicate various 
state or any applicable Federal requirements, but rather to provide 
consistent protection of the important Federal and Indian resource 
values that may be affected by the use of hydraulic fracturing. 
Although the proposed rule is currently under OMB review and is subject 
to an ongoing deliberative interagency review process, the BLM expects 
to propose a rule with three key provisions:
          Disclosure of the chemicals used in hydraulic 
        fracturing operations, with appropriate protections for trade 
        secrets. The agency is evaluating how best to provide this 
        information to the public and has been in touch with 
        organizations, including the Ground Water Protection Council 
        and the Interstate Oil and Gas Compact Commission, that run the 
        website FracFocus.org.
          Assurance of wellbore integrity. The BLM is looking 
        at wellbore integrity as a means to minimize the risk of 
        fracturing fluids or other contaminants leaking into nearby 
        aquifers.
          Water management requirements that would apply to the 
        fluids that flow back to the surface after hydraulic fracturing 
        has taken place. This is frequently referred to as 
        ``flowback.''
Tribal Outreach and Next Steps for the Consultation Process
    In January 2012, the BLM began initial outreach, communication, and 
information-sharing with Tribal communities on the proposed rule. The 
agency conducted a series of meetings in the oil and gas producing 
regions of the West where there is significant development of Indian 
oil and gas resources. Nearly 180 Tribal leaders from all Tribes that 
are currently receiving oil and gas royalties and all Tribes that may 
have had ancestral surface use were invited to attend these meetings, 
which were held in Tulsa, Oklahoma; Billings, Montana; Salt Lake City, 
Utah; and Farmington, New Mexico.
    In these initial meetings Tribal representatives were given a draft 
of the hydraulic fracturing rule to serve as a basis for discussion and 
substantive dialogue about the hydraulic fracturing rulemaking process. 
The BLM asked the Tribal leaders for their views on how a hydraulic 
fracturing rule proposal might affect Indian activities, practices, or 
beliefs if it were to be applied to particular locations on Indian and 
public lands. A variety of issues were discussed, including 
applicability of Tribal laws, validating water sources, Inspection and 
Enforcement, wellbore integrity, and water management, among others.
    The development of this hydraulic fracturing rule will include 
proactive Tribal consultation under the Department's newly-formalized 
Tribal Consultation Policy. This policy, announced on December 1, 2011, 
emphasizes trust, respect and shared responsibility in providing Tribal 
governments an expanded role in informing Federal policy that impacts 
Indian lands. Under this policy, consultation is an open, transparent, 
and deliberative process.
    The agency will continue to consult with Tribal leaders throughout 
the rulemaking process. Responses from Tribal representatives will 
inform the agency's actions in defining the scope of acceptable 
hydraulic fracturing rule options.
Conclusion
    The BLM will continue to encourage responsible energy development 
on public and Indian trust lands and ensure a fair return for the use 
of these resources. Following internal Administration review and 
continuing Tribal consultations, a draft rule incorporating the 
feedback received will be released to the public as part of a formal 
comment period. At that time, the BLM will be pleased to receive 
detailed feedback from industry, state, local, and Tribal governments, 
individual citizens and all other interested parties. Consultation with 
Tribes will continue throughout this process. I am glad to answer any 
questions you may have.
                                 ______
                                 
    Mr. Young. Thank you, sir. Mr. Boren?
    Mr. Boren. Thank you, Mr. Chairman. I have a couple of 
questions. First question right off the bat, since ``Indian 
lands'' is excluded from the definition of ``public lands'' in 
the Federal Land Policy and Management Act of 1976, what gives 
the BLM authority to regulate Indian lands? What gives you all 
the right to do that?
    Mr. Spisak. The Department follows the Indian Mineral 
Leasing Act of 1938 and the regulations that were promulgated 
from that.
    In 25 CFR Subsection 225.4 is where that authority from the 
Indian development is covered by the BLM processes for permit 
application approvals.
    Mr. Boren. Let's just assume that you are right, that you 
do have the ability to do that. I want to talk a little bit 
about the collaboration, what you all have been doing.
    In their testimonies, many of the tribes claim that the BLM 
meetings were purely informational. After reviewing the 
information that was made available at the meetings, I am going 
to have to agree that the content did not really seem 
consultative.
    Can you describe how these meetings were collaborative in 
nature? Were copies of the proposed rulemaking's made available 
at every meeting? What were some of the tribal concerns about 
this specific rulemaking, and how were they addressed?
    Mr. Spisak. That is a lot. Let me start with the meetings 
themselves. We held the four. We tried to mirror each meeting 
to be the same. They started out with primarily what was 
hydraulic fracturing, kind of a 101 of what it is, because we 
understood that may be different, tribes may not have the same 
level of understanding.
    Then we had----
    Mr. Boren. I think the BLM may not have a level of 
understanding. I think the tribes know a little bit more. They 
have been pretty proactive, but go ahead.
    Mr. Spisak. We also had a presentation from EPA at some of 
them. They were not able to attend at all of them. We had an 
engineer talking about the process and how it applied 
specifically in that particular region.
    Then we had a session where we provided the reg text to the 
folks that were there, and went through the individual pieces 
and what they meant.
    This is the first time to my knowledge where we actually 
provided reg text prior to it being published in a Federal 
Register Notice.
    We wanted to make it clear that this was just the start of 
the tribal consultation process, and we did not believe that it 
was in and of itself the single time that we expected the 
consultation to----
    Mr. Boren. I actually have a copy of the meeting agenda. I 
do not see any time blocked off for review or to discuss the 
regulations.
    In your testimony you said ``Tribes were given a draft of 
the rulemaking process to serve as a basis for discussion and 
substantive dialogue.''
    When during the meeting did the substantive dialogue about 
the specific rulemaking's occur?
    Mr. Spisak. It was the last part of the meeting where we 
talked about--where we handed out the reg text. I was actually 
at two of the meetings. I understood the other two were held 
the same way.
    We stepped through the reg text and had a discussion about 
that in particular.
    Mr. Boren. I ask unanimous consent to put this in the 
record.
    Mr. Young. Without objection, so ordered.

    [The meeting agenda submitted for the record by Mr. Boren 
follows:]
[GRAPHIC] [TIFF OMITTED] 73938.001

                                ------                                


    Mr. Boren. Has feedback from consultation sessions with the 
tribes been incorporated into some of these draft regulations? 
When you all visited, have you taken some of their input?
    Where are we on this time line? Can you kind of go through 
the time line of after this process has happened and when you 
see these draft regulations actually being more formalized?
    Mr. Spisak. Sure. They were transmitted over to the OMB in 
the middle of February. There has been some back and forth with 
OMB and other agencies on the regs.
    It is undergoing changes as we speak based on input that we 
received from the tribes as well as Executive Order 12866 
meetings that OMB has been conducting over the last month or 
so.
    Those are where virtually anybody can call in for 30 
minutes and provide comments and concerns that they have 
regarding the particular piece in question, and this would be 
the reg text that had been provided to the tribes in January.
    Mr. Boren. OK. Mr. Chairman, I am running out of time. I 
yield back. I am looking forward to the testimony from the 
tribes to see if there really was consultation here. Thank you.
    Mr. Young. I thank the gentleman. If he wishes to ask more 
questions in the second round, fine.
    Mr. Kildee?
    Mr. Kildee. Thank you, Mr. Chairman. Thank you for having 
this hearing.
    I always look at matters like this at a balance of economic 
development on Indian land and the unique sovereignty of Indian 
land.
    You mentioned a law passed in 1938. When we read the 
Constitution and it says ``Congress shall have the power to 
regulate commerce with foreign nations and among the several 
states, and with the Indian tribes,'' it talks about the 
sovereignty of Indian land.
    Are we in any way impinging upon that sovereignty? You 
mentioned the Act of 1938. Were Indians part of the discussions 
or negotiations when that Act was passed? Was this just done by 
people here in Washington?
    Mr. Spisak. I have no idea, sir.
    Mr. Young. You were not born then?
    Mr. Kildee. I was born by nine years that time. I am 82 
years old.
    Mr. Young. I was talking to him.
    Mr. Kildee. I was on the Committee, I think.
    [Laughter.]
    Mr. Young. And we will miss you.
    Mr. Kildee. I am wondering, there are several principles 
involved here. It is real sovereignty. When they wrote here, 
our founding fathers, to regulate commerce with foreign nations 
and with the several states and Indian tribes, that says 
``foreign nations,'' that does not mean we grant sovereignty to 
France. We recognize the sovereignty, right?
    Mr. Spisak. Yes.
    Mr. Kildee. The Indians, John Marshall tells us, have 
retained sovereignty. It is not something we gave them. They 
had it long before the Europeans landed here.
    How sensitive were those involved in the writing of the 
1938 law to the principle of Indian sovereignty? I want to do 
what is right and helpful to the Indians, but we cannot just 
treat them as a piece of land.
    They are sovereign nations with sovereign lands with all 
the attendant rights of sovereign nations.
    I am just wondering if there was any discussion at all or 
has there been any current discussion about the unique status 
of sovereign land?
    Mr. Spisak. Well, I would not say specifically, but I know 
the Department of the Interior has a Trust responsibility for 
the development of the Indian mineral estate along with the 
Indians and the tribes, and we take that responsibility 
seriously, and that is why the regulation as it is currently 
drafted would cover public lands and Indian mineral estates, 
because of that Trust responsibility that is part of the 
authority under the Secretary of the Interior.
    Mr. Kildee. I would like to do some more information 
seeking myself. You can provide more.
    I really want to do what is right for the Indians under our 
Constitution and among their sovereignty, which they had long 
before the Constitution was written.
    If there is any information of how that sensitivity is in 
play when things like this are developed, I would be very 
appreciative.
    Mr. Spisak. I understand.
    Mr. Kildee. The Indians are certainly capable of 
determining what is a good use of their land, and they should 
at least be at the table as an equal, sovereign to sovereign 
relationship.
    I would like to see how sensitive the Department is to that 
sovereign to sovereign relationship.
    Mr. Spisak. I would say BLM agrees with that 100 percent. 
Many of the tribes have become very sophisticated in their 
development of their own resources, and we want to work with 
them in that area.
    Mr. Kildee. Very good. I appreciate that, and any further 
information you can get for us.
    I have been in Congress now 36 years. I was founder of the 
Native American Caucus, although my ancestors came from 
Ireland. I just feel we have to be very careful when we think 
we are doing something very good, but we might also be 
impinging upon something that is not cognizant of their rights 
of sovereign.
    Anything you can do to supply more information will be 
appreciated.
    Mr. Chairman, again, I appreciate your calling this 
hearing.
    Mr. Young. I thank the gentleman. With all due respect to 
the BLM, and this is not meant for you, they manage Native 
lands in Trust. In my estimate, they mis-spent, mis-used and 
frankly were very corrupt in the $27 billion, I think, they 
took from the Natives in their leasing practices.
    We had a legal court case that settled for $3.5 billion.
    I am not really fond of the BLM managing American Indian 
lands.
    Mr. Spisak, you are a career officer and I realize that. I 
think one of the things that bothers me here today is we have 
some very distinguished American Indian leaders in this room, 
and you are a career officer.
    Mr. Spisak. Yes, sir.
    Mr. Young. Mr. Salazar decided not to appear or even a 
political appointee. I read your testimony. This hearing is 
about consultation.
    When did the initial draft of this proposed rule begin?
    Mr. Spisak. Secretary Salazar had a listening session as it 
were in November 2010, where we brought in various people 
interested to start a discussion about hydraulic fracturing.
    At that point, he had conveyed an interest in doing that. 
BLM then followed up with a series of listening sessions in 
April of 2011 that brought in more public interest.
    We tried to engage the tribes to sit on the panels, and we 
were successful, I think, in a couple of the states, but the 
drafting of the rules--we did not get a clear go ahead until 
after that time that we started looking at putting together reg 
text, as it were, for hydraulic fracturing.
    It was probably last Spring/Summer when it started.
    Mr. Young. You mentioned that Secretary Salazar hosted a 
forum including major stockholders on hydraulic fracking on 
public and Indian lands. I have a copy of the Interior meeting 
advisory regarding that hearing.
    I do not see a single tribe leader listed as a participant. 
Not one. In fact, I do not even see the Bureau of Indian 
Affairs. I see Carol Browner. That is a winner. She was the 
President's radical environmental advisor.
    I do not see the Natural Resources Defense Council. I see 
Trout Unlimited. I do not see any Natives. This is sovereign 
land.
    I have heard this, Mr. Kildee, and I love you for bringing 
it up. We still treat these lands as ours. That is wrong. It is 
just not this Administration. I am upset with this 
Administration because they say, ``I have your back.''
    We have had three big Native conferences, all political. 
That is all it is. If we can get enough support, and I am going 
to be around a while, I know that makes some of you quite 
unhappy. I am going to be around a while, unfortunately, Mr. 
Boren is not going to be with me, but maybe he can help me.
    We are going to pass the American Indian Empowerment Act 
which gives them the right of sovereignty and self 
determination.
    An 1938 Act, Mr. Kildee, with all due respect, they were 
not at the table. The American Indians were considered then--do 
not take offense--as inferior. That was the truth.
    We get into this modern society, this equal rights and 
everything else, and we, the Congress of the United States, 
will not give them their just dues as sovereign nations.
    Remember this, Carol Browner, Natural Resources Defense 
Council, and Trout Unlimited. That is a real winning group.
    By the way, after that, did the Department invite on 
November 30, 2010 any of the Native tribes and who were they?
    Mr. Spisak. I do not recall----
    Mr. Young. They were not invited.
    Mr. Spisak. I know we did not start engaging--the BLM did 
not start engaging the tribes until the April listening 
sessions. I know there was one up in North Dakota, Bismarck, I 
believe, and I think there was quite a bit of tribal 
participation there.
    The Little Rock, Arkansas one, there was not a lot of 
tribal----
    Mr. Young. They were not invited and they still invited 
environmental groups and Carol Browner. This was about 
fracking. As a sovereign nation, they have a right to make that 
decision, not you, not under a law that is so old, I was nine 
years old at that time, too. I remember a lot of things in 
those days. That was during the Depression. I hate to say that, 
it embarrasses me.
    Anyway, by the way, let's go back to the Government. Did 
the BLM consult with the Bureau of Indian Affairs?
    Mr. Spisak. We have engaged them. I think we can say BLM is 
learning how to do this consultation. When I say that, I see 
your reaction, but the policy came out in December. We are 
trying to be more open in how we are providing information.
    I think we can say there were some things that we certainly 
could have done better and we are----
    Mr. Young. It is not you, personally. I am trying to be 
nice and it is difficult sometimes.
    Mr. Spisak. I appreciate that.
    Mr. Young. You are part of the problem. It is just not BLM. 
This Administration, every Administration. I keep saying it.
    This is the problem. We have Secretary Salazar, who happens 
to be a friend of mine. He is up here. Then you have the Park 
Service. Then you have Fish and Wildlife. Then you have the 
BLM. Then you have Minerals and Management, whatever they call 
it nowadays.
    At the very bottom is BIA. They were not even invited. This 
is why, with all due respect to my good friends, we are screwed 
up. Either we change that pecking order or we pass our bill 
that gives them the right to do what they wish to do on their 
land.
    Remember as I said in my opening statement, you have a 
checkerboard agreement, and you pass these regulations under 
what you have now, here is a square, part of the reservation, 
the oil companies are not going to go there. They will go next 
door.
    Where is the Indian tribe? With 80 percent unemployment and 
no money, no way to take care of themselves. That is not fair.
    I am just saying this is our fault, not your fault. 
Congress has to act to create sovereign self determined tribes. 
If we do that, we are in good shape. If we do not do it, shame 
on us.
    This has been going on--I have been here 40 years. I have 
watched this, oh, we are going to take care of you. That is the 
problem. When someone tells you they are going to take care of 
you, be careful. Check your shoes and your shorts because you 
are going to lose both of them.
    My time is up. Do you have any more questions?
    Mr. Boren. One more, Mr. Chairman. Thank you. We have a 
letter here from NCAI, they had written a letter to Secretary 
Salazar. They go through the towns again, Tulsa, Oklahoma, just 
outside my District, Billings, Montana, Salt Lake, Farmington, 
New Mexico.
    Many of the tribal leaders did not know about these events 
until after they occurred.
    From what I have been told, you talked about the reg text 
being available--from what I have been told, only one of these 
meetings the actual text was passed out. I am not sure if that 
is correct.
    Were they passed out at all four?
    Mr. Spisak. Yes, sir. All four.
    Mr. Boren. All four. But they were at the end of the 
meeting.
    Mr. Spisak. At the end of the meeting. It was not here is 
the text, we will see you later. It was here is the text, let's 
talk about it.
    Mr. Boren. You believe there was proper consultation?
    Mr. Spisak. I believe we initiated consultation.
    Mr. Boren. Initiated consultation. I am not going to say 
anything. Never mind. I will not say it.
    The other question I have or the only comment I have is you 
know, when you have consultation--I have heard from so many 
tribes that have gone through--whether it is the BLM, you name 
the agency. These agencies come in and they say OK, we are 
going to have consultation.
    They take a tribal chief, a Governor, a chairman, and they 
put them in a room and they make them watch a slide show for 
five minutes and they say thanks a lot.
    We hear that over and over and over again. When you go back 
to the folks within the BLM, let them know consultation is not 
five minutes. It is not ten minutes. It is listening. That is 
the biggest thing--politicians have a real hard time using 
that.
    The most important thing we can do in Indian Country is to 
listen. For all the agencies, not just you all, but everyone 
else that is thinking about drafting regulations, let's go to 
Indian Country first, not to some of these other folks that 
have nothing to do with it, that do not understand hydraulic 
fracturing.
    Hydraulic fracturing has been around for decades. It did 
not just happen in the last couple of years because of shale.
    I have been around this industry for a long, long time. 
There have been literally over a million wells drilled without 
a problem. For some reason, there are a lot of groups that are 
searching for a problem because we have some people getting 
jobs in Indian Country and great things are happening.
    Anyway, I look forward to the next panel. Mr. Chairman, I 
yield back.
    Mr. Young. Mr. Kildee?
    Mr. Kildee. Just one follow up. Having been a teacher most 
of my life, a politician probably more, but knowledge is power. 
When you have any consultation with people and at the end of 
the meeting you pass out something and say here's some further 
information, you have to share that knowledge.
    I really think there is a culture in much of the Executive 
Branch of Government, including the BLM, a culture of where 
they treat the Indians as if they are not equals at that table.
    In my 36 years here in Congress, I have been fighting that. 
It is still here. You were thrown into that culture. That 
culture has taken years to build. We are trying to change that.
    We recognize that sovereignty is really sovereignty.
    I went over to a resignation party of Kim Teehee who used 
to work for me in the Native American Caucus. There has been 
some improvement over there, but I think there is an idea that 
this sovereignty is not quite like other sovereignty.
    The Constitution is very clear. I think to have a meeting 
and then toward the end of a meeting say oh, you might want to 
do this reading on your plane ride home, you should share that 
information from the beginning. Treat them as the equals they 
are.
    Again, it is the culture that exists in the Executive 
Branch of Government, and the BIA and BLM. I think you have an 
opportunity to try to change that culture.
    The three of us here, we have tried to change that culture.
    Thank you, Mr. Chairman.
    Mr. Young. Thank you, sir. Like I say, this is a long haul 
because it is a bureaucracy.
    Mr. Spisak, you also mentioned Pavilion, Wyoming and the 
EPA. They hailed a study they made in Pavilion as exclusive 
proof, EPA, and those that oppose fracking. By the way, those 
that oppose fracking oppose any type of drilling, any type of 
development of energy.
    They do not understand like the Ranking Member said, this 
has happened for a long while.
    After the Congress and the media and oil and gas industry 
and the State of Wyoming and other people started looking at 
it, the agency's study was flawed. It was flawed. In fact, they 
are coming back now with some additional studies.
    I will say one of our biggest concerns, if you really want 
to do something good for fracking to meet everybody's 
requirement, think about this a moment, not just Native lands 
and not somebody else's land.
    There is technology to reuse the water. That is one of our 
biggest problems. Some company is already doing it. I think 
that is a justifiable requirement, reusing the water, not just 
dumping the water. Water is going to be our scarcest commodity 
in the future.
    You might want to look at that. The technology is there. 
Some companies are using it. Some are not. It is cheaper to not 
reuse the water. It does reduce the cost of fuels and it is 
still worthwhile for everybody. That is something you might 
want to look at instead of just saying no, it is damaging, it 
is hurting everybody, the world is coming to an end.
    I can tell you, in fact, we are fracking in Alaska now. 
Every one of those wells were put in as new pipe or new 
concrete, new ceilings. There is no chance of losing or having 
any contamination. That would solve some of our problems, too.
    I appreciate your testimony, Mr. Spisak. Congratulations on 
your career work.
    I still think that the Secretary should have had his tail 
down here.
    Mr. Spisak. Thank you.
    Irene Cuch, Chairwoman, Ute Indian Tribe Business Council. 
T.J. Show, Chairman, Blackfeet Tribal Business Council. Mike 
Olguin, Vice Chair, Southern Ute Indian Tribal Council, and Red 
Tipped Arrow Hall, Chairman of the MHA Nation--Three Affiliated 
Tribes.
    Thank you. I am going to reverse this order a little bit.
    Tex, you are going to be up first.

   STATEMENT OF TEX ``RED TIPPED ARROW'' HALL, CHAIRMAN, MHA 
                NATION--THREE AFFILIATED TRIBES

    Mr. Hall. Thank you, Mr. Chairman, members of the 
Committee. For the record, my name is Tex Red Tipped Arrow 
Hall, Chairman of the Mandan, Hidatsa and Arikara Nation on 
Fort Berthold Reservation in Western North Dakota.
    I want to just summarize so there is more time for 
questions and answers later. I will summarize a little bit 
about the development and then I will give about five or six 
recommendations that we have as a tribe.
    We are in the middle of the Bakken. USGS says 4.3 billion 
recoverable barrels. We know it will probably be double. We do 
have about 275 producing wells on Trust land, and about 450 
total, including fee on Fort Berthold, without one incident of 
any problems with hydrofracking.
    I want to also mention that hydrofracking is a method that 
is needed to break the shale. It is about a million gallons of 
water, sand and some chemicals that are used to break the 
shale.
    We have deep water wells a mile deep, and then we do a 
horizontal lateral. You can either do a short lateral half a 
mile or you can do a mile long lateral. You can do a multi-
stage frack.
    Companies are not required to disclose the ingredients. We 
are in favor of requiring companies to disclose.
    However, we are not in favor of requiring a rule that we 
never had any consultation whatsoever.
    We are in the middle of the Bakken. It is the biggest oil 
place in the U.S. Bakken is not in Farmington. It is not in 
Billings. It is not wherever else.
    I thought he was going to stay here, too. It is the first 
time I saw anybody from BLM and he left out the door.
    You know, I do not appreciate that. We did the math. If 
they require another permit, if ``they,'' BLM, requires another 
permit, that will be an additional delay.
    We have been a guinea pig. We have gone through boxes and 
boxes of leases that the BIA could not sift through. We have 
sifted through it. We got additional staff. We got through 
that.
    Now the Communitization Agreements were backed up by BLM at 
Dickinson. We thought we had a good Director. The Director is 
gone. There is no Director in Dickinson at BLM.
    We have never had any discussion about what this guy was 
talking about to you guys. He never talked to me once. March 
26, there was nobody of any kind of authority that came out to 
meet with tribes on March 26. It is like they are afraid to 
talk to tribes.
    You know these lands are Indian lands for the Mandan, 
Hidatsa and Arikara. These are our lands. They are not BLM's 
lands. These are not public lands.
    Our 1851 Fort Laramie Treaty, that is why I was hoping he 
would listen, maybe he will read our testimony, that Treaty is 
set aside for the use of our Indian people. It is not set aside 
for BLM. The Treaty is supposed to be the supreme law of the 
land, Representative Kildee, is that not right?
    What happened to this thing? This thing has gotten out of 
control. If it is not EPA, not it is BLM.
    Anyway, getting back to the economics. It would cost us 
$10,000 a day for over 100 wells, that is $132 million it will 
cost Fort Berthold.
    We are 75 percent of all the oil and gas and royalty 
production in the U.S. right now. That is why I am talking the 
way I am. That is why I do not like it when they do not listen 
and they get up and ignore us. That is disrespectful. It should 
be unlawful. He should be reprimanded.
    Anyway, getting back to this consultation. Does BLM have a 
public lands' responsibility or a Trust responsibility? He said 
he had a Trust responsibility. If he did, he would have to 
follow the Executive Order, and he admitted to it. I listened 
closely. ``Initial consultation'' I think is what he said.
    There are various steps. We have objected from day one. We 
have not heard back from him or Secretary Salazar on our 
objections of what this would cost Fort Berthold. They haven't 
said nothing to us, but I have heard through the newspapers 
that we have been consulted. That is a bunch of baloney.
    BLM is not a friend of the Bakken, I can tell you that. 
They are here to destroy the Bakken. The Bakken is a good thing 
for the United States. It is a good thing for MHA Nation.
    This Executive Order, if he does have a Trust 
responsibility, he needs to follow his own Secretary Salazar's 
Executive Order.
    A tribe should have the authority to object like we did, 
then you have to sit down with them, do not have them go to 
Farmington or Billings or whatever city.
    If you look at the information, it is all about public 
lands. The tribes were an afterthought. Again, he admitted to 
it on the agenda.
    Over and over, he has admitted to their own blunders, 
finally, after your hearing, Chairman Young. It took your 
hearing for us to get that out of BLM. Otherwise, they were not 
going to disclose that.
    Second, on the authority, I do not believe they have the 
authority. We have researched the Federal Lands Management and 
Policy Act, Ranking Member Boren, as you indicated, 1976 on. 
There is no authority. That is why they keep putting us as 
public lands.
    Now our permits at Fort Berthold, people from New York, 
people from Pennsylvania can make public comment on a permit or 
maybe a hydraulic fracking permit.
    We are going to get people that are not even from North 
Dakota, going to all object to energy development, and we are 
soon going to be in Alaska. We are going to be number two, 
Chairman Young.
    My recommendation is that they withdraw this fool hearted 
rule that they never consulted after he admitted to it today, 
and go back and give a year or two years, I would recommend two 
years, to get the consultation right. If they do not get the 
consultation right, I do not know how we can sit down at the 
table with BLM or any other Federal agency and have meaningful 
dialogue.
    We will know what they say on paper and what they actually 
do are two different things.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Hall follows:]

           Statement of The Honorable Tex G. Hall, Chairman, 
  Mandan, Hidatsa and Arikara Nation of the Fort Berthold Reservation

    Good morning Chairman Young, Ranking Member Boren and Members of 
the Subcommittee. My name is Tex Hall. I am the Chairman of the Mandan, 
Hidatsa and Arikara Nation (MHA Nation). I am honored to present this 
testimony on the BLM's proposed regulation of hydraulic fracturing.
I. Introduction
    Every time I turn around the MHA Nation must overcome yet another 
barrier to Indian energy development. Today's barrier is the BLM's 
proposed regulation of hydraulic fracturing used in the development of 
oil and gas resources. The BLM proposes to require an additional review 
and approval loop in what the Subcommittee has already found to be an 
overburdened regulatory process for developing Indian energy resources.
    Over the last four years, MHA Nation and the Reservation have been 
in the middle of the most active oil and gas play in the United States. 
The Fort Berthold Reservation is located in the heart of the Bakken 
Formation, which is the largest continuous oil accumulation in the 
lower 48 states. In 2008, the United States Geological Survey estimated 
that the Bakken Formation contains between 3 billion and 4.3 billion 
barrels of oil.
    MHA Nation is actively promoting the development of our energy 
resources. This country has an energy problem and we want to be a part 
of the solution! Our resources provide us with a substantial 
opportunity to ensure that our members have good jobs, can heat their 
homes and provide for their families. Our resources also add to this 
Nation's domestic energy supplies. Our goal is to continue to develop 
our resources in a responsible manner that will maintain our homelands 
and provide long-term economic security for our Reservation 
communities.
    Since energy development began on the Reservation we have struggled 
with the federal bureaucracy for every single oil and gas permit. We 
now have about 250 wells in production and the MHA Nation and Fort 
Berthold Allottees have earned about $182 million in oil and gas 
royalties. In addition, we have 905 vendors providing services directly 
to the oil and gas industry. Each of those vendors employs between 4 
and 24 people. Based on an average employment of 12 jobs per company, 
that is in excess of 10,000 jobs.
    In 2012, we expect more wells to be drilled on the Reservation than 
were drilled in the first four years combined. In 2013, we expect 
another 300 wells to be drilled. This energy development will result in 
hundreds of millions in royalty payments and economic activity. The 
BLM's proposed regulations stand in the way of that energy and economic 
development and will limit energy and economic development on the Fort 
Berthold Reservation.
    It is important to note at the outset, that the BLM developed its 
regulations, which will have a tremendous impact on the development of 
Indian energy resources, without anything close to meaningful tribal 
consultation. This violates the Department's four month old ``Policy on 
Consultation with Indian Tribes'' (December 2011). What BLM has done to 
date, does not even come close to the ``strong, meaningful role for 
tribal governments at all stages of federal decision-making on Indian 
policy'' that the Department of the Interior promised when it announced 
its new tribal consultation policy. Press Release, Department of the 
Interior, ``Secretary Salazar Kicks Off White House Tribal Nations 
Conference at Department of the Interior'' (Dec. 2, 2011).
    My testimony examines BLM's failure to comply with the Department's 
tribal consultation policy and sets out the requirements for 
consultation. In addition, I will discuss some of the problems with the 
proposed regulations and the impact the proposed regulations will have 
on energy development on the Fort Berthold Reservation.
II. BLM Must Withdraw the Proposed Regulation Until Meaningful Tribal 
        Consultation has Occurred
    The Bureau of Land Management (BLM) is developing a regulation for 
hydraulic fracturing activities that will have significant impacts the 
oil and gas resources being development on the Fort Berthold 
Reservation. Our industry partners report that BLM's proposed 
regulations may add so much delay, uncertainty and cost to the oil and 
gas permitting process that they may be forced to pull their drilling 
rigs off the Reservation. These rigs would likely end up developing oil 
and gas resources just over the Reservation boundary on state and 
private lands.
    Since BLM has not fulfilled the Department's and the 
Administration's requirements for consultation with Indian tribes, BLM 
must withdraw the draft hydraulic fracturing regulations from the 
Office of Management and Budget (OMB) or should exclude the application 
of these regulations to any permits on Indian lands until proper and 
meaningful consultation with tribes can occur. In addition, the 
Department's Tribal Governance Officer (TGO), the Assistant Secretary 
for Indian Affairs and BLM should work with tribes to develop an 
appropriate consultation protocol and timeline for the development of 
any regulations that may be needed for this issue.
    Tribal consultation requirements are not just a formality. Tribal 
consultation is based on the long-standing government-to-government 
treaty relationship between Indian tribes and the federal government. 
This relationship requires consultation with tribal governments when 
federal actions will affect Indian resources. The purpose of 
consultation is to allow the two governments to engage in collaborative 
decision-making, promote tribal self-determination, and avoid costly 
mistakes. Tribal consultation is also an exercise of the federal 
government's trust responsibility to Indian tribes.
    The Department of the Interior's Policy on Consultation with Indian 
Tribes (Tribal Consultation Policy) requires that the BLM structure a 
consultation process to allow ``timely input'' from tribes and which 
will enable BLM to work with tribes as ``collaborative partners.'' 
Tribal Consultation Policy Sec. VII.E.2. The policy states that, 
``[c]onsultation is a deliberative process that aims to create 
effective collaboration and informed Federal decision-making. 
Consultation is built upon government-to-government exchange of 
information and promotes enhanced communication that emphasizes trust, 
respect, and shared responsibility.'' Id. Sec. II.
    Because of the severe impacts the proposed regulation will have on 
the MHA Nation's and other tribe's resources, BLM is required to follow 
the ``Stages of Consultation'' set out in the Department's Tribal 
Consultation Policy in the development of any hydraulic fracturing 
regulations. These stages include an ``Initial Planning Stage,'' a 
``Proposal Development Stage,'' and an ``Implementation of Final 
Federal Action Stage.''
    As described in detail below, BLM has only begun to meet the 
requirements of the Initial Planning Stage even though BLM already 
submitted its draft regulations for review by OMB--generally the last 
step before publication in the Federal Register. BLM's tribal 
consultation actions to date consist of four January 2012 Regional 
Tribal Consultation meetings and a few follow up meetings with 
individual tribes. This is not what the Department's tribal 
consultation policy requires. This is just the beginning of tribal 
consultation. At this stage, BLM should not have draft regulations 
pending at OMB.
    In addition, I believe that BLM must take proactive steps to 
correct its failure to comply with the Department's Tribal Consultation 
Policy and its federal trust obligations. This is particularly needed 
because BLM has already provided the draft hydraulic fracturing 
regulations to OMB. BLM's actions to date have given me and other 
tribes the impression that tribal input is not desired or only 
minimally needed even though there is strong evidence that the proposed 
regulations will cost the MHA Nation and the surrounding community a 
sizable number of jobs and money.
    I ask that the Department enlist its TGO to monitor BLM's actions 
as it develops an appropriate consultation protocol and restarts tribal 
consultation. Throughout the consultation process, the Department's 
policy directs the TGO to facilitate government-to-government 
consultation, to implement a reporting system to ensure that 
consultation efforts are documented and reported to the Secretary, and 
to fulfill other TGO obligations under the Department's policy. Tribal 
Consultation Policy Sec. VII.B.1(a)-(g).
    In this case, the resulting consultation protocol should clarify 
that BLM is prepared to: (1) withdraw the draft regulations from OMB or 
excluded permits on Indian lands from the proposed regulations, (2) 
work with tribes to develop a consultation timeline, (3) engage tribes 
in the Initial Planning Stage and the other two stages of consultation, 
and (4) generally set out the steps that BLM will follow to comply with 
the Department's Tribal Consultation Policy and other consultation 
requirements.
A. Initial Planning Stage
    During the Initial Planning Stage, BLM is directed to involve 
tribes ``as early as possible'' and provide enough information to 
enable tribes to fully engage and assist in the development of 
regulations that will affect tribal resources. Tribal Consultation 
Policy Sec. VII.E.1. This early stage should be informative as BLM 
identifies and describes the issue it believes needs regulation and it 
must also include a meaningful dialogue in which BLM considers tribal 
views on the issue, the need for regulation and, most importantly, 
alternatives for addressing the issue. Based on my review of BLM's 
actions to date, BLM has only begun to comply with the requirements of 
the Initial Planning Stage of the Department's Tribal Consultation 
Policy.
    As an initial matter, the April and November 2011 Regional Public 
Forums in Bismarck, North Dakota, Little Rock, Arkansas, Denver, 
Colorado, and Washington, D.C. were not part of the tribal consultation 
process--as BLM asserted in meetings with tribes. These meetings were 
advertised to the general public, were not directed to tribal leaders, 
and were purely informational. These are not tribal consultation 
sessions on a government-to-government basis, do not provide 
opportunities for tribes to discuss their concerns and propose 
solutions, and should not be represented by BLM as part of the tribal 
consultation process.
    The January 2012 Regional Tribal Consultations in Tulsa, Oklahoma, 
Billings, Montana, Salt Lake City, Utah; and Farmington, New Mexico 
could be considered a beginning to tribal consultation, but on their 
own, they do not fulfill the Department's Tribal Consultation Policy. 
These meetings were purely informational. The BLM made no attempt at 
these meetings to involve tribes in determining the scope of the issue, 
offer tribes an opportunity to participate in drafting the regulations, 
or engage tribes in a discussion of alternatives to federal regulation.
    BLM's failure to involve tribes early in the regulation development 
process violates basic tribal consultation principles. For example, 
Executive Order No. 13175 requires that agencies, ``consult with tribal 
officials as to the need for Federal standards and any alternatives 
that would limit the scope of Federal standards or otherwise preserve 
the prerogatives and authority of Indian tribes.'' Exec. Order No. 
13175 Sec. 3(c)(3) (Nov. 9, 2000). BLM never consulted with tribes on 
the need for hydraulic fracturing regulations, on the staffing and 
other steps which would be required to implement those regulations on 
Indian lands, or on preservation of tribes' authority to regulate the 
issue themselves. By not involving tribes, BLM has developed a 
regulation that is likely to limit energy development on the Fort 
Berthold Reservation and cost us needed governmental revenues.
    Based on these actions and according to the Department's own Tribal 
Consultation Policy, BLM is still in the Initial Planning Stage of 
tribal consultation. Consequently, BLM's draft regulations needs to be 
withdrawn from OMB or permits on Indian lands should be excluded from 
the regulation until BLM has complied with the policy. Allowing the 
draft regulation to be published in the Federal Register before initial 
consultation stages are completed would violate the Administration's 
and the Department's tribal consultation policies and leave tribes and 
the federal government with a costly new set of federal requirements 
that they are unprepared to implement.
B. Proposal Development Stage
    Without fully initiating or completing the Initial Planning Stage, 
BLM is attempting to skip ahead and quickly complete the Proposal 
Development Stage with little to no tribal involvement. Contrary to 
BLM's actions, the Department's Tribal Consultation Policy requires BLM 
to work with tribes at the beginning of the Proposal Development Stage 
to establish a timeline for the consultation process. The Tribal 
Consultation Policy also requires BLM to work with tribes as 
``collaborative partners.'' This collaboration is critical because 
tribes are already facing regulatory requirements that the federal 
government is not capable of implementing in a timely manner.
    First, at the start of the Proposal Development Stage, BLM is 
required to work with tribes to develop an appropriate schedule for the 
consultation. This is necessary in order to allow tribal officials and 
staff the time to analyze the issues and prepare meaningful ideas. The 
Tribal Consultation Policy specifically states that:
        The Bureau or Office shall develop a process. . .that maximizes 
        the opportunity for timely input by Indian Tribes and is 
        consistent with both Tribal and Bureau or Office schedules. The 
        Bureau or Office will solicit the views of affected Indian 
        Tribes regarding the process timeline to consult on a 
        Departmental Action with Tribal Implications. The Bureau or 
        Office should work with Indian Tribes to structure a process, 
        to the extent feasible, that considers specific Indian Tribal 
        structures, traditional needs, and schedules of the Indian 
        Tribes. The Bureau or Office should make all reasonable efforts 
        to comply with the expressed views of the affected Indian 
        Tribes regarding the process timeline at this Stage, taking 
        into account the level of impact, the scope, and the complexity 
        of the issues involved in the Departmental Action with Tribal 
        Implications, along with the other factors driving the 
        schedule. The process will be open and transparent. . ..
Tribal Consultation Policy Sec. VII.E.2. BLM has not developed the 
required consultation process or timeline with tribes.
    Hydraulic fracturing and the potential impact of the proposed 
regulations on tribal resources, Indian energy and economic development 
are significant--especially in areas of high demand for oil and gas 
resources like the Fort Berthold Reservation. A regulation of this 
magnitude requires a more extensive timeline and process to fully 
engage tribes in the development of draft regulations. To comply with 
the Department's Tribal Consultation Policy during the Proposal 
Development Stage, BLM needs to develop a consultation timeline with 
tribes that takes into account the level of impact, the scope, and the 
complexity of the issues involved. To date, this has not happened.
    Second, the Proposal Development Stage requires that BLM work with 
tribes as collaborative partners. While the January 2012 Regional 
Tribal Consultations included disclosure of the Department's proposed 
action, BLM did not involve the MHA Nation or other tribes as 
collaborative partners or engage tribes in a meaningful dialogue about 
the substance of the regulations. These meetings were merely 
informational.
    For example, BLM arrived at two of the four meetings with draft 
regulations already completed. Given our government-to-government 
relationship, and our first-hand knowledge of the industry, BLM should 
not present tribes with completed regulations at this stage, rather BLM 
should work with tribes to develop the regulations from the ground up. 
We know what works on our Reservations, BLM does not. BLM also did not 
engage tribes in a meaningful dialogue about the substance of the 
regulations. Of course, this would have been difficult as tribes were 
not provided an opportunity to review the regulations ahead of the 
meeting.
    Moreover, soon after the January 2012 Regional Tribal 
Consultations, BLM submitted its draft regulation to OMB for review. 
OMB review is typically the last step before publication of a draft 
regulation in the Federal Register. BLM's actions foreclosed meaningful 
consultation and did not provide any opportunity for collaboration with 
tribes on how to accomplish federal goals in the most efficient and 
cost effective manner.
    After extensive efforts to contact BLM, the MHA Nation and a few 
tribes met with BLM in Washington, D.C. on March 26, 2012, to discuss 
the lack of tribal consultation and finally provide some feedback to 
BLM on the draft regulations. This meeting represented the first time 
that BLM and tribes were prepared to have a dialogue on the draft 
regulations. Unfortunately, because of BLM's actions to date, the 
majority of the meeting was spent discussing the lack of tribal 
consultation. Towards the end of the meeting, there was a little time 
for tribes to provide some comments on the details of the draft 
regulations, but there was no substantive exchange of information, no 
development of the required consultation timeline, and no discussion of 
ideas and concerns about the practical problems that these regulations 
present.
    The Department's Tribal Consultation Policy also requires that 
tribal consultation be conducted with Departmental officials who are 
knowledgeable about the matters at hand, are authorized to speak for 
the Department, and can exercise delegated authority in the disposition 
and implementation of an agency action. Tribal Consultation Policy 
Sec. II. In contrast, BLM officials who attended the March 26th meeting 
made clear throughout the meeting that they could only listen to tribal 
suggestions, could not provide any responses during the meeting, and 
would need to discuss any responses with their superiors. Similarly, 
BLM's suggestion that tribes meet with their local Field Offices for 
consultation does not comply with the Department's Tribal Consultation 
Policy since BLM has made no indication that the local Field Offices 
are authorized to speak for the Department or exercise delegated 
authority. BLM ``Dear Tribal Leader'' letter (Dec. 9, 2011).
    Finally, it is not the responsibility of the MHA Nation or other 
tribes to seek out meetings to discuss the contents of a draft 
regulation. The BLM is required to comply, with the Department's Tribal 
Consultation Policy on its own initiative when proposing to develop 
regulations that will affect tribal resources.
C. Implementation of Final Federal Action Stage
    The Department's Tribal Consultation Policy includes a third stage 
regarding a post-consultation review process. While this third stage is 
not mandatory, its inclusion in the Department's Tribal Consultation 
Policy suggests that these efforts are encouraged, support the federal 
trust responsibility, and would result in more effective Departmental 
actions and regulations. If BLM eventually decides that a hydraulic 
fracturing regulation that includes Indian lands is needed, BLM should 
include an Implementation of Final Federal Action Stage in its 
consultation process.
    Given the complexity of hydraulic fracturing, the fact that 
multiple agencies are already involved in the on-reservation drilling 
permit approval process, the magnitude of potential impacts to tribes 
and the need for adequate BLM staff to oversee any regulatory process, 
post-consultation review and training is likely to be needed. As you 
know, BLM already lacks the staff necessary to implement its current 
regulatory scheme in a timely manner, and these new regulations will 
simple add to that backlog, unless proper planning, with full tribal 
involvement, is undertaken
D. Summary
    BLM skipped most of the Initial Planning Stage of the Department's 
Tribal Consultation Policy and is not complying with the requirements 
of the Proposal Development Stage. Consequently, BLM must withdraw the 
draft hydraulic fracturing regulations from OMB or should exclude the 
application of these regulations to any permits on Indian lands until 
proper and meaningful consultation with tribes can occur. Also, the 
Department's TGO, the Assistant Secretary for Indian Affairs and BLM 
should work with tribes to develop an appropriate consultation protocol 
and timeline for consultation on the development of any hydraulic 
fracturing regulation. This is a basic level of consultation and it is 
needed here to avoid impacts on the Reservation economy.
    In sum, BLM must restart its consultation process to properly 
engage tribes. If BLM does not take these steps, BLM's proposed 
regulations on hydraulic fracturing would be developed in violation of 
the Department's four-month old Tribal Consultation Policy. This policy 
was developed, in part, to ensure early planning, involvement of 
tribes, and avoidance of negative impacts. BLM's consultation to date 
is nothing like the meaningful role in federal decision-making promised 
to tribes when the consultation policy was announced.
III. Problems with the Proposed Regulation and Impacts on Energy 
        Development
    After many years of economic hardship, the MHA Nation and its 
members are finally seeing improved economic conditions due to the oil 
and gas development on the Reservation. BLM's proposed regulation of 
hydraulic fracturing activities would disproportionately impact the MHA 
Nation and its members due to our reliance on oil and gas development 
for economic growth and sustainability.
    Time is of the essence. I ask that the Subcommittee and Congress 
take any actions that are available to prevent BLM from implementing 
its proposed regulations in order to save domestic energy production 
and desperately needed jobs and economic opportunity in Indian Country. 
I have already testified before the House Committee on Appropriations' 
Subcommittee on Interior, Environment and Related Agencies that 
Congress should prohibit federal dollars from being used to implement 
the proposed hydraulic fracturing regulations until a number of 
prerequisites are met. These prerequisites are:
          As described above, the BLM needs to follow the 
        Department's own tribal consultation policy;
          The Environmental Protection Agency (EPA) must 
        complete its study on hydraulic fracturing that the full House 
        Appropriations Committee requested in its FY 2010 budget report 
        and Indian tribes must be given an opportunity to review and 
        respond to EPA's study;
          BLM needs to develop a staffing and implementation 
        plan to ensure that its review and approval of hydraulic 
        fracturing plans will not add to the already unreasonable 
        delays that tribes face in trying to get oil and gas permits 
        approved on Indian lands;
          BLM should be required to request and receive the 
        funding necessary to fill staff positions, and to complete the 
        hiring and training of those individuals, before it is allowed 
        to implement these types of new regulations;
          BLM should be required to demonstrate that it has an 
        adequate process in place to ensure that there is no 
        duplication of existing requirements for on-reservation permits 
        to drill; and,
          BLM should develop an implementation plan that will 
        phase in hydraulic fracturing requirements over time, as the 
        federal agencies and the oil and gas industry working on our 
        reservations become familiar with these new demands.
    These are common sense requirements for the development of any 
federal regulation. Rather than follow this logical procedure, BLM 
officials have stated that they developed the proposed regulations in 
response to ``public outcry.'' I ask that the federal government, and 
the MHA Nation's federal trustee, follow a more deliberative and 
substantive process, like the one outlined above, in developing 
regulations that will have economic consequences on the MHA Nation. In 
the remainder of my testimony, I will highlight a variety of problems 
with the BLM's proposed hydraulic fracturing regulations.
    First, I can find no authority for the BLM to regulate activities 
on Indian lands, including hydraulic fracturing. Although the BLM has 
jurisdiction to regulate activities on ``public lands,'' Indian lands 
are not public lands. Indian reservation lands are set aside and 
reserved for the exclusive use and benefit of Indian tribes. Neither 
the Federal Land Policy and Management Act of 1976 nor the Department 
of the Interior's Departmental Manuel provide BLM with direct or 
delegated authority over Indian lands.
    If the BLM has somehow assumed authority over Indian lands, the BLM 
may not, consistent with the trust responsibility, apply public 
interest standards to Indian lands. In contrast to oil and gas 
development on public lands, royalties and taxes from oil and gas 
production on tribal and allotted lands on the Reservation are a 
significant source of revenue for our tribal government and income for 
allottees on the Reservation. Adding additional burdens for the 
development of oil and gas on the Reservation could chill production 
and force operators to shift investment away from our Reservation to 
state and private lands where the regulatory burden is less onerous. 
The Tribe requests that the Subcommittee and Congress pass legislation 
that would prevent Indian lands from being swept into laws and policies 
for public lands.
    Second, I am not aware of any incidents on tribal lands, or for 
that matter public lands, that would precipitate federal regulation. 
While federal regulation of shallow gas wells in Wyoming and 
Pennsylvania may be justified to protect ground water, I see no such 
justification for deep horizontal wells like those that are drilled on 
the Fort Berthold Reservation. The wells drilled on our Reservation and 
the hydraulic fracturing activities take place far below the water 
table. Without proof that these rules are necessary to protect against 
an identified threat to the environment, deep well fracing on the 
Reservation should be exempt from the additional regulatory burdens 
that the proposed BLM regulations would impose.
    Of course, I am also greatly concerned about the environmental 
health of the Fort Berthold Reservation. The MHA Nation cannot just 
pick up and move to another reservation if our lands or waters are 
spoiled. This is my home and I work every day to ensure that we 
maintain our natural resources for many generations to come. All I ask 
is that any regulation be based on sound science, as opposed to public 
outcry, and developed consistent with the federal trust responsibility 
as opposed to public interest standards.
    Third, the BLM already lacks the staff to keep up with existing 
permitting requirements, let alone a new and complicated one. It 
already takes 5 to 20 times longer to get an oil and gas permit on 
Indian lands. On the Fort Berthold Reservation, we just got done 
clearing the backlog of Communitization Agreements when we lost the 
Director of our BLM Field Office. Now, Communitization Agreements are 
starting to pile up again while the BLM is proposing to create 
additional work for its short-staffed offices.
    Fourth, oil and gas operators seeking permits for oil and gas 
activities on Indian lands already undergo an extensive environmental 
review process. BLM has not explained what its proposed hydraulic 
fracturing regulations will add to this process. The process is already 
lengthy, time consuming and costly. These delays and costs are one of 
the primary reasons why oil and gas developers look just over the 
Reservation boundary for cheaper and quicker development opportunities 
on private lands. We need to remove road blocks to Indian energy 
development, not increase them.
    Fifth, as noted above, federal studies of hydraulic fracturing 
activities are still ongoing. The EPA and other federal agencies are 
currently conducting scientific studies on hydraulic fracturing. BLM's 
proposed regulations are premature in advance of the EPA study, and BLM 
has offered no justification for proceeding with this new regulation 
without the benefit of these studies.
    Sixth, economic impacts on the MHA Nation will be significant. The 
MHA Nation has been using revenues from oil and gas development to 
successfully reduce its governmental debt and provide the physical and 
governmental infrastructure to support economic development. If the 
BLM's new hydraulic fracturing regulations create a disincentive for 
companies to develop energy on the Reservation, the MHA Nation would 
suffer a disproportionately greater impact than others.
    For example, based on an 18% tribal royalty rate, a single oil and 
gas well provides our tribal government with more that $2 million per 
year in revenues to fund government functions. Multiply this by 100 or 
200 wells producing tribally owned minerals and the numbers are 
staggering. While we do not have this many wells producing from 
tribally owned minerals yet, these kinds of numbers are not far off. 
The MHA Nation will not receive these revenues if companies are forced 
to pull drilling rigs off the Reservation for cheaper and more certain 
development opportunities on state and private lands.
IV. Conclusion
    I want to thank Chairman Young, Ranking Member Boren and the 
members of the Subcommittee for the opportunity to testify on the BLM's 
proposed hydraulic fracturing regulations. Unlike the public lands that 
are clearly within BLM's authority to regulate, the application of the 
regulations to Indian lands will have a direct effect on the MHA 
Nation's revenues, our ability to invest in the future, and the 
services we are able to provide our members and future generations. The 
MHA Nation stands ready to work with the Subcommittee and the BLM to 
find an appropriate resolution.
    At the appropriate time, I would be happy to answer any questions 
you may have. Thank you.
                                 ______
                                 
    Mr. Young. I want to thank you for your comments. Do you 
have to leave? It is the reason I picked you up. If you do not 
have to leave, you can sit there and wait. It is up to you. 
Which one do you want to do?
    Mr. Hall. I will wait for a little while.
    Mr. Young. OK. Good. Next is Irene.
    Good to see you again, Irene.

             STATEMENT OF IRENE CUCH, CHAIRWOMAN, 
               UTE INDIAN TRIBE BUSINESS COUNCIL

    Ms. Cuch. Same here. ``Maiku'' means ``Greetings'' in Ute. 
Good morning, Chairman Young, Ranking Member Boren and members 
of the Subcommittee.
    My name is Irene Cuch. I am the Chairwoman of the Ute 
Indian Tribe. Also, at this time I would like to introduce 
Manuel Myore, who is our Energy and Minerals Department 
Director. Manuel? Our oil and gas land man, and Ronnie Wilson, 
our Ute Tribal attorney.
    I thank you for the opportunity to testify on the Bureau of 
Land Management's proposed fracking rule.
    I am very concerned about the impact the rule will have on 
energy development on my reservation. My concern with the BLM 
rule should not be confused with lack of concern for the 
environment, water, or the health of the tribal members.
    The reservation is my home, and the tribe knows the value 
of protecting our natural resources.
    As I have explained in prior testimony to the Subcommittee, 
the tribe is a major oil and gas producer. We produce about 
45,000 barrels of oil a day and about 900 million cubic feet of 
gas per day.
    The tribe relies on these resources as a primary source of 
funding for our tribal government. We govern and provide 
services on the second largest reservation in the United 
States.
    Despite our progress, the tribe's ability to fully benefit 
from its resources is limited by the Federal agencies 
overseeing oil and gas development on the reservation.
    The companies who operate on the reservation tell the tribe 
that the Federal oil and gas permitting process is their single 
biggest risk factor.
    The BLM's proposed fracking rule will increase these risks 
and further limits the tribe's revenues. It would be impossible 
for me to tell you about all the problems with BLM's proposed 
rule in five minutes.
    I will focus on some of the most important problems. First, 
Indian lands are not public lands. Our reservation is for the 
exclusive use and benefit of the Ute Indian tribe.
    The BLM's role in overseeing permitting on the reservation 
should be in fulfillment of its Trust responsibility to the 
tribe and no one else.
    Instead, the BLM developed a public interest rule and wants 
to apply it to my reservation.
    At a meeting in Washington, D.C., BLM officials told tribes 
that they developed the rule in a response to public outcry. 
BLM should not apply public interest standards to Indian lands.
    Congress already passed a law telling BLM not to do this. 
BLM's organic act, the Federal Land Policy and Management Act 
of 1976, defines what are public lands and excludes Indian 
lands from this definition.
    This make sense when you think about it. We live on our 
lands. BLM rules might make sense for public lands but not the 
tribe lands.
    We have bills to pay. We rely on our oil and gas resources 
to fund our government, provide services to members, and invest 
in our economy.
    Second, the tribe has been in the oil and gas business for 
a long time, and I have not heard of any incidents that would 
require new Federal regulations for the wells on my 
reservation.
    Third, as I have testified before, the Federal agencies 
overseeing permitting already have too much to do and not 
enough staff.
    On our reservation, there is a backlog of hundreds of 
permits. The additional delay caused by BLM's fracking rule 
will have a big economic impact on the tribe.
    Currently, a single drilling rig completes about 20 wells a 
year on the reservation. If permitting becomes unreliable, 
companies will move their rigs off the reservation for state 
and private lands.
    The loss to the tribe from a single rig leaving the 
reservation is about $16 million over a 12-month period.
    To summarize other problems with the rule, it seems like 
BLM developed it without talking to anyone involved in the oil 
and gas development process. Many of the BLM's requirements 
simply will not work.
    I can tell you this, BLM never discussed its rule with my 
tribe. They should have. The tribe is a major domestic energy 
producer. We own our own energy company and we oversee 
development of the reservation with our own energy and minerals 
department.
    In fact, the Department's own policy requires that BLM 
consult with the tribe on actions affecting our resources. Just 
four months ago, the Department said its new tribal 
consultation policy would provide a strong meaningful role for 
tribal governments at all stages of Federal decision making on 
Indian policy.
    The BLM did no such thing. By the time BLM invited tribes 
to a meeting, the whole purpose of the meeting was to tell the 
tribes what BLM had already decided to do.
    BLM needs to postpone its rule and restart its consultation 
with tribes.
    I would like to thank you for the opportunity to present 
this testimony on behalf of the Ute Indian Tribe. Thank you.
    Again, I would just like to repeat what Chairman Tex Hall 
just said about Mr. Spisak, that he left the room. He should 
have stayed here, I believe.
    Congressman Kildee, he did say listening is part of the 
consultation, and he should have stayed here to listen to us.
    Thank you again.
    [The prepared statement of Ms. Cuch follows:]

Statement of Irene C. Cuch, Chairwoman, Ute Tribal Business Committee, 
          Ute Indian Tribe of the Uintah and Ouray Reservation

    Chairman Young, Ranking Member Boren, and Members of the 
Subcommittee on Indian and Alaska Native Affairs, my name is Irene 
Cuch. I am the Chairwoman of the Ute Tribal Business Committee for the 
Ute Indian Tribe of the Uintah and Ouray Reservation (Tribe). The Ute 
Indian Tribe consists of three Ute Bands: the Uintah, the Whiteriver 
and the Uncompahgre. Our Reservation is located in northeastern Utah. 
Thank you for the opportunity to provide this testimony on the Bureau 
of Land Management's (BLM) proposed hydraulic fracturing (fracing) rule 
and the impact it will have on energy development in Indian Country.
    My testimony will focus on problems with the BLM's fracing rule, 
BLM's failure to conduct meaningful tribal consultation, and some 
solutions to these issues. Although I have many concerns with the BLM's 
fracing rule, this should not be confused with a lack of concern for 
the environment, water, or the health of the Tribe's members. The Tribe 
is interested in not duplicating existing regulations and creating an 
efficient permitting process that will allow us to conduct business on 
the Reservation. The Reservation is our home and we know the value of 
protecting our natural resources.
I. Energy Development of the Ute Indian Tribe
    Energy development has long been an important part of the Tribe's 
Reservation economy. Production of oil and gas began on the Reservation 
in the 1940's. Over the past 70 years, production has been ongoing and 
went through periods of expansion. Today, the Tribe is a major oil and 
gas producer. The Tribe leases about 400,000 acres for oil and gas 
development. We have about 7,000 wells that produce 45,000 barrels of 
oil a day. We also produce about 900 million cubic feet of gas per day. 
And, we have plans for expansion. The Tribe is currently in process of 
opening up an additional 150,000 acres to mineral leases on the 
Reservation with an $80 million investment dedicated to exploration.
    The Tribe relies on its oil and gas development as the primary 
source of funding for our tribal government and the services we 
provide. We use these revenues to govern and provide services on the 
second largest reservation in the United States. Our Reservation covers 
more than 4.5 million acres and we have 3,175 members living on the 
Reservation.
    Our tribal government provides services to our members and manages 
the Reservation through 60 tribal departments and agencies including 
land, fish and wildlife management, housing, education, emergency 
medical services, public safety, and energy and minerals management. 
The Tribe is also a major employer and engine for economic growth in 
northeastern Utah. Tribal businesses include a bowling alley, a 
supermarket, gas stations, a feedlot, an information technology 
company, a manufacturing plant, Ute Oil Field Water Services, and Ute 
Energy. Our governmental programs and tribal enterprises employ 450 
people, 75% of whom are tribal members. Each year the Tribe generates 
tens of millions of dollars in economic activity in northeastern Utah.
    The Tribe takes an active role in the development of its resources 
as a majority owner of Ute Energy which has an annual capital budget of 
$216 million. In addition to numerous oil and gas wells, Ute Energy 
teamed with the Anadarko Petroleum Corporation to establish and jointly 
own the Chipeta gas processing and delivery plant in the Uintah Basin. 
The Tribe recently approved plans for Ute Energy to become a publically 
traded company. This investment will allow us to expand our energy 
development and increase revenues.
    Despite our progress, the Tribe's ability to fully benefit from its 
resources is limited by the federal agencies overseeing oil and gas 
development on the Reservation. As the oil and gas companies who 
operate on the Tribe's Reservation often tell the Tribe, the federal 
oil and gas permitting and regulatory process is the single biggest 
risk factor to operations on the Reservation. Add the BLM's proposed 
hydraulic fracturing regulations increase the risks dramatically. This 
process is primarily managed by the Department of the Interior (DOI).
II. General Problems with BLM's Proposed Hydraulic Fracturing Rule
    The BLM is developing new regulations, which I understand are under 
review by the Office of Management and Budget (OMB), for hydraulic 
fracturing activities used in the oil and gas development process on 
``public lands.'' We are concerned with the process by which BLM is 
developing its regulations as well as the impact it will have on the 
significant oil and gas industry on our Reservation. On its face, there 
are a variety of problems with BLM's fracing rule.
    First, the BLM incorrectly considers Indian lands to be public 
lands and plans to apply its fracing regulations to Indian lands. 
Indian lands are not public lands. Indian lands are for the exclusive 
use and benefit of Indian tribes. BLM's oversight of activities on our 
lands should be in fulfillment of the federal trust responsibility to 
the Tribe. BLM should not apply public interest standards to our lands. 
The Tribe requests that the Subcommittee develop and Congress pass 
legislation that would prevent Indian lands from being swept into laws 
and policies for public lands.
    The fracing rule, as currently written, will reduce the benefits 
that the Tribe is able to realize from its lands. The fracing rule will 
increase costs to operators, slow development of Reservation lands, and 
introduce additional uncertainty in the permitting process that will 
lead to reduced oil and gas development on our Reservation. This may be 
acceptable for oil and gas development on public lands, but not on the 
Tribe's lands. The Tribe relies on its oil and gas development to fund 
its government, provide services to members, and invest in the regional 
economy.
    Second, we know of no incidents on tribal lands that would 
necessitate federal regulation of fracing. According to the draft 
regulations the BLM provided at a meeting in Salt Lake City, Utah, the 
BLM plans to look at three key issues pertaining to the fracing 
process: wellbore integrity, disclosure, and flowback water. For each 
of these three areas, there has never been a fracing related problem on 
our Reservation.
    Third, the proposed rule would require prior approval from the BLM 
for all well stimulation activities, not just fracing of oil and gas 
wells. This additional time required for BLM staff to review a proposed 
fracing job only adds to delays oil and gas companies on the 
Reservation face--delays that have economic consequences. Requiring BLM 
approval for fracing adds to the burden of an already short-staffed BLM 
Field Office. At our BLM Field Office there is already a backlog of 
application for permits to drill (APD). Adding an additional burden on 
BLM staff will only worsen the problem.
    Fourth, oil and gas operators seeking permits to drill on Indian 
already undergo an extensive environmental review process before they 
can begin drilling activities. This process has become lengthy, time 
consuming and costly, so much so that there is a backlog of hundreds of 
APD's that have not been acted upon by our local BLM Field Office.
    An oil and gas permit is already subject to approval processes by 
the BLM, the Bureau of Indian Affairs, the Utah Division of Oil and Gas 
and the Tribe's Energy and Minerals Department. New Clean Air Act 
restrictions may be on the horizon for activities on the Reservation, 
and new United States Fish and Wildlife Service sage grouse 
conservation requirements are pending. Further, hookless cactus 
mitigation requirements applicable to the Tribe's lands become more 
restrictive daily. When operating on the Reservation, our industry 
partners are also subject to review under the National Environmental 
Policy Act and BLM's Federal Lands Policy and Management Act planning 
rules. Adding to these hurdles and requirements by requiring additional 
approval of fracing plans will in no way improve an already over-
regulated process.
    Fifth, delays in the oil and gas permit approval process are 
already causing energy companies to limit their activities on the 
Tribe's lands. Companies operating on the Reservation cite the federal 
approval process as the single biggest risk to their business 
activities, and additional delays will cause oil and gas operators to 
leave the Tribe's lands for state and private lands. Each delayed 
approval for drilling activities, each drilling rig that must leave the 
Tribe's lands due to uncertainty or inactivity, each limitation on oil 
and gas production on the Tribe's lands, reduces the Tribe's revenues 
from oil and gas development.
    The additional delays that will be caused by the BLM's fracing rule 
will have an astronomical economic impact on the Tribe. For example, a 
company operating single drilling rig can drill approximately 20 wells 
per year. If that drilling rig were to leave the Reservation because of 
delays in obtaining permits, the economic loss to the Tribe will be 
approximately $16.2 million over a twelve-month period.
    In addition, some companies could operate three drilling rigs on 
the Reservation and drill approximately 60 wells per year. If those 
drilling rigs leave the Reservation or are limited in the number of 
wells they can drill, the economic loss to the Tribe will be 
approximately $48.7 million over a twelve-month period. This data is 
illustrative of only a single company's drilling program; the figures 
become more daunting when you multiply the figures by the many 
companies operating on the Reservation.
    Finally, BLM's fracing rule is premature ahead of Environmental 
Protection Agency (EPA), and other federal agencies, ongoing scientific 
studies on fracing. BLM has offered no justification for proceeding 
with this new regulation without the benefit of these studies. Without 
clear demonstration of a problem with the fracing process, specifically 
the type of fracing done on our Reservation, and any other information 
that may come from these studies, the BLM regulation is putting the 
cart before the horse.
III. Specific Problems with BLM's Proposed Hydraulic Fracturing Rule
    First, the BLM's hydraulic fracing rule requires ``pre-fracing 
disclosure.'' The fracing rule, as drafted, requires operators to 
provide BLM with detailed information regarding anticipated fracing 
operations at least 30 days in advance of the proposed fracing job. The 
information required by BLM includes identification of all additives to 
be used in fracing and the complete chemical makeup of the overall 
fracing fluid mixture, as well as other detailed information. The 
``plan'' is subject to approval by the authorized officer.
    Requiring ``pre-fracing disclosure'' is impractical and will 
ultimately be ineffective. The fracing rule would require operators to 
estimate the types and amounts of chemicals to be used at a time when 
that information may not be known or when that information may change 
due to conditions the operator obtains from subsurface conditions. In 
addition, the plan that the operator submits to the BLM for approval 
may change over the course of time due to scheduling conflicts and 
other factors thus forcing the operator to use a different service 
provider which results in the use of a different set of product 
additives. Moreover, fracing treatments are often continuously adjusted 
and revised as the well is drilled and more information is gathered 
about well-specific conditions.
    As a result, the information that is supplied to the BLM prior to 
fracing a well may well become stale as conditions change. Thus, the 
information supplied to the BLM will be of no practical use, yet 
causing the operator to devote substantial resources to gathering and 
providing this information to the BLM. This is simply not practical.
    Second, the BLM's fracing rule requires disclosure of ``chemical 
concentrations.'' The BLM fracing rule requires the disclosure of the 
percentage by mass of each chemical contained in the fracing fluid. 
However, providing the exact concentration of an ingredient in the 
fracing fluid used at a specific well site would be very difficult and 
burdensome because it would require sampling and extensive laboratory 
testing of the fluid used at each well.
    In contrast, state governments that require the disclosure of 
fracing fluids only require the maximum concentrations of chemicals. 
This also helps to prevent the disclosure of the chemical formulas or 
particular additive products, which companies consider proprietary 
information. The Tribe is concerned that rather than disclosing 
confidential competitive information, services providers simply will 
not operate on tribal land or alternatively, the very best products 
will not be used for oil and gas recovery on tribal land.
    Third, the BLM fracing rule requires disclosure of more than just 
``intentionally added ingredients.'' The BLM's fracing rule, as 
currently written, requires the disclosure of all ingredients in a 
fracing fluid mixture. State governments which have adopted a fracing 
rule only require the disclosure of ingredients intentionally added to 
a base fluid and does not extend to chemicals that may be incidentally 
present in fracing fluids as a result of chemical reactions or 
impurities in the base fluid. Both Texas and Colorado have adopted this 
approach.
    Fourth, the BLM fracing rule requires an operator to provide the 
``chemical composition of flowback'' as part of its plan for well 
stimulation operations. This requirement is inherently unworkable. It 
would, in effect, mandate that operators sample and analyze the 
flowback fluid from a well to determine its chemical makeup at a time 
when the flowback has not even been generated and would therefore be 
impossible to analyze.
    Finally, the BLM fracing rule requires ``compliance 
certification.'' The BLM fracing rule requires operators to certify 
that they are in compliance not only with applicable federal law but 
also state and local law concerning fracing. This would effectively 
make state and local law applicable to Indian lands. The BLM cannot by 
regulation make state and local law applicable to Indian lands without 
a specific act of Congress. The Tribe maintains its own laws and, 
pursuant to its federal trust responsibility, the BLM should instead be 
encouraging tribal regulation of oil and gas activities on tribal 
lands, rather than threatening tribes with state and local 
jurisdiction.
IV. Failure of BLM to Fulfill Tribal Consultation Policies
    After barely beginning to consult with tribal governments, I 
understand that OMB is already reviewing BLM's draft fracing rule. This 
rule will have a substantial impact on energy development on Indian 
lands and BLM must fulfill tribal consultation policies. To date, BLM 
has not complied with Executive Order No. 13175 on Consultation and 
Coordination with Indian Tribal Governments, the Department of the 
Interior's Policy on Consultation with Indian Tribes (Tribal 
Consultation Policy), and its December 1, 2011, affirmation of those 
policies in Secretarial Order No. 3317. BLM's actions do not uphold its 
obligations under the federal trust responsibility and do not fulfill 
the Department's long-standing and ongoing commitment to consult with 
Indian tribes.
    The Department's tribal consultation policy states that tribal 
``[c]onsultation is a deliberative process that aims to create 
effective collaboration and informed Federal decision-making [and, 
that]. . .[c]onsultation is built upon government-to-government 
exchange of information and promotes enhanced communication that 
emphasizes trust, respect, and shared responsibility.'' Department of 
the Interior Policy on Consultation with Indian Tribes at Sec. II. In 
contrast, BLM has only held four informational meetings on the proposed 
fracing rule and already has a draft rule pending at the OMB for 
publication in the Federal Register.
    In addition, BLM never developed a protocol or timeline for tribal 
consultation, did not include tribal input in its draft regulations, 
did not engage tribes in a discussion about the need for a rule, and 
did not engage tribes in a discussion about alternatives that would 
limit the scope of Federal standards or otherwise preserve the 
prerogatives and authority of Indian tribes. Because of the impacts the 
proposed fracing rule will have on tribal resources, BLM is required to 
follow the ``Stages of Consultation'' set out in the Department's 
Policy on Consultation with Indian Tribes in the development of any 
fracing rule. These stages include an ``Initial Planning Stage,'' a 
``Proposal Development Stage,'' and an ``Implementation of Final 
Federal Action Stage.''
    On March 26, 2012, a few tribes met with BLM in Washington, D.C. to 
attempt to resolve our concerns regarding BLM's failure to meaningfully 
consult with tribes. BLM rejected our concerns. BLM stated that its 
past actions and its willingness to meet with tribes if tribes so 
request fulfills the Department's tribal consultation policies. These 
actions completely fail to provide tribes with effective consultation 
as required by the Administration's and the Department's consultation 
policies.
    If corrective active is not taken, the BLM's actions will fail to 
fulfill a Departmental policy that was announced only four months ago. 
In December 2011, the Department announced that its new Tribal 
Consultation Policy would provide, ``a strong, meaningful role for 
tribal governments at all stages of federal decision-making on Indian 
policy.'' Press Release, Department of the Interior, ``Secretary 
Salazar Kicks Off White House Tribal Nations Conference at Department 
of the Interior'' (Dec. 2, 2011). BLM has not afforded tribes the 
meaningful role described in this announcement in the development of 
its fracing rule.
    To ensure that the proposed rule will be developed according to 
tribal consultation policies, I ask that the Subcommittee seek the help 
of the Assistant Secretary for Indian Affairs in this matter. The 
Assistant Secretary could work with the BLM to: (1) develop a 
consultation protocol that will comply with the Department's Tribal 
Consultation Policy, and (2) determine how the proposed rule should 
apply in Indian Country if at all, in light of the federal trust 
responsibility, the federal policy to promote economic development and 
tribal self-sufficiency, and other concerns unique to Indian Country.
    I also ask that the Subcommittee inquire about involving the 
Department's Tribal Governance Officer (TGO) to monitor BLM's actions 
as it develops an appropriate consultation protocol. This protocol 
should clarify that BLM has withdrawn the draft regulations from OMB or 
excluded Indian lands from the proposed rule, is ready to engage tribes 
in the Initial Planning Stage and the other two stages of consultation, 
and generally set out the steps that BLM will follow to comply with the 
Department's Tribal Consultation Policy, including working with tribes 
to develop a consultation timeline.
    The Department's TGO can assist and monitor BLM's efforts to 
develop this protocol. The Department's Tribal Consultation Policy 
directs TGO's to facilitate government-to-government consultation, to 
implement a reporting system to ensure that consultation efforts are 
documented and reported to the Secretary, and to fulfill other TGO 
obligations under the Department's policy. Tribal Consultation Policy 
Sec. VII.B.1(a)-(g).
    Fortunately, the BLM still has the opportunity to correct its 
violation of the policy and take steps to fully engage tribes in 
consultation. The Tribe is willing to work with the Department, its 
TGO, the BLM, and the Assistant Secretary for Indian Affairs to develop 
an appropriate tribal consultation protocol to consider issues related 
to fracing.
V. Conclusion
    I would like to thank Chairman Young, Ranking Member Boren and 
members of the Subcommittee for the opportunity to present this 
testimony on behalf of the Ute Indian Tribe. The Tribe stands ready to 
work with the Subcommittee to find common and practical ground 
concerning the proposed fracing rule and to eliminate the barriers to 
tribal resource development that this rule would create. The current 
barriers, and the promulgation of any new barriers, have a direct 
effect on the Tribe's revenues, our ability to invest in the future, 
and the services we are able to provide our members, our children and 
grandchildren.
    Towaok (Thank You)
                                 ______
                                 
    Mr. Young. Tex and Irene, do not be too hard on Mr. Spisak. 
He is a lackey and came down here at the direction. Who should 
have been sitting there was Mr. Salazar or somebody higher up. 
They are following the lead.
    Look who the witnesses were they had. They had Trout 
Unlimited and Carol Browner and the Defense League.
    He is just fulfilling his job. I am not defending him. I am 
just saying who we should be talking to and you should be 
talking to is the Secretary. He chose not to show up. Remember 
the President said they had your back. I would again check that 
out.
    He is just a hired hand, you know.
    Mr. T.J. Show, Blackfeet Tribal Business Council.

               STATEMENT OF T.J. SHOW, CHAIRMAN, 
               BLACKFEET TRIBAL BUSINESS COUNCIL

    Mr. Show. Good morning, Chairman Young and members of the 
Subcommittee. My name is T.J. Show. I am the Chairman of the 
Blackfeet Nation of Montana.
    I am honored to be here and thank you for conducting 
today's hearing and your interest in issues that affect energy 
development in Indian Country.
    In presenting my testimony today, I want to honor the 
memory of Corporal Antonio Burnside, ``Many Hides,'' a young 
Blackfeet warrior who was just recently killed in the line of 
duty in Afghanistan. Thank you.
    The Blackfeet Reservation is a 1.5 million acre reservation 
established by a Treaty within the United States in 1855. 
Unemployment on the reservation reaches 70 to 80 percent.
    The reservation is dependent on development of oil and gas 
to improve economic conditions for our people.
    Presently, we have significant exploration activities 
underway by a number of companies.
    Today, I would like to address three primary concerns we 
have about the proposed BLM fracking rule.
    Number one, the lack of meaningful consultation with 
tribes, meeting the Department of the Interior policy on 
consultation with the tribes.
    Number two, the disregard for tribal sovereignty by 
treating Indian lands like general public lands, and requiring 
compliance with state and local laws.
    Number three, the unworkable and unrealistic provisions 
that have the potential for impacting the reservation's 
development.
    I attended BLM's informational meeting in Billings, Montana 
on January 12, 2012. BLM stated the session was informal only 
and was not a formal consultation. The presentation generally 
discussed hydraulic fracturing, but did not include a 
presentation of the proposed rule, and the BLM did not solicit 
any tribal comments on the rule.
    These discussions fall short in compliance with the 
Interior's consultation Order No. 3317, that communication will 
be open and transparent without compromising the rights of 
Indian tribes or the Government to Government consultation 
process.
    Unfortunately, the BLM chose to develop a rule without 
participation and chose to forward the proposed rule for final 
adoption without regard to Order No. 3317.
    BLM officials state the rule was developed to respond to 
public outcry regarding use of hydraulic fracturing for East 
Coast development of public lands.
    However, we do not consider our reservation lands public 
lands. On tribal lands, the tribes have ownership and control 
of the minerals subject to the Trust obligation of the United 
States.
    BLM's proposed rules to address public outcry for 
activities on public lands overreaches its goal and infringes 
on tribal sovereignty.
    The proposed rule mandates that development of activities 
comply with state and local laws, imposing state and local law 
on tribes is in conflict with the existing law governing 
jurisdiction on the reservations.
    Presently, we struggle with the delayed BLM approval of 
APDs, which has routinely taken three to 18 months. The 
proposed rule adds to the already lengthy BLM review process. 
The delays and the burden of the rules makes the reservation 
development less attractive and our neighboring fee land owners 
will benefit long before we do.
    The BLM proposed rule appears to raise three distinct 
concerns with hydraulic fracking. Disclosure of chemical 
additives for well stimulation, well bore integrity, and water 
management.
    The Blackfeet Tribe has already implemented measures to 
address these concerns. The Blackfeet Tribe presently requires 
oil companies to number one, disclose all chemicals utilized 
for fracking. Number two, has contracted with BLM for an 
inspector for well bore integrity, and finally, number three, 
exploring methods for on-site water treatment for reuse.
    Based on our experience with the development at the 
Blackfeet Tribe, we have several recommendations.
    Withdraw the BLM rule and develop a separate Indian Country 
rule that considers the unique issues on Indian reservations. 
An Indian Country rule can balance the need for development 
with responsible regulation consistent with tribal sovereignty.
    Any rule should be integrated with existing application and 
approval process so not to add any additional delays or 
burdens.
    Standards for acceptable hydraulic fracking need to be 
developed. Disclosure is only part of the answer. Standards are 
required to approve or disapprove fracking activity once 
disclosure is made.
    The development of baseline water quality data for 
groundwater is essential. Impacts can only be assessed with 
existing water quality data for comparison. Sufficient 
resources to the BLM and BIA are absolutely necessary for 
efficient implementation of the rule including enforcement.
    Finally, an one stop shop would streamline the review 
process and approval process of necessary applications and 
permits at the Blackfeet.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Show follows:]

                   Statement of T.J. Show, Chairman, 
          Blackfeet Tribal Business Council, Blackfeet Nation

    Good Morning Chairman Young and honorable members of the House 
Resources Subcommittee on Indian and Alaska Natives, my name is T. J. 
Show and I am the Chairman of the Blackfeet Nation of Montana. I am 
honored to be here and thank you for conducting today's hearing and 
your interest in issues that affect energy development in Indian 
Country.
    The Blackfeet Reservation, located along the Rocky Mountain Front 
in Northwest Montana, shares a border with Canada, is adjacent to the 
Glacier National Park and is inhabited by approximately 9,000 members 
of the total 18,000 plus Blackfeet Tribal members. The Blackfeet 
Reservation was established by a Treaty with the United States in 1855 
and today consists of 1.5 million acres. The Blackfeet homeland is 
known for its pristine mountain ranges, clear mountain lakes and 
streams, abundant wildlife and wide open country. The Tribe has a long-
standing record of responsible stewardship evidenced by the existence 
of tribal laws to regulate, manage and protect land, natural resources 
and wildlife.
    The Blackfeet Tribe, like numerous other large land-based Tribes, 
suffers from an unemployment rate that reaches 70 to 80 percent, a lack 
of on-Reservation economic development opportunities, an extreme 
shortage of housing, sub-standard governmental buildings and 
overwhelmed medical facilities. The Blackfeet Tribal government, like 
many other tribal governments, is frustrated with the continued 
reduction of federal funds available to fulfill treaty obligations for 
essential services. Thus, the Blackfeet Council has determined that 
development of the large pools of oil and natural gas that on the 
Blackfeet reservation, in a responsible manner, is the most viable 
option to improve the Reservation economy, to provide jobs to Tribal 
members, to provide necessary services on the Reservation, and to bring 
some measure of improvement to the standard of living of Blackfeet 
tribal members.
Status of Blackfeet Development
    The Blackfeet Reservation has a lengthy history of oil and gas 
development that extends back to the 1930's. The 1950's and a brief 
period in the early 1980's marked the heyday of production on the 
Reservation. However, as oil fields aged and market forces have 
affected development, new oil and gas production has been at a 
standstill since the mid-1980's. However, interest in oil and gas 
development has greatly increased, and beginning in 2008, the Blackfeet 
Tribe has negotiated Indian Mineral Development Agreements with various 
oil and gas companies, as authorized by the Indian Mineral Development 
Act of 1983. Consistent with the intent of the Indian Mineral 
Development Act, the Tribe exercised its sovereign authority over the 
Blackfeet mineral resources to establish the terms and parameters for 
exploration and development. The IMDA's were all reviewed and approved 
by the Bureau of Indian Affairs.
    The Tribe is now attempting to implement the IMDA's through the 
negotiation of mineral leases and commencement of mineral exploration 
by the companies. However, progress has been extremely slow and 
burdensome as the Tribe and the producers attempt to comply with the 
requirements of the BIA and BLM for access rights to exploration sites, 
changing environmental requirements, permits to drill and lease 
approvals. Often the federal mandates are duplicative and the federal 
agencies have been largely unable to review and approve documents in a 
timely manner. For Blackfeet, the local BIA agency is responsible for 
leases, while the Regional Office in Billings, over 350 miles away, is 
responsible for IMDA issues. Permitting and development issues are 
handled by the regional BLM office 150 miles from the reservation. 
Approvals of required documents for Blackfeet development can take from 
6 months to two years under the present processes. Exploration and 
development on the Blackfeet reservation is expensive, time-consuming 
and lagging behind nearby off-reservation development.
    The Blackfeet Tribe is concerned that BLM's proposed rule on 
Hydraulic Fracturing, if adopted, will create additional burdens to an 
already burdensome process that will likely delay and possibly prevent 
beneficial development of Blackfeet oil resources. To be clear, 
hydraulic fracturing is necessary to fully explore and maximize oil 
development on the Blackfeet Reservation. At the same time, the Tribe 
has a responsibility to its Tribal members and other Reservation 
residents to insure that hydraulic fracturing activities on the 
Reservation are conducted in a safe and environmentally sound manner. 
However, the Tribe is not willing to allow the imposition of rules by 
the Federal Government that are promulgated without the Tribe's full 
participation, and that do not take into account the unique issues of 
development on the Blackfeet Reservation.
Lack of Meaningful Consultation
    On December 1st of 2011, the Department of Interior adopted Order 
No. 3317, the Department of the Interior Policy on Consultation with 
Indian Tribes to acknowledge that the provisions for conducting 
consultation complies with Executive Order 13175, Consultation and 
Coordination with Indian Tribal Governments. Tribes welcomed the 
consultation policy as a positive effort to enhance government to 
government relationships and to involve Tribes in a meaningful and 
transparent manner in the creation of federal policy. However, just 
months later, the BLM developed a rule that seriously impacts Indian 
Country energy development without regard to the consultation process.
    Recently, I was invited by the Bureau of Land Management to 
participate in discussions regarding the process of hydraulic 
fracturing well stimulation for oil development. I attended the 
scheduled discussion in Billings, Montana on January 12, 2012. BLM 
representations, from the outset of the day-long presentation, stated 
the session was informational only and was not a formal consultation. 
While the presentation generally discussed issues related to hydraulic 
fracturing, it did not include an overview of the proposed rule on 
hydraulic fracturing, and BLM representatives did not solicit any 
Tribal comments on issues relating to regulation of well stimulation. 
While the BLM discussed the hydraulic fracturing processing with 
Tribes, these discussions fall short of compliance with the mandates of 
Order No. 3317 that ``Communication will be open and transparent 
without compromising the rights of Indian tribes or the government-to-
government consultation process'' Unfortunately, the BLM choose to 
develop a rule without Tribal participation, in apparent response to 
issues outside Indian Country, and chose to forward the proposed rule 
toward final adoption without regard to Order No. 3317.
The Proposed Rule's impact on Tribal Sovereignty
    Blackfeet Tribal representatives participated in a discussion with 
BLM officials specifically regarding the proposed hydraulic fracturing 
rule on March 23, 2012. BLM officials stated the rule was developed to 
respond to public outcry regarding the use of hydraulic fracturing for 
east coast development of public lands. However, we do not consider our 
reservation lands public lands. The considerations that the Federal 
Government must take into account for development on federal lands in 
furtherance of its responsibility to the general public do not apply on 
Indian lands. Tribal lands are governed by the Tribes pursuant to 
``inherent powers of a limited sovereignty which have never been 
extinguished,'' derived from their sovereign existence predating 
European settlement of the United States. On Tribal lands, the Tribes 
have ownership and control of the minerals subject to the trust 
obligations of the United States. The policy considerations for 
development of Tribal lands are made by the Tribes in the best interest 
of their Tribal members. BLM's proposed rule to address public outcry 
for activities on public lands overreaches its goal and infringes on 
tribal sovereign authority to make decisions concerning development on 
reservation lands.
    As discussed above, the Tribe has entered into Indian Mineral 
Development Agreements, consistent with its sovereign authority to 
govern oil and gas development, that specifically address the 
development and production relationship between the Tribe and oil 
companies.
    The additional requirements of the proposed rule may impact a 
company's ability to comply with negotiated timeframes for exploration 
and well construction in an IMDA.
    The proposed rule also mandates that development activities comply 
with all applicable federal laws, rules and regulations and ``state and 
local laws, rules, and regulations.'' Imposing state and local law on 
Tribes clearly infringes on tribal sovereignty and could empower an 
unfriendly local government to adopt regulations that curtail or 
complicate Tribal oil development. The State of Montana has no 
jurisdiction over Tribal lands, and the Tribe is unwilling to accept a 
mandate that on-reservation activities comply with local or State 
regulations.
    In addition to the delay concerns with duplicative requirements, 
the proposed rule requires BLM to make a formal decision before well 
stimulation operations. 43 CFR Part 4 allows any interested party to 
appeal a BLM decision. The rule authorizes BLM to render a formal 
decision although no standards were included in the rule for approval 
or disapproval of hydraulic fracturing proposals. Thus, the door opens 
for entities in conflict with tribal development, regardless of 
affiliation with the Tribe, to file an appeal of the approval. Without 
standards for approval of the various hydraulic fracturing activities, 
the determination of whether a proposed well stimulation activity is 
acceptable will be determined by either an administrative decision-
maker or a federal court. Further, an appeal, if pursued through the 
various administrative stages can take years to resolve before 
proceeding in Federal Court. This open-ended opportunity for interested 
parties to appeal creates a mechanism to thwart development of 
Blackfeet resources, empowers either an administrative body or the 
Court to determine acceptable practices for hydraulic fracturing, and 
more importantly, infringes on Tribal sovereignty. Such a process may 
be appropriate for development on federal lands, but not on Indian 
lands.
Burdensome Requirements of New Rule
    Presently, operators must submit an application for a permit to 
drill (``APD'') before any drilling activity commences. The APD 
describes the proposed drilling plan. The proposed rule then requires 
submission of a Notice of Intent Sundry (``NOI'') to the BLM for any 
and all well stimulation activities at least 30 days before the 
commencement of well stimulation operations. In most instances, the 
chemical composition for the fracturing activity is not finally 
determined until data is collected from the well. To stop the on-going 
exploration activity and submit the NOI for approval 30 days prior to 
the fracturing activity will disrupt the exploration process.
    Presently, we struggle with the delayed BLM approval of APDs which 
has routinely taken from three months to 18 months. Adding twice the 
paperwork, with new requirements, for review and approval will 
certainly increase the delay time as well as increase the overall costs 
for BLM. Additionally, and most importantly, the proposed rule provides 
no standards to approve or disapprove well stimulation activities as no 
guidance is provided for acceptable or unacceptable well stimulation, 
chemical/additive usage, or chemical mass compositions. The rule makes 
no reference to current industry standards and instead appears to 
disregard them.
    Hydraulic fracturing well stimulation is currently under debate in 
many forums across the country. A major concern exists regarding the 
chemical additives utilized by the industry for fracturing activities 
and I understand BLM's proposed rule is to facilitate disclosure of 
additives utilized for well stimulation operations. However, the rule 
does not address how the BLM will react to the chemical disclosures 
other than to grant approval or disapproval of activities. A public 
disclosure of specific chemicals utilized presently occurs in numerous 
jurisdictions but little information exists as to appropriate action 
following disclosure.
    BLM's proposed rule goes beyond requiring the disclosure of 
additives to requiring a report on the complete chemical makeup of the 
stimulation. Prior to stimulation operations, the operator must submit 
the mass composition of the chemical and water combination for the 
entire stimulation to the BLM for approval. Two specific concerns exist 
with this requirement. First, no standards are provided to determine 
acceptable or unacceptable chemicals or in what quantities or an 
acceptable total chemical makeup of the stimulation activity (including 
fresh water). Second, I understand that stimulation activities often 
change depending on geologic conditions, weather and temperature, that 
are often unpredictable and outside the control of the operator. I am 
concerned that operations would shut down each time a change in the 
stimulation process occurs to comply with the additional reporting and 
approval process which would prevent expeditious exploration and likely 
delay moving from oil exploration to productive development. For 
example, if it rains, snows, or temperatures drop below freezing during 
well stimulation activities, the chemical composition of the fracturing 
fluids would likely change and, under the rule, the operation would 
have to stop and a new report for approval of the changed fluid 
submitted for approval. Blackfeet Country is subject to extreme climate 
changes that will likely cause changes in stimulation process 
especially when stimulating previously drilled wells. This provision of 
the rule appears drafted to intentionally stop hydraulic well 
fracturing activity.
    These additional requirements will increase costs of development 
and decrease proceeds from oil development to tribal members and 
Tribes. Further, these additional requirements will render reservation 
development less attractive and open doors for our neighboring fee land 
owners to realize the financial benefits of oil development long before 
we do.
Current Blackfeet Practices
    The BLM proposed rule appears to raise three distinct concerns with 
hydraulic fracturing well stimulation; disclosure of chemical additives 
for well stimulation, well-bore integrity (to insure protection of the 
aquifer) and water management. The Blackfeet Tribe already seriously 
considered these concerns and implemented measures to address them to 
our satisfaction. First, we have reached an agreement with our industry 
partners for full disclosure of chemicals/additives utilized for well 
stimulation. As required by the BLM in Montana, these chemicals are 
also disclosed to the State. Thus, the Tribe, the owner of the land and 
governing authority over all lands within the Blackfeet reservation is 
informed about the chemicals used for well stimulation. The Tribal Oil 
and Gas Department is now reviewing industry standards to determine 
acceptable types of hydraulic fracturing well stimulation.
    Secondly, the Blackfeet Tribe has entered into a contract with the 
BLM for the training and employment of a tribal member to serve as a 
petroleum engineer technician that inspects all well construction 
activity to insure well bore integrity. Thus, we are assured that we 
are monitoring the construction of well casings to comply with industry 
standards for the protection of the aquifer.
    Finally, the Blackfeet Tribe is proposing a water management scheme 
that will treat water recovered from hydraulic fracturing activities 
on-site utilizing a mobile water treatment process that will treat 
water for re-use.
    These efforts reflect how seriously the Blackfeet Tribe considers 
these matters. We will continue to address them as a matter of Tribal 
law and regulation. Any federal regulations must take into account the 
Tribe's role in these matters, and its on-going effort to address them, 
and not supplant them.
    Instead of applying a rule to Indian country that is intended to 
address a set of very different situations on public lands, I am 
hopeful that through Tribal and federal collaboration and cooperation, 
a different alternative is considered. In that spirit, I believe there 
are sound alternatives to the proposed rule.
Recommendations
        1.  An alternative hydraulic fracturing rule to the proposed 
        BLM rule should be developed to apply to Indian Country 
        exploration and development that considers the unique issues on 
        Indian reservations. This rule should be promulgated in 
        compliance with Interior's Order No. 3317 in collaboration with 
        the Bureau of Indian Affairs. An alternative rule could balance 
        the interests of Tribal oil and gas development with protection 
        of pristine Tribal lands and water and avoid infringement on 
        tribal sovereignty. Tribes must be trusted with decision-making 
        authority over their lands and allowed to be at the forefront 
        of the development of any rules or regulations that impact, 
        affect or involve their homelands. Upon completion of a rule 
        applicable to Indian Country, Tribes could be allowed to 
        undertake regulatory activities through compacting or 
        contracting. In addition to this alternative rule, Tribes 
        should be provided financial resources to develop capacity for 
        effective regulation. The proposed BLM rule necessitates 
        additional funds to the BLM and BIA for implementation. Thus, 
        it should not be considered unrealistic that Tribes, instead of 
        the BLM, should be funded to carry out regulatory activities on 
        Indian lands.
        2.  Standards for acceptable hydraulic fracturing well 
        stimulation should be developed with consideration of the 
        varying types of geology, chemical compositions of water, 
        location of wells, probability of success at stimulation and 
        industry practices.
        3.  This rule, consistent with public concerns, is generated 
        due to a lack of knowledge regarding impacts of hydraulic 
        fracturing of groundwater. However, impacts can only be 
        assessed with existing water quality data for comparison. Thus, 
        the development of baseline water quality data for groundwater 
        is essential.
        4.  If a rule on hydraulic fracturing, similar to the proposed 
        rule, is adopted, sufficient resources to the BLM and BIA are 
        absolutely necessary for efficient implementation of the rule 
        including enforcement.
        5.  Finally, implementation of a ``one-stop shop'' comprised of 
        representatives of the various agencies with approval authority 
        over exploration and development activities housed on the 
        Blackfeet Reservation would streamline the review and approval 
        process of the required applications, permits and sundry 
        notices required for Blackfeet oil exploration and development. 
        A one-stop shop would demonstrate a clear commitment to 
        realistic development for the Blackfeet Reservation.
Conclusion
    I would like to again thank the Committee for conducting this 
hearing regarding BLM's proposed rule on hydraulic fracturing and for 
consideration of my testimony. In conclusion, the Blackfeet Nation 
hopes to proceed with responsible oil and gas exploration and 
development while remaining always mindful of environmental protection. 
Further, we are not proposing the hydraulic fracturing occur without 
regulation. However, BLM's proposed rule is not the appropriate rule 
for Indian Country development and will likely prevent development of 
reservation fossil fuels.
                                 ______
                                 
    Mr. Young. Thank you, T.J.
    Mike, you are up.

             STATEMENT OF MIKE OLGUIN, VICE CHAIR, 
               SOUTHERN UTE INDIAN TRIBAL COUNCIL

    Mr. Olguin. Good morning, Chairman Young, Ranking Member 
Boren, and members of the Subcommittee.
    I am Michael Olguin, the Vice Chairman of the Southern Ute 
Indian Tribe. I am honored to appear before you today on behalf 
of my tribe, my people, and Tribal Council, to provide 
testimony regarding the Bureau of Land Management's proposed 
regulation on fracking in tribal energy development.
    Thank you, Chairman Young, for holding a hearing at this 
critical time on this important issue.
    Unfortunately, we do not believe that BLM has engaged in 
effective tribal consultation on its proposed rules.
    At Southern Ute, we have a long history of energy 
development, and have used fracking for many decades. If BLM 
had worked with us and other energy tribes to develop the 
proposed rules, we believe the draft rules would be much 
better.
    Instead, we were asked to consult and then handed rules 
that had already been drafted.
    Despite BLM's failure to effectively consult with us, we 
hope that the agency will consider the comments made by tribal 
leaders here today.
    Thank you for providing us this opportunity.
    We are extremely concerned that the agency's proposed 
fracking rules will add more hurdles to energy development on 
tribal lands.
    We fear that additional requirements when piled on top of 
the existing bureaucracy will only cause more and more 
operators to move away from tribal lands and onto state and 
private lands, which are not subject to such procedures.
    If developers leave tribal lands, Indian Country loses 
economic potential, and ultimately domestic energy production 
suffers.
    As I mentioned, our tribe has used fracking over several 
decades to develop our mineral resources. Hopefully, these 
techniques will continue to help us develop new opportunities 
for decades to come.
    Given our long history and experience in energy 
development, we respect and understand the concerns of fracking 
that the BLM's proposed rules seek to address.
    Our Tribal Council has always sought to balance the 
economic benefits of our development with the environmental, 
health and safety concerns of our people and community.
    Like many other tribes, we have already taken a number of 
steps to address these issues as they relate to fracking. For 
example, we support full disclosure of chemicals used in the 
fracking process. The tribe also participates in domestic water 
well testing programs.
    In addition, we were instrumental in requiring that wells 
in the San Juan Basin are cemented to the surface, which 
protects groundwater by improving well integrity.
    These and other best management practices provide 
protection without being unduly burdensome.
    We continue to urge BLM to ensure that any rules drafted by 
the agency be cost effective and consistent with best 
practices.
    Unfortunately, as currently drafted, the BLM's proposed 
rules do not meet these objectives.
    Certain requirements proposed by the BLM are simply 
impractical. It is nearly impossible for an operator to submit 
an accurate detailed frack design 30 days prior to a fracking 
operation as opposed by the draft rules.
    Typically, the details of such a proposal depends upon 
information learned as the well is drilled.
    Also, the rules would require the operators run cement bond 
logs on each and every well. This requirement will result in 
significant expense but little additional benefit.
    The BLM already receives well completion reports that 
reflect the success of well integrity measures, like cementing 
the well to the surface which is already required.
    Beyond the substance of the proposed rules, we must 
emphasize our concern about BLM's ability to implement them.
    BLM does not have adequate staff to process additional 
duties in a timely fashion. In fact, existing staff may not be 
qualified to do so at all.
    We already deal with agencies within the Department of the 
Interior that are under staffed, under funded, and under 
qualified. Adding more Federal regulators to the mix will not 
help things.
    Given these issues, our primary concern over BLM's proposed 
fracking regulations is the effect those rules would have on 
energy development on Indian lands.
    As you know, because of the nature of Indian lands, our 
activities are already subject to a maze of Federal approvals. 
Adding more hoops to the existing requirements will only 
further impede tribal economic and mineral development.
    We have already seen operators move on to state and private 
lands, where unlike tribal land, the numerous and burdensome 
Federal requirements do not apply.
    Operators will find the path of least resistance and once 
they leave, they may never return to tribal lands.
    The additional requirements proposed by the BLM will only 
make tribal energy development more challenging while imposing 
new restrictions that are either unnecessary or ineffective.
    In closing, we believe that the status quo for addressing 
frack issues is working at Southern Ute. Had BLM asked us about 
it, we would have told them that. What is not working are the 
ongoing delays caused by all Federal agencies we have to deal 
with.
    Thank you, Chairman Young and Committee.
    [The prepared statement of Mr. Olguin follows:]

  Statement of The Honorable James M. ``Mike'' Olguin, Vice Chairman, 
     Southern Ute Indian Tribal Council, Southern Ute Indian Tribe

I. Introduction
    Chairman Young, Ranking Member Boren and members of the 
subcommittee, I am Mike Olguin, the Vice Chairman of the Southern Ute 
Indian Tribe. I am honored to appear before you to provide testimony 
regarding Indian energy development. The leaders of my Tribe are glad 
that you have convened this oversight hearing to evaluate potential 
impacts on Indian energy development likely to result from the Bureau 
of Land Management's (``BLM'') proposed rules regulating hydraulic 
fracturing undertaken in the development of Indian oil and gas 
resources. We have serious concerns regarding the BLM's approach to 
this matter, and we appreciate the opportunity to share those concerns 
with you today.
II. Background
    The Southern Ute Indian Reservation consists of approximately 
700,000 acres of land located in southwestern Colorado in the Four 
Corners Region of the United States. Our Reservation is part of the 
northern San Juan Basin, an area with that has seen widespread oil and 
gas development over a period of more than 60 years. The land ownership 
pattern within our Reservation is complex and includes tribal trust 
lands, allotted lands, non-Indian patented lands, federal lands, and 
state lands. In many situations, non-Indian mineral estates are 
adjacent to tribal mineral estates. This land ownership pattern is very 
significant and magnifies the impact of differences in federal 
regulation of Indian lands from the absence of regulation on 
neighboring non-Indian lands. Added regulatory burdens to the 
development of tribal minerals discourage development on Indian lands 
and provide a direct incentive to operators to lease and drill on 
offsetting non-Indian lands because of the associated cost savings. The 
revenues we receive from natural gas development on our Reservation are 
our tribe's economic lifeblood. For decades, we have worked with 
industry to ensure that oil and gas development occurs in an 
environmentally responsible manner on our lands.
    Hydraulic fracturing involves the underground injection of fluid 
and proppants under high pressure in order to propagate and maintain 
fractures and enhance the movement and recovery of oil and gas. 
Hydraulic fracturing is necessary for the continued development of both 
conventional and coalbed methane resources on our lands. Thousands of 
wells on our Reservation have been stimulated through hydraulic 
fracturing. Preliminary studies also indicate that there are 
significant recoverable reserves associated with shale formations 
underlying our Reservation that will require hydraulic fracturing in 
order to be produced.
    Over the course of the extensive history of hydraulic fracturing on 
our Reservation, there have been no documented cases of adverse 
environmental impacts resulting from such well stimulation. It should 
be noted that the hydrocarbon bearing zones on our Reservation are 
located at depths much greater (2,500 to 8,000 feet below surface) than 
useable water aquifers (typically 100 to 300 feet below surface). 
Further, the hydrocarbon bearing zones are separated from useable 
aquifers by thick strata with low permeability. Even with those natural 
safeguards in place, our tribe has led the effort, with cooperation 
from the BLM, to ensure that oil and gas development activities do not 
adversely affect groundwater resources. Significantly, we have insisted 
upon regular Bradenhead testing of well integrity and have required 
cementing of well casings to surface.
    In recent years, oil and gas companies have been able to recover 
oil and gas resources throughout the country from shales and tight 
formations previously considered unproductive. This recovery has been 
spurred by technological advances in horizontal drilling in association 
with hydraulic fracturing stimulation. The significant expansion of 
this activity into geographic areas not previously subject to oil and 
gas development has fostered debate regarding the environmental effects 
of hydraulic fracturing. These concerns have, in turn, led the 
Department of the Interior and the BLM to develop a response intended 
to ensure the public that, through government oversight and regulation, 
hydraulic fracturing occurring on federal and Indian leased lands will 
be undertaken in an environmentally safe and prudent manner.
III. The Process of Consultation with Affected Indian Tribes Has Been 
        Inadequate.
    In mid-December of last year, BLM's Assistant Director for Minerals 
and Realty Management Michael D. Nedd sent a letter inviting our tribe 
and other tribes to engage in government-to-government consultation 
regarding BLM's intent to develop regulations governing hydraulic 
fracturing on federal and Indian lands. We welcomed this initial 
invitation for early consultation. On January 19, 2011, a substantial 
contingent of our Tribe's staff, including representatives from our 
Energy Department, Natural Resources Department, and Environmental 
Programs Division, attended a BLM information session in Farmington, 
New Mexico, where representatives from the BLM provided basic 
information about hydraulic fracturing and asked for tribal input 
regarding the shape that any such regulations might take. We again 
congratulated BLM on this seemingly fresh approach to visiting with 
Tribes at the formative stages of regulation development. We also 
delivered at that time written comments from our Chairman Jimmy R. 
Newton, Jr. that addressed three principal matters: (1) suggestions for 
process; (2) a summary of the importance of hydraulic fracturing to the 
Tribe; and (3) a summary of potential environmental concerns and 
protection measures associated with hydraulic fracturing.
    In commenting on the process going forward, Chairman Newton's 
letter specifically urged that ``the consultation process include not 
only an opportunity to comment on proposed BLM regulations but 
consultation on the formulation of proposed regulations.'' Chairman 
Newton further suggested that ``BLM circulate discussion drafts of 
possible regulations for review and comment before any proposed 
regulations are issued.'' Only recently have we learned that our 
concept of meaningful consultation has been shortchanged by the BLM. It 
is now our understanding that, notwithstanding our requests and 
suggestions, BLM proceeded to develop draft proposed regulations in 
isolation and submitted those draft regulations to the Office of 
Management and Budget for publication approval in the Federal Register 
as proposed regulations under the Administrative Procedures Act. We 
have not seen the text of the draft proposed regulations but we were 
provided with a summary sheet of their terms. Approximately ten days 
ago, we submitted written comments to the BLM expressing our deep 
concerns with many of the substantive proposals contained in those 
draft regulations.
    Although we genuinely appreciated BLM's initial approach to 
consultation, we are not satisfied with this process as it is 
unfolding. It is vital that Congress and the Administration realize 
that every extra regulatory step, every extra required report, and 
every extra approval imposed by the Government on operators in Indian 
Country increases the costs of operating in Indian Country and 
decreases the competitive opportunity for Indian tribes to attract 
energy development dollars to our lands. That critical sensitivity is 
lost in the approach that is reflected in BLM's summary of its proposed 
regulations. More fundamentally, however, as to process, this is 
another example of the federal trustee's train leaving the station 
before Indian Country has had a chance to buy a ticket.
IV. The Tribe's Substantive Comments Would Improve the Quality of the 
        Draft Regulations and Reduce Adverse Economic Impacts in Indian 
        Country.
    Chairman Newton's preliminary correspondence in January and written 
comments to the BLM in April stressed that any new regulations 
associated with hydraulic fracturing be cost effective and consistent 
with best available industry practices. The current set of draft 
regulations being reviewed by OMB does not meet those threshold 
objectives. A number of the proposals are impractical, expensive and 
will needlessly drive operators off of Indian lands.
    For example, one of BLM's draft proposals would require a minimum 
30-day advance notice and BLM approval of frac design before an 
operator could initiate well stimulation. Specific frac design does not 
occur until a well has been drilled and specific data regarding the 
target formation have been obtained, so it generally cannot be provided 
in advance of drilling. Once drilling has been completed, frac design 
proceeds quickly and fracturing operations begin as soon as possible in 
order to utilize equipment efficiently and minimize ongoing surface and 
wildlife disturbance. Even assuming that BLM has the personnel 
qualified to review and approve frac design, which is highly 
questionable, the approval process would cause substantial delays to an 
already time-sensitive process. Although a notice filing might be 
appropriate, an operator's ability to conduct hydraulic fracturing 
should not be contingent upon additional approvals beyond the 
Application for Permit to Drill (``APD'').
    Another example is reflected in BLM's suggestion that operators be 
required to provide cement bond logs (``CBLs'') for all wells. Our 
experience indicates that requiring cement to the surface of well 
casing is a more cost effective approach to ensuring well integrity 
than universally requiring CBLs. CBLs are just one of a variety of 
additional tests or monitoring conditions that can be pulled from a hat 
and imposed upon operators by the BLM with little consideration for the 
cost or benefit to be obtained. In fact, even in the absence of 
approved regulations, we are increasingly seeing BLM add detailed 
conditions related to hydraulic fracturing as part of the APD approval 
process for standard wells under the guise of NEPA compliance. One 
recent condition called for microseismic monitoring during frac 
operations, which could add several hundred thousand dollars to the 
cost of well completion and stimulation while generating little or no 
useful information.
    In raising these concerns, we are mindful of the important role 
that BLM plays in reviewing and processing oil and gas development 
activities on Indian lands. We, too, are actively involved in that 
review and we are protective of the environment. In the interest of 
safety and environmental protection, our Tribe has been a long-time 
supporter of operator disclosure of substances contained in frac 
fluids, and we will continue to participate in domestic water well 
testing and data collection. We are compelled, however, to express our 
concern that the steps being proposed by BLM to regulate hydraulic 
fracturing on our lands have been developed with little regard for 
practical considerations or the adverse financial impact that such 
regulations will have upon Indian tribes.
Conclusion
    In conclusion, I am honored to appear before you today on behalf of 
the Southern Ute Indian Tribe. We hope that our comments will assist 
you in your important work on behalf of Indian Country. We look forward 
to continuing our work with the Subcommittee on this and other 
important matters.
    At this point, I would be happy to answer any questions you may 
have.
                                 ______
                                 
    Mr. Young. I thank you. I want to thank the panel. Before I 
turn this over to Mr. Boren for a few minutes, I would like to 
suggest one thing.
    I think the BLM is being heard in this room right now. 
There is someone in this room that will report back to the 
Secretary, I am confident. Look at your neighbor. You might 
want to find out what he is doing in the room. There is 
somebody in this room, believe me. I have been in this business 
a long time.
    There is a little contradictory statement in both your 
testimonies. Some of you have said this. You are not public 
lands. That 1938 law and they interpret it as such, we will 
repeal that law. That will solve that.
    The second one, if you have not commented on our bill, it 
puts you back in charge. Apparently, the Southern Ute is doing 
the job as they should, you require that.
    Mr. Olguin. Right.
    Mr. Young. Each one of the tribes can require your 
regulations. I think you do a better job. This is an attempt 
again to keep you economically dependent on a side of beef and 
a blanket. That is what this is all about.
    Again, this is what we have to do. You are not public land. 
You are private land. You are a sovereign nation. It is hard 
for people to understand.
    We do not tell France what to do. We do not tell Saudi 
Arabia what to do or Nigeria what to do or Venezuela what to 
do.
    Here we are as a nation saying you are independent, you are 
sovereign, but you are going to do what we tell you to do.
    This fracking thing is not new. It has been done. This is a 
charade by those that do not want any fossil fuels developed, 
and they do not want you to progress.
    With those little comments, Mr. Boren, would you like to be 
Chairman again for a few seconds? I will give you the gavel and 
I will transfer this over to you.
    You can ask Mr. Lamborn if he would like to ask some 
questions.
    Mr. Boren [presiding]. Mr. Lamborn, would you like to ask 
any questions?
    Mr. Lamborn. Thank you, both of you, for having this 
hearing and for allowing me to sit at the dais here with you.
    If I could make a very brief opening statement and then 
maybe ask a question or two.
    Mr. Boren. Without objection.
    Mr. Lamborn. I would love that.

    STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN 
                     CONGRESS FROM COLORADO

    Mr. Lamborn. I welcome everyone who has come today, 
including the person from Colorado, the Ute Tribe. Thank you 
for being here.
    I appreciate your and Mr. Young's long commitment to tribal 
issues and specifically the focus that you have given on the 
important issue of energy and energy development on tribal 
lands.
    The development of our resources is a priority for all 
Americans. Our nation's resources have helped us win world 
wars, strengthen the economy and employ millions of Americans.
    Unfortunately, too often, the development of these 
important resources has been hindered on Federal lands by 
burdensome and unreliable policies of the Federal Government, 
and nowhere is this hindrance more offensive than on tribal 
lands that the Federal Government holds in Trust.
    The mismanagement of these lands and that Trust has a 
tragic history in our nation. I am glad we are finally 
beginning to take steps to correct that.
    The fracking rule now being put forward by the Department 
will in my opinion continue this historic mismanagement by 
putting tribal lands at a clear disadvantage compared to 
private lands next door.
    I want to add my voice to those here today concerned that 
the tribal consultation on this rule and other rules under 
development by this Administration has failed to be fair, 
transparent, and adequate.
    With that, Mr. Chairman, I yield back, and when you have 
questions, I will have one or two.
    [The prepared statement of Mr. Lamborn follows:]

       Statement of The Honorable Doug Lamborn, a Representative 
                 in Congress from the State of Colorado

    Thank you Mr. Chairman, and Ranking Member Boren for allowing me to 
participate here today. I appreciate your long commitment to tribal 
issues and specifically your focus on the important issue of energy and 
energy development on tribal lands.
    The development of our resources is a priority for all Americans, 
our nation's resources have helped us win world wars, strengthen our 
economy and employ millions of Americans. Unfortunately, too often the 
development of those resources is hindered on federal lands by 
burdensome and unreliable policies of the federal government. Nowhere 
is this hindrance more offensive than on tribal lands that the federal 
government holds in trust. The mismanagement of these lands and that 
trust has a tragic history in our nation. Too often cheating or keeping 
tribal citizens from their resources, the benefits of the development 
of those resources, or simply pushing tribes deeper into poverty by 
preventing the development.
    The fracturing rule being put forward by the Department will in my 
opinion continue this historic mismanagement by putting tribal lands at 
a clear disadvantage to the private lands next door. I want to add my 
voice to those here today concerned that the tribal consultation on 
this rule and other rules under development by this Administration has 
failed to be fair, transparent and adequate.
    That said, I have a number of questions, and limited time, so I 
would ask that you answer quickly for me, Mr. Spisak.
        1.  In your opinion who should be responsible for determining 
        whether an Indian tribe should permit mineral development on 
        their lands, the specific Indian tribe and their leadership or 
        the federal government?
        2.  It's my understanding that BLM provided a draft rule to the 
        tribes in January. Secretary Salazar and Director Abbey have 
        both testified before this committee that the draft rule has 
        since changed. OMB is currently is reviewing it. Is OMB 
        reviewing the same draft rule as the tribes were given and have 
        tribes been consulted on the proposal that went to OMB?
        3.  Has the BLM performed an analysis of the economic and jobs 
        impact of the proposed rule on Indian tribes and their ability 
        to develop on their lands? Specifically, will this rule result 
        in increased jobs, revenue and opportunity for tribes or will 
        this hinder the development on tribal lands?
        4.  Would the Department support revisions to the rule to 
        provide for a tribal opt-in? In other words, the hydraulic 
        fracturing rule will not have any effect on tribal lands unless 
        a tribe expressly chooses to accept it on its lands. Is this 
        something in the name of tribal sovereignty the Department can 
        support?
                                 ______
                                 
    Mr. Boren. Mr. Kildee, would you like to ask some 
questions?
    Mr. Kildee. Thank you, Mr. Chairman. Again, I am grateful 
for the fact of having this hearing.
    Mr. Hall mentioned a Treaty of 1857, was it.
    Mr. Hall. 1851.
    Mr. Kildee. You know, there are several parts of the 
Constitution that we should read. I read the part about the 
sovereignty of the Indian lands.
    Also, this Constitution says ``This Constitution and the 
laws of the United States which shall be made in pursuance 
thereof, and all treaties made or shall be made under the 
authority of the United States shall be the supreme law of the 
land.''
    No meeting in 1938, meeting in some hotel some place, where 
you were handed something on the way out and by the way, here 
is something you might want to read on the plane on the way 
home.
    It says it shall be the supreme law of the land, all 
treaties shall be the supreme law of the land. It does not say 
Treaty of France or Germany. All treaties, including that 
Treaty of 1851, supreme law of the land, which guaranteed your 
sovereignty.
    To be called to a meeting and being treated as someone less 
than equal in my mind is insulting, besides being illegal.
    On fracking, I do not know a great deal about fracking, but 
I know a great deal about sovereignty. You had to know that, as 
you have seen it chip by chip taken away from you.
    Let me say this, they will probably never come at you with 
a meat axe and take a big chunk, but they will come and take a 
slice here and a slice here and a slice here of your 
sovereignty. Do not let them use a paring knife to take a 
little bit of your sovereignty. You have to fight.
    Not just the fracking, anything that interferes with your 
right, sovereignty that is guaranteed, not granted, guaranteed 
by this Constitution.
    To my mind, this is a constitutional question. The 
importance of sovereignty, you have to win on both these 
issues, you have to win on your input as equals at any 
conference, as equals. Let the Indians in, right, and then hand 
them something on the way out to read.
    I just respect all of you. I am leaving Congress this year 
after 36 years. I hope I will leave somewhat of a legacy of 
protecting Indian sovereignty.
    I will leave it at that. The most precious thing you have, 
do not ever trade it for anything else. We will give you this, 
we will be a little flexible here if you just kind of shed a 
little bit of your sovereignty. Do not give any of it up, and 
you have it.
    I respect all four of you for your demand that your 
sovereignty be respected.
    Thank you very much.
    Mr. Boren. Thank you, Mr. Kildee. Just for scheduling 
purposes, we are getting word that we are going to have votes 
probably within 10 to 15 minutes. 12:45. We have a little bit 
more time. I was wrong.
    I will yield to you, Mr. Lamborn, for any questions you may 
have.
    Mr. Lamborn. Thank you. I want to publicly say before I ask 
my question that I have two Members on this Subcommittee, Mr. 
Kildee and Mr. Boren, who are leaving Congress. I am going to 
miss them.
    They have a high reputation. I have worked with them on 
different things, especially Mr. Boren on energy issues.
    You will be missed.
    Mr. Olguin, thank you for coming here from Colorado. I have 
long been impressed by the Southern Ute Tribe and the 
professional way that resources have been managed and finances 
have been done in such an exemplary model, a true model for the 
entire country.
    I commend you for what your tribe has done, the people, and 
how they have benefitted from that.
    I was in the Colorado Legislature. We would hear every so 
often OK, no problems here, they are on top of everything. That 
was always refreshing.
    Mr. Olguin. Thank you.
    Mr. Lamborn. When it comes to energy and in particular the 
proposed rule by BLM on fracking and how that might affect 
energy production, and I have looked at your testimony, but can 
you summarize for us, and maybe you have already done this, 
forgive me if I am covering old territory here, but can you 
summarize how that could be a concern in that it might limit 
production of energy?
    Mr. Olguin. The rules and the regs, we just find that it is 
an unnecessary burden, particularly when it comes to the cost, 
for example, requiring bond logs as an example. It is not 
necessary in every case, but if the rules require it, it is 
going to be costly, and that cost will pass on to the tribes.
    We also look when rules come in, it will force companies to 
move, to find those areas where it is the path of least 
resistance. We are a checkerboard reservation, an example 
Chairman Young described is our description.
    They will move across a line and develop a mineral. That 
has a potential to also impact us particularly from the 
standpoint of drainage.
    We have a lot of concerns of the impacts the rule will 
have, not only for us but even the economy of the region. We 
are on the state line in the Four Corners. A lot of our service 
providers do come from Farmington, New Mexico, and that 
economy, the local economy around the Four Corners area is 
affected by what happens with us.
    We feel that these rules just plainly interfere with our 
own operators, because we do have operations on the reservation 
as well that are managed by the Southern Ute Tribe, Red Willow 
Production Company.
    I feel that we have a very strong track record of being 
responsible in our development, and we just find this 
interference is just plainly unacceptable.
    Mr. Lamborn. Do you feel the proposed rule, if the final 
rule is anything like the proposed rule, will negatively impact 
your tribe and the economic development of your tribe?
    Mr. Olguin. Yes, we do.
    Mr. Lamborn. Thank you very much. Mr. Chairman, I yield 
back.
    Mr. Boren. Thank you. The real Chairman is here now, but I 
have a few questions. I have a couple of questions and then we 
will go back to the real Chairman.
    Irene, let me ask you, you have been on this dais several 
times. You have talked about the great things going on with the 
Southern Ute Tribe and what all has happened, all the economic 
development.
    Has there been a problem on your reservation which would 
precipitate to have some kind of Federal regulation? Have you 
had some environmental disaster or something like that?
    Ms. Cuch. I believe to answer your question, not really.
    Mr. Boren. OK. We just heard testimony again from the BLM 
in which they discussed consulting the tribe on these issues. 
There was a particular point in your testimony that directly 
disagrees with this.
    You state and I quote ``The BLM never developed a time line 
for tribal consultation, did not include tribal input in its 
draft regulations, did not engage tribes in the discussion for 
the need for the rule, and did not engage tribes in a 
discussion about the alternatives that would limit the scope of 
Federal standards or otherwise preserve the prerogatives and 
authority of Indian tribes.''
    With all that in mind and what the BLM said today, what is 
your reaction to that testimony of BLM today? Do not laugh.
    Ms. Cuch. My reaction is that they said they consulted with 
us, but I know there was one that was in Salt Lake City, but 
all of that was just a discussion, there was nothing like a 
consultation. We did have----
    Mr. Boren. I asked for your opinion. What is your opinion?
    Ms. Cuch. My opinion is no, it was never clear.
    Mr. Boren. OK. Finally, Tex had to leave. Let me ask you 
all this, is it 45,000 barrels of oil, did you say, a day?
    Ms. Cuch. Yes.
    Mr. Boren. What have you all done, and I would like to hear 
the other panelists, what have you all done with this revenue? 
Health care? What kind of investments have you made because 
there is oil and gas development within your boundaries?
    Ms. Cuch. We usually use our revenues mostly to help to run 
the tribal government. It is major income. It is used to run 
our tribal government.
    Mr. Boren. If this development was impeded, there could be 
a loss of jobs, loss of services, and everything else.
    Ms. Cuch. That is correct.
    Mr. Boren. Chairman Show, could you tell us what oil and 
gas development means to you? What kind of revenues, how it 
impacts you?
    Mr. Show. Thank you, Mr. Chairman. You know, the Blackfeet 
Tribe just recently in the last couple of years started 
developing IMDAs to help prosper our tribe.
    With the funds, even just the signing bonus, the tribe was 
able to basically get itself out of debt that we had previously 
incurred.
    Also, just two weeks ago, we opened a tribal store, a $7 
million tribal store that employs 56 tribal members, and prior 
to that, there was only one game in town for 10,000 people that 
live on the reservation. There was only one store in town. Now, 
with the competition, our people are actually getting cheaper 
groceries and things like that.
    We do have money set aside from this for economic 
development. Maybe a hotel. We do already have a casino. That 
is what we are doing with it. We are not trying to let our 
tribal government eat it up the best we can.
    Mr. Boren. Thank you. Mike, what are some nuggets that you 
could share with us about the development, economic 
development, jobs, that sort of thing, that results from this 
oil and gas revenue?
    Mr. Olguin. First off, I would like to state that with our 
wealth that has been created, 90 percent of our wealth has been 
through oil and gas development. That in itself has created an 
AAA rating, which is how many times than the U.S. Government.
    Along that line, we are able to issue bonds. We are able to 
sustain a Government, an enterprise, and even an investment 
component of our tribe. We have actually gone off reservation 
and invested in other oil and gas development companies in the 
Gulf of Mexico.
    We own buildings in different parts of the nation. We are 
getting ready to develop in Oceanside, California. We are in 
New Mexico with real estate.
    We have private equities, plus the biggest advantage here 
is we are able to pay a dividend to our membership, that is 
actually putting them well above the poverty level, and putting 
them into higher than the median income of people across the 
nation.
    The oil and gas has created a lot of opportunities for us 
as a tribe.
    Mr. Boren. Thank you. Let me just finish on this, Mr. 
Chairman, and say these are real people. These are jobs. We 
talk about gaming in Indian Country. I have been supportive of 
gaming.
    When we are trying to diversify, when we are trying to get 
people involved in all sorts of other things, whether it is 
building a grocery store, whether it is health care, what have 
you, if we impose these Federal regulations without real 
consultation, we are talking about taking away jobs, taking 
away livelihoods, in the middle of a terrible recession.
    I am very proud that you have been able to hold this 
hearing today and we are getting to the bottom of this and 
figuring out that the BLM is out to lunch.
    Mr. Young [presiding]. It is 12:30.
    Mr. Kildee?
    Mr. Kildee. No, Mr. Chairman.
    Mr. Young. I am going to excuse this panel. I am going to 
tell you what we are going to do. We have read your testimony 
and heard from you. We thank you.
    We have some steps we are going to try to take with this 
so-called proposed regulation down at OMB right now, trying to 
expedite it. We are going to try to stop it through the 
Appropriations process until there is proper consultation.
    I personally will tell you that if I have not heard from 
you, look at the Empowerment Act, so you would have control of 
it.
    This idea that you are relying on the Federal Government to 
give you the OK, to pat you on the head and say well, now you 
cannot do it, you know, it just frosts me every time I think 
about it.
    I want to thank each one of you. We would appreciate some 
comments on our legislation. We will try to take care of this 
problem because they did not consult with you. You did not have 
a chance to say no, this will not work. That is not 
consultation, handing you a set of regulations is the wrong way 
to go.
    With that, you are excused.
    We have the next panel, please. Wesley Martel, Council Vice 
Chairman, Shoshone Business Council. Larry DeCoteau, Tribal 
Council Representative, Turtle Mountain Band of Chippewa 
Indians.
    Scott Russell, Vice President of National Congress of 
American Indians, and Wilson Groen, President and CEO of Navajo 
Nation Oil and Gas Company.
    Wesley, you are up first. I think everybody knows the 
rules. We are about ready to have a vote, so we will try to get 
this panel done and ask question so you all do not have to sit 
around here for another two hours.
    Wesley, you are up first.

  STATEMENT OF WESLEY MARTEL, COUNCIL VICE CHAIRMAN, SHOSHONE 
                        BUSINESS COUNCIL

    Mr. Martel. Good morning, Mr. Chairman, members of the 
Committee. My name is Wes Martel, Co-Chairman of the Eastern 
Shoshone Business Council, and on behalf of the two Councils, 
the Eastern Shoshone and Northern Arapaho for Wind River, I 
thank you for this opportunity.
    The Wind River Reservation is located in West Central 
Wyoming with over 2.2 million acres of land. We have been in 
the oil and gas business since 1891.
    In 1979, several tribal members undertook an investigation 
of our oil and gas fields whereby we were able to prove that 
all of the major oil and gas companies and independents 
operating on our reservation were stealing from us and not 
paying correct amounts in values.
    We pointed this out to the State of Wyoming and soon all of 
the Western States began auditing after they learned what was 
transpiring and recovered billions of dollars in the early 
1980s based on what they initially learned from Wind River.
    Congress' answer to these egregious transgressions was the 
Federal Oil and Gas Royalty Management Act of 1982, which 
established the system as we know it today.
    Minerals Management Service was created to oversee 
production accounting and royalty auditing and the Bureau of 
Land Management was delegated the responsibility of subsurface 
inspection and enforcement as it pertains to Federal policy and 
statutes.
    Of course, the Bureau of Indian Affairs plays a role in 
regards to land records, lease agreements, and surface 
environmental obligations.
    In 1983, I and ten others representing tribes, industry, 
states and the Federal Government were appointed by Interior 
Secretary James Watt to the Advisory Committee on Minerals 
Accountability, to promulgate regulations for FOGRMA.
    Thirty years later, we are still waiting for these 
regulations to be fully implemented.
    I have been around a while, Mr. Chairman, but I was not 
around in 1938 when we talked about the original Act.
    Section 202 of FOGRMA authorizes tribes to enter into 
cooperative agreements with the Federal Government to assume 
the duties of the MMS to perform production accounting and 
royalty auditing functions.
    This is a role that we had been undertaking at Wind River 
for the past 25 years.
    This section of FOGRMA also allows tribes to undertake the 
inspection and enforcement duties associated with BLM's 
responsibility as relates to monitoring, enforcement and 
protection.
    Unfortunately, this is an area where Congress and the 
Department of the Interior have not provided the technical and 
financial resources to allow for tribes to assume this 
important function.
    In 1982, Congress adopted the IMDA to allow tribes to enter 
into alternative types of agreements. These leases are an 
important part of allowing tribes to obtain technical and 
administrative capabilities while maximizing return on non-
renewable resources.
    These standard BIA leases place tribes in a predicament 
whereby other jurisdictions are allowed to intrude on tribal 
accessible valuation, which diminishes return to tribes and 
inhibits abilities to improve and upgrade governmental 
programs, services, and infrastructure.
    Triple taxation is the norm on many reservations, which 
inhibits the economic life of producing fields.
    Based on the United States Supreme Court decision in the 
Cotton Petroleum case on the Jicarilla Apache Reservation, the 
state and counties are able to tax a non-Indian energy company 
doing business when a tribe signs a standard BIA lease.
    Mr. Chairman, I must ask you, would you do business on an 
Indian reservation if you had to pay twice the tax you would 
off the reservation?
    I really think if Congress is going to help us with mineral 
development, you need to fix this double taxation problem and 
get rid of this disincentive.
    Recently, Wind River was brought into the national 
spotlight based on citizen complaints in the East Central 
portion of the reservation, where residents felt their health 
and water resources were being adversely affected by oil and 
gas activity.
    For several years, the initial complaints fell on deaf ears 
as they were labeled trouble makers and malcontents.
    However, in 2010 and 2011, under Superfund authority, the 
EPA drilled two monitoring wells near the homes of these 
residents and determined that groundwater in the aquifer 
contained compounds likely associated with gas production 
practices including hydraulic fracturing.
    This was the first report by the EPA to link hydraulic 
fracturing to possible water pollution.
    Upon release of this information, rather than a methodical 
calculated level headed type of inquiry being undertaken, all 
hell broke loose.
    Some folks came unglued along with industry 
representatives, assailing EPA for scientifically questionable 
practices, critical mistakes and misjudgments, and 
contaminating its own monitoring wells.
    This is the exact opposite of what we expected. There was a 
total lack of objectivity regarding the findings of the single 
Federal agency that undertook this volatile issue and attempted 
to make their best technical judgment.
    Issues such as well bore integrity and inspection and other 
compliance must be undertaken by an authority with some 
regulatory power.
    The content of fracking solutions must be made public so we 
know what is being put into the ground and how to deal with it.
    Perhaps it is important for you to understand that the 
Shoshone and the Arapaho are far more in favor of mineral 
extraction than we are opposed to it. It is a critical source 
of our government's income and certainly creates many good 
jobs.
    The main goal should not be how quickly we can get permits 
approved but how do we support safe and responsible 
development.
    The rule as proposed could slow development but for those 
tribes who want to protect water and land from contamination, 
there are provisions in the proposed rule that will allow for 
transparency, assessment, and monitoring to minimize 
degradation.
    Our worry at Wind River is that the BLM has shown that they 
cannot bring about compliance with existing policies and 
statutes. How are they going to enforce a whole new set of 
rules that require additional oversight, report review, and 
monitoring?
    We believe a more enhanced regulatory role for the tribes 
is part of this answer.
    The lack of meaningful consultation with tribes by the BLM 
has eliminated discussions that should have addressed assisting 
tribes in becoming self regulating through Section 202 of 
FOGRMA.
    Inserting additional language into Indian Mineral 
Development Act agreements would provide clear information 
regarding drilling practices and procedures and assisting 
tribes in becoming stewards of their own resources.
    I thank you for the time allocated, and I would be happy to 
answer any questions.
    [The prepared statement of Mr. Martel follows:]

                 Statement of Wes Martel, Co-Chairman, 
             Eastern Shoshone Tribe--Wind River Reservation

Introduction
    Good morning, Mr. Chairman and members of this Committee. My name 
is Wes Martel, Co-Chairman for the Eastern Shoshone Business Council. 
On behalf of the Eastern Shoshone Business Council and the Northern 
Arapaho Business Council, I thank you for this opportunity..
    The Wind River Indian Reservation is located in west-central 
Wyoming with over 2.2 million acres of land where we have been in the 
oil and gas business since 1891. In 1979, several tribal members 
undertook an investigation of our oil and gas fields whereby we were 
able to prove that all of the major oil and gas companies and the 
independents operating on our Reservation were stealing from us and not 
paying correct amounts and values. We pointed this out to the State of 
Wyoming and soon all of the western states began auditing after they 
learned what was transpiring and recovered billions of dollars in the 
early 1980's based on what they initially learned from Wind River.
The Federal Oil and Gas Royalty Management Act of 1982
    Congress' answer to these egregious transgressions was the Federal 
Oil and Gas Royalty Management Act of 1982 (FOGRMA) which established 
the system as we know it today. Minerals Management Service (MMS) was 
created, (now Office of Natural Resource Revenue (ONRR)), to oversee 
production accounting and royalty auditing. The Bureau of Land 
Management (BLM) was delegated the responsibility of the subsurface 
inspection and enforcement as it pertains to Federal policy and 
statutes and the Bureau of Indian Affairs (BIA) plays a role in regards 
to land records, lease agreements and surface environmental 
obligations. In 1983, I and 10 others representing Tribes, industry, 
states and the Federal government were appointed by Interior Secretary 
James Watt to the Advisory Committee on Minerals Accountability (ACMA) 
to promulgate regulations for FOGRMA. Thirty years later we are still 
waiting for these regulations to be fully implemented.
FOGRMA Section 202--Cooperative Agreements
    Section 202 of FOGRMA authorizes Tribes to enter into Cooperative 
Agreements to assume the duties of the MMS/ONRR to perform production 
accounting and royalty auditing functions. This is a role that we have 
been undertaking at Wind River for over 25 years. This Section also 
allows Tribes to undertake the inspection and enforcement duties 
associated with BLM's responsibility as it relates to monitoring, 
enforcement and protection. Unfortunately, this is an area where 
Congress and the Department of Interior (DOI) have not provided the 
technical and financial resources to allow for Tribes to assume this 
function.
Indian Minerals Development Act of 1982 (IMDA)
    In 1982 Congress adopted the IMDA to allow Tribes to enter into 
alternative types of agreements other than the Standard BIA Lease. 
Partnerships, joint ventures, operating agreements and other types of 
business agreements were envisioned as a way to allow tribes to attain 
technical and administrative capabilities while maximizing return on 
non-renewable resources. 31 years later most agreements being signed 
are still a form of Standard BIA Lease where minimum royalties are 
realized, no renegotiation terms are present and for the most part 
Tribes have been unable to develop comprehensive Energy Departments.
    These Standard BIA Lease places Tribes in a predicament whereby 
other jurisdictions are allowed to intrude on tribal assessable 
valuation which diminishes return to tribes and inhibits ability to 
improve and upgrade governmental programs, services and infrastructure! 
Triple taxation is the norm on many Reservations which inhibits the 
economic life of producing fields. Based on a U.S. Supreme Court 
decision in the Cotton Petroleum case on the Jicarilla Apache 
Reservation the state and counties are able to tax a non-Indian Energy 
Company when a Tribe signs a Standard BIA Lease. Mr. Chairman I have to 
ask, would you do business on an Indian reservation if you had to pay 
twice the tax you would off the reservation? I really think if the 
Congress is going to help us with mineral development that you need to 
fix this double taxation problem and get rid of this disincentive.
Bureau of Land Management's Hydraulic Fracturing Rule's Impact on 
        Indian Tribal Energy Development
    Recently, Wind River was brought into the national spotlight, based 
on citizen complaints, in the east-central portion of the Reservation 
where residents felt that their health and water resources were being 
adversely affected by oil and gas activity. For several years their 
initial complaints fell on deaf ears as they were labeled trouble 
makers and malcontents. However, in 2010 and 2011, under Superfund 
authority, the Environmental Protection Agency (EPA) drilled two 
monitoring wells near the homes of these residents and determined that 
ground water in the aquifer contained compounds ``likely associated 
with gas production practices, including hydraulic fracturing.'' This 
was the first report by the EPA to link hydraulic fracking to possible 
water pollution.
    Upon release of this information, rather than a methodical, 
calculated, level-headed type of inquiry being undertaken, all hell 
broke loose! Some folks came unglued, along with industry 
representatives, assailing EPA for ``scientifically questionable 
practices'', ``critical mistakes and misjudgments'' and contaminating 
its own monitoring wells. This was the exact opposite of what was 
expected. There was a total lack of objectivity regarding the findings 
of the single Federal agency that undertook this volatile issue and 
attempted to make their best technical judgment. Issues such as well-
bore integrity, inspection and other compliance must be undertaken by 
an authority with some regulatory power. The content of fracking 
solutions must be made public so we know what is being put into the 
ground and how to deal with it.
BLM--from Enforcer to Facilitator
    Perhaps it is important for you to understand that the Shoshone and 
Arapaho are far more in favor of mineral extraction than we are opposed 
to it. It is a critical source of our government's income and certainly 
creates good paying jobs. The main goal should not be how quickly we 
can get permits approved but how do we support safe and responsible 
development. The rules as proposed could slow development but for those 
Tribes who want to protect water and land from contamination there are 
provisions in the proposed rules that will allow for transparency, 
assessment, evaluation and monitoring to minimize degradation. Our 
worry at Wind River is that BLM has shown that they cannot bring about 
compliance with existing policies and statutes. How are they going to 
enforce a whole new set of rules that requires additional oversight, 
report review and monitoring? We believe a more enhanced regulatory 
role for the Tribes is part of the answer.
Conclusion
    The lack of meaningful consultation with Tribes by the BLM has 
eliminated discussions that should have addressed assisting Tribes in 
becoming self-regulating through Section 202 of FOGRMA, inserting 
additional language into IMDA's that would provide clear information 
regarding drilling practices and procedures and assist Tribes in 
becoming stewards of their own resources. Helping Tribes to acquire the 
technical and administrative capacity would uphold tribal sovereignty 
and treaty rights and allow Tribes to take their rightful place in 
contributing to the energy security of this country. In our spiritual 
lodges and ceremonies water is deemed a ``sacred gift from the 
Creator'' requiring great care and respect. While jobs and revenue are 
important, for most Indian people there are things far more important 
than money. We cannot forsake the blood and bones of our ancestors by 
desecrating the ``Water of Life''
    I thank you for the time allocated and would be happy to answer any 
questions.
                                 ______
                                 
    Mr. Young. Thank you, Wesley.
    Larry, you are up.

  STATEMENT OF LARRY DeCOTEAU, TRIBAL COUNCIL REPRESENTATIVE, 
      DISTRICT 4, TURTLE MOUNTAIN BAND OF CHIPPEWA INDIANS

    Mr. DeCoteau. Thank you for having me here. My name is 
Larry DeCoteau. I am Tribal Council Representative from Turtle 
Mountain Band of Chippewa up in North Dakota.
    We are in the North Central portion of it, right on the 
edge of the Bakken Range, that Mr. Hall was talking about. They 
are right in the middle of it.
    We are the only tribe in this nation who will not allow 
fracking on our land at this particular time, basically because 
we have one aquifer that supplies our water.
    As this gentleman was saying, Mr. Martel, he said there is 
possible contamination within their wells, their test wells, 
this and that.
    At this time, we have no intention of allowing this to come 
onto our tribal lands. We are looking into the new practice 
they have, that the Blackfeet are doing some of that, green 
fracking. If that comes about, we will be more than happy to 
look at it again. I am not sure.
    The reason for it is all these chemicals that are put into 
these. They do not give you an idea what is in there, and we 
have no intention of allowing it to put that kind of pollution 
into our territory.
    We could use the economic boost. There is no getting around 
it. We have 70 percent unemployment like most Northern Plains 
tribes. There is genuine unemployment.
    A gentleman up there talked about a depression in this 
United States at eight percent. We have a genuine depression in 
Indian Country. We could use the money. We could use the 
economic boost.
    At this particular time, we have no intention of allowing 
it. An oil company came up to us and offered us $5 million a 
couple of months. It looked great. We could have used the 
money. There is no doubt about it.
    We told them to put it in their pocket, put it back in your 
pocket, we do not want to look at it right now. In the future, 
I can see all these other tribes, they have been through all of 
this before, and we are right on the edge, so it is a real big 
deal to us. It is going to come eventually.
    We are going to get into the service portion of it. We are 
going to supply sand. We are going to supply fracking tanks, 
this and that.
    This oil is great for Indian Country. It is one of the 
greatest things that has happened other than the casinos, 
because of economic development.
    Again, there are many things you put upon the tribes, 
regulations, rules and regulations of this and that, again.
    We live in Roulette County, and if that state decides or 
Roulette County decides to frack, they are going to drill right 
underneath our aquifer and we are not going to be able to stop 
this thing.
    The only way to stop it is to beat them at the voting 
polls. We have 60 percent of the vote in Roulette County, the 
Native people do, and if we have to, we are going to go out and 
eliminate those people, I mean voting wise.
    That is our point on this issue here. Again, EPA and other 
Federal regulatory groups, they have to be in there. I realize 
every Federal organization is under staffed. You can see that 
in the oil country.
    In the western part of the state in North Dakota, there is 
no way they can look at all them wells. There is no way in the 
world with the staff they have.
    It is like the gold booms of the 1800s in California. Our 
state has doubled. The cities have doubled out there, 
Williston, Bismarck, Dickinson.
    You have to look at your infrastructure and everything 
else, but regulations are very important. Do not put 
regulations on the Native people that you do not put on the 
rest of the country.
    Thank you.
    [The prepared statement of Mr. DeCoteau follows:]

       Statement of Larry DeCoteau, District Four Tribal Council 
        Representative, Turtle Mountain Band of Chippewa Indians

    Honorable Members of the Subcommittee on Indian and Alaska Native 
Affairs,
    My Name is Larry DeCoteau and I am the District Four Representative 
for the Turtle Mountain Band of Chippewa Indians. This is my first term 
on the council and I am honored to be here today. On behalf of my 
entire tribe I thank you for the opportunity to be here today to 
provide testimony on this important and dynamic issue. Turtle Mountain, 
as you may know, recently voted to ban hydraulic fracturing on our 
reservation. To date, I am under the understanding that we are the only 
tribe in the country to ban fracturing on its reservation. The fact 
that we unanimously voted to do so is much less important that why we 
decided to ban fracking. We, as elected officials of the Tribe, have a 
duty to know everything involved in the fracking process, we need to 
know the impact of fracking on our lands; everything from the 
environmental impact, the potential for the process to harm our water, 
the chemicals used in the process and the ratios of those chemicals 
used, the manpower needed for fracking and the ability of the oil 
companies to ensure those individuals respect our people and honor our 
ways. Fracking, as it's currently being done in the western part of the 
state of North Dakota is not a process that interests us at Turtle 
Mountain.
    We will allow hydraulic fracking on our reservation when and if it 
can be proven to us that it can be done with zero impact on our water, 
with full disclosure of any chemicals used and the amounts of each 
chemical being used. We will allow fracking on our reservation when we 
can institute a detailed set of laws that ensure the process is safe, 
respectful of our people and culture and does not harm the environment. 
We will decide when that has been proven to us, not the federal 
government. We do not need rules and regulations proposed by the Bureau 
of Land Management. We do not need yet another federal bureaucracy 
dictating to us what rules we have to play by, and worse, dictating to 
us when and where fracking can take place. We are a sovereign nation, 
fully capable of writing our own laws and then enforcing them.
    A huge consideration when we banned fracking on our reservation was 
the fact that we did not yet have laws that dictated the process and 
ensured the safe-keeping our precious land and natural resources. The 
federal government dictated to us, through a now infamous, one-sided 
and shameful treaty, where we would live, we do not need more 
directives from the federal government. What we need from the federal 
government is less rules and more respect for our sovereignty. Many, 
many of our ancestors fought for and died for our sovereignty, I ask 
you to please respect that fact and let each tribe decide what 
appropriate rules and regulations are right for them, for their people, 
for their culture.
    Turtle Mountain people know our land best, we know our resources, 
we know what methods of mining and drilling we are comfortable with, 
and we are best suited to make the decisions that impact our land and 
our people. We respectfully request that the Bureau of Land Management 
not adopt rules and regulations impacting Indian lands and leave that 
duty to the those best suited to make the decisions that impact the 
lands and the people they were elected to represent: The Tribes.
                                 ______
                                 
    Mr. Young. I thank you.
    Scott?

          STATEMENT OF SCOTT RUSSELL, VICE PRESIDENT, 
             NATIONAL CONGRESS OF AMERICAN INDIANS

    Mr. Russell. Thank you, Mr. Chairman. Chairman Young, 
Ranking Member Boren and members of the Committee, thank you 
for having this hearing today and inviting the National 
Congress of American Indians to testify.
    As you mentioned earlier, I am Area Vice President for the 
Rocky Mountain Region and I am also the Secretary of the Crow 
Nation.
    [Speaks in Crow language.]
    Mr. Russell. I thank you, I addressed you in my own 
language, Crow language.
    The National Congress of American Indians' concerns are 
echoing what has been said today, and that is basically proper 
consultation.
    The Department of the Interior has a responsibility to 
consult with Indian tribes to ensure meaningful and timely 
input by tribal officials in the development of regulatory 
policies that have tribal implications.
    This is Executive Order 13175, and it is also the Trust 
responsibility of the Federal Government.
    Consultation on regulations is also required by the IMDA, 
the Indian Minerals Development Act. The hydraulic fracturing 
regulations affect us directly as they apply only to Federal 
lands and tribal lands.
    The BLM did hold some meetings with tribal leaders, but it 
clearly was not consultation. The regulations were drafted 
before tribes met with BLM and then submitted to OMB before the 
due date for tribal comments last week. We did not have any 
input into these regulations much less meaningful and timely 
input.
    In addition, I believe that the BLM has understated the 
impact of these regulations. BLM focuses on the disclosure 
requirements, and that does not sound like a big problem, but 
under these regulations, every drilling plan and every minor 
change to a drilling plan triggers another set of documentation 
and approvals by the Department of the Interior.
    Federal requirements create a nightmare for tribes. As it 
is, we have to go through 49 steps just to drill.
    The Federal Government does not have the funding or the 
staff to do all this. The oil and gas producers have millions 
of dollars worth of equipment and employees in the field, and 
creating multiple new requirements for Federal review and 
approval will drive them away. This has already happened.
    My tribe, the Crow Nation, hold the fourth largest coal 
reserve in the whole United States. We have nine billion tons 
of coal. We have oil. We have gas on our reservation.
    Hydraulic fracturing offers the potential for significantly 
expanded production.
    The Crow Reservation has over two million acres of 
subsurface in Trust. It is checkerboarded, as you mentioned 
earlier.
    If the costs and burdens are too high, the producers can 
avoid the tribal lands and drill on the private lands right 
next door. We will get shut out of the biggest oil boom in the 
history of the United States, perhaps billions of dollars.
    I cannot over emphasize what kind of revenue that could do 
for our tribe. We are still very hopeful maybe some of those 
veins might be under our reservation.
    In addition to the economic effect to many tribes, 
including the Crow Nation, we have concerns about the 
environmental impacts of hydraulic fracturing. It is happening 
all over Indian Country and upstream on Indian reservations.
    We want to know more about it. We are not against it. We 
just want to know more.
    I am here on behalf of many tribes under NCAI and the 
environmental concerns are important to all of us.
    Will these regulations provide enough protection? There are 
many questions still to be answered.
    One sign of a lack of consultation on these regulations is 
they give no consideration at all to tribal regulations on 
hydraulic fracturing processes. Indian tribes should be able to 
opt out of the BLM regulations and instead institute tribal 
government regulatory methods.
    Finally, I would like to note that tribal lands are not 
public lands. Tribal lands are under the jurisdiction of 
sovereign tribal governments and for the benefit of our own 
tribes and tribal members.
    However, BLM continues to treat tribal lands like public 
land. This extends to the burden of the application for a 
permit to drill.
    Mr. Chairman, I mentioned these drills in the previous 
testimony when I sat before this Committee, and it is a 
travesty of the system.
    Why do we have to pay $6,500 just to drill on an Indian 
reservation when you can take one step off the reservation and 
drill for $400? Companies are literally avoiding reservations 
because of this.
    The fee only applies to public lands. Tribal lands should 
be exempted from APD fees. APD fees are known to deter 
investment in tribal oil and gas and it slows down much needed 
economic development.
    I do not have to tell you how much of an unemployment rate 
we have. It is something we are not proud of. It is reality. We 
have to be allowed to help our own people.
    In conclusion, I thank you for the opportunity today to 
testify on this important issue.
    We urge Congress to continue its oversight of the BLM 
hydraulic fracturing regulations and the more general issue of 
consultation with tribes. We have great confidence that this 
issue with the BLM can be worked out in a beneficial way to 
tribes and the Federal Government, if truly meaningful 
consultation takes place in the near future.
    Thank you again, and I will be happy to answer any 
questions.
    [The prepared statement of Mr. Russell follows:]

       Statement of Scott Russell, Secretary of the Crow Tribe, 
                 NCAI Board Member, Area Vice President

Introduction
    I'd like to thank the House subcommittee for Indian and Alaska 
Native Affairs for holding this important hearing at such a crucial 
time and inviting NCAI to testify. I am the Area Vice President for the 
Rocky Mountain Region for NCAI and the Secretary of the Crow Tribe in 
Montana.
    The National Congress of American Indians (NCAI) is the oldest and 
largest national organization of American Indian and Alaska Native 
tribal governments. Since 1944, tribal governments have gathered as a 
representative congress through NCAI to deliberate issues of critical 
importance to tribal governments.
    Indian tribes control significant areas of land that contain oil & 
gas that could be accessed by hydraulic fracturing. BLM regulation and 
related activities that affect tribal lands must be guided by 
meaningful consultation with tribal governments. Tribal interests are 
distinct from the public interest and are sovereign nations, furthering 
the need for meaningful consultation between the BLM and tribal 
governments.
    NCAI recently passed a resolution seeking meaningful consultation 
with the Bureau of Land Management regarding new hydraulic fracturing 
regulations. The resolution also asserts that the BLM regulations for 
hydraulic fracturing on public lands should not apply to Indian lands. 
The resolution is attached to this testimony for inclusion in the 
record.
    The BLM is required to conduct meaningful consultation with tribal 
governments to develop new regulations.
    NCAI's concerns are focused on consultation. The Department of 
Interior has a responsibility to consult with Indian tribes to ``ensure 
meaningful and timely input by tribal officials in the development of 
regulatory policies that have tribal implications.'' This is Executive 
Order 13175, and it is also a trust responsibility of the federal 
government. The hydraulic fracturing regulations affect us directly, as 
they apply only to federal lands and tribal lands. We are directly 
affected and we have not been consulted.
    The BLM did hold some meetings with tribal leaders. I went to the 
meeting in Salt Lake City. But it clearly wasn't consultation. The 
regulations were drafted before we met with BLM, and then submitted to 
the Office of Management & Budget before the due date for tribal 
comments last week. We didn't have any input into the regulations, much 
less ``meaningful and timely input.'' Tribal leaders were handed a copy 
of the draft regulations and told that it was purely an informational 
meeting.
    In the DOI's own words, the consultation policy is necessary to, 
``detail early tribal involvement in the design of a process 
implicating tribal interests,'' and to, ``honor the government to 
government relationship.'' BLM has not followed the consultation policy 
and risks creating burdensome regulations that further restrict tribes 
from using their lands to benefit tribal members.
    In addition, I believe that the BLM understated the impact of these 
regulations. In all of the summaries, BLM focuses on the disclosure 
requirements, and that doesn't sound like a big problem. But if you 
read more deeply into the draft regulations, you will see that they are 
significantly more burdensome and will substantially impact tribal 
development. In particular, every drilling plan and every minor change 
to a drilling plan triggers another set of documentation and approvals 
by the Department of Interior. Federal approval is a nightmare scenario 
for Indian tribes. The federal government does not have the funding or 
the staff to do this process efficiently. Oil & gas producers have 
millions of dollars worth of equipment and employees in the field with 
the meter running, and creating multiple new requirements for federal 
review and approval will drive them away because the costs are too 
high.
    My tribe, the Crow Tribe, is directly affected. We have oil & gas 
on our reservation in Montana, and hydraulic fracturing offers the 
potential for significantly expanded production in the future. In fact, 
these regulations affect tribes more than anyone else. BLM manages 700 
million acres of subsurface, so oil producers will put up with some 
extra expenses and burdens to get access to federal lands. The Crow 
Reservation has only 2 million acres of subsurface in trust, and it is 
checkerboarded. If the costs and burdens are too high, the producers 
can avoid the tribal lands and drill on the private lands right next 
door. We will get shut out of the biggest oil boom in the history of 
the United States, perhaps billions of dollars. I cannot overemphasize 
what that kind of revenue could do for our Tribe.
    In addition to the economic affect, many tribes, including the Crow 
Tribe, have concerns about the environmental impacts of hydraulic 
fracturing. It is happening all over the country, near Indian 
reservations and upstream from Indian reservations. We want to know 
more about it. Will these regulations provide enough protection? I am 
here on behalf of the many member tribes of NCAI, and the environmental 
concerns are important to all of us.
Impact on Tribal Sovereignty and Regulation
    The Executive Order on Tribal Consultation has another important 
feature. It requires that:
    When undertaking to formulate and implement policies that have 
tribal implications, agencies shall:
        1.  encourage Indian tribes to develop their own policies to 
        achieve program objectives;
        2.  where possible, defer to Indian tribes to establish 
        standards; and
        3.  in determining whether to establish Federal standards, 
        consult with tribal officials as to the need for Federal 
        standards and any alternatives that would limit the scope of 
        Federal standards or otherwise preserve the prerogatives and 
        authority of Indian tribes.
    One sign of the lack on consultation on these regulations is that 
they give no consideration at all to tribal regulation of hydraulic 
fracturing processes. We believe that there are more efficient and 
effective ways to do disclosure of hydraulic fracturing chemicals and 
processes, and that tribes are already engaged in this regulation. The 
Indian Mineral Development Act of 1982 clearly envisioned a role for 
tribes in regulating mineral production through the use of mineral 
agreements. We believe that an Indian tribe should be able to opt out 
of the BLM regulations, and instead institute tribal government 
regulatory methods.
Tribal Lands are not public lands.
    Though tribal lands are held in trust by the federal government, 
they are not public. Tribal lands are under the jurisdiction of 
sovereign tribal governments and are for the benefit of tribal members. 
However, BLM continues to treat tribal lands like public land by trying 
to regulate oil and gas development on tribal lands.
    This incorrect treatment of tribal lands as public lands extends to 
the burden of the Application for Permit to Drill (APD) fees. The BLM 
APD fees only apply to public lands and therefore, tribal lands should 
be exempted from APD fees. APD fees are known to deter investment in 
tribal oil and gas, slowing down much needed economic development.
    Tribes would like to work with the BLM to develop regulations for 
hydraulic fracturing that are specific to Indian lands.
    Regulation that is generated in consultation with tribes can become 
not only less burdensome but a constructive tool to guide tribal 
processes. The BIA has recently conducted extensive consultation to 
generate new surface leasing regulations specifically for Indian lands. 
These regulations are likely to not only improve the economic 
development opportunities on tribal lands but also preserve the 
environment by further enabling renewable energy development.
    BLM hydraulic fracturing regulations, when promulgated specifically 
for tribes and in consultation with tribes also have the opportunity to 
strike this balance. Currently, the lack of consultation almost ensures 
that the resulting regulation will further burden tribal economies and 
the process has dishonored the nation to nation relationship between 
the federal government and tribes.
Conclusion
    Thank you for the opportunity today to testify on this important 
issue, and for your consideration of the views of the National Congress 
of American Indians. We urge Congress to continue its oversight of the 
BLM Hydraulic Fracturing regulations and the more general issue of 
consultation with Indian tribes. We have great confidence that this 
issue with the BLM can be worked out in a beneficial way for tribes and 
the federal government, if truly meaningful consultation takes place in 
the near future.
                                 ______
                                 
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                                 .eps__
                                 
    Mr. Young. Thank you, Scott.
    Wilson?

STATEMENT OF WILSON GROEN, PRESIDENT AND CEO, NAVAJO NATION OIL 
                        AND GAS COMPANY

    Mr. Groen. Good morning/afternoon, Chairman Young, Ranking 
Member Boren, Congressman Kildee. It is a pleasure to speak in 
front of you again.
    I am Wilson Groen, President and CEO of the Navajo Nation 
Oil and Gas Company. The Navajo Oil and Gas Company is 
chartered under Section 17 and is wholly owned by the Navajo 
Nation, so it is a Federally chartered corporation.
    I have given written statements for the Committee and I 
will not go into a lot of detail on that.
    I do again appreciate the opportunity to be here. Many of 
the speakers prior to me have covered the same issues that I am 
concerned about. I do not believe the Navajo Nation has 
formally given a response as yet, but I know in speaking with 
some of their staff, they have very similar concerns.
    The big concerns are sovereignty, the overreach of this, 
and the lack of consultation. That is really the heart of the 
whole thing.
    Navajo Oil and Gas is a very successful for profit 
corporation. We are 90 percent staffed by Navajo Nation 
members.
    We take the protection of the resources of the Nation very 
seriously. That is not only from a corporate point of view, but 
for the Navajo people and with almost all Native American 
people that I am aware of, it is a very culturally sensitive 
issue.
    We take that responsibility likewise very seriously.
    Our mission statement is to maximize the resources for the 
benefit of the Navajo people with respect for Mother Earth. 
Again, we take this very seriously.
    The fracking regulations that are being talked about, it 
has to be done in the best interest and with proper 
consultation. We keep coming back to that.
    The tribal oil and gas producers, as mentioned, not only 
here, but if not on the Nation, with these regs, with the taxes 
and other issues, they will move off and do their development 
off the Nation's lands.
    For Navajo Oil and Gas, we very specifically have a new 
resource, the shale that is developing in the Four Corners 
area. It is significant. Is it developed like the Bakken at 
this point? No. Does it have the potential? Yes. It has huge 
potential.
    We need to know how to develop. We are evaluating these 
processes and procedures, what is the most applicable way.
    Again, it is being done in a very proactive, best 
management practices.
    As was mentioned earlier, we as a company and the Nation as 
part of their permitting procedures--when we run casing in a 
well, all those types of things are taken into account.
    In my experience, I cannot recall ever a situation in which 
there has been contamination of a water zone that is a result 
of the fracking process.
    Has there been well bore integrity breakdown? Yes. That is 
one of the reasons that we now instigate the practice of 
cementing to the surface. Again, we want to focus on best 
practices to allow these fracking procedures to proceed on 
safely and without the undue and unnecessary regulatory burden 
that the current rules are proposing.
    Again, I basically support all of the comments that have 
been made by all the various tribes here earlier.
    I look forward to any other additional comments. I may add 
one additional thing. One of the overall issues with this is 
still the same issue as the February hearings, releasing some 
of the chains and letting the Native Americans develop their 
resources.
    I appreciate this Committee's support of 415(3) and the 
amendments that are put before it.
    Thank you.
    [The prepared statement of Mr. Groen follows:]

    Statement of Wilson Groen, President & Chief Executive Officer, 
                   Navajo Nation Oil and Gas Company

Introduction
    Good afternoon Chairman Young, Ranking Member Boren, and members of 
this distinguished Subcommittee.
    My name is Wilson Groen and I am the President and Chief Executive 
Officer of the Navajo Nation Oil and Gas Company (NNOGC), a company 
wholly-owned by the Navajo Nation (the Nation). NNOGC is active in oil 
and gas exploration and production on and off Navajo lands, owns and 
operates a crude oil pipeline, and is a retail and wholesale 
distributor of refined petroleum products. I had the privilege of 
appearing before you in February of this year to discuss Chairman 
Young's ``Native American Energy Act'' (H.R. 3973), and urge you to 
bring that bill to a markup in the full Committee on Resources.
    Thank you for the opportunity to appear today to discuss the Bureau 
of Land Management's (BLM) proposed hydraulic fracturing regulation 
that will provide additional and unnecessary regulatory burdens on 
energy producers in Indian Country.
    NNOGC's mission statement is particularly appropriate considering 
the theme of this oversight hearing. It is NNOGC's mission to 
``Maximize resources for the benefit of the Navajo Nation with respect 
for Mother Earth.'' I can assure the Subcommittee that NNOGC approaches 
its mission and its operations with utter seriousness.
Background of the NNOGC
    In 1992, the Navajo Nation Energy Policy (Energy Policy) was issued 
by the Nation after much discussion and input from energy experts, 
environmentalists, economic development specialists, lawyers, and 
political leaders of the Nation. The Energy Policy observed that the 
Nation was resource rich, but that it was neither obtaining proper 
value for its minerals nor, more importantly, participating in the 
energy industry as a business owner. For example, the standard oil and 
gas leases issued by the Bureau of Indian Affairs (BIA) relegated the 
Nation to the role as passive lessor, and that needed to be changed.
    NNOGC was established in 1993 and is a direct outgrowth of the 
Energy Policy. The Nation's objective was to launch a tribal 
corporation to engage in oil and gas production as an integrated, for-
profit business entity to maximize the value of the Nation's energy 
resources for the benefit of the Navajo people.
    NNOGC has acquired and now operates an 87-mile crude oil pipeline, 
acquired and is continuing to acquire significant oil and gas working 
interests in the Greater Aneth, Utah, oil fields, and expanded its 
retail and wholesale business. Just last week, NNOGC entered an option 
to purchase 10 percent of Resolute Energy Corporation's interest in the 
Aneth Field, the largest oil producer in the State of Utah.
    While NNOGC is still in a robust growth mode, it has returned 
significant royalty payments, taxes, right-of-way payments, lease 
payments, scholarships and other contributions to the Nation and host 
communities. Much of the Nation's resources used to provide employment 
and services to the Navajo people derives from NNOGC's operations.
NNOGC's Oil and Gas Activities
    Since 2005, oil and gas production on Navajo lands in southeastern 
Utah has increased and the Nation is consequently witnessing an 
increase in oil and gas royalty revenues. It is critical to the 
continued growth of the Nation's economy to continue oil and gas 
resource development on Navajo lands.
    NNOGC, often with industry partners, is also leasing and developing 
tracts of land on and near the Navajo Reservation. NNOGC has obtained 
rights to 150,000 acres of land within the Nation to develop coal bed 
methane, oil and conventional gas resources. NNOGC is also exploring 
the feasibility of developing helium reserves on the Navajo 
Reservation. NNOGC has recently partnered with another company to 
develop oil and gas reserves in Montana.
    As the Committee will surely appreciate, these activities 
contribute not only to the Nation's self-sufficiency, but also to the 
energy security of the United States.
NNOGC Comments on the BLM's Proposed Rule
    NNOGC is a corporation wholly-owned by the Nation, and is a 
significant producer of oil and natural gas from Nation lands. With the 
largest reservation and tribal population in the U.S., NNOGC's energy-
related activities represent a major source of revenues to the Nation 
and significant employment and income opportunities to Navajo people.
    Tribal oil and gas producers and their private sector partners 
around the country, including the Southern Ute Indian Tribe, the Ute 
Tribe of the Uintah and Ouray Reservation, the Mandan Hidatsa and 
Arikara Nation, and the Blackfeet Nation, make prudent use hydraulic 
fracturing and believe the practice necessary for the future 
development of their mineral resources. NNOGC agrees with these 
sentiments, particularly with respect to the anticipated development of 
recently-acquired lands and mineral resources.
    Should the department proceed with a rule regulating the practice 
of hydraulic fracturing, NNOGC strongly suggests it be guided by the 
following principles and considerations.
    The expressed justification for the rule is to ``protect the larger 
public's interest in the public domain,'' and as Indian lands cannot 
remotely be considered ``public lands,'' the rule should not apply to 
Indian lands in the first instance.
    Nevertheless, if the department decides to proceed with a rule and 
intends the rule to have application to activities on Indian lands, the 
rule should not include reference to state and local rules or 
jurisdiction over activities and persons on Indian tribal lands, see 
e.g., 25 CFR 1.4.
    Departmental officials have cited environmental protection, and 
specifically water quality measures, as justifying the need for a 
Federal rule to regulate activities related to hydraulic fracturing. 
The reality is that best management practices have been successfully 
developed in the oil and gas industry relating to the hydraulic 
fracturing process, the construction and monitoring of wells and 
wellbore integrity, groundwater sampling and protection, and others, 
all of which minimize the types of environmental degradation that is at 
the heart of the argument for a Federal rule.
    Unlike all other landowners in the U.S., Indian tribes and their 
development corporations such as NNOGC face unique hurdles in their 
efforts to identify and develop conventional energy resources. These 
hurdles include significant delays in securing Federal approvals for 
land leasing and related permitting, an untimely Federal appraisal 
process, fees for applications for permits to drill and other Federal 
fees, NEPA compliance, and other challenges which, taken together, 
result in under-investment in energy resource development on tribal 
lands.
    A Federal rule relating to hydraulic fracturing will result in 
additional and extraordinary delays in getting tribal projects moving 
because the need for new BLM approvals will likely foster appeals that 
could take the Interior Board of Land Appeals a year or more to decide.
    Imposing a new, burdensome rule on tribal energy producers and 
their partners is contrary to the essential thrust of Indian energy 
bills now pending in the House of Representatives and the Senate that 
are intended to remove unreasonable, uneconomic, or anachronistic 
barriers to more vigorous energy production on Indian lands and to 
promote tribal self-determination and self-sufficiency. The BLM's 
proposed regulation will place additional burdens on an already over-
regulated industry and will harm Indian tribes, their members and 
surrounding communities, many of which depend on energy production to 
drive the regional economies.
    To-date, the BLM has held four regional meetings to discuss a draft 
rule informally shared with tribes earlier this year. I am reliably 
informed that a second draft rule has been developed but has not been 
circulated to any tribes. Given there is a second draft rule extant, 
and as various Indian tribes, the National Congress of American 
Indians, the Council of Energy Resource Tribes, industry groups, and 
Members of Congress have already noted in correspondence to you, the 
breadth and depth of BLM outreach and consultation with Indian Country 
has been insufficient given the potential impact the rule could have on 
tribal energy resources and economic development.
    In lieu of the proposed rule's current trajectory, NNOGC has urged 
the department to undertake a more vigorous consultation with the 
tribal community consistent with President Obama's public commitments 
and Secretarial Order 3317, in which Secretary Salazar announced a 
policy of ``enhanced communication'' when it comes to decisions that 
impact Indian tribes and their members.
Conclusion
    In conclusion, I want to thank Chairman Young and Ranking Member 
Boren for their leadership in holding this oversight hearing.
    If, as we suspect, the BLM insists on promulgating the proposed 
rule, we urge the Subcommittee to consider legislative action that will 
respect tribal regulatory authority and encourage the continued 
development of energy resources on Indian lands.
    At this juncture, I would be happy to answer any questions you 
have.
                                 ______
                                 
    Mr. Young. I thank you. We are going to have a couple of 
questions.
    Were any of you consulted by the BLM?
    [No response.]
    Mr. Young. That ought to be an answer in itself. That was 
what this hearing was about, and about the so-called 
``regulations.''
    Mr. Boren?
    Mr. Boren. Thank you, Mr. Chairman. Just really a comment 
and then a quick question, one for Larry here.
    Even though I am a big proponent of oil and gas 
development, I think when we are talking about sovereignty and 
tribes having the ability to say we want to do what we want to 
do on our land, I deeply respect the fact that you have made 
the decision not to do that.
    I thank you for being here, even though as I said, I am a 
proponent of energy development. It is up to the tribes to make 
that decision. Thank you for being here.
    For Mr. Martel, the EPA study that was done, I think 
without going into it because we have to go vote, there were 
two test wells that were drilled. Many of the folks involved 
with that study are saying those wells may have compromised the 
data. A lot of the methane and some of the other things that 
were discovered during those test wells, they actually 
naturally occur.
    That was a very shallow well that was drilled, so the test 
wells, we are talking about less than 1,000 feet deep.
    When most people think of shale wells, they think of a 
14,000 foot well that is done with fracking and it is done 
horizontally.
    These were traditional wells that were not even horizontal. 
They were very shallow.
    A lot of times, there is naturally occurring methane. There 
is naturally occurring chemicals that are also used in the 
fracking process.
    I think that study has been put on hold. We have to be very 
careful about how we say this is chapter and verse, this is 
what we are going to take and say this is how we are going to 
take this and we are going to regulate fracking.
    I appreciate your testimony and your balanced way of 
letting us know about what you all are doing to develop your 
resources.
    This is my comment. We have to go vote. I will yield back.
    Mr. Young. Mr. Kildee?
    Mr. Kildee. Just to thank the witnesses for your testimony. 
You are here today protecting the rights of your Nation and the 
rights of your citizens, a very important thing.
    I am going to be leaving Congress but I hope that the rest 
of the years that God gives me that I can continue to work with 
you to protect your sovereignty. God bless all of you. Thank 
you.
    Mr. Young. Thank you. One other question. The thing I do 
not understand and again we have to go back and review these 
laws, you are not public land. They passed public land 
requirements on public land.
    If they want to have those in public land, that is a 
different story, although I may not agree with them.
    You have a right to make your own decisions. Larry, you 
told the oil companies to get lost right now. If an oil company 
comes to any one of you three and say they want to drill, you 
can sit down your own regulations, can you not?
    Mr. DeCoteau. Absolutely.
    Mr. Young. That is what we should be doing. If you make 
them too prohibitive, they will go someplace else. You do not 
need the Federal Government telling you what you can and cannot 
do.
    What is this $6,000 in taxes? What is that? Scott, you 
brought that up.
    Mr. Russell. Those are the APD fees.
    Mr. Young. APD. Thank God we have what, 27 letters in the 
alphabet. I am glad we have that. What is an ``APD?''
    Mr. Russell. That is an application for the permit to drill 
that was imposed by the BLM.
    What is crazy about this is the money does not even go 
locally, it goes back into the general fund for the Treasury, 
and it does not help local communities.
    Mr. Young. That does not make sense. We can probably change 
that. That is something that does not make sense to me. Right 
next door, they do not apply that, do they?
    Mr. Russell. No, they do not. One step off the reservation, 
they pay only $400. That is why companies are staying away.
    Mr. Young. If you have the sovereign right to those lands, 
you could charge what you want for the permits. You should not 
have to have BLM collecting the money and putting it back in 
the general Treasury.
    Mr. Russell. Exactly.
    Mr. Young. This is a quagmire right now. We have to get it 
straightened out to try to make sure you guys fulfill your 
obligations to your constituents, your tribal members.
    When I first started this job here a while back, I am 
amazed that you have been able to do anything. You are not 
encouraged to do it. You are told you cannot do it because.
    EPA will be here next. They are already there. I am 
surprised the Corps is not there, come to think about it.
    One other thing, Navajo Tribe, do they reuse or do you 
require they reuse the water in fracking?
    Mr. Groen. Currently, we have to either recycle or properly 
dispose of the water, depending on what is in it. The Navajo 
Nation has very extensive departments, water, environmental 
protection, historical preservation, fish and wildlife, 
minerals.
    They have existed for tens of years, so it is not just a 
new function that is there, and they look very carefully at it, 
and we do submit when we drill wells and so on water--any 
indications of water that has been found, and if a well is 
abandoned or plugged, we offer it back to the Nation as a water 
resource if it is potentially usable.
    Mr. Young. All right. I would like to ask a favor of all 
the panel members that have appeared before us, if you have 
some suggestions about this problem and how it can be solved 
other than just eliminating the BLM, we want to hear it. We are 
going to try to stop this set of regulations. I do not think 
they are fair. Again, you are not public lands. You are 
sovereign lands.
    We will do everything we can. I do think you have the 
ability to be responsible. I think that is your responsibility, 
to make sure you do not hurt your land. You said you would not, 
and make sure that happens.
    With that, and I do excuse you, and this Committee is 
adjourned.
    [Whereupon, at 1:01 p.m., the Subcommittee was adjourned.]

                                 
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