[Senate Hearing 113-338]
[From the U.S. Government Publishing Office]
S. Hrg. 113-338
S. 2132, INDIAN TRIBAL ENERGY DEVELOPMENT
AND SELF-DETERMINATION ACT AMENDMENTS
OF 2014
=======================================================================
HEARING
before the
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
APRIL 30, 2014
__________
Printed for the use of the Committee on Indian Affairs
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COMMITTEE ON INDIAN AFFAIRS
JON TESTER, Montana, Chairman
JOHN BARRASSO, Wyoming, Vice Chairman
TIM JOHNSON, South Dakota JOHN McCAIN, Arizona
MARIA CANTWELL, Washington LISA MURKOWSKI, Alaska
TOM UDALL, New Mexico JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota MIKE CRAPO, Idaho
MARK BEGICH, Alaska DEB FISCHER, Nebraska
BRIAN SCHATZ, Hawaii
HEIDI HEITKAMP, North Dakota
Mary J. Pavel, Majority Staff Director and Chief Counsel
Rhonda Harjo, Minority Deputy Chief Counsel
C O N T E N T S
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Page
Hearing held on April 30, 2014................................... 1
Statement of Senator Barrasso.................................... 2
Statement of Senator Heitkamp.................................... 18
Statement of Senator Hoeven...................................... 20
Statement of Senator Murkowsi.................................... 21
Statement of Senator Tester...................................... 1
Witnesses
Lankford, Hon. Carole, Vice Chairwoman, Confederated Salish and
Kootenai Tribes................................................ 25
Prepared statement........................................... 26
Lebeau, Hon. Tracey A., Director, Office of Indian Energy Policy
and Programs, U.S. Department of Energy........................ 9
Prepared statement........................................... 10
Finley, Hon. Michael O., Chairman, Confederated Tribes of the
Colville Indian Reservation; First Vice-President, National
Congress of American Indians................................... 32
Prepared statement........................................... 33
Olguin, Hon. James ``Mike'', Acting Chairman, Southern Ute Indian
Tribal Council................................................. 39
Prepared statement........................................... 40
Tom, Hon. Aletha, Chairwoman, Moapa Band of Paiutes Tribe........ 36
Prepared statement........................................... 37
Washburn, Hon. Kevin, Assistant Secretary--Indian Affairs, U.S.
Department of the Interior..................................... 4
Prepared statement........................................... 4
Appendix
Hall, Tex ``Red Tipped Arrow'', Chairman, Mandan, Hidatsa and
Arikara Nation, prepared statement............................. 51
Howell, Gordon, Chairman, Business Committee for the Ute Indian
Tribe of the Uintah and Ouray Reservation, prepared statement.. 61
S. 2132, INDIAN TRIBAL ENERGY
DEVELOPMENT AND SELF-DETERMINATION ACT AMENDMENTS OF 2014
----------
WEDNESDAY, APRIL 30, 2014
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m. in room
628, Dirksen Senate Office Building, Hon. Jon Tester,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
The Chairman. I will call the hearing on Indian energy
development to order.
Today, the Committee will discuss S. 2132, the Indian
Tribal Energy Development and Self-Determination Act Amendments
of 2014.
I am going to start by thanking Vice Chairman Barrasso for
introducing this bill. I think we both recognize that energy
development on tribal lands is one of the most promising areas
of economic development in Indian country.
The Committee has received testimony numerous times
regarding development of Indian energy resources. We have held
oversight hearings and listening sessions. The Committee has
also taken up similar bills in the last two Congresses. The
former Chair of this Committee, Senator Byron Dorgan,
introduced a bill in the 111th Congress. In the last Congress,
Chairman Akaka and Vice Chair Barrasso co-sponsored the Indian
Energy bill, S. 2132. This is a culmination of all of those
discussions.
The last major congressional amendments regarding tribal
energy resources were included in the Energy Policy Act of
2005. In that Act, Congress provided the Secretary of Interior
the authority to enter into tribal energy resource agreements
with tribes. These agreements would allow a tribe to manage
their own energy resources without further Federal approval.
However, over the past decade no tribe has yet entered into
a Tribal Energy Resource Agreement (TERA) with the Department.
Meanwhile, development of tribal energy resources has continued
to lag behind the development of other Federal or privately
owned lands.
You would think the Federal Government's trust
responsibilities toward tribes and tribal lands would assist
tribes in developing their resources. Instead, tribes have
often claimed that development opportunities have been lost,
specifically because of delays caused by the Federal Government
to carry out its trust responsibility.
Legislation such as S. 2132, which we will discuss today,
HEARTH Act, which was enacted in the last Congress, are
intended to remove those bureaucratic hurdles by giving tribes
direct management of their lands and their resources.
Our tribal witnesses today will provide testimony on all
types of energy from conventional oil and gas to renewable
resources such as solar, biomass and hydro. S. 2132 contains
provisions that would affect all types of energy development as
well as a section on allowing tribes to administer a federally
funded weatherization program.
While I am not yet a co-sponsor of this bill, I am a big
proponent of improving tribal energy development. I recognize
that S. 2132 has widespread support from tribes and look
forward to hearing from the Administration and tribal leaders
today about this bill. In particular, I hope this hearing
provides an opportunity to insure that we are not missing any
other possible fixes that would further improve tribes' ability
to develop their resources.
The Chairman. With that, I would ask Vice Chair Barrasso
for his opening statement.
STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Thank you, Mr. Chairman. I appreciate
your kind words.
You are right, it was Senator Dorgan, when he was Chairman
of the Committee, who brought this additional concern when he
brought forth a map of his home State of North Dakota and we
saw how difficult it was on tribal lands to use the many
resources that were on those lands. That is why I continue to
come back time and time again, so I want to thank you for
holding this hearing today on my bill, S. 2132, the Indian
Tribal Energy Development and Self-Determination Act Amendments
of 2014.
I introduced this bill on March 13 and am joined by
Senators McCain, Hoeven, Murkowski, Thune, and Enzi as co-
sponsors. The bill is largely similar to S. 1684 which I
introduced in the last Congress and this Committee favorably
approved. We continue to advance this measure again because
energy development on tribal lands is undeniably important. It
is a significant facilitator for jobs and economic growth in
Indian country, and for all of America.
As reported by the National Congress of American Indians,
tribal lands hold nearly one-quarter of all American onshore
oil and gas reserves but they produce less than five percent of
the domestic oil and gas supply. Tribes have called upon
Congress and the Administration to assist in finding a way to
tap into that potential.
The Energy Policy Act of 2005 attempted to do that through
tribal energy resource agreements, TERAs, you referred to
those, Mr. Chairman, between tribes and the Secretary of
Interior. These agreements allow tribes to execute leases,
business agreements and rights-of-way for energy development
without further secretarial approval. The agreements were
intended to reduce bureaucracy and to increase access to energy
development.
However, uncertainty in the review process for these
agreements has prevented tribes from applying for any
agreement. My bill is intended to address this uncertainty and
other tribal recommendations in several key respects.
First, the legislation would streamline the approval
process for tribal energy resource agreements on Indian lands.
This bill would provide clear deadlines and requirements for
approval or disapproval of the tribal application for the
agreements. In addition, S. 2132 would allow tribes and third
parties to perform mineral appraisals to expedite secretarial
approval of tribal energy transactions.
Moreover, S. 2132 would also encourage the development of
renewable energy resources by authorizing tribal biomass
demonstration projects. In harvesting biomass materials, tribes
could experience multiple benefits. These biomass projects
would promote tribal forest health and economies, create jobs
and reduce the risk of destructive wildfires.
Mr. Chairman, this legislation has been pending for quite
some time and enjoys wide tribal support and is narrowly
tailored in a way that provides procedural measures needed to
kick start energy development.
Larger, substantive reforms for tribal energy development
have not been included in this specific bill and certainly
deserve consideration by Congress. However, that would require
a more extensive debate and potentially involve multiple
committees. Mr. Chairman, I want to continue to work with you
on those initiatives in the future.
In the interim, I urge my colleagues to advance this
legislation so it can be signed into law this year and tribes
can move forward toward energy self-determination.
I want to welcome the witnesses and look forward to the
testimony.
Thank you, Mr. Chairman.
The Chairman. Thank you, Vice Chairman Barrasso. I
appreciate your testimony. I appreciate your leadership on this
issue.
I want to welcome our first panel and would remind all the
witnesses to limit their testimony to five minutes. This will
allow Committee members enough time to ask questions. The full
written statements will be made a part of the record.
Our first panel includes our Federal officials. From the
Department of Interior we are going to hear from Kevin
Washburn, Assistant Secretary, Indian Affairs. Kevin is a
regular testifier here, almost on a monthly basis if not more.
Welcome back, Kevin. We look forward to your testimony.
Then we will hear from Ms. Tracey LeBeau, Director, Office
of Indian Energy Policy and Programs at the Department of
Energy. She will talk about how S. 2132 would impact those
agencies who assist tribes in developing their energy
resources. Tracey, welcome to the Committee and look forward to
your testimony as well.
With that, we will put five minutes on the clock and start
with the Honorable Kevin Washburn.
STATEMENT OF HON. KEVIN WASHBURN, ASSISTANT
SECRETARY--INDIAN AFFAIRS, U.S. DEPARTMENT OF THE
INTERIOR
Mr. Washburn. Thank you, Chairman and Vice Chairman for
holding this hearing.
Vice Chairman, thank you for your consistent leadership in
this area. You have been long focused on Indian energy and it
has needed your focus of attention. We appreciate that.
S. 2132 has a lot that we really like in it. We are
grateful you are considering doing something in this area. The
2005 Act has been relatively unsuccessful. That bill attempted
to create self-governance and self-determination in this area
but the tribes have not engaged with it really at all.
We do not have a single TERA that has been signed. That
means something has gone wrong because we all know that things
work better when self-determination and self-governance is the
order of the day.
One of the issues about the 2005 Act that was problematic
is the capacity determination. The bill was really prescriptive
and really put us in a straightjacket about determining
capacity of tribes. Frankly, determining the capacity of tribes
to do something feels very much like a 20th Century concept to
me.
We have sort of moved beyond that now with the HEARTH Act.
In the HEARTH Act, we have to approve a tribe's regulations and
once we have done so, and we can be confident they have a
regulatory scheme in place, we can turn the whole program over
to the tribe. We very much think that is a really good model.
I think that is the model we like and frankly, it is one
the House has been comfortable with, the Senate has been
comfortable with and the President enacted the HEARTH Act.
One of the big suggestions we have in my testimony is can
we work with the existing model that we have all sort of agreed
to in principle. That would largely be our suggestion.
That said, there is not a whole lot that we disagree with
in this bill. We have raised a few things about which we have
some concerns but I think that we have learned we should trust
tribes. Tribes do better when we trust them to do these things.
They are most concerned with doing these things right because
they have to live on the lands about which we are talking.
We are all in favor of self-governance with regard to
energy as we are in all things, so why don't I stop right
there. I think that is sort of the basic bottom line.
We thank the Committee for giving attention to this
important issue.
[The prepared statement of Mr. Washburn follows:]
Prepared Statement of Hon. Kevin Washburn, Assistant Secretary--Indian
Affairs, U.S. Department of the Interior
Good afternoon Chairman Tester, Vice-Chairman Barrasso and Members
of the Committee. My name is Kevin Washburn and I am the Assistant
Secretary for Indian Affairs at the Department of the Interior
(Department). Thank you for the opportunity to present testimony for
the Department on S. 2132, the ``Indian Tribal Energy Development and
Self-Determination Act Amendments of 2014.'' S. 2132 is legislation to
amend the Indian Tribal Energy Development and Self-Determination Act
of 2005.
The Department believes that it is appropriate to consider
amendments to Title V of the Energy Policy Act of 2005, relating to
tribal energy resource agreements (TERAs). The Energy Policy Act sought
to increase tribal self-governance over energy development. That Act
authorized TERA which are designed to shift authority for the review,
approval, and management of leases, business agreements, and rights-of-
way for energy development on tribal lands from the Federal government
to participating tribes. Sadly, however, the Energy Policy Act has not
been successful. Indeed, since promulgation of the Department's TERA
regulations in 2008, the Department has not received a single TERA
application.
The Department supports the goal of increasing tribal self-
governance in the area of energy and mineral development. The
Department believes that environmentally responsible development of
tribal energy resources is critical to the economic viability of many
American Indian Tribes and to the sustainability of many Alaska Native
villages. Energy and mineral development represents a near-term
solution for many tribes to promote economic development, small
business, capital investment, Indian-owned businesses, and job creation
for tribal members. TERAs are designed to promote tribal sovereignty
and economic self-sufficiency by establishing a process where tribes
can assume a greater role in the development of their energy and
mineral resources.
Key to a tribe's ultimate success under a TERA is its capacity to
perform the functions and responsibilities outlined in a TERA--
functions and responsibilities historically performed by the
Department. Under existing law, the Department plays a critical role in
determining a tribe's capacity to take on those functions. S. 2132
seeks among other things to simplify and expedite the TERA process.
This is a laudable goal. While the Department supports this overall
goal, the Department would like to work with the Committee to further
improve S. 2132 as described below.
Implementation of the 2005 Amendments
As noted, the current TERA regime has not been successful. This is
not for lack of effort by the Department. Under current regulations, a
tribe can request a pre-application meeting with the Office of Indian
Energy and Economic Development (OIEED) to discuss any regulatory or
administrative activities it might wish to exercise through a TERA.
These informal pre-application meetings include discussion of the
required content of a TERA application, such as identifying the energy
resources the tribe anticipates developing; what capacity, management,
and regulation will be needed to develop the energy resource; and
potential mechanisms for building the capacity and pursuing other
activities related to the energy resource the tribe anticipates
developing. Since 2008, the Department has met with six tribes who have
considered entering into a TERA. Of these tribes, one had active oil
and gas development occurring on its reservation and was considering a
TERA for further oil and gas development. The other tribes were
considering renewable energy resource development. We understand that
several tribes with renewable energy resources have expressed an
interest in developing a TERA.
The Department supports several of the provisions in S. 2132:
Sec. 101(a)(1)(E), requiring consultation with each
applicable Indian tribe before adopting or approving a well
spacing program or plan applicable to the energy resources of
that Indian tribe or the members of that Indian tribe. The
Department notes, however, that this consultation requirement
could slow the timeframe for adoption or approval of well
spacing programs or plans.
Sec. 101(a)(4)(B), promoting cooperation with the Department
of Energy's Office of Indian Energy Policy and Programs in
providing assistance to tribes in development of energy plans.
(The Department also believes that cooperation with other
federal agencies is important and has made efforts to
accomplish such cooperation, through the White House Native
American Affairs Council.)
Sec. 102(1) that adds ``tribal energy development
organization'' as an eligible entity for grants under this
section.
Sec. 102(2) that adds ``tribal energy development
organization'' as an eligible entity for technical assistance
from the Department or eligible for financial assistance to
procure technical assistance.
Sec. 103(a)(1) that adds ``production'' to ``facility'' and
specifically includes a facility that produces electricity from
renewable energy resources. Energy resources developed on lands
owned by individual Indians in fee, trust, or restricted status
as well as energy resources developed on land owned by any
other persons or entities may be included in leases, business
agreements, and rights-of-way a tribe or tribal energy
development organization may approve as long as a portion of
the energy resources have been developed on tribal land. The
amendment also expands ``facility to process or refine energy
resources'' to specifically include renewable energy resources
and to add energy resources that are ``produced from,'' in
addition to energy resources ``developed on,'' tribal land. The
amendment includes pooling, unitization, or communitization of
the energy mineral resource(s) of the tribe with energy mineral
resource(s) owned by individual Indians in fee, trust, or
restricted status or owned by any other persons or entities.
Sec. 103, which expands purposes for rights-of-way under a
TERA beyond pipelines, electric transmission or distribution
lines that serve electric generation, transmission or
distribution facilities located on tribal land to include those
lines that also serve an electric production facility or a
facility located on tribal land that extracts, produces,
processes, or refines energy resources (not necessarily
produced on tribal land) and lines that serve the purposes of
or facilitate the purposes of any lease or business agreement
entered into for energy resource production on tribal land.
Sec. 103, which expands the time period for Secretarial
approval of a revised TERA from 60 days to 90 days.
Sec. 103, which provides that a Tribal Energy Resource
Agreement remains in effect until rescinded by the tribe or
Secretarial re-assumption.
Sec. 103, which declines to waive the sovereign immunity of
tribes.
The Department also supports the provision that amends 25
U.S.C. 415(e) to allow the Navajo Nation to approve its own
leases for business or agricultural purposes for 99 years. The
Department is, however, concerned about the extent of the
showing needed for the tribe to engage in mineral development
(exploration, extraction and development) without Secretarial
approval, as discussed further below.
The Department supports the proposed changes to the existing
environmental review process for TERAs, but we suggest that the
Committee consider addressing environmental review similar to
the approach Congress utilized in the HEARTH Act. Both the
Department and the Council on Environmental Quality supported
the HEARTH Act approach and the Department generally supports a
similar approach here.
As noted, the Department is concerned with some of the provisions
of S. 2132. The Department's concerns include the following issues:
A. Allocation of Liability
We are concerned about a lack of clarity in S. 2132 in allocating
liability for tribes that choose to utilize a TERA. According to its
terms, the bill would amend 25 U.S.C. 3504(e)(6) to state that
nothing in the bill would change the liability of the Department for
terms of any lease, business agreement, or right-of-way that is not a
``negotiated term'' or losses that are not the result of a ``negotiated
term.'' However, the definition of ``negotiated term'' does not clearly
articulate how liability is allocated and the current language
regarding the remaining trust responsibility does not provide
sufficient clarity.
The Department believes that there is an easy fix to this problem.
The Department recommends that the Committee replace the current and
proposed amendment with the recently enacted liability provision in the
HEARTH Act. This approach will clarify for both the Department and
tribes the allocation of liability.
B. Determining ``Capacity''
S. 2132 seeks to amend the statute's capacity requirement by
providing that a tribe satisfies the capacity requirement if it has
carried out a self-determination contract or compact ``relating to the
management of tribal land.'' We recommend that this approach be refined
to ensure that the function performed pursuant to the self-
determination contract or compact is appropriate given the broad array
of functions that TERAs may implement.
The 2005 Act provides a framework under which tribal capacity
includes not only managerial and technical capacity for developing
energy resources (which necessarily includes realty, environmental, and
oversight capabilities), but also managerial and technical capacity to
account for energy production, experience in managing natural
resources, and financial and administrative resources available for use
by the tribe in implementing a TERA. Given the scope of functions that
could be included in a TERA, successful administration of a self-
governance contract or compact relating to the management of tribal
lands may or may not be relevant to performing a particular TERA
function.
For example, a self-governance contract for realty functions on a
reservation largely devoted to grazing and residential use may not be
indicative of regulating the development of oil and gas extraction. We
recommend an approach that relies on experience with specific duties
and compliance activities to demonstrate capacity for specific
functions the tribe wishes to undertake with a TERA. Certainly prior
participation in 638 contracts/compacts for specific duties and
compliance activities is an important factor, but depending on the
specific functions to be undertaken by a tribe in a TERA, it may not be
the only factor that should be considered.
Additionally, the Department recommends, as an alternative, the
Committee consider streamlining or eliminating capacity determinations.
Under existing law the Secretary is required to determine ``that the
Indian Tribe has demonstrated that the Indian Tribe has sufficient
capacity to regulate the development of energy resources of the Indian
tribe.'' To date, no tribe has applied for a TERA, so we have no data
on how much effort a tribe must expend for a positive capacity
determination for the realty, environmental, and oversight activities
it may assume.
However, enactment of the HEARTH Act eliminates this determination
for entire categories of energy production. Because the HEARTH Act
applies to surface leasing, it is now much simpler for tribes to pursue
wind, solar and biomass energy projects without Secretarial approval.
The HEARTH Act's promotion of self-governance for surface leasing
should be carried forward to mineral development. At a minimum, the
Indian Energy Development and Self-Determination Act should be modified
to limit TERAs to oil, gas, coal, geothermal, and other mineral-based
energy projects, i.e., those that would require a lease under the
Indian Mineral Leasing Act of 1938, a Minerals Agreement under the
Indian Mineral Development Act of 1982, or a right-of-way under the
Indian All Rights-of-Way Act of 1948.
If Congress maintains the capacity requirement because minerals are
a limited and valuable resource, a TERA capacity determination could be
based on whether the tribe contracts BIA realty functions in accordance
with Pub.L. 93-638. Utilizing this approach would be a well-understood
procedure for tribes, it would be useful to a tribe regardless of
whether a TERA were ever obtained, and it is an important component to
developing energy resources or entering into associated energy leases
and rights-of-way.
As currently drafted, S. 2132 uses a similar standard (though not
necessarily the contracting of BIA realty functions) as a ``safe
harbor'' standard that would result in an automatic finding of tribal
capacity. Successfully operating a 638 contract ``relating to the
management of tribal lands'' for 3 years may not be, in and of itself,
sufficient to demonstrate that the tribe involved is prepared to
review, approve and manage leases, business agreements and rights-of-
way for energy development. However, operating BIA's realty functions
on tribal lands represents a component common to all energy development
activities a tribe may want to undertake with a TERA. Amending the
Indian Energy Development and Self-Determination Act to make this an
explicit component of a favorable capacity determination would be
clarify the requirement for applicant tribes and streamline the
Department's review.
Tribal authority for approving tribal leases for residential and
business purposes granted under the HEARTH Act may also serve as a
clear capacity criterion for a Tribal Energy Resource Agreement under
the Tribal Energy Development and Self-Determination Act of 2005. Such
tribal authority is based on the tribe's submittal of, and the
Secretary's approval of, tribal leasing regulations consistent with
Departmental leasing regulations that also include environmental
provisions for identification and evaluation of significant effects
leasing may have on the environment and public notice and comment on
the effects. While HEARTH Act authority for leasing does not require
any capacity determination by the Secretary, tribes that have approved
leasing regulations and have issued leases under that authority may be
assumed to have both the structure (regulations) and the ability
(personnel qualified to carry out the leasing functions) for basic
leasing functions.
In addition, the tribal environmental regulations required under
the HEARTH Act may form the basis for the environmental review process
also required for a TERA under the ITEDSD Act. Other considerations for
capacity for environmental review and compliance could include
environmental personnel, experience of the Indian tribe in managing
natural resources and financial and administrative resources available
for use by the Indian tribe in implementing the approved tribal energy
resource agreement of the Indian tribe. An amendment specifying tribal
adoption of an environmental code that includes requirements under a
TERA would provide clarity for a capacity determination.
We also believe that the proposed 120 day limit for the Department
to determine capacity may not be adequate to comply with the notice
requirement required by law. Currently, the Secretary must publish in
the Federal Register a notice that a tribe has applied for a TERA with
a copy of the TERA and request public comments. The process of seeking
and considering public comments and to make appropriate changes in the
TERA based on the public comments likely cannot be accomplished within
120 days unless the issue of capacity is excluded from the notice and
comment requirement. As a result, we would request that the 120 period
run only after the comment period has closed and, if additional changes
are then necessary, only after a final TERA has been submitted.
C. The Structure of the Petition Process
The Department suggests that the Committee utilize a review process
similar to that set forth in the HEARTH Act rather than construct a new
review process that could lead to confusion and inconsistent
administration. Aligning the statutory authorization for both processes
would allow the Department to coordinate the corresponding regulations,
thereby making the process more transparent and consistent for tribes
and the public. The Department is comfortable with the different
standing requirements for third party petitions concerning TERAs versus
such petitions under the HEARTH Act.
D. Approval Authority for TEDO's and Tribes Without a TERA
We have strong concerns about the proposed deletion of the TERA
requirement for a lease, business agreement, or right-of-way entered
into between a tribe and a tribal energy development organization
(TEDO). This would be the first time that Congress has allowed for
leases to be exempt from Secretarial approval based solely on the
identity of the lessee, and not on any determination, either through a
capacity determination under a TERA or through approval of regulations,
that the tribe has a leasing program that can perform this
responsibility.
E. Other Concerns
While the Department has other minor concerns which it would be
willing to discuss with Committee Staff, the concerns discussed above
are the primary concerns.
Alternative Ideas
The following represent concepts the Department believes may work
as alternatives to those in the current bill. We would be happy to help
develop these concepts in the context of S. 2132 or a new bill, if
requested.
1. Allow the tribes to recover costs from energy developers, e.g.,
environmental review costs, in the same manner that the Bureau of Land
Management can.
The nature of this authority, and any limitations on it, would most
likely require tribal consultation.
The BLM has the authority to enter into cost recovery agreements so
that the labor costs of processing energy applications are funded by
the applicants and not the Department. The BLM's cost recovery
authority allows funds from developers to supplement existing
appropriations. The BIA has a form of cost recovery authority in
theory. However, any funds collected by the BIA must offset
appropriated funding, so the authority provides no real benefit to
tribes or the BIA in practice. One immediate concern tribes might have
could be avoided, however, if this authority specifies that other
annual funding for participating tribes, such as Tribal Priority
Allocations, cannot be reduced as a consequence of proceeds from cost
recovery.
BLM has used its cost-recovery funds to establish Renewable Energy
Coordinating Offices (RECOs). The RECO teams include a dedicated
Project Manager, a Planning and Environmental Coordinator and two
Realty Specialists who process only renewable energy projects within
their designated area. The Bureau of Indian Affairs could benefit from
having its own independent cost recovery authority to gain revenues to
pursue similar initiatives. Staffing issues continue to be an issue in
the Department's processing of conventional energy development in
Indian Country as well.
2. Specify that a tribe's initial TERA may be limited in
scope, and thus complexity, with subsequent amendments to that
TERA focusing only on new and additional responsibilities the
tribe wishes to undertake.
As currently provided by law, TERA authority is defined by the
resource(s) a tribe wants to develop (e.g., oil and gas, solar) and/or
the function the tribe wants to undertake (e.g., entering into leases
and business agreements, granting rights-of-way). We understand that
the current law does not clearly provide a process for a tribe over
time to add to its TERA functions without starting over and pursuing an
entirely new TERA. It therefore would be helpful to clarify that a
tribe that wants to perform only a limited function initially can phase
in new, related functions over time as the tribe's capacity increases,
by amending its initial, approved TERA and not by having to duplicate
any of the still relevant elements of its initial TERA application.
Thus, a tribe that wants to develop oil and gas resources will not feel
obliged to demonstrate it has the capacity to handle all conceivable
aspects of oil and gas development, from exploration to production to
refinement, just to issue oil and gas leases. This is consistent with
the way that the Department and the Navajo Nation have implemented the
Navajo Nation Trust Land Leasing Act of 2000 [25 U.S.C. 415(e)] and
the way that the Department currently interprets the HEARTH Act of
2012.
Conclusion
Thank you for the opportunity to present the Department's views on
S. 2132. I will be happy to answer any questions you may have.
The Chairman. Thank you, Kevin, for that testimony.
With that, we will go to Ms. Tracey LeBeau.
STATEMENT OF HON. TRACEY A. LEBEAU, DIRECTOR, OFFICE OF INDIAN
ENERGY POLICY AND PROGRAMS, U.S.
DEPARTMENT OF ENERGY
Ms. LeBeau. Chairman Tester, Ranking Member Barrasso, thank
you for the opportunity to testify on behalf of the Department
of Energy.
As Director of DOE's Indian Energy Policy and Programs
Office, I am responsible for promoting Indian energy self-
determination, and providing, directing, coordinating and
implementing energy planning, education, financial and
technical assistance programs to support and facilitate energy
infrastructure development.
In doing so, my office has quite a unique perspective on
energy development challenges and opportunities in Indian
country which we are prepared to share with you here today.
While the Department is still reviewing the bill and
doesn't have an official position to share with you today, I
came prepared to provide an update to the various energy
development and management programs under our purview and where
we believe we are making some inroads.
I would also like to note that the department is also doing
what it can to reduce the serious threat of climate change in
Indian country, particularly with a focus on infrastructure
resilience and doing what we can to prepare communities for the
impacts already being felt in tribal communities.
Since my appointment three years ago, I have fully
committed to collaborate with Indian country to ensure we
identify and address tribal priorities. Our office's
authorities are broad in scope. However, I believe it is
noteworthy that tribes are showing high motivation to pursue
clean energy development.
Responding to that articulated interest, our focus is on
designing and implementing innovative programs to accelerate
clean energy and energy infrastructure development. Providing
Indian country with committed collaborative technical
assistance is a cornerstone of the programs that we now
provide. Our guiding star is to work with tribes often in their
communities as they seek expertise to support their own
strategic long term solutions.
Since 2011, we have made an effort to survey, evaluate,
coordinate and better leverage DOE energy programs across the
DOE complex. One insight includes that prior to efforts by both
DOE and Indian country, largely focused on commercial scale
renewable energy projects which are typically developed to
export into the broader energy marketplace. This focus is
understandable given the revenue potential of such large
projects.
In our view, however, given the capacity building and
community energy authorities in the Energy Policy Act of 2005,
we have identified a considerable opportunity and tribal
interest to focus efforts on community scale projects to
address high energy costs and articulated want from tribes to
own and operate their own facilities.
Key obstacles we continue to monitor with respect to large
commercial scale energy development include the cost of
financing requirements, particularly for renewable projects
that depend on tax incentives, frequent congestion on the grid
or difficulty working through interconnections or transmission
of service with entities who are not jurisdictional or open
access compliant, and being located in markets that do not
incentivize renewable energy purchases or markets dominated by
utilities exempted from renewable incentive programs.
Another real time observation in working closely with
tribes has been the level of education and expertise which
remains a challenge for tribes undertaking often complex energy
projects but we feel we are making some headway.
The complexity of the renewable energy tax structure,
technology risk, and operational issues have made it difficult
for even the most financially sophisticated tribes given the
unique nature of these issues. It is particularly the case
where tribes wish to finance, own and operate their own
systems.
Given these observations, the near term goals have been to
develop programs to respond to these obstacles and
opportunities so tribes can begin to successfully navigate
these complexities and begin to get case studies done for
Indian country on a broader scale.
Our Strategic Energy Response Team initiative is a
signature program and unique to our office. The goal of this
program is to bring our strategic technical assistance to
tribal communities and Alaska Native communities who have
already committed resources and efforts to developing clean
energy.
Our investments in the START program are already seeing
some returns. Several of our START projects are resulting in
tribal investment commitments, construction starts this year
and deployment of clean energy solutions.
I am going to leave it at that and look forward to your
questions about our programs and some of the funding that has
gone out in the last couple years.
Thank you once again for the opportunity to share the
exciting things we are doing in partnership with Indian country
to promote energy development on Indian lands.
Thank you.
[The prepared statement of Ms. LeBeau follows:]
Prepared Statement of Hon. Tracey A. Lebeau, Director, Office of Indian
Energy Policy and Programs, U.S. Department of Energy
Chairman Tester, Ranking Member Barrasso, and Members of the
Committee, thank you for the opportunity to testify on behalf of the
U.S. Department of Energy (DOE) on S. 2132, Indian Tribal Energy
Development and Self-Determination Act Amendments of 2014. As Director
of the Office of Indian Energy Policy and Programs (Office), I am
responsible for promoting Indian self-determination and to provide,
direct, foster, coordinate, and implement energy planning, education
management, conservation, and delivery programs of the Department that
promote Indian tribal energy development, efficiency and use and
enhance energy infrastructure. In doing so, my Office has a unique
perspective on energy development challenges and opportunities in
Indian Country.
While the Department is still reviewing S. 2132 and does not have
an official position on the bill at this time, I will provide an update
to the various energy development and management programs under our
purview where we believe we are making inroads in addition to
identifying the continuing challenges facing tribal communities in
energy and energy security.
The Department of Energy takes seriously its responsibilities and
commitments to Sovereign Tribal Nations. We are committed to
strengthening federal-tribal relationships to protect tribal rights and
interests to promote tribal sovereignty and self-sufficiency. And the
Department is also focused on doing what we can to reduce the serious
threat of climate change and, with a heightened focus on resilience,
doing what we can to prepare American communities, including tribal
communities, for the impacts of a changing climate that are already
being felt.
DOE Office of Indian Energy: Background and Executive Summary of
Accomplishments
The U.S. Department of Energy Office of Indian Energy was directed
by Congress in Title V of the Energy Policy Act of 2005 (``Act''), and
in previous legislation enacted in 1992, to direct, foster, coordinate,
and implement energy planning, education, management, conservation, and
delivery programs that assist Tribes with energy development, capacity
building, energy infrastructure, energy costs, and electrification of
Indian lands and homes. This Office has specific statutory goals:
Promote Indian tribal energy development, efficiency, and
use;
Reduce or stabilize energy costs;
Enhance and strengthen Indian tribal energy and economic
infrastructure relating to natural resource development and
electrification; and
Bring electrical power and service to Indian land and the
homes of tribal members.
To accomplish these goals, the Act conferred on the Office the
authority to provide grants to assist eligible tribal entities in
meeting energy education, research and development, planning, and
management needs, which could include: Energy generation, energy
efficiency, and energy conservation programs; Studies and other
activities supporting tribal acquisitions of energy supplies, services,
and facilities, including the creation of tribal utilities; Planning,
construction, development, operation, maintenance, and improvement of
tribal electrical generation, transmission, and distribution
facilities; Development, construction, and interconnection of electric
power transmission facilities; Developing a program to support and
implement research projects that provide opportunities to participate
in carbon sequestration practices; and Encouraging cooperative
arrangements between Indian Tribes and utilities that provide service
to Tribes.
Since joining DOE three years ago, I have been fully committed to
implementing the statutory goals for energy development in Indian
Country which has included a commitment to continually collaborate with
Indian Country. The results of that collaboration are opportunities to
identify and address tribal priorities for energy development policies
and programs and to fill gaps in current Department programs. More
details about these efforts, as well as future plans, are provided
below.
Pursuing Sustainable Energy Development in Indian Country
Our Office facilitates energy development in Indian Country--
including renewable energy sources such as wind and solar, energy
efficiency improvements, and fossil-fuel electric generation that uses
carbon sequestration systems, as well as improving the infrastructure
needed to deliver this energy. Tribes have shown a high motivation to
pursue expanded clean energy development. It is our experience thus far
that the DOE Office of Indian Energy Policy and Programs' initiatives
that are taking root in Indian Country are a direct reflection of the
innovation and the promise of the next generation of tribal energy
development. Our priority is focused on providing useful information
and tools as well as designing and implementing innovative programs to
accelerate clean energy and energy infrastructure development in Indian
Country.
Our office tasked the DOE National Renewable Energy Laboratory
(NREL) to update all the renewable resource estimates in Indian
Country. Based on updated data provided by using updated analysis and
modeling tools, the estimated maximum renewable energy resource
potential on Indian lands is millions of megawatts (MW) of nameplate
capacity. These comprehensive updated estimates can be found at http://
www.nrel.gov/docs/fy13osti/57748.pdf. It is clear that further
development of these energy resources in Indian Country can provide an
opportunity to not only increase tribal energy reliability and self-
sufficiency but also contribute to the President's energy security
goals and Climate Action Plan.
President Obama and SecretaryMoniz have been extremely supportive
of improving the economy of Tribal communities through enhanced clean
energy development. At the 2013White House Tribal Nations Conference,
the President stated:
`` The health of tribal nations depends on the health of tribal
lands. So it falls on all of us to protect the extraordinary
beauty of those lands for future generations. And already, many
of your lands have felt the impacts of a changing climate,
including more extreme flooding and droughts. That's why, as
part of the Climate Action Plan I announced this year, my
administration is partnering with you to identify where your
lands are vulnerable to climate change, how we can make them
more resilient.''
Indian Tribes and Alaskan Native villages have made clear to us
that resilient energy and energy infrastructure can, as a priority, go
hand in hand with the vision of a cleaner energy future. Providing
Indian Country with committed, collaborative technical assistance is a
keystone of the programs and policies of the Office. Our guiding star
is to work with Tribes as they implement their own strategic, long-term
solutions--solutions with the potential to reduce energy costs, enhance
energy security, promote tribal sovereignty and guide Native
communities towards a sustainable energy future To support this
tribally articulated vision, we support a number of programs that
provide energy policy information as well as practical, market-based
tools to Tribes that are taking tribal projects past feasibility
discussions and into investment and deployment decision making.
The Indian Country Energy and InfrastructureWorking Group was
established in August 2011 to ensure these and future technical and
financial assistance programs are responsive to Tribes. The working
group provides critical advice and recommendations to the Secretary and
to the Director of the DOE Office of Indian Energy Policy and Programs
on the strategic planning and implementation of the Department's energy
resource, energy technology, and energy infrastructure development
programs.
Promoting Strong Partnerships and Addressing Common Challenges
We also have taken time to survey, evaluate, coordinate and better
leverage a variety of DOE energy programs, for example, the Office of
Electricity Delivery and Energy Reliability, Western Area Power and
Bonneville Power Administrations, and also including the grants offered
through the Office of Energy Efficiency and Renewable Energy. Below are
important lessons learned we would like to highlight:
Prior to 2011, efforts both by DOE and in Indian Country largely
focused on commercial-scale projects, which are typically developed to
export from Tribal areas into the broader energy marketplace. This
focus is understandable, given the revenue potential of these large
scale projects. In our view, however, the capacity-building and
community energy issues highlighted in the Energy Policy Act of 2005
provisions which guide our Office's mission and goals, there was a
considerable opportunity and continuing need in community-scale and
facility-scale energy generation, as well as energy efficiency.
Community-scale and facility-scale projects are developed to provide
electricity to the local community (housing) or on-site (government
buildings, community buildings), usually in order to address fiscal
challenges of high energy costs in Native communities. These types of
projects allow tribes to marshal their resources to cleanly generate
their own energy and electricity; reduce and/or stabilize their energy
costs; create jobs in the construction, operation, and maintenance of
these systems; promote energy reliability and self-sufficiency; and
promote reservation economic development.
Key obstacles which my Office continues to monitor with respect to
commercial-scale energy development in Indian Country include:
Cost to build projects and the financing and funding options
available for projects, particularly renewable projects that
use financial incentives not well suited to tribal governments
or their enterprises;
Frequent congestion on the transmission grid or difficulty
working through interconnection and transmission service
agreements with public electric entities whom are not FERC
jurisdictional and/or open access compliant;
Being located in markets that do not support, require or
incentivize renewable energy portfolio standards or purchases
or markets that are dominated by utilities whom are exempted
from any renewable incentive programs; and
Securing whole buyers who are willing to purchase renewable
energy at the cost to produce the energy and whom are
unfamiliar with the legalities of financing or contracting with
tribal businesses.
Other recent or real-time observations in working closely with
Tribes and Alaska Native communities on a variety of projects and
issues include:
Much of the high visibility, celebrated commercial-scale energy
development in Indian Country has been almost exclusively in the
purview of third-party developers who lease land from Tribes to build
renewable energy projects in Indian Country. There are three primary
reasons for this: magnitude of upfront capital cost; tax and other
financial incentives which promote third party development and
ownership by taxable entities; and the extensive expertise required to
build commercial-scale projects.
Tribes have become more interested in community-scale, facility-
scale development for a number of reasons, including the success of the
Energy Efficiency Community Block Grant program, state and utility
companies' incentives that pay for on-site generation, newly emerging
relative ease of tribal leasing and permitting for renewable projects
under the HEARTH Act, and reducing or stabilizing costs.
The level of energy education and expertise remains a challenge for
Tribes undertaking often complex energy projects, but we are making
headway. And the lack of energy business acumen is not necessarily
based on business capacity. The complexity of issues such as renewable
energy tax structuring and technology risk and operational issues is
difficult to navigate for even the most business-oriented Tribes, given
the unique nature of these issues. This is particularly the case where
Tribes wish to finance, own and operate their own systems without third
party ownership or participation to address tax and related financial
incentives.We have provided that training to Tribes which has led to
affirmative decision making.
In many respects, there are several issues shared between Alaska
Native villages and smaller tribes in the contiguous states, including:
remote locations (cannot access transmission grids), small land bases
(insufficient for commercial-scale and even sometimes community-scale
development), small populations (they lack the human resource capacity
for comprehensive energy development), and scarce financial resources.
Hence, we have refocused our efforts on the unique energy situation for
Alaska Native villages.
Lastly, given this information, our primary short term goal has
been to develop several programs to respond to the issues, obstacles,
and opportunities in Indian Country so that we can see more
implementation of successful, cost-effective projects.
DOE Office of Indian Energy Programs and Priorities
My Office has recently launched several programs and initiatives to
promote energy development in Indian Country and address the challenges
identified above:
DOE Indian Energy START Program
The Strategic Technical Assistance Response Team (START) initiative
is a signature and unique DOE Office of Indian Energy program aimed at
advancing next-generation energy development in Indian Country. The
START program is focused on the 48 contiguous states and Alaska. http:/
/energy.gov/indianenergy/resources/start-program
For the 48 contiguous states, early-stage project development
technical assistance will be provided through the START program to
selected projects. The goals of the START programs are to bring
targeted, strategic technical assistance to Tribes and Alaska Native
governments whom have already committed resources and efforts to
developing clean energy in their communities. This program is the next
step in the development process as the Department has invested in
early-stage feasibility in many Indian communities and this next-level
development work is providing tribal communities with unbiased, expert
technical assistance and information which is helping tribal decision
makers to take the next step towards investments and deployment.
After being competitively selected, DOE and NREL experts work
directly with tribal community-based teams as well as tribal legal and
finance specialists to further develop market feasibility assessments;
due diligence research, analysis, and documentation; and early pre-
development work to prepare site control, verify resource, pre-qualify
off-take agreements and strategy, and produce a permitting plan.
Our investments in the START Program are starting to already see
returns. Several START projects have resulted in decisionmaking, tribal
investment commitments, construction starts and deployment of clean
technology solutions. http://energy.gov/indianenergy/downloads/office-
indian-energy-newsletter-springsummer-2014 In Alaska, we initially
teamed up with the Denali Commission to specifically assist in the
development of tribal energy planning for Alaska Native entities. Our
Alaska START Program continues to actively seek programmatic and
financial federal and state partners to ensure comprehensive
collaboration and success for Alaska Native communities in need of
stabilized energy costs. Alaska START Program Summary at http://
www.nrel.gov/docs/fy13osti/58879.pdf
Energy Capacity Building and Tribal Energy Training
In three years, we have established a robust tribal technical
assistance and training program which features in-person, in-depth
training to tribal leaders and staff as well as web-based, on-demand
training for those whom prefer to participate at their own pace and in
their own offices.
Since launched in October 2012, our renewable energy web-based
curriculum has had over 1,490 visitors and our resource library which
hosts dozens of tribally-relevant documents and tools has had over
1,250 visitors. Since July 2013, we have hosted 49 tribal members for
in-person renewable product development and finance forums. We have
held numerous best practice and peer-to-peer forums--ranging from such
topics as solar energy development to transmission and clean energy
integration. Since December 2011, approximately 350 tribal leaders and
staff have attended these in-person best practices forums.
Energy Transmission Training and Technical Assistance
Understanding the transmission grid, interconnection issues, and
issues related to distribution of clean energy also are critical for
successful development of energy projects, whether commercial or
community scale. We are working with our partners in DOE's Office of
Electricity Delivery and Energy Reliability, the Western Area Power
Administration, and the Office of Energy Efficiency and Renewable
Energy to offer a webinar series to address the range of issues
associated to developing clean energy and transmission. Since January
2013, we have had over 2,050 participants in our webinar series.We have
as a team also provided almost a dozen Tribes with pre-feasibility
transmission study assistance and a range of other training and
technical assistance.
Office of Indian Energy's Enhanced Coordination with the Office of
Energy Efficiency and Renewable Energy's (EERE) Tribal Energy
Program
EERE's Tribal Energy Program was originally established under the
Energy Policy Act of 1992 to implement DOE's responsibilities under the
Act. Since 2005, the program has been implementing the Office of Indian
Energy's EPAct Title V grant authority and has been providing funding
related to renewable energy and energy efficiency. Since becoming fully
operational, the Office of Indian Energy and EERE's tribal program have
jointly offered coordinated energy programs to ensure against
duplication, have leveraged grants into START projects to accelerate
project successes, and have offered free technical assistance to Tribes
(up to 40 hours) which has focused much of its efforts on energy
strategic planning and hands-on prioritized technical analysis for
clean energy projects.
Other DOE Office and Interagency Coordination
As stated earlier, one of our primary goals is to leverage existing
DOE resources to promote and implement energy development in Indian
Country. As one recent example, the Department highlighted tribal
eligibility and inclusion in our $15 million Solar Market Pathways
funding opportunity announcement. This funding opportunity seeks to
help state, tribal and local communities develop replicable multi-year
strategies that spur significant solar deployment, drive down solar
soft costs, and support local economic development efforts. Our
experience is the Office's vantage point enhances DOE-wide coordination
which facilitates more opportunities to leverage the considerable
technical assistance mechanisms developed by our programs for
government and community leaders. These programs also have created
educational materials byworking with and learning from government
leaders on implementing renewable energy policies and programs at the
community level. It is our goal to leverage those lessons and best
practices in Indian Country, so that we do not have to recreate the
wheel and can apply proven techniques and technical assistance.
We also intend to build on the many relationships and coordination
efforts we have initiated with other federal agencies that provide
support for energy development. Those agencies include the Department
of the Interior (DOI), Department of Agriculture, Denali Commission in
Alaska, Environmental Protection Agency, and the Department of
Commerce. For example, in Alaska, we have been actively engaged in
energy development and management activities over the last two years
and as part of the National Strategy for the Arctic Region, and will
take the lead on the implementation plan for promoting more renewable
energy development in the Alaska Native villages in the Arctic Region.
This plan includes continuing the Office of Indian Energy's Alaska
START program, comprehensive strategic technical assistance to assist
Alaska Native villages with community-wide energy issues and project
opportunities. The Office of Indian Energy will also convene a
renewable energy development forum in the summer of 2014 to bring
together key stakeholders in renewable energy development and focused
on building public-private partnerships as the means for structuring
and financing renewable energy projects remote Alaska Native villages.
Also, in support of its Alaska efforts, the Office of Indian Energy has
stationed a full-time program manager in Anchorage.
Setting Priorities in Fiscal Year 2015 Budget and Future Efforts
The President's FY 2015 budget request, which includes $16 million
for Indian Energy Policy and Programs as a separate appropriation,
reflects the consolidation of our tribal energy programs and Office of
Indian Energy into a single office. This increased and consolidated
budget request will enable DOE to maintain key initiatives while
leveraging authorized tools and build on initiatives developed and
executed since 2011. For example, we will continue: to support the
Indian Country Energy and InfrastructureWorking Group; the START
Program; to expand our energy capacity building efforts; and to provide
additional technical assistance to Tribes in support of tribal energy
development projects.
Conclusion
Thank you for the opportunity to share the exciting things we are
doing in collaboration and in partnership with Indian Country to
promote energy development on Indian lands.
The Chairman. Thank you, Tracey, for your testimony.
I am going to start with questions for Kevin Washburn.
Your testimony references the provisions of the HEARTH Act
several times as alternative to some of the TERA language in S.
2132. With the relative success of the HEARTH Act provisions,
what are your thoughts on simply expanding authority to include
tribal subsurface development for all tribes that choose to
adopt their own regulations?
Mr. Washburn. I think that is probably the right approach.
We reinvent the wheel a lot in Indian country so we have
five volumes of the United States Code with statutes dealing
with Indian country. We often do similar things in different
ways in different statutes.
I think the HEARTH Act looks like it is being very
successful. Since it is something we all agree on, we think
that model is a good one to follow. We actually deal with some
of the same issues we are trying to deal with in this energy
Act.
The Chairman. Currently, S. 2132 would expand the HEARTH
Act provisions to include subsurface development but only for
the Navajo Nation. You mentioned the department has some
concerns about that provision. Could you talk a little more in-
depth about what those concerns are?
Mr. Washburn. The Navajo Nation thankfully has gone forward
quite a bit on some of these things. We have tested out some of
these things with the Navajo Nation and that has worked well.
The HEARTH Act is a good model. However, mineral
development is more complicated than business site leases or
something like that or surface leases. I think that basically
is the issue. That is where the Navajo model is important.
We need to recognize there are some slight differences in
the way the HEARTH Act works and the way energy leasing needs
to work. Those are sort of the bases for our concerns around
the Navajo version.
The Chairman. We have heard a lot in the last couple of
years about a one stop shop. I believe the department is using
a virtual one stop shop for Ft. Berthold for oil and gas
permitting. The BLM currently has one stop shops in seven
locations created by the Energy Policy Act of 2005.
Should Congress consider similar statutory language for the
BIA or modify the existing one stop shops to strengthen the
BIA's involvement?
Mr. Washburn. Let me say this. I think the one stop shop
model in some cases has been successful. Everybody has sort of
a different idea of what they mean by one stop shop. A lot of
tribes mean they want a shop on their reservation that has
every Federal agency. That is hard. It is hard to produce this
everywhere and get all the Federal agencies lined up that we
need to do that. We just don't have the fiscal resources to
open all those offices.
We have tried to do it. We have experimented with it. It is
not a bad idea. It is just that we don't have all the fiscal
resources we need necessarily to accomplish one everywhere that
a tribe wants one.
Another approach is to try to locate those in one stop in
the United States. It may not be on every single reservation.
We have toyed with both those models in different ways. That is
an improvement.
The Chairman. If there was a one stop shop in the United
States, I'm assuming that could all be accessed through the
Internet?
Mr. Washburn. That's right.
The Chairman. Tracey LeBeau, your testimony discussed the
progress your office has made in providing technical assistance
to tribes through the START Initiative. Can you describe what
has been successful?
Ms. LeBeau. We have had a few projects, namely the San
Carlos Apache is one notable one where we have been able to
work very closely on the ground with tribal staff and decision-
makers to help them sort through technology issues and also the
very complex financial structuring issues inherent in a lot of
these renewable energy projects.
I believe they are set to start construction in the next 60
days on a solar project to serve their community needs.
In Alaska, we have had a number of areas where we have made
progress to help tribes get technically ready and further down
the road to access and better leverage State funding which is a
very significant area of funding for Alaskan Native
communities.
I am looking forward to other near term announcements on
new construction starts this year and next for some of the
projects we have been working on.
The Chairman. You talked about State funds. Is it allowed
to bring in the outside capital, private capital?
Ms. LeBeau. Definitely. As an example, San Carlos leveraged
a State renewable energy incentive, and put in their own debt
financing to make that project a reality. In Alaska, that has
definitely also been the case.
The Chairman. Vice Chairman Barrasso?
Senator Barrasso. Thank you very much, Mr. Chairman.
Mr. Washburn, your written testimony stated the Department
has strong concerns regarding the tribal energy development
organizations. These are organizations that must be majority
owned and controlled by the tribe. The bill would treat certain
transactions between the tribe and the organization as an
agreement with the tribe itself or its agency.
I appreciate the Department staff working with my staff on
this provision. Why do you believe the Secretary should review
intratribal transactions. I think you said in your statement
always trust the tribes.
Mr. Washburn. I think our written testimony is probably a
bit too strong on that by saying strong concerns. I think we,
in general, should trust the tribes.
The key to tribal economic development or energy
development organization is slightly removed from the tribes.
It is not exactly the tribe, but is an organization the tribe
has a strong interest in. I think we should be able to work
closely in that context. That is pretty close to the tribe
doing the development itself. I see that.
We will work with you on that and see if we can get to
comfort on that.
Senator Barrasso. I want to talk a bit about Federal
liability. You written testimony talks about Federal liability
provisions for the TERA and the agreements which you say are
unclear in my bill but you also say in the Energy Policy Act of
2005 they are unclear.
You recommend replacing the Federal liability provisions
with those contained in the HEARTH Act of 2012, which is a
broader waiver of liability. Can you explain why you think that
a broader waiver of Federal liability is appropriate for
subsurface mineral resource development?
Mr. Washburn. I guess this goes to the point I made
earlier. I am an Indian law scholar in my day job when I am not
in the government. We often use slightly different language to
reach the same basic meaning in Federal law. We make lawyers
wealthy by doing that but we are largely trying to achieve the
same outcome.
Again, this is an area where we all agreed on the language
in the HEARTH Act and everyone celebrated that language. This
language is pretty similar but is slightly different. It feels
like it is a full employment act for lawyers and doesn't
accomplish much difference. I would suggest that we use the
same language we all agreed on in the HEARTH Act.
Senator Barrasso. For tribal energy resource agreements, a
tribe needs to demonstrate sufficient capacity to regulate
energy resource development. Your written testimony suggests
eliminating from my bill and from current law the provision
that requires tribes to demonstrate sufficient capacity.
Can you spend a little time explaining why the capacity
determination should be eliminated?
Mr. Washburn. It feels kind of old school to me, frankly.
We have started trusting tribes a lot more and it has taken
time. The Federal Government comes slowly along but has learned
to trust tribes more. Again, it is the tribe that lives on this
land and is most affected by the outcomes of development.
I think we have learned that when we trust tribes to do the
right thing, they are basically doing it for themselves and can
be trusted as well as Federal officials can or Federal
bureaucrats can to make decisions about these actions.
Senator Barrasso. Ms. LeBeau, following up on what we just
heard from Mr. Washburn, entering tribal energy resource
agreement, a tribe must have sufficient capacity to regulate
the development of energy resources. Part of your Office's
specific responsibility is to assist tribes in capacity
building for energy development.
Can you tell us a bit about how you collaborate with the
Department of the Interior to ensure that tribes have that
capacity to regulate energy resource developments?
Ms. LeBeau. Most of our capacity building and training
programs really revolve around helping support technical
capacity, getting them more acquainted with technology, better
acquainted with technology risks, energy facility operations
and how these projects typically get developed and financed and
what the energy marketplace looks like.
We work very closely with the Department of the Interior as
their focus has been more on energy capacity building in terms
of governance matters related to energy development. I think
there is a nice complementary role we play and we collaborate.
Senator Barrasso. Thank you, Mr. Chair.
The Chairman. Senator Heitkamp?
STATEMENT OF HON. HEIDI HEITKAMP,
U.S. SENATOR FROM NORTH DAKOTA
Senator Heitkamp. Thank you, Mr. Chairman.
First, I want to say, Kevin, in this room are probably
about 15-20 students from the Mandan, Hidatsa, and Arikara
Nation. What we talk about is their future when we talk about
the development of this resource, doing it the right way but
also not discouraging folks from actually making that
investment.
For many of our treaty tribes, whatever land was negotiated
in those treaties is the land they have to develop and use. I
think one of the biggest complaints that I hear repeatedly in
Indian country is that the system of Federal regulation treats
these as if they were public lands and not tribal lands.
I think both of you acknowledge that this is land that
first and foremost the tribes have primacy over. The Federal
Government would not play the same role if these were private
leases that did not have any kind of tribal or Federal land
involvement. This creates a real system of problems for
developing these resources on the reservation. I don't think it
can be understated.
I met yesterday with a major company that does business on
the Mandan, Hidatsa, and Arikara Nation who told us that they
are this close to pulling out and this close to moving those
rigs someplace else because of the morass of Federal
permitting.
Senator Dorgan once said it takes four agencies and 49
steps. I think with the Mandan, Hidatsa and Arikara Nation, we
say it is seven agencies and 100 steps.
The reason we are pushing in a very aggressive way this
notion of one stop shop is all too often what happens is you
say, it's BIA's fault, then BIA says it's BLM's fault and BLM
says, oh, no, the slow up is with Fish and Wildlife, so around
and around and around the circle they go. In the meantime you
have now frustrated everyone.
I want to go back to Senator Tester's discussion about one
stop shop and accommodating those concerns not from the
standpoint of just ease of discussion but accountability of all
those agencies to work together. I know there has been some
discussion about doing this in one central location, say
Denver, where we can actually get an answer.
I think in order to reestablish faith with the tribes and
the mineral rich tribes, we need to have timelines that people
actually consider valid and essential. We have the
predictability.
I would like you to comment about building a one stop shop
in Denver and also talk about what would be your reaction if we
set a timeline and said all you Federal agencies who want to
participate, instead of saying no longer is this your job, we
are going to say you have two months from the time of
application to actually get it done, a completed application.
What would be your reaction?
Mr. Washburn. That would motivate us.
Senator Heitkamp. I hope so.
Mr. Washburn. These are difficult issues and the first one
you raised, the fact that on non-Indian lands nearby, private
lands, people have to go to one government to get everything
worked out, usually the State government. On Indian land, they
have to work with both the Federal Government and the tribal
government.
You already have double the number of governments people
have to work with. There is always sort of a clash of multiple
interests whenever we do any kind of energy development. There
are sacred sites, endangered species, interest in getting
minerals out of the ground, economic development and all that.
These are difficult issues. We put different Federal agencies
in charge of each of those interests.
Senator Heitkamp. You do understand their problem with this
distinction of public land versus tribal land?
Mr. Washburn. I do understand that distinction. The fact is
Federal land is what keeps the States from being able to swarm
on to it and start regulating. If it is not Federal land, then
it is State land. In the grand scheme of things, that is what
we recognize. We recognize there is Federal land and there is
non-Federal land. Non-Federal land is subject to State taxation
and State regulation.
Senator Heitkamp. Tribal land isn't. You and I can have
that discussion another time.
Mr. Washburn. Fair enough.
Senator Heitkamp. I did a little work on State taxation in
Indian country. I would dispute some of your statements. Kevin,
you and I can debate this back and forth. We have spent a lot
of quality time together but just a quick answer to
establishing a time certain whether you are willing to do that
with all the agencies to facilitate development of tribal
resources?
Mr. Washburn. They will throw me out on my ear if I go back
and say I just got us 60 days to dramatically transform oil and
gas development in Indian country.
Let me say this, we are definitely interested in working on
something like that. The White House Native American Affairs
Council, which Sally Jewel chairs, is meeting tomorrow at the
White House with several Cabinet Secretaries. These are the
kinds of issues we are trying to deal with, breaking down silos
between Federal agencies. We will work on progress in breaking
down those silos.
Senator Heitkamp. Kevin, I look forward to a response.
The Chairman. Senator Hoeven.
STATEMENT OF HON. JOHN HOEVEN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Hoeven. Thank you, Mr. Chairman.
Secretary Washburn, thanks for joining us today.
I found out recently, and it has been in the media, that
two infants have died on the Spirit Lake Reservation. We don't
have any information yet on what happened. I believe the FBI is
investigating.
I am wondering if you have any information you can provide
to us or if you have any information, even if you can't provide
it to us, and what steps you are taking to ensure that you are
doing everything you can and that BIA is doing everything it
can to protect families and particularly children on the Spirit
Lake Nation Reservation.
Mr. Washburn. Thank you for your longstanding concern and
interest in this issue. We have worked together quite a bit to
try to address these issues. I know you know a lot of the
things we have been doing.
I won't speak about the infant investigation because I
don't want to jeopardize it. I know you understand that. The
public has a right to know these things but we often can't talk
about those things until the time is appropriate. I appreciate
your understanding about that.
We have made great efforts over the past year or so to
ensure that we do better by the children in Indian country. We
have been working on several different fronts, we have been
working on updating our BIA protection handbook, working on
improving our BIA Indian child welfare guidelines for State
courts and working specifically at Spirit Lake to try to get
Spirit Lake staffed.
We have retroceded the authority from the tribe back to the
Federal Government for some of the protection issues out there.
Again, I can't talk about the specific facts of the case but we
are painfully aware of these issues and are following up.
Senator Hoeven. Can you assure me you are doing everything
you can with BIA to make sure this situation addressed fully
and you are doing everything you can for child safety on the
reservation?
Mr. Washburn. Senator, yes, I can make that statement to
you with confidence. We are also working with the Department of
Justice rather closely as well.
Senator Hoeven. As you know, I put forward the Native
American Children's Safety Act which would provide additional
protection for Native American children in foster homes. Are
you willing to work with me to see we get that passed to
provide additional protection for children on the reservation?
Mr. Washburn. We would be happy to work with you more on
that bill. We testified on that bill before and have some
concerns about the bill but we understand what you are trying
to do and agree with your overall goals. We will work with you.
Senator Hoeven. I would encourage you to contact me and if
you have concerns, let's work on those. I am willing to do that
with you.
Speaking about legislation, the Ranking Member on this
Committee introduced a bill, the Indian Tribal Energy
Development and Self Determination Act and was kind enough to
allow me to co-sponsor that with him. That would address some
of the concerns that Senator Heitkamp and Senator Tester have
raised in terms of energy development on the reservation across
the country.
I would really encourage your help and support on that
legislation in terms of getting at some of the red tape and
some of the challenges that were faced on the reservation. Have
you had a chance to look at the bill and I would like your
thoughts on it.
Mr. Washburn. We testified extensively on it before you got
here. I submitted written testimony on the bill.
I will say that it would be a feather in the cap of this
Committee to get something passed on Indian energy this year.
We will work with you to get something we can agree on because
it is time. The Vice Chairman has been working on this for a
very long time and thank you for your support of that work. I'd
like to see something happen here.
Senator Hoeven. Ms. LeBeau, I think you could be very
helpful with that legislation as well. Right now, in North
Dakota, the Three Affiliated Tribes are producing an amazing
amount of oil and gas but they are flaring off 40 percent of
the natural gas that is being captured.
We need markets for that gas. That is part of the equation
and we have legislation on that part but we have to be able to
develop the infrastructure. We cannot do that without
permitting of the pipelines and the gathering systems to do it.
I would encourage you to look at that legislation. I think
you can make a big difference here in terms of helping not only
produce more energy but good environmental stewardship with
your help and support for that legislation.
Ms. LeBeau, any thoughts you might have in that regard?
Ms. LeBeau. I actually had some very initial conversations
with the Three Affiliated Tribes on the gas flaring issue.
Those conversations and dialogue are ongoing.
Senator Hoeven. I know expediting permitting infrastructure
is something they very much want.
Thank you.
The Chairman. Senator Murkowski?
STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman. Thank you for
the hearing.
I too am honored that the Ranking Member has allowed me to
join in his great piece of legislation. I think it is an
important bill and I too hope we will able to see this advance
through the Committee.
We are seeing such an energy boom across this country. I
have been to North Dakota, my colleague's State; I was out in
New Mexico, Texas and Colorado over this recess. We are seeing
this boom everywhere. Yet our Indian tribes on the reservation
are seemingly being left out due to bureaucratic delays with
the Federal Government.
It gives tribes the impression that the government doesn't
trust them to handle their own energy development on their
lands. I heard that frustration.
About 43 years ago in Alaska, we did something different.
We gave Alaska Natives collective title to own their own lands
under ANCSA. Today our Alaska Native corporations are among the
largest energy and mineral producers in our State. They are
exploring for natural gas, for oil and are actively developing
mineral resources.
Our Native corporations continue to make investments in the
State and are really changing the energy landscape. Whether it
is through development of hydropower, we are seeing a great
deal of wind power developed in our coastal communities and our
villages, or whether conventional energy development.
Nearly nine years after passage of EPACT, the Energy Policy
Act of 2005, we still have yet to see a tribe in the lower 48
assume regulatory powers over the energy development on tribal
lands. We do have to recognize that there are considerable
missed opportunities and how we can address these policies to
help even that playing field, to get these opportunities, to
really make a difference with our tribes. This is what this is
all about.
Secretary Washburn, today in the Federal Register, you
issued a proposed rule establishing a process for tribes to
take lands into trust in Alaska. As I understand it--just me
for the first time looking at this proposed rule you announced
today--it raises questions from my perspective, probably more
questions than answers.
It clearly represents a departure from 43 years of
established policy in this area in which Alaska Natives took a
different course. We deviated from the failures of the
reservation system, set up something that was pretty novel with
ANCSA.
I want you to know that I am reviewing your proposed regs
in view of its potential impact on Alaska. I will have some
questions that I will submit for the record and would
appreciate your responses to them at that time.
I want to use the balance of may time this afternoon to
talk about the issues as they relate to price of energy in
Alaska because as we all know we have abundant resources, we
don't have any shortage there but we have an energy crisis. We
have an energy crisis in our rural Native communities because
of geography, of the distances and the economies of scale.
We had Kawerack testify to this Committee during our energy
roundtable last summer, talking about aging infrastructure,
high construction costs and antiquated technology. You are in a
region where gasoline is costing you about $7 a gallon. In the
AVCP region in the YK Delta, you are looking at $600-$800 for a
heating bill, your heating bill per month. Understanding what
we can do to reduce these costs has been so paramount to so
many in Alaska.
This is for you both. You're going to be looking to take
lead on renewable energy development. You are bringing together
some stakeholders in renewable energy development and focusing
on building these public/private partnerships.
I'm trying to understand exactly what this might mean in
terms of how we can deal with some of our high cost issues when
talking about these public/private partnerships. Effectively,
what can Alaska tribes expect from this?
One of the things AVCP is considering is in an effort to
reduce energy costs, one thing we are looking at is the
transportation costs and the possible development of an energy
freight corridor that could connect the Kuskokwim River
villages with the Yukon River villages. They are only separated
by about 20 miles of land but how you can kind of knit all of
this together to save costs is something that is worthy of
consideration.
Can either of you or both of you explain to me how you
envision development of these public/private partnerships that
might make a difference in reducing energy costs?
Mr. Washburn. I'll say a few words and then maybe Director
LeBeau can address the question.
In the first four years of the Obama Administration, we
focused on massive utility scale type projects, multiple
megawatt type projects, things that take a lot of financing to
produce. I think one of the insights we have developed over the
last couple of years is we need to focus a lot more on local
community scale projects that can help a small community like
that.
It may not be multiple megawatts and may not be hundreds of
millions of dollars but it is very important to that community.
I frankly find inspiring some of the things going on in Alaska.
I was in King Cove not too long ago and they have a wonderful
hydro facility that works great, saves the community a lot of
money and saves the earth because it takes less hydrocarbon
emission to deliver gas and fuels to the community.
I think we have kind of pivoted, kind of turned a corner
that I think will be good for Alaska. I think that is one of
the reasons for the public/private partnerships. Private
entities can make a big difference as well whenever you're
talking about community scale projects.
Senator Murkowski. Ms. LeBeau?
Ms. LeBeau. I will try to cover a couple things I think
might be of particular interest to you, Senator, and a bit of
an update.
My office in the last three years has duly noted the issues
and unique challenges in Alaska and how they could be better
addressed by the Department of Energy. In keeping with that and
also recognizing that almost half the tribes in the United
States are in Alaska, I can say this year our budget reflects
that. Almost half of our entire budget is dedicated to Alaska.
I would also mention--I know this is of particular interest
to you--we also have hired a full time person and he is now
stationed in Anchorage.
We are very, very committed to working with Alaska Native
governments and communities.
On the public/private partnership side, this is a dialogue
in which we are keenly interested and I think it will be
ongoing. I will note that one area of interest has been talking
to the Alaska Native regional corporations, folks like Cook
Inlet and others who have invested in renewable energy
projects. We are trying to get some lessons learned from them
on what the motivations are, how those investments are doing
and if those could be leveraged into Native communities
throughout Alaska as well.
We are very much focused on and providing a lot of
technical assistance and funding towards trying to answer the
questions of what is the best way to integrate renewables and
microgrids and incorporate deployment of wind and diesel. I
think that is one solution for a lot of Native communities.
That is of particular interest and we are still learning some
lessons on the best way to integrate those types of
technologies in addition to microgrids.
I think once we can answer that question as well as
microgrid and renewable integration questions, it will help
industry and others investing in those types of systems and
with economies of scale, where we have more interest and
settling on some technology solutions, and I think you will see
the prices of those systems come down.
Those are two areas I wanted to share with you today.
Senator Murkowski. I thank you. Know that I am very
interested in how we might be able to make these public/private
partnerships work. I know the tribes are hopeful as well.
I will have some additional questions also for you,
Director LeBeau, in terms of specifics on the budget for the
START program in Alaska, how many villages you anticipate
serving and all that. I will submit those for the record.
Thank you, Mr. Chairman.
The Chairman. Thank you.
I think there will probably be many additional questions
because we are not going to have a second round of questioning
for both of you.
I want to thank you both for your testimony. I appreciate
your being here today.
I would also say it was four or five weeks ago, we had a
hearing on several bills I had asked you, Kevin, and a lady by
the name of Lillian Sparks Robinson, to give their concerns to
us so we could get working on them.
One of them was the bill of Senator Hoeven, the Children's
Safety, and the other one was Senator Murkowski's job training
bill. The other one was an IHS issue, and I say this because
hopefully they are watching, because I wanted to get their
concerns. We haven't received them yet, so you need to kick
whoever needs to be kicked to get us that information so we can
get to working on that. It is critically important for Indian
country as we move forward.
That being said, thank you both for being here. I
appreciate it.
Now I would like to invite our second panel to come
forward. The first panelist is the Honorable Carole Lankford--
whom I know very well--the Vice Chair of the Confederated
Salish and Kootenai Tribes of the Flathead Reservation in
Montana. We appreciate your making the long haul out here,
Carole.
Then we have the Honorable Michael O. Finley, representing
both the Colville Tribes of Washington and the National
Congress of American Indians. It is always good to have you
here, Michael.
Next, we have the Honorable Aletha Tom, Chairwoman of the
Moapa Band of Paiute Indians of Nevada. It is very good to have
you here, Aletha.
Lastly, we will hear from the Honorable James ``Mike''
Olguin, Acting Chairman of the Southern Ute Indian Tribe. We
met with Mike this morning. We look forward to your testimony.
With that, the same rules apply as earlier. You have five
minutes. Please keep it to five minutes so it gives us time for
questions. Your entire written testimony will be made a part of
the record. That is what is really important, so if you could
hit the highlights, we would appreciate it.
We will start with you, Carole. It is good to have you
here.
STATEMENT OF HON. CAROLE LANKFORD, VICE
CHAIRWOMAN, CONFEDERATED SALISH AND KOOTENAI TRIBES
Ms. Lankford. Thank you very much.
Chairman Tester, Vice Chairman Barrasso and members of the
Committee, my name is Carole Lankford and I am Vice Chair of
the Tribal Council of Confederated Salish and Kootenai Tribes.
This is an exciting time for CSKT as we prepare to purchase
Kerr Dam, a nearly 200 megawatt hydroelectric facility located
in the heart of the Flathead Reservation. We will soon become
the first tribe in the country to fully own, operate and manage
its own hydroelectric power facility.
We are very proud of the role and are already one of the
largest employers in western Montana and in helping our State's
economy. The acquisition of Kerr will be a big step in
furthering our supportive role in the economy of our State.
Owning and operating this dam will mean taking control of
an important tribal resource that will produce clean energy as
well as provide economic benefit to our people, our government
and the local economy.
Additionally, the tribes are currently utilizing a Federal
grant to explore the feasibility of a biomass facility that can
be built on the reservation. This has the potential of creating
more renewable energy and jobs on the reservation.
As CSKT prepares to become a major producer of clean and
renewable power, we appreciate the opportunity to share our
thoughts on S. 2132. We commend Senator Barrasso and the co-
sponsors of this bill for introducing this important
legislation and for your dedication to assisting Indian tribes
in the development of energy resources while helping to both
generate jobs and growth on reservation economies.
Our detailed statement provides information about some of
our energy programs and goals and highlights provisions in S.
2132 we believe are of particular importance to CSKT. Our
tribes support this legislation and are particularly pleased
with Section 201, Issuance of Preliminary Permits or Licenses,
which would give tribes the same preference for acquiring hydro
licenses that States and municipalities have.
We also are particularly supportive of Section 202 of the
Tribal Biomass Demonstration Project which would provide
funding for biomass demonstration projects on four
reservations. Both of these provisions could help CSKT as well
as other tribes to further develop their economies and become
more self sufficient.
CSKT has always strongly supported the Federal Government's
initiatives towards promoting tribal self-governance. We see
implementation of Tribal Energy Resource Agreements, TERAs, as
consistent with these initiatives.
In particular, CSKT supports allowing tribes to take over
environmental review functions that are now vested in the
United States pursuant to the National Environmental Policy
Act. To the extent that any TERA provision supports tribal
self-governance, we support it.
We utilize the weatherization program on our reservation
and have a good working relationship with the State in working
with them on this program. We support the self-governance
provision for weatherization in S. 2132, but it is unclear to
us whether in the name of self-governance, we might
unintentionally end up with less funding pursuant to S. 203
than we presently receive.
CSKT strongly supports the proposed bill expanded process
and consultation with Indian tribes which will improve tribal
sovereignty and autonomy over some of the energy resources that
form the pillar of tribal culture and governance.
In particular, it is important to increase Federal
technical assistance in the interest of Indian tribes. CSKT has
a continued benefit from such assistance in more energy areas
and is welcome and appropriate.
Much of our comments focused on CSKT's acquisition of Kerr
Dam but it is emblematic of harnessing energy resources for
electric production, generation, transmission and distribution.
Beyond technical support, increasing tribal autonomy to
increase and execute certain business agreements and rights-of-
way moves in the right direction of promoting tribal governance
and reducing bureaucratic impediments to governance. The
combination of increasing capacity and thereby increasing self-
governance is right and supported.
Many tribal governments struggle to find energy activities
and as such CSKT strongly supports the bill's furthering
financial assistance in lieu of Federal activities. This may
promote tribal employment, self-governance and self-
determination.
Thank you for the opportunity to testify before the
Committee.
[The prepared statement of Ms. Lankford follows:]
Prepared Statement of Hon. Carole Lankford, Vice Chairwoman,
Confederated Salish and Kootenai Tribes
Chairman Tester, Vice Chairman Barrasso and Members of the
Committee:
Thank you for the opportunity to testify on behalf of the
Confederated Salish and Kootenai Tribes (``CSKT'' or ``Tribes''). CSKT
has 8,000 members, the majority of whom live on the 1.3 million acre
Flathead Reservation located in Western Montana--an area we have
inhabited since time immemorial.
This is an exciting time for CSKT as we prepare to purchase Kerr
Dam, a nearly 200 Megawatt hydroelectric facility that is located in
the heart of the Flathead Reservation. Owning and operating this dam
will mean taking control of an important tribal resource that will
produce clean energy, as well as provide an economic benefit to our
people, our government and the local economy. Additionally, the Tribes
are currently utilizing a federal grant to explore the feasibility of a
biomass facility that can be built on the reservation. This has the
potential to create even more renewable energy and jobs on our
Reservation. As CSKT prepares to become a major producer of clean and
renewable power, we appreciate the opportunity to share our thoughts on
S. 2132. We commend Senator Barrasso and the co-sponsors of this bill
for introducing this important legislation and for your dedication to
assisting Indian tribes in the development of energy resources while
helping to both generate jobs and grow reservation economies.
Our testimony today will provide information about some of our
energy programs and goals and will highlight provisions in S. 2132 we
believe are of particular importance to CSKT. Our tribes support this
legislation and are particularly pleased with Sec. 201, Issuance of
Preliminary Permits or Licenses, which would give tribes the same
preference for acquiring hydro licenses that states and municipalities
have. Sec. 202, the Tribal Biomass Demonstration Project would provide
funding for biomass demonstration projects on four reservations. Both
of these provisions could help CSKT, as well as other tribes, to
further develop their economies and become more self-sufficient.
CSKT has always strongly supported the Federal Government's
initiatives toward promoting tribal self-governance. We see
implementation of Tribal Energy Resource Agreements (TERAs) as
consistent with these initiatives. In particular, CSKT supports
allowing Tribes to take over environmental review functions that are
now vested in the United States pursuant to the National Environmental
Policy Act (NEPA). To the extent that any TERA provision supports
Tribal Self Governance we support it.
Given our active interest in various aspects of tribal energy
development and management, we again support the reintroduction of the
Indian Energy bill in this Congress.
Background--Confederated Salish and Kootenai Tribes
CSKT is composed of three confederated tribes, the Salish, the Pend
O'reille, and the Kootenai. The Salish, Pend O'reille and Kootenai
people have lived in the Flathead, Clark Fork, and Bitterroot River
basins for thousands of years. CSKT formed a relationship with the
United States by signing the Hellgate Treaty on July 16, 1855, whereby
the tribes gave up most of their territory in exchange for reserving a
permanent homeland called the Flathead Indian Reservation. In our
Treaty, we also retained a number of identified off-reservation rights
in the lands and waters that we ceded to the United States; rights
which have been repeatedly reaffirmed by the highest courts in the
United States.
CSKT's utmost priority is to retain the sovereignty and the control
over tribal resources that our ancestors preserved for us in the
Hellgate Treaty.
Background--Kerr Hydroelectric Project
Kerr Dam, located in the center of the Flathead Reservation on the
Flathead River, has had a mixed history in the eyes of our people but
in recent decades has been a symbol for both tribal sovereignty and
tribal control over tribal resources. The dam was built in the 1930s--
with little to no input from the Tribes--and then operated by a
private, non-Indian company during a low point of tribal sovereignty
over its resources. Then, as Kerr Dam's license was up for renewal in
1980, the leadership and vision of CSKT's elected officials at that
time led to a negotiated settlement that now puts CSKT in the position
to acquire Kerr Dam--an action the tribes will take on September 5,
2015--and which will launch CSKT into a new era of control over our own
resources, as well as being a producer of clean, renewable energy.
CSKT is currently in the process of becoming the first tribe in the
country to fully own, operate, and manage its own major hydropower
facility. The Kerr Hydroelectric Project consists of: (1) a reservoir
for storing water; (2) a dam for regulating the upstream reservoir
level and downstream river flow; (3) three water intake structures
called penstocks for directing water from the reservoir to the
powerhouse; (4) a powerhouse for generating electricity; and (5)
related shops, buildings, and roads.
The Kerr Project can generate up to 188 megawatts of electricity at
any one point in time. It is not always able to generate at its full
capacity because the Flathead River flow is not usually high enough
during the fall, winter, and early spring seasons. So, the Project
operates at about 66 percent of its capacity in an average year.
By acquiring the Kerr Project, CSKT will be restoring ownership and
control over lands of the Flathead Indian Reservation, its treaty-
reserved homeland. By assuming control over Kerr Dam, CSKT will be
asserting management and control over Flathead Lake and the Flathead
River, two critically important water resources of the Flathead Indian
Reservation. And by selling the electricity generated at the Kerr
Project, CSKT will receive more income than it gets from rental of the
Project land, which will allow the tribe to better meet the needs of
our people.
CSKT will have opportunities to develop businesses with the skill
and ability to operate and maintain large energy generation facilities.
The Tribes will have opportunities to develop businesses to sell
electricity for a profit. We will create good-paying jobs in the local
economy. CSKT will be developing a collection of financial and
professional resources that should encourage development of other
projects that might benefit CSKT in the future.
Operating Kerr Dam will thus not only give CSKT control once again
over the natural resources that the dam utilizes and affects, but it
will also provide the tribe with much needed revenue to pay for and
improve our tribal programs. We are already one of the largest
employers in western Montana and are very proud of the role we play in
creating jobs and helping the state's economy. Taking ownership of Kerr
Dam will assure we can continue helping our people, our region and our
state's economy.
Background--Kerr Project License
The Federal Energy Regulatory Commission (FERC) issued the first
license for the Kerr Project for a 50-year term in 1930 to a company
owned by the Montana Power Company (MPC). When the Project was due to
be relicensed in 1980, CSKT competed with the MPC for the license.
After five years of the FERC issuing one-year licenses to MPC, CSKT and
MPC came to a negotiated settlement and pursuant to that agreement the
FERC issued a license jointly to CSKT and MPC in 1985. In the new
license, MPC had the right to occupy and use the Project for the first
30-years of the license term (1985-2015) and CSKT had the right to
occupy and use the Project for the last 20-years of the license term
(2015-2035). After operating the Project for 14 years, MPC transferred
its interest in the license and sold its ownership interest in the
Project to PPL Montana in 1999. In order to exercise its right to take
over the Project, CSKT has to pay a conveyance price equal to
$18,289,798. \1\ Once it pays that amount, CSKT will become the sole
licensee and will own and control the entire Project. We have been
setting aside money every year since 1985 in order to buy Kerr Dam.
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Background--Energy Keepers, Incorporated
Energy Keepers, Incorporated (EKI) is a for-profit corporation
wholly owned by the Confederated Salish and Kootenai Tribes. EKI was
chartered by the United States Department of the Interior pursuant to
Section 17 of the Indian Reorganization Act of 1934 (25 U.S.C. 477).
EKI's primary purpose is to act on behalf of CSKT to acquire,
construct, manage, operate, and maintain the Kerr Hydroelectric
Project, and its related assets, so as to provide electricity, flood
control, and environmental protection for regional needs and to make a
profit from the sale of electrical energy products, consistent with the
terms of the FERC license for the Project. EKI employs fifteen skilled
staff members with expertise in business management, engineering,
hydropower plant operations, accounting, hydrology, power marketing,
human resources, and law. EKI has established its main office in
Polson, Montana on the Flathead Reservation.
Particular Provisions of S. 2132 Supported By CSKT: Section 201 and
Section 202
1. CSKT Supports Section 201 of Senate Bill 2132 Amending the Federal
Power Act to Place Indian Tribes on the Same Footing as States
and Municipalities Regarding Preliminary Permits for Original
Hydropower Licenses
The Confederated Salish and Kootenai reserved the Flathead Indian
Reservation to themselves as a homeland by the terms of the Treaty of
Hellgate (12 Stat. 975, July 16, 1855). The Flathead River is a central
hydrologic feature of the Flathead Indian Reservation. There may be
sites on the Flathead River within the boundaries of the Flathead
Indian Reservation that become subject to exploration for establishment
of hydropower generation facilities. Currently, Section 7(a) of the
Federal Power Act (16 U.S.C. 800(a)) provides a preference to States
and municipalities in the grant of permits for development of such
potential sites. Providing this preference to any government other than
CKST is inconsistent with the purpose and intent of Article II (i.e.
homeland reservation clause) of the Treaty of Hellgate. Accordingly, in
order for the United States to honor the terms of the Treaty, it is
important that it correct this error in the law by amending Section
7(a) so that CSKT is not disadvantaged in protecting and/or developing
hydropower generation sites on its own treaty-reserved homeland.
Providing CSKT with preference in hydro-licensing is important for
a number of reasons. These reasons are briefly listed below.
1. Respect/preserve Flathead Reservation as CSKT treaty-
reserved homeland.
a. Consolidate prospective FERC licensee interests in
Flathead River with pre-existing CSKT land ownership rights.
b. Affirm sovereignty.
2. Facilitate/support/encourage CSKT self-governance by
facilitating the internal development of CSKT Indian trust land
by CSKT Indians.
a. Avoid the destabilizing influence that a non-resident
corporate licensee would likely bring to the Flathead
Reservation economy (e.g. the Kerr Project history shows a
continual repetitive pattern of litigation, bankruptcy, and
corporate transition by the FERC licensee for the Kerr
Project).
b. Avoid the forced introduction of a State or municipal
sovereign into the Flathead Reservation with concomitant
potential for jurisdictional conflict over their regulatory and
legal affairs.
c. Respect and restore CSKT's sovereign right to administer
to the health, safety, and welfare of Flathead Reservation
communities by providing CSKT preferential treatment regarding
managerial control over critical electrical infrastructure and
flood control assets located on the Flathead Reservation.
3. Respect/preserve CSKT management control of Flathead
Reservation treaty-reserved natural resources.
a. Control of Flathead River flows.
b. Administration of mitigation activities implemented in
response to environmental impacts caused by any newly-licensed
FERC project.
4. Provide CSKT with the opportunity to realize the economic
benefit from sale of electrical output from any new project
resulting in:
a. Revenues from sale of electricity.
b. Revenues from headwaters benefits.
c. Revenues from providing ancillary power services.
5. Provide much-needed employment opportunities for CSKT
members emerging from the recession in a climate of high
unemployment and poverty.
a. Exploration, construction, operation and maintenance of
any new project.
b. Mitigation of the cultural and environmental impacts
caused by project impacts.
c. Administration and management of the FERC license and the
electricity generated for sale at any new project.
6. Provide entrepreneurial opportunities for CSKT-owned
businesses and CSKT member-owned businesses, including:
a. Energy Keepers, Incorporated
b. Contractors and subcontractors for services.
2. CSKT Supports Inclusion of Section 202 In Senate Bill 2132 for the
Purpose of Providing for Establishment of Four Indian Tribal
Biomass Demonstration Projects Each Year Pursuant to Forest
Stewardship Agreements Between an Indian Tribe and The
Secretaries of Agriculture or Interior
The management of forest resources is a complex business involving
climatology, silviculture, forestry, wildlife biology, hydrology,
fisheries management, archeology, tribal cultural preservation, range
science, weed management, and prescribed fire and fuel treatment. The
management challenge is becoming more daunting because of economic
depression in the timber industry, insect infestations that threaten
forest health, and anticipated changes in climate.
CSKT does not anticipate improvement in the economic conditions
within the timber industry. Although CSKT Forestry has been able to
sustain a base level of timber harvest in CSKT forests for the past ten
years, that level is significantly reduced from harvest levels
sustained throughout the forty-year period prior to that. Accordingly,
Tribal people who earn their living planting, managing, harvesting, and
processing forest products have endured a difficult economic period
during the past decade. CSKT is searching for new types for forest
products and new economic markets to sell those products into.
CSKT forests, of course, continue to photosynthesize, grow and
develop, sequestering carbon and producing woody biomass as a result.
CSKT forests are producing more woody biomass than is being harvested.
This excess productivity results in a significant accumulation of
biomass in the forest that is unhealthy because it results in older
less-diverse forest stands that decay over time and create
opportunities for insect infestation.
Our Reservation is located on the crown of the continent at the
headwaters of the Flathead River Basin in Western Montana. It is
beautiful mountainous country that is reliant on season changes in the
rainfall, temperature, and sunlight to sustain a rich environment.
Indications are that changes in climate will result in more variability
in conditions from year-to-year and more intensity in individual
weather events. Accordingly, it is likely that there will be periods of
significantly increased temperature and reduced precipitation that
might last for several years. Such conditions will add stress to the
forest's ecological community that will result in a concentration of
diseased, dead and downed timber in steep mountainous terrain that will
be combined with hot, dry and windy climatological conditions to cause
dangerous wildfires.
CSKT is not alone in its plight or its concern for revitalizing the
forest products economy, enhancing forest health, and protecting
against destructive wildfire. The boundaries of the Flathead
Reservation adjoin federal lands under management authority of the
Flathead and Lolo National Forests. We know that our neighboring forest
products workers and federal land managers are also grappling with
conditions similar to the ones we face.
One way to address the economic, forest health, and wildfire
conditions is to harvest forest biomass and burn it in a controlled
environment that can capture the heat from burning and utilize it to
generate electricity. CSKT is currently conducting an engineering
feasibility assessment project regarding use of CSKT forest biomass
products as a renewable energy resource for generation of electricity.
In conducting our feasibility assessment, it has become apparent to us
that securing a steady local fuel supply is a key factor for project
success. We therefore, applaud the inclusion of Section 202 within S.
2132. This section authorizes and directs the Secretaries of
Agriculture and Interior to enter into forest stewardship agreements
with Indian tribes for performance of four demonstration projects each
year. As CSKT proceeds with its biomass generation feasibility
assessment project, we will need to identify local sources of biomass
fuel in sufficient quantity to support long-term sustainable generation
of electricity. The forested lands of the neighboring Flathead and Lolo
National Forests would be excellent sources of such biomass. In the
event our project shows that development of a project is in fact
economically viable, then there is a high likelihood that CSKT would
seek to secure such a demonstration project for a period of 20-years.
CSKT strongly supports the concept of biomass demonstration projects
and advocates for inclusion of Section 202 within S. 2132.
Section 203. Weatherization Assistance Program
Section 203 of the bill would amend the Energy Conservation and
Production Act of 1976 (42 U.S.C. 6863(d)) to change the process
through which tribes can seek direct funding from the Department of
Energy's Weatherization Assistance Program. Under the existing law
these funds are allocated to states.
The amendments to Sec. 203 would provide that Tribes can receive
direct funding on behalf of their low income members if DOE makes a
determination that ``the low-income members of an Indian tribe are not
receiving benefits under this part that are equivalent to the
assistance provided to other low-income persons in such State''.
Section 203 would allow a Tribal organization serving low-income Tribal
members to apply to DOE for a direct grant, and DOE would only have to
determine that the services to be provided through the tribe would be
equal to or better than services through the state.
Montana Weatherization Program
The State of Montana, through the Montana Department of Public
Health and Human Services, offers a Weatherization Program that helps
participants to improve the heating efficiency of their homes and thus
reduce their energy consumption. \2\
---------------------------------------------------------------------------
\2\ Montana currently maintains a Tribal Energy Assistance
eligibility referral directly to the CSKT Lands Department. http://
www.dphhs.mt.gov/programsservices/energyassistance/
eligibilityoffices.shtml#tribal.
---------------------------------------------------------------------------
CSKT currently has a sub-contractor relationship with the State
whereby the Tribes administer the state's weatherization assistance
program for Tribal members. The State takes a small percentage of
overall available funds for contract management but it is possible that
this amount is less than it would cost CSKT to deal with federal
funders. The program with the State has been working well.
Discussion
Section 203 amendments would allow CSKT to seek direct allocation
funding for the proportional amount of Tribal low income dollars that
go to the State. It is unknown just how much this amount would be or
how this could change the current funding rubric. It is possible that
dollars would increase or decrease under a Tribal program pursuant to
Section 203. \3\
---------------------------------------------------------------------------
\3\ For example, if low income Tribal members apply for
weatherization funds at a greater rate than similar low income non-
tribal members, then as a whole the tribal members could be getting
more weatherization funds under the current rubric than would happen
under Section 203's amendments. Therefore--it is possible that because
of state income and application requirements Tribal members are getting
more than their proportional share of funds, in which case the amount
of dollars for Tribal members would decrease under the amendments. The
opposite could also be true.
---------------------------------------------------------------------------
CSKT is exercising (somewhat limited) self-governance by
administering funds that come through the State, but the degree of
self-governance could arguably be greater if CSKT received funding
directly from the Department of Energy. The distinction warrants
discussion and clarification.
1. Section 203's amendments could enhance self-governance but
would not greatly change the current weatherization program
whereby CSKT directly services its members. It is also possible
that these funds could be ``leveraged'' to apply for or match
other funding sources (although this is wholly speculative).
2. The financial uncertainties described above make it
difficult to conclude whether Section 203's amendments would
yield greater or lesser dollars for weatherization programs for
CSKT Tribal members.
3. Section 203 allows for Tribal exercise of weatherization
dollars only if there is a net financial benefit to Tribal
members. This is good from a financial perspective but not as
good from a self-governance angle. The program should be made
available to Tribes independent of any financial analysis--
allowing Tribes to exercise greater self-governance as a
priority.
4. We are somewhat conflicted by Section 203 and would like to
discuss this more with Committee staff. As one of the original
10 Self Governance Tribes we are big supporters of Self
Governance but we certainly don't want to receive less
weatherization money than we are now receiving from the state.
Changes in the bill to clarify this point may be in order.
Conclusion
CSKT strongly supports the proposed bill's expanded processes and
consultations with Indian Tribes--which will improve tribal sovereignty
and autonomy over some of the energy resources that form a pillar of
tribal culture and governance. In particular it is important to
increase federal technical assistance to interested Indian tribes. CSKT
has and continues to benefit from such assistance--and more and in more
energy-areas is welcome and appropriate. Much of our comments have
focused on CSKT's acquisition of the Kerr Dam but it is emblematic of
harnessing energy resources for electric production, generation,
transmission, and distribution on--and off of--tribal lands.
Beyond technical support, increasing tribal autonomy to create and
execute certain business agreements and rights-of-way moves in the
right direction of promoting tribal governance and reducing
bureaucratic impediments to governance. The combination of increasing
capacity and thereby increasing self-governance is right and supported.
Many tribal governments struggle to fund energy activities and as such
CSKT strongly supports the Bill's furthering financial assistance in
lieu of federal activities. This may promote tribal employment, self-
governance, and self-determination.
As the history of Kerr Dam's construction and--finally--the return
of its land and resources to CSKT underscores, the bill's provisions
for certification of tribal energy development entities will greatly
enhance tribal governance and our ability to effectuate our visions for
the future. We have created energy entities to develop tribal energy
resources--and they should be appropriately recognized and supported by
the Federal Government.
Thank you for the opportunity to testify before the Committee
today. This bill and other Congressional efforts to empower tribes to
develop and manage their energy resources are important to us and other
tribes. Your support for tribal self-determination and tribal
sovereignty is greatly appreciated. Indian energy development is a key
component of our ability to control our destiny and provide for our
people.
We look forward to working further with Congress to figure out how
CSKT and other tribes can further maximize our energy potential, and we
invite future discussions on how to create win-win scenarios for both
the tribes and the Federal Government.
The Chairman. Thank you, Carole.
Next we have Michael Finley representing NCAI and the
Colville Tribes of Washington. Welcome, Michael. You may
proceed.
STATEMENT OF HON. MICHAEL O. FINLEY, CHAIRMAN,
CONFEDERATED TRIBES OF THE COLVILLE INDIAN
RESERVATIONS; FIRST VICE PRESIDENT, NATIONAL
CONGRESS OF AMERICAN INDIANS
Mr. Finley. Thank you, Mr. Chairman. It is an honor to be
able to provide testimony before the Committee today.
I want to acknowledge Vice Chairman Barrasso.
I serve as Chairman to the Confederated Tribes of the
Colville Reservation in northeast Washington State and as First
Vice President of the National Congress of American Indians. I
provide testimony on behalf of both today.
I want to go back four or five years or even longer to
where tribes talked about these changes and worked with this
Committee on a number of occasions, having hearings on trying
to get these very provisions done. I acknowledge Vice Chairman
Barrasso for leading the charge on that a number of years ago.
NCAI passed a resolution with overwhelming numbers not
three weeks after that bill was introduced back in 2011. Tribes
have been working heavily no these provisions and lobbying
various congressional offices to try to get this pushed
forward.
I want to acknowledge at the outset we do appreciate this
Committee's work on this. It is something really important to
us. It strikes the very chord of what economic development is
in Indian country and using our natural resources.
As stated a number of times, we do have issues with the
TERA because no tribes have entered any. We continue to have
problems with what those provisions mean and whether or not
that makes the best sense for tribes. Because no tribes have
entered into it, we are looking at different scenarios within
the provisions of this bill as introduced to try to circumvent
some of those problems.
Some are here at the administration level. We do need to
submit those plans as tribes but we do need to have back and
forth dialogue with the Federal Government in a timely manner
on when those will be approved and implemented and used to the
benefit of the tribes. That is why within there we have the
provision about 270 days if you don't answer, we want them to
be automatically approved.
There are a number of other provisions under the TERA we
feel would be beneficial to tribes and some of the cost savings
that the Secretary would have the authority to delegate those
monies or always be spent on those TERAs to the tribes for the
benefit of those projects outlined within those agreements.
I wanted to touch a bit on more flexibility that we need
within the appraisal processes of getting some of these leases
approved that we'd like to have implemented within this
legislation that would streamline a lot of things for tribes.
There are a number of tribes that have difficulties getting
from point A to point B. I know some of the oil and gas tribes
who have given testimony in the past, and Senator Heitkamp
alluded to it, that there are a lot of steps they have to go
through.
I think a lot of the things that we have as problems aren't
just within the Energy Policy Act of 2005, there a number of
others outlined within my written testimony provided a number
of days ago.
There is another provision that the Colville Indian Tribes
are particularly interested in, the biomass demonstration
projects. This would be a slight amendment to the Tribal Force
Protection Act that would allow tribes greater flexibility to
enter agreements with the U.S. Forest Service for contiguous
U.S. Forest Service properties so those forests can be taken
care of better by the tribes in their integrated resource
management plans.
A number of tribes have integrated resource management
plans. We believe we are the national model. We take care of
our forests and natural resources and in particular, our
cultural resources and we do that process better than anyone.
Our forests directly reflect the model of that.
I think some of the provisions being introduced would allow
us to expand that model into the areas of the U.S. Forest
Service, create jobs in the economically depressed areas on my
reservation which is Kevary County, the poorest county in the
State of Washington. It would also provide opportunity for
tribes in Alaska to enter similar agreements also outlined in
that provision of the bill introduced today.
There are a number of others in my written testimony but I
will stop there. I appreciate the time, Mr. Chairman. I will
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 Indian Reservation; First Vice-President,
National Congress of American Indians
Good afternoon Chairman Tester, Vice Chairman Barrasso, and members
of the Committee. My name is Michael Finley and I am testifying today
in my capacities as Chairman of the Confederated Tribes of the Colville
Reservation (``CCT'' or the ``Colville Tribes'') and First Vice
President of the National Congress of American Indians. I appreciate
the opportunity to testify today on S. 2132, the ``Indian Tribal Energy
Development and Self-Determination Act Amendments of 2014.''
Both the CCT and NCAI strongly support S. 2132. Although not
completely identical, all of the provisions in S. 2132 were included in
Vice-Chairman Barrasso's Indian energy bill (S. 1684) that this
Committee approved by voice vote and reported in the 112th Congress.
The full membership of NCAI, in its 2011 annual meeting in Portland,
Oregon, adopted a formal resolution supporting S. 1684 less than three
weeks after the bill was introduced. I think that speaks volumes about
how NCAI and Indian Country feel about Senator Barrasso's Indian energy
bill and the extensive tribal consultation and outreach that preceded
its introduction.
The CCT is particularly supportive of Section 202, which would
authorize a Tribal Biomass Demonstration Project. Not only would this
provision encourage biomass utilization, it would also allow tribes to
perform forest health projects and on neighboring federal forest and
rangelands. With wildfire season rapidly approaching, this type of
authority would provide the Colville Tribes and similarly situated
tribes with immediate benefits if it were currently in effect.
Because S. 2132 contains provisions that the Committee has
previously approved and that would provide Indian country with
immediate benefits, we ask that the Committee avoid making significant
changes to S. 2132 that would delay or prevent its consideration and
passage this year.
Background on the Colville Tribes and NCAI
Although now considered a single Indian tribe, the Confederated
Tribes of the Colville Reservation is a confederation of twelve
aboriginal tribes and bands from all across eastern Washington State.
The present day Colville Reservation is located in north-central
Washington State and was established by Executive Order in 1872. The
Colville Reservation covers approximately 1.4 million acres and its
boundaries include parts of Okanogan and Ferry counties. The CCT has
more than 9,400 enrolled members, making it one of the largest Indian
tribes in the Pacific Northwest, and the second largest in the state of
Washington. About half of the CCT's members live on or near the
Colville Reservation. Of the 1.4 million acres that comprise the
Colville Reservation, 922,240 acres are forested land.
The Colville Reservation originally consisted of nearly three
million acres and included all of the area north of the present day
Reservation bounded by the Columbia and Okanogan Rivers. This 1.5
million acre area, referred to as the ``North Half,'' was opened to the
public domain in 1891 in exchange for reserved hunting and fishing
rights to the CCT and its members. Most of the Colville National Forest
and significant portions of the Okanogan National Forest are located
within the North Half. Both forests are contiguous to the northern
boundary of the Colville Reservation.
NCAI is the oldest and largest American Indian organization in the
United States. Tribal leaders created NCAI in 1944 as a response to
federal termination and assimilation policies that threatened the
existence of American Indian and Alaska Native tribes. Since then, NCAI
has fought to preserve the treaty rights and sovereign status of tribal
governments, while also ensuring that Native people may fully
participate in the political system. As the most representative
organization of American Indian tribes, NCAI serves the broad interests
of tribal governments across the nation.
Overview of S. 2132
As noted above, all of the provisions included in S. 2132 were
considered and favorably reported by this Committee in the 112th
Congress. These provisions are discussed in detail in Senate Report No.
112-263. As such, the bill includes the following important proposals.
First, as background, it takes an inordinate amount of time for the
Department of the Interior to review and approve permits to drill,
exploration and production agreements, rights of ways, and to approve
other related energy agreements. Potential partners and development
capital sit on the sidelines because it takes years to get anything
approved by the Department. Indian Country needs an institutionalized
answer to the ongoing challenge of burdensome bureaucratic processes
and delay of tribal energy leasing and permitting.
Title I of S. 2132 would provide increased technical assistance to
tribes, increase access to existing energy grant and loan guarantee
programs, and streamline the process for Indian tribes to enter into
Tribal Energy Resource Agreements or ``TERAs.''
With regard to TERAs, the bill would make many significant
improvements to the TERA process under the Energy Policy Act of 2005. I
will highlight just a few here.
First, instead of having the BIA approve or disapprove a proposed
TERA, under S. 2132 a proposed TERA would automatically go into effect
after 270 days unless the BIA determines that there is a reason to
disapprove the TERA. This is important because tribes cannot rely on
the Federal Government to take action in a timely way.
The bill also includes a funding mechanism for tribes in carrying
out a TERA. Some tribes have expressed concerns about the costs of
implementing a TERA and would want to have financial support for taking
on the additional activities. In a section called ``Financial
Assistance in Lieu of Activities by the Secretary,'' S. 2132 would
create a process for the Secretary of the Interior (``Secretary'') to
calculate the savings to the Department resulting from a tribe entering
into a TERA and direct the Secretary to make that savings available to
the tribe. This would provide funding to the tribe without impacting
the Federal budget.
S. 2132 would also clarify the liability clause of the 2005 Act.
The bill would make it clear that the exemption from liability only
applies to losses stemming from matters negotiated by the tribe itself;
it does not extend to matters that are in the Secretary's control or
for losses occasioned by the Department's failure to perform its
obligations.
Title II contains several miscellaneous provisions that would
enhance the ability of Indian tribes to develop both renewable and
traditional energy resources. Section 201 would amend the Federal Power
Act to authorize the Federal Energy Regulatory Commission to give
Indian tribes the same preference that states and municipalities can
receive when that Commission issues preliminary permits or original
licenses for hydroelectric projects.
Section 203 would amend the home weatherization program under the
Energy Conservation and Production Act to make it easier for Indian
tribes to request and obtain direct funding from the Secretary of
Energy. These changes are critical in that they would bring Indian
tribes into closer parity with states in being able to access these
weatherization funds.
Section 204 would provide new flexibility for tribes to obtain
appraisals of tribal mineral or energy resources by allowing tribes or
certified, contract appraisers to prepare appraisals and imposing
timeframes for Secretarial review and approval of the appraisals.
Indian tribes have long complained of delays in obtaining appraisals
for their trust resources, particularly for time sensitive transactions
with potential economic development benefits. These changes would
provide a measure of certainty that the Secretary will approve
appraisals of energy resources in a timely manner.
Section 205 would amend the Long-Term Leasing Act to allow the
Navajo Nation to enter into leases for the exploration, development, or
extraction of any mineral resources without the approval of the
Secretary, if the lease is executed under tribal regulations, approved
by the Secretary and meets certain other requirements.
The CCT is Particularly Supportive of the Tribal Biomass Demonstration
Project in 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. Section 202(c) would also authorize for
Alaska Native Corporations one biomass demonstration project per year
for FY 2015 through 2019.
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 diversify its economy. 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. 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.
As the Committee is aware, many federal lands that are adjacent to
tribal lands are in need of thinning, hazardous fuels reduction, and
restoration activities to reduce the risk of catastrophic wildland
fires, disease, and insect infestations. These risks are particularly
severe in dry forested areas like the Colville Reservation, the
southwestern United States, and other areas that do not receive
significant rainfall. Indian tribes like the CCT are uniquely situated
to carry out these activities because they have a vested interest in
ensuring that neighboring federal lands do not pose fire or disease
threats that will encroach on our tribal lands and threaten our
communities.
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 considerations into activities conducted
on federal lands included in demonstration projects. Many have praised
tribal land management practices as being far more efficient than those
of their federal counterparts. Federal agencies, however, have been
slow to incorporate these principles even on those federal lands that
are contiguous to tribal trust lands. Section 202 would provide tribes
with this much needed opportunity.
Conclusion
The CCT and NCAI believe that S. 2132 will provide tribes with
immediate benefits by removing structural barriers to energy
development on tribal lands. We appreciate the Committee's
consideration of these issues and look forward to working with the
Committee to ensure passage of S. 2132. At this time I would be happy
to answer any questions you may have.
The Chairman. Michael, thank you for your testimony. I very
much appreciate it.
Next, we have the Chairwoman of the Paiute Indians of
Nevada, Aletha Tom. Aletha, you may proceed.
STATEMENT OF HON. ALETHA TOM, CHAIRWOMAN, MOAPA BAND OF PAIUTES
TRIBE
Ms. Tom. Thank you, Mr. Chairman and members of the
Committee.
I am Aletha Tom, Chairwoman of the Moapa Band of Paiutes
Tribe.
My purpose in testifying today is to provide our story on
energy development utilizing one of the most abundant natural
resources, solar energy.
Significant land holdings are important in developing solar
energy. The Moapa Band of Paiutes has lived in southern Nevada
since time immemorial. In 1874, the Moapa Band of Paiutes
Reservation encompassed 2.2 million acres which stretched to
the Colorado River in the south and Las Vegas to the east.
However, subsequent government action reduced our land holdings
to 1,000 acres.
In 1980, we got back a portion of our ancestral land
pursuant to P.L. 96-491 which restored 70,500 acres of land.
Upon our land being returned, the Moapa Band of Paiutes have
engaged in significant economic development opportunities by
working with industry leading partners to establish large,
commercial solar voltaic power.
The Moapa River Indian Reservation's location is unique to
other parts of Indian country because we have an energy
corridor going through our reservation that contains power
lines and gas lines. Additionally, adjacent to our reservation
sits two power substations that have capacity to transport the
renewable power produced by our solar plant. Hence, we are
fortunate to be in this prime development location.
Currently, the Moapa Band of Paiutes has three projects
that will supply over 500 megawatts of renewable energy and we
are also considering a fourth project that could bring in
another 100 megawatts of clean renewable energy. This means we
have the potential for 600 megawatts of clean energy that will
not add any greenhouse gases to the atmosphere.
Furthermore, we have talked with potential partners who are
interested in building even more solar power on our lands.
Government must act as a facilitator to produce more
renewable energy. Currently, the Federal Government has made
renewable energy investment very attractive by providing an
investment tax credit for renewable energy that will end in
2016. This tax credit provides incentives for companies who
invest to receive 30 percent tax breaks for a renewable energy
investment and significant depreciation tax.
We want to see the Solar Investment Tax Credit extended to
provide additional tax incentives for business to invest in
Indian country. Of course, we want Indian country to benefit as
energy producers, however, very few tribes would have the
multi-millions or billions to invest in such large scale
projects.
If there was other government spending to invest so that
tribes could capitalize more on the renewable energy market as
energy producers, it would be the most favorable option.
Tribes who want to engage in solar energy must be aware of
the substantial transaction cost in developing these projects.
Developers can facilitate the projects by assisting with
biological and environmental compliance requirements by
supplementing the expertise with the Federal agencies in charge
of overseeing these regulations.
Substantial costs can also be attributed to regulatory
compliance. Tribes must be prepared to absorb these known and
unknown costs.
Tribes interested in renewable energy assistance should
work with the Department of Energy, Office of Indian Energy who
will provide integral technical assistance to better understand
how tribal projects fit into the renewable energy market.
Tribes can utilize the government-to-government
relationship to push for legislation and administrative action
that will facilitate renewable energy investment on Indian
land. Senator Harry Reid has been a leader on this issue in
Nevada and attended the groundbreaking for the first utility
scale solar project on tribal lands.
As the energy industry changes so do relationships. Nevada
Power is now owned by Nevada Energy, which is owned by Warren
Buffett. We have worked with the new Nevada Energy president,
Paul Caudill and we hope to work positively to develop new
renewable energy projects with the company.
In conclusion, we have outlined that renewable solar energy
projects can be accomplished with participation of Federal and
State governments. We endorse government going down this green
road and supporting policies that promote substituting
greenhouse gases for clean energy.
We appreciate the Senate Committee on Indian Affairs for
holding this worthwhile hearing and listening to the input from
the Moapa Band of Paiute Tribes.
Thank you.
[The prepared statement of Ms. Tom follows:]
Prepared Statement of Hon. Aletha Tom, Chairwoman, Moapa Band of
Paiutes Tribe
Mr. Chairman and Members of the Committee,
Good afternoon. I am Aletha Tom, Tribal Chairwoman of the Moapa
Band of Paiutes. My purpose in testifying today is to provide our story
on Energy Development utilizing one of the most abundant natural
resources; solar energy.
Significant land holdings are important in developing solar energy.
Since time immemorial, the Southern Paiutes, the Nuwu, have occupied
the Southern Great Basin, including Southern California, Southern
Nevada, Northern Arizona, and Southern Utah. The Moapa Band of Paiutes
is one of several bands, which make up the entire Southern Paiute Tribe
of Nuwu. In 1874, the Moapa Band of Paiutes Reservation encompassed 2.2
million acres which stretched to the Colorado River in the South and
Las Vegas to the east. However, subsequent government action reduced
our land holdings to 1000 acres. In 1980 we got back a portion of our
ancestral land pursuant to P.L 96-491 which restored 70,500 acres of
land. Upon our returned land, the Moapa Band of Paiutes have engaged in
significant economic development opportunities by working with industry
leading partners to establish large, commercial solar voltaic arrays.
The Moapa River Indian Reservation's location is unique to other
parts of Indian Country because we have an energy corridor going
through our Reservation that contains electronic power lines and gas
lines. Additionally, adjacent to our reservation sits two power
substations that have capacity to transport the renewable power
produced by our solar plant. Hence, we are fortunate to be in this
prime development location.
Currently, the Moapa Band of Paiutes, has three projects that will
supply over 500 Megawatts of Renewable Energy and we are also
considering a forth project that could bring in another 100 megawatts
of clean renewable energy. This means we have the potential for 600
megawatts of clean energy that will not add any green-house gases into
the atmosphere. Furthermore, we have talked with potential partners who
are interested in building even more solar voltaic systems on our land.
Government must act as a facilitator to produce more renewable
energy. Currently the Federal Government has made renewable energy
investment very attractive by providing an investment tax credit for
renewable energy that will end in 2016. This tax credit provides
incentives for companies who invest to receive thirty percent tax break
for renewable energy investment and significant deprecation tax.
We want to see the Solar Investment Tax Credit (ITC) extended to
provide additional tax incentives for business to invest in Indian
Country. Of course, we want Indian Country to benefit as energy
producers, however, very few tribes would have the multi-millions or
billions to invest in such large scale projects, but if there was other
government spending to invest so that Tribes could capitalize more on
the renewable energy market as energy producers it would be the most
favorable option.
Business entities who rent tribal land should not be afraid to
comply with the substance of our Tribal Employment Rights Ordinance
(TERO). TERO requires Indian Preference in employment, subcontracting,
and business opportunities on the reservation. Complying with TERO is
not burdensome because it puts the onus on the tribes TERO officer to
provide lists of employable natives and potential training for
employment opportunities. Once the tenant company engages the TERO
officer and provides a request for assistance the TERO officer has the
burden to produce lists of qualified individuals for the tenant
company. The tenant company can go beyond entry level and skilled
positions it provides additional capabilities for Tribal members to
move up to executive positions within the tenants company. Complying
with TERO is a vital component to the success of these projects. It
provides immediate access to workforce, it provides opportunities to
strengthen the workforce, and strengthens the socioeconomic status of
the tribe and its community.
Tribes who want to engage in solar energy must be aware of the
substantial transaction cost in developing these projects. Developers
can facilitate the projects by assisting with biological and
environmental compliance requirements by supplementing the expertise
with the federal agencies in charge of overseeing these regulations.
Substantial costs can also be attributed to legal analysis and
reviewing each stage of regulatory compliance. Tribes must be prepared
to absorb these known and unknown costs.
If the Tribe has the financing to complete a renewable energy
project then this is the optimum route to develop a project. However,
in the beginning of a project, do not be surprised to work with a
development team, skilled in obtaining energy contracts called Purchase
Power Agreements with major utilities, based upon sound resource data.
Investors will then be interested in funding these projects for the
Solar Investment Tax Credit.
Tribes that are interested in renewable energy assistance should
work with the Department of Energy, Office of Indian Energy who will
provide an integral technical assistance to better understand how
Tribal projects fit into the renewable energy market.
Tribes can utilize the government to government relationship to
push for legislation and administrative actions that will facilitate
renewable energy investment on Indian land. Senator Harry Reid has been
a leader on this issue in Nevada and attended the groundbreaking for
the first utility scale solar project on tribal lands.
Limited waivers of certain Tribal Laws are inevitable. Tribes need
to work diligently to protect their sovereignty but be aware that the
investors also want to limit their financial risk as they invest multi-
millions and billions of dollars in these projects. Investors also want
longer term deals which have been facilitated by your committee who
recently passed the HEARTH act that allows for longer term ground
leases.
Do not back down from fighting for your rights. At the same time
that the Tribe was beginning to venture into renewable energy, the
Tribe sued the old Nevada Power to close down their power plant located
adjacent to the Reservation. The Tribe and the Sierra Club sued to shut
down the Reid Gardner Power plant, which lies adjacent to our
reservation and tribal citizens homes, because the pollution coming
from the plant was detrimental to the health of our Tribal members. One
result of the lawsuit and other political pressure contributed to the
recent Nevada State legislation, SB 123, which directed Reid Gardner to
close its 1, 2 and 3 stacks by the end of this year and the large stack
by 2017.
As the Energy Industry changes so do relationships. Nevada Power is
now owned by Nevada Energy, a subsidiary of Mid American Holding
Company, which is owned by Warren Buffett. We have worked with the new
Nevada Energy President, Paul Caudill and we hope to work positively to
develop new renewable energy projects with the company.
In conclusion, we have outlined that renewable solar energy
projects can be accomplished with participation of Federal and State
Governments. We endorse government going down this green road and
supporting policies that promote substituting green-house gases for
clean energy.
We appreciate the Senate Committee on Indian Affairs for holding
this worthwhile hearing and listening to input from the Moapa Band of
Paiutes. Thank you.
The Chairman. Thank you, Aletha. We appreciate your input.
Next, we will hear from Acting Chair of the Southern Ute
Indian Tribe, Mike Olguin. Mike, you're up.
STATEMENT OF HON. JAMES ``MIKE'' OLGUIN, ACTING CHAIRMAN,
SOUTHERN UTE INDIAN TRIBAL COUNCIL
Mr. Olguin. Good afternoon, Chairman Tester, Ranking Member
Barrasso and members of the Committee.
I am Mike Olguin, Acting Chairman of the Southern Ute
Indian Tribe. I am honored to appear before you today on behalf
of my tribe and tribal council to provide testimony on S. 2132,
the Indian Tribal Energy Development and Self Determination Act
amendments of 2014.
We fully support S. 2132 because it is another step towards
maximizing tribal oversight and management of our own resources
and minimizing Federal Government's role in these decisions.
Over the years, this Committee has worked on a number of
legislative proposals to help us with our primary and ongoing
concerns, the delays and impediments to tribal energy
development caused by Federal bureaucracy.
With the price of natural gas at one-third of what it was
only six years ago, you can easily understand the impact that
multiyear delays in the approval of rights-of-way and other
energy related transactions had and continues to have on our
tribal economy.
In my written statement, I describe the results of a 2009
review conducted by our own tribal energy department of
projects then awaiting approval from the Bureau of Indian
Affairs. At the time, over 100 rights-of-way and permits were
pending before the BIA and over half of those had been pending
since 2007 or before. These delays cost the tribe more than $90
million in direct revenue and because the price of gas dropped
during that time, much more in lost opportunity costs.
Because we are the largest employer in our region, these
impacts are felt in the non-tribal community as well. Despite
our concerted efforts to solve this ongoing problem, these
bureaucratic delays and their financial impacts continue. We
continue to believe the best way to minimize or eliminate these
delays and their corresponding negative impacts is to support
and enhance tribal decision-making and respect tribal authority
and reduce the Federal role on our own lands.
We have been working on various ways to do that for many
years. For more than a decade, we have worked with this
Committee on specifics. In 2002, our legal counsel wrote to
your legal counsel about a possible 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 their own energy
development transactions without Federal oversight provided the
Secretary of Interior was satisfied the tribe had the capacity
to do so.
As a pre-condition, the law required a tribe and the
Secretary of Interior to first establish a master agreement or
a TERA. We continue to believe that TERA provided an important
avenue for tribes to assert greater authority over their own
energy development. Unfortunately, no tribe has yet entered a
TERA to take advantage of that promise.
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 inherently
Federal 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 approved.
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. 2132 would make.
First, the legislation would expand the ability of tribes
to demonstrate sufficient capacity to enter a TERA by including
successful performance of other Federal 638 contracts on a
basis for such demonstrations. These amendments would provide a
clear standard we could easily meet.
Second, S. 2132 would broaden the types of activities that
could be included in the TERAs. For example, the bill includes
addition of transactions related to renewable energy facilities
and clarifies that TERAs may extend to pooling and
communitization 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 would require that if the Secretary does not
act upon a proposed TERA in 270 days, the TERA becomes
effective on the 271st day.
Taken together, these amendments would improve the chances
that other tribes would enter TERAs. In addition, the bill
would include amendments to support tribal biomass projects and
allow tribes to conduct their own appraisals when such
appraisals are required for project approval by the Federal
Government.
As detailed in my written statement, we strongly support
these appraisal provisions and would further streamline BIA's
review of many of the realty related transactions.
With that, I am available for any questions.
[The prepared statement of Mr. Olguin follows:]
Prepared Statement of Hon. James ``Mike'' Olguin, Acting Chairman,
Southern Ute Indian Tribal Council
I. Introduction
Chairman Tester, Vice Chairman Barrasso and distinguished members
of the Committee, my name is Mike Olguin and I am the Acting Chairman
of the Southern Ute Indian Tribal Council. It is my great honor to
appear before you today on behalf of the Southern Ute Indian Tribe in
support of the ``Indian Tribal Energy Development and Self
Determination Act Amendments of 2014,'' (S. 2132).
Although this legislation was introduced just last month, we have
been working closely with this Committee for 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
legislation did not become law, it served as a key building block for
S. 1684, which was introduced in late 2009 and for S. 2132, which is
before you today and is substantially similar to that earlier bill.
In recent years, tribal leader after tribal leader has come before
you to express concerns about the dire economic conditions in Indian
Country, and to call for statutory, regulatory and policy changes to
improve 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. 2132.
II. The Southern Ute Indian Tribe's Experience in Becoming the Premier
Indian Tribal Natural Gas Producer in the United States
The Southern Ute Indian Reservation consists of approximately
700,000 acres of land located in southwestern Colorado in the Four
Corners Region of the United States. The land ownership pattern within
our Reservation is complex and includes tribal trust lands, allotted
lands, non-Indian patented lands, federal lands, and state lands. Based
in part upon the timing of issuance of homestead patents, sizeable
portions of the Reservation lands involve split estates in which non-
Indians own the surface but the tribe is beneficial owner of oil and
gas or coal estates. In other situations, non-Indian mineral estates
are adjacent to tribal mineral estates. When considering energy
resource development, these land ownership patterns have significant
implications that range from the potential for drainage to questions of
jurisdiction. Historically, we have established solid working
relationships with the State of Colorado and local governmental
entities, which have minimized conflict and emphasized cooperation.
Our Reservation is a part of the San Juan Basin, which has been a
prolific source of oil and natural gas production since the 1940's.
Commencing in 1949, our tribe began issuing leases under the
supervision of the Secretary of the Interior. For several decades, we
remained the recipients of modest royalty revenue, but were not engaged
any active, comprehensive resource management planning. That changed in
the 1970's as we and other energy resource tribes in the West
recognized the potential importance of monitoring oil and gas companies
for lease compliance and maintaining a watchful eye on the federal
agencies charged with managing our resources.
A series of events in the 1980's laid the groundwork for our
subsequent success in energy development. In 1980, the Tribal Council
established an in-house Energy Department, which spent several years
gathering historical information about our energy resources and lease
records. In 1982, following the Supreme Court's decision in Merrion v.
Jicarilla Apache Tribe, the Tribal Council enacted a severance tax,
which has produced more than $500 million in revenue over the last
three decades. After Congress passed the Indian Mineral Development Act
of 1982, we carefully negotiated mineral development agreements with
oil and gas companies involving unleased lands and insisted upon
flexible provisions that vested our tribe with business options and
greater involvement in resource development.
In 1992, we started our own gas operating company, Red Willow
Production Company, which was initially capitalized through a
secretarially-approved plan for use of $8 million of tribal trust funds
received by our tribe in settlement of reserved water right claims.
Through conservative acquisition of on-Reservation leasehold interests,
we began operating our own wells and received working interest income
as well as royalty and severance tax revenue. In 1994, we participated
with a partner to purchase one of the main pipeline gathering companies
on the Reservation. Today, our tribe is the majority owner of Red Cedar
Gathering Company, which provides gathering and treating services
throughout the Reservation. Ownership of Red Cedar Gathering Company
allowed us to put the infrastructure in place to develop and market
coalbed methane gas from Reservation lands and gave us an additional
source of revenue. Our tribal leaders recognized that the peak level of
on-Reservation gas development would be reached in approximately 2005,
and, in order to continue our economic growth, we expanded operations
off the Reservation.
As a result of these decisions and developments, today, the
Southern Ute Indian Tribe, through its subsidiary energy companies,
conducts sizeable oil and gas activities in approximately 10 states and
in the Gulf of Mexico. We are the largest employer in the Four Corners
Region, and there is no question that energy resource development has
put the tribe, our members, and the surrounding community on stable
economic footing. These energy-related economic successes have resulted
in a higher standard of living for our tribal members. Our members have
jobs. Our educational programs provide meaningful opportunities at all
levels. Our elders have stable retirement benefits. We have exceeded
many of our financial goals, and we are well on the way to providing
our children and their children the potential to maintain our tribe and
its lands in perpetuity.
Along the way, we have encountered and overcome numerous obstacles,
some of which are institutional in nature. We have also collaborated
with Congress over the decades in an effort to make the path easier for
other tribes to take full advantage of the economic promise afforded by
tribal energy resources. As we have stated repeatedly to anyone who
will listen to us, ``We are the best protectors of our own resources
and the best stewards of our own destiny; provided that we have the
tools to use what is ours.'' We believe S. 2132 will help us do just
that and that's why we strongly urge its passage.
III. Indian Energy Legislation in Previous Congresses
Before commenting on S. 2132, it is important to take a step back
and re-visit the underlying reasons that led to introduction of S. 3752
in the 111th Congress, S. 1684 in the 112th Congress and now S. 2132 in
the 113th Congress. Second, we believe it is also 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 this
Committee's favorable 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 consistently worked in
a non-partisan manner and 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. 2132.
Because the process leading to S. 2132 has spanned considerable
time and has included the introduction of different 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,
bureaucracy-driven delays in federal approval of Indian mineral leases
and drilling permits captured the attention of former Chairman Dorgan.,
His constituents on the Fort Berthold Indian Reservation watched their
non-Indian neighbors get rich from mineral resource development, as
their 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 U.S. 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, technical 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 federal 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's 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. To carry out these projects, Indian Self-Determination and
Education Assistance Act contracts and funding provisions were proposed
for energy efficiency activities associated with tribal buildings and
facilities. Section 305 of S. 3752 reflected a major revision of the
federal 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 adequately describe the myriad matters
addressed in 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 was considerably more narrow than
S. 3752. Nonetheless, S1684 contained provisions equating tribes with
States and municipalities for hydropower permits and licensing under
the Federal Power Act [Sec. 201]. It also made provision for biomass
tribal demonstration projects [Sec. 202] and would have provided
considerably more modest, indirect access to weatherization program
funding [Sec. 203] for Indian communities. It encouraged tribal energy
resource development planning in coordination with the Department of
Energy [Sec. 101]. That bill did 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).
S. 2132 revives the concepts set forth in S. 1684 as that earlier
bill was referred to the full Senate by this Committee but does not
tackle the full scope of reforms that S. 3752 sought. The differences
between the much earlier S. 3752 and the much more modest recent
proposals reflect both fiscal realities associated with cost as well as
the need to ensure this Committee maintains jurisdiction over this
important legislation.
Perhaps the most significant element in S. 2132 and S. 1684 is the
series of amendments to 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 this Committee who sponsored S. 3752,
which our Tribe fully supported, not to abandon S. 2132 because of its
narrower scope because the legislation before you is badly needed in
Indian Country.
IV. 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 15-title statute is the ``Indian Tribal Energy Development
and Self-Determination Act of 2005,'' which provided comprehensive
amendments to 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 Indian tribes, in their
discretion, could be authorized to grant energy-related leases, enter
into energy-related business agreements, and issue rights-of-way for
pipelines and electric transmission facilities without the prior,
specific approval by the Secretary of the Interior.. As a pre-condition
to such authorization, a tribe and the Secretary of the Interior are
first required to enter into a Tribal Energy Resource Agreement
(TERA)--a master agreement of sorts--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
delays and trust administration then that we have now. A memorandum
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 debate 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 and in Indian Country. 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 federally-dominated system of Indian trust
administration was broken and was condemning Indian people to an
arbitrarily imposed future of impoverishment and hopelessness
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 preserving
to the Federal Government its prerogative in carrying out an
array of functions--called ``inherent federal functions'' in
the vernacular--an undefined term that potentially rendered the
act's goal of fostering tribal decisionmaking and self-
determination practically meaningless.
2. Unlike contracts carried out by Indian tribes under the
Indian Self-Determination and Education Assistance Act, Section
2604 provided no funding to Indian tribes even though TERA-
contracting tribes would be assuming duties and
responsibilities typically carried out by 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. Many Indian 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 lesson for this
Committee, therefore, is that the tragic consequence of no approved
TERAs and a continued reliance upon federal supervision has been the
incredible lost opportunities to develop Indian energy resources during
the period between 2005 and today. Those development opportunities were
extended to non-Indian mineral owners on State and private lands in
other regions of the country, where no federal approval was required
for leasing or development.
For example, when one considers that the price of natural gas in
2008 exceeded $10 per mcf, and today is only one third of that price,
those lost opportunities may not return for decades. In February 2009,
we sent a letter to the Regional Director of the BIA and explained the
impacts being caused by bureaucratic delays at that time:
The Tribe's Energy Department recently completed a review of
delays in processing pipeline rights-of-way (ROWs) and BIA
concurrences for the BLM to issue permits to drill wells on
tribal oil and gas leases. The results of that review are
staggering. Currently, approximately 24 Applications for Permit
to Drill (APDs) await BIA concurrence. Additionally,
approximately 81 pipeline ROWs await issuance by the BIA. Of
the 81 pending ROWs, 11 were approved in Tribal Council
resolutions adopted in 2006, 44 were approved in Tribal Council
resolutions adopted in 2007, 22 were approved in Tribal Council
resolutions adopted in 2008, and 4 were approved in Tribal
Council resolutions adopted in 2009. It should be emphasized
that in each instance these pending transactions have already
undergone environmental reviews by the Tribe's Natural Resource
Department pursuant to the Tribe's 638 contract with the BIA as
well as review by the Tribe's Energy Department.
Had these APDs and ROWs been approved, the Tribe would have
received revenue in a number of different ways, including: (i)
surface damage compensation; (ii) grant-of-permission fees;
(iii) severance taxes; (iv) royalties; (v) Red Willow
Production Company working interest income; and (vi) Red Cedar
Gathering Company gathering and treating fees. We estimate that
lost revenue attributable to severance taxes and royalties
alone exceeds $94,813,739. Significantly, during the period of
delay, prices for natural gas rose to an historic high, but
have now declined to approximately one-third of that market
value. Thus, much of this money will never be recovered by the
Tribe.
One example of these delays involves the Samson South Ignacio
Pipeline Project, which was introduced to the Tribe and the BIA
in June of 2006. It is our understanding that Samson has
complied with all BIA requirements, yet BIA continues to resist
issuance of the ROWs. We estimate that the Tribe is losing
royalties on this project at the rate of approximately $300,000
per month.
Our Tribe continues to believe that TERAs provide great potential
as a vehicle for tribal self-determination and development. 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
Bureau of Indian Affairs (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.
V. TERA Provisions of S. 2132
The major proposed revisions to current law affecting TERAs are
found in Section 103 of S. 2132. 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
proposed in S. 2132 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 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 Indian Self-
Determination and Education Assistance Act contracts or Tribal Self
Governance Act 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.
VI. Other Important Provisions of S. 2132
In addition to the critical changes to existing law regarding TERAs
to be made by S. 2132, the legislation also includes much-needed
changes to the appraisal requirements for projects proposed on tribal
trust lands. Section 204 would amend the Energy Policy Act of 2005 by
making clear that, for such projects where approval by the Secretary of
the Interior is required--which is most, if not all of them, the Tribe
or a third-party contractor hired by the Tribe can conduct the required
appraisal. Furthermore, S 2132 would require Secretarial review and
approval of the appraisal within 45 days, unless specific disapproval
criteria are met. That section would also require that the Secretary
provide the Tribe with written notice of any such disapproval and such
notice must explain how any deficiencies in the appraisal can be cured
or the specific reasons why the appraisal was not approved.
If enacted, this section would eliminate the timely and often
costly delays associated with completing fair market value appraisals
for projects on tribal trust lands. Given the unique status and nature
of these lands, determining such values is always difficult and
sometimes impossible; however, under existing law, the Secretary must
have an appraisal in order to ensure that the proposed transaction
would benefit the Tribe.
The fact is that the Southern Ute Indian Tribe long ago surpassed
the capabilities of the Department of the Interior to advise the Tribe
regarding its business decisions and often seeks waivers of the
appraisal requirement for various tribal projects. Passage of S. 2132
would ensure that the Tribe has the necessary flexibility to do its own
appraisals and require that the Secretary approve those appraisals in a
timely fashion, which would significantly reduce the risk of delays and
the threats such delays pose to the Tribe's business interests.
VII. 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. 2132, and respectfully request that you move expeditiously on this
legislation on behalf of Indian Country
The Chairman. Thanks, Mike.
First of all, I appreciate your testimony. I think the
Southern Utes' experiences in oil and gas development are
exemplary. We appreciate that because it shows what can happen
when tribes take the lead on their own resources.
Let's say S. 2132 is enacted with proposed TERA amendments,
what would the TERA look like for the Southern Ute and, from
your perspective, what roles would the Southern Ute take over
and what roles would the Department retain?
Mr. Olguin. If the legislation was passed, it definitely
would streamline the process for tribes across the Nation to be
able to really decide for themselves what is in their best
interest for their respective tribes to develop their energy
resources. It is really getting the Federal Government out of
the way, I think is the bottom line, and give the tribes the
authority to manage their own affairs particularly when tribes
have reached the ability to well exceed the Federal Government.
I heard earlier about the trust. It is not necessarily the
government needs to trust the tribes; the tribes need to be
able to trust the government that they will fulfill their
obligations. If we look at what is going to be the government
responsibility, it is going to be to assist the tribes, help
those tribes that do need that assistance because not all
tribes are the same. Every tribe is different, every tribe's
capacity is different, every tribe's ability to manage their
affairs is different, particularly from a financial standpoint.
The Federal Government may be needed in areas where tribes need
that capacity.
The Chairman. It has been several decades ago there was oil
and gas development on the Ft. Peck Reservation and some salt
brine water was reinjected into the ground, got into an aquifer
and ruined an aquifer and ruined the drinking water.
I don't know that anyone did anything wrong in this
particular case, but it does show a problem of oversight. I
will tell you my concern which is somebody has to have the
oversight of what is going on. I would like you guys to have it
because I think it helps with your self-determination.
Give me your perspective on if there would be gaps that I
should be concerned about or if I shouldn't be concerned about
potential gaps in oversight.
Mr. Olguin. From our perspective, I am not sure if there
would be a gap, particularly from Southern Ute's perspective. I
can only speak to that.
We require a lot criteria and requirements that are
probably more stringent than the Federal Government. When you
look at these situations where we have well bores not sealed
properly, that may mean some oversight by the Federal
Government but in our case, we exceed that.
The Chairman. Okay. That's good.
Carole, once again I appreciate you being here. Thank you
for your leadership when it comes to CSKT in particular.
Your testimony supports inclusion of biomass in S. 2132.
Can you explain how the biomass provisions could help the tribe
in its biomass energy facility project, because I know you have
one?
Ms. Lankford. Currently, we are working on feasibility. We
don't have biomass.
The Chairman. How would this help you as you plan?
Ms. Lankford. Currently, we have a lot of timber products,
a lot of timber sales and things like that but there is always
a lot of salvage and things like that which lays on the ground
and goes to waste. We also have adjacent to us the U.S. Forest
Service. The potential of utilizing some of the slash and
things they have would also help operate the biomass facility.
The Chairman. Vice Chairman Barrasso.
Senator Barrasso. Chairman Finley, Assistant Secretary
Washburn's testimony contends that the Federal liability
provisions for the Tribal Energy Resource Agreements in my bill
and also the Energy Policy Act of 2005 are unclear. He is
recommending replacing those provisions with a broader waiver
of liability that is in the HEARTH Act. What do you think about
his recommendation?
Mr. Finley. I would say that I don't support it. As you
stated, they are a lot broader than they really need to be.
Within the present language in this bill, those are under
negotiated terms between the third party and the tribe. That is
a lot narrower.
Senator Barrasso. Your testimony also noted that your tribe
is interested in using biomass to promote on-reservation
economic development. My bill would create demonstration
projects to give tribes access to reliable supplies of biomass
material from Federal land. What kind of economic impact would
this demonstration project have for your tribe and other
participating tribes?
Mr. Finley. I think you would have a great deal of positive
impact. We have done a lot of the studies. I think we are ahead
of my counterpart to my right on whether or not we want to do a
Woody Biomass Project on the Colville Reservation because of
the price tag. We have a lot of other needs at the front of the
line. Whether or not we can get to that in a timely manner is
another story.
However, the ability to manage those forests with the same
model that we have not only creates jobs, it is going to allow
us the opportunity to sell those to third parties, but allow us
to create a buffer zone for wild fires that are epidemic in my
area at certain times of the year, especially this year being a
dry year.
Other than the benefits of the biomass plant itself that
has all these other ancillary benefits that are almost
immeasurable in terms of jobs and safety.
Senator Barrasso. Thank you very much, Mr. Finley.
Chairman Olguin, the Assistant Secretary's testimony
suggested giving the Federal Government a broader exemption
from liability for tribal energy development. He recommended
using the waiver of liability in the HEARTH Act for tribal
energy resource agreements. What do you think of that
recommendation?
Mr. Olguin. A waiver of liability, not being able to read
his testimony--according to what I have been advised, we are
supportive either way but I believe we would like to respond to
it in writing as again, we have not read his testimony.
Senator Barrasso. Okay. He contends that the 120-day time
period for making the capacity determinations for Tribal Energy
Resource Agreements is not enough. He recommends this time
period begin running after a public comment period on the
agreement ends or after a final agreement is submitted.
Do you think this is an appropriate length of time to have
to wait for the capacity determinations?
Mr. Olguin. I believe when we look at making these
determinations, again we have to look at what is the delay. I
think we need to understand why more time is needed
particularly when a tribe can demonstrate tomorrow that it has
the capability of doing so. Again, I think we need to look at
the details of what he is talking about to really understand
why he needs a further delay.
Senator Barrasso. Thank you.
The Chairman. Senator Heitkamp?
Senator Heitkamp. I have just a couple quick questions
about building on capacity.
Mike, your earlier testimony today when we heard concerns
and issues and looking at what is happening in places like
North Dakota where we have a huge development on the Mandan,
Hidatsa and Arikara Nation and the potential development down
in Standing Rock. I would note that the Chairman of Standing
Rock Sioux Nation is here with his beautiful wife, Dave
Archimbold and Nicole.
I think everyone wants to get out of the business of being
paternalistic. I thought some of the answers Mr. Washburn gave
about the distinction between tribal lands and Federal lands
less than satisfying. I think what we want to do is build out
that capacity of self-determination and provide an avenue for
predictability for tribal governments to determine the welfare
or development of their resources for the welfare of the people
that those resources exist.
You obviously have an excellent reputation among the oil
and gas producing counties. What can the tribes do working
among themselves to build up that capacity and maybe create a
broad standard that could then be used to argue with the
Department of Interior that you are ready?
Mr. Olguin. There have been efforts in the four corners
area to bring four corners tribes together who are energy
producing and prompt these questions to come up with some
answers. What is it going to take from a capacity standpoint?
A lot boils down to hiring the right people, the experts.
Will the tribes have that ability? Some may, some may not but
is there an opportunity to share some of that expertise across
the board or at least from the standpoint of what are the
qualifications needed for some of these positions.
We realize when you look at the Federal capacity, as I said
this morning, institutional knowledge is being lost in the
Federal system so who better to gain that dealing with tribes
seeking education, getting the professionals and actually
exceeding the Federal capacity. I think it is working together
amongst ourselves as tribes to better our lives.
Senator Heitkamp. Kind of the point I am getting at is
there is a lot of collective knowledge among the tribes that
can be shared, a lot of technical expertise that can be shared
and really build out that knowledge capacity that will lead to
greater self-determination.
I want to congratulate you and your tribe for providing
that assistance and encourage you to continue to work in a
leadership capacity to work with all the oil and gas producing
tribes and coal producing tribes to reach that point at which
these minerals which are part of your treaty rights can be
determined, the use of those minerals and oil and gas can be
determined by the people that own those minerals and that is
the tribal entities themselves.
Mr. Olguin. Thank you.
The Chairman. Thank you, Senator Heitkamp.
Again, I want to thank today's tribal witnesses for
traveling. Some have traveled far to get here to discuss energy
development and this bill, S. 2132.
Aletha, you got off easy but I will tell you I appreciate
the work your tribe has done in solar development. It is
exemplary, it is great and I think it speaks well to what you
are trying to do for your tribe in Nevada.
This hearing is going to remain open for two weeks from
today for anyone wishing to submit comments on S. 2132.
Once again, I want to thank my Vice Chair, Senator
Barrasso, for his leadership on this issue.
With that, the hearing is adjourned.
[Whereupon, at 3:55 p.m., the Committee was adjourned.]
A P P E N D I X
Prepared Statement of Tex ``Red Tipped Arrow'' Hall, Chairman, Mandan,
Hidatsa and Arikara Nation
Chairman Tester, 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 and our Fort Berthold Reservation sit in the middle
of the most active oil and gas development in the United States. With
about 1200 new oil and gas wells producing 300,000 barrels a day, the
MHA Nation, located in west-central North Dakota, is the equivalent of
the 7th highest producing oil and gas state in the Country. In this
environment we need the full support of the Committee and we need it
now.
While the MHA Nation appreciates how quickly the Committee has
acted on S. 2132, additional provisions are needed to make a difference
in Indian energy development and should be included in the bill as it
is brought to the Senate floor. Attached to my testimony is one of the
most important amendments needed--creation of a new Indian Energy
Coordination Office to streamline and improve energy permitting on
Indian lands. We do not need more study or discussion of the issues, we
need legislation that will reform how the Federal Government oversees
Indian energy development and works with tribes.
The MHA Nation is already working on the front lines and needs your
support. We work every day to promote responsible development of our
energy resources and provide for our communities, including:
working directly with energy companies to develop our
resources;
passing and enforcing laws to govern energy activities and
protect our human, natural and cultural resources;
maintaining and improving our Reservation infrastructure;
and,
thinking creatively to maximize the value of our resources
and return that value to our members and our Reservation.
The MHA Nation is forging a new era of self-determination. We are
no longer merely implementing limited Federal programs nor are we
sitting back waiting for the Federal government to regulate in these
areas. The MHA Nation is a sovereign government and we must oversee and
regulate the tremendous energy development occurring on our Fort
Berthold Reservation. In this new era of self-determination, the MHA
Nation exercises its own authority, enforces our own laws and delegated
federal authority, and develops and manages our own programs.
The MHA Nation asks that this Committee and Congress take action to
support our work in two ways. First, by restructuring how federal
agencies work to oversee and approve energy development on Indian
reservation. Second, by ensuring that Indian tribes are able to
exercise full authority over energy development on our lands. These
amendments to S. 2132 are described in more detail below and in the
attached legislative proposal. These amendments should be included as
the bill is brought to the Senate floor.
Legislative History
The Committee already has an extensive record and much agreement on
the obstacles to Indian energy development. More study and discussions
are not needed. Over the last 6 years, the Committee has investigated
the issues, held roundtables, numerous hearings and considered
legislation. The MHA Nation has been an active participant in this
process.
In the 110th and 111th Congresses, the MHA Nation presented
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. Senator Dorgan also drafted an ``Indian Energy Tax Act.'' These
important tax provisions are needed to help make energy development
possible on Indian lands.
In the 112th Congress, the MHA Nation participated in a May 2011
Committee listening session on a draft bill entitled 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. In
response, on July 18, 2011, the MHA Nation submitted 31 legislative
proposals to the Committee.
This draft bill was eventually introduced as S. 1684 and the
Committee held a hearing on the bill on April 19, 2012. I testified at
that hearing and included the MHA Nation's 31 legislative proposals in
my testimony so that they would be a part of the Committee hearing
record. I ask that the Committee incorporate my prior testimony into
today's testimony by reference.
On the House side, the MHA Nation also testified before the
Subcommittee on Indian and Alaska Native Affairs on April 1, 2011
during an Indian Energy Oversight Hearing, in February 15, 2012, on
Chairman Young's ``Native American Energy Act,'' H.R. 3973, on April
19, 2012 on the Bureau of Land Management's (BLM) proposed regulation
of hydraulic fracturing activities, and on May 10, 2013 on the current
version, H.R. 1548, of Chairman Young's Indian energy bill.
Need for Congressional Action
Now is the time to act. The MHA Nation and number of other Indian
tribes are already working to develop and manage our energy resources
to provide long-term economic security for our communities, increase
tribal self-determination, while also providing additional domestic
energy resources. Without Congressional action, tribes will miss out on
energy development opportunities, or, when development does occur,
tribes will be unable to keep the benefits of development on the
reservation. Congress should pass legislation that restructures the
current process used by federal agencies and provides support for the
exercise of tribal authority over energy development.
The MHA Nation is working on the front lines of energy development
and Congressional and federal agency support for this work is critical
to our success. The Bakken Formation underlying our Reservation is the
largest continuous oil deposit in the lower 48 states. In a few short
years, our region has become the second highest oil and gas producing
area in the United States. We produce more oil than Alaska. Only Texas
produces more. Currently, on our Reservation there are 30 drilling
rigs, more than 27,000 semi-trucks, and about 1,200 oil and gas wells
producing in excess of 300,000 barrels of oil per day.
We are also constructing the first oil refinery to be built in the
United States since 1976. Our Clean Fuels Refinery Project is now under
construction and we expect to begin operations in 2015. Our refinery
will provide the MHA Nation with ``value added'' benefits for the oil
produced on our Reservation, including a higher return on our oil
resources, jobs and economic opportunity as well as additional domestic
energy production. While we appreciate effort of the Bureau of Indian
Affairs (BIA) and the Environmental Protection Agency (EPA) to keep
this project moving through the approval process, it took us a decade
before the refinery was finally approved. With the level of activity on
our Reservation, we cannot wait a decade or even a year for approval of
permits.
To improve this situation we need to be working on two fronts.
Congress should restructure how federal agencies oversee and approve
energy development on tribal lands while also ensuring that tribes have
full authority to manage and regulate energy development on our lands.
The need for greater tribal authority over permitting and regulatory
functions is easy to see by simply looking at federal staffing levels.
While these federal agencies must be fully staffed to meet the Federal
Government's trust responsibilities, we also cannot wait for the
Federal Government to act and have no choice but to take matters into
our own hands. The MHA Nation has been doing all we can to fill the
regulatory and staffing void while promoting development of our energy
resources.
For example, the MHA Nation enacted forward thinking regulations to
address widespread and wasteful flaring of natural gas. Regulation was
needed to protect our clean air and to promote responsible development
of our tribal energy resources. However, we did not address this issue
by simply imposing new requirements that make it more difficult to
produce energy. Instead, we enacted a regulation that encourages our
industry partners to put their gas resources to beneficial use.
One of the reasons we enacted regulations for gas flaring was
because the Bureau of Land Management (BLM) lacks the staff to
adequately enforce its ``Notice to Lessees and Operators of Onshore
federal and Indian Oil and Gas Leases: Royalty or Compensation for Oil
and Gas Lost'' which covers the flaring of gas. With the majority of
the wells on the Reservation being flared and our trust resources going
to waste, the MHA Nation was forced to step up and assert our tribal
authority.
Indeed, there is no better manager and regulator of our homelands
than the tribal government elected to serve the MHA Nation and our Fort
Berthold Reservation. In another example, our Tribal Council passed the
``Missouri River, Badlands and Sacred Sites Protection Act'' to provide
for the protection of sensitive natural resources on our Reservation
while allowing for responsible energy development. The requirements of
this Act even far exceed requirements in the neighboring State of North
Dakota.
As a part of this Act, to protect the Missouri River, we require a
half-mile setback from the River for oil and gas wells on our lands.
Meanwhile, across the River, the State only requires a 500-foot
setback. We wish the State had followed our lead. Currently there is
pollution of the River and our waters as well pads and oil and gas
operations on State lands are washed over by the spring thaw. In
addition, in the Badlands portion of our Reservation we require a
minimum of 8 wells per multi-pad. Requiring that oil and gas operators
combine many wells onto a single multi-pad reduces the number of well
pads and roads that are constructed in the sensitive Badlands area.
The MHA Nation has also enacted an Environmental Spill Code
including fines and penalties for intentional dumping of hazardous
materials. These are just a few examples of the authority the MHA
Nation is exercising to promote responsible development of our energy
resources. We still have a long way to go and we need the support of
Congress and federal agencies in this effort.
As we work on the front lines and enter a new era of self-
determination, we ask that this Committee and the full Congress support
our efforts in two ways. First, by restructuring how federal agencies
work to oversee and approve energy development on Indian reservation.
Second, by ensuring that Indian tribes are able to exercise full
authority over energy development on our lands. We have developed
proposals in both of these areas and explain them in more detail below
as well as in the attached legislative proposal.
Proposal for Indian Energy Coordination Office
First, in order to develop federal expertise in the area of Indian
energy and to provide leadership as well as a model for efficient
permit processing, MHA Nation asks that Congress direct Interior and
all the other federal agencies involved in overseeing Indian energy
development to establish a high-level Indian Energy Coordination Office
in Denver, Colorado. The office would use existing resources to finally
provide the staff and expertise that Indian energy deserves.
We are already working with the Administration to create this
office, but legislation is needed to combine federal agency authorities
and restructure energy permitting on Indian lands. I have attached a
legislative proposal to my testimony. The MHA Nation asks that this
proposal be included in S. 2132 as it is brought to the Senate floor.
This new office should be located in the Interior Deputy
Secretary's Office and be led by a Director who has all the authority
necessary to issue permits and approve energy development on Indian
lands--everything from permitting oil and gas wells to environmental
review of proposed projects. Staff with energy expertise would ensure
that permits and other approvals keep moving and do not get hung up by
a lack of understanding or experience. The office would also enter into
Memorandum of Understanding with EPA, the Army Corps of Engineers, and
the United States Department of Agriculture to provide staff and
further ensure permit streamlining and coordination. The staff of this
office would also provide technical assistance to local BIA Agencies
and tribes doing work on the ground.
This office should be guided by basic principles that have been
lost in the current unorganized federal system for overseeing energy
development on Indian lands. In particular, Indian lands are not public
lands. While both Congress and Interior have been clear on this point
in the past, over time, some federal agencies have attempted to apply
public land management standards to Indian lands. Current examples
include the application of the National Environmental Policy Act (NEPA)
to Indian lands, and BLM's proposal to regulate hydraulic fracturing on
Indian lands. In both cases, these agency actions exceed the underlying
legal authority. This Office would end these practices, treat Indian
lands according to federal trust management standards, and enter a new
era where this Office provides technical support for tribes to regulate
these issues ourselves.
The Office we are proposing is long overdue. Congress already
approved and expanded similar offices for energy development on federal
lands. The same should be provided for Indian lands where the benefits
would far exceed the benefits of energy development on federal lands.
Energy development on Indian lands provides badly needed jobs, economic
development, revenues for tribal governments, and, if managed properly,
long-term investment in reservation infrastructure.
Legislative Proposals to Increase Tribal Authority
In addition, to improved federal coordination, this Committee and
Congress should support changes in the law to increase tribal authority
over energy development. The MHA Nation and many Indian tribes are
entering a new era of self-determination where we exercise tribal
authority to regulate energy development on our lands. This new era
builds upon and is the fulfillment of decades of successful federal
policy and tribal decisionmaking under the Indian Self-Determination
and Education Assistance Act of 1975 (Public Law 93-638). In this new
era, the Federal Government and Indian tribes should work together on a
government-to-government basis to determine how to best regulate
activities on Indian lands. Then, with appropriate technical assistance
and support from the Federal Government, tribes can exercise their own
authority or delegated federal authority to regulate and manage
reservation resources.
This is exactly what is required by long-standing federal
consultation policies. Executive Order No. 13175 on Consultation and
Coordination with Indian Tribal Governments directs in Section 3 that
federal agencies ``consult with tribal officials as to the need for
Federal standards and any alternatives that would limit the scope of
Federal standards or otherwise preserve the prerogatives and authority
of Indian tribes.'' This Committee and Congress should support these
efforts by recognizing and affirming tribal authority in all areas
related to the development of Indian energy resources. Below we
highlight some of the most important changes needed to support tribal
authority over energy development.
First, The most significant authority Indian tribes need to develop
their energy resources is exclusive taxing authority over their
reservations. Tribes already have the authority to tax, but
encroachments on tribal authority, jurisdiction and business activities
by state and federal governments, have disabled the ability of tribes
to use their taxing authority to support energy and economic
development.
The MHA Nation and tribes everywhere, need Congress to pass laws
affirming the exclusive authority of Indian tribes to tax energy
development on our reservations. Currently, outdated Supreme Court
precedent allows states to place a double tax on energy development on
tribal lands. These state taxes eliminate or reduce our ability to
raise our own taxes and tribes remain ever more dependent upon the
Federal Government.
On the MHA Nation's Fort Berthold Reservation, this double taxation
forced the MHA Nation into an unfair oil and gas tax agreement with the
State of North Dakota. Over the last 5 years the State took almost $500
million in taxes from energy development on my Reservation. In 2013
alone, the State took about $215 million.
The negative impact on the Reservation is not so hard to figure
out. For example, in 2011, the State collected more than $75 million in
taxes from energy development on the Reservation, but spent less than
$2 million of that amount on state roads on the Reservation and zero
tax dollars on federal and tribal roads. In addition, none of the 2011
funds were used to mitigate impacts that oil and gas development has
had on the MHA Nation, its members and our natural resources.
The State receives this windfall at the expense of the MHA Nation
and tribal and federal infrastructure even though in just the past two
years the State has collected almost $4 billion in tax revenues from
all of the oil and gas development in the State. In fact, within a year
or two of the tax agreement, the State's coffers were so full that the
State created an investment account whose funds cannot be spent until
2017. While these funds sit around earning interest, federal and tribal
infrastructure on our Reservation is such disrepair every day is a
state of emergency. This affects our ability to maximize oil and gas
development, but more importantly, our residents and tribal members
must live in this state of emergency just getting to school or the
grocery store.
The MHA Nation needs tax revenues to do the same work that every
other government does. We need 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 on our Reservation. We also need to develop tribal codes and
employ tribal staff to regulate activities on the Reservation.
The Committee should include in S. 2132 a provision to clarifies
the law and affirms the exclusive authority of tribes to tax energy
development on Indian lands. Or, at the very least, the Committee
should limit the amount of tax revenues that states can take from
development of trust resources on Indian lands. Considering that states
use none of these dollars to benefit infrastructure on Indian lands,
states should be limited to 10 percent or less of the tax revenues
earned from our resources.
Second, if not adopted as a part of the MHA Nation's Indian Energy
Coordination Office proposal, the Committee should separately prohibit
BLM from applying regulations developed for public lands to Indian
lands. Indian lands are not public lands, yet BLM 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.
BLM's 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. At a minimum, the Committee should
require BLM to allow tribes to opt out of the proposed regulations so
that tribes may determine whether and how best to regulate hydraulic
fracturing on their lands.
Third, the Committee should prohibit 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. And, again, EPA
should also allow tribes to opt out of the proposed rule so that tribes
may determine how best to regulate minor sources on their lands.
Fourth, the Committee should expand the Indian Self-Determination
and Education Assistance Act of 1975 (Public Law 93-638) to apply to
additional agencies and bureaus. Indian tribes, not federal agencies,
have the on the ground staff to provide oversight and monitoring of oil
and gas development. Contracting authority under P.L. 638 should be
expanded to BLM, EPA, and the Fish and Wildlife Service.
Fifth, we also need to clarify tribal jurisdiction over Reservation
activities and any rightsof- 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 Department of
Defense with tribally produced and owned domestic energy supplies.
Seventh, S. 2132 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. 2132 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. 2132 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, S. 2132 should open the doors of the Department of
Energy's (DOE) 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.
Analysis of Indian Tribal Energy Development and Self-Determination Act
Amendments of 2014
In general, the MHA Nation supports S. 2132, the ``Indian Tribal
Energy Development and Self-Determination Act Amendments of 2014.''
There are only a few problems with some of the provisions in S. 2132.
The biggest problem is what is not in the bill. After 6 years of
investigations, roundtables and hearings, S. 2132 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.
S. 2132 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 MHA Nation supports increasing tribal authority over energy
development on Indian lands, but we are concerned about the effect the
TERA program may have on the Federal Government's trust responsibility
to Indian tribes. The trust responsibility is one way that the Federal
Government fulfills its treaty obligations to the MHA Nation and other
tribes. As described in my testimony above, the MHA Nation is
interested in working with the Federal Government to increase tribal
authority in ways that do not potentially undermine the federal trust
responsibility.
We appreciate S. 2132'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. However, S. 2132 should 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. When laws like the TERA program are enacted, we should all
fully discuss and understand any consequences for the trust
responsibility and our treaties.
S. 2132 includes a variety of other changes and initiatives that
the MHA Nation 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. Currently, the
BLM relies on state well spacing forums and often does not consult with
tribes regarding this important issue. On our Reservation, the North
Dakota Industrial Commission recently approved a well spacing plan that
would have stranded $90 million in tribal minerals. The BLM was
prepared to approve this plan without discussing it with the MHA
Nation. We were lucky to learn about this decision from the BIA. Well
spacing is to important to Indian tribes and the Federal Government's
trust and treaty responsibilities to be left to state forums that have
no authority on Indian lands.
Second, we support changes in S. 2132 that would make it more
likely that the DOE would implement its long overdue Indian Energy Loan
Guarantee Program. However, the language in S. 2132 falls short of
requiring the Secretary of Energy to implement this program as was
required for DOE's other loan guarantee program, the 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,
Interior 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. 2132 that would
allow tribes to apply for direct weatherization funding from DOE.
However, S. 2132 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 nonprofits. Regardless of whether this
legislation is passed by Congress, DOE should immediately reform its
weatherization program consistent with federal trust responsibilities.
Conclusion
I want to thank Chairman Tester, Vice Chairman Barrasso, Senator
Heitkamp and the other 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 do not
need more studies or discussion. Instead, the attached legislative
proposal and other important amendments should be included in S. 2132
as it is brought to the Senate floor. These amendments would, first,
restructure how federal agencies work to oversee and approve energy
development on Indian reservation and, second, ensure that Indian
tribes are able to exercise full authority over energy development on
our lands. The MHA Nation asks for the Committee and Congress' support
in these two areas as we continue to advance tribal authority over
energy development on our lands.
Attachment
______
Prepared Statement of Gordon Howell, Chairman, Business Committee for
the Ute Indian Tribe of the Uintah and Ouray Reservation
Chairman Tester, Vice Chairman Barrasso, and Members of the
Committee on Indian Affairs, thank you for the opportunity to testify
on S. 2132, the ``Indian Tribal Energy Development and Self-
Determination Act Amendments of 2011.'' My name is Gordon Howell. I am
the Chairman 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.
I. Introduction
The Ute Indian Tribe is a major oil and gas producer. 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 in process of opening up an additional 150,000
acres to mineral leases on the Reservation with an $80 million
investment dedicated to exploration.
The Tribe relies on its oil and gas development as the primary
source of funding for our tribal government and the services we
provide. We use these revenues to govern and provide services on the
second largest reservation in the United States. Our Reservation covers
more than 4.5 million acres and we have 3,175 members living on the
Reservation.
Our tribal government provides services to our members and manages
the Reservation through 60 tribal departments and agencies including
land, fish and wildlife management, housing, education, emergency
medical services, public safety, and energy and minerals management.
The Tribe is also a major employer and engine for economic growth in
northeastern Utah. Tribal businesses include a bowling alley,
supermarket, gas stations, feedlot, an information technology company,
manufacturing plant, and Ute Oil Field Water Services, 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,
however, 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. For example, we need 10 times
as many permits to be approved. Currently, about 48 Applications for
Permits to Drill (APD) are approved each year for oil and gas
operations on the Reservation. We estimate that 450 APDs will be needed
each year as we expand operations.
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. In order
for the Tribe to continue to grow and expand our economy the federal
permitting process needs to be streamlined and improved.
It has been 6 years since former Senator Dorgan called for reform
of the bureaucratic permit approval process for energy projects. He
reported that a single oil and gas well must navigate a 49-step process
involving at least 4 understaffed federal agencies. The Tribe asks that
the Committee finally take dramatic action to focus federal staff and
resources on Indian energy development and provide the support tribes
need to fully benefit from their energy resources.
Since Senate Dorgan highlighted the issues there have been numerous
Congressional hearings, testimony and roundtables. The Committee has
developed an extensive record and there has also been much agreement
about the need for change, but no new legislation has been moved out of
Committee or passed by Congress. We have seen a few changes within the
Administration, but much more needs to be done.
II. A New Indian Energy Regulatory Office is Needed to Improve Staffing
and Coordination
Improvements in Bureau of Indian Affairs (BIA) energy staff and
coordination are long overdue. Despite our tremendous oil and gas
resources and the value of these resources to the Tribe and to domestic
energy production, we have only 2 or 3 BIA staff involved in the
oversight and processing of oil and gas permits on our Reservation.
These BIA staff are responsible for ensuring that permits comply with a
numerous federal laws and they must engage in extensive coordination
with other federal staff located in remote offices.
The Ute Tribe believes the best way to address these staffing and
coordination issues is to establish a new Indian Energy Regulatory
Office. This Office would be centrally located in Denver, Colorado,
utilize and refocus existing federal resources in Denver, and serve as
a new BIA Regional Office for energy producing tribes. To improve oil
and gas permitting on Indian lands we need major reforms and high-level
federal coordination. In fact, this is exactly the solution that
Congress chose for permitting of oil and gas development on federal
lands. Why is Congress leaving Indian lands behind?
In 2005, Section 365 of the Energy Policy Act authorized the Bureau
of Land Management (BLM) to initiate a ``Pilot Project to Improve
Federal Permit Coordination.'' The law allowed BLM to establish 7 pilot
offices and streamline federal permitting by co-locating staff from
different federal agencies in these offices. Recently, Congress passed
a bill to expand these pilot offices.
We need a similar effort for Indian lands. BIA is the most
important federal agency charged with supporting Indian energy, yet
there are only a handful of BIA employees with energy expertise. A
high-level regulatory office would encourage BIA to hire staff with
energy expertise, provide technical and financial management support
needed by tribes, and improve coordination of Indian energy permitting
across Interior and the Federal Government.
The Ute Tribe has developed a legislative proposal to establish an
Indian Energy Regulatory Office. I have attached to my testimony a Ute
Tribal Resolution setting out the need and propose of this office and
providing proposed legislative text. This proposal utilizes existing
funding and staff, but refocus these resources as a BIA Regional Office
that would support BIA Agency Offices with high levels of energy
permitting. We ask that this proposal be included in S. 2132 before it
is approved by this Committee.
III. No-Cost Improvements to Indian Energy Permitting
The Ute Tribe supports S. 2132, but much more needs to be done. In
prior Congresses and in response to requests by former Senator Akaka,
Senator Barrasso and, on the House side, Congressman Young, the Tribe
developed 32 legislative proposals to improve Indian energy permitting,
coordination and financing. The Tribe submitted these proposals to the
Committee on July 11, 2011, and we included these proposals in our
written testimony on a prior version of this bill, S. 1648, on April
19, 2012. We incorporate our prior testimony and these 32 legislative
proposals in today's testimony by reference.
Today we highlight a few of these proposals that the Committee
could include in S. 2132 without increasing the cost of the bill or
government bureaucracy. The proposals we highlight would address gaps
in the current system, clarify the authority of tribal governments to
oversee energy activities on tribal lands and increase the resources
available to tribes to address all aspects of energy development on
tribal lands. These proposals are attached to my testimony. They
include:
ensuring that Communitization Agreements do not delay
royalty payments;
ensuring that the Environmental Protection Agency's new
regulation of minor sources in Indian Country will not impede
energy development;
clarifying tribal jurisdiction over right-of-ways;
ensuring that tribes have the tax revenues needed to support
tribal infrastructure;
limiting the number of times Interior can require revisions
to a Tribal Energy Resource Agreement Application;
setting aside a portion of existing energy efficiency
funding for Indian tribes;
setting aside a portion of existing weatherization funding
for Indian tribes;
streamlining environmental reviews on Indian lands by
providing tribes with ``treatment as a sovereign'' status under
the National Environmental Policy Act (NEPA);
clarifying that Indian lands are not public lands and
therefore are not subject to NEPA; and,
preventing BLM's Hydraulic Fracturing Regulations, designed
for public lands, from applying to Indian lands.
Through these legislative changes, Congress would greatly
streamline energy permitting on Indian lands providing more revenues
for tribal governments, on-reservation jobs and increased supplies of
domestic energy resources. 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.
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.
IV. Analysis of S. 2132, the Indian Tribal Energy Development and Self-
Determination Act Amendments of 2014
The Tribe supports S. 2132 and believes that it is a good start. S.
2132 would amend existing laws to provide tribes with improved
opportunities to manage their own energy resources. However, S. 2132
only addresses a few areas of the law. 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. In the rest of my testimony, I provide a section-by-
section analysis of S. 2132's provisions.
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. Even worse, BLM
typically relies on well-spacing developed in State forums. 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.
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, 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. 2132. 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)(1) 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)(2) is 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)(2) 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)(1) and (2) 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 the (Department of
Energy) 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.
H. Section 204. Appraisals
The Ute Tribe supports streamlining the appraisal process and
providing tribes options for obtaining appraisals. Interior agencies
involved in energy development are already understaffed. Indian tribes
and the Interior should be able to rely on appraisals conducted by the
tribe itself or certified, third party appraisers.
I. Section 205. Leases of Restricted Lands for Navajo Nation
This section provides that the Navajo Nation may submit regulations
governing mineral leases for approval by the Secretary, and, once
approved, would provide the Navajo Nation with the authority to approve
mineral leases without subsequent review and approval by the Secretary.
The Ute Tribe supports providing tribes with independent authority to
approve mineral leases and believes this section should be expanded to
include all tribes who submit mineral leasing regulations for approval
to the Secretary.
V. Conclusion
S. 2132 is a good start, but much more is needed to support and
promote Indian energy development. Indian energy resources have the
potential to provide many tribes and their members with long-term
financial security and on-reservation jobs as well as increased
domestic energy resources. However, to reach these goals, Congress and
the Administration must improve and coordinate Indian energy
permitting, provide tribes with access to federal energy programs, and
clarify tribal authorities to provide the resources necessary to
support Indian energy development.
I would like to thank Chairman Tester, Vice Chairman Barrasso and
members of the Committee for the opportunity to present this testimony
on behalf of the Ute Indian 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.
Attachment 1