[Senate Hearing 112-636]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-636

 
                   S. 1684, THE INDIAN TRIBAL ENERGY 
       DEVELOPMENT AND SELF-DETERMINATION ACT AMENDMENTS OF 2011

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 19, 2012

                               __________

         Printed for the use of the Committee on Indian Affairs




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                      COMMITTEE ON INDIAN AFFAIRS

                   DANIEL K. AKAKA, Hawaii, Chairman
                 JOHN BARRASSO, Wyoming, Vice Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
KENT CONRAD, North Dakota            LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN HOEVEN, North Dakota
MARIA CANTWELL, Washington           MIKE CRAPO, Idaho
JON TESTER, Montana                  MIKE JOHANNS, Nebraska
TOM UDALL, New Mexico
AL FRANKEN, Minnesota
      Loretta A. Tuell, Majority Staff Director and Chief Counsel
     David A. Mullon Jr., Minority Staff Director and Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 19, 2012...................................     1
Statement of Senator Barrasso....................................     1
Statement of Senator Conrad......................................    15
Statement of Senator Franken.....................................    16
Statement of Senator Hoeven......................................    35
Statement of Senator Tester......................................    36
Statement of Senator Udall.......................................    40

                               Witnesses

Cuch, Hon. Irene C., Chairwoman, Ute Tribal Business Committee...    20
    Prepared statement...........................................    22
Finley, Hon. Michael O., Chairman, Confederated Tribes of the 
  Colville Reservation...........................................    16
    Prepared statement...........................................    18
Groen, Wilson, President/CEO, Navajo Nation Oil and Gas Company..    29
    Prepared statement...........................................    30
Hall, Hon. Tex ``Red Tipped Arrow'', Chairman, Mandan, Hidatsa 
  and Arikara Nation, Fort Berthold Reservation..................     8
    Prepared statement...........................................     9
Olguin, Hon. James M. ``Mike'', Vice Chairman, Southern Ute 
  Indian Tribal Council..........................................     3
    Prepared statement...........................................     4

                                Appendix

Crow Nation, prepared statement..................................    47
Intertribal Timber Council, prepared statement...................    58
King, Hon. Randy, Chairman, Shinnecock Indian Nation, prepared 
  statement......................................................    51
Office of Hawaiian Affairs (OHA), prepared statement.............    60
Porter, Robert Odawi, President, Seneca Nation of Indians, 
  prepared statement.............................................    56


                   S. 1684, THE INDIAN TRIBAL ENERGY 
       DEVELOPMENT AND SELF-DETERMINATION ACT AMENDMENTS OF 2011

                              ----------                              


                        THURSDAY, APRIL 19, 2012


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:15 p.m. in room 
628, Dirksen Senate Office Building, Hon. John Barrasso, Vice 
Chairman of the Committee, presiding.

           OPENING STATEMENT OF HON. JOHN BARRASSO, 
                   U.S. SENATOR FROM WYOMING

    Senator Barrasso. Good afternoon. I am calling this hearing 
to order.
    First, I want to thank the Chairman, Senator Akaka, for 
scheduling this hearing today and allowing me to act as the 
Chairman. We will be considering my bill, the Indian Tribal 
Energy Development and Self-Determination Act Amendments of 
2011.
    The Chairman has graciously agreed to co-sponsor the bill 
with me in the spirit of the Committee's long tradition of 
bipartisanship. As I have stated in the past, when I meet with 
leaders of the Eastern Shoshone and the Northern Arapaho 
Tribes, I am reminded how important energy development is to 
Indian communities across the Country. On the Wind River 
Reservation, energy development means jobs.
    Energy development on the Wind River Reservation also means 
income for families. It means paying the heating bill. It means 
food on the tables. We know that many Indian communities have 
more than their fair share of challenges, unemployment, crime 
and drug abuse. Many of these problems are really aspects or 
features or something much larger: a pervasive lack of 
opportunity to earn a good living.
    Economic development and economic opportunities--those are 
the keys to a healthy, productive community. Energy development 
on Tribal lands is critical for employment and economic growth 
in Indian Country and for America's energy security and our 
independence.
    For years, Indian Tribes have expressed concern about the 
numerous Federal laws and regulations governing the management 
of trust and energy resources. These rules often create 
significant delays and uncertainty in development proposals.
    For these reasons, I have introduced S. 1684, the Indian 
Tribal Energy Development and Self-Determination Act Amendments 
of 2011. I would like to highlight some of the more important 
provisions.
    First, this legislation is intended to make the Tribal 
Energy Resource Agreement, or TERA, process, easier for Indian 
Tribes to follow. It will also make TERA more predictable. 
Since passage of the Indian Energy title of the Energy Policy 
Act of 2005, it appears that no Tribe has yet availed itself of 
the authorized TERA process.
    Under my legislation, a Tribal energy resource agreement 
would automatically go into effect after 270 days unless the 
Secretary determines that its terms do not meet the specific 
statutory requirements.
    Second, S. 1684 would allow Tribal entities to enter into 
certain energy development leases without approval by the 
Secretary. These entities could have non-Tribal investors, but 
the Tribe would have to be the majority equity owner and retain 
control at all times.
    Third, this Act provides the Indian Tribes with some 
funding to implement the TERA process without increasing the 
cost of the program. The amount would be equal to any savings 
that the United States realizes as a result of the Indian Tribe 
carrying out the TERA.
    There are other energy-related issues addressed in this 
bill apart from the Energy Policy Act of 2005. For example, 
Tribes also face barriers when seeking approval of 
hydroelectric projects. There is a provision in my bill that 
modifies the barrier in the Federal Power Act, making it 
difficult for Tribes to pursue hydroelectric projects.
    This bill would also authorize a biomass demonstration 
project for biomass energy production from Indian forest range 
lands and other Federal lands. We will hear more on that 
project from Michael Finley, from the Colville Tribes.
    For far too long, bureaucratic red tape has prevented the 
pursuit of Tribal economic development opportunities, 
especially energy development. This legislation will reverse 
that trend.
    Before I conclude, I want to again thank Chairman Akaka for 
his leadership on the issue. I would also like to thank the 
Chairman's staff, who have been so very helpful as well.
    A final word: I am going to have to leave the hearing just 
before 3 o'clock. Senator Hoeven from North Dakota will be 
chairing the hearing from that point on.
    With that, I would like to turn to the panel. We have a 
panel of five witnesses. I am going to introduce them, starting 
with the Honorable James ``Mike'' Olguin, the Vice Chairman of 
the Southern Ute Indian Tribe of Colorado. Next is the 
Honorable Tex Hall, Chairman of the Mandan, Hidatsa and Arikara 
Nation, from North Dakota. He will be followed by the Honorable 
Michael Finley, Chairman of the Confederated Tribes of the 
Colville Reservation in Washington State. Next is the Honorable 
Irene Cuch, Chairwoman of the Ute Indian Tribe of the Uintah 
and Ouray Reservation in Utah. And finally, we will hear from 
Mr. Wilson Groen, the President and CEO of the Navajo Nation 
Oil and Gas Company in Arizona.
    As you see, we do not have a witness from the 
Administration here today. I continue to work with the 
Administration to address questions they have and reiterate the 
importance of this legislation to Indian Country. So I am 
looking forward to the coming dialogue.
    With that, I would like to welcome our witnesses here today 
and look forward to their testimony, and we can begin.

  STATEMENT OF HON. JAMES M. ``MIKE'' OLGUIN, VICE CHAIRMAN, 
               SOUTHERN UTE INDIAN TRIBAL COUNCIL

    Mr. Olguin. Good afternoon, Vice Chairman Barrasso. Also 
good afternoon, witnesses.
    My name is Mike Olguin, I am 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 on S. 1684, the Indian Tribal Energy and 
Self-Determination Act Amendments.
    We fully support S. 1684, especially its provisions 
regarding Tribal Energy Resource Agreements, or TERAs, which 
will be the focus of my comments today.
    S. 1684 continues this Committee's commitment to support 
Tribal energy development. Over the years, you have worked on a 
number of legislative proposals to help us with our primary and 
ongoing concern, the delays and impediments to Tribal energy 
development caused by Federal bureaucracy.
    With the price of natural gas at a one-fifth of what it was 
only four years ago, you can easily understand the impact that 
multi-year delays and the approval of rights of way and other 
energy-related transactions have had and continue to have on 
our Tribal economies. Because we are the largest employer in 
our region, these impacts are felt in the non-Tribal community 
as well. Despite our mutual efforts to solve this ongoing 
problem, these bureaucratic delays and their financial impacts 
continue. In 2002, we began work with your staff on a possible 
solution. Back then, our legal counsel wrote to your legal 
counsel about a possible alternative approach that would allow 
Tribes to elect to escape the Federal bureaucracy for mineral 
development purposes, provided the Secretary has a reasonable 
indication that an electing Tribe will act prudently once cut 
free.
    This proposal ultimately came to fruition in the Indian 
Tribal Energy Development and Self-Determination Act of 2005. 
That law gave Tribes authority to manage some of their own 
energy development transactions without Federal oversight, 
provided the Secretary of the Interior was satisfied that the 
Tribe had the capacity to do so.
    As a precondition, the law required a Tribe and the 
Secretary of Interior to first establish a master agreement, or 
TERA. We continue to believe that this alternative approach is 
the right one. Unfortunately, no Tribe has yet entered a TERA 
to take advantage of the promise offered by the 2005 law. Each 
Tribe likely has its own reason for not pursuing a TERA, but we 
believe many concerns revolve around one, the lack of Federal 
funding for Tribes to assume additional duties under a TERA; 
two, the lack of clarity regarding what inherent trust 
functions would be retained by the Federal Government after 
entering a TERA; three, public input requirements for Tribal 
processes; and four, the extensive capacity demonstrations 
required before a TERA could be entered.
    S. 1684 would amend existing law regarding TERAs and while 
these amendments do not address all of the potential reasons 
for no TERAs, they expand the use of TERAs and their potential 
benefit for Indian Tribes. My written statement contains a 
detailed review of these complex provisions, but I would like 
to summarize a few of the most important changes S. 1684 would 
make.
    First, S. 1684 would expand the ability of Tribes to 
demonstrate sufficient capacity to enter a TERA by including 
successful performance of other Federal 638 contracts as a 
basis for such demonstration. This expansion provides a 
straightforward and reasonable capacity requirement, in 
addition to those already allowed by existing law. S. 1684's 
amendments would provide a clear standard that we could easily 
meet.
    Second, S. 1684 would broaden the types of activities that 
could be included in a TERA. For example, the bill includes the 
addition of transactions related to renewable energy facilities 
and clarifies that TERAs may extend to pooling and 
communications agreements affecting Indian energy minerals.
    Third, the bill would allow for cost-sharing between the 
Secretary and a TERA Tribe, where the Tribe's TERA activities 
have resulted in cost savings to the Secretary. Last, the bill 
shortens the time frame for secretarial review and approval of 
a TERA, and would require that if the Secretary does not act 
upon a proposed TERA in 270 days, the TERA becomes effective on 
the 271st day.
    Each of these amendments, as well as the other changes 
under S. 1684, would improve the chances that Southern Ute and 
other Tribes would enter TERAs. We continue to believe that the 
TERA alternative is the answer to the ongoing delays caused by 
inefficient and ineffective Federal processes. S. 1684 is 
another step toward making that alternative a reality, and we 
urge you to move forward.
    Thank you for this opportunity and we are available to 
answer any questions.
    [The prepared statement of Mr. Olguin follows:]

  Prepared Statement of Hon. James M. ``Mike'' Olguin, Vice Chairman, 
                   Southern Ute Indian Tribal Council

I. Introduction
    Chairman Akaka, Vice Chairman Barrasso and distinguished members of 
the Committee, I am the Vice Chairman of the Southern Ute Indian Tribal 
Council, and it is my great honor to appear before you today on behalf 
of the Southern Ute Indian Tribe in support of S. 1684. Although this 
legislation was introduced approximately six months ago, we have been 
working closely with this Committee for more than three years in an 
effort to obtain legislation further empowering Indian Tribes to 
address energy needs and energy development opportunities. We were 
active participants in field hearings and legislative discussions that 
led former Chairman Dorgan to introduce S. 3752 in the summer of 2010. 
While that proposed legislation did not become law, it served as a key 
building block for S. 1684, which is before you today. Throughout the 
intervening years, Tribal leader after Tribal leader has come before 
you to express concerns about extreme needs in Indian Country, both for 
improved access to energy and for economic development for their 
constituents. Today we hope that members of the Committee will 
collectively determine that the needs of Indian Country merit passage 
of S. 1684.
    The first purpose of our testimony is to take a step back and re-
visit the underlying reasons that led to introduction of both S. 3752 
in the 111th Congress and S. 1684. Second, we believe it is important 
to review the factors leading to and the potential significance of 
Tribal Energy Resource Agreements (``TERAs'') as an optional vehicle of 
Tribal self-determination. Third, we hope to show why suggested changes 
to Title V of the Energy Policy Act of 2005 are improvements that 
deserve your positive action.
    For decades our leaders have had the privilege of working with this 
Committee and its staff. Even when differences on other political 
issues have divided Congress, this Committee has led the way in 
focusing on the needs of Indian Country and in attempting to craft 
solutions to those problems. We respectfully urge you to do so once 
again in passing S. 1684.

II. S. 3752 (111th Congress, 2d Session) and S. 1684
    Because the process leading to S. 1684 has spanned such a 
considerable time and has included the introduction of two separate 
legislative measures addressing several of the same concerns, we 
believe it is worthwhile to review those two measures.
    Investigative hearings before this Committee leading to 
introduction of S. 3752 addressed a number of critical problems that 
continue to exist today in Indian Country. First, the unacceptable, 
bureaucratic delays in federal approval of Indian mineral leases and 
drilling permits related to Indian mineral lands captured the attention 
of former Chairman Dorgan, whose own Tribal constituents watched their 
non-Indian neighbors get rich from mineral resource development, as 
Indian lands remained unleased and undrilled month after month while 
awaiting federal approval and permitting. The punitive effect of those 
delays on the poorest individuals and communities in the Nation clearly 
impressed this Committee as unjustifiable. A number of the provisions 
of S. 3752 attempted to reduce such administrative burdens through such 
measures as: mandated interagency coordination of planning and 
decisionmaking; regulatory waiver provisions; relief from land 
transaction appraisal requirements; and the elimination of fees 
assessed by Bureau of Land Management for applications for permits to 
drill on Indian lands.
    Other testimony received by this Committee prior to the 
introduction of S. 3752 reflected frustration regarding barriers to 
capital, expertise and facilities needed for Tribes to proceed with 
alternative or renewable energy development. Again, the Committee 
attempted to address these concerns through a number of provisions 
including authorization for greater governmental technical assistance, 
reclassification of certain Tribal agricultural management practices as 
sustainable management practices under federal laws, treating Indian 
Tribes like State and municipal governments for preferential 
consideration of permits and licenses under the Federal Power Act 
hydroelectric provisions; expansion of the Indian Energy Loan Guaranty 
Program; and authorization for a Tribal biomass demonstration project.
    In response to other evidence demonstrating inadequate access of 
many Indian communities to energy services and weatherization 
assistance, S. 3752 authorized the Secretary of Energy to establish at 
least 10 distributed energy demonstration projects to increase the 
availability of energy resources to Indian homes and community 
buildings. Special 638 contract funding provisions were put in place 
for energy efficiency activities associated with Tribal buildings and 
facilities. Section 305 of S. 3752 reflected a major revision of the 
Nation's weatherization program by authorizing direct grants to Indian 
Tribes for weatherization activities.
    S. 3752 also proposed significant revision of the Indian Land 
Consolidation Act to address practical problems in that act's 
administration and substantial expansion of the durational provisions 
of the non-mineral, long-term business leasing provisions of 25 U.S.C. 
 415(a).
    While this brief summary can by no means do justice to the myriad 
of matters addressed in the specific provisions of S. 3752, it is fair 
to state that it touched a wide array of Indian-related programs 
involving Indian energy issues.
    In contrast, the scope of S. 1684 is considerably more narrow than 
S. 3752. Nonetheless, S. 1684 does contain provisions that equate 
Tribes with States and municipalities for hydropower permits and 
licensing under the Federal Power Act [Sec. 201]. It also makes 
provision for biomass Tribal demonstration projects [Sec. 202] and 
would provide considerably more modest, indirect access to 
weatherization program funding [Sec. 203] for Indian communities. It 
also encourages Tribal energy resource development planning in 
coordination with the Department of Energy [Sec. 101]. It does not, 
however, address a number of matters contained in S. 3752, such as 
expansion of the Indian Energy Loan Guaranty Program, establishment of 
distributed energy demonstration projects, revision of the Indian Land 
Consolidation Act provisions, or expansion of the durational provisions 
of the non-mineral, long-term business leasing provisions of 25 U.S.C. 
 415(a).
    The differences in the two legislative measures in some measure 
reflect the apparent fiscal reality that increased authorizations for 
Indian programs will likely be meaningless due to constrictions in 
appropriation funding. Perhaps the biggest single difference in the two 
legislative measures is the emphasis in S. 1684 on amending the TERA 
provisions initially established in the Title V of the Energy Policy 
Act of 2005. For reasons discussed in more detail below, those changes 
merit the Committee's support. We urge those members of the Committee 
who sponsored S. 3752, which our Tribe fully supported, not to abandon 
S. 1684 because of its narrower scope. S. 1684 is badly needed in 
Indian Country.

III. TERAs and the Balancing of Tribal Self-Determination and 
        Secretarial Review
    On August 8, 2005, the Energy Policy Act of 2005 became law. Title 
V of this voluminous legislation, known as the ``Indian Tribal Energy 
Development and Self-Determination Act of 2005,'' amended Title XXVI of 
the Energy Policy Act of 1992. One of the key provisions of Title V was 
Section 2604 [25 U.S.C.  3504], which created a mechanism pursuant to 
which electing Tribes might ultimately be allowed to grant energy-
related leases, enter into energy-related business agreements, and 
issue rights-of-way for pipelines and electric transmission facilities 
without specific approval by the Secretary of the Interior, subject to 
certain durational limitations. As a pre-condition to such 
authorization, a Tribe and the Secretary of the Interior were first 
required to enter into a master agreement, or TERA, addressing the 
manner in which such a Tribe would process such energy-related 
agreements or instruments.
    Although the TERA concept did not become law until 2005, its 
genesis before this Committee occurred several years earlier, and our 
files show that our former Chairman Howard Richards, Sr. formally 
requested support for similar legislation in 2003. Earlier 
correspondence confirms that we had the same concerns about federal 
trust administration then that we have now. A memo from our legal 
counsel to the Committee's legal counsel dated June 30, 2002 states:

        The problems with Secretarial approval of Tribal business 
        activities include an absence of available expertise within the 
        agency to be helpful . . . . Some structural alternative is 
        needed. The alternative should be an optional mechanism that 
        allows Tribes to elect to escape the bureaucracy for mineral 
        development purposes, provided the Secretary has a reasonable 
        indication that an electing Tribe will act prudently once cut 
        free.

    Much like the debates that surrounded passage of the Indian Mineral 
Development Act of 1982, the potential diminishment of the Secretary's 
role contemplated under a TERA caused considerable discussion before 
this Committee. We participated in those debates. Ultimately, with the 
encouragement of the National Congress of American Indians and the 
Council of Energy Resource Tribes, compromise was reached among this 
Nation's leaders on energy and Indian issues. Senator Bingaman and 
Senator Domenici and Senator Inouye and Senator Campbell reached 
agreements on a number of matters that paved the way for passage of 
this legislation in both houses of Congress. These legislative 
resolutions were reached only because of the overriding recognition 
that the system of Indian trust administration was broken and was 
condemning Indian people to an arbitrarily imposed future of 
impoverishment.
    Despite the potential promise extended by Section 2604, no Tribe 
has yet entered into a TERA. We have spent considerable time asking 
ourselves why. Clearly, the inadequacies of federal trust supervision 
persist and show no signs of marked improvement. Given the years that 
we have invested in pushing for the TERA alternative, it is worth 
identifying some of the reasons why no Tribe has entered into a TERA. 
The following is a list of some of the reasons we have considered:

        1. The regulations implementing Section 2604 diminished the 
        scope of authority to be obtained by a TERA Tribe by 
        eliminating and reserving ``inherent federal functions,'' an 
        undefined term that potentially rendered the act meaningless.

        2. Unlike 93-638 contracting, Section 2604 provided no funding 
        to Indian Tribes even though TERA contracting Tribes would be 
        assuming duties and responsibilities of the United States.

        3. One of the statutory conditions for a TERA, the 
        establishment of Tribal environmental review processes 
        requiring public comment, participation, and appellate rights 
        with respect to specific Tribal energy projects, was an 
        unacceptable opening of Tribal decisions to outside input and 
        potential criticism.

        4. Individual Tribes lacked the internal capacity to perform 
        the oversight functions potentially contemplated in a TERA or 
        standards for measuring Tribal capacity were vague or unclear.

        5. The extensive process of applying for and obtaining a TERA 
        was simply too consuming and distracting to merit disruption of 
        ongoing Tribal governmental challenges.

    Clearly, this list is not exhaustive. The tragic consequence of no 
TERAs and continued reliance upon federal supervision, however, has 
been the incredible lost opportunity to develop Indian energy resources 
during the period between 2005 and today. Those development 
opportunities were extended to non-Indian mineral owners throughout 
vast regions of the country, where no federal approval was required for 
leasing or development. If one considers that the price of natural gas 
in 2008 exceeded $10 per mcf, and today is only one fifth of that 
price, those lost opportunities may not return for decades. We estimate 
that multi-year delays in approval of rights-of-way and drilling 
permits cost our Tribe more than $90 million, and those practices are 
ongoing.
    Our Tribe continues to believe that TERAs provide great potential 
as a vehicle for Tribal self-determination. We remain extremely 
frustrated with the federal administrative impediments to making simple 
decisions, such as granting rights-of-way across our lands. The federal 
system on our Reservation is getting worse, not better, and, 
increasingly, we are spending more time fighting with the BIA about 
nonsensical directives and conditions for obtaining federal approvals. 
This is true even though we are considered one of the most commercially 
advanced Tribes in the country, with operations in multiple states 
related to energy exploration and production, commercial real estate 
acquisition, real estate development, midstream gathering and treating, 
and private equity investment.
    While S. 1684's provisions related to TERAs do not address all of 
the potential reasons listed above for no TERAs, they do eliminate some 
of those disincentives and also expand the use of TERAs for the benefit 
of Indian Tribes.

IV. TERA Provisions of S. 1684
    The major proposed revisions to current law affecting TERAs are 
found in Section 103 of S. 1684. The proposed changes are technical in 
many cases and cannot be easily understood without a side-by-side 
comparison of the existing law. We fully support the changes, however, 
and hope that the Committee considers them favorably. Some key changes 
include the following:

        First, Section 103 expands the scope of TERAs to include leases 
        and business agreements related to facilities that produce 
        electricity from renewable energy resources.

        Second, clarifying amendments also confirm that TERAs may 
        extend to pooling and communitization agreements affecting 
        Indian energy minerals.

        Third, Section 103 expands on existing law related to direct 
        development of Tribal mineral resources when no third party is 
        involved. Under existing law, because no federal approval for 
        such activity is required, a Tribe may lawfully engage in such 
        activity, but few Tribes have the capacity or internal 
        expertise to do so directly. The expansion contemplated by 
        Section 103 extends such an approval exemption to leases, 
        business agreements and rights-of-way granted by a Tribe to a 
        Tribal energy development organization in which the Tribe 
        maintains a controlling interest. This provision expands the 
        opportunity for access to capital for direct Tribal development 
        without federal approval where the Tribe continues to control 
        the activity.

        Fourth, Section 103 would make a proposed TERA effective after 
        271 days following submittal unless disapproved by the 
        Secretary and would shorten the time-period for review of TERA 
        amendments.

        Fifth, Section 103 provides for a favorable Tribal capacity 
        determination based on a Tribe's performance of 93-638 
        contracts or self governance compacts over a three year period 
        without material audit exceptions.

        Sixth, Section 103 allows for TERA funding transfers to be 
        negotiated between the Secretary and the Tribe based on cost 
        savings occasioned by the Secretary as a result of a TERA.

        Seventh, Section 103 confirms that TERA provisions are not 
        intended to waive Tribal sovereign immunity.

    While Section 103 includes other clarifying provisions, these 
constitute the major changes to TERA requirements found in Section 2604 
of existing law. The changes improve the scope and clarity of current 
statutory provisions.
Conclusion
    Individually and on behalf of the Southern Ute Indian Tribe, I hope 
that these comments have been instructive as to why we strongly support 
S. 1684. We respectfully request that you move forward with this 
legislation on behalf of Indian Country.

    Senator Barrasso. Thank you very much. I have a couple of 
questions, but perhaps we will go through the rest of the 
testimony then I will come back.
    Mr. Hall, thank you for being here.

       STATEMENT OF HON. TEX ``RED TIPPED ARROW'' HALL, 
  CHAIRMAN, MANDAN, HIDATSA AND ARIKARA NATION, FORT BERTHOLD 
                          RESERVATION

    Mr. Hall. Thank you, Mr. Vice Chairman Barrasso.
    For the record, I am Tex ``Red Tipped Arrow'' Hall, the 
Tribal Chairman of the Mandan, Hidatsa and Arikara Nation of 
the Fort Berthold Reservation in North Dakota.
    I would like to just summarize my testimony verbally and 
give a little background about where we are with oil and gas 
development, and some recommendations on 1684, your bill, to 
improve the energy development and lessen the Federal obstacles 
that exist currently.
    The fracking and the horizontal drilling is very integral 
to Fort Berthold. In 2008, we had zero wells. We were just 
getting into the leasing. We had a huge backlog. We were the 
guinea pig of the 49 steps of the Bureau of Indian Affairs, 
taking up to six months to a year to get a lease approved. So 
nobody has to tell us, no Federal agency has to sit here and 
tell us what it takes to go through those 49 steps.
    I feel like a mouse or a rat in a maze, and when you hit 
one side you get kicked to the other side. You have to go 49 
steps through those.
    Then now we have an air permit requirement from EPA. And 
this was, this occurred, this mandate occurred without 
consultation in August of 2011. So now our permits were treated 
like public lands. These lands are set aside by our 1851 
treaty, Mr. Chairman Barrasso. That treaty means these lands 
are set aside for the Indians at Mandan, Hidatsa, Arikara. They 
are not set aside for EPA or BLM.
    So we don't appreciate being categorized into public lands. 
So when you are categorized into public lands, then our permits 
get under the Federal Register, so somebody in New York, 
Pennsylvania, who knows, Puerto Rico, can comment on our wells 
on Fort Berthold Reservation for me as an allottee to see if 
maybe I shouldn't get a well on my allottee farm or not. And 
now on top of that you have BLM trying to impose a fracking, 
another permit.
    So we are used to these bureaucratic delays. We feel this 
additional requirement, and this has already gone to OMB, we 
just testified in the House this morning, Mr. Chairman, and the 
rule has been without consultation, it has already gone to OMB. 
So something needs to happen. We are not going to sit down and 
take it. This would cost our reservation $132,010,000 a day, $2 
million for each well at an 18 percent royalty payout. That is 
at a minimum, if you own the entire thing, it is a lot more 
money.
    So this is a serious issue that is not going away, because 
it has been sent to OMB. So we met with Senator Hoeven, Senator 
Conrad, Secretary Salazar and reiterated what kind of economic 
harm. We have 950 vendors that do subcontracting for the oil 
rigs, we have 22 active drilling rights. We have 450 rigs. We 
are 75 percent of the payout for all Indian Tribes in oil and 
gas right now at Fort Berthold, Mr. Chairman.
    So this has a huge, huge impact on us. I am sure, like 
everybody else sitting here, it has that kind of impact for 
them at home.
    But gain, for not having any kind of a consultation, and on 
top of that, that BLM official walked out on us after he gave 
his testimony this morning. I told Chairman Young he should be 
reprimanded. It is the first time I have seen BLM at the table, 
and they are talking about us and causing, we have almost 
10,000 employees, 950 small businesses and $132 million of 
potential economic and job loss at Fort Berthold. So this is 
not good for us.
    And then in line with your bill, generally we endorse your 
bill. We would like your bill to go further and do more.
    I do have one thing I want to mention, our tax agreement, 
Mr. Chairman. It is a lopsided tax agreement and I wish that 
your bill would address Tribes having the authority to impose 
our own taxation. Cotton Petroleum, the State takes 65 percent, 
they will take $100 million from Fort Berthold Oil in 2012 and 
give us back $2 million on State roads. I told Senator Akaka in 
the roads meeting earlier, I wouldn't be back here if we can 
fix that one item of the tax bill. That is the single most 
issue facing Fort Berthold today, is having to share a lopsided 
tax agreement.
    And the last thing I will finish on is kind of crazy. But 
we have truck bombs. That is our latest law enforcement scare. 
You know what a truck bomb is, Mr. Chairman? Well, the truckers 
are now making between $100,000 and $135,000 at a minimum, a 
year. So the run 24/7, so they go to the bathroom in a Coke 
bottle and they throw the Coke bottle in a ditch. So when they 
come to clean the ditches and cut grass, those bottle explode. 
Nobody wants to clean the ditches in North Dakota any more.
    So that is what our law enforcement has to deal with, the 
latest, is truck bombs.
    It is a funny note to finish on, but again, generally we 
endorse and support 1684. We just would like it to go further. 
So I would be happy to answer any questions you may have later.
    [The prepared statement of Mr. Hall follows:]

  Prepared Statement of Hon. Tex ``Red Tipped Arrow'' Hall, Chairman, 
     Mandan, Hidatsa and Arikara Nation, Fort Berthold Reservation

    Good afternoon Chairman Akaka, Vice Chairman Barrasso and Members 
of the Committee. 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.
Introduction
    The MHA Nation has long been working with both the Senate Committee 
on Indian Affairs and the House Subcommittee on Indian and Alaska 
Native Affairs in an effort to advance Indian energy legislation that 
would help Tribes unlock the potential of their energy resources and 
provide additional tools for Tribes to manage their energy resources. 
In the 110th and 111th Congresses, the MHA Nation was fortunate to 
participate and present testimony at two Indian energy hearings held by 
former Senator Dorgan. Senator Dorgan eventually introduced the 
``Indian Energy Parity Act of 2010'' which included a number of 
proposals supported by the MHA Nation.
    In the current 112th Congress, the MHA Nation is again an active 
participant. In May of 2011, the Committee held a listening session on 
Senator Barrasso's draft bill the ``Indian Tribal Energy Development 
and Self-Determination Act Amendments of 2011.'' At that listening 
session Committee staff requested that Tribes submit proposals to 
overcome barriers to Indian energy development. On July 18, 2011, the 
MHA Nation submitted 31 legislative proposals to the Committee. I have 
attached these proposals to my testimony so that they will be a part of 
the Committee hearing record. *
---------------------------------------------------------------------------
    * The information referred to has been retained in the Committee 
files.
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    The MHA Nation also testified before the House Subcommittee in 
April of 2011 as a part of an Indian Energy Oversight Hearing, in 
February 15, 2012, on Chairman Young's ``Native American Energy Act,'' 
H.R. 3973, and again this morning on the Bureau of Land Management's 
(BLM) proposed regulation of hydraulic fracturing activities. We also 
attended this Committee's oversight hearing on ``Energy Development in 
Indian Country'' held in February 2012.
    The MHA Nation has a strong interest in these proceedings because 
our lands are currently in the middle of the most active oil and gas 
play in the United States. As you know, 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.
    In the last four years, energy development in and around the 
Reservation has exploded and we have struggled with the federal 
bureaucracy for every single oil and gas permit. We now have about 250 
wells in production on the Reservation 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 and 
provide the MHA Nation with a substantial opportunity to fund 
government operations, and ensure that our members can heat their homes 
and provide for their families.
    MHA Nation is actively promoting the development of our energy 
resources and seeking every opportunity to be an active developer of 
our resources, not just a passive lessor. However, the MHA Nation 
continues to work on many of the same barriers to Indian energy 
development that we started working on four years ago. The agencies and 
the issues change, but we are still trying overcome outdated laws and 
regulations, bureaucratic regulatory and permitting processes, and 
insufficient federal staffing or expertise to implement those 
processes.
    Of all of these challenges, the biggest issue we face is the 
inequitable division of tax revenues with the State of North Dakota. 
Under current law, states can tax energy companies on Reservation 
lands. To avoid double state and Tribal taxation and promote energy 
development on the Reservation, the MHA Nation was forced into an 
unfair tax agreement with the State.
    About four years later, the State has a $1 billion budget surplus 
and created a $1.2 billon trust fund for infrastructure needs. The MHA 
Nation has roads that need fixing now. Our tax revenues should not go 
to a State investment account. State Governor Dalrymple said that 
infrastructure is his number one priority to promote growth and manage 
impacts on our communities. Apparently, this does not include Tribal 
communities. In 2011, the State collected more than $60 million in 
taxes from energy development on the Reservation, but spent less than 
$2 million for infrastructure on the Reservation. In 2012, projections 
are that the State will make nearly $100 million in tax revenues from 
oil and gas development on the Reservation.
    Because of these state taxes, we cannot raise enough of our own tax 
revenue to provide the infrastructure needed to support and regulate 
the growing energy industry. Under the tax agreement, the State has 
been receiving about 60 percent of the revenues and the MHA Nation is 
receiving about 40 percent. However, about 60 percent of the total tax 
revenue collected under the agreement comes from lands held in trust 
for the MHA Nation and its members and only 40 from privately owned 
land fee lands within the Reservation. This is a windfall for the 
State! In addition, it is important to note that, 100 percent of the 
development covered by the tax agreement and the impacts are occurring 
on the Reservation.
    We need Congress to affirm the exclusive authority of Tribes raise 
tax revenues on the Reservation so that we can rely on the same 
revenues that state governments use to maintain infrastructure and 
support economic activity. The MHA Nation needs to maintain roads so 
that heavy equipment can reach drilling locations, but also so that our 
Tribal members can safely get to school or work. We also need to 
provide increased law enforcement to protect Tribal members and the 
growing population of oil workers. And, we need to develop Tribal codes 
and employ Tribal staff to regulate activities on the Reservation. 
Below are two pictures of the tremendous toll energy development is 
taken on our Reservation roads.





    It is with this background that the MHA Nation assesses whether the 
``Indian Tribal Energy Development and Self-Determination Act 
Amendments of 2011'' or S. 1684 will advance the development of Indian 
energy resources. If Indian Tribes are going to unlock the potential of 
their energy resources, we need real changes in the law. Changes that 
affirm Tribal authority, provide Tribes access to funding and financing 
opportunities, and allow Tribes to participate in federal energy 
programs that have over looked Tribes for decades.
MHA Nation Views on S. 1684, the Indian Tribal Energy Development and 
        Self-Determination Act Amendments of 2011
    In general, the MHA Nation supports S. 1684, the ``Indian Tribal 
Energy Development and Self-Determination Act Amendments of 2011.'' 
There are only a few problems with some of the provisions in S. 1684. 
The biggest problem is what is not in the bill. S. 1684 barely 
scratches the surface of outdated laws and regulations, bureaucratic 
regulatory and permitting processes and insufficient federal staffing 
or expertise to implement those processes. While we appreciate the 
effort made to improve these areas of law, much more needs to be done.
    In the last two Congresses, former Senator Dorgan spent three years 
holding hearings and consulting with Indian Tribes in the development 
of Indian energy legislation. Senator Dorgan's bill was introduced in 
August 2010 as the ``Indian Energy Parity Act of 2010.'' This bill 
contained a variety of new tools, programs and authorities that were 
designed to help Tribes at any stage in the energy development process. 
In addition, Senator Dorgan developed a draft Indian Energy Tax Act to 
address issues in tax law that can make or break an Indian energy 
project.
    A few of former Senator Dorgan's proposals found their way into S. 
1684, but most are more limited versions. I ask that the Committee go 
back and reconsider these proposals for inclusion in S. 1684. I also 
ask that the Committee look across Capitol Hill to Congressman Don 
Young's H.R. 3973, the ``Native American Energy Act.'' Combining all 
four of these bills, S. 1684, H.R. 3973, the ``Indian Energy Parity Act 
of 2010,'' and the draft ``Indian Energy Tax Act,'' would bring to the 
table much of what is needed to bring Indian energy law into modern 
times.
    S. 1684 would provide some of what is needed and the MHA Nation 
supports much of what is in the bill. S. 1684 is focused on making 
changes to the Tribal Energy Resource Agreement (TERA) program that was 
authorized by Title V of the Energy Policy Act of 2005. The primary 
benefit of a TERA is to enable a Tribe to enter into leases and rights-
of-way without Secretarial approval. A TERA would allow a Tribe to gain 
greater control over the multiple approvals needed for oil and gas 
development.
    The changes in S. 1684 are needed changes as I understand that no 
Tribe has utilized the TERA program since it was created. S. 1684 would 
make the TERA application process more certain, allow a new category of 
Tribes to exercise partial TERA authority, attempt to clarify the 
Federal Government's trust responsibility in relation to a TERA, and 
provide a potential funding source for Tribes to run TERA programs.
    MHA Nation and the oil and gas development on our Reservation could 
benefit from these proposed changes to the TERA program. Oil and gas 
development is permitting intensive and we are constantly struggling 
with the Federal Government's bureaucratic permitting processes. The 
proposed changes to the TERA program would make it possible for MHA 
Nation to take over the oil and gas permitting process from the 
Secretary, or to greatly streamline the permitting process by creating 
a Tribally owned energy company to develop our energy resources. The 
changes in S. 1684 might also provide some funding from the Department 
of the Interior (DOI) to help support the increased responsibilities we 
would be assuming.
    In addition to these changes, I ask that the Committee consider a 
few more changes to the TERA program. First, MHA Nation would be in a 
better position to take over the oil and gas permitting process from 
DOI and establish its own energy company if S. 1684 provided more 
reliable source of funding than annual funding agreements with DOI. To 
help make the changes proposed in S. 1684 a reality for the MHA Nation 
and other Tribes, S. 1684 should also affirm the exclusive authority of 
Indian Tribes to tax energy activities on our lands. As I mentioned 
above, Tribal governments need access to the same tax revenues that 
other governments rely on to support energy and economic development. 
If the state or local governments provide any services on the 
Reservation in support of this energy and economic development, then 
the law could provide for fair reimbursement by Tribes for state and 
local services.
    Second, to help make the TERA application process even more 
certain, S. 1684 should include a one-revision limit on a TERA 
application. In response to an initial application, DOI should get one 
bite at the apple in requesting revisions. If DOI requires any 
additional changes beyond this first round, DOI should have to show 
cause for why such changes were not requested the first time, and 
Tribes should be able to appeal any DOI requests to revise the same 
application multiple times.
    Finally, the MHA Nation appreciates S. 1684's new language that 
would help clarify the Secretary of the Interior's trust responsibility 
in relation to leases and agreements made under a TERA. S. 1684 should 
also include an additional requirement for the Secretary to further 
consult with Tribes on the effect of a TERA on the Secretary's trust 
responsibility. The Secretary should then be required to ensure that 
the results of this consultation are included in the regulations for 
implementing the TERA program. The trust responsibility is an 
expression of the government-to-government treaty relationship between 
Indian Tribes and the Federal Government. When laws like the TERA 
program are enacted, we should all fully discuss and understand any 
consequences.
    S. 1684 includes a variety of other changes and initiatives that 
the MHA Nation also supports. In some cases, we ask that the Committee 
revise these proposals to make them more likely to benefit Indian 
energy development. First, the MHA Nation supports a legislative 
directive for the Secretary to include Tribes in well-spacing 
decisions. As a part of the Coalition of Large Tribes, the MHA Nation 
is seeking this same change administratively.
    Second, we support changes in S. 1684 that would make it more 
likely that the Department of Energy (DOE) would implement its long 
overdue Indian Energy Loan Guarantee Program. However, the language in 
S. 1684 falls short of requiring the Secretary of Energy to implement 
this program as was required for DOE's Title XVII, Energy Innovations 
Loan Guarantee Program. DOE should be required to offer loan guarantees 
to Indian Tribes. Indian energy loan guarantees are likely to be more 
successful than the Title XVII program because of the vast unlocked 
potential of Indian energy resources. As an example, DOI is already 
running a successful Indian loan guarantee program but it lacks the 
budget to fund expensive energy projects.
    Finally, the MHA Nation supports changes in S. 1684 that would 
allow Tribes to apply for direct weatherization funding from DOE. 
However, S. 1684 only goes halfway to solving the problem. Allowing 
Tribes to simply apply for direct funding is an important change, but 
Indian Tribes need a weatherization program that is tailored to Indian 
Country.
    The MHA Nation included needed changes to DOE's weatherization 
program in its legislative proposals. In addition to direct funding, 
DOE should reduce reporting requirements for Indian Tribes, use 
weatherization standards that reflect the status of housing in Indian 
Country, and provide training for energy auditors in Indian Country. 
The weatherization program is a low-income program and its funding 
should go to those that need it most--in Indian Country poverty rates 
are two and half times the national average.
    The decades old weatherization program and its management by DOE is 
an affront to the Federal Government's trust responsibility and DOE's 
own ``American Indian Tribal Government Interactions and Policy.'' 
Funding intended, in part, for the members of Indian Tribes should not 
be distributed through state governments who then distribute the 
funding through state non-profits. Regardless of whether this 
legislation is passed by Congress, DOE should immediately reform its 
weatherization program consistent with federal trust responsibilities.

MHA Nation Proposals that Should be Included in any Indian Energy 
        Legislation
    The MHA Nation asks that the Committee review the legislative 
proposals submitted by the MHA Nation and other Indian energy 
legislation to increase the scope and benefits that S. 1684 would 
provide. If Indian Tribes are going to unlock the potential of their 
energy resources and provided needed domestic energy supplies, we need 
real changes in the law. Changes that affirm Tribal authority, provide 
Tribes access to funding and financing opportunities, and allow Tribes 
to participate in federal energy programs that have over looked Tribes 
for decades. Below we highlight some of the most important changes 
needed in law.
    First, similar to Congressman Don Young's bill, H.R. 3973, the 
Committee should include authority for establishing Indian Energy 
Development Offices in areas of high energy demand. These ``one-stop 
shops'' would encourage the hiring of staff with energy expertise by 
the Bureau of Indian Affairs (BIA) and promote communication and 
efficiency among the DOI agencies that are involved in energy 
permitting on Indian lands. While MHA already has a virtual ``one-stop 
shop,'' this provision would make the office permanent in law. As 
former Senator Dorgan reported, the one-stop shop increased permitting 
on the Fort Berthold Reservation by four times.
    Second, the Committee should prohibit the Bureau of Land Management 
(BLM) from applying regulations developed for public lands to Indian 
lands. Indian lands are not public lands, yet the Bureau of Land 
Management has been incorrectly using its authority under the Federal 
Land Policy and Management Act of 1976 to regulate activities on Indian 
lands. In the most recent example, the BLM is developing regulations 
for hydraulic fracturing activities for public lands and intends to 
apply those regulations to Indian lands. The proposed regulations would 
eliminate much of the oil and gas development the MHA Nation has been 
working so hard to establish. Indian lands are for the use and benefit 
of Indian Tribes and the Committee should develop legislation that 
either precludes BLM from exercising authority on Indian lands, or 
require that BLM develop regulations consistent with its trust 
responsibility to Indian Tribes and not public interest standards.
    Third, the Committee should prohibit the Environmental Protection 
Agency (EPA) from implementing its new synthetic minor source rule for 
two years to ensure appropriate staffing is in place to administer any 
new permitting requirements. Energy development on the Fort Berthold 
Reservation is already limited by layers of bureaucratic federal 
oversight and federal agencies that are too short-staffed to manage 
existing requirements. EPA should be prohibited from implementing this 
new rule, or any new rule, until it can prove that it has the staff 
resources in place.
    Fourth, as described above, S. 1684 should affirm that Tribes have 
exclusive authority to raise taxes from activities on Indian lands. 
Because federal courts have allowed other governments to tax energy 
development on Indian lands, Tribes are unable to impose their own 
taxes or can only impose partial taxes. Without tax revenues, Tribal 
infrastructure, law enforcement, and social services cannot keep up 
with the burdens imposed by increased energy development. This 
authority is essential for Tribal governments to exercise self-
determination over our energy resources. We cannot be asked to take 
over more responsibilities for the Federal Government without the 
ability to raise the revenues needed to support those responsibilities.
    Fifth, we also need to clarify Tribal jurisdiction over Reservation 
activities and any rights-of-way granted by an Indian Tribe. Courts 
have created uncertainty in the law and this uncertainty is yet another 
disincentive to the energy business.
    Sixth, the Committee should develop legislation to expand and 
clarify the ``Buy Indian Act,'' 25 U.S.C.  47. As a part of its 
government-to-government and trust relationship to Indian Tribes, the 
Federal Government should be required to purchase Tribally produced or 
owned energy resources. As an example, the MHA Nation is developing an 
oil refinery that could supply federal agencies and the Defense 
Department with Tribally produced and owned domestic energy supplies.
    Seventh, S. 1684 should address delays in payments of oil and gas 
royalties due to approval of Communitization Agreements. Under current 
law, royalties are due within 30 days of the first month of production. 
However, without any authority, the BLM has allowed royalty payments to 
be delayed for months and years pending the approval of Communitization 
Agreements. This violation of the law cannot be allowed to continue.
    Where feasible, S. 1684 should require Communitization Agreements 
to be submitted at the time an Application for Permit to Drill is 
filed. This is possible where the oil and gas resource is well known. 
When this is not feasible, BLM should require that royalty payments 
from producing wells be paid within 30 days from the first month of 
production into an interest earning escrow account.
    Eighth, S. 1684 should eliminate BLM oil and gas fees on Indian 
lands. BLM fees for oil and gas activities on Indian lands create 
additional disincentives for development on Indian lands and in the 
case of shallow wells may make development uneconomical. In addition, 
where an Indian Tribe is seeking to develop its own resources, BLM 
should not charge Tribes to carry out its trust responsibilities to the 
Tribe. We included a legislative proposal that would prohibit BLM from 
charging fees for oil and gas activities on Indian trust and restricted 
fee lands, including fees for: (1) applications for permits to drill; 
(2) fees for oil and gas inspections; and, (3) fees for non-producing 
acreage.
    Ninth, S. 1684 should create a low sulfur diesel tax credit for 
Tribal refineries. This credit would be in addition to the existing 
credit for small business refiners. This legislation would retain the 
1,500 employee cap and 5 cents per gallon credit, but remove the barrel 
and time limits, and provide that the credit may be sold for equity.
    Finally, in addition to the weatherization program discussed above, 
S. 1684 should open the doors of DOE's energy efficiency programs to 
Indian Tribes. Despite a longstanding state program, there are no 
ongoing programs to support Tribal energy efficiency efforts. DOE 
should allocate not less than 5 percent of existing state energy 
efficiency funding to establish a grant program for Indian Tribes 
interested in conducting energy efficiency activities for their lands 
and buildings.
    The MHA Nation has included in its legislative proposals a Tribal 
energy efficiency program that is modeled after the successful Energy 
Efficiency Block Grant (EEBG) program. Despite its success, the EEBG 
program was only funded one time--under the American Reinvestment and 
Recovery Act of 2009. To ensure an ongoing source of funding for Tribal 
energy efficiency efforts, Tribes should be provided a portion of the 
funding for state energy efficiency efforts.
Conclusion
    I want to thank Chairman Akaka, Vice Chairman Barrasso and the 
members of the Committee for the opportunity to highlight the most 
significant issues the MHA Nation faces as we promote and manage the 
development of our energy resources. We ask that you consider 
legislation to address many of the issues we have described.

    Senator Barrasso. Thank you very much, Mr. Hall.
    We are joined by two Senators, Senator Franken of Minnesota 
and Senator Conrad of North Dakota. Since we have just heard 
from a member from North Dakota, perhaps you might want to make 
some opening comments and then Senator Franken, if you wouldn't 
mind, after Senator Conrad. Then we will go and pick up with 
Mr. Finely if you would like.

                STATEMENT OF HON. KENT CONRAD, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Conrad. I thank the Senator for his courtesy, and I 
thank the Senator from Minnesota for his courtesy as well.
    I just want to say very briefly how delighted we are to 
have Chairman Hall here, how delighted we are that his health 
is recovering after a very serious health scare. Chairman Hall 
is somebody who has provided leadership not only in North 
Dakota, but across the Country. We deeply appreciate the 
extraordinary leadership he has provided. He has become 
somebody that is a trusted friend and somebody who has enormous 
credibility on the national stage as well as in the State of 
North Dakota.
    So welcome to Washington. I am so glad that you are here, 
so glad that you are feeling better. And so glad that you 
dodged a really tough bullet.
    Senator Barrasso. Thank you, Senator.
    Senator Franken?

                 STATEMENT OF HON. AL FRANKEN, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Franken. I think this is a very, very important 
hearing. I thank the Vice Chairman for calling this and for 
writing an Indian energy bill. I think there may be some more 
things that we can do, but I commend the Chairman for that.
    And I just really believe that there is tremendous 
potential for economic development in Indian Country. I look 
forward to your testimony and look forward to asking some 
questions. Thank you.
    Senator Barrasso. Thank you, Senator.
    Mr. Finley?

  STATEMENT OF HON. MICHAEL O. FINLEY, CHAIRMAN, CONFEDERATED 
               TRIBES OF THE COLVILLE RESERVATION

    Mr. Finley. Good afternoon, Vice Chairman Barrasso.
    I want to thank the Committee for holding this hearing 
today, as well as being a part of this distinguished panel. I 
share the words that were shared earlier, that we are happy to 
have Mr. Hall among us today. We are happy to see that he is 
having a speedy recovery. He is truly a powerhouse in Indian 
Country and I am always happy to serve next to him. So thank 
you.
    Today my testimony will focus on Section 202 of Senate Bill 
1684, as introduced. Section 202 is of particular interest to 
the Colville Tribes because of our historic background and 
natural resources, particularly forest products and the logging 
industry. Starting back in 2008, with the downturn in the 
market, we felt a tremendous impact on Colville, because 
historically, our economy was driven by forest products. As a 
result, we were forced to shut down our two mills that our 
corporations operated underneath the Colville business council.
    As a result of that, the majority of our people went into 
unemployment and have been there since. Colville Tribes is the 
largest employer in North Central Washington State. But at the 
same time, we have some of the highest levels of unemployment 
on the reservation. We have a membership base of 9,400, of 
which about half live on or near the reservation. So our 
members rely heavily on the jobs that our Tribe creates for 
them.
    And because many of the people, many of our working class 
members, their number one trade is logging or forest products-
derived employment, they rely on us to keep these jobs going. 
Because our land base consists of 660,000 acres of commercial 
timber property, being the stewards of the lands as we always 
have been, we take great pride in making sure that our forest's 
health is up to par and that we manage it in a sustainable 
fashion.
    But with the downturn in the market, it has left us very 
little money to move forward with some of these efforts. And 
Section 202 would allow for us to build a greater capacity for 
a project that we want to do, which is a woody biomass project, 
which this provision is meant to help promote.
    And in doing this, we originally were going to try to do 
this underneath the Tribal Forest Protection Act. But because 
of some of the limitations and because of some of it being 
unknown to many of the Forest Service entities throughout the 
United States, you see that there are very few Tribes that have 
actually taken advantage of it. So this would actually be an 
amendment to that.
    And we were hoping that we would get more longevity out of 
a potential contract that could come from it, whether or not 
the Secretary is granted that authority. This in itself would 
give us the ability to approach financial institutions who want 
to go into business with the Colville Tribes to fund such a 
grandiose project. We were looking at a project that would cost 
about $150 million. It would be a 40 megawatt woody biomass 
plant.
    But because of a ll the excess material that we have on 
Colville, in the past we have previously burned it because we 
had no other place to take it. If this project were to move 
forward, we would then have a place to take this excess 
material and actually create energy with it.
    For us, it is right in line with our traditional thinking. 
It is going green, it is a sustainable plan. But without the 
ability to go into a contract with the Federal Forest Service 
to the north of our reservation, we would have to downscale 
that project to a smaller plant.
    But looking outside of that, there are other reasons why we 
would want to do this. We have the forest health issues that, 
as I mentioned earlier, there is a fear of wildfire and some of 
the spruce bud epidemics moving south from the north of our 
reservation. We are starting to see a little bit of that right 
now within our forest. We have concern over that.
    With the recent settlements that have taken place, Colville 
included, we have a large sum of money to start to address some 
of our forest health concerns that have been epidemic over the 
years. We have a huge problem with an abundance of Douglas fir 
that currently exists within our forest. Historically and 
traditionally, it has always been primarily Ponderosa pine.
    So our intent with some of that money is to send our people 
out in the forest and to overturn that, and get some of that 
Douglas Fir, that smaller size Douglas Fir, out. But there 
always isn't a market out there for it. So our intent is to get 
some of that to this plant, if and when it does move forward.
    But as I stated earlier, and I cannot stress enough that we 
need that excess material off the Forest Service lands, as well 
as to create more of a healthy forest there. We believe that 
with our integrated resources management plan, which we go by, 
it is a sustainable plan, that we can do that better than the 
Federal entity. Because let's face it, a lot of times there 
isn't enough money appropriated for them to even properly 
manage their forest to begin with.
    And I have to agree with my counterpart, Tex Hall, that it 
troubles us to have people that aren't even from our area 
commenting on these little projects that we are trying to do 
that are ultimately going to be to the benefit of not just the 
Colville Tribes, but to all the U.S. citizens that live in that 
area. Because those forests need to be managed in a sustainable 
fashion, and presently they are not. Our intent is to use that 
excess material for the benefit of everybody and to create more 
energy and to create jobs for our people who, daily I am 
getting emails and phone calls asking when they are going to be 
put back to work. As their leader, I need to ensure that they 
have something that they can rely on to feed their families.
    With that, you have my testimony and I stand for questions. 
Thank you.
    [The prepared statement of Mr. Finley follows:]

 Prepared Statement of Hon. Michael O. Finley, Chairman, Confederated 
                   Tribes of the Colville Reservation

    Good afternoon Chairman Akaka, Vice-Chairman Barrasso, and members 
of the Committee. On behalf of the Confederated Tribes of the Colville 
Reservation (``Colville Tribes'' or the ``Tribes''), I appreciate the 
opportunity to testify today on S. 1684, the ``Indian Tribal Energy 
Development and Self-Determination Act Amendments of 2011.''
    The Colville Tribes strongly supports S. 1684, particularly Section 
202, which would authorize the Tribal Biomass Demonstration Project 
(``Demonstration Project''). My testimony today will focus on the 
Demonstration Project and how it could potentially benefit the Colville 
Tribes and other Indian Tribes that are developing or that have an 
interest in biomass projects.

Background on the Colville Tribes
    I would like to take this opportunity to provide some brief 
background on the Colville Tribes. Although now considered a single 
Indian Tribe, the Confederated Tribes of the Colville Reservation is, 
as the name states, a confederation of 12 aboriginal Tribes and bands 
from all across eastern Washington State. The Colville Reservation 
encompasses more than 1.4 million acres, of which approximately 66 
percent is forest land. The Colville Tribes has traditionally relied on 
its forest resources as a primary source of revenue for Tribal 
government programs.
    The Colville Tribes has more than 9,400 enrolled members, making it 
one of the largest Indian Tribes in the Pacific Northwest. About half 
of the Colville Tribes' members live on or near the Colville 
Reservation.
    Utilizing grants and technical assistance from both the Department 
of the Interior and the Department of Energy, the Colville Tribes is 
developing a woody biomass facility on the Colville Reservation in 
Omak, Washington. Access to a reliable, long-term supply of woody 
biomass material is a key consideration in obtaining financing for the 
planned facility. This is one of the structural impediments that the 
Demonstration Project is intended to address.

Overview of Section 202
    Section 202 would add a new section to the Tribal Forest Protection 
Act of 2004 that would require the Secretary of Agriculture (in the 
case of Forest Service land) and the Secretary of the Interior (in the 
case of Bureau of Land Management land) to enter into a collective 
total of at least four new contracts or agreements with Tribes to 
promote biomass, biofuel, heat, or electricity generation each year of 
the five-year authorization.
    Although Section 202 requires the Secretaries to enter into a 
minimum number of contracts, the Secretaries would be responsible for 
jointly developing the eligibility requirements. This would allow the 
Forest Service and the Bureau of Land Management to control the 
universe of potential applications. In evaluating applications, the 
respective Secretaries must consider a variety of factors, including 
whether a project would improve the forest health or watersheds on the 
Federal land and whether a project would enhance the economic 
development of the Indian Tribe and the surrounding community.
    Section 202 also allows for Tribal management land practices to 
apply to areas included in contracts or agreements entered into under 
demonstration projects. This would allow, for example, Indian Tribes to 
incorporate cultural resource or sacred site planning considerations 
into activities conducted on lands included in demonstration projects.
    Finally, Section 202 would authorize contracts or agreements 
entered into under the Act to have maximum terms of 20 years, with the 
ability to renew for additional 10-year terms. The exact length of 
contract or agreement terms under a demonstration project would be 
subject to negotiation between Tribes and the federal agencies. The 
current limit for stewardship contracts under existing law is 10 years.
    Section 202 is not specific to any one Indian Tribe or region. If 
it is enacted into law, any Indian Tribe that meets the eligibility 
criteria may apply.

The Tribal Biomass Demonstration Project Promotes Forest Health, Tribal 
        Economies, and Renewable Energy
    Since passage of Title V of the Energy Policy Act of 2005, energy 
development on Indian lands has been a priority for many Indian Tribes, 
including the Colville Tribes. Renewable energy development such as 
biomass has been of particular interest to the Colville Tribes as it 
seeks new ways to promote on-reservation economic development and to 
diversify its economy. The Demonstration Project will eliminate 
barriers to these goals and promote the following--
    Forest Health: As the Committee is aware, many federal lands that 
are adjacent to Tribal trust lands are in need of thinning and 
restoration activities to reduce the risk of catastrophic wildland fire 
and disease. Indian Tribes like the Colville Tribes are uniquely 
situated to carry out these activities because we have a vested 
interest in ensuring that neighboring federal lands do not pose fire or 
disease threats that will encroach on our Tribal trust lands. 
Protection of Tribal trust land was the primary consideration in the 
enactment of the Tribal Forest Protection Act of 2004. The 
Demonstration Project would ensure that forest health considerations 
are paramount in any stewardship contract or similar agreement that 
might be entered into under Section 202.
    The Colville Tribes recently approved a $193 million settlement 
with the United States government that will resolve the Tribes' pending 
claims of mismanagement of its trust funds, natural resources and other 
non-monetary trust assets. The Colville Tribes is considering utilizing 
a portion of the settlement proceeds for thinning of our Tribal forests 
and restoration of the landscapes and watersheds on the Colville 
Reservation.
    Wood Products Industries and Local Economies: Stewardship contracts 
generally involve no payment by federal agencies. Rather, the 
contractor is ``paid'' by retaining and selling the woody materials 
they remove from federal lands in performing the contract. The use of 
stewardship contracting has risen dramatically by the Forest Service in 
recent years largely because these contracts do not require the 
expenditure of scarce agency resources.
    Viable wood products infrastructure is often needed to make 
stewardship contracts and other forest health activities on federal 
lands economically viable. Without a market demand for otherwise non-
merchantable wood material, the costs of performing the forest health 
activities are prohibitively expensive. The housing market crash and 
increased global competition have resulted in the closure of many, if 
not most, saw mills in the western United States. The Colville Tribes 
was forced to close both its sawmill and its veneer plant due to market 
conditions in 2008 and 2009.
    Section 202 supports new and existing wood products infrastructure 
by authorizing contracts for up to 30 years. Longer-term contracts will 
encourage private sector financing by increasing the likelihood that 
investors will recoup their initial capital costs through a reliable 
supply of biomass material for a longer period. The Colville Tribes 
understands that the Administration is interested in exploring longer-
term stewardship contracts in a controlled manner that will allow for 
study and evaluation. Section 202 provides this type of mechanism.
    Tribal Management Practices Can Benefit Federal Lands: Many have 
praised Tribal land management practices as being far more efficient 
than those of their federal counterparts. In addition, Section 202(b) 
of the Federal Land Policy and Management Act of 1976 (FLPMA) requires 
the Secretary of Agriculture to coordinate land use plans for National 
Forest System lands with Tribal management activities. Section 
202(c)(9) of the FLPMA further directs the Secretary of Agriculture to 
coordinate land use planning with Indian Tribes by, among other things, 
ensuring that consideration is given to those Tribal plans that are 
germane in the development of land use plans for public lands, 
assisting in resolving inconsistencies between Federal and Tribal plans 
and providing for meaningful involvement in the development of land use 
programs, land use regulations, and land use decisions for public 
lands.
    Despite these statutory directives, federal agencies like the 
Forest Service have been slow to incorporate Tribal management 
principles to even those federal lands that are contiguous to Tribal 
trust lands. Many Indian Tribes, including the Colville Tribes, have 
adopted comprehensive integrated resource management plans (IRMPs) that 
govern management of Tribal natural resources.
    The Colville Tribes' IRMP contains detailed prescriptions for 
ensuring that its forest management activities allow for sustainability 
of huckleberries and other foods and plants of cultural and spiritual 
significance to the Tribes and its members. These types of management 
practices can and should be carried out on federal lands that are 
adjacent to Tribal trust lands or to which Tribes have an historic or 
cultural interest. Section 202 encourages this by allowing Tribal 
management principles to be carried on federal lands that are included 
in contracts or agreements.

Other Provisions of S. 1684
    The Colville Tribes also supports the other provisions of S. 1684. 
The amendments in Section 103 relating to Tribal Energy Resource 
Agreements (TERAs) will streamline and provide certainty to the process 
for Indian Tribes to obtain TERAs. Overall, the Colville Tribes 
believes that S. 1684 will remove structural barriers to energy 
development on Tribal lands and we applaud Vice-Chairman Barrasso and 
Chairman Akaka for developing and introducing this important 
legislation.
    The Colville Tribe appreciates the Committee's consideration of 
these important issues and looks forward to working with the Committee 
to ensure passage of S. 1684. At this time I would be happy to answer 
any questions the members of the Committee may have.

    Senator Barrasso. Mr. Finley, thank you. Thank you for 
being here.
    Ms. Cuch?

    STATEMENT OF HON. IRENE C. CUCH, CHAIRWOMAN, UTE TRIBAL 
                       BUSINESS COMMITTEE

    Ms. Cuch. Good afternoon, Vice Chairman Barrasso and 
members of the Committee.
    My name is Irene Cuch. I am the Chairwoman of the Ute 
Indian Tribe. Thank you for the opportunity to testify today.
    Before I go any further, I would like to introduce some of 
my people who came with me. I would like to introduce Manuel 
Myore, who is the Director of our Energy and Minerals 
Department. He is sitting back there. Also Rose Taveapont, Oil 
and Gas Landman. And Rollie Wilson, our Tribal attorney.
    Senator Barrasso. Thank you. Welcome to the Committee.
    Ms. Cuch. The Tribe is a major oil and gas producer. 
Production of oil and gas began on our reservation in the 1940s 
and has been ongoing for 70 years. We have 7,000 wells that 
produce about 45,000 barrels of oil a day, and we produce about 
900 million cubic feet of gas per day. This energy development 
is a primary source of funding for our Tribal Government and 
the services we provide to our members.
    The Tribe also invests in businesses and is an engine for 
economic growth. One of the Tribe's businesses is Ute Energy 
and Oil and Gas Development Company. We recently approved plans 
for Ute Energy to become a publicly-traded company. With this 
investment, improvements to the oil and gas permitting process 
are vital to our long-term success.
    The best example of the need for improvements comes from 
the oil and gas companies themselves. They tell us that 
interior permitting process is the single biggest risk factor 
in their operations. We take this issue very seriously, because 
the number of permits that Interior is able to process is 
directly related to the funding the Tribe has to serve its 
members.
    As you may know, oil and gas development is dependent on 
drilling rigs. Drilling rigs are expensive equipment that move 
from site to site, creating wells. On our reservation, a rig 
can drill about 20 wells a year. In the first year, the Tribe 
will earn about $16 million from those 20 wells. Over the life 
of those wells, we earn about $82 million. Every time a 
drilling rig leaves the reservation because of permitting 
delays and does not come back, the Tribe loses $16 million in 
short-term and $82 million in the long term.
    The Tribe has made a lot of progress, but our ability to 
fully benefit from our resources is limited by the agencies 
overseeing energy development on the reservation. We cannot 
forget that every single well on our reservation began with a 
permit that had to make its way through a bureaucratic maze of 
49 steps involving at least four understaffed Federal agencies.
    To promote Indian energy development and increase domestic 
production we need Congress to provide funding for BIA, BLM, 
and other agencies to hire more staff with energy expertise. 
The BIA has dozens of people who can approve a grazing lease. 
We need people who understand energy resources and keep up with 
the pace of energy development.
    In the rest of my testimony I will focus on specific 
sections of S. 1684 and highlight some of the Tribe's 32 
proposals that should be included in the bill. The Tribe 
supports the bill and believes it is a good start. In 
particular, changes to the TERA program will benefit the Tribe.
    We strongly support providing Tribes with demonstrated 
experience. The authority to approve agreements with Tribal 
energy development organizations. This change would promote 
Tribal self-determination over our energy resources and allow 
us to avoid understaffed and bureaucratic agencies. We would be 
free to develop our own processes for approving agreement with 
Tribally-owned companies.
    We also strongly support requiring the Secretary to make 
funds available to Tribes who take over permitting. If Tribes 
are going to take over Federal responsibilities, then the 
government must provide adequate funding. In addition to any 
funding that may be available, Tribal self-determination would 
be better advanced if Congress affirmed Tribes' exclusive 
authority to tax activities on Indian lands. Managing energy 
resources and providing infrastructure is an expensive 
undertaking for any government. A Tribe needs the same 
authority and revenue set as a government relies on to support 
energy development.
    We support the bill's effort to include Tribes in well 
spacing decisions, implement DOE's loan guarantee program, 
provide Tribes the same hydropower preference as any other 
government, and allow Tribes to seek weatherization funding 
directly. However, for many of these, the bill only goes 
halfway. We need real changes in the law.
    First, DOE must be required to provide energy loan 
guarantees the same as DOE's Title 17 loan guarantee program. 
This is needed because financing energy projects is one of the 
most significant barriers Tribes face.
    Second, the bill's limitations on Tribal hydropower 
preferences are not necessary. Existing laws already protect 
previously issued permits and encourage competition for 
licenses.
    Third, DOE weatherization program should be further 
modified so that it will work in Indian Country. We need 
Tribally-based standards and training for energy auditors.
    Finally, I ask that you review the Tribe's 32 legislative 
proposals and expand the bill to address more of the barriers 
that Tribes face in developing and managing our energy 
resources. In particular, I ask that you support the creation 
of an Indian energy development office to improve energy 
permitting. Former Senator DOrgan called these one stop shops. 
There are three one stop shops already in Indian Country. 
Senator Dorgan reported that the one stop shop on Fort Berthold 
Reservation helped to increase oil and gas permit approvals by 
four times.
    On our reservation, we need ten times as many permits to be 
approved, currently about 48 permits are approved each year. We 
estimate that about 400 permits will be needed each year as we 
expand our investment. The Tribe believes that one stop shop is 
the best way to get the agencies to hire energy staff, and 
working together to manage the high level of permitting needed 
on our reservation.
    I would like to thank the Committee for the opportunity to 
present this testimony. The Tribe is ready to work to find ways 
to eliminate barriers to Indian energy development. The current 
barriers have direct effect on the Tribe's revenues, our 
ability to invest in the future and the services we provide to 
our members, our children and grandchildren.
    Towaok, thank you.
    [The prepared statement of Ms. Cuch follows:]

   Prepared Statement of Hon. Irene C. Cuch, Chairwoman, Ute Tribal 
                           Business Committee

    Good afternoon Chairman Akaka, Vice Chairman Barrasso, and Members 
of the Committee on Indian Affairs, my name is Irene Cuch. I am the 
Chairwoman of the Business Committee for the Ute Indian Tribe of the 
Uintah and Ouray Reservation. The Ute Indian Tribe consists of three 
Ute Bands: the Uintah, the Whiteriver and the Uncompahgre Bands. Our 
Reservation is located in northeastern Utah. Thank you for the 
opportunity to testify on S. 1684, the ``Indian Tribal Energy 
Development and Self-Determination Act Amendments of 2011.''
I. Introduction
    The Ute Indian Tribe is a major oil and gas producer in the United 
States. Production of oil and gas began on the Reservation in the 
1940's and has been ongoing for the past 70 years with significant 
periods of expansion. 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 reservations 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 LLC, and 
Ute Energy LLC. Our governmental programs and Tribal enterprises employ 
450 people, 75 percent 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 LLC 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 process is the single biggest risk factor to 
operations on the Reservation. As former Senator Dorgan highlighted, a 
single oil and gas permit must make its way through a bureaucratic 49 
step maze to be approved. This process involves at least 4 routinely 
understaffed federal agencies.
    The Tribe estimates that an oil and gas permit could be processed 
through these steps in about 60 to 90 days. That is about how long it 
takes a permit to be approved on the Fort Berthold Reservation in North 
Dakota, where the Department of the Interior (DOI) utilizes a ``virtual 
one-stop shop'' to oversee and streamline permitting. On our 
Reservation, a typical permit can take about 480 days to be processed--
more than one year.
    The Tribe takes delays in the permitting process seriously because 
the number of permits approved is directly related to the revenues the 
Tribe has available to fund our government and provide services to our 
members. For example, the Tribe understands that oil and gas companies 
operating on the Reservation are currently limiting operations based on 
the number of permits the agencies are able to process. In particular, 
companies are limiting the number of drilling rigs they are willing to 
operate on the Reservation.
    Drilling rigs are expensive operations that move from site to site 
to drill new wells. Oil and gas companies often contract for the use of 
drilling rigs. Any time a drilling rig is not actively drilling a new 
well, it amounts to an unwanted expense. Consequently, oil and gas 
companies will only employ as many drilling rigs as permit processing 
will support. On our Reservation, the Tribe understands that some oil 
and gas companies who are currently using one drilling rig would 
increase their operations to three drilling rigs if permit processing 
could support this increase.
    One example of this is the Anadarko Petroleum Corporation's 
operations on the Reservation. Anadarko reported that it needed 23 well 
locations approved per month in 2011 and beyond, but in 2010, their 
permits were approved at a rate of 1.7 per month. Anadarko informed the 
Tribe that unpredictable approvals of permits forces the company to 
alter its operational plans at the last minute and often results in the 
company temporarily moving its operations off the Reservation to state 
and private lands. With consistent and reliable permit approvals, the 
Tribe is hopeful additional drilling rigs will move on to Tribal lands 
and increase the revenues available for the Tribal government, our 
members, and our investments.
    To improve the permitting process, the Tribe has been directly 
seeking legislative and administrative improvements to the permitting 
process for oil and gas development on Indian lands. The Tribe is 
working with the Administration on its own and as a part of the 
Coalition of Large Tribes (COLT) to improve the oil and gas permitting 
process. The Tribe hosted tours of oil and gas development on the 
Reservation for government officials, attended meetings with high 
ranking Bureau of Indian Affairs (BIA) and Bureau of Land Management 
(BLM) officials, and is planning energy summits and conferences to work 
collaboratively with other Tribes and industry partners in seeking 
improvements to the permitting process.
    The Tribe is also working directly with Congress to improve the 
permitting process. In the 111th Congress and the current Congress, the 
Tribe participated in the development of Indian energy legislation to 
help resolve these permitting issues. In the current Congress, the 
Tribe attended two listening sessions on a draft of S. 1684. At these 
listening sessions, Committee staff asked Tribes to submit legislative 
ideas that would facilitate Indian energy development. In response, the 
Ute Indian Tribe developed 32 legislative proposals to overcome 
barriers and improve the management of Indian energy resources. These 
proposals were submitted to the Committee in July 2011. In February 
2012, the Committee held an oversight hearing on Indian energy 
development. The Tribe attended that hearing and submitted extensive 
testimony for the hearing record.
    Today, the Tribe is again providing testimony on needed legislative 
changes. My testimony will focus on the specific sections of S. 1684. I 
will also highlight some of the Tribe's 32 legislative proposals that 
need to be included in S. 1684 to further improve the permitting 
process and provide additional tools for Indian Tribes to manage their 
energy resources. For your convenience, I have attached the Tribe's 32 
legislative proposals to my testimony. *
---------------------------------------------------------------------------
    * The information referred to has been retained in the Committee 
files.
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II. S. 1684, the Indian Tribal Energy Development and Self-
        Determination Act Amendments of 2011
    The Tribe supports S. 1684 and believes that it is a good start. S. 
1684 would amend existing laws to provide Tribes with improved 
opportunities to manage their own energy resources. However, S. 1684 
only addresses a few areas of the law. On its own, the Tribe came up 
with 32 areas of law that need revision. Much more needs to be done to 
overcome barriers Tribes face in Indian energy development and to put 
Tribes on an equal playing field with state governments and other 
energy developers. Before discussing what else is needed, below I 
specifically discuss the substantive sections of S. 1684.

A. Section 101. Indian Tribal Energy Resource Development
    The Tribe supports the amendments proposed in Section 101, but, in 
at least one case, more is necessary. First, this section would require 
the Secretary to consult an Indian Tribe when adopting or approving an 
oil and gas well-spacing program or plan on the Tribe's lands. This 
proposal was among the 32 legislative proposals submitted by the Tribe. 
For too long the BLM, on behalf of the Secretary, has approved well-
spacing plans on Indian lands without involving Tribes. Tribes should 
be involved in this decisionmaking process to ensure that Indian lands 
are being developed efficiently, that protected areas are avoided, and 
to ensure that Tribes have every opportunity to work closely with their 
industry partners.
    Over the past year, the Tribe has been working as a part of COLT to 
seek an administrative change from the BLM on the issue of well-
spacing. BLM officials in attendance at these meetings have been 
supportive of including Tribes in well-spacing decisions, but the BLM 
has yet to issue any sort of policy directive to ensure that Tribes are 
included. By making this change legislatively, the Congress would 
advance an issue that the Tribe and COLT has been seeking for almost a 
year, and which appears to have the support of the Administration.
    Second, Section 101 also extends important planning authority to 
the Secretary of the Interior. When the Energy Policy Act of 2005 was 
passed, two Indian energy offices were created--one in the DOI and one 
in the Department of Energy (DOE). The DOE office was provided specific 
authority to assist Tribes in overall energy planning. The DOI office 
was not provided similar authority.
    Both offices need this specific planning authority. Federal energy 
policy has long overlooked or ignored Tribes. Today Tribes are catching 
up quickly and need the same or similar federal assistance that states 
rely on to manage their energy resources. In addition, Congress must 
support this statutory authority with needed appropriations to help 
Tribes overcome decades of neglect by federal energy policy makers.
    Third, Section 101 would require the Secretary of Energy to develop 
regulations for a long-overdue Indian energy loan guarantee program 
that was originally authorized in 2005 but never implemented. The Tribe 
believes that developing regulations would go a long way toward 
implementing the program and ensuring needed appropriations from 
Congress, but more is needed.
    The law also needed to be changed to actually require the Secretary 
of Energy to provide these loan guarantees. Current law only states 
that the Secretary ``may'' provide guarantees. Making the program 
mandatory would provide the Indian energy loan guarantee program with 
the same authority provided to the Title XVII loan guarantee program 
which was authorized at the same time for energy innovations. Under the 
Title XVII program, the law stated that the Secretary ``shall'' provide 
guarantees.
    We need similar energy innovations on Indian lands and we need 
similar laws to require that they be implemented. The Tribe 
specifically included this recommendation among its 32 legislation 
proposals because financing expensive energy projects is one of the 
most significant barriers to Indian energy development. Providing 
Tribes with the opportunity to secure government backed financing would 
promote Tribal self-determination in the development of energy 
resources because Tribes would have the opportunity to be the owners of 
their development companies rather than relying on others to develop 
Tribal resources.
    DOI currently manages a successful Indian loan guarantee program 
for Tribal businesses, but it lacks the budget for more expensive 
energy projects. Tribes need the level of funding proposed by the DOE 
loan guarantee program to cover the investment needed for energy 
projects. With this level of funding Tribes will be encouraged to be 
owners of their own energy projects and vast untapped Tribal energy 
resources can be developed for the long-term benefit of Tribal 
communities and the Nation's domestic energy supplies.

B. Section 102. Indian Tribal Energy Resource Regulation
    The amendments in this section would extend DOI funding 
opportunities for energy surveys and inventories to a new entity called 
a ``Tribal energy development organization'' that is defined elsewhere. 
The Tribe believes that it would be useful for Tribal energy 
development organizations to be able to receive funding through this 
program. However, it is more important and would advance Indian self-
determination for Congress to provide sufficient appropriations to fund 
Indian energy surveys and inventories in the first instance. Funding is 
needed to ensure that Tribes can enter into energy development 
negotiations with sufficient information and thereby promote Indian 
energy development.

C. Section 103. Tribal Energy Resource Agreements
    The Tribe supports the changes Section 103 would make to the 
existing Tribal Energy Resource Agreement (TERA) program. As you know, 
the TERA program generally provides a process for Indian Tribes to 
apply and potentially gain authority to approve leases, business 
agreements, and rights-of-way for energy development or transmission on 
their lands without Secretarial review. Many of the proposed changes in 
Section 103 would make the existing TERA application process more 
certain by providing timelines, requiring the Secretary to act on a 
TERA or it is deemed approved, and making more specific the reasons the 
Secretary may disapprove a TERA application. These are needed changes. 
I understand that since the program was created in 2005, no Tribe has 
applied for a TERA, in part, because of the lengthy and uncertain 
application process.
    Section 103 would also expand some TERA authority to a new category 
of Tribes. This new category would be Tribes who have carried out a 
contract or compact under the Indian Self-Determination and Education 
Assistance Act (ISDEAA) involving activities related to the management 
of Tribal land for not less than three years and without a material 
auditing exception. This new category of Tribes may exercise TERA 
authority when the other party to the lease is a ``certified'' Tribal 
energy development organization that is majority-owned and controlled 
by the Tribe, or the Tribe and one or more other Tribes.
    The Tribe strongly supports this change to the TERA program. This 
change would provide Tribes, with demonstrated experience, the 
authority to approve some of their own leases, business agreements, and 
rights-of-way without the delays inherent in Secretarial review and 
approval. The Tribe has long managed its own energy development, lands 
and natural and cultural resources. The Tribe's experience in these 
areas should be recognized by the Federal Government without the Tribe 
being forced to take the additional, extensive, and uncertain step of 
completing a TERA application.
    This change also promotes Tribal self-determination and local 
control over the development of Tribal energy resources. Tribes would 
be encouraged to develop Tribally owned energy companies to develop 
their resources because Tribes could enter into leases and agreements 
with Tribally owned businesses without Secretarial oversight. This 
change allows Tribes to avoid understaffed and bureaucratic federal 
agencies and the permitting delays associated with those agencies. 
Instead, Tribes would be free to develop their own processes for more 
efficiently reviewing and approving leases and agreements with Tribally 
owned businesses.
    The Tribe also strongly supports changes proposed in Section 103 
that would require the Secretary to make funds available to Tribes 
operating an approved TERA pursuant to annual funding agreements--
similar to ISDEAA contracts. If the Tribes are going to take over these 
responsibilities for the Federal Government, then the Federal 
Government must provide adequate funding to Tribes. Although it is 
unclear how much funding would be available from the Secretary for , 
any new opportunity for funding energy activities is a significant 
change.
    In addition to any federal funding may become available, Tribal 
self-determination in the area of energy development would be better 
advanced if Congress affirmed Tribes' exclusive authority to tax 
activities on Indian lands. Managing the permitting of energy 
resources, not to mention the infrastructure needs, is an expensive 
undertaking for any government. Tribes need the same revenues that 
other governments rely on to oversee and provide the needed 
infrastructure for energy development.
    Finally, the Tribe supports changes in Section 103 that would help 
to clarify the Secretary's trust responsibilities for leases and 
agreements negotiated pursuant to a TERA. The proposed changes use 
language that is similar to existing law for Indian Mineral Development 
Agreements 25 U.S.C.   2101-08 (1982) (IMDA). The IMDA's explanation 
of the Secretary's trust responsibilities has stood the test of time 
and is an appropriate model for the Secretary's trust responsibilities 
pursuant to a TERA.

D. Section 104. Conforming Amendments
    Section 104 expands the definition of ``Tribal energy development 
organizations'' to include a greater variety of Tribally owned business 
entities that can utilize the authorities provided to Tribal energy 
development organizations. The Tribe supports this change. The Tribe 
agrees that it is important and will advance Indian energy development 
to specifically recognize and extend authorities to Tribally owned 
business entities. In many cases, Tribally owned business entities, as 
opposed to just Tribal governments themselves, are needed for the 
practical and efficient development of resources.

E. Section 201. Issuance of Preliminary Permits or Licenses
    The Tribe supports Section 201 which would provide Tribes with the 
same preference that states and municipalities have over private 
applicants for hydroelectric preliminary permits or licenses. It is 
appropriate to extend this preference to Indian Tribes because Tribal 
governments have many of the same public water development needs as 
state and municipal governments.
    However, subsection 201(b) ``Applicability'' is neither appropriate 
nor needed and should be deleted from S. 1684. This subsection would 
limit the Tribal preference and is intended to protect previously 
issued preliminary permits and original licenses that had been accepted 
for filing. Subsection 201(b) is not needed because the underlying law, 
16 U.S.C.  800(a), already provides protection for previously issues 
preliminary permits. Section 800(a) provides that governments may only 
receive this preference ``where no preliminary permit has been 
issued.''
    Subsection 201(b) also not an appropriate protection for original 
licenses that have been accepted for filing. Congress already provided 
a process for ``competing'' license applications at 16 U.S.C.  808 and 
subsection 201(b) should not attempt to override existing law. In 
Section 808, Congress encourages competition for licenses and provides 
standards to ensure the best development of public waterways. The 
proposed changes in subsection 201(b) would limit competition and 
result in water projects that are not the best available for Tribal and 
public waterways.

F. Section 202. Tribal Biomass Demonstration Project
    The Tribe supports Section 202 and requests that these provisions 
be made permanent and available to many Tribes rather than just a 
limited demonstration project. Section 202 would require the Secretary 
of Agriculture or the Secretary of the Interior to enter into long-term 
contracts with Tribes to collect woody debris on federal lands for 
biomass energy production. Longer contract terms are needed to help 
finance and justify the investment in biomass energy generation 
facilities. The Tribe could utilize a longer-term contact to test 
development of biomass facilities and make use of National Forests that 
have been included within our Reservation.

G. Section 203. Weatherization Program
    The Tribe supports the change proposed in Section 203, but thinks 
that it does not go far enough to make weatherization programs work in 
Indian Country. The Tribe requests that Section 203 be replaced with 
the weatherization proposal included among the Tribe's 32 legislative 
proposals. The Tribe's proposal includes a number of changes to the 
weatherization program so that it would work in Indian Country
    Section 203 would provide Tribes with the ability to apply for 
direct access to weatherization funding. This authority should have 
been provided long ago. Under current law, Indian Tribes are supposed 
to receive federal weatherization funding through state programs funded 
by DOE. However, very little funding reaches Indian Tribes, despite 
significant weatherization needs.
    If a Tribe wants to receive direct funding from DOE, it must prove 
to DOE that it is not receiving funding that is equal to what the state 
is providing its non-Indian population. This arrangement is a violation 
of the government-to-government relationship between Indian Tribes and 
the Federal Government, and the federal trust responsibility. DOE does 
not even track the weatherization needs of Indian Tribes or the funding 
distributed to Tribes. When former Senator Dorgan raised this issue 
with DOE in the 111th Congress, DOE reported that it had no idea how 
much weatherization funding was actually received by Indian Tribes.
    Over the years that the weatherization program has been in 
existence, Tribes have missed out on millions in funding. Each year the 
weatherization program is funded at around $50 million per year, and 
under the American Reinvestment and Recovery Act of 2009 $4 billion was 
provided for weatherization needs. This funding is intended for low-
income households and should go to those who need it most. On Indian 
reservations poverty rates are 2 to 3 times higher than national 
averages.
    Section 203 should include additional changes to the weatherization 
program otherwise Indian Tribes will still not be able to utilize the 
funding. As written, Section 203 requires Tribes to comply with the 
same standards as state governments who have been receiving 
weatherization assistance for decades. This puts the burden on Tribes 
to overcome decades of neglect by the Federal Government for energy use 
and management on Indian reservations. Without standards and training 
that are appropriate to Indian country, many Indian Tribes will still 
not be able to utilize this funding opportunity. Section 203 should 
include reporting standards that make sense in Indian country and 
provide for training of energy auditors to serve Indian reservations.

III. Additional Changes Needed to Promote Indian Energy
    I ask that you review the Tribe's legislative proposals and expand 
the bill to address more of the barriers that Tribes face in managing 
our energy resources. I have attached the Tribe's 32 legislative 
proposals to my testimony for your convenience and so that they will be 
part of the hearing record.
    In particular, the Tribe asks that the Committee support the 
creation of Indian Energy Development Offices to improve both 
traditional and renewable energy permitting. On the House side, 
Congressman Don Young has already included this proposal in H.R. 3973, 
his ``Native American Energy Act.'' As former Senator Dorgan and many 
in Congress have noted, the oil and gas permitting process is a 
bureaucratic maze of federal agencies. Indian Energy Development 
Offices would bring all of the agencies into the same room and would 
streamline permit processing. These agencies could then work 
collaboratively to eliminate backlogs and delays in approving leases, 
rights-of-way, and applications for permits to drill.
    Former Senator Dorgan referred to these offices as one-stop shops. 
There are 3 one-stop shops already in Indian Country. There is one at 
Navajo, in Oklahoma, and a virtual one-stop shop on the Fort Berthold 
Reservation in North Dakota. Former Senator Dorgan reported that the 
one-stop shop at Fort Berthold helped to increase oil and gas permit 
approvals by 4 times.
    On our Reservation, the Ute Indian Tribe needs 10 times as many oil 
and gas permits to be approved. Currently, about 48 Applications for 
Permits to Drill (APD) permits are approved each year on the 
Reservation. The Tribe and its business partners estimate that about 
450 APDs will be needed each year as the Tribe expands its operations. 
The Tribe believes that a one-stop shop is the best way to get the BIA, 
the BLM, and other federal agencies working efficiently with the Tribe 
to manage the high level of permitting needed on the Reservation.
    Just as important, the BIA, BLM and other federal agencies that 
oversee the permitting process do so without the staffing and expertise 
needed to fully support Indian energy development. A one-stop shop 
would encourage DOI to hire staff with Indian energy expertise. The BIA 
may be the most important federal agency responsible for supporting 
Indian energy development, yet there are only a handful of BIA 
employees with energy expertise. Congress needs to provide the 
authority and budgets so that the BIA can hire energy experts.
    The Tribe also believes that we need to remove as many 
disincentives to energy development on Indian reservations as we can. 
For example, the fees that the BLM charges for oil and gas activities 
on Indian lands are a disincentive to Indian energy development and 
encourage developers to move just over the Reservation boundary to 
private lands where there are no BLM fees. In the case of shallow 
wells, these fees may make development completely uneconomical. In 
addition, when the Tribe is developing its own resources, it is 
outrageous that the Tribe's federal trustee would charge us for 
performing its trust responsibility. The BLM should be prohibited from 
charging fees for oil and gas activities on Indian lands.
    We also need clarifications in the law to encourage energy 
development and other economic activities. Legislation should clarify 
that Indian Tribes retain their inherent sovereign authority and 
jurisdiction over any rights-of-way they have granted. Over the last 30 
years, jurisdiction over rights-of-way has been treated differently by 
various federal courts. Each time an issue arises, another federal 
court undertakes a new examination. This leads to uncertainty in the 
law and a lack of dependability about the rules that apply on a right-
of-way. This hinders our ability to develop energy resources because 
all parties need certainty in the law.
    The law should also be clarified to ensure that Tribes can raise 
needed tax revenues to support and oversee energy development. 
Currently, federal courts allow other governments to tax energy 
development on Indian lands. This limits and even prevents Tribes from 
earning tax revenues from development on our lands. Without tax 
revenues, Tribal infrastructure, law enforcement, and other services 
cannot keep up with the burdens imposed by energy development, and we 
remain dependent upon funding from the Federal Government.
    The Tribe also asks that Committee not overlook the important role 
DOE could be playing in the management of Indian energy resources. In 
general, DOE ignores Indian Tribes in its programs and in setting 
national energy policies. The relatively new Office of Indian Energy 
Policies and Programs is making progress, but Tribes are left out of 
the vast majority of DOE programs. The Committee could hold an entire 
hearing on the lost opportunities. Tribes need full access to existing 
DOE programs for energy loan guarantees, energy efficiency, 
weatherization assistance, and renewable energy research and 
development.
    At a minimum, DOE should fully include Tribes in federal energy 
efficiency and weatherization programs. The Federal Government provides 
about $100 million every year to fund these programs at the state 
level. This funding should go to those who need it most, but for 
decades these programs have ignored the needs of Tribes. The Tribe asks 
that these programs be expanded to include set-asides for Tribal 
governments. These programs would help Tribes reduce energy costs and 
manage energy use in government buildings and reservation homes.

IV. Regulatory Barriers to Indian Energy Development
    Finally, the Tribe asks that the Committee monitor agency actions 
to create additional barriers to Indian energy development. Two recent 
examples are the BLM's decision to develop regulations for hydraulic 
fracturing activities on public lands, and the Environmental Protection 
Agency's (EPA) implementation of its Minor Source Rule for air permits. 
The Committee may need to hold oversight hearings on these issues or 
develop legislative solutions depending upon how the agencies proceed 
in developing or implementing these rules.
    There are a variety of problems with the BLM's proposed regulation 
of hydraulic fracturing. First, the BLM has never initiated a 
discussion with Indian Tribes about the need for the regulations, 
alternatives that could preserve Tribal authority for Tribes to 
regulate the issue ourselves, or even a government-to-government 
discussion of the substance of the proposed regulations. All of which 
fails to fulfill DOI's four month old Policy on Consultation with 
Indian Tribes (December 2011) and Executive Order No. 13175 on 
Consultation and Coordination with Indian Tribal Governments. The Tribe 
requests that the Committee inquire with BLM regarding its plan for 
ensuring that Tribal concerns are considered in the development of any 
regulations.
    Second, Indian lands are not public lands. Indian lands are for the 
exclusive use and benefit on Indian Tribes. Any BLM oversight of 
activities on our lands is in fulfillment of the BLM's trust 
responsibility to the Tribe. The BLM should not apply public interest 
standards to Indian lands. The Tribe requests that the Committee and 
Congress pass legislation that would prevent Indian lands from being 
swept into laws and policies for public lands.
    Third, as written, the proposed rule would increase delays in 
obtaining oil and gas permits. The very delays the Tribe has been 
working so hard to overcome. The proposed rule would require separate 
approval of hydraulic fracturing plans. This will add time to the oil 
and gas permitting process, increase the costs of developing energy on 
Indian lands, and overburden already short-staffed BLM offices. Oil and 
gas operators seeking permits to develop oil and gas on Indian lands 
already undergo an extensive environmental review process before they 
can begin drilling activities. As written, BLM's proposed regulations 
add additional unnecessary steps to the process.
    While EPA's Minor Source Rule, to date, has not had a significant 
impact on the oil and gas industry on our Reservation, we understand 
that it has impacted some of our sister Tribes. First, EPA also did not 
engage in meaningful Tribal consultation prior to finalizing the rule 
and subsequent publication in the Federal Register. Any agency action 
without meaningful consultation impacts us greatly.
    Second, although EPA delayed implementation of part of the rule for 
three years while it hires the necessary staff and develops its 
permitting process, one significant part of the rule took effect almost 
immediately, the Synthetic Minor Source Rule (SMSR). EPA implemented 
the rule despite not knowing what the SMSR permit should look like or 
exactly what it should contain. To date, EPA has yet to share with our 
industry partners what a SMSR permit should look like and what is 
should contain. EPA plans to phase the SMSR rule in over the next year. 
To prevent any impacts to energy development on Indian lands, we ask 
the Committee to develop legislation that would delay implementation of 
the SMSR part until September 2013 in order for the EPA to develop its 
permitting process fully.

V. Conclusion
    I would like to thank Chairman Akaka, Vice Chairman Barrasso and 
members of the Committee for the opportunity to present this testimony 
on behalf of the Tribe. The Tribe stands ready to work with the 
Committee to find ways to eliminate barriers to Indian energy 
development. The current 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)

    Senator Barrasso. Thank you very much. Thank you for 
bringing a number of members of your organizational staff, and 
thank you for the 32 recommendations. We will take them most 
seriously. Thank you.
    Mr. Groen?

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

    Mr. Groen. Thank you, Vice Chair, Senators. I appreciate 
the opportunity to testify before you.
    I am Wilson Groen, President and CEO of Navajo Nation Oil 
and Gas Company. Navajo Nation Oil and Gas Company, or NNOGC, 
as we refer to ourselves frequently, is a Section 17 federally-
chartered corporation, wholly owned by the Navajo Nation. So 
all of our shareholders, our directors, are members of the 
Navajo Nation.
    Just in a quick summary, and right to the point, we do 
fully support the work that the Committee has been doing and 
the direction that this legislation is taking. We appreciate 
your efforts in that way.
    A brief background on the company, as I said, we are wholly 
owned by the Navajo Nation. We are a for-profit and fairly 
successful oil and gas company. We operate in the Four Corners 
area and we also have some activities off the Navajo Nation, 
currently up in Montana. Most of our production and exploration 
activities are in southeast Utah and northwest New Mexico. We 
have, there is major energy development in new projects. But as 
kind of a gist of where we are going, the company just last 
week either purchased or signed purchase sale agreements to add 
41 percent additional reserves and production base to the 
company's bottom line. That creates lots of new opportunities 
for the company, and it also creates a major revenue source for 
the Navajo Nation.
    We currently, before these acquisitions, have direct 
payments back to the Nation in royalties, taxes, bonuses, other 
activities, in excess of $14 million. This will probably exceed 
$20 million next year. And under the current budget, we will 
contribute approximately $35 million to the Navajo Nation 
economy.
    Why do I bring these subjects up? I think the key thing, 
and one of the major aspects of this bill and the 415(e) 
amendments that the House is working on is, how do we improve 
the working relationships and minimize some of the hurdles, so 
that we can work very efficiently, move our projects forward in 
an efficient manner. I think that is the gist of S. 1684 
legislation, and again, I commend the Committee for moving this 
in this direction.
    A couple of other things, though. How are we going to 
administer this? Are there concerns with the Nation's ability 
to oversee and regulate these? What are some of the other 
obstacles? The Navajo Nation has a very well-developed network 
of departments that focus on Navajo, it has Navajo EPA, Water, 
Water Resources, Minerals Department, Fish and Wildlife, 
Historic Preservation. All of these departments have been 
around 10 or more years and have guided both the Nation and 
been the basis for the formation of this company to better 
develop and reacquire the resources of the Nation. And again, 
our focus really is how can we even make it more efficient to 
continue to grow the company more effectively.
    But we can do it with these departments and so on, we do 
have very strict guidelines that we follow, along with a lot of 
the discussions recently on the fracturing and so on. We cement 
all of our wells from TD to surface to ensure that they are 
going to maximize the well integrity, to give the least 
potential of any failure of contamination of water and other 
resources.
    So I want to again thank the Committee for the support of 
this direction they are going. It will make the development of 
the resources on the Navajo Nation much more efficient and 
cost-effective and timely, because time does cost us money.
    And even we as a wholly-owned company do have to consider 
the timely use of our capital. If we can't timely deploy it on 
the Nation, we deploy it elsewhere. Thank you.
    [The prepared statement of Mr. Groen follows:]

 Prepared Statement of Wilson Groen, President/CEO, Navajo Nation Oil 
                            and Gas Company

Introduction
    Good afternoon Chairman Akaka, Vice Chairman Barrasso, and members 
of this distinguished Committee. 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 want to thank you for the opportunity to discuss energy 
development on Indian lands. I also want to thank you for your 
leadership in identifying barriers to energy development on Indian 
lands, and for introducing legislation to address and remedy those 
barriers.

History of the NNOGC
    In 1992, the Navajo Nation Energy Policy (Energy Policy) was issued 
by the Navajo 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 Production
    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 S. 1684
    NNOGC supports the objectives of the bill, namely, to eliminate or 
reduce undue Federal interference in tribal energy resource 
development, strengthen tribal self determination, and boost energy 
resource production on Indian lands. In particular, we believe the 
following provisions contained in section 103 of the bill are key to 
achieving these objectives.
    Section 103 authorizes an Indian tribe to negotiate and enter 
energy-related business agreements, rights of way, and leases without 
the review or approval of the Secretary of the Interior (Secretary) if 
the lease or agreement was executed

         (1) pursuant to a secretarially-approved ``tribal energy 
        resource agreement,'' or

         (2) by the Indian tribe and a tribal energy development 
        organization, certified by the Secretary as majority-owned by 
        the tribe; and

         (3) has a term not more than 30 years, or if the lease is for 
        the production of oil, gas or both, 10 years and as long 
        thereafter as oil or gas is produced in paying quantities.

    Section 103 would also expedite the review and approval of tribal 
energy resource agreements (TERAs) submitted to the Secretary by 
providing that a TERA is effective 271 days after receipt by the 
Secretary, unless the Secretary disapproves the agreement. With regard 
to revised TERAs, section 103 renders them effective 91 days after 
receipt by the Secretary, unless the Secretary disapproves the 
agreement.
    Importantly, section 103 also amends existing law to provide that 
the Secretary may disapprove a TERA only if the Secretary determines

         (1) the Indian tribe has failed to demonstrate sufficient 
        capacity to regulate the development of one or more energy 
        resources identified for development in the agreement;

         (2) a provision of the tribal energy resource agreement would 
        violate applicable Federal law, regulations, or a treaty 
        applicable to the Indian tribe; or

         (3) the tribal energy resource agreement fails to include all 
        prescribed provisions.

    This section also adds language providing that an Indian tribe 
shall be considered to have demonstrated capacity if the Secretary 
determines the tribe has for three years successfully carried out a 
contract or compact under the Indian Self-Determination and Education 
Assistance Act that is related to the management of tribal land, or the 
Secretary has failed to make a capacity determination within 120 days.
    Section 103 also carefully, and properly in our view, circumscribes 
who may be considered to be ``an interested party'' for purposes of 
challenges to tribal energy activities pursuant to a TERA.
    Section 103 also directs the Secretary to transfer any amounts the 
secretary would otherwise expend to operate any program, function, 
service or activity of the department as a result of the tribe carrying 
out those activities pursuant to a TERA, and directs the Secretary to 
make these amounts available through negotiated, annual funding 
agreements separate from the TERA.
    NNOGC also appreciates the changes proposed in section 104(a) 
altering the name of a ``tribal energy resource development 
organization'' to ``tribal energy development organization,'' and 
including in such organization ``any enterprise, partnership, 
consortium, or other type of business organization that is engaged in 
the development of energy resources and is wholly owned by an Indian 
tribe (including an organization incorporated pursuant to section 17 of 
the Indian Reorganization Act of 1934) or section 3 of the Oklahoma 
Indian Welfare Act; or (B) any organization of two or more entities, at 
least one of which is an Indian tribe, that has the written consent of 
the governing bodies of all Indian tribes participating in the 
organization to apply for a grant, loan or other assistance, or to 
enter a lease or business agreement with, or acquire a right of way 
from, an Indian tribe.''
    Similarly, section 104(b) makes clarifying amendments by 
substituting the term ``tribal energy development organization'' for 
the term ``tribal energy resource development organization.'' These 
proposed changes will add flexibility and creativity in how energy 
development projects are structured. NNOGC strongly supports these 
changes.

Navajo Nation and NNOGC-Proposed Amendments to 25 U.S.C.  415(e)
    NNOGC's continued growth is critical to the continued growth of the 
Nation's economy. While NNOGC sees the need for and supports the 
refinements to the TERA process contained in S. 1684, for the Navajo 
Nation, which is unique in many relevant respects, a more appropriate 
path is to amend 25 U.S.C.  415(e) to authorize the Nation to engage 
in subsurface mineral leasing and development without the involvement 
of the Secretary. Should these amendments come to pass, they will 
facilitate the Nation's economic growth and encourage self-
determination by removing Federal delays and unnecessary obstacles from 
the process.
    Some background is in order. In 2000, the Navajo Nation requested 
Congress to amend the Long Term Leasing Act of 1955 (25 U.S.C.  415) 
to authorize the Nation to develop and execute its own business, home-
site, agricultural and other surface leases without the approval of the 
Secretary. The Nation made this request because member-owned businesses 
were not flourishing on tribal lands due to the overlay of tribal and 
Federal authority in granting business leases and other barriers such 
as bonding requirements, requirements for appraisals, and delays in 
lease processing and obtaining financing.
    The Congress responded by adopting 25 U.S.C. section 415(e)--the 
Navajo Nation Surface Leasing Act--which authorizes the Nation to 
execute its own leases without Federal approval, provided that the 
leases are issued pursuant to regulations approved by the Secretary and 
leases are limited to 25 years, subject to a right of renewal.
    The Nation's leasing regulations were approved by the Secretary, 
and the Nation has been operating its own surface leasing regime 
without event for approximately seven years. All business site leases 
require surveys, geo-tech studies, archaeological clearances, and 
environmental assessment taking into account the impacts on the natural 
and human environment pursuant to the Nation's business leasing and 
environmental laws. The various agencies and offices of the Nation, 
which are the most advanced in Indian Country, have more than ten years 
experience in performing these studies and assuring regulatory 
compliance.
    The Nation successfully manages the Navajo Nation Environmental 
Protection Agency, Department of Historic Preservation, Fish and 
Wildlife Department, the Minerals Department, and the Navajo Land 
Department.
    Amending 25 U.S.C.  415(e) as the Nation and NNOGC are suggesting 
would continue to advance the Nation's self-determination and self-
sufficiency by amending the Nation's leasing authority to permit 
business and agricultural and other surface leases for terms up to 99 
years, and by further amending the statute to authorize the Nation to 
execute mineral leases, again, under the regulations approved by the 
Secretary, for a term of 25 years, and potential renewal for an 
additional term of 25 years --the customary term of minerals agreements 
approved by the Navajo Nation Council since approximately 1985.
    I note for the Committee's consideration, these proposed amendments 
are currently contained in Chairman Don Young's ``Native American 
Energy Act'' (H.R. 3973), which is pending in the House Committee on 
Natural Resources.

Conclusion
    In conclusion, I want to thank the bill's sponsors--Vice Chairman 
Barrasso, Chairman Akaka, and Senator McCain--for their leadership in 
crafting and introducing S. 1684, and for your support for the 
amendments to 25 U.S.C.  415(e) that the Nation and NNOGC are jointly 
proposing.
    It is our hope that the Committee will quickly and favorably report 
S. 1684, together with our proposed language, to the Senate Floor for 
its consideration.
    At this juncture, I would be happy to answer any questions you 
have.

    Senator Barrasso. Thank you, each and every one of you, for 
your testimony.
    I have a few questions for the record, but first I want to 
remind everyone that the hearing record will be open for two 
additional weeks, so that additional comments may be provided. 
So if you have additional comments, we would like to have them.
    Mr. Olguin, it has been over six years since Title 5 of the 
Energy Policy Act of 2005 was passed, yet no Tribes have 
applied for a TERA. In your view, what are the most significant 
obstacles that the Tribes face that discourage them from 
entering into such a process?
    Mr. Olguin. I believe, as I stated, we are looking at the 
cost. The Tribe is taking on the responsibility of the Federal 
Government, are there going to be funds available to provide 
that? I think that is a big issue.
    Also the Federal inherent trust responsibility along that 
line, too, are the Tribes going to have that ability to really 
manage their assets here?
    Senator Barrasso. Mr. Hall, you see Senator Hoeven, your 
other Senator from North Dakota. You have people up here to 
sing your praises. You have a Republican and a Democrat, both 
sides of the aisle. You obviously have made a lot of friends 
from all of your leadership.
    I was very impressed with your testimony. We will make your 
entire written testimony part of the record. You talked about, 
since 2008 there have been no new wells, how it's hard to go 
through the 49 steps, and you said you felt like either a mouse 
or a rat in a maze. And now the EPA has come forward and now 
you are being treated as if you are under EPA's public lands 
area. You said we needed to go further with the bill. I didn't 
know if there was anything additional that came to your mind 
that you would like to share with us in terms of significant 
obstacles that you are facing that discourage the Tribes from 
entering into a TERA.
    Mr. Hall. Mr. Chairman, it is a longstanding history where 
the Federal Government has done this for us. The BIA, the BLM, 
the EPA. And the Oil and Gas Leasing Act of 1938, Tribes 
weren't at the table. That is when big brother was going to 
say, this is how it is going to be done. And so we weren't at 
the table, so we kind of had to take it. Our grandfathers had 
to sit here and take it and do those things.
    But Tribes have actually bypassed the Federal Government. 
Our staff are more educated, we have more staff, we have an 
energy office, an environmental office. We have an oil and gas 
company. We have a water office, we have a health clinic, we 
have law enforcement, we have every agency that we provide 
these services, and have to supplement. Our Tribe supplements 
the Federal budget that we get through 638 contracts, $42 
million a year. That is how understaffed and underfunded our 
Federal agencies are.
    So as this TERA is coming, as Vice Chairman Mike here had 
mentioned, the money, what additional costs? Is there going to 
be money? Are there going to be some resources that are going 
to add to this? So that way we can have this adding to what the 
Tribes' capabilities already are.
    So the one stop shop that Irene was talking about is not 
funded. And Senator Dorgan did a great job advocating for it, 
but it is not funded, it is not permanent. It might be 
something that Tribes are scared of, is that a one time funding 
thing, or is it going to be a permanent funding base so you can 
count on it every single year? Because we are going to have 10 
more years of drilling and about 30 or 40 more years of 
production.
    So this economy is something that we want to continue to 
grow, and it is not going to go away.
    Then finally, the trust responsibility. What happens if 
there is an accident or if an allottee says, well, there has 
been a breach, there has been a breach of that trust 
responsibility on my land? Who is responsible, the Tribe? Or is 
it the Federal Government? So that is what I really want to be 
clear on.
    But as far as the TERA removing Federal obstacles, there is 
no question about it, we are tired of being under the thumb.
    Senator Barrasso. Thank you very much.
    My time has expired. Senator Tester, did you want to make 
an opening statement?
    Senator Tester. No, thank you, Mr. Chairman.
    Senator Barrasso. Okay, then Senator Franken is next in 
line for questioning. I am going to have to excuse myself and 
Senator Hoeven will take the gavel. Thank you.
    Senator Franken. Sure, great. Thank you, Mr. Vice Chairman.
    This is really to the entire panel. In the Midwest, we have 
a lot of wind. A number of Tribes in my home State of Minnesota 
have put up turbines, wind turbines to provide electricity to 
their communities.
    Southwest Tribes also have vast solar resources. But many 
Tribes still must rely on old, inefficient, dirty sources of 
energy, such as coal-fired power plants. And Tribes still 
struggle to provide reliable and affordable energy to their own 
members.
    Can any of you talk about the potential for distributed 
energy generation in Indian Country and what could the Federal 
Government do to help Tribes provide for their own energy 
needs?
    Mr. Finley?
    Mr. Finley. One of the problems we have in the northwest is 
that BPA is near full capacity on their grid. So a lot of 
Tribes want to develop energy development, they want to develop 
energy projects. But with the uncertainty of not being able to 
wheel your power and move it, what is the need to even try to 
move forward with the project, if you can't move the power. 
Ultimately, many Tribes have some of the highest rates in 
electricity in their area, particularly us at Colville. 
Although we have the largest hydroelectric dam in North 
America, and the second largest, or one of the third or fourth 
largest on our reservation, we pay some of the highest 
electricity rates in the State.
    Senator Franken. So the hydroelectric plant is on your 
reservation?
    Mr. Finley. Yes, they are federally-operated. But not one 
megawatt of power, not a single gallon of irrigation water has 
been made available to the Tribes. It all goes the opposite 
direction from the reservation.
    Senator Franken. Anyone else have any thoughts on that? 
Because this is what I have heard, this is what I understand, 
is that there are Tribes that have all kinds of solar energy 
beating down on them and yet are paying for their electricity. 
Chairman Hall?
    Mr. Hall. Senator, in the Dakotas, we have WAPA, which has 
been an agency, Western Area Power Administration. It has not 
been willing to work or provide any space on the grid, as 
Chairman Finley was talking about. And they do have the lines, 
because we are by the river, and we have the dams, the Garrison 
Dam. We have seven dams from Fort Peck Dam down to Lake Oahe. 
But Tribes are not under that, and those, the Federal power 
should give Indian Tribes a little space on that grid. And we 
have some of the most, all the wind studies that have been done 
for almost all of us, 16 Dakota Tribes, have all shown that we 
have tremendous wind capacity in the Dakotas.
    But WAPA has just been hesitant to help provide any space 
on their grid, even though they have all the power lines 
running through our reservations.
    Senator Franken. Thank you.
    Those are separate but related issues, which is, having the 
transmission in order to send out power that you are creating 
on your land, but also the idea of paying out, as Mr. Finley 
said, paying out for your own power, when you are making it, 
basically, on your land.
    Mr. Olguin, in your testimony you mentioned your 
involvement in the development of Chairman Dorgan's Indian 
Energy Parity Act. I was also a co-sponsor of that legislation 
and believed it would have been a huge step forward for Tribal 
energy development, especially renewable energy development. S. 
1684 is a much more narrowly-tailored bill, many provisions 
that were part of the Indian Energy Parity Act did not make it 
into S. 1684.
    Can you discuss any specific provisions from Senator 
Dorgan's bill that you think would greatly improve the 
prospects for Tribal renewable energy development if it were 
included in the bill?
    Mr. Olguin. Along this line, we are still going to have to 
go back and look at that further. Right now, with 1684 we see 
that as the opportunity to streamline particularly the TERAs 
going forward. But as far as what you are asking, we will have 
to look at that further.
    Senator Franken. Thank you. I see that my time has expired.

                STATEMENT OF HON. JOHN HOEVEN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Hoeven. [Presiding.] At this point, we will go to 
Senator Tester, then I will conclude. And we can come back for 
another round, Senator Franken, if you have additional 
questions or would like additional time. Senator Tester?

                 STATEMENT OF HON. JON TESTER, 
                   U.S. SENATOR FROM MONTANA

    Senator Tester. Thank you, Mr. Chairman, and I want to 
thank everybody who testified today.
    Research development can do a lot of good things for Indian 
Country, and a lot of good things for this Country. 
Particularly, and I don't know what it is on each one of your 
reservations, but in Montana, unemployment is damned high. 
There is opportunity to employ people, whether you are talking 
about conventional energy or renewable energy or utilizing your 
wood products, the list goes on and on and on.
    My question is, and anybody can answer this of it applies 
to them, if you have high unemployment, the work that you are 
doing or the Tribal colleges that you have, are you able to 
train the people that are your neighbors to be able to obtain 
the jobs when those jobs come available?
    Mr. Finley. Well, on the provision that I shared, that was 
a part of my testimony earlier, one of the things that we are 
seeing on the reservation is a lot of the younger generation 
are not taking an interest in forest products and some of the 
logging practices that we do on Colville. It is something that 
our older loggers have observed and shared with us as leaders, 
that some of the younger generation, they are not taking an 
interest in that.
    So if we are going to consider things outside of this 
endeavor that we have of building this woody biomass 
demonstration project, it is something that we are going to 
have to take into consideration. Obviously there is not a whole 
lot of training that goes into some of those jobs, but some of 
them are pretty technical. Some of them have a high risk as far 
as injury and there have been many deaths as a result of that. 
I think I have seen statistics in the past where it is one of 
the high risk jobs in the United States, being a logger.
    But having said that, I know that our older generation is 
prepared to move forward, and hopefully as the jobs are created 
with this legislation and with some of the projects that we 
want to move forward, that our younger generation will step up 
and that knowledge that has been developed over the course of 
several generations won't be lost, and it will be shared.
    Senator Tester. Do you have a Tribal college on your 
reservation?
    Mr. Finley. Yes, we do. It doesn't focus on woody biomass 
or the forest products division. It is more so with core 
classes to help develop the classes they need to move on to a 
four-year institution.
    Senator Tester. Do each one of you have a Tribal college on 
your reservation? You do, Tex?
    Mr. Hall. Yes.
    Senator Tester. You do, Wilson?
    Mr. Groen. Yes.
    Senator Tester. I will kick it over to Tex, because I have 
a question for Wilson in a minute. Does your Tribal college 
train folks that you need to work in the fields?
    Mr. Hall. It does, Senator Tester. It is probably the 
bigger one is TERO, the TERO office. Every Tribe should have a 
Tribal employment rights office. These were designed about 35 
years ago for employment and training of Indian Tribal members 
of that Tribe. So there is a TERO fee for every company, as I 
mentioned earlier, I don't know if you were in chambers, we 
have 950 small businesses. About 200 of those are Native 
businesses. And some of them didn't even know how to start a 
corporation, write a business plan or do a financial 
spreadsheet. But they all do now. They have been forced, it is 
sink or swim.
    Senator Tester. Yes, and as energy development has already 
happened in your neck of the woods, and is probably going to be 
happing more so and more so in my neck of the woods, are you 
able to share your challenges with other Tribes around the 
Country?
    Mr. Hall. Absolutely. We have an expo at Fort Beck, Crow, 
Southern Ute, and everybody here is invited, May 8th and 9th. 
It is our annual MHA Oil and Gas Expo. We are going to do an 
actual tour of rigs to show production, drilling and 
hydrofracking, and then all the jobs, the TERO office, the 
Tribal college, all of this tour is going to be part of that 
regular conference agenda.
    Senator Tester. Very good. I commend you in that.
    Wilson, curiosity always gets me. In your testimony you 
talked about developing a partnership with Montana companies. 
Can you give me any sort of idea who you are partnering with or 
is that a trade secret?
    Mr. Groen. It is not a trade secret. We are involved with a 
small company out of Texas, actually, called Vecta, and we are 
in the Central Montana uplift area applying some new, latest 
technology, multi-component seismic, to help figure out where 
those fractures are and what direction we may want to drill the 
wells.
    Senator Tester. So are you looking at oil, natural gas or 
something else?
    Mr. Groen. Principally oil.
    Senator Tester. Okay.
    Mr. Groen. Along the line of your training and schools, the 
Navajo Nation does have a community college, Dine Community 
College. It is not focused really on oil and gas and that type 
of technology.
    However, in Farmington, New Mexico, there is a community 
college and it has one of the best reputations for training not 
only oil field services but gas plant and other types of 
training facilities for power plants, gas plants and other 
types of things. So they have a very good program.
    Additionally, our company itself, we commit approximately 1 
percent, a little over 1 percent of our net income every year 
in support of scholarships for the Navajo Nation students. We 
want to build a well-trained, quality Navajo workforce to run 
this company well into the future.
    Senator Tester. I appreciate that, I think that is smart. 
You need to be commended for that, allowing folks who need jobs 
to be able to have the mental infrastructure to be able to go 
get those jobs is critically important.
    I don't know how aggressive you all are being, so I will 
just leave you with a comment. That is, there is incredible 
opportunity to put some folks to work here. Some of them are 
very skilled jobs, some of them are pretty regular kinds of 
jobs, too, that don't require a big skill set.
    And I would just say that if it is firing up the Tribal 
colleges or partnering with community colleges or partnering 
with other reservations around the Country, I think it would be 
a missed opportunity. I just had the Blackfeet in my office 
earlier this week, and they are looking at some energy 
development. I said, boy, if you don't aggressively get after 
it, you are missing a big opportunity to employ your own 
people. Because if you don't do it, somebody from Texas will 
come up and do it for you.
    So with that, thank you very much for your testimony.
    Senator Hoeven. Several questions. I want to start out with 
Chairman Hall. Chairman, it is good to see you. It looks like 
you are on the mend. Matter of fact, you look better even than 
the last time I saw you.
    Mr. Hall. I still have yet to get on a horse, though.
    Senator Hoeven. Oh, well, you had better. I am counting on 
a ride together.
    Thanks to all of you for being here. We appreciate it very 
much. I am just going to follow up on something that you 
mentioned earlier, Chairman Hall, and that is in regard to the 
permitting for oil and gas development on the reservation. And 
the first would be, give me your sense of where you feel the 
Tribe is with EPA on the minor source rule. We have been 
talking to Region 8, we are determined to bring them out there. 
They have now committed to come back out. As you know, I feel 
there is real work to do here.
    Just give me an update as to where you think we are at this 
point and what your communication has been with the EPA on this 
synthetic minor source rule.
    Mr. Hall. The latest information, Senator Hoeven, we have 
is that they have only put out five permits for the Federal 
Register for public comment. So I stressed to, I think his name 
is Carl Bailey, who is the head of Air Quality at Denver, so we 
were on a conference call recently and I told Carl, I said, I 
don't think that is enough. He begged to differ, he thought 
that was enough.
    So I said, so what happens after 30 days, Carl? If somebody 
from New York objects to an oil well on our family's property 
on Fort Berthold in North Dakota, do they get another 30 days? 
He just kind of asked somebody next to him and they said, well, 
I think so.
    So there is really nothing cut and dried that says after 30 
days. We went through this with the refinery, it took us eight 
years to get a permit for the refinery. So we just feel they 
don't have enough permits in the queue in order to really, I 
think they are going to stymie development. And I don't think 
you can develop an oil and gas field, a full field. The 
Mandaree Field, the Spotted Horn Field, I don't think you can 
develop that field if you are going to do it just piecemeal, 
with five permits at a time. You are just going to develop that 
one well, and that is not a way to do oil and gas development. 
I don't think EPA understands that, and I don't think they 
care.
    Senator Hoeven. That is exactly my sense as well. And 
exactly the sense that I am getting from the oil companies. 
They are getting frustrated as well. You have done a tremendous 
job of oil and gas development on the reservation. The 
companies want to continue to come there and do business. I 
think the Tribes do an incredible job. You talked about some of 
the things that you have put in place that were needed. And 
working with the State, it has been a very good working 
relationship.
    But we absolutely need to get EPA to work with the Tribe, 
listen to the Tribe and work with you on this minor source rule 
and the permitting process. We have talked to them and we just 
feel we have to get them up there to sit down with you on the 
reservation, have a meeting and go through this.
    Mr. Hall. Carl Bailey and the director, Jim Martin have 
never been to the --
    Senator Hoeven. And they need to come. Like I say, we have 
talked to them and we are going to get them up there.
    I think the best way, I have met with them in my office, I 
think the best thing is for them to come up and sit down with 
you on the reservation to see what you are doing and really get 
down to what needs to happen. A follow-on there is the one stop 
shop. You talked about it, Senator Dorgan was involved in 
getting it set up with you and others on the reservation. But 
where are we? My understanding is that there really, there is 
some concern on your part in terms of staffing and supporting 
that one stop shop to handle the volume that you have on the 
reservation. Is that the case, and what do you think needs to 
happen?
    Mr. Hall. The one stop shop is absent, even though it was 
in the green book, Senator Hoeven. The green book said it was a 
million dollars for oil and gas development on Fort Berthold. 
We don't know where that million dollars is. So I have been 
working with the Administration trying to identify where that 
money went. Hopefully we will get an answer.
    But we just found out that Dickinson doesn't have a BLM 
director now. So we just got through the communitization 
agreement backlog and the APD backlog. Well, now the CAs are 
backlogging again because there is no director. The one stop 
shop person would have been able to coordinate all of the 
agencies, including EPA, and schedule them for these visits on 
Fort Berthold. That way, these could have been foreseen. And 
actually, some of these functions could be 638, under Public 
Law 638 to the Tribe. The Tribe could be doing some of those 
functions at BLM. But it has never been shared with us.
    So again, that one stop shop director should be on Fort 
Berthold and helping to coordinate all that, sir.
    Senator Hoeven. Did Secretary Salazar give you any 
indication when he was up several weeks ago as to what would 
happen with the one stop shop?
    Mr. Hall. He stressed it was a priority for him. And I 
think Mike Black was the, Larry Echo Hawk wasn't there, so I 
think he is going, anyway. It is actually, he has six more days 
left. But actually, Mike Black is the head of the BIA and I 
believe Karen Atkinson or Del Lavadure, who is Acting Assistant 
Secretary of Indian Affairs after six days, will be the 
responsibility.
    But it is in the Office of Indian Energy Development at BIA 
and Karen Atkinson is over that. So she is coming out to our 
oil and gas expo on May 8th and 9th. So we are hopeful that 
Karen can meet with Del, meet with Mike and give us some 
direction on what happened to the money and see if we can get a 
plan to get this implemented.
    If they don't want the Tribe to do it, do it yourself, BIA. 
We don't care. But don't just hang on to the million dollars.
    Senator Hoeven. And maybe that is the next best step. If 
not, you and I should maybe develop a letter to Secretary 
Salazar, asking specifically what they are going to do. We can 
have that meeting first at your energy expo and see where that 
goes. But we definitely need to follow up. Because that was the 
commitment, was to provide that assistance. And clearly, you 
need it with, how many wells are you up to on the reservation 
now?
    Mr. Hall. Four hundred fifty, including fee.
    Senator Hoeven. Four hundred and fifty wells. And I know 
you have applications for many, 200 more. So we are talking a 
lot of jobs and a lot of revenue for the Tribe.
    Mr. Hall. Are you coming to the expo?
    Senator Hoeven. I sure hope to be able to come, absolutely. 
Did I get invited?
    Mr. Hall. Can you speak at our expo, Mr. Senator?
    [Laughter.]
    Senator Hoeven. I would love to.
    Mr. Hall. Okay. Thank you.
    [Laughter.]
    Senator Hoeven. Good to have you here. I am going to, at 
this point, go to, Senator Franken, did you have something or 
should we go to Senator Udall first?
    Senator Franken. We should go to Senator Udall.
    Senator Hoeven. Senator Udall.

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you.
    Sorry for being a little late here. I had some other 
commitments, but I know that this has been very lively. Part of 
this question I am going to ask I think was asked by Senator 
Franken to Mike Olguin. But I would like the rest of the panel 
to address it. That question is, what additional provisions 
should the Committee add to the Barrasso-Akaka bill? Are there 
provisions from Senator Dorgan's 2010 bill we should include, 
like access to tax credits, leasing reform or Tribal funding?
    Irene, do you want to start there?
    Ms. Cuch. Yes. I believe the Ute Tribe has submitted 32 
proposals. And in there, that is our proposal to the present 
bill, the bill that Barrasso is sponsoring. That bill is asking 
for the Secretary to make funds available to take over the 
Tribes that want to take over permitting. I believe it is 
pretty much self-explanatory, that 34 proposals in there. That 
is what we would like to add to it.
    Senator Udall. Thank you.
    Ms. Cuch. I believe, Senator, the Vice Chairman Barrasso 
did say he was going to look at the 32 proposals, which we just 
to here.
    Senator Udall. Thank you.
    Mr. Finley. Our hope is that the bill moves forward. We 
realize that there may be things that get tied into other 
committees or may even stretch into other jurisdictions of 
other committees, and some may have concern over little minor 
things. For the most part, the pieces that don't cost money, 
the pieces that make sense, that aren't going to be a 
tremendous burden on the Federal Government, move forward. We 
just want movement.
    Senator Udall. Do you have any specific recommendations of 
additional?
    Mr. Finley. Well, our provision that we are championing 
doesn't cost the Federal Government any money. So I can't speak 
to the rest of it. It is a great bill, it is going to do a lot 
of good things for Indian Country. But we spent a great deal of 
resources helping develop that provision. It appeared in the 
last Congress under Dorgan's bill and it is here again. We were 
hoping there would have been movement then, there wasn't. We 
just want there to be movement today.
    Senator Udall. Tex, do you have anything to add there?
    Mr. Hall. Senator, it is in our written testimony but I can 
three just on the top of my head. One is that we need to 
clarify, under the TERA, under that section of the bill, the 
additional resources from Department of Energy need to be 
added, a budget needs to be added, because Tribes are taking on 
more responsibility. You are doing it instead of the Federal 
Government. Trust responsibility should be clarified. If there 
is a violation or dumping occurring, if Tribes don't have an 
environmental code that prohibits that kind of activity.
    Second, I think that there needs to be something in the 
bill that clarifies Tribal lands or reservation, Indian lands 
are not public lands. BLM and EPA, you can't treat us as public 
lands, because we are not. By treaty it is set aside and that 
treaty is supposed to be the supreme law of the land, according 
to our Constitution.
    Finally, I think Cotton Petroleum needs to be reviewed and 
overturned.
    Senator Udall. Thank you, Tex. Wilson, do you have anything 
to add here?
    Mr. Groen. I guess my key point would be, I like the 
provisions of S. 1684. There are some, the House Subcommittee 
on Alaskan and Indian Affairs has an amendment to 415(e) which 
I think there are some aspects of that that could be blended 
into this bill that would further enhance it.
    Senator Udall. Wilson, it is good to see you here. I would 
like to give you an opportunity to expand on your testimony 
about the Nation's proposal to do its own subsurface leasing. 
What are the benefits and how would the Nation protect its land 
and water resources?
    Mr. Groen. Thank you. We have, the Navajo Nation has a very 
extensive department that focuses on the environment, fish and 
wildlife, historic preservation. I know I interacted, long 
before I worked for Navajo Oil and Gas back in the 1980s and 
early 1990s, I interacted with these departments and they had 
very detailed provisions, oversight and regulations that we had 
to follow as an operating company from the outside. The Nation 
has these capabilities.
    So I really feel that a lot of the oversight from the BIA 
and others on this is duplicative. They are basically kind of a 
rubber stamp of all of the work. When we bring a new operating 
agreement in front of the Nation to develop additional 
resources on the Nation, we are treated, for all practical 
purposes, just like an outside for-profit company. And it goes 
through all of the departments, it goes through various 
committees of the council, it goes back then in front of the 
full council for approval. Once that is signed, that is usually 
when we pay our bonus payment to the nation for a lease bonus.
    Having said that, we can't start our activities then until 
this agreement has been approved by the Bureau of Indian 
Affairs. The most current one that, most current approved one 
was approved in October by the council and was approved by the 
Bureau of Indian Affairs in August, after much arm twisting and 
discussions. The previous one took over 400 days. This current 
one that took over nine months, we had paid out over $8 million 
in bonus fees to the Nation and over $12 million to the Nation 
in bonuses and rentals before we could drill our first well. 
These types of delays are just too onerous. Basically that's 
the reason a lot of other companies won't work on the Nation's 
lands. There's too many delays.
    Senator Udall. Thank you, and thank all the witnesses for 
their testimony. Senator Hoeven, thank you for letting me go 
over a minute or so.
    Senator Hoeven. Senator Udall, if you have anything else, 
go ahead and finish up, rather than another round, then we will 
go to Senator Franken.
    Senator Udall. Sure. I have one more question. How is your 
proposal, the one we just talked about here on subsurface 
leasing, different than the proposal being made in the 
Barrasso-Akaka legislation?
    Mr. Groen. I believe it gives a little more flexibility to 
the Nation and more independence to the Nation to move forward. 
I think there are some similarities, but it gives another 
alternative to TERA and to move it forward. That is my 
understanding.
    Senator Udall. Great, thank you very much. Thanks, Senator 
Hoeven.
    Senator Hoeven. Senator Franken?
    Senator Franken. Thank you, Senator Hoeven.
    Just a couple of questions here. On weatherization, this 
bill would allow Tribes to get direct weatherization funding 
instead of funding through the State. Weatherization has a lot 
of positive impacts, it reduces energy costs, protects the 
environment and reduces demand on power generation. Can each of 
you, whoever wants to, talk about the importance of 
weatherization funding to your Tribes and do your Tribes have 
the systems in place in order to take advantage of this new 
stream of funding?
    Mr. Olguin. Yes, at Southern Ute, we do have our own 
housing department, and they are utilizing these types of funds 
to weatherize through replacement of windows, doors, on 
multiple homes. We are actually in phase four of that program.
    Senator Franken. And it puts people to work doing that, 
too.
    Mr. Olguin. Yes.
    Senator Franken. And it saves energy. Anybody else?
    Chairman Finley, you were talking about the use of woody 
biomass. Minnesota also has a lot of woody biomass and other 
biomass. Does anyone here think that it would help, in 
Minnesota we have a renewable energy standard of 25 percent by 
2025. We are actually ahead of the game on that. If we put in, 
we have a clean energy standard that Chairman Bingaman has 
authorized. Does anyone feel that a renewable energy standard 
within a clean energy standard or a national renewable energy 
standard would help Indian Country because utilities and others 
would be wanting to use the biomass and other renewables, solar 
and wind, that is available in Indian Country?
    Mr. Finley. I think it would be a tremendous help. Probably 
for the concern I raised earlier, the inability to wheel the 
power because of the various entities, the Federal entities, 
ours being BPA, that are near full capacity on their grid. If 
there was a need or a requirement for green energy from Indian 
Tribes, a hard percentage, that would put us in the driver's 
seat, that would give us a stronger foothold to develop these 
projects.
    I think that would be more appealing to some of the outside 
entities that would like to partner with the Tribe, to come in 
on the reservation and do it.
    Senator Franken. Give them an incentive to invest.
    Mr. Finley. Correct.
    Senator Franken. To meet the renewable energy requirement 
that they have.
    Mr. Finley. Correct.
    Senator Franken. I saw, Chairman Hall, you are nodding. I 
know you have a tremendous amount of oil and gas and that is a 
great thing. Senator Hoeven, I have asked him many times to 
discover oil in Minnesota and he has yet to do it. He seems to 
refuse.
    [Laughter.]
    Senator Franken. But you do have wind.
    Mr. Hall. Oh, yes.
    Senator Franken. Would a renewable energy standard be of 
help in that regard?
    Mr. Hall. No question about it. When I think of just oil 
and gas, getting back toy our point, Senator Franken, there are 
probably 30, 40 of us, there are 565 Tribes, the super majority 
have renewable. They have wind, they have solar, they have 
wood, whatever else. They have the resources. A lot of them 
have the studies. So I certainly agree, that is an income that 
is sitting on the table not being utilized.
    Senator Franken. Chairwoman Cuch?
    Ms. Cuch. I wanted to make a comment on the weatherization 
question you asked.
    The Department of Energy weatherization program, it goes to 
the States and they have been handling it for the last 30 
years. It rarely comes to the Tribe. But it should be further 
modified so that it will work in Indian Country. We need 
Tribally-based standards and training for energy auditors. That 
is my comment.
    Senator Franken. Thank you so much for that comment.
    Yes, Mr. Vice Chairman.
    Mr. Olguin. I would like to make a comment here just from 
the standpoint of Southern Ute, through its business 
opportunities--not mentioning any names here--but we attempted 
to partner with another Tribe on a wind energy project. Along 
that line, when we look at the Federal rules and regulations, 
it is very difficult for certain Tribes to really enter into 
types of agreements, even with other Tribes. It diminishes 
opportunities. We are here, we are available and willing to 
assist other Tribes, but when we are hitting a roadblock, those 
opportunities unfortunately fall to the wayside.
    So I see opportunities increase for Indian Country as a 
whole, where other Tribes are ready and willing to help as 
well.
    Senator Franken. Thank you, and thank you, Senator Hoeven.
    Senator Hoeven. Thank you, Senator Franken.
    One follow-up question I have before we close, and I am 
going to start with Chairman Hall, and that is hydraulic 
fracturing. Just discuss your thoughts on hydraulic fracturing. 
I know you work very closely with the State, it seems to be 
going well. EPA is doing various studies. It recently came out, 
I think yesterday or the day before, with a 600-page report in 
regard to handling methane, if it is found in the hydraulic 
fracturing process.
    So just give me a status report, Chairman, where you are 
with the hydraulic fracturing on the reservation.
    Mr. Hall. When I look at the overall numbers, over 6,000 
wells in North Dakota, over 450 wells on Fort Berthold, not one 
single incident of any contamination of any of the groundwater, 
we have deep, deep wells. We are 10,000 feet down vertically, 
up to a mile horizontally and longer, on a longer lateral. And 
the casing, the industry, I have been out to a rig, I have seen 
the hydrofracking. There are experts, there are expert 
companies that have like Schlumberger and Halliburton that have 
safety certificates hanging on their walls since the 1970s. The 
statistics are there.
    We have to have the hydrofracking in our Bakken formation 
in order to crack the shale. It is just an injection of a 
million gallons of water, sand and some chemicals. That is all 
it is. We think BLM stepped way out in front where their nose 
don't belong. They are treating us as public lands. They got 
the rule with no consultation. So they are violating their own 
policy. We don't think they have the authority, if you look at 
the Federal Land Policy Management Act of 1976 it does not give 
them the authority.
    I listened to that one guy, whatever his name was, 
Sipstack, at the House this morning, and he said he got it, he 
thought, from the 1938 Act. We looked at the 1938 Oil and Gas 
Act, it isn't there either. Actually BLM wasn't even born in 
1938. So I don't know what he is talking about. And he 
admitted, after Chairman Young got out his, all the cities, 
because he was saying that he went to Bismark, well, Bismark 
wasn't even on their list. But he was talking about Farmington, 
Tulsa, Billings, and I don't know where else.
    But there was no Tribal input. He said, well, yes, toward 
the end of the meeting we did hand out the rule, toward the end 
of the meeting. There was not one committee member that said 
that was right, both Republican or Democrat. None of them said 
that was right. That wasn't right to treat Indian lands as 
public lands. And for you to give a piece of paper at the end 
of the meeting and say, go ahead, by the way, read this, this 
is the new rule.
    The problem is at OMB. So I was on a conference call two 
days ago and they said they are embargoed to talk about it. 
They are just there to listen. I said, you aren't any good to 
us, if you are just going to listen.
    So we asked Chairman Young to do something. So they are 
looking at legislation or appropriations or something. But we 
need all the help we can get, Senator Hoeven. Everyone here 
that testified this morning is on the same page, all the 
Tribes.
    Senator Hoeven. Thank you, Chairman Hall. That is exactly 
where I was going next, is just to get comments from anyone 
else on the same issue, if you do have oil and gas on the 
reservation. Chairman Finley?
    Mr. Finley. The only well you will find on the Colville 
Reservation is a water well. So I will defer to my counterparts 
on this one.
    Senator Hoeven. All right.
    Ms. Cuch. Yes, your question is on hydraulic fracturing. 
The Ute Tribe is concerned about this, because of the pollution 
or contamination it might create with our drinking water. And 
the other problem is, there was no adequate consultation, or I 
guess you could say no consultation done with my Tribe. The 
only thing is, the closest to consultation was a meeting they 
held in Salt Lake City. I believe that is what is on their 
schedule.
    But some of our Tribal, well, he is sitting here in the 
audience, Manuel Myore, who is the Director of our Energy and 
Mineral Resource Department. He went to that meeting. He said 
as far as he could see, there was no consultation, just only 
discussion at that meeting.
    Senator Hoeven. Thank you. President Groen, your thoughts 
on the matter?
    Mr. Groen. Very similar to what has already been spoken by 
Chairman Hall and Vice Chair Olguin. We have new play potential 
on the Nation. We have a new resource play that is being 
developed. These new rules could easily set this play back 
significantly. So we much appreciate the comments that were 
made and we strongly feel that there has to be real 
consultation with the Tribe. I cannot officially speak for the 
Nation itself, but I know they have very similar feelings and 
concerns.
    Senator Hoeven. Thank you, I agree. I think it is very 
important that there be a consultation.
    Vice Chairman Olguin?
    Mr. Olguin. Yes, from Southern Ute's standpoint, we have 
been in the gas and oil industry business there for several 
decades, probably as early as the early 1950s. We have over 
3,000 wells on Southern Ute reservation and probably over 90 
percent of those have been fracked.
    We are currently at the point where we are looking at the 
horizontal drilling. We have never had experience that we are 
aware of where we have had issue with the fracking.
    Senator Hoeven. And this goes back how long, did you say?
    Mr. Olguin. Back to the 1950s.
    And along that line, there are many rules, regulations that 
the Tribe itself imposes. An example of that is cementing to 
the surface as far as the seal, versus requiring cement bond 
logs on every well. So definitely the concern with the fracking 
on the rule and regs, there are the costs again. And the rule 
imposes a definite threat to the economy in the southwest 
there, as well, as we are on the State line. A lot of the 
service providers do come from New Mexico. So we do serve the 
Four Corners region from an economic standpoint.
    Plus when we look at the opportunity, even with the 1684 
TERA opportunity here again, get the Federal system out of the 
Tribal business opportunities and in essence, get them out of 
the way.
    Senator Hoeven. I want to thank all of you for coming today 
and for your testimony. I think you really demonstrated not 
only a lot of knowledge but a lot of work on issues that are 
very important. I always go back to, job creation is job one. 
And this discussion has been about energy, but it really goes 
to job creation, which is so important to the future of your 
respective Tribes.
    So thank you for your good work. Thank you for being here. 
In closing, I want to remind everyone, the witnesses and any 
other interested parties, that the hearing record will be open 
for two additional weeks. So additional comments may be 
submitted.
    Again thanks to all of you for coming today. We truly 
appreciate it. And this hearing is adjourned.
    [Whereupon, at 3:44 p.m., the Committee was adjourned.]

                            A P P E N D I X

                 Prepared Statement of the Crow Nation

I. Introduction
    The Crow Nation welcomes this opportunity to provide comments on S. 
1684, the Indian Tribal Energy Development and Self-Determination Act 
Amendments of 2011. The Crow Nation is a sovereign government located 
in southeastern Montana. The Crow Nation occupies a reservation of 
approximately 2.2 million acres, with abundant natural resources 
including coal, oil, natural gas, and bentonite. We also are also 
actively working to develop hydropower and wind power projects 
utilizing renewable energy resources. The Crow Nation is uniquely 
positioned to contribute to the energy independence of our country.
    We are encouraged to see the Committee working to address a number 
of the issues that impact energy development opportunities in Indian 
Country. Eliminating obstacles to energy project development and 
empowering tribes to regulate development on their own reservations, 
along with providing incentives to secure and expand Indian energy 
projects, will build additional capacity to create more jobs in the 
national economy. We must work together to address the barriers that 
currently limit project development in order to fully realize the 
potential for energy development that exists in Indian Country, and for 
the nation.
    We believe that S. 1684 makes significant strides encouraging 
energy project development in Indian Country. Based on our experiences 
working with industry partners in the coal, oil, and natural gas 
extraction industries, we will also suggest additional provisions that 
would further promote this objective, and that would expand the impact 
of S. 1684 in addressing longstanding disparities in energy project 
development.

II. Comments on Existing Provisions in S. 1684
    The current provisions of S. 1684 are all pointed in the right 
direction to eliminate obstacles to Tribal energy development and to 
facilitate efforts by Indian Tribes to control their own energy 
development.
    In particular, the amendments to the 2005 Act's Tribal Energy 
Resource Agreement (TERA) statutes go a long ways toward making it 
possible for Tribes to take advantage of the authorization to approve 
their own energy development agreements and associated rights-of-way 
pursuant to an approved TERA. The time limits on approval by the 
Secretary of the Interior help assure that a TERA application will not 
languish for years due to staff shortages, or sheer inertia, within the 
Bureau of Indian Affairs. Providing Tribes with clear timeframes for 
TERA application processing should only serve to encourage tribal 
participation.
    The additional criterion for determining whether the tribe has 
sufficient capacity to regulate--based on its operation of programs 
under the Indian Self-Determination and Education Assistance Act for 
three consecutive years--should greatly facilitate what could otherwise 
be a complex and uncertain TERA approval process. The Crow Nation, and 
undoubtedly many other energy Tribes, have long histories of successful 
administration of P.L. 93-638 contracts and grants. We agree with the 
author and sponsors of S. 1684 that proficient consistent 
implementation of 638 contracts do, in fact, demonstrate a Tribe's 
capacity to implement a TERA. There is no need to put tribes through 
the time and resources to demonstrate capacity, nor to spend limited 
federal resources evaluating tribal capacity needlessly.
    Further, the amendments providing for certification of ``tribal 
energy development organizations'' provide an important alternative 
route for tribes to approve their own energy development agreements, 
when the tribe maintains majority control of the organization. The Crow 
Tribe has formed such an organization, Apsaalooke Energy Company, LLC, 
under its own limited liability company act. Financial and other 
constraints have thus far severely limited our ability to maintain 
majority control of projects, when all the investment dollars are 
furnished by the outside developer. However, the potential advantages 
of operating a project through a tribal energy development 
organization, as afforded by the amendments in S. 1684, may also help 
facilitate that goal.
    The funding mechanism included in the S. 1684 amendments assures 
tribes that at least some of their efforts in regulating their own 
resources will be paid for by funds that would other be expended by 
federal agencies in carrying out their trust responsibilities. Whether 
this approach truly makes tribes whole will depend to a large extent on 
the scope and clarity of the Secretary's regulations promulgated under 
the Act. In any event, additional funding is needed for tribes to 
create, expand or improve some tribal regulatory structures before 
undertaking new responsibilities under a TERA.
    Finally, we appreciate that S. 1684 includes clarifying provisions 
that expressly maintain the United States' responsibility for losses 
not resulting from negotiated terms. Ultimately, Crow Nation's ability 
to apply for a TERA or certification will depend on a consensus that 
the advantages are more than offset by any risks of future 
uncompensated losses that could threaten the tribes' long-term 
financial viability.
    Apart from the TERA amendments, the other existing provisions of S. 
1684 are also positive steps in eliminating barriers to Indian energy 
development and enhancing tribal self-determination. The amendments to 
the Federal Power Act would place tribes on an equal footing with 
states and municipalities in terms of preferences for FERC hydropower 
licenses. For the Crow Nation, the amendments supplement the exclusive 
rights to develop and market hydropower on the Yellowtail Afterbay Dam 
recognized in the 2010 Crow Tribe Water Rights Settlement Act (Pub. L. 
11-291). The Nation is actively pursuing this hydropower development 
project to complement our portfolio of nonrenewable energy development 
projects. The amendments to provide weatherization assistance funding 
directly to tribes, rather than through the states, also recognizes the 
status of sovereign tribal governments.

III. Recommendations for Additional Provisions

A. BLM Oil and Gas Fees
    In order to address a long-standing concern of the Crow Nation, the 
Senate bill should include language prohibiting collection of any fee 
by the Secretary of Interior, through the Bureau of Land Management, 
for any application for a permit to drill oil and gas wells on Indian 
land.
    Beginning with the FY 2008 Appropriations Act for the Department of 
Interior, Congress required the Bureau of Land Management to charge a 
$4,000 fee to process every Application for Permit to Drill (APD) on 
the federal lands, which BLM has also applied to Indian lands on which 
it supervises oil and gas development activity. The APD Fee has since 
been increased by subsequent appropriations legislation to $6,500 for 
each new well. The Crow Nation has continually protested the 
application of this fee to tribal lands, and has sought relief in 
numerous ways.
    This $6,500 fee compares to drilling permit fees of less than $100 
off the Reservation in the State of Montana. Obviously, this creates a 
disincentive to explore for oil and gas on Indian lands compared to 
off-reservation State and fee lands. It has been a major factor in the 
suspension of additional natural gas field exploration and development 
on the Crow Reservation. The APD fee is a particular burden for the 
type of shallow (less than 1500' deep), low-producing gas wells on the 
Crow Reservation. The cost of completing these types of wells--and the 
gas production volume--is quite low, so the APD Fee substantially 
increases the capital investment necessary to bring additional wells 
into production.
    The APD Fee also discourages efficient development and slows 
exploration efforts. For exploratory ``wildcat'' drilling where success 
is speculative, the developer can only afford to get permits for a 
couple of wells at a time, see if they hit gas, and if so, file APDs 
for another couple of wells, and repeat the cycle. Without the high APD 
Fee, the developer would be able to obtain many permits and immediately 
drill additional wells if the first ones are successful. Considering 
the lead time for issuance of the drilling permits (more than 90 days), 
the APD fee causes delays of up to a year in developing a handful of 
new wildcat wells, in addition to adding tens of thousands of dollars 
of non-productive costs that limit the Crow Nation's ability to charge 
taxes and collect royalties on future oil and natural gas production.
    Language eliminating the collection of APD fees on Indian lands 
will eliminate the disparity that currently exists between drilling on 
Crow lands and drilling on adjacent State fee lands. Such a provision 
will enable expanded and more efficient oil and gas development on the 
Crow Reservation, and conform to our longstanding belief that Indian 
lands should not be treated the same as federal ``public lands.'' This 
additional language would also be consistent with the amendment in 
Section 101 of the Bill that requires the BLM to consult with tribes 
with respect to well spacing decisions.

B. Leases of Restricted Lands
    The Crow Nation seeks authority to lease surface rights for not 
more than 99 years by being added to the long list of tribes in 25 USC 
415 (a). Having the authority to provide longer term surface leases 
will allow the Crow Nation to more effectively attract energy partners 
considering costly, long-term equipment installations, such coal-to-
liquids plants or other clean coal conversion facilities.

C. Certainty in Tax Incentives
    There are several current federal tax incentives for economic 
development in Indian Country, including an accelerated depreciation 
provision, an Indian wage tax credit, and for energy in particular, the 
Indian Coal Production Tax Credit.
    Each of these tax incentives has substantial limitations 
restricting their usefulness for major Tribal energy development 
projects. More importantly, however, all of these tax incentives are 
set to expire at the end of this year, and in the past they have been 
extended only one year at a time. For major Tribal energy projects, 
such as a coal mine or a coal conversion project with 6-10 year 
development lead times, the inability to rely on the continued 
availability of these incentives means that they cannot be factored 
into the economic evaluations that are necessary for investment 
decisions. Permanent extensions and appropriate modifications to these 
existing tax incentives will facilitate job creation and economic 
development, particularly in energy development, on the Crow 
Reservation and for all of Indian Country.

1. Indian Coal Production Tax Credit
    The Crow Nation has leased a portion of its coal reserves for 38 
continuous years to Westmoreland Resources Inc (WRI). WRI owns and 
operates the Absaloka Mine, a 15,000-acre single pit surface coal mine 
complex on the northern border of the Crow Reservation. The Absaloka 
Mine was expressly developed to supply Powder River Basin coal to 
Midwestern utilities and has produced over 170 million tons of coal to 
date. WRI annually pays substantial production taxes and coal royalties 
to the Crow Nation: $9.9 million of taxes and $9.1 million in royalties 
were paid to the Crow Nation in 2010. A major portion of the Crow 
Nation's non-federal budget, approximately two-thirds, comes from 
Absaloka Mine coal revenues. Additionally, WRI employs a 70 percent 
tribal workforce, with an average annual salary of over $62,000, and 
averages a total annual employment expense of approximately $16 
million. The Absaloka Mine is the largest private employer of Crow 
Tribal members on the Crow Reservation, where the unemployment rate 
exceeds 47 percent. The importance of the Absaloka Mine to the economy 
of the Crow Reservation cannot be overstated. Without question, the 
Absaloka Mine is critical to the Crow Nation's financial independence 
now, over the past 38 years, and well into the future.
    Several factors have contributed to the longevity of the Absaloka 
Mine and the partnership between the Crow Nation and WRI, but a 
critical element in keeping the Absaloka Mine in operation has been the 
Indian Coal Production Tax Credit (ICPTC).
    The 2005 Energy Policy Act authorized the ICPTC beginning in tax 
year 2006, based upon the number of tons of Indian coal produced and 
sold to an unrelated party. ``Indian coal'' is coal produced from 
reserves owned by an Indian Tribe, or held in trust by the United 
States for the benefit of an Indian Tribe, as of June 14, 2005, from 
facilities placed in service before January 1, 2009. The tax credit is 
calculated by totaling the number of tons of Indian coal produced and 
sold, then multiplying that number by $1.50 (for calendar years 2006 
through 2010). For tax years between 2010 and December 31, 2012, the 
total number is multiplied by $2.00.
    The origin of this production tax credit was an effort to 
neutralize the impact of price differentials created by sulfur dioxide 
(SO2) emissions allowances, thereby keeping Indian coal competitive in 
the regional market. Without the credit, the Absaloka Mine would have 
lost some of its supply major coal supply contracts and would likely 
have closed in 2005, which would have had a devastating impact on the 
Nation. The ICPTC has worked to keep the Absaloka mine competitive and 
open, as it struggles to compete with much larger Powder River Basin 
coal mines producing federal coal. This tax credit remains critically 
important because, without it, the Absaloka Mine's economic viability 
would be in serious jeopardy. Continuation of the ICPTC will also 
provide an important incentive to help us attract additional investment 
for future energy projects utilizing our vast coal resources, estimated 
at 9 billion tons.
    In order to protect existing operations and encourage growth, the 
ICPTC (a) should be made permanent, (b) should be allowed to be used 
against alternative minimum tax, (c) the ``placed in service'' date 
should be extended by at least 15 years (from 2009), and (d) the 
requirement that the coal be sold to an unrelated person should be 
deleted to allow and encourage mine-mouth conversion projects and 
facilities owned, in whole or in part, by Indian Nations to participate 
and benefit from the credit.
    The continued operation of the mine has been significantly 
facilitated by the tax benefits made possible by the ICPTC. Without the 
ICPTC, the Absaloka Mine would likely have ceased to operate, thereby 
ending a major revenue and employment source for the Crow Nation. 
Continuance of the ICPTC is critical to the future of the Absaloka Mine 
and to attract new investment for developing other Crow coal resources.

2. Accelerated Depreciation Allowance
    Included in the Omnibus Budget Reconciliation Act of 1993, Pub. L. 
103-66, 107 Stat. 558-63, codified at 26 U.S.C. 168(j), 38(b), and 
45(A), are two Indian reservation-based Federal tax incentives designed 
to increase investment and employment on Indian lands. The theory 
behind these incentives was that they would act in tandem to encourage 
private sector investment and economic activity on Indian lands across 
the United States. Neither incentive is available for gaming-related 
infrastructure or activities. The incentives--an accelerated 
depreciation allowance for ``qualified property'' placed in service on 
an Indian reservation and an Indian employment credit to employers that 
hire ``qualified employees''--expired on December 31, 2003, and have 
been included in the short-term ``extenders packages'' of expiring 
incentives since that time.
    Energy projects require significant equipment and physical 
infrastructure, and involve the hiring of large numbers of employees. 
Crow is not alone in holding vast untapped natural resources; for 
several Indian nations, estimates of proven and undeveloped energy 
resources on Indian lands suggest that revenues to tribal owners would 
exceed tens of billions in current dollars.
    Unfortunately, one-year or two-year extensions of the accelerated-
depreciation provision do not provide an incentive for investment of 
new capital in Indian country for significant energy projects. 
Development of major projects generally takes a decade or longer. 
Investors need certainty that the benefit will be available when the 
project initiates operations in order to factor that benefit into their 
economic models and investment decisions. A permanent extension would 
address this problem, making the incentive attractive to investors for 
long-term energy projects on Indian lands.
    As currently written, the depreciation allowance could be 
interpreted to exclude certain types of infrastructure related to 
energy resource production, generation, transportation, transmission, 
distribution and even carbon sequestration activities. We recommend 
that language be inserted to statutorily clarify that this type of 
physical infrastructure expressly qualifies for the accelerated 
depreciation provision. In proposing this clarification, it is not our 
objective to eliminate non-energy activities that might benefit from 
the depreciation allowance and, if adopted, the language we propose 
would still encourage other forms of economic development in Indian 
country.
    By providing clarifying language and this permanent extension, the 
accelerated depreciation provision will finally accomplish its 
purpose--enhancing the ability of Indian nations to attract energy 
industry partners to develop long-term projects utilizing the available 
Indian resources.

3. Indian Employment Wage Credit
    The 1993 Act also included an ``Indian employment wage credit'' 
with a cap not to exceed twenty percent (20 percent) of the excess of 
qualified wages and health insurance costs that an employer pays or 
incurs. ``Qualified employees'' are defined as enrolled members of an 
Indian tribe or the spouse of an enrolled member of an Indian tribe, 
where substantially all of the services performed during the period of 
employment are performed within an Indian reservation, and the 
principal residence of such employee while performing such services is 
on or near the reservation in which the services are to be performed. 
See 26 U.S.C. 45(c)(1)(A)-(C). The employee will not be treated as a 
``qualified employee'' if the total amount of annual employee 
compensation exceeds $35,000.
    As written, the wage tax credit does not attract private-sector 
investment in energy projects within Indian country. The provision is 
too complicated, the wage ceiling is too low for good energy sector 
jobs, and private entities conclude that the cost and effort of 
calculating the credit outweighs any benefit that it may provide. We 
therefore propose that the wage and health credit be revised along the 
lines of the much-heralded Work Opportunity Tax Credit, which is less 
complicated and more likely to be used by the business community. We 
propose retaining the prohibition contained in the existing wage and 
health credit against terminating and rehiring an employee and propose 
to alter the definition of the term ``Indian Reservation'' to capture 
legitimate opportunities for employing tribal members who live on their 
reservations, even though the actual business activity may be off-
reservation. These amendments would allow the Indian Employment Wage 
Credit to more effectively fulfill the purpose for which it was 
originally enacted.

4. Alternative Fuel Excise Tax Credit
    Several coal-to-liquids (CTL) projects have been announced in the 
United States. However, all of these projects are struggling due to the 
high financial commitment needed to plan and implement these projects 
in an uncertain economic and energy policy environment.
    The Crow Nation's Many Stars CTL Project has not been immune from 
these challenges. Although progress on Many Stars has been suspended 
while we seek a new industry sponsor for the project, the Crow Nation 
remains committed to development of a major clean coal conversion 
facility as the best way to monetize our very large coal resource base 
over the long term. Among other potential actions that the federal 
government could take to encourage the development of new technology in 
this area, the extension of the Alternative Fuel Excise Tax Credit is 
critical.
    The current Alternative Fuel Excise Tax Credit provides for a 50-
cent per gallon credit. We would propose to extend the expiration of 
the tax credit for a definitive time period, rather than year-to-year 
extensions as has been done recently. Since it could take roughly 6-10 
years for a CTL project to be fully planned, implemented, and 
operational, investors cannot count on incentives that will expire 
before the plant starts operation. An addition to S. 1684 should 
address this concern by providing the tax credit for a period of at 
least 10 years following start-up for those projects that utilize 
Indian coal as defined in the ICPTC provisions.

IV. Conclusion
    It is critical that Congress act to protect Indian nations' 
sovereignty over their natural resources and secure Indian nations as 
the primary governing entity over their own homelands. This will have 
numerous benefits for the local communities as well as the Federal 
Government.
    The Crow Nation aspires to develop its vast coal and other natural 
resources not only for itself, but to assist the United States realize 
the long-sought goals of achieving energy independence, securing a 
stable domestic supply of energy, and protecting national security. 
These goals are consistent with the provisions in S. 1684, and can be 
furthered by the additional provisions we suggest adding to the Bill.
    Thank you for the opportunity to provide these comments and to 
suggest additional measures to encourage energy development and self-
determination in Indian Country.
                                 ______
                                 
  Prepared Statement of Hon. Randy King, Chairman, Shinnecock Indian 
                                 Nation

    Good afternoon Chairman Akaka, Vice Chairman Barrasso, and Members 
of the Committee on Indian Affairs. My name is Randy King. I am the 
Chairman of the Shinnecock Nation Board of Trustees. Thank you for the 
opportunity to testify on S. 1684, the ``Indian Tribal Energy 
Development and Self-Determination Act Amendments of 2011.'' The 
Shinnecock Nation supports S. 1684, but asks that existing sections be 
strengthened and additional provisions be added to increase renewable 
energy and energy management opportunities for Indian tribes.

I. Introduction
    The Shinnecock Nation's Reservation is located within the 
geographic boundaries of Suffolk County, New York--on Long Island. The 
Nation has maintained its existence on Long Island as a self-governing 
nation with a land base that it has exercised jurisdiction over since 
time immemorial. Despite this long history, the Nation was only 
recently acknowledged by the federal government. Federal 
acknowledgement opens up new opportunities for the Nation to provide 
for the critical needs of its communities, including implementation of 
energy development and efficiency measures.
    Our Nation is facing impacts from climate change, growing energy 
costs, and the need to provide jobs for tribal members. In order to 
provide long-term economic opportunities for our people, protect our 
Reservation homelands, and address the imminent challenges of climate 
change, the Nation must plan for its energy future. We have already 
begun by working to partner with local organizations, including 
exploration of a potential partnership with Stony Brook University, to 
develop and implement renewable energy projects that will benefit both 
the Nation and the surrounding communities. We also plan to utilize 
federal programs and grants to examine and support options for energy 
self-sufficiency, and economic development, including job training for 
tribal members, as well as energy efficiency programs.
    Because the Nation's Reservation is geographically limited and 
surrounded on three sides by water, we have an acute sense of the 
growing threat of climate change and the need to plan for our energy 
future. The Nation's energy planning includes developing sustainable 
energy projects that will serve the immediate needs of the Nation, and 
longer term adaptive measures that will be needed in the face of 
climate change impacts over time. Energy independence will play a 
critical role in meeting these challenges. In order to be self-
sufficient and sustainable as a Nation, the Shinnecock people will need 
to have sound reliable sources of energy. This includes not just 
generation resources, but also energy efficiency and weatherization 
measures that will help the Nation control energy costs and limit 
carbon emissions for itself and its members.
    Environmentally sound energy development and the promotion of 
tribal energy sustainability would dramatically and positively impact 
the Shinnecock tribal economy by creating revenue through the sales of 
clean energy and, potentially, carbon credits, into the regional 
economy. Our effort to gain energy independence would promote the long-
term security of our communities, provide a major regional economic 
boost, and provide a test-case in clean energy development that can 
assist the Department of the Interior (DOI), the Department of Energy 
(DOE), and other tribal communities seeking examples of successful 
tribal energy management and renewable energy development.
    As an example, he Nation is currently exploring options for a 
potential partnership with Stony Brook University's Southampton Campus 
to develop clean renewable energy sources such as a hydrokinetic 
project. This potential project would allow a research facility to be 
put in place off the coast of the Nation's Reservation. Tribal members 
and the University would be able to gain practical engineering 
experience and electric market experience in the development of the 
project. Hydrokinetic power offers a clean reliable domestic source of 
energy that could have far reaching benefits not only for the 
Shinnecock Nation, but for all coastal communities.

II. Specific Comments on S. 1684
    The Nation supports the Committee's interest in promoting Indian 
energy development, and generally support's Senator Barrasso's Indian 
energy bill, S. 1684. Promoting Indian energy and tribal management of 
energy resources is consistent with the Nation's energy planning and 
goals described above. S. 1684 makes some important changes to existing 
laws, but much more is needed. In addition to strengthening what is 
already in S. 1684, the Nation requests that the Committee include 
additional measures needed to promote renewable energy development and 
overcome barriers to Indian energy development.

A. Indian Energy Loan Guarantees
    Section 101 of S. 1684 would require the Secretary of Energy to 
develop regulations for an Indian Energy Loan Guarantee Program that 
was originally authorized in 2005 but which was never implemented. We 
believe that requiring the Secretary to develop regulations would be 
helpful, but more is needed. The law also needs to be changed to 
require the Secretary of Energy to provide these loan guarantees so 
that Indian tribes can benefit from loan guarantees the same as other 
energy developers. Changing this law would help tribes overcome one of 
the major obstacles to Indian energy development--project financing.
    Under current law, the Secretary ``may'' provide loan guarantees to 
Indian tribes. This program needs to be made mandatory so that Indian 
tribes can received the same loan guarantees currently provided to 
other energy developers through the Energy Innovations Loan Guarantee 
Program. The Energy Innovations Loan Guarantee Program was authorized 
by Title XVII of the Energy Policy Act of 2005. The Secretary was 
required to implement the program under Title XVII and the law should 
be changed to require the Secretary to implement the program under 
Title V.
    Indian energy projects are innovative projects that are providing 
energy to generally underserved communities. These projects would bring 
economic and energy security to our communities while advancing 
national interests in increased domestic energy production. The 
Shinnecock Nation's energy plans to develop hydrokinetic, distributed 
energy and community transmission projects deserve the same support as 
the support provided by the Title XVII program.
    Although the DOE stated that its Title XVII program is available to 
Indian tribes, the lack of tribal applicants and loan guarantees 
successfully awarded to tribes demonstrates that the Title XVII program 
is not a tribal program. The Title V Indian Energy Loan Guarantee 
program is needed to address issues specific to Indian Country. First, 
the loan guarantees need to be marketed to tribes. Second, tribal 
applications should not have to compete with national energy developers 
who have decades of experience in the energy industry. And, third, the 
loan guarantees should be provided to tribes on terms that will work in 
Indian Country.

B. Tribal Energy Resource Agreements
    Section 103 of S. 1684 would make changes to the existing Tribal 
Energy Resource Agreement (TERA) to increase tribal interest in the 
program. In general, the TERA program provides a process for Indian 
tribes to apply and potentially gain authority to approve leases, 
business agreements, and rights-of-way for energy development or 
transmission on their lands without Secretarial review. The changes 
proposed in S. 1684 would make the application process more certain and 
provide an alternative route for a tribe to obtain limited TERA 
authority.
    While these are useful changes, the benefits of TERA authority seem 
limited to those tribes who are likely to be entering into many leases, 
business agreements and rights-of-way. It is not clear to us that 
tribes who may only enter into a handful of energy agreements would 
gain any benefit for the expense of going through the TERA application 
process. We propose additional changes that would benefit more tribes 
interested in energy development.
    As you know, TERA was enacted to promote tribal self-determination 
in the development and management of Indian energy resources. TERA does 
this by focusing on the lease and agreement approval process. This is 
only half of the problem. In addition to the authority to approve our 
own energy agreements, tribes need the exclusive authority to tax and 
exercise jurisdiction over energy projects. Without these two important 
elements of governmental authority, tribes are being asked to take over 
more governmental responsibilities with one hand tied behind our back.
    To really provide Indian energy self-determination and encourage 
Indian energy development we need Congress to affirm that Indian tribes 
have the same authorities that other governments use to support energy 
and economic development. First, we need to clarify that Indian tribes 
retain their inherent sovereign authority and jurisdiction over any 
energy rights-of-way they have granted. Over the last 30 years, 
jurisdiction over rights-of-way has been treated differently by various 
federal courts. Each time an issue arises, another federal court 
undertakes a new examination. This leads to uncertainty in the law and 
a lack of dependability about the rules that apply on a right-of-way. 
This hinders our ability to develop energy resources because all 
parties need certainty in the law.
    Second, the law should be clarified to ensure that tribes can raise 
needed tax revenues to support and oversee energy development. 
Currently, federal courts allow other governments to tax energy 
development on Indian lands even though these other governments may not 
provide services to the tribal community. This limits and even prevents 
tribes from earning tax revenues from development on our lands. Without 
tax revenues, tribal infrastructure, law enforcement, and other 
services cannot keep up with the burdens imposed by energy development, 
and we remain dependent upon funding from the Federal Government.
    Third, even more streamlined opportunities should be available for 
tribes to gain control over energy permitting within their 
jurisdictions. For example, similar to the Clean Water Act and Clean 
Air Act treatment-as-a-state programs, and energy permitting program 
could be developed to allow either DOE or DOI to certify tribal energy 
programs that could then issue tribal approvals for projects within the 
jurisdiction of the tribe. Another option would be a list of projects 
or a checklist of project components where if a project description 
meets the majority of the provisions in the checklist the project would 
be considered ministerial or qualify for a categorical exemption from 
review under the National Environmental Policy Act.

C. Hydroelectric Preliminary Permits and Licenses
    We support Section 201 of S. 1684 which would provide us with the 
same preference that states and municipalities have over private 
applicants for hydroelectric preliminary permits or licenses. As with 
taxing and jurisdictional authority described above, tribal governments 
should have the same preferences as state and municipal governments in 
the development of our water supplies. However, subsection 201(b) 
should be deleted from S. 1684. This subsection is intended to protect 
previously issued preliminary permits and original licenses that had 
been accepted for filing. This subsection unnecessarily limits the 
tribal preference and restricts competition.
    Subsection 201(b) is not needed because existing law, 16 U.S.C.  
800(a), already provides protection for previously issued preliminary 
permits. Section 800(a) provides that governments only receive this 
preference ``where no preliminary permit has been issued.'' 
Consequently, there is no reason to include an extra limitation on 
tribal applications for preliminary permits.
    Subsection 201(b) also restricts competition for licenses contrary 
to prior Congressional intent. In Section 16 U.S.C.  808, Congress 
recognizes and provides a process for competing license applications. 
Subsection 201(b) should not override this existing law and policy. In 
Section 808, Congress encourages competition for licenses and provides 
standards to ensure the best development of public waterways. The 
proposed changes in subsection 201(b) would limit competition and 
result in water projects that are not the best available for tribal and 
public waterways.

D. Weatherization Program
    We support the changes proposed in Section 203 of S. 1684, but the 
changes do not go far enough to make weatherization programs work in 
Indian Country. Section 203 would provide tribes with the ability to 
apply for direct access to weatherization funding. This authority 
should have been provided long ago. Under current law, Indian tribes 
are supposed to receive federal weatherization funding through state 
programs funded by DOE. Not only is this a violation of the federal 
government's government-to-government relationship with Indian tribes, 
but distribution through state programs also severely limits the amount 
of funding tribes receive.
    Instead, DOE should be required to establish a tribal set-aside and 
develop a weatherization program that will work in Indian Country. A 
tribal set-aside is needed to ensure that a portion of the 
approximately $50 million per year that is devoted to weatherization 
assistance gets to Indian tribes and their members. The weatherization 
program is intended for low-income households and should go to those 
who need it most. On Indian reservations poverty rates are 2 to 3 times 
higher than national averages.
    In addition, Section 203 should include changes that will allow 
tribes to put weatherization funding to work. Without standards and 
training that are appropriate to Indian country, many Indian tribes 
will still not be able to utilize weatherization funds. Training is 
needed for energy auditors in Indian Country and weatherization 
standards need to be adjusted to reflect the status of housing in much 
of Indian Country. For more than three decades, DOE has overlooked 
weatherization needs of Indian tribes and the program should be 
adjusted to reflect the unique challenges tribes face.

III. Additional Measures Needed
    The Shinnecock Nation also asks that additional provisions be added 
to S. 1684 to increase renewable energy and energy management 
opportunities for Indian tribes.

A. Land Into Trust
    We believe the need for energy security and a sound domestic energy 
supply justifies a clean Carcieri fix as well as an expedited fee to 
trust process for tribal energy projects. As a newly acknowledged 
tribe, the Shinnecock Nation needs support for the land into trust 
process for many of our activities including energy development. We 
believe resolving the Carcieri problem through adoption of a Carcieri 
fix will significantly assist tribal nations in moving forward with 
social welfare and economic development projects such as new more 
efficient housing and renewable energy projects.
    For example, the Nation has an opportunity to purchase a number of 
tracts of land on eastern Long Island that could be utilized for the 
development of a solar power facility that would bring clean and 
reliable energy to Long Island. Currently, there are transmission 
constraints on Long Island that have impacted the ability for the 
eastern end of the Island to have reliable power. The Nation's plan to 
acquire the lands and develop a solar facility on eastern Long Island 
would help meet New York State's renewable portfolio standard and also 
provide local power without the constraints of wheeling power from 
other areas which would promote the reliability of electricity for the 
Nation and Long Island.
    This potential project is also consistent with Governor Cuomo's 
Energy Highway concept as it creates new clean sources of power to meet 
the needs of Downstate New York, while providing skilled jobs for 
tribal members and revenue for the Nation. This project will provide an 
opportunity for the Nation to work cooperative with the local 
governments for the benefit of both the Nation and the Long Island 
community generally.
    However, in order to move forward with the proposed solar project, 
the Nation will need to acquire the land and have it placed into trust. 
The Nation recommends that the Committee seek passage of a clean 
Carcieri fix and develop legislation that would require the DOI to 
expedite fee to trust applications for tribal energy projects.

B. DOE Support for Hydrokinetic Projects
    Committee member Senator Murkowski has introduced an important 
bill, S. 630, which will improve marine and hydrokinetic renewable 
energy research and development. However, the bill should include 
Indian tribes and Alaska Natives as eligible entities for grant funds 
to implement hydrokinetic test facilities. Currently, the bill does 
not.
    The Nation requests that the Committee include the provisions of S. 
630, and include tribes in those provisions, in S. 1684. In the 
alternative, if the Senate plans to move S. 630 on its own or part of a 
larger national energy bill, the Nation asks that the Committee and 
Senator Murkowski ensure that Indian tribes and Alaska Natives are 
included in the list of eligible entities. The Nation is seeking an 
equal opportunity to apply for such funding and participate with other 
entities on Long Island as an equal partner for implementation of a 
hydrokinetic project.

C. Distributed Energy and Community Transmission
    The Nation asks that the Committee include provisions in S. 1684 
that would support distributed energy and community transmission 
projects in Indian Country. In the Indian Energy Parity Act of 2010, 
former Senator Dorgan included a demonstration project that would 
provide just this kind of support. Senator Dorgan's provision directed 
the Secretary of Energy to conduct no fewer than 10 distributed energy 
demonstration projects to increase the energy resources available to 
Indian and Alaska Native homes, communities, and government buildings. 
Priority is given to projects that reduce or stabilize energy costs 
among other things.
    Support for distributed energy and community transmission would 
help the Nation achieve energy independence and increase our energy 
security. While we have access to the traditional energy grid, supplies 
are geographically constrained. This is not unlike other tribes who are 
not connected to the traditional energy grid or have limited access. 
Currently, there are no existing federal programs that assist tribes in 
this situation.

D. Tribal Authority Over Energy Approval Processes
    The Nation asks that Committee consider exempting energy projects 
in Indian country from some DOI approvals, or allowing tribes to take 
over certain approval processes. While the TERA program from the 2005 
Energy Policy Act already allows tribes to do much of this, the TERA 
program requires tribes to take over most or all of the permitting. 
Very few tribes have the resources to completely take over energy 
permitting.
    Instead, the Nation asks that the Committee recognize that every 
tribe is at a different place in its capacity to oversee energy 
projects and alternatives should be available for tribes to take over 
some DOI approvals, but not necessarily the entire energy permitting 
process. The Committee should consider exempting or allowing tribes to 
take over approval processes for appraisals, leases, rights-of-way, 
environmental reviews, and any other discrete parts of the energy 
development process. Having these options available will allow tribes 
to develop energy expertise and permitting capacity in manageable 
steps.

E. Inclusion of Tribes in Offshore Energy Projects
    The Nation aspires to make President Barack Obama's Executive Order 
No. 13547, ``Stewardship of the Ocean, Our Coasts and the Great Lakes'' 
a reality. We plan to examine our opportunities for development of 
ocean energy technology, which will be a monumental step towards energy 
security and conservation for the entire Northeast Region. In order to 
be successful in this pursuit, the Nation will need to have the ability 
to permit such facilities, and have access to federal programs and 
funds that promote the development of offshore energy projects.
    The Executive Order contemplates direct participation by tribal 
officials in the promotion of this policy, as well as tribal 
collaboration with state and Federal officials, with the goal of 
developing and implementing regional coastal and marine spatial 
planning that includes assessment and consideration of offshore 
renewable energy technologies.
    The Nation asks that the Committee help to make sure that tribes 
are included in programs and legislation supporting offshore energy 
projects. The Nation intends to participate in the process and pursue 
the potential for clean renewable ocean energy development; including 
both the aforementioned hydrokinetic project, as well as examining the 
potential for offshore wind projects.

F. Renewable Energy Tax Credits
    The Nation and many other tribes need to be able to take advantage 
of renewable energy tax credits. These tax credits are essential to 
financing renewable energy projects and lowering the cost of the energy 
produced. Tribes need to be able to monetize these tax credits or share 
them with a private energy partner. Without the ability to utilize 
renewable energy tax credits tribes will continue to be priced out of 
the renewable energy market.

G. Energy Efficiency
    The Nation asks that the Committee include provisions in S. 1684 
that would allow tribes to participate in energy efficiency programs. 
Despite a longstanding state program, there are no ongoing programs to 
support tribal energy efficiency efforts. DOE should allocate not less 
than 5 percent of existing state energy efficiency funding to establish 
a grant program for Indian tribes interested in conducting energy 
efficiency activities for their lands and buildings.
    S. 1684 could include a tribal energy efficiency program modeled 
after the successful Energy Efficiency Block Grant (EEBG) program. The 
EEBG program was very successful in providing funding to tribes to 
manage their energy resources, but it was only funded one time--under 
the American Reinvestment and Recovery Act of 2009. To ensure an 
ongoing source of funding for tribal energy efficiency efforts, tribes 
should be provided a portion of the funding for state energy efficiency 
efforts.

IV. Conclusion
    I would like to thank Chairman Akaka, Vice Chairman Barrasso and 
Members of the Committee on Indian Affairs for the opportunity to 
present this testimony on behalf of the Shinnecock Nation.
                                 ______
                                 
Prepared Statement of Robert Odawi Porter, President, Seneca Nation of 
                                Indians

    Dear Senator Akaka, Ranking Member Barrasso and Members of the 
Committee:
    On behalf of the Seneca Nation of Indians, thank you for the 
opportunity to add the voice of the Seneca Nation to the important 
topic of Indian Nation energy and economic development. The Seneca 
Nation has had the pleasure of addressing you and the Committee over 
the years and very much enjoys the strong working relationship with you 
and your staff. The Seneca Nation's is a leader in the development of 
economic opportunities for its citizens and the surrounding region of 
Western New York and is eager to protect and develop its renewable 
resources as part of its economic diversification.
    The Seneca Nation submits this letter as comments for the record to 
the above-referenced legislative hearing on S. 1684, specifically 
concerning the necessity for stronger Federal Power Act amendments that 
clarify Indian Nation Self-Determination. To increase its economic 
diversification, the Seneca Nation is a competitor in the hydropower 
re-licensing proceeding to operate the Seneca Pumped Storage Project at 
Kinzua Dam, which uses Seneca Nation lands and waters; and the Nation 
has filed a preliminary permit to add a conventional hydropower project 
at Kinzua Dam to increase hydroelectric capacity from the water 
resource; also, the Seneca Nation is a stakeholder in the incumbent's 
attempt to continue its operation of the Seneca Pumped Storage Project. 
The Nation's role as a stakeholder and competitor for hydropower has 
provided the Nation with valuable experience concerning the failures of 
the Federal Power Act to support Indian Nation Self-Determination.
    The ``Seneca Pumped Storage Project'' at Kinzua Dam requires the 
use of land and water that belongs to the Seneca Nation. However, the 
definition of ``tribal lands embraced within Indian reservations'' in 
the Federal Power Act has led to an inaccurate interpretation of 
``Indian reservations'' by the Federal Energy Regulatory Commission. 
FERC has ordered that only lands held in trust status may be recognized 
as ``tribal lands embraced within Indian reservations.'' This is 
contrary to Indian Country Self-Determination and the body of federal 
Indian law defining ``Indian Country.'' As one of very few provisions 
in the Federal Power Act meant to protect Indian Country, it is 
important for Congress to clearly define the term ``tribal lands 
embraced within Indian reservations'' as it is understood in the body 
of federal Indian law.
    In addition, in re-licensing proceedings for projects that use 
Indian nation lands and waters, Indian nations receive no preference. 
The proposed Section 201 of S. 1684 addresses Indian nation preference 
for original licensing and preliminary permits, and does not provide 
the same preference for re-licensing proceedings. The Seneca Nation and 
many other Indian Nations such as the Confederated Tribes of Warm 
Springs, the Crow Nation, and the Coeur d'Alene Tribe, have been 
historically burdened by private development of hydropower utilizing 
Indian lands and waters. For the Seneca Nation over the last 40 years, 
the Seneca Pumped Storage Project has eroded its lands, affected water 
quality and the ecosystem, disturbed cultural resources--and has done 
so without compensation or mitigation. The Seneca Nation should be 
provided a preference in re-licensing where the project uses Seneca 
lands and waters in order to support Seneca Self-Determination, to 
regain control and management of our treaty protected resources, and 
for Seneca Nation economic development that will benefit local and 
regional economy.
    When the Seneca Pumped Storage Project license was granted in 1965, 
the use of the Nation's lands and waters were ignored, environmental 
concerns to Seneca resources were not considered, and annual charges 
for the use of our lands were not paid. Minor amendments to the Federal 
Power Act today could provide protection to Indian lands and waters and 
clarify the meaning and use of ``tribal lands'' in the Seneca Nation's 
re-licensing efforts, as well as future development and participation 
in hydropower licensing by other Indian nations.
    To assist in your further review of the Federal Power Act, the 
Seneca Nation will be submitting proposed amendments to the Federal 
Power Act to your staff and counsel. These amendments highlight the 
need to ensure the goal of renewable energy development in Indian 
Country so that Indian Nation governments are no longer excluded in 
hydropower licensing, are allowed at least an equal playing field for 
Indian nations whose lands and waters are used for hydropower purposes 
so that they receive annual fees to which they are entitled, and to 
support Indian Nation development of hydropower as part of its economic 
and energy long term strategies.
    The National Congress of American Indians passed a Resolution, 
which called on Congress to explore the impact of dams in Indian 
Country, and to ``amend the Federal Power Act to fully incorporate 
Indian Nations into the hydropower licensing and re-licensing processes 
wherever Indian Nation lands, former lands waters and on and off-
reservation treaty rights are affected by dams and associated 
projects.'' A copy of this Resolution, ABQ-10-035 passed in November 
2010, is attached hereto.
    The strength of the Federal Power Act to Indian Country should be 
considered inS. 1684 as a potentially powerful way to protect (or 
usurp) Indian Nation sovereignty and energy development of our land and 
water resources, and can provide further opportunities (or hindrances) 
in the development of Indian Country renewable resources. The current 
re-licensing of the Seneca Pumped Storage Project allows the Nation to 
revisit the loss of land and use of our treaty protected lands and 
waters for hydropower purposes. The Seneca Nation's entry into the re-
licensing of the Seneca Pumped Storage Project and its preliminary 
permit for conventional hydropower at Kinzua Dam will further redefine, 
and hopefully strengthen, the Seneca Nation's treaty relationship with 
the U.S. and its executive agencies, including the U.S. Army Corps of 
Engineers, the Department of the Interior, and the Forest Service. Most 
importantly the potential to obtain the license will grow the Seneca 
Nation's economic independence and mutual goals for economic 
sustainability.
    The Seneca Nation would be grateful for the opportunity to discuss 
proposed amendments to the Federal Power Act to include in S. 1684 that 
will benefit Indian Country, at your convenience. The Nation looks 
eagerly toward the Committee's progress on these issues.

Attachment
   The National Congress of American Indians--Resolution #ABQ-10-035
title: call on congress and obama administration to redress effects of 
    federal dams and water projects on indian lands and waters and 
     incorporate sovereignty and self-determination into future use
    WHEREAS, we, the members of the National Congress of American 
Indians of the United States, invoking the divine blessing of the 
Creator upon our efforts and purposes, in order to preserve for 
ourselves and our descendants the inherent sovereign rights of our 
Indian nations, rights secured under Indian treaties and agreements 
with the United States, and all other rights and benefits to which we 
are entitled under the laws and Constitution of the United States, to 
enlighten the public toward a better understanding of the Indian 
people, to preserve Indian cultural values, and otherwise promote the 
health, safety and welfare of the Indian people, do hereby establish 
and submit the following resolution; and

    WHEREAS, the National Congress of American Indians (NCAI) was 
established in 1944 and is the oldest and largest national organization 
of American Indian and Alaska Native tribal governments; and

    WHEREAS, the Federal Government has a long history of building dams 
and related water projects that impact Indian Nation waterways and 
lands for various national flood control, navigation, water supply, 
pollution abatement, economic development and energy production 
efforts; and

    WHEREAS, these dams and their associated projects have had dramatic 
and devastating effects on our Indian Nations, communities, lands, 
waterways, traditional ways, and resources and have resulted in 
legacies of removal, loss and trauma from which we have not recovered; 
and

    WHEREAS, the continued operation of these dams and their associated 
projects creates disproportionate hardships for Indian Nations, 
including continued dislocation, loss of access to Indian Nation lands, 
poor water quality, increased trespassing and theft or damage to 
cultural resources, artificial sediment deposits that impact water 
infrastructure and contain unknown contaminants, harm to waterways and 
fisheries, loss of traditional medicines and plants, damage to riparian 
habitat and wildlife, and increased recreational traffic and impacts; 
and

    WHEREAS, much of America benefits from the continued misuse of our 
Indian Nation lands and waters for flood control, water supply, 
pollution abatement, electricity and income generated therefrom, while 
our own communities enjoy few of these benefits, have had no control 
over the use of our lands and waters, and often have no voice in the 
process of determining continued use; and

    WHEREAS, Indian Nation governments and communities have not been 
acknowledged as the owners and caretakers of their lands and waters, 
have not been fully compensated for their past losses nor ongoing 
impacts, nor fully consulted as impacted sovereigns on the current 
operations and effects of dams and their associated projects.

    NOW THEREFORE BE IT RESOLVED, that NCAI calls on Congress to create 
a nine member Commission with a majority of tribal governmental 
representatives impacted by dams, to investigate and report on (1) the 
failure of Congress to fairly compensate Indian Nations for losses 
caused by dams and their associated projects, which Indian Nations have 
borne disproportionate burdens compared to the benefits received by the 
American people; (2) how Indian Nation sovereignty and self-
determination can be supported so that Indian Nations maintain control 
of the use and enjoyment of their own lands and waters; and (3) how to 
compensate Indian Nations for past harms and future uses of Indian 
Nation lands and waters for dams and associated projects; and

    BE IT FURTHER RESOLVED, that NCAI calls on Congress to respect 
Indian Nation sovereignty and self-determination and amend the Federal 
Power Act to fully incorporate Indian Nations into the hydropower 
licensing and re-licensing processes wherever Indian Nation lands, 
former lands waters and on and off-reservation treaty rights are 
affected by dams and associated projects; and

    BE IT FURTHER RESOLVED, that NCAI calls on President Obama to issue 
an Executive Order calling on all federal entities, which have any role 
in administering dams, associated projects, or nearby lands (including 
but not limited to the Federal Energy Regulatory Commission, the U.S. 
Army Corps of Engineers, the U.S. Bureau of Reclamation, the Department 
of the Interior, the National Park Service, the U.S. Forest Service, 
the U.S. Fish and Wildlife Service, and the National Marine Fisheries 
Service) to acknowledge and support Indian Nation sovereignty and self-
determination in the control and management over their own lands and 
waters, and to fully consult and cooperate with Indian Nation 
governments, whose lands, waters and resources are affected by dams and 
associated projects, and to read existing statutes and interpret 
existing authorities in favor of Indian Nation rights, sovereignty, and 
self-determination; and

    BE IT FURTHER RESOLVED, that NCAI calls on President Obama to 
include in his Executive Order a requirement of a joint consultation on 
issues impacting affected tribes including the designation of a lead 
agency; and

    BE IT FINALLY RESOLVED, that this resolution shall be the policy of 
NCAI until it is withdrawn or modified by subsequent resolution.

    CERTIFICATION

    The foregoing resolution was adopted by the General Assembly at the 
2010 Annual Convention of the National Congress of American Indians, 
held at the Albuquerque Convention Center in Albuquerque, NM on 
November 14-19, 2010, with a quorum present.
                                 ______
                                 
          Prepared Statement of the Intertribal Timber Council

    The Executive Board of the Intertribal Timber Council (ITC) 
supports S. 1684, the Indian Tribal Energy Development and Self-
Determination Act Amendments of 2011, and requests that this statement 
be included in the Committee's April 19, 2012 hearing record on the 
bill.
    The ITC is a thirty-six year old association of sixty Indian tribes 
and Alaska Native organizations that collectively manage more than 90 
percent of the 18 million acres of forest land held in trust by the 
Bureau of Indian Affairs. The ITC is dedicated to pursuing the best 
management and protection of tribal forests and other natural 
resources. We actively participated in the development of the National 
Indian Forest Resources Management Act (PL 101-630, 1990) and the 
Tribal Forest Protection Act (PL 108-278, 2004). It is our pleasure to 
now support S. 1684.
    We wish to express our strong support for Section 202 which would 
establish Tribal Biomass Demonstration Projects. Such projects are 
sorely needed to improve forest health and reduce threats to lands held 
in trust for Indians. Tribal inquiries into biomass projects on federal 
public forests have often been thwarted by lack of federal direction, 
administrative timidity, and cripplingly slow decisionmaking. The 
demonstration projects will help overcome these obstacles by providing 
clear direction to the Forest Service and BLM and assuring that 
eligible projects are promptly selected and carried out.
    Tribal forest lands frequently adjoin or are in close proximity to 
federal public forest land, much of which is in need of forest health 
treatments that can be carried out by tribal forestry operations. 
Biomass projects could help reduce threats to nearby Indian trust 
forest resources from fire, disease and insect infestation. Protection 
of these trust lands and resources is the basic premise of the Tribal 
Forest Protection Act. In addition, improvement of forest health and 
ecological functions are vital to maintain watersheds and fish and 
wildlife habitat on lands that may be subject to federally-reserved 
tribal rights.
    Tribes are particularly well situated to undertake biomass 
projects. Some forested tribes have their own forest products 
processing facilities and many provide timber that supports other 
forest products milling facilities. Such infrastructure (roads, site, 
electricity, water, harvesting, transportation, and a trained work 
force) is essential for development of facilities that can use woody 
biomass for biofuels or renewable energy to contribute to national 
goals of energy independence and security.
    Tribes, as America's first stewards, are committed to long-term, 
sustainable management of forests and other natural resources and have 
skilled and experienced professional staffs and field operations. The 
biomass demonstration project will help provide jobs, revenues, heat, 
fuel, or electricity for tribal and other rural communities. Some 
financial opportunities available to tribal governments, such as tax 
credits or bond financing, could also prove helpful in securing 
financing to develop and operate biomass facilities.
    The ITC appreciates the thought and effort in developing Section 
202. Among particular elements we note in the bill are--

   A minimum of four projects a year for the Project's five 
        year authorization should provide an adequate opportunity for 
        interested tribes to develop and submit applications to 
        participate in the program. The eligibility criteria allow the 
        Secretary, working with affected tribes and intertribal 
        organizations, to flexibly tailor those requirements. The 
        selection elements, drawn from the Tribal Forest Protection 
        Act, include the Secretary's according weight and deference, 
        pursuant that Act's Section 2(e)(2)(A), to the special and 
        unique attributes of tribal governments, such as the 
        government-to-government relationship between tribal 
        governments and the U.S. and the sovereign authorities of 
        tribal governments.

   The budget neutrality of the Project, including the specific 
        limitations on direct service contracts and use of merchantable 
        logs already identified for commercial sale to assure that 
        neutrality.

   The prompt promulgation required for the Program.

   The authority for the Secretary to extend, as practicable, 
        the tribe's forest management plan or Integrated Resource 
        Management Plan to the biomass project. Such plans are already 
        required by statute to be sustainable, and must have been 
        approved by the Secretary to be in effect, and their potential 
        application to the biomass project would substantially 
        facilitate the project's implementation.

   The twenty-years-plus-ten year term for contracts (presuming 
        that stewardship contracting authority will be extended) or 
        agreements entered to carry out the Act. The potential to 
        secure a thirty-year feedstock supply would provide sorely-
        needed support for financing biomass plants.

    Lastly, the ITC recommends that the term ``biomass'' be defined in 
S. 1684. ``Biomass'' has been defined and referenced extensively, but 
inconsistently, in various legislation and administrative policies. \1\ 
To eliminate ambiguity, we recommend that ``biomass'' be defined the in 
the same manner as ``renewable biomass'' in the 2008 Farm Bill (PL 110-
246). For Biomass projects to be successful, it is important for all 
potential feedstock to be available to provide diversity and stability 
of supply and to minimize the administrative costs of chain of custody 
requirements to qualify for classification as renewable fuels or 
renewable energy.
---------------------------------------------------------------------------
    \1\ Bracmort, K. and R.W. Gorte. 2012. Biomass; Comparison of 
Definitions in Legislation Through the 111th Congress. Congressional 
Research Service Report R40529. March 7, 2012.
---------------------------------------------------------------------------
    We look forward to the Senate's consideration of S. 1684 this year, 
and hope the bill will promptly move through Congress.
                                 ______
                                 
       Prepared Statement of the Office of Hawaiian Affairs (OHA)

    Aloha e Committee Members. The Office of Hawaiian Affairs (OHA) 
thanks you for taking the time to conduct a legislative hearing on 
April 19, 2012 on S. 1684, the Indian Tribal Energy Development and 
Self-Determination Act Amendments of 2011. OHA is a unique, quasi-
independent state agency established by the Hawai'i State Constitution 
and state statutes to better the conditions of Native Hawaiians 
(Hawai'i's indigenous people). Guided by nine trustees elected by the 
voters of Hawai'i, OHA advances the interests of Native Hawaiians and 
serves as a fiduciary for Native Hawaiian public trust funds and other 
resources. One of the ten strategic results identified in OHA's 
strategic plan is to achieve pae 'aina sustainability--i.e., to 
increase the amount of Hawaiian land that is managed in a sustainable 
and balanced manner to create economic value and to preserve cultural 
and natural resources and historic properties. Accordingly, OHA offers 
the following testimony in support of the Indian Tribal Energy 
Development and Self-Determination Act Amendments of 2011.
Native Hawaiians and Energy
    Limited resources required Native Hawaiians to develop careful land 
and resource management practices to support individuals and society, 
as well as to maximize available resources. With that in mind, OHA 
carefully monitors existing and proposed energy projects.
    As Hawai'i moves towards a renewable energy future, energy is 
playing an increasingly important role in sustaining a thriving, self-
determining Native Hawaiian community. Namely, the pono (balanced and 
proper) use of wind, solar, geothermal, hydro, bio-fuel, and other 
renewable energy sources that are abundantly found in Hawai'i leads to 
increased employment, education, preservation of cultural and natural 
resources, and self-sufficiency, all of which are of critical 
importance to the self-determination of the Native Hawaiian community.
The Indian Tribal Energy Development and Self-Determination Act 
        Amendments of 2011
    The Indian Tribal Energy Development and Self-Determination Act 
Amendments would provide Indian tribes with technical assistance in 
planning energy resource development programs; make intertribal 
organizations eligible for Department of Energy program grants; make 
tribal energy development organizations eligible for Department of 
Energy development loan guarantees; allow for leases and business 
agreements that pool, unitize, or communitize tribal energy resources 
with other energy resources; and require energy-related tribal leases, 
business agreements, and grants of a right-of-way that are made without 
secretarial approval to meet certain standards.
    OHA supports increased opportunities for Native communities to 
exercise their authority in the area of resource management and, 
specifically, in the area of energy resource development. Accordingly, 
OHA supports S. 1684, The Indian Tribal Energy Development and Self-
Determination Act Amendments of 2011. Thank you for the opportunity to 
comment.

                                  
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