[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]








 TRIBAL PROSPERITY AND SELF-DETERMINATION THROUGH ENERGY DEVELOPMENT

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

                        OVERSIGHT FIELD HEARING

                               before the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

            Tuesday, October 4, 2016 at Santa Fe, New Mexico

                               __________

                           Serial No. 114-54

                               __________

       Printed for the use of the Committee on Natural Resources




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                     COMMITTEE ON NATURAL RESOURCES

                        ROB BISHOP, UT, Chairman
            RAUL M. GRIJALVA, AZ, Ranking Democratic Member

Don Young, AK                        Grace F. Napolitano, CA
Louie Gohmert, TX                    Madeleine Z. Bordallo, GU
Doug Lamborn, CO                     Jim Costa, CA
Robert J. Wittman, VA                Gregorio Kilili Camacho Sablan, 
John Fleming, LA                         CNMI
Tom McClintock, CA                   Niki Tsongas, MA
Glenn Thompson, PA                   Pedro R. Pierluisi, PR
Cynthia M. Lummis, WY                Jared Huffman, CA
Dan Benishek, MI                     Raul Ruiz, CA
Jeff Duncan, SC                      Alan S. Lowenthal, CA
Paul A. Gosar, AZ                    Donald S. Beyer, Jr., VA
Raul R. Labrador, ID                 Norma J. Torres, CA
Doug LaMalfa, CA                     Debbie Dingell, MI
Jeff Denham, CA                      Ruben Gallego, AZ
Paul Cook, CA                        Lois Capps, CA
Bruce Westerman, AR                  Jared Polis, CO
Garret Graves, LA                    Wm. Lacy Clay, MO
Dan Newhouse, WA                     Vacancy
Ryan K. Zinke, MT
Jody B. Hice, GA
Aumua Amata Coleman Radewagen, AS
Thomas MacArthur, NJ
Alexander X. Mooney, WV
Cresent Hardy, NV
Darin LaHood, IL

                       Jason Knox, Chief of Staff
                      Lisa Pittman, Chief Counsel
                David Watkins, Democratic Staff Director
                  Sarah Lim, Democratic Chief Counsel
                                 ------  
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 
                                 

                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Tuesday, October 4, 2016.........................     1

Statement of Members:
    Bishop, Hon. Rob, a Representative in Congress from the State 
      of Utah....................................................     1
        Prepared statement of....................................     3
    Westerman, Hon. Bruce, a Representative in Congress from the 
      State of Arkansas..........................................     3

Statement of Witnesses:
    Denetsosie, Louis, President and CEO, Navajo Nation Oil and 
      Gas Company, Window Rock, Arizona..........................    20
        Prepared statement of....................................    21
    Ferguson, Hon. Jack, Confederated Tribes of the Colville 
      Reservation, Representative, Intertribal Timber Council, 
      Nespelem, Washington.......................................    11
        Prepared statement of....................................    13
    Glenn, Richard, Executive Vice President, Lands and Natural 
      Resources, Arctic Slope Regional Corporation, Barrow, 
      Alaska.....................................................    15
        Prepared statement of....................................    17
    Henson, Eric, Senior Vice President, Compass Lexecon, 
      Research Affiliate, Harvard Project on American Indian 
      Economic Development, Tucson, Arizona......................    23
        Prepared statement of....................................    25
    Olguin, Hon. James M. ``Mike'', Tribal Council Member, 
      Southern Ute Indian Tribe, Ignacio, Colorado...............     5
        Prepared statement of....................................     7
                                     


 
  OVERSIGHT FIELD HEARING ON TRIBAL PROSPERITY AND SELF-DETERMINATION 
                       THROUGH ENERGY DEVELOPMENT

                              ----------                              


                        Tuesday, October 4, 2016

                     U.S. House of Representatives

                     Committee on Natural Resources

                          Santa Fe, New Mexico

                              ----------                              

    The committee met, pursuant to call, at 10:00 a.m., at 490 
Old Santa Fe Trail, Santa Fe, New Mexico, Hon. Rob Bishop 
[Chairman of the Committee] presiding.
    Present: Representatives Bishop and Westerman.
    The Chairman. Hi. Thank you all for being here. I 
appreciate you coming and joining us in this official committee 
hearing today.
    I actually had to wait until it was after 10:00 just 
because of tradition, but you should know, by my time, we are 
still 8 minutes early. So, it may be after 10:00, but this is 
my time.
    The committee is meeting today to hear testimony on the 
following topic: ``Tribal Prosperity and Self-Determination 
through Energy Development.'' Under Committee Rule 4(f), oral 
opening statements at the hearing are limited to the Chairman, 
Ranking Member, and any other Member who happens to be here, so 
we will all get a chance to say something.
    I ask unanimous consent that all Members' opening 
statements be made a part of the hearing record if they are 
submitted to the Clerk by 5:00 p.m. or if they say them here in 
the actual meeting. And hearing no objection, that is so 
ordered.
    So, let me begin with my opening statement, if I could.

STATEMENT OF THE HON. ROB BISHOP, A REPRESENTATIVE IN CONGRESS 
                     FROM THE STATE OF UTAH

    The Chairman. I first want to thank the Legislature of New 
Mexico for their kindness and cooperation in allowing us to use 
this facility. I understand this is the Natural Resources 
Committee room for New Mexico, in which case, this is the 
appropriate place for us to be. So, thank you for allowing us 
to borrow your facilities for this hearing, and particularly 
when this is a busy time.
    We are gathered here to review what I think is an important 
topic. It is an issue at its core that deals with human 
dignity, self-determination, and opportunity. These concepts 
underlie the relationship between government and people, and 
this particular relationship is a little bit different because 
tribes and the Federal Government are both sovereigns. A 
failure to understand this fundamental difference on the part 
of the Federal agencies is one of the reasons why I think we 
are here today.
    Increasingly, the Federal Government treated tribal lands 
like they are Federal lands. Rather than working with tribes to 
promote self-governance, Federal agencies have imposed a 
cumbersome web of blanket mandates and policies where 
consultation is merely an afterthought, not the first step in 
the process. In many cases, this is taking place despite policy 
from Congress to devolve control over trust lands to the 
rightful Indian owners.
    For Native communities, the decision to develop their 
energy resources can provide a multitude of economic, 
educational, and infrastructural benefits. Some tribes have 
stated that revenues from energy development fund up to 90 
percent of their government operations.
    Unfortunately, nearly every aspect of energy development on 
tribal lands is influenced or controlled by the Federal 
Government, a policy stemming from some old notions that some 
people cannot manage their own resources, which is totally 
inaccurate.
    Many of the laws and regulations that apply to Indian 
Country are complex and cumbersome, increasing development 
costs and causing delays and uncertainty to the development of 
resources on tribal land.
    When a tribe wants to lease its trust lands to drill an oil 
well, that lease is not valid until it is approved, if it is 
ever approved, by the Interior Department, which imposes an 
array of regulatory obstacles and investor uncertainty.
    Further, if any tribe wishes to enter into an agreement 
with a private company, the parties must go through an onerous 
49-step process which involves more than 15 Federal agencies 
and offices and unelected bureaucrats to acquire a permit for 
an energy development project.
    As many tribal representatives have testified before 
Congress, it is not uncommon for several years to pass before 
any determination is made by Interior on whether energy 
development projects may move forward. This often leads to less 
development on Indian lands than on adjacent Federal property, 
and definitely less than on private property.
    Many tribes, rich in land and natural resources, suffer 
unemployment rates up to 50 percent or higher. They live in 
some of the most impoverished conditions known in America 
today. The bipartisan Federal policy of promoting tribal self-
determination launched by President Nixon in 1970 cannot be 
fully realized as long as there are paternalistic Federal laws 
and policies that remain on the books or, as we have seen, 
Federal agencies that act beyond what I think is their proper 
authority.
    Today's hearing is intended to let a number of Native 
leaders, as well as an economist, tell us about the impacts of 
energy development on tribal lands. This is a source of 
legislation that the House has passed, and the Senate passed. I 
would like to see it passed in both bodies of the Congress so 
we can move forward in this particular area, but I would also 
like to see us change the overall policy, so that our goal is 
actually to develop the resources that are here, so that tribal 
areas have the same benefit of those resources that private and 
state lands currently have.
    I want this to be both a positive sketch of how tribes are 
managing their resources for the benefit of their communities, 
and a critical analysis of what more needs to be done with the 
Federal obstacles that stand in the way of that development.

    [The prepared statement of Mr. Bishop follows:]
   Prepared Statement of the Hon. Rob Bishop, Chairman, Committee on 
                           Natural Resources
    I first want to thank the Legislature of New Mexico for their 
kindness and cooperation in allowing this committee to borrow their 
State Capitol facilities for this hearing, particularly during a busy 
time for them.
    We have gathered here to review an important topic. The issue at 
its core deals with human dignity, self-determination and opportunity. 
These concepts underlie the relationship between government and people. 
In this particular relationship, it's different.
    Why? The relationship between tribes and the Federal Government is 
between sovereigns. A failure to understand this fundamental difference 
on the part of Federal agencies is one reason why we are here today.
    Increasingly, the Federal Government has treated tribal lands like 
they are Federal. Rather than work with tribes to promote self-
governance, Federal agencies have imposed a cumbersome web of blanket 
mandates and policies where consultation is a mere afterthought. In 
many cases, this is taking place despite congressional policy to 
devolve control over trust lands to their Indian owners.
    For Native communities, the decision to develop their energy 
resources can provide a multitude of economic, educational, 
infrastructural benefits. Some tribes have stated that revenues from 
energy development fund up to 90 percent of their government 
operations.
    Unfortunately, nearly every aspect of energy development on tribal 
lands is influenced or controlled by the Federal Government, a policy 
stemming from old notions that Natives are incapable of or unwilling to 
manage their resources. Many of the laws and regulations that apply to 
Indian Country are complex and cumbersome, increasing development costs 
and causing delays and uncertainty to the development of energy 
resources on tribal land.
    When a tribe wants to lease its trust lands to drill an oil well, 
the lease is not valid until it is approved--if it is approved--by the 
Interior Department, which imposes an array of regulatory obstacles and 
investor uncertainty.
    Further, if any tribe wishes to enter into agreements with a 
private company, the parties must go through an onerous 49-step process 
which involves more than 15 Federal agencies and offices--unelected 
bureaucrats, to acquire a permit for energy development projects.
    Many tribal representatives have testified before Congress that it 
is not uncommon for several years to pass before any determination is 
made by the Interior on whether energy development project may be able 
to move forward. This often leads to less development on Indian lands 
than adjacent Federal and private lands.
    Many tribes rich in land and natural resources suffer unemployment 
rates of 50 percent and higher and live in the most impoverished 
conditions known in America today. The bipartisan Federal policy of 
promoting tribal self-determination launched in President Nixon's 1970 
``Special Message on Indian Affairs'' cannot be fully realized as long 
as paternalistic Federal laws and policies remain on the books, or, as 
we've seen, Federal agencies act beyond their authorities.
    Today's hearing is intended to let a number of Native leaders, as 
well as an economist, tell us about the impacts of energy development 
on Indian lands. I want this to be both a positive discussion about how 
tribes are managing resources for the benefit of their communities, and 
a critical analysis of what more needs to be done with the Federal 
obstacles that stand in their way.

                                 ______
                                 

    The Chairman. I appreciate everyone being here. I look 
forward to the testimony.
    I will yield to Mr. Westerman if he wants to say a few 
words in opening.

  STATEMENT OF THE HON. BRUCE WESTERMAN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ARKANSAS

    Mr. Westerman. Thank you, Mr. Chairman. I would also like 
to thank the state of New Mexico and the New Mexico legislature 
for hosting us today, and I would like to thank Chairman Bishop 
for his work in getting out in these field hearings across the 
country. I know he spends a lot of time doing that, and it is 
an honor to be here with him today.
    Like Chairman Bishop, I served in my state legislature in 
Arkansas. But before I did that, the first elected office I 
held was on the school board. I was just discussing earlier 
with someone about how I firmly believe that government is most 
effective when it is closest to the people, and those decisions 
that are made locally have a big impact on local communities. 
The further away the government gets from the decisions that 
are being made, the more overbearing, unrealistic, and 
unattainable are the goals that need to be accomplished.
    When I ran for Congress--and I am in my first term--my 
campaign slogan was ``less hassle, more freedom,'' and it was 
about this very kind of issue where Americans want to live 
their lives with less hassle from the Federal Government, and 
they want to have more freedom to raise their families, to 
create jobs, to grow communities, and sometimes we get in the 
way of that in the Federal Government, which I think is the 
classic example of what is happening here with over-reach.
    When we look at poverty, the number-one anti-poverty 
program has always been a job, and it is the local entities, it 
is the tribes, it is the businesses that create jobs. But when 
they are working in an environment where they cannot create 
jobs, that hurts everyday people who are just trying to make a 
living and raise their families.
    So, I hope that we can move forward here and put the 
decisionmaking where it belongs, and that is in the hands of 
the tribes and the local community.
    With that, I yield back, Mr. Chairman.
    The Chairman. Thank you. I appreciate that, and thank you 
for joining us here, Mr. Westerman, and coming from Arkansas to 
do it.
    I want to thank the witnesses who are going to be here to 
provide testimony, both orally as well as for the record. Let 
me introduce them to you all at the beginning.
    First, the Honorable James M. Olguin, who is a Tribal 
Council Member from the Southern Ute Tribe. Thank you for being 
with us again.
    The Honorable Jack Ferguson, Confederated Tribes of the 
Colville Reservation. He is also a representative on the 
Intertribal Timber Council. Appreciate you being here.
    Mr. Richard Glenn, who is the Executive Vice President, 
Lands and Natural Resources for the Arctic Slope Regional 
Corporation. Thank you for coming from Alaska to be down here.
    Mr. Louis Denetsosie. Did I come close to that? I didn't 
come close at all, did I?
    [Laughter.]
    The Chairman. But anyway, he is a significant player in 
this issue as the President and CEO of the Navajo Nation Oil 
and Gas Company. So, I thank you even though I slaughtered your 
name. I thank you for being here to give your testimony.
    And Mr. Eric Henson, who is a Senior Vice President for 
Compass Lexecon and a Research Affiliate for the Harvard 
Project on American Indian Economic Development.
    For the five of you, thank you for being here.
    Many of you have testified before. This is still a 
congressional hearing, so we will run it under the rules of a 
congressional hearing. Anything that you have to add as far as 
written testimony will obviously be part of the record. Oral 
testimony should be limited to 5 minutes.
    This is a smaller gathering. We don't have that many people 
here. Usually, I am a stickler with that and I try to cut you 
off when the 5 minutes ends. I am not going to do that this 
time, unless you go way beyond that. We can be a little bit 
more generous as far as the timing because I do appreciate you 
taking the time to be here.
    But we have the lights in front of you for you to utilize. 
When the red light lights, it is trouble time.
    With that, I am going to recognize Mr. Olguin first to give 
oral testimony that will be in addition to your written 
testimony. And once again, I am so grateful for you being down 
here. I appreciate it very much.
    Mr. Olguin.

STATEMENT OF THE HON. JAMES M. ``MIKE'' OLGUIN, TRIBAL COUNCIL 
      MEMBER, SOUTHERN UTE INDIAN TRIBE, IGNACIO, COLORADO

    Mr. Olguin. Thank you. Good morning, Chairman Bishop and 
distinguished members of the committee. My name is Mike Olguin, 
and I am the treasurer and a member 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. Our reservation is 
located several hours from here in southwestern Colorado.
    As the premiere natural gas producer in the United States, 
the Southern Ute Indian Tribe is a great example of the 
positive impacts of Indian energy development. We became 
involved in oil and gas development on our reservation in the 
1940s, and we have increased our participation in the 
development process, doing aggressive effort to assume control 
over our mineral resources.
    In 1982, we enacted a severance tax by which we have 
collected $800 million over the last three decades. In 1992, 
the tribe started Red Willow Production Company, which operates 
wells on the reservation. In 1994, the tribe partnered to 
create Red Cedar Gathering Company, which provides gathering 
and training services throughout the reservation.
    Less than 50 years ago, the Tribal Council had to suspend 
the practice of distributing per-capita payments to tribal 
members because the tribe could not afford them. Today, the 
tribe conducts sizable oil and gas activity in 10 states and is 
the largest employer in the Four Corners region. Today, the 
tribe provides health insurance for its tribal members and 
promises all members a college education.
    The tribe is the only tribe in the Nation with a Triple-A-
plus credit rating from Standard and Poor's. Approximately 30 
percent of the tribe's income comes from energy development on 
the reservation. There is no question that energy resource 
development has put the tribe, our members, and the surrounding 
community on a more stable economic footing.
    We can tell you firsthand that Federal oversight often 
impedes tribal self-determination. Despite decades of success 
in managing our own affairs and conducting highly complex 
business transactions on and off the reservation, the tribe 
remains subject to Federal regulations that require Federal 
review and approval of even the most basic transactions. This 
causes delays and subverts tribal economic development.
    For example, the BLM issues building permits on tribal 
lands, which takes 4 to 6 months. The state of Colorado issues 
building permits on private lands, which typically takes 45 
days. Building permits on tribal lands cost $9,500, while 
building permits on private lands are free. Operators obviously 
prepare to drill on private lands, and, unfortunately for 
Southern Ute, our reservation is a combination of tribal and 
private lands.
    We are here to tell you that willing and able tribes should 
be allowed greater authority over energy development on tribal 
lands. The tribe has consistently demonstrated that it can 
complete major projects more quickly and effectively than 
Federal agencies can. Yet, the same agencies often hinder or 
flat-out refuse the tribe's efforts to assist in carrying out 
their functions.
    For example, after a 2014 Office of Trust review and audit 
report revealed massive mishandling by the BIA of the tribe's 
historical records at the Southern Ute Agency, the tribe made 
countless offers to assist the BIA in solving the problem. 
Months after the problem was revealed, the BIA finally entered 
into a 638 contract authorizing the tribe to scan and organize 
the files at the agency. Interior provided $250,000 to fund the 
contract, while the tribe contributed more than a million 
dollars of its own money and its tribal staff to complete the 
scanning project.
    As another example, the tribe has a streamlined process of 
approving in a single transaction renewals of all rights-of-way 
that an operator has on the reservation, usually numbering in 
the hundreds. This allows the tribe to easily monitor 
expiration dates and negotiate renewals. When the tribe 
presented one of these rights-of-way packages to the Southern 
Ute Agency for approval, it took the agency approximately 4 
years to approve the package because there was no way to enter 
the rights-of-way into the Department's Trust Asset and County 
Management System, or TAMS.
    To overcome this inadequacy of the BIA realty function, the 
tribe created its own GIS system known as the Land Information 
Management System. This system allows the tribe to scan realty 
records into its database, where each document has a location 
on the map, a function that TAMS lacks.
    It is perfectly clear that the BIA does not have the data, 
resources, technological capabilities, or staffing to meet the 
needs of the tribe. Meanwhile, the tribe has the capability 
and, most importantly, the incentive to improve the situation.
    In conclusion, like other energy tribes, the Southern Ute 
Indian Tribe's economic prosperity is due in large part to 
responsible energy development. The Southern Ute Indian Tribe, 
like many other tribes, is well-equipped to responsibly develop 
its own energy resources to achieve ever-increasing self-
determination. The tribe respectfully suggests that in some 
instances the best way for the United States to uphold its 
trust responsibility would be to step aside.
    The tribe appreciates the efforts of this committee and 
others to encourage tribal self-determination through economic 
and energy development. Thank you for this opportunity to 
appear before you today, and I would be happy to answer any 
questions.
    [The prepared statement of Mr. Olguin follows:]
     Prepared Statement of the Honorable James M. ``Mike'' Olguin, 
Treasurer, Southern Ute Indian Tribal Council on behalf of the Southern 
                            Ute Indian Tribe
                              introduction
    Chairman Bishop and distinguished members of the committee, my name 
is Mike Olguin and I am the Treasurer and a Member of the Southern Ute 
Indian Tribal Council. Appearing before you today on behalf of the 
Southern Ute Indian Tribe is a great honor.
    The Southern Ute Indian Reservation consists of approximately 
700,000 acres of land located in southwestern Colorado, approximately 
311,000 acres of which is held in trust by the Federal Government for 
the benefit of the Tribe. As a result of the complex history of the 
Reservation, the Tribe also owns severed oil and gas minerals and coal 
estates on additional portions of the Reservation that are held in 
trust by the United States. The Tribe, which is comprised of just over 
1,500 members, is a leader in Indian Country with a demonstrated and 
sterling record of foresight and business acumen. The Tribe is the only 
tribe in the Nation with an AAA+ credit rating, which was earned 
through years of steady governance and successful and prudent business 
transactions. Though the Tribe has a diversified portfolio, energy 
development remains a key component of the Tribe's strategy. 
Approximately 30 percent of the Tribe's income comes from energy 
development on the Reservation. Accordingly, we are well positioned to 
speak to the relationship between energy development, prosperity, and 
tribal self-determination.
   careful planning led the southern ute indian tribe to become the 
    premier indian tribal natural gas producer in the united states
    The Southern Ute Indian Tribe is a great example of the positive 
impacts of Indian energy development. Our Reservation is part of the 
San Juan Basin, which has been a prolific source of oil and natural gas 
production since the 1940s. Beginning in 1949, the 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 in any comprehensive resource management planning. 
That changed in the 1970s as we and other energy resource tribes in the 
West recognized the potential importance of monitoring oil and gas 
companies for lease compliance and keeping a watchful eye on the 
Federal agencies charged with managing our resources. In 1974, the 
Tribal Council placed a moratorium on oil and gas development on the 
Reservation until the Tribe could gain better understanding and control 
over the process. That moratorium remained in place for 10 years while 
the Tribe compiled information and evaluated the quality and extent of 
its mineral resources.
    A series of events in the 1980s 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 $800 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 the Tribe with business options and 
greater involvement in resource development. Because the Tribe's 
leaders believed that the Tribe could do a better job of monitoring its 
own resources than Federal agencies, shortly after passage of the 
Federal Oil and Gas Royalty Management Act of 1982, the Tribe entered 
into a cooperative agreement with the Minerals Management Service 
permitting the Tribe to conduct its own royalty accounting and 
auditing.
    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, the Tribe is the majority owner of Red Cedar 
Gathering Company, which provides gathering, processing, and treating 
services throughout the Reservation. Ownership of Red Cedar Gathering 
Company allowed us to put the infrastructure in place to further 
develop and market coal bed methane gas from Reservation lands and 
provided 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.
    These acts of energy development through self-determination are key 
to the Tribe's economic success. Today the Southern Ute Indian Tribe, 
through its subsidiary energy companies, conducts sizable oil and gas 
activities in approximately 10 states and in the Gulf of Mexico. Today 
we are the largest employer in the Four Corners Region. Energy resource 
development has unquestionably had a great positive impact on the 
Tribe, our members, and the surrounding community. The regional 
community college even has a new associate degree program in Tribal 
Energy Management, and because of the Tribe's vast experience in this 
realm, the college has enlisted the Tribe's assistance and input.
   indian energy development has an enormous impact on the economic 
  prosperity of tribes and the livelihood of individual tribal members
    Less than 50 years ago the Tribal Council had to suspend the 
practice of distributing per capita payments to tribal members because 
the Tribe could not afford them. Today the Tribe provides health 
insurance for its tribal members, promises all members a college 
education, and has a campus dotted with state-of-the art buildings. 
This success was not an accident. Without a prolonged effort to take 
control of its natural resources, the Southern Ute Indian Tribe would 
not be the economic powerhouse that it is today. Our 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 grandchildren and their 
grandchildren the opportunity 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.'' Successful energy development, in spite of 
institutional obstacles, has also enabled the Tribe to invest in 
diverse, non-energy projects, laying the foundation for long-lasting 
economic prosperity. For example, the Tribe has made real estate 
investments in 11 markets located in 8 states. These investments 
include residential, commercial, industrial, and hotel properties 
throughout California, Nevada, Colorado, Texas, Kansas, Illinois, Ohio, 
and Maryland. Return on these investments has spurred further economic 
growth for the Tribe, which would not have been possible but for the 
Tribe's active efforts to control and develop its energy resources.
       federal oversight often impedes tribal self-determination
    The Tribe has achieved its stature despite the Federal Government's 
stifling role in Indian energy development. We have been carrying this 
same message to Capitol Hill since at least 2002. A memorandum from our 
legal counsel to the Senate Committee on Indian Affairs' 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.
    More than a decade later, the Tribe's long-standing concerns were 
supported by the findings of a 2015 GAO Report that weaknesses in the 
Bureau of Indian Affairs' (BIA) management of oil and gas resources 
contributed to a general preference by industry to acquire oil and gas 
leases on non-Indian lands over Indian lands. This conclusion comes as 
no surprise to the Tribe, which is all too aware of this reality. For 
example, the state of Colorado, which issues drilling permits on fee 
lands, typically issues a permit in approximately 45 days. If the 
permit is not issued within 75 days, the operator has a right to a 
hearing. In comparison, on tribal lands, BLM issues the permits to 
drill, which typically take 4 to 6 months. There are no regulatory 
commitments to a processing time frame; operators must simply wait. In 
addition, permitting costs are much higher on tribal lands than on fee 
lands. The BLM's drilling permit fee is $9,500, and none of that money 
goes to the Tribe. In comparison, a state drilling permit in Colorado 
is free. These disparities create a problem that is exacerbated on 
reservations like the Southern Ute Indian Reservation, where tribal 
land and non-Indian fee land are arranged like a checkerboard, and oil 
or gas operators can develop on non-Indian fee land for less time and 
money, all-the-while depleting Indian minerals.
    Despite the Tribe's decades-long success in managing its own 
affairs and conducting highly complex business transactions, both on 
and off of the Reservation, Federal law and regulations still require 
Federal review and approval of even the most basic realty transaction 
occurring on the lands held in trust for the Tribe on the Reservation. 
Federal involvement invariably delays a proposed tribal project. These 
delays are exacerbated by the fact that a Federal approval often 
constitutes a Federal action, which triggers environmental and other 
review requirements, even for simple and straightforward realty 
transactions. In essence, the Tribe's own lands are treated as public 
lands, and, if Federal approval is involved, no action--not even some 
initiated by the Tribe itself--can occur until the Federal Government 
has analyzed the potential impacts. In order to eliminate these delays 
and in recognition of the Tribe's ability to protect its own interests 
and assets without assistance from Federal agencies, the statutory and 
regulatory requirements for Federal approval of tribal transactions 
must be modified so that Federal review and approval of realty-related 
tribal projects is not required.
    The Energy Policy Act of 2005 offered a new and creative 
alternative to this situation in the form of ``Tribal Energy Resource 
Agreements'' (TERAs), which are essentially bi-lateral agreements 
between an electing tribe and the Secretary of the Interior that would 
govern energy resource development on Indian lands. Under an approved 
TERA, a tribe would have the authority to negotiate and enter leases, 
business agreements, rights-of-way and other agreements without the 
prior review or approval of the Secretary.
    Entering into a TERA would--at least in theory--address the 
problems the Tribe has faced. However, the implementing regulations 
diminished the scope of authority to be obtained by a TERA tribe by 
preserving the Federal Government's prerogative in carrying out an 
array of functions--called ``inherently Federal functions'' in the 
vernacular--an undefined term that could render the Act's goal of 
fostering tribal decision making and self-determination practically 
meaningless. Despite the Tribe's repeated requests for clarification of 
the TERA process, and in particular, for clarification on what 
constitutes an ``inherently Federal function'' for which the Tribe 
would not be allowed to assume authority under the Department's 
regulations, the Department of the Interior has refused to provide 
guidance. Fortunately, Indian energy legislation currently pending 
would address other inefficiencies in the TERA process, but does not 
address the ``inherently Federal function'' dilemma.
    The Department is also hoping that its ``one stop shop'' (the 
Indian Energy Service Center) will help address the problem of delays 
in energy transaction processing on Indian lands, but the Tribe has 
opposed this idea since its inception out of concern that it could pull 
already scarce staffing resources from local agencies. Insufficient 
staffing at the Southern Ute Agency is a long-standing problem, and the 
Regional Office has told the Tribe it could take up to 4 years to 
obtain the cost of living adjustment needed to help attract qualified 
staff. For a time, the Southern Ute Agency's realty staff consisted of 
one administrative assistant. If the creation of the Indian Energy 
Service Center will serve as another obstacle to strengthening local 
agencies, the Service Center will be no solution at all. The Tribe has 
recently learned that the Service Center is now open for business, but 
the Tribe has not received official notification of its opening and 
neither the Tribe nor the Southern Ute Agency have received 
instructions as to how to utilize the Center.
willing and able tribes should be allowed greater authority over energy 
                      development on tribal lands
    Some tribes do not need or desire the current level of Federal 
interference and ``oversight'' in tribal energy development, and in 
some instances like at Southern Ute, the Federal ``oversight'' is a 
massive and quantifiable impediment to the Tribe's ability to develop 
its own resources. The Tribe has consistently demonstrated that it can 
successfully complete major undertakings more quickly and effectively 
than Federal agencies can.
    For example, after a 2014 Office of Trust Review and Audit (OTRA) 
report revealed the massive mishandling of the Tribe's priceless, 
historical trust and realty records at the Southern Ute Agency, and 
after months of the Tribe virtually begging Interior to be allowed to 
help solve the problem, the BIA finally entered into a P.L. 93-638 
contract that authorized the Tribe to (largely with the Tribe's own 
funding) scan and organize the Bureau's own files at the Southern Ute 
Agency before they would be sent to the American Indian Records 
Repository. The electronic files will then be sent off site, where they 
will be organized in accordance with the Bureau's filing protocol, the 
16 BIAM, which has been only loosely followed at the Southern Ute 
Agency in past decades. The electronic files are then being indexed 
into the Tribe's proprietary Geographic Information System (GIS). This 
scanning project, which utilizes $250,000 from the Department of the 
Interior and more than $1M of tribal money and the dedication of tribal 
staff, is well worth the money to the Tribe. The Tribe is well-equipped 
to define and articulate its best interests, yet the ethos of Federal 
agencies is to second-guess and over-rule it. This makes no sense, 
particularly given that Federal agencies cannot themselves meet the 
Tribe's needs, and in at least this instance, was the cause of the 
problem.
    As another example, the Southern Ute Indian Tribe, as well as 
operators on the Reservation, prefer to handle the renewal of an 
operator's rights-of-way all at once. This utterly rational approach 
allows the Tribe to more easily monitor the end date and renegotiate 
renewals when an operator's hundreds of rights-of-way are handled 
together. In one instance, the Tribe was even able to leverage the 
renewals to require an operator on the Reservation to replace several 
grandfathered high pollutant-emitting 1950s-era compressor engines in 
lieu of paying compensation for the right-of-way renewal. However, when 
the Tribe presented one such ``global rights-of-way'' package to the 
Southern Ute Agency for approval, it took the Agency approximately 4 
years to approve it. The Tribe later learned that the biggest hurdle to 
prompt approval was that there was no effective way to enter the 
rights-of-way into the Department's Trust Asset and Accounting 
Management System (TAAMS). The unwieldiness of TAAMS has been cited 
numerous times as an excuse for delays in energy transaction processing 
and as an excuse for why the BIA cannot assist the Tribe. The problem 
with the TAAMS system is well documented. (See U.S. Gov't 
Accountability Office, GAO-15-502, Indian Energy Development: Poor 
Management by BIA Has Hindered Energy Development on Indian Lands; 
Office of Inspector General, U.S. Dep't of the Interior, Report No.: 
CR-EV-BIA-0011-2014, Bureau of Indian Affairs' Southern Ute Agency's 
Management of the Southern Ute Tribe's Energy Resources.)
    To improve access to critical mineral resource information and to 
avoid being hamstrung by TAAMS, the Tribe's Department of Energy has 
scanned its entire set of files and developed an associated GIS system 
that allows each document to be linked to a location on a map. Together 
the store of digital documents and the GIS make up the Tribe's 
Department of Energy's ``Land Information Management System'' and 
represents a major improvement to tribal operations. Basically, because 
the BIA lacks the technology and sophistication required to manage the 
Tribe's energy resources adequately, the Tribe developed its own 
database in-house, complete with the GIS module that TAAMS lacks. 
Juxtapositions like these--the disparity between the Tribe's 
technological acuity as compared to Interior's technological 
bankruptcy--make the ``inherent Federal function'' requirement all the 
more patronizing and meaningless.
    ``What is it that we need to do, to help you help us?'' is a common 
refrain in meetings between the Southern Ute Tribal Council and 
Interior officials. The Tribe has implored the BIA in particular to 
accept the Tribe's countless offers to assist. BIA has repeatedly 
resisted those offers for reasons that are not particularly compelling. 
It is perfectly clear that the BIA does not have the data, resources, 
technological capabilities, or staffing to meet the needs of tribes. 
The Tribe has data, resources, staffing, technological capabilities, 
and the incentive to improve the situation.
    The Department constantly cites lack of resources as the reason for 
delays, but in the Tribe's experience, it sometimes seems as if more 
Federal resources are expended trying to thwart the Tribe's exercise of 
self-determination than are spent supporting the Tribe. For example, 
when the Agency's records were discovered to be in utter disarray, and 
after an OTRA audit resulted in findings of records in jeopardy, the 
Tribe tried to assist the Bureau with cleanup and organization. 
However, the Bureau told the Tribe that because of its trust 
responsibility, tribal employees assisting with the Tribe's records 
needed to have extensive background checks, and staff from the BIA's 
Albuquerque Area Office met with tribal representatives in Ignacio to 
explain that the tribal employees did not have the knowledge and 
expertise necessary to assist. To address this, the Tribe had several 
of its employees go through the Department's background check process, 
which involved a long application, a 160-mile round trip drive to be 
finger-printed and have a photograph taken for facial recognition, and 
an hour-long interview with an Office of Personnel Management contract 
investigator. This process took many months, as did the negotiation of 
an MOU to establish the parameters within which the Tribe could provide 
assistance. The Tribe even hired local museum archivists to conduct 
training on archival techniques for Agency and tribal staff so that the 
BIA would allow tribal staff to handle the tribal records that had been 
desecrated by the BIA for decades. Time and time again the BIA held up 
its trust responsibility to the Tribe as the reason it could not allow 
the Tribe to assist.
                               conclusion
    Like other energy tribes, the Southern Ute Indian Tribe's economic 
prosperity is due in large part to responsible energy development, and 
because of the Tribe's energy resources, tribal members have education, 
health, and employment benefits they would not likely otherwise have. 
The Southern Ute Indian Tribe, like many other tribes, is well-equipped 
to utilize its own energy resources, particularly if given ever-
increasing self-determination, and if limited Federal resources are 
used to encourage those efforts rather than stifling them. The Tribe 
respectfully suggests that in some instances, the best way for the 
United States to uphold its trust responsibility would be to step 
aside. The Tribe appreciates the continued efforts of this committee 
and others to encourage tribal self-determination through economic and 
energy development.

                                 ______
                                 

    The Chairman. Thank you. I appreciate your willingness to 
be here.
    [Disturbance in Hearing Room.]
    The Chairman. I am sorry. This is a congressional hearing, 
and this kind of demonstration is not allowed in Congress. So, 
if you would walk away, I would appreciate it.
    Voice of Law Enforcement Officer. I will ask you again to 
leave. There are no signs allowed in here, so you are going to 
be asked to leave. So, would you do that, please, before you 
are removed? Are you not going to leave? It is simply a yes or 
no question. Please leave. You guys need to go. You guys need 
to leave. Please do that. Are you going to leave on your own, 
or are we going to have to remove you? Come on, let's go.
    The Chairman. All right. Now, we will continue to see how 
real people can actually be helped in this situation.
    Mr. Ferguson, you are the next witness. We appreciate you 
being here. You are recognized for 5 minutes for your 
presentation.

 STATEMENT OF THE HONORABLE JACK FERGUSON, CONFEDERATED TRIBES 
OF THE COLVILLE RESERVATION, REPRESENTATIVE, INTERTRIBAL TIMBER 
                 COUNCIL, NESPELEM, WASHINGTON

    Mr. Ferguson. Good morning, Chairman Bishop and members of 
the committee. My name is Jack Ferguson, and I am a member of 
the Colville Business Council, which is the governing body of 
the Colville Confederated Tribes of the Colville Reservation. I 
also serve as the Colville Tribes' delegate to the Intertribal 
Timber Council. My testimony today is on behalf of both the 
Colville Tribes and the ITC. I am joined today by Cody 
Desautel, the Land and Property Director for the Colville 
Tribes, who will be able to answer any type of questions.
    As explained in my written statement, both Colville Tribes 
and ITC urge Congress to authorize new tools to promote tribal 
biomass development and forest help on Federal forest land. The 
Colville Reservation is located in North Central Washington 
State and covers 1.4 million acres. More than 920,000 of those 
acres are forest land, and the reservation borders two national 
forests. Colville Tribes has explored woody biomass 
opportunities in the past and continues to evaluate 
opportunities to make use of on-reservation and neighboring 
forest land.
    Between fuel costs, hauling distance, access to power grid, 
and fluctuating incentives for renewable energy, profit margins 
are razor thin for forest biomass energy. Having a reliable 
wood supply is absolutely critical for tribes and outside 
investors to connect resources to biomass projects.
    The Colville Tribes developed the Tribal Biomass 
Demonstration Project which is included as Section 6 in 
Congressman Don Young's Native American Energy Act. It would 
amend the Tribal Forest Protection Act to require Federal 
agencies to enter into long-term contracts with Indian tribes 
to allow the tribes to develop biomass resources on Federal 
lands.
    Existing authorities authorize but do not direct Federal 
agencies to enter into such arrangements. This new language 
would change that and provide a more certain wood supply. It 
would also authorize tribes to use on-reservation forest 
management practices on those Federal lands that are included 
in the demonstration projects.
    As this committee has examined in prior areas, tribal 
forest management practices are much more sustainable, 
effective, and efficient than those of Federal land managers. 
We believe that this new demonstration project authority, if 
enacted into law, would provide certainty of wood supply and 
enhance forest health on Federal lands. The ability to enter 
into agreements with terms longer than 10 years, the current 
limit under existing authorities, will greatly contribute to 
the ability of Indian tribes to secure financing and otherwise 
develop biomass projects.
    The Colville Tribes and the ITC urge the committee to 
ensure that this provision is included in any final version of 
a national energy bill.
    Congress should provide additional tools to expedite 
harvesting of small-diameter logs and improve forest health on 
Federal lands. Beyond the biomass demonstration project, the 
Colville Tribes and the ITC also believe that Congress should 
enact additional tools that would accelerate the harvest of 
small-diameter timber on Federal lands. Several of these tools 
are currently being discussed as part of the House-Senate 
Conference on the national energy bill.
    For example, time lines could be added to ensure that the 
tribes are able to meaningfully utilize the Tribal Forest 
Protection Act. Only a handful of TFPA projects have been 
implemented in the last 12 years since enactment. Part of the 
reason is that Federal agencies do not have firm deadlines to 
complete scoping and planning work for these projects.
    Like many other reservations, the Colville Reservation's 
forests face imminent threat from pests that have infected 
large areas of the Colville and Okanogan National Forests, 
specifically the spruce budworm and mountain pine beetle. Some 
of the affected areas are currently just a few miles north of 
our reservation boundary. Wild land fire from neighboring 
Federal lands also continues to pose a danger to the Colville 
Reservation. Many areas of the neighboring national forests 
contain overstocked stands with fuel loadings well outside 
historic ranges. When fires occur on these stands, they are 
extremely difficult to manage.
    The ITC and the Colville Tribes also support the use of 638 
contracting for all Federal departments to allow tribes to 
directly conduct TFPA projects to protect their lands and 
communities. This authority, also under current discussion in 
the House and Senate energy conference, would allow tribes to 
bring more of their knowledge of the landscape to Federal 
forest management. In the future, the Colville Tribes would 
also like to see additional authority to conduct and contract 
other Forest Service activities under 638 authority.
    Finally, ITC and the Colville Tribes support the provisions 
in the Tribal Forestry Participation and Protection Act that 
authorize the Secretaries of Agriculture and Interior to work 
with tribes to carry out additional forest health projects 
using the Federal laws and regulations that are currently used 
on tribal trust forests. Again, in our experience, Indian 
tribes are far superior forest land managers than Federal 
agencies.
    The Colville Tribes and the ITC thank the committee for 
convening this hearing. This concludes my testimony and I will 
be happy to answer any questions that members of the committee 
may have.
    [The prepared statement of Mr. Ferguson follows:]
Prepared Statement of Jack Ferguson, Member, Colville Business Council, 
   Confederated Tribes of the Colville Reservation and Board Member, 
                       Intertribal Timber Council
    Good morning Chairman Bishop and members of the committee. My name 
is Jack Ferguson and I am a member of the Colville Business Council, 
the governing body of the Confederated Tribes of the Colville 
reservation (``Colville Tribes'' or the ``CCT''). I also serve as the 
Colville Tribes' delegate to the Intertribal Timber Council (``ICT''). 
My testimony today is behalf of both the Colville Tribes and the ITC 
and focuses on the need for Congress to authorize new tools to promote 
tribal biomass development and forest health on Federal forest land.
    Although now considered a single Indian tribe, the Confederated 
Tribes of the Colville Reservation is a confederation of 12 aboriginal 
tribes and bands from all across eastern Washington State. The present 
day 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 Colville Tribes' members live on or near 
the Colville Reservation. Of the 1.4 million acres that comprise the 
Colville Reservation, more than 922,240 acres are forested land.
    The Colville Reservation originally consisted of nearly 3 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 reserving 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 most of the northern 
boundary of the Colville Reservation.
         the need for reliable wood supply for biomass projects
    Between fuel costs, hauling distance, access to the power grid, and 
fluctuating incentives for renewable energy, profit margins are razor 
thin for forest biomass energy. As such, certainty of wood supply is 
absolutely critical for tribes or third party financiers to invest 
resources in biomass projects.
    The Colville Tribes developed the Tribal Biomass Demonstration 
Project, which is included as section 6 in the Native American Energy 
Act (H.R. 538) and was included in versions of that legislation 
introduced in prior Congresses. Section 6 would add a new section to 
the Tribal Forest Protection Act of 2004 (``TFPA'') that would 
establish a 5-year demonstration project. The demonstration project 
would require the Secretaries of Agriculture and Interior to enter into 
contracts or other agreements with Indian tribes to promote biomass 
energy production by providing reliable supplies of woody biomass from 
Federal land.
    The demonstration project in H.R. 538 would require the applicable 
Secretary to enter into at least four new projects during the 5-year 
authorization that meet the requisite eligibility criteria--a total of 
20 projects. Existing authorities authorize, but do not direct, Federal 
agencies to enter into such arrangements. It would also allow for 
tribal management practices to apply to areas included in contracts or 
agreements entered into under demonstration projects. As this committee 
has examined in prior hearings on Indian forest management, tribal 
forest sustainable management practices are much more effective and 
efficient than those of Federal land managers.
    Contracts or agreements entered into under the demonstration 
project could have maximum terms of 20 years, with the ability to renew 
for additional 10-year terms. The ability to enter into agreements with 
terms longer than 10 years--the current limit under existing 
authorities--will greatly contribute to the ability of Indian tribes to 
secure financing and otherwise develop biomass projects.
    The demonstration project is also included in S. 209, which is part 
of the House-Senate conference on the Energy Policy Modernization Act 
(EPMA). Mandatory agreements with Federal land management agencies like 
those provided in the Tribal Biomass Demonstration Project would be 
extremely helpful in providing some level of certainty of wood supply 
and enhancing forest health on Federal lands. The Colville Tribes and 
the ITC urge the committee to ensure that this provision is included in 
any final version of the EPMA.
 congress should provide additional tools to expedite harvest of small 
        diameter logs and improve forest health on federal lands
    Additional tools should be provided to Federal agencies to 
accelerate and sustain the production of small diameter material 
available for biomass projects and to otherwise improve forest health 
on Federal lands. Like the Native American Energy Act, many of these 
tools are currently being discussed as part of the House-Senate 
conference on the EPMA. Examples include:

     Timelines for TFPA Projects: The TFPA currently allows 
            tribes to request forest health treatments be conducted on 
            Federal land adjacent to tribal forests. However, only a 
            handful of TFPA projects have been implemented in the 12 
            years since enactment. Like many other reservations, the 
            Colville Reservation's forests face an imminent threat from 
            pests that have infected large areas of the Colville and 
            the Okanogan National Forests, specifically the spruce 
            budworm and mountain pine beetle. Some of the infected 
            areas are currently just a few miles north of our 
            Reservation boundary. Wildland fire from neighboring 
            Federal lands also continues to pose a danger to the 
            Colville Reservation. Many areas of the neighboring 
            national forests contain overstocked stands with fuel 
            loadings well outside historic ranges. When fires occur on 
            these stands they are extremely difficult to manage and 
            pose an extreme risk to the CCT's trust lands.

      The ITC and the U.S. Forest Service have worked to improve TFPA 
            implementation and there is a growing number of projects in 
            the pipeline. Both the ITC and the Colville Tribes supports 
            provisions in H.R. 2647, the House substitute amendment to 
            EPMA, and Senator Daines' ``Tribal Forestry Participation 
            and Protection Act'' that would improve the certainty and 
            timeliness of TFPA projects.
     638 Authority for TFPA: The ITC and the Colville Tribes 
            support the use of ``638'' contracting for all Federal 
            departments to allow tribes to directly conduct TFPA 
            projects to protect their lands and communities. This 
            authority, also under current discussion in the EPMA 
            conference, would allow tribes to bring more of their 
            knowledge of the landscape to Federal forest management. In 
            the future, the Colville Tribes would also like to see 
            additional authority to contract other Forest Service 
            activities under 638 authority.

     Tribal management pilot project: Finally, ITC and the 
            Colville Tribes support the provisions in the ``Tribal 
            Forestry Participation and Protection Act'' that authorize 
            the Secretaries of Agriculture and Interior to work with 
            tribes to carry out additional forest health projects using 
            the Federal laws and regulations that are currently used on 
            tribal trust forests. This is a discretionary, limited 
            authority under which tribes and Federal land managers can 
            replicate lessons and efficiencies found on tribal forests. 
            This authority could also be used to implement section 6 of 
            the Native American Energy Act and promote biomass.

    The Colville Tribes and the ITC appreciates the committee convening 
this hearing and its interest in expanding tribes' ability to develop 
energy resources.

                                 ______
                                 

    The Chairman. Thank you. I appreciate that.
    We next turn to Mr. Glenn of the Arctic Slope Regional 
Corporation.

STATEMENT OF RICHARD GLENN, EXECUTIVE VICE PRESIDENT, LANDS AND 
 NATURAL RESOURCES, ARCTIC SLOPE REGIONAL CORPORATION, BARROW, 
                             ALASKA

    Mr. Glenn. Thank you, Chairman Bishop, Member Westerman, 
and fellow panelists and guests. My name is Richard Glenn. I am 
the Vice President for Lands and Natural Resources----
    The Chairman. I am sorry. You are going to be interrupted 
again. I apologize for that.
    [Disturbance in hearing room.]
    The Chairman. All right. Before you start again, let me 
express my appreciation to the law enforcement here in New 
Mexico for handling this in a very nice, calm, and easy way, 
and hopefully no one will interrupt you again.
    Mr. Glenn, why don't you start over again?
    Mr. Glenn. Thank you, Mr. Chairman.
    Mr. Chairman, Member Westerman and committee members, 
staff, and my panel guests, I am from Barrow, Alaska, the 
northern-most part of the state. I work for Arctic Slope 
Regional Corporation as the Vice President of Lands and Natural 
Resources. Our region contains eight communities. They are not 
connected by any roads, in an area about the size of Montana. 
Our residents are Inupiat Eskimos. They rely on a clean 
environment for a subsistence lifestyle from the river, the 
land, and the ocean. And we also rely on energy development for 
the communities that we can come home to from our subsistence 
activities.
    ASRC was created by the Alaska Native Claims Settlement Act 
of 1971. It owns about 5 million acres of land on the North 
Slope, much of it with energy and mineral potential.
    The story in Alaska is a little bit different, but I am 
thankful that the Southern Ute story was told before mine 
because I get to save a little bit of time. There are a lot of 
parallels between our two stories, but the Alaska story is a 
little bit different.
    Briefly, the indigenous leadership of Alaska sanctioned the 
formation of our tribes. The same leadership at first opposed 
and then abided by the terms of the Native Claims Settlement 
Act, which extinguished aboriginal title to lands. Tribes 
continue to exist but, in general, tribes do not own lands in 
our region. The land ownership of formerly tribal land now 
exists in these Native-owned regional and village corporations.
    In addition to that, we use the tools of the state 
government to exercise influence and control and to benefit 
from the presence of any industry in our region. In our case, 
the only industry that was present was the oil and gas 
exploration industry.
    In 1972, the residents of our region voted to form a 
borough, a county-like government to tax the presence of 
industry in our region and to use the taxes to provide quality-
of-life improvements to our communities, to exercise permitting 
and zoning controls, and basically to build communities from 
scratch.
    This story in and of itself is a story of self-
determination. But interwoven with this story is the story of 
the regional corporation and its ownership of mineral lands. 
Most of the oil and gas produced on Alaska's North Slope has 
been produced on state lands, which has been great for tax 
benefits and for jobs, but there is no royalty involved 
directly to our Native corporations. It was not until the year 
2000 that lands began to produce natural resources that were 
owned jointly by the state and our Native people.
    Yet, this small, brief time of production has yielded great 
benefits both to the Native people in our eight communities and 
to the Alaska Natives statewide in Alaska. It can be summarized 
by the history of production from the Alpine field located in 
the Colville River Delta. This is Alaska's Colville River. In 
this case, we have joint ownership of the subsurface by the 
state and the Alaska Natives of the area, and we have this 
little bit of socialism programmed into the Settlement Act that 
says for any Native regional corporation that hosts mineral 
wealth, 70 percent of that wealth shall be distributed to all 
the other regions of the state; and hopefully, if there is 
mineral wealth elsewhere, 70 percent of their wealth is 
distributed similarly. In this way, there is a fishnet fabric 
of sharing of resource revenue.
    So, over the course of its production, the alpine field on 
Native-owned lands in Alaska has distributed about a billion 
dollars to Alaska Natives statewide. If you use the 70/30 
formula, about several hundred million, actually equaling tens 
of millions of dollars a year has directly benefited Alaska's 
North Slope Native people. We have used this resource revenue 
to bootstrap our Native Corporation to advance and evolve into 
other areas. We are doing things beyond resource development, 
and we are engaged in commercial enterprises across the 
country.
    The story of our history is different, yet, we are a region 
that depends on resource development. We have shepherded it and 
controlled it to the greatest degree possible, and the story 
continues. We are involved in continued exploration of gas and 
oil resources in our region, and we have improved the quality 
of life for the residents of our small communities.
    Thank you.
    [The prepared statement of Mr. Glenn follows:]
 Prepared Statement of Richard K. Glenn, Executive Vice-President for 
     Lands and Natural Resources, Arctic Slope Regional Corporation
    My name is Richard Glenn and I am a resident of Barrow, on Alaska's 
North Slope. I serve as Executive Vice President for Lands and Natural 
Resources of Arctic Slope Regional Corporation (ASRC).
                               about asrc
    The Arctic Slope Regional Corporation is 1 of 12 land-owning Alaska 
Native regional corporations representing created at the direction of 
Congress under the terms of the Alaska Native Claims Settlement Act of 
1971 (ANCSA). ASRC's region is the North Slope of Alaska and 
encompasses 55 million acres (the informal names ``North Slope'' and 
``Arctic Slope'' are geographically identical and are alternately used 
when one or the other has become more associated with a given usage or 
is a part of a formal name). The North Slope region includes the 
villages of Point Hope, Point Lay, Wainwright, Atqasuk, Barrow, 
Nuiqsut, Kaktovik, and Anaktuvuk Pass. The North Slope residents of the 
villages that I have named are also citizens of the North Slope 
Borough, a home-rule municipality. The residents are largely Inupiat 
(North Alaskan ``Eskimos''); and they comprise many of the shareholder 
owners of ASRC. North Slope village residents depend on subsistence 
resources from the land, rivers and ocean, as they have for millennia. 
Within this large region ASRC also holds title to approximately 5 
million acres of surface and subsurface estate conveyed to it by ANCSA, 
much of it with energy, mineral and other resource potential. Among 
many other efforts, ASRC pursues and benefits from natural resource 
development on and near its lands. Energy development of Native-owned 
and State-owned lands is a major component of the success of ASRC and 
its region. Energy resource development and in some cases energy 
resource ownership have provided for substantial gains in economic 
self-determination for ASRC's growing shareholder base of approximately 
13,000.
    Under ANCSA, Congress created Native corporations, including ASRC, 
as profit-making entities ``to provide benefits to its shareholders who 
are Natives or descendants of Natives or to its shareholders' immediate 
family members who are Natives or descendants of Natives to promote the 
health, education or welfare of such shareholders or family members.'' 
Consistent with this unique mandate, ASRC is committed both to 
providing sound financial returns to our shareholders in the form of 
jobs and dividends, and to preserving our Inupiat way of life, culture 
and traditions, including the ability to hunt for food to provide for 
our communities. A portion of our corporate revenues are invested in 
initiatives that aim to promote and support an educated shareholder 
base, healthy communities and sustainable local economies. Our 
perspective is based on the dual realities that our Inupiat culture and 
communities depend upon a healthy ecosystem and the subsistence 
resources it provides and upon present and future oil and gas 
development as the foundation of a sustained North Slope economy. 
Perhaps however it is useful to see how Native corporations are related 
to Alaska Native tribes and local communities and governments.
    why alaska is different: north slope land and resource ownership
    Mr. Chairman and committee members, the present layers of local 
government, resource ownership and representation in our region can be 
very confusing for outsiders, even for those who are familiar with 
tribal relations and governance. A brief review may be helpful for some 
and is included in my written testimony.
    The Native-occupied lands of northern Alaska were never ceded away 
by any treaty nor lost in any battle. The Treaty of Cession, which 
ratified the United States' 1867 purchase of Alaska from Russia 
recognized that the Native residents of Alaska existed and had rights. 
Following Alaska's purchase, however, the Alaska Natives' land rights 
remained in limbo for generations. While Alaska was still a territory, 
the Federal Government appropriated massive swaths of land with little 
regard for the land ownership rights of the Natives who lived there (In 
the Arctic Slope region there were two: In 1926--the formation of the 
23-million acre Naval Petroleum Reserve No. 4 by President Harding, and 
in 1960--the formation of the 8-million acre Arctic National Wildlife 
Range by President Eisenhower.).
    Statehood in Alaska, in 1959, similarly overlooked aboriginal land 
and resource ownership rights. The state did allow for the formation of 
city (and eventually borough) governments which could tax, zone, and 
offer community improvements within their areas of authority, but 
offered no method to validate the assertion of aboriginal title. 
Against this land ownership vacuum, the exploration for energy 
resources around known oil and gas seeps on the North Slope intensified 
in the 1960s, including the gobbling up of North Slope lands by the 
young state of Alaska for its own benefit. Tensions rose and eventually 
action was taken at the Federal level. In 1966 Interior Secretary 
Stewart Udall declared that no oil would be developed and no more state 
lands would be conveyed to Alaska until the issue of aboriginal title 
was resolved. The ``land freeze'' occurred right before the discovery 
of the massive Prudhoe Bay oil field in 1968-69. The terms of ANCSA 
were negotiated and debated in Congress and eventually ratified by 
December of 1971.
    The result was the extinguishment of aboriginal land title in 
Alaska and the formation of land-owning Native regional and village 
corporations. The land base represented a fraction (in ASRC's case 
about 10 percent) of the land that was originally claimed by the 
Natives. The Federal Government offered a cash settlement as additional 
compensation. With the land base and cash settlement as startup assets, 
the ANCSA corporations were intended to succeed as profitable 
corporations delivering benefits to their Alaskan Native shareholders.
    Briefly, the indigenous leadership of the people of the North Slope 
sanctioned the formation of what were to become federally-recognized 
tribes. The same leadership at first opposed, and then abided by the 
terms of ANCSA, which extinguished aboriginal title. Some lands with 
resource potential were conveyed back to the Arctic Slope Native 
corporations, along with an additional cash settlement. The Federal and 
state governments took the remainder of the lands, a taking which still 
pains many of those who argued for or against the terms of ANCSA before 
ratification. Those of us who came of age during these years are of 
mixed views on this history. For the most part the leadership that 
negotiated the terms of ANCSA and my colleagues and I at ASRC today 
have been trying to make the best of the Act for the benefit of our 
shareholders.
    Using myself as an example: By virtue of Indian Law, ANCSA law, and 
State law, I am a tribal member, a city and Borough resident, and a 
village and regional corporation shareholder. My tribe today possesses 
many rights similar to those of other Indian tribes, but in general 
owns no land or natural resources. My city and more predominantly my 
borough governments provide civic infrastructure and quality of life 
improvements to communities inhabited largely by our tribal members but 
also comprised of citizens of other ethnic groups. And my village and 
regional corporations own title to ANCSA-conveyed lands and natural 
resources, and have formed for-profit operating subsidiaries that offer 
employment and dividend benefits to their shareholders. The 
institutions that represent us are thus split into three broad swaths, 
yet braided together like rope and operate on our behalf.
  energy development as a tool of self-determination--the north slope 
                                borough
    The 1972 formation of the North Slope Borough, a state-chartered 
home-rule government, was largely driven by the interest of the Inupiat 
community in protecting our traditional way of life and exercising 
permitting, zoning and taxation controls on the industry that was to 
develop after the Prudhoe Bay discovery. The foundational goals of the 
North Slope Borough were to protect the environment and to use local 
government tools to improve the quality of life in communities within 
its boundaries.
    By using a strong permitting and zoning process, the Borough today 
(as it has ever since its inception) regulates energy development on 
its terms to the greatest degree possible. The Borough then taxes the 
real property value of the pipelines, drill rigs, and other oil field 
production and transportation infrastructure. The Borough uses the 
infrastructure-derived tax proceeds to build, operate and maintain 
local education facilities and quality of life improvements (airstrips, 
roads, reliable power, improved housing and health care centers) in 
every one of the villages of our region.
    The presence of the oil and gas industry in our region is the 
economic base for what have become improvements to our cities and 
towns. Our community is empowered by oil and gas development. The North 
Slope Borough employs the largest number of village residents on the 
North Slope; maintains its own Department of Wildlife Management, which 
invests heavily in protecting our subsistence resources; and maintains 
stringent permitting requirements for oil and gas companies that 
operate within our region. Our people therefore depend on a healthy 
Arctic environment to support subsistence species (caribou, waterfowl, 
marine mammals, fish and others), and also depend on a healthy energy 
industry to provide the tax base that fuels the North Slope Borough 
government operations. While these dependencies appear to be in 
conflict, it is the view of many on the North Slope that it is a 
totally appropriate one.
    native ownership of lands and natural resources: the asrc story
    For ASRC North Slope energy development presented a related but 
different set of opportunities and issues. The lands conveyed to ASRC, 
some 5 million acres in total are located in areas that either have 
known resources or are highly prospective for oil, gas, coal, and 
minerals. Some of the lands are remote and very distant from areas of 
current exploration and production. The State and Federal lands of the 
North Slope also contain similar energy resource potential. In fact the 
overwhelming majority of lands developed in Alaska to date have been on 
state-owned lands. The supergiant Prudhoe Bay (initial production in 
the 1970s) and Kuparuk River (1980s) fields were discovered and 
developed on state-owned lands, for example. Their development was a 
boon to the North Slope Borough tax base and to local Alaska Native 
corporation contractors offering jobs in oilfield construction and 
operations. Generations of ASRC shareholders and North Slope village 
residents have explored job opportunities in the development of state-
owned North Slope fields. But the development of the state-owned lands 
offered no direct royalty benefits to the shareholders of ASRC.
    Exploration and development of oil and gas resources moved westward 
from the Prudhoe Bay/Kuparuk fields and eventually toward and into the 
Colville River delta. Finally, in the mid-1990s oil discoveries were 
made on Colville River delta lands that were owned jointly by the state 
of Alaska and Alaska Natives of ASRC (subsurface) and the Kuukpik 
Corporation (the surface landowner which was the ANCSA village 
corporation representing the people of the Colville River delta village 
of Nuiqsut). Facilities were carefully planned and constructed over the 
next 10 years and in 2000 production finally began from the ARCO Alaska 
Inc.-operated Alpine oil field. ASRC became a royalty revenue owner. 
Since production began, the Alpine oil field and its related satellite 
fields have produced a half a billion barrels of quality crude oil that 
has been shipped down the Trans Alaska Pipeline along with oil from the 
Prudhoe/Kuparuk and related fields that continue to produce to this 
day. Other Kuukpik/ASRC lands are slated for additional production.
    The royalty benefits from the Alpine and satellite fields and from 
fields yet to produce represent tens of millions of dollars of benefits 
per year to ASRC and its shareholders over the lifetime of production. 
In addition a much larger portion of the royalty revenue has been 
distributed to all of the regional and village corporations of the 
state of Alaska by virtue of a provision in ANCSA that mandated for the 
sharing of natural resource wealth between all ANCSA corporations. The 
Act states in general, that Seventy Per Cent (70 percent) of natural 
resource royalty revenue received by a given regional corporation (and 
this includes oil, gas, minerals and timber resources) be shared 
amongst all the ANCSA regional corporations within Alaska, who must 
also share with the respective village corporations within their 
regions. As a result of its Colville River delta royalty position and 
the terms of ANCSA, ASRC has shared over a billion dollars to date with 
other ANCSA corporations in Alaska. Energy development has thus been a 
part of the economic self-determination of every Alaska Native who is a 
member of a village or regional corporation.
   economic self-determination of alaska's north slope alaska natives
    In summary, the development of oil and gas resources in our region 
has fostered a stable local tax base that provides local education and 
community improvements that would otherwise be lacking or furnished at 
great expense by the Federal Government and other agencies. The 
development of Native-owned lands has provided a regular stream of 
royalty revenue that has allowed ASRC to grow its non-royalty 
subsidiaries. Today, royalty revenue is a significant, but not the only 
or even the largest contributing sector to ASRC's bottom line, and ASRC 
has become the largest privately owned corporation in Alaska. 
Meanwhile, ASRC distributes a significant portion of its annual net 
income to its shareholders in regularly distributed dividends.
    The relationship with energy resources does not stop at the 
shoreline. The village of Wainwright, for example, is located within 
the ASRC region about 90 miles west of Barrow, Alaska. Wainwright's 
Native village corporation, Olgoonik, has been involved in the 
preliminary stages of Arctic OCS development. Since 2007, Olgoonik has 
supported oil industry activities with marine mammal observers, 
communications coordination between the industry and subsistence 
hunters, and crew change and supply support services. Olgoonik also has 
managed marine science studies in the Chukchi and Beaufort Seas. Other 
village corporations as well as ASRC itself have made similar inroads 
in this field of work.
    And ASRC, along with six of our village corporations, created its 
own offshore development company, Arctic Inupiat Offshore (AIO). Where 
else in America does BOEM find indigenous people investing proactively 
in offshore development so they may be positioned to assure that 
development benefits their communities while also protecting their way 
of life and culture? AIO representatives believe, by the way, that for 
the Bureau of Ocean Energy Management to set aside vast areas of the 
Beaufort and Chukchi Seas, or to give up completely on its Arctic Outer 
Continental Shelf program, would be to completely fail our Arctic 
communities who are not afraid to admit that they depend upon 
successful new exploration and production for the survival of our 
communities and our Native enterprises.
    ASRC itself is engaged in the exploration and development of lands 
that are not part of its ANCSA conveyance. It is leasing and exploring 
state and federally owned lands much like the major oil companies that 
have dominated the history of North Slope exploration and production. 
Success in private exploration has the potential to yield many new 
benefits to the shareholders of ASRC.
    In some parts of the world and some parts of America, indigenous 
people have been reduced to conservation refugees within their own 
homelands. Energy development on Alaska's North Slope has provided the 
wellspring for the growth of economic self-determination of the Natives 
of Alaska's North Slope and the whole state of Alaska. We have formed a 
home-rule government in our own region and diversified and grown ASRC 
into a multi-billion dollar corporation thanks in large part to 
successful exploration and development of Native-owned lands. To me, 
this sounds like the definition of economic-self determination.

                                 ______
                                 

    The Chairman. Thank you.
    Next we will have Mr. Denetsosie from the Navajo Oil and 
Gas Company. We recognize you for 5 minutes, please.

STATEMENT OF LOUIS DENETSOSIE, PRESIDENT AND CEO, NAVAJO NATION 
           OIL AND GAS COMPANY, WINDOW ROCK, ARIZONA

    Mr. Denetsosie. Thank you. Chairman Bishop, members of the 
committee, members of the public, and fellow presenters, good 
morning. My name is Louis Denetsosie. I am the CEO and 
President of the Navajo Nation Oil and Gas Company. It is a 
corporation owned by the Navajo Nation. I should mention that I 
am also former Attorney General for the Navajo Nation.
    Right now, NNOGC produces over a million barrels of oil a 
year on the Navajo Nation, operates an 87-mile crude oil 
pipeline, and operates c-stores on the Navajo Nation. We have 
84 employees, and that is down from about 115 since the oil 
prices went south.
    I thank you for the opportunity to testify here on the 
important topic of tribal prosperity and self-determination 
through energy development. The Navajo Nation is really a major 
story in Indian Country. When the Navajos came back from the 
Bosque Redondo, they had 3 million acres. Now they have 17 
million acres, and that is through the leadership and the 
culture of the people that managed to do this, and the Navajo 
has always reinvented itself. Unfortunately, our tribe became 
very dependent on coal, oil, and gas and the resource curse, 
and it is really time for the Navajo Nation to reinvent itself 
again. I heartily agree with Mr. Olguin. It is time for the 
government to step aside to let the Indian Nations do their 
thing.
    They are very self-reliant. They have been in business with 
themselves and with the surrounding communities. So, in my 
testimony here today, I would like to shed some light on the 
barriers and regulatory hurdles faced by the oil and gas 
industry and how Congress can help spur more economic activity 
by eliminating these barriers.
    The main thing with the legislation that is pending for 
reconciliation before Congress--and that is H.R. 538 and Senate 
Bill 209--we would like to see those reconciled and sent to the 
President for his signature. There are some very important 
provisions in there, and one of them is to allow Navajo to 
issue its own leases.
    The Navajo Nation government is a very sophisticated 
government. It has its own laws to protect the environment. 
There is even fracking legislation pending in the Navajo Nation 
Council today. They face many of the same issues that are faced 
on the outside. But the Navajo Land Department and other 
executive branches of the Navajo Nation, they do a 
comprehensive and thorough job of performing environmental, 
archaeological, biological, and cultural resource studies of 
the impacts on the environment from oil and gas extraction, and 
that includes impacts from applications for permits to drill.
    We would like this legislation to clarify the Nation's 
authority to issue its own oil and gas leases, and at the same 
time clarifying that and allowing the Nation to issue 
applications for permits to drill. They already approve them 
anyway. But let's remove all these different layers of 
regulation by the BIA and the Bureau of Land Management and do 
away with these redundant approvals that are required to issue 
permits, seismic permits and drilling permits. It takes a 
minimum of 4 years to start a drilling program on Navajo. That 
is really how it goes. Navajo has helium resources sitting in 
the ground right now. We can't even touch it.
    Therefore, we urge very strongly that the legislation be 
reconciled and amendments to 25 U.S.C. 415(e) be passed by the 
Council.
    As another example, BLM last week announced that they are 
adjusting the fee for APDs to $9,610. Well, I have been the 
Attorney General, and as a member raised on the Navajo Nation, 
I just object to BLM collecting that money on our land, 
especially when the Navajo people do all the work for the 
issuance of those permits. That should rightfully go to Navajo. 
They can collect it on BLM land, fine. But in this case, that 
should not apply to Navajo at all, and I am sure it is the same 
with other tribes.
    With regard to Senate Bill 209, there will be changes to 
the requirements for entering into energy resource agreements, 
or TERAs. One of the provisions in there is the creation of the 
Tribal Energy Development Organization. That is an entity that 
would be majority owned by the tribal landowner. Under that 
TERA, the tribe can issue leases and rights-of-way to the TEDO, 
much like NNOGC, without further BIA approval. Every tribe is a 
little bit different, but we like these options, and that 
should also go forward, too.
    There are very many issues facing Indian Country. I 
probably have more time but I like to be brief and make my 
pitch for reconciling that legislation. Thank you very much.
    [The prepared statement of Mr. Denetsosie follows:]
Prepared Statement of Louis Denetsosie, Chief Executive Officer, Navajo 
                       Nation Oil and Gas Company
    Good morning. I am Louis Denetsosie, President and CEO of the 
Navajo Nation Oil and Gas Company (``NNOGC'') and a member of the 
Navajo Nation. I am also a former Attorney General for the Navajo 
Nation. NNOGC produces over a million barrels of oil a year on the 
Navajo Nation and operates an 87 mile crude oil pipeline and a number 
of c-stores and service stations on the Navajo Nation. NNOGC currently 
has 84 employees, virtually all of them tribal members.
    Thank you for the opportunity to testify on the important topic of 
Tribal Prosperity and Self Determination through Energy Development. 
The Navajo Nation has been a major producer of coal for electricity 
generation and oil and gas in the Four Corners region of the 
reservation. The downturn in these industries has already had an 
adverse impact on the Navajo Nation economy as well as NNOGC and will 
continue to do so in coming years, therefore it is gratifying to have 
the Congress address these issues.
    It is hoped that my testimony here will shed some light on some of 
the barriers and regulatory hurdles faced by the oil and gas industry 
in Indian Country and how Congress can spur more economic activity by 
lowering these barriers, including enacting legislation pending for 
reconciliation by the House of Representatives and the Senate.
    NNOGC is in support of the legislation passed by the House of 
Representatives in H.R. 538 (Oct. 8, 2015), titled ``An Act to 
facilitate the development of energy on Indian lands by reducing 
Federal regulations that impede tribal development of Indian lands, and 
for other purposes,'' and similar legislation passed by the Senate in 
S. 209, titled ``An Act to amend the Indian Tribal Energy Development 
and Self Determination Act of 2005, and for other purposes.'' Enactment 
of a reconciled version of these two pieces of legislation by Congress, 
and particularly the amendments to 25 U.S.C. Sec. 415(e), is of 
tremendous importance to the Navajo Nation and NNOGC. The House version 
of those amendments is preferable from a self-determination 
perspective, as it would leave any requirement for a 10 year 
development period for oil and gas leases to be placed in an operating 
agreement or lease in the discretion of the Navajo Nation.
    Removing the Bureau of Indian Affairs from the mineral lease 
approval process will eliminate unnecessary and burdensome layers of 
Federal regulation. The Navajo Nation has a sophisticated three-branch 
government. Through its Land Department and other executive branch 
agencies, the Navajo Nation comprehensively and thoroughly performs 
environmental, archaeological, biological and cultural resource studies 
of impacts on the environment from proposed oil and gas extraction, 
including impacts from applications for permit to drill (``APDs''). 
Clarifying the Navajo Nation's authority to issue its own oil and gas 
leases and drilling permits will remove additional layers of regulation 
by the Bureau of Indian Affairs and the Bureau of Land Management 
(``BLM''). Due to the redundant approvals that are required at present, 
it takes approximately 4 years to initiate a drilling program in Indian 
Country. That delay can make oil and gas exploration and production 
simply uneconomic on the Navajo Nation, and has been a significant 
hindrance to energy development by NNOGC. I therefore urge that 
reconciled legislation adopting the amendments to 25 U.S.C. Sec. 415(e) 
be passed by the House of Representatives.
    I would also like to note to the committee that just last week the 
BLM announced that it is adjusting the fee for APDs on tribal lands to 
$9,610. As a tribal member, I have no objection to the collection of 
this fee on BLM lands but any fees collected for APDs issued on Navajo 
land should go to the Navajo Nation. The Navajo Nation performs the 
vast majority of the environmental studies and evaluations necessary 
for issuance of APDs on reservation lands and the services provided by 
the BLM relative to APDs are minimal.
    From my understanding, S. 209 would also make much needed changes 
to the requirements for entering into tribal energy resource 
agreements, or ``TERAs,'' under Title V of the 2005 Energy Policy Act, 
P.L. 109-58. Although TERAs, once executed between tribes and the 
Federal Government, were intended to be a vehicle to improve energy 
development in Indian Country by removing requirements for further 
Federal approvals, to my knowledge, not a single tribe has entered into 
a TERA because the requirements are so onerous. S. 209 would streamline 
those requirements and would also create a new option for tribes to 
issue, without Federal approval, leases and rights-of-ways on tribal 
lands to a certified Tribal Energy Development Organization, or 
``TEDO,'' an entity that would be majority owned by the tribal 
landowner. Thus, an energy and business arm of the tribe, like NNOGC, 
could be certified as a TEDO and no longer have to get BIA approval for 
energy development on behalf of its tribal owner. TEDOs and TERAs, 
under the proposed amendments to P.L. 109-58, are excellent vehicles 
for tribal self-determination in energy development, and I urge that 
reconciled legislation adopting this language in S. 209 be passed by 
the House of Representatives.
    Concerning other regulations not addressed by H.R. 538 and S. 209, 
NNOGC has concerns about the proposed BLM regulations to reduce waste 
of natural gas from venting, flaring and leaks during oil and natural 
gas production activities and establishing when produced gas lost 
through venting, flaring or leaks is subject to royalties. The 
regulations, which are quite strict, are proposed to be codified at 43 
Parts 3178 and 3179. The proposed regulations address an activity 
already regulated by states and other departments of the Federal 
Government. There are very few oil and gas pipelines on the Navajo 
Nation and thus venting and flaring under reasonable regulations is 
necessary if the industry is to be viable. For that reason alone, these 
regulations should not apply in Indian Country without the consent of 
the affected Indian tribe. Moreover, the regulations may be beyond 
BLM's delegated authority from Congress. In recently striking down 
hydraulic fracturing regulations promulgated by the BLM, the U.S. 
District Court for the District of Wyoming ruled that Congress has not 
delegated any authority to regulate environmental impacts from oil and 
gas activities to the Department of the Interior. See State of Wyoming 
et al. v. Department of the Interior et al.,--F.Supp.3d--, 2016 WL 
3509415 (D. Wyo. June 21, 2016). That case is on appeal to the Tenth 
Circuit Court of Appeals, which will hopefully agree with the District 
Court's well-reasoned opinion.
    Thank you for the opportunity to provide this testimony, and for 
your interest and assistance in improving tribal prosperity and self-
determination in Indian Country and on the Navajo Nation, through 
energy development.

                                 ______
                                 

    The Chairman. Thank you. Thank you again so very much.
    Mr. Henson, you are, I believe, our economist on the panel, 
which means you have a right to be boring if you want.
    [Laughter.]
    Mr. Henson. I will try not to be.
    The Chairman. OK. I recognize you for 5 minutes.

   STATEMENT OF ERIC HENSON, SENIOR VICE PRESIDENT, COMPASS 
LEXECON, RESEARCH AFFILIATE, HARVARD PROJECT ON AMERICAN INDIAN 
             ECONOMIC DEVELOPMENT, TUCSON, ARIZONA

    Mr. Henson. My name is Eric Henson. I am a citizen of the 
Chickasaw Nation, located in Oklahoma. As you heard, I have a 
couple of jobs. I work at a place called Compass Lexecon in 
Boston, and I do economics consulting full time. I am also a 
Research Affiliate at the Harvard Project on American Indian 
Economic Development. A very short synopsis of the research 
that Harvard has done over the past 32 or so years is something 
you have already heard mentioned today--tribal governments do 
better when they have control over their own resources. This 
squares very nicely with the evolution that we have seen in a 
lot of government elections.
    The incentives for risk and reward line up better when 
those who make the decisions potentially benefit the most from 
those decisions, and also potentially suffer the consequences 
of bad decisions. Having a Federal authority from thousands of 
miles away decide which leases should be approved and what 
appraisals should come in at, just does not square with the 
kind of risk and reward trade-off we tend to see that really 
helps economies in any setting, not just Indian Country.
    One of the things everyone here knows is how important 
energy development is to a number of tribal lands, particularly 
out West and in Alaska. Mr. Glenn and I share the distinction 
of growing up in some of the world's greatest oil producing 
regions. I went to high school in a tiny little town in west 
Texas, and so I personally observed the benefits that can come 
with sensible oil and gas development. Of course, those same 
kinds of regulatory frameworks that allow that to happen and 
increase the right incentives for that to happen apply to all 
sorts of Indian resources, including solar, biomass, and 
lumber. This is not confined only to hard minerals and 
nonrenewables.
    As you have heard a couple of people talk about, the 
statistics for tribes are still pretty terrible in terms of the 
socioeconomic. There is this kind of, I think, knee-jerk 
reaction to the notion that, well, tribes have gaming now, so 
Indian tribes are not poor anymore. That is really not the 
case. We have a great diversity of tribes with incredibly 
divergent outcomes in terms of different enterprises. And 
gaming, because we have a few examples of large revenues coming 
into certain tribes, has tended to unfairly dominate the 
conversation. It kind of puts energy development in a bin that 
does not get the attention it deserves.
    I really support the notion that you are trying to get some 
public attention for tribes that do not necessarily have gaming 
revenues driving their economies, kick-starting some 
development that really does make a big difference to a lot of 
people on the reservation and in places like Alaska, not only 
those that have the resources in the south.
    A few things about the bill itself, H.R. 538. It appears to 
me to be on this trajectory now, the TERA and the HEARTH Act 
and the ITEDSA exclusive component, components of the HEARTH 
Act, or HEARTH-like components to them. I suppose that is a 
question that we can get into in the Q&A a little bit about its 
somewhat limited scope, Navajo-only and certain limitations 
that I would like to know more about in terms of why that 
cannot be expanded more broadly across Indian Country.
    It has some explicit attempt to get the appraisal process 
moving more quickly, and I think that is a really great idea, 
and there are a number of other ideas we can probably pursue to 
bolster the appraisal process getting done more quickly. I have 
done some work for a number of tribes, including places like 
the Crow Reservation. Folks up there have these tremendous 
delays. I hear from people on the ground about how some of the 
delay problems arise from lack of funding at the BIA, lack of 
personnel in terms of skill and expertise, and background and 
workload. So, there are ways we can address this with maybe the 
carrot and the stick in the funding mechanisms, an explicit 
time limit, maybe some funding that goes directly to tribes for 
appraisals, just take those off the backlog that the BIA has, 
some process by which we can approach it from a multi-part 
solution rather than just only sticking with time limits for 
the BIA to approve.
    One of the things I think we ought to keep in mind as we 
address the delay in things like appraisals is how incredibly 
important the BIA still is to energy development on tribal 
lands. In my work with tribes, one thing that you cannot do if 
you work 20 years in Indian Country is not recognize the great 
diversity that is out there. So, I hear from tribes like the 
Southern Ute about the delays that are still tremendously 
problematic, and I also hear from other tribes in certain 
situations, ``Hey, you know, we have a well-funded, well-
staffed area office, and we have this kind of ability to 
utilize some expertise that is already there. It is working for 
us as is.''
    In any proposed solution, I would urge everyone on the 
committee, while drafting legislation, keep in mind the 
incredible diversity and leave it in the tribal purview about 
how much of this might come under tribal activities versus how 
much might stay with the BIA, because the experiences out there 
on the ground are very different.
    I have heard quite a bit over the last few weeks, as I have 
thought about this legislation, about other approaches that 
sometimes work, potentially funding appraisal teams inside 
tribes, or this notion of a one-stop shop where located close 
to Indian Country you can have the expertise instead of relying 
on the area offices, and different ways that tribes might be 
able to take on some of the backlog of the appraisals 
themselves and then run the approvals by the BIA without it 
flowing the other direction with this many-months delay we seem 
to be having.
    That is, I think, my 5 minutes. I will stop there and look 
forward to the Q&A.
    [The prepared statement of Mr. Henson follows:]
   Prepared Statement of Eric Conrad Henson, Senior Vice President, 
Compass Lexecon and Research Affiliate, The Harvard Project on American 
                      Indian Economic Development
    I would like to take a moment to thank you for the opportunity to 
speak to you today in beautiful Santa Fe. My name is Eric Henson, and I 
am a Senior Vice President at Compass Lexecon, which is an economics 
consulting firm with offices located around the world.\1\ I primarily 
work out of the Compass Lexecon offices in Boston, Massachusetts and 
Tucson, Arizona. In my economics consulting, I have worked on numerous 
projects involving oil and gas development, coal production, electric 
utilities, and the energy marketplace more broadly. A number of my 
consulting engagements have involved working with Native American 
tribes such as the Navajo Nation and the Crow Nation, both of which 
have substantial energy resources of the types at issue here. I also 
serve as a Research Affiliate with the Harvard Project on American 
Indian Economic Development,\2\ and in that position I am engaged in an 
ongoing effort to understand what makes tribal economies work best.\3\ 
I am a citizen of the Chickasaw Nation, and I grew up in one of the 
country's great oil producing regions, the Permian Basin of West 
Texas.\4\
---------------------------------------------------------------------------
    \1\ Compass Lexecon is an international economics consulting firm 
and is part of FTI Consulting.
    \2\ Referred to herein as ``HPAIED'' or ``Harvard Project.'' The 
Harvard Project is based at Harvard's John F. Kennedy School of 
Government in Cambridge, MA. We partner with the Native Nations 
Institute, which is located at the University of Arizona in Tucson, AZ. 
The Native Nations Institute provides executive education and 
leadership programs, uniquely tailored to senior executives and 
managers within Native communities.
    \3\ See, e.g., The Harvard Project on American Indian Economic 
Development, The State of the Native Nations: Conditions Under U.S. 
Policies of Self-Determination, New York: Oxford University Press, 
2008.
    \4\ I appear today not as a representative of Compass Lexecon or 
Harvard University. Furthermore, I have no financial interest in 
pending legislation that might impact my opinions in any way.
---------------------------------------------------------------------------
    I have a Master's Degree in Public Policy from the John F. Kennedy 
School of Government at Harvard University, an MA in Economics from 
Southern Methodist University, and a BBA in Business Economics from the 
University of Texas at San Antonio. I attended Harvard as the Kennedy 
School's Christian Johnson Native American Fellow. I have been engaged 
in Indian affairs since graduate school; my Master's thesis at Harvard 
examined the importance of a uniform commercial code for economic 
development on the Crow Reservation.\5\ I've had the great privilege of 
visiting many of the tribal lands we will be discussing today.
---------------------------------------------------------------------------
    \5\ A copy of my curriculum vitae was submitted for the Committee 
record.
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      the harvard project on american indian economic development
    Since its inception in 1987, the Harvard Project has collaborated 
with Native Nations to understand how and why tribal economies, social 
institutions, and political systems either succeed or fail. At the 
Harvard Project, my colleagues and I undertake research and teaching 
specifically tailored to meet the needs of tribal communities and 
tribal leadership.
    One of the major questions the Harvard Project has been grappling 
with is: How is it that, despite widely cited poverty and social 
distress, which is prevalent across numerous American Indian 
reservations, more and more tribes have been able to cast off the bonds 
of external economic dependence? We have seen an increasing number of 
tribes taking part in what we have often referred to as an ``Indian 
Renaissance,'' where dynamic self-sustaining economies are created by 
tribal actions. These economies are built upon, and supported by, 
vibrant political and social institutions. The success stories are 
wide-ranging, from the property development and management of the 
Tulalip Tribes in Washington State, to sustained energy-based projects 
at Southern Ute, to the diverse array of professional and construction 
services offered by Ho Chunk, Inc. in Nebraska. Many tribes have begun 
actively challenging century-long economic paradigms and demonstrating 
effective self-determination and governance. It is curious that, 
contemporaneously, a number of other tribes experience continued 
economic hardship, high unemployment, rampant social and physical 
health challenges, and the like. What might be the causes of the 
striking economic and social divergences within Indian Country?
    In the first years of HPAIED, the founding researchers recognized 
that what was needed in Indian Country was not additional unsolicited 
interference from outsiders, but culturally specific educational 
programs and research, developed for tribes, and undertaken hand-in-
hand with tribal governments. The results of these studies are 
channeled back to those who must deal with the daily challenges of 
improving the economies and social conditions in Native communities 
(i.e., Indian people working in Indian Country).
    In accordance with the above-mentioned approach, graduate students 
at the Kennedy School of Government and at the Native Nations Institute 
(working in close coordination with tribes) have completed several 
hundred projects and field research reports, many of which were on 
matters specifically requested by the tribes. These field projects have 
ranged from welfare reform at the Navajo Nation to bison ranching at 
Cheyenne River, and from judicial reform at Hualapai to ski resort 
management for the White Mountain Apache. As part of our organization's 
mission, many of these reports are available on our website from which 
all tribes can learn.\6\
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    \6\ See the Harvard Project website at http://www.hpaied.org/.
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    Another important facet of the Harvard Project's work is our 
Honoring Nations program. Honoring Nations is a competitive awards 
program that identifies, celebrates, and shares outstanding success 
stories in tribal governance. We honor tribes that exemplify successful 
tribal governance, and to date the Harvard Project has recognized 
tribal governmental programs ranging from the Eastern Band of Cherokee 
for their Tribal Sanitation Program (in 1999), to the Effective Law 
Enforcement Program of the Gila River Police Department (in 2003), to 
the Seniors Skilled Nursing Facility at the Tohono O'odham Hospice (in 
2008), to the Tribal Fisheries Department at Nez Perce (in 2015). Since 
1999, we have honored about 130 tribal governmental initiatives.\7\ 
HPAIED remains committed to empowering Native Nations through 
identifying the common characteristics of tribes that are successfully 
charting a course toward a socially, culturally, politically, and 
economically healthy future.
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    \7\ For more examples, see ``Honoring Nations: Directory of Honored 
Programs 1998-2010,'' Honoring Nations Program, The Harvard Project on 
American Indian Economic Development, at pages 9 and 11, at http://
hpaied.org/sites/default/files/documents/finalhndirectory.pdf.
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                           research findings
    Prior to the 1980s, there was a notable lack of research pertaining 
to economic development in Indian Country. The small amount that was 
available contained at least two consistent themes: First, the over-
riding focus of thinking and policymaking was on what the Federal 
Government could do to create jobs, raise income, and increase 
household wealth. This helped contribute to the unbalanced relationship 
between the Bureau of Indian Affairs (``BIA''), other Federal programs, 
and the tribes, which often became dependent on Federal funding and 
expertise.
    Second, the Federal policies and programs that did exist within 
Indian Country constituted what we refer to as a ``Planner's Approach'' 
to economic and community development. The Planner's Approach was 
simplistic in treating economic development as a fundamental question 
of resources and expertise, as opposed to one of incentives and 
institutions. Viewing the world through the lens of the Planner's 
Approach, academics, government officials, and tribal leaders 
interpreted the underdevelopment seen on reservations as stemming from 
a lack of access to financial capital, technical skills, and managerial 
expertise. The Planner's Approach typically provided grants and loans 
in a well-intended effort to stimulate economic development. However, 
this heavy-handed approach was driven by Federal budget allocations and 
has had a strong adverse impact on many Native communities. This 
approach created a world in which grant writers were always in short 
supply and tribal politics revolved around which elected officials 
could most effectively capture (or perhaps extract), funds from the 
Federal Government. Under the Planner's Approach, what was originally 
intended to be a solution to underdevelopment instead seems to have 
perpetuated it, degrading the core tenets of economic development into 
a series of rent-seeking behaviors.\8\
---------------------------------------------------------------------------
    \8\ ``Rent seeking'' is a term from economics and occurs when an 
organization or individual(s) seeks to obtain economic gain from others 
without reciprocating in the form of further wealth creation.
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    A fundamental flaw of the Planner's Approach was the erroneous 
assumption that a nation's economic development is a mechanical process 
that can be achieved by way of the imposition of a predetermined 
blueprint. While it is advisable and even advantageous to plan ahead, 
it is an exercise of hubris to think that one can ``plan'' an economy, 
in the sense of expecting tribal councils, national legislatures, or 
Federal planners to correctly select a portfolio of businesses, 
projects, and activities that will not only survive, but will meet the 
needs of tribal citizens, and will thrive over time.\9\
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    \9\ Consider the natural experiment of the German economies after 
World War II. The parts of former Germany subjected to market forces 
(i.e., West Germany) became a powerhouse of development in post-war 
Europe. The parts of the former Germany subjected to centralized 
planning (i.e., East Germany) stagnated and the citizenry had to be 
forcefully restrained from leaving for better opportunities elsewhere. 
For a discussion in the context of Indian Country, see, the Statement 
of Joseph P. Kalt, Establishing a Tribal Development Corporation, 
Before the U.S. Senate Committee on Indian Affairs, September 20, 2004 
(hereinafter, ``2004 Kalt Testimony''), noting that ``Economic 
development is an organic process. In an environment in which 
opportunities are subject to the vicissitudes of competition and 
continually changing marketplace conditions, economic development 
occurs as the sum of small, adaptive decisions of myriad individuals 
who by luck or preparation are in the right place at the right time to 
take advantage of unplanned prospects. Economic development is much 
more analogous to tenacious plants looking for places to pop up and 
take root, than to an engineered system.''
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    The discussion above raises one obvious question: If one cannot 
``plan'' an economy to arrive at productive and sustainable 
development, what is the alternative? While there is no predetermined 
blueprint for success, there are some general tenets for effective, 
long-term economic development, and these tenets are now being 
demonstrated by a large number of tribes in Indian Country. We have 
found that these tenets of sustainable development are applicable to 
developing nations the world over, and are being acted upon by many 
successful tribes in Indian Country. A discussion of these tenets is 
found below, and in contrast to the Planner's Approach, we refer to 
tribes that are building their communities under these principles as 
governments engaged in a ``Nation Building'' process.\10\
---------------------------------------------------------------------------
    \10\ For more information on the Nation Building approach, see: The 
Harvard Project on American Indian Economic Development, The State of 
the Native Nations: Conditions Under U.S. Policies of Self-
Determination, New York: Oxford University Press, 2008, starting at 
page 26.

    Institutions Matter: The nature of a society's institutions, 
whether social, cultural, and/or governmental, determines the 
incentives around productive or unproductive activity. Within the scope 
of our research, the Harvard Project and the Native Nations Institute 
have consistently found that a tribe's economic development is anemic, 
or worse, unless the tribe's institutions personify at least three 
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characteristics. The key attributes are:

     A Rule of Law. A respect for tribal law and the 
            establishment of legitimate means for dispute resolution.

     Separation of Politics from Day-to-Day Administration and 
            Business Affairs. Enterprises and economic transactions are 
            free from societal politics and power struggles.

     Efficient Bureaucracy. Clarity of procedures, good 
            recordkeeping, efficient administration processes, reliable 
            computer networks, and the like.

    Culture Matters: Given the importance of institutions within a 
society, the social norms and world view of the citizens that interact 
with those institutions also matter.\11\ This lesson, observed 
repeatedly in our research with Native Nations, is an important tenet 
regarding economic development. The importance of local conditions and 
political willpower in building and promoting effective institutions as 
part of economic development cannot be ignored. However, our research 
in Indian Country indicates that, for governing institutions to provide 
the foundation upon which sustained economic development can take 
place, there first must be a cultural match.\12\
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    \11\ Miriam Jorgensen, Bringing the Background Forward: Evidence 
from Indian Country on the Social and Cultural Determinants of Economic 
Development, Doctoral Dissertation, May 2000, at page 129.
    \12\ 2004 Kalt Testimony at pages 13-14.

    One can think of cultural match as the consonance between the 
structure of a society's formal institutions of governance (and its 
economic development initiatives) and its underlying norms of political 
power and authority (i.e., culture).\13\ In order to function 
effectively, a society's institutions and corresponding economic 
development must be consistent with underlying cultural, political, and 
organizational norms. Simply put, they must be seen as legitimate in 
the eyes of the society's citizenry.
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    \13\ 2004 Kalt Testimony at page 14.

    Sovereignty Matters: Self-determination is a key issue within 
Indian Country and its importance to economic development cannot be 
overlooked. There are four inseparable issues connecting sovereignty 
and self-determination to economic and community development within 
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Indian Country. They are:

     Design issues. Without self-determination, it is 
            impractical (and perhaps impossible) to change institutions 
            so that they more closely match those of Native Nations and 
            their unique economic needs.

     Ownership issues. Absent a strong sense of ownership, it 
            is unquestionably difficult to get a local community 
            involved and interested in the payoff from tribal economic 
            investments.

     Accountability issues. Linked closely with the concept of 
            ownership, those making the investments and program 
            decisions need to be held accountable for how all Federal 
            (and tribal) resources are used.

     Leadership development issues. There are an increasing 
            number of astute, capable, highly experienced leaders 
            emerging within Indian Country. This is demonstrated by 
            tribes (and tribal leadership) taking charge of issues 
            irrespective of historical (or concurrently existing) 
            Federal support.

    After years of research, it has become clear that tribes must have 
autonomy in order to foster institutions that are a cultural match for 
their societies. Successful tribal governments all exhibit effective 
institutions paired with a cultural match. We have come to believe that 
this is why policies of sovereignty and self-determination have been 
the only strategy that has shown any prospect of breaking the patterns 
of poverty and dependence that became so familiar on reservations from 
the late 1800s until at least the 1990s. It is only logical that it 
requires self-rule for a culture to put in place institutions that are 
a cultural match. Thus, we can restate the uniform qualities that have 
marked successful economic development in Indian Country as aggressive 
assertions of sovereignty, resulting in self-governed institutions that 
are characterized by a cultural match. It has repeatedly been shown 
that, when a tribe takes control of its institutions and runs them in 
congruence with its own cultural norms, the result is a set of 
economic, social, and political systems that work for its citizens.\14\ 
Continued dependence on the Federal Government for grants and guidance 
removes accountability for tribal leadership and undermines the 
processes necessary for stable and lasting economic development. The 
negative results of such dependence should not be surprising.
---------------------------------------------------------------------------
    \14\ Stephen Cornell and Joseph P. Kalt, ``Reloading the Dice: 
Improving the Chances for Economic Development on American Indian 
Reservations,'' Joint Occasional Papers on Native Affairs, No. 2003-02, 
2003.
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              energy development on native american lands
    The importance of furthering Native American economic development 
and reducing Federal dependence can be highlighted by looking the 
socioeconomic conditions of Native American tribes. Consider a few 
basic statistics, illustrated in Figures 1 and 2. As shown in Figure 1, 
the annual per-capita income of American Indians living on the 
reservations has been consistently lower than (and often less than half 
that of) the U.S. average. In the period between 2006 and 2010, 
American Indians living on reservations had an average per-capita 
income of $12,459, compared to the national average of $26,893. Family 
poverty levels reflect this same shortfall: despite a decrease from 
1990 to 2010, the family poverty rate for Native Americans in the 2006-
2010 time period was 33.5 percent for the Navajo Nation and 31.7 
percent for reservations other than Navajo, approximately three times 
the U.S. average for that same time period (see Figure 2). Figure 3 
further highlights income disparities for Native Americans, with 
particular focus on the Crow and Navajo Nations. As the figure shows, 
approximately 40 percent of Crow and Navajo people were living in 
poverty in 2014, relative to the 15 percent nationally.\15\ A potential 
contributing factor to this income disparity in 2014 could be that 
employment rates for many tribes, including some of the energy-
producing tribes, lag behind the national average (see Figure 4). 
Lagging socioeconomic indicators such as these persist across energy-
producing tribes; consider, for example, the Blackfeet, Sioux and 
Tohono O'odham tribes, which, like the Navajo and Crow Nations, are all 
endowed with substantial natural resources. Unemployment rates for 
these tribes are consistently much higher than the national average 
across the United States (unemployment data from 2007 to 2014 are shown 
by Figure 5). In 2012, the unemployment rate gap was the highest shown 
(at 14.2 percent); in 2008 the divergence in unemployment rates was 
``merely'' 7.6 percent.
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    \15\ The U.S. Census, American Community Survey (``ACS'') 5-year 
data are presented for Figures 3 and 5, because the U.S. Census 
typically provides the most complete and reliable data available.
---------------------------------------------------------------------------
    It is striking that these socioeconomic conditions were (and are) 
present on these reservations, despite the tribes' abundance of 
valuable and accessible natural resources. The wealth of available 
resources available to select tribes is detailed in Figure 6. Data for 
all tribes indicate that Indian lands hold almost 30 percent of the 
nation's coal reserves west of the Mississippi, 50 percent of potential 
uranium reserves, and 20 percent of known oil and natural gas 
reserves.\16\ These resources are estimated to be worth approximately 
$1.5 trillion.\17\ Figure 7 further illustrates how important tribal 
energy resources are. As this figure shows, potential production of 
important commodities such as coal, uranium, and oil and natural gas is 
substantial. The largest producing states do in fact generate more of 
each of these energy sources than the potential from tribal lands, but 
the potential from tribal lands eclipses the second largest producing 
states (that is, tribal production of coal could be greater than that 
of West Virginia, tribal production of uranium could be greater than 
that of Texas, and tribal production of oil and gas could be greater 
than that of North Dakota).
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    \16\ Shawn Regan and Terry L. Anderson, ``Unlocking the Wealth of 
Indian Nations: Overcoming Obstacles to Tribal Energy Development,'' 
Property and Environment Research Center, February 2014 (hereinafter 
referred to as ``PERC Report'') at page 4.
    \17\ PERC Report at page 4.
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    In addition to coal, uranium, oil, and gas, tribal lands also hold 
large potential renewable energy resources. Wind, solar, geothermal and 
hydroelectric energy are all accessible in many tribal areas, but 
relatively few examples exist to demonstrate successful development of 
renewable energy supplies. For example, the U.S. Department of Energy 
notes that ``Overall, the analysis shows that the technical potential 
on tribal lands is about 6 percent of the total national technical 
generation potential. This is disproportionately larger than the 2 
percent tribal lands in the United States, indicating an increased 
potential density for renewable energy development on tribal lands.'' 
\18\ The potential that tribal energy development represents is largely 
untapped; the Department of the Interior indicates that only 2.1 
million acres of Indian lands are being developed for their energy 
resources, while an additional 15 million acres with energy potential 
remain undeveloped. In other words, 88 percent of Indian surface lands 
have resources that could provide tremendous economic and social 
benefits to a number of tribes, but have yet to be developed.
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    \18\ E. Doris, A. Lopez and D. Beckley, ``Geospatial Analysis of 
Renewable Energy Technical Potential on Tribal Lands,'' U.S. Department 
of Energy, February 2013, at pages 1-2.
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    Our meeting today has been arranged so that we can discuss the 
potential for enhancing energy development on American Indian lands by 
reducing Federal regulations that impede the process. By any measure, 
the potential resource base found on tribal lands is substantial. These 
largely untapped assets offer significant and unique prospects for 
individual citizens as well as entire tribal communities; successful 
energy development represents important revenue streams and higher 
socioeconomic standards for a number of tribes. If tribes choose to 
pursue energy development, they can see benefits from well-managed 
development such as well-paying jobs, substantial royalty and tax 
revenues to the tribes, and greater access to critical healthcare and 
social services, among several others. If these resources remain 
effectively inaccessible to tribes, then what is already a set of 
complex and difficult socioeconomic challenges that face the most 
economically disadvantaged people in the country could easily degrade 
further.\19\
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    \19\ Maura Grogan, Rebecca Morse and April Youpee-Roll, ``Native 
American Lands and Natural Resource Development,'' Revenue Watch 
Institute, 2011, at pages 6-7.
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    The bill we are discussing today, H.R. 538, looks to streamline 
energy development on tribal lands by decreasing Federal oversight and 
regulation. Lessening the need for this regulation and oversight moves 
toward tribal autonomy and self-governance, and as the research noted 
above indicates, successful tribal development will depend on enhanced 
tribal decision-making authority over governmental and economic 
policies that affect tribal lands and resources.\20\ Promoting 
opportunities for tribal self-determination and governance is something 
the Federal Government has tried to do over the last several decades, 
but has largely fallen short of in regard to energy development.
---------------------------------------------------------------------------
    \20\ Stephen Cornell and Joseph P. Kalt, ``Two Approaches to 
Economic Development on American Indian Reservations: One Works, the 
Other Doesn't,'' Joint Occasional Papers on Native Affairs No. 2005-02, 
2006, at pages 14-15.
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    Congressional efforts to facilitate energy development on tribal 
lands include the Indian Tribal Energy Development and Self-
Determination Act (``ITEDSA'') of 2005 (which is part of the Energy 
Policy Act of 2005). This legislation was an attempt to give tribes the 
option to exercise greater authority over their own energy resources. 
Under the ITEDSA, something known as the Tribal Energy Resource 
Agreement (``TERA'') allows a tribe, at its own discretion, to enter 
into leases, business agreements and right-of-way agreements for energy 
development on their lands without review or approval from the 
Secretary of the Interior. However, as is well known, not a single 
tribe has entered into a TERA agreement, about a decade after passage 
of the Act. This lack of adoption of TERAs is due to factors such as 
uncertainty about some of the TERA regulations and a complicated, 
confusing, and time-consuming application process.\21\
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    \21\ Indian Energy Development: Poor Management by BIA Has Hindered 
Energy Development on Indian Lands, U.S. Government Accountability 
Office, June 15, 2015 (``GAO Report''), at pages 32-33.
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    In contrast to the unutilized TERA, the more recent Helping 
Expedite and Advance Responsible Tribal Homeownership Act of 2012 
(``HEARTH'') provides a model which should help tribes accelerate the 
leasing of tribal surface lands.\22\ My understanding is that HEARTH 
has as its foundation ideas that were articulated in earlier limited 
legislation authorizing tribes such as the Navajo Nation to 
independently lease surface lands without Secretarial approval for each 
individual lease; HEARTH extended these rights to all tribes.\23\ In 
the context of energy, HEARTH allows for projects that lease only 
surface land and does not extend tribal leasing authority over 
subsurface extraction or exploration. Energy projects on surface land 
are often renewable energy projects, such as utility-scale solar or 
wind farms. While it is promising that under HEARTH tribes can 
implement their own regulations governing the leasing of Indian lands 
(including for renewable energy development), such projects have not 
yet taken off on tribal lands. As of March 2015 only one utility-scale 
wind facility was in operation on tribal land, with one more such 
facility and one utility-scale solar facility under construction at 
that time.\24\ This is in stark contrast with the significant 
developments in utility-scale wind and solar capacity in the United 
States. Data indicate that in the decade between 2004 and 2013, 686 
utility-scale wind projects and 778 utility-scale solar projects were 
constructed nationally.\25\ This difference between renewable capacity 
added nationally and on tribal lands illustrates the need to create 
further provisions for tribes to develop their energy resources.
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    \22\ HEARTH does not cover subsurface leasing or the ability to 
grant rights-of-way (Code of Federal Regulations, Title 25--Indians, at 
Sec. 162.006(b)(1)).
    \23\ Monte Mills, ``New Approaches to Energy Development in Indian 
Country,'' The Federal Lawyer, April 2016 (``Mills Report'') at page 
53. Under HEARTH, the Pueblo of Sandia was the second tribe (after the 
Federated Indians of Graton Rancheria) to be approved for tribal 
regulations on their land (U.S. Department of the Interior, ``Secretary 
Salazar Signs Historic Agreement in New Mexico to Help Spur Economic 
Development in Indian Country,'' March 14, 2013). The Governor of the 
Pueblo, Victor Montoya, said at the time he expected HEARTH to aid with 
elimination of red tape and quicker negotiations with companies looking 
to lease land. With the help of HEARTH, the Pueblo has been working to 
develop its airport and improve its retail center (Albuquerque Journal, 
``A `historic day' at pueblo,'' March 15, 2013).
    \24\ GAO Report at page 2.
    \25\ GAO Report at page 3.
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    H.R. 538 takes the HEARTH provision of tribal surface land leasing 
one step further, specifically in the context of energy development and 
the Navajo Nation. Section 8 of the proposed bill contains a provision 
to allow the Navajo Nation to lease tribal land for the exploration, 
development, or extraction of mineral resources without Federal 
approval. This would allow for the Navajo Nation to engage in energy 
development beyond projects limited to the surface (i.e., such as 
utility-scale solar and wind facilities). It is possible that the 
Navajo Nation will benefit from such a provision as it is a tribe with 
substantial natural resources, and a capable governmental bureaucracy. 
However, Section 8 appears to be narrow in scope; it does not extend 
the subsurface leasing rights to tribes more broadly and somewhat 
constrains the Navajo Nation's ability to fully exploit energy projects 
as the Nation sees fit. Allowing tribes to develop and control their 
own resources has, in certain instances, been tremendously successful. 
Consider the example of the Red Willow Production Company, which is 
owned and operated by the Southern Ute Tribe in Colorado. Red Willow, 
which engages in oil extraction in a number of geographic areas and 
produces throughout the Western United States and offshore in the Gulf 
of Mexico, is but one of five energy companies operated by the Southern 
Ute Tribe. The success of the tribe's energy endeavors has allowed it 
to create a growth fund worth billions of dollars, and to provide 
sizable dividends to the tribe's citizens over a number of years.\26\ 
Extending this section of H.R. 538 to tribes beyond the Navajo Nation, 
in a way that maintains the trust responsibility held by the United 
States toward tribes, could promote significant economic and energy 
development on tribal lands.
---------------------------------------------------------------------------
    \26\ PERC Report at pages 17-18.
---------------------------------------------------------------------------
    In addition to the provision for Navajo subsurface leasing without 
Federal approval, H.R. 538 sets out to reduce the time required for the 
approval process and lessen the potential for legal challenges (for 
example, imposing binding time limits on the appraisal and approval 
processes could significantly speed up the time taken to greenlight a 
project and prevent bureaucratic delays). Tribal energy development 
projects that have been stymied in the past have caused significant 
economic damages to tribes, and have led to skepticism in pursuing 
tribal projects among nontribal industry participants in the energy 
market. Streamlining the Federal appraisal process could make it easier 
for tribes to undertake energy development in pursuit of tribally-
driven economic development and determination.\27\ Similarly, language 
limiting legal fees that might be recovered by those bringing legal 
challenges to energy project could help insulate tribal energy 
development projects from costly delays, but may also have unintended 
consequences through chilling judicial access for parties that have 
legitimate standing to challenge certain developments.
---------------------------------------------------------------------------
    \27\ Mills Report at page 57. National Congress of American 
Indians, ``Policy Update, 2016 Mid-Year Conference,'' 2016, at pages 
13-14.
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    While tribes such as the Southern Ute are benefiting from energy 
development, research has noted that some tribes that engage in the 
natural resource industries are often overly and unjustly burdened by 
the current system. Cumbersome regulations and/or past mismanagement by 
the Federal Government deter some tribes from proceeding with energy 
development. Complying with unwieldy Federal regulations and 
application processes can be incredibly time-intensive and complex, and 
mismanagement and delays of energy projects cost tribes a significant 
amount of revenues. Consider one example of bureaucratic impediments 
that have stymied energy development for tribes such as the Crow 
Nation. In January 2005, the Crow Tribal Council approved an oil and 
gas lease on tribal lands,\28\ but development of the resource was 
blocked until September 2007 due to the excessively slow review and 
approval process in place at the BIA.\29\ Additionally, the Crow Nation 
reports that BIA's records for surface and mineral ownership are 
repeatedly missing or out-of-date.\30\ Persisting issues and 
inefficiencies, layers of regulatory oversight, lack of access to 
markets, higher-than-elsewhere permitting costs, and persistent 
infrastructure challenges create an environment of uncertainty and 
contribute to lackluster economic development.\31\
---------------------------------------------------------------------------
    \28\ Clair Johnson, ``Crow Tribe signs lease with oil exploration 
firm,'' Billings Gazette, May 16, 2005, at http://billingsgazette.com/
news/state-and-regional/montana/crow-tribe-signs-lease-with-oil-
exploration-firm/article85763605-8812-5993-a56d-8717f7c71bff.html. See 
also, ``Crow Tribe Signs oil and gas development deal,'' May 17, 2005, 
at http://www.indianz.com/News/2005/008205.asp.
    \29\ Tribal Development of Energy Resources and the Creation of 
Energy Jobs on Indian Lands, Before the House Committee on Natural 
Resources, Subcommittee on Indian and Alaska Native Affairs, 112th 
Cong. (2011), Statement of Scott Russell, Secretary of the Crow Nation, 
at page 13. Delayed approval of oil and gas leases can have a 
particularly detrimental impact on the potential revenues earned from 
energy development projects in a world of falling oil and gas prices. 
In cases where oil and gas prices have fallen significantly in the long 
waiting period between application submission and BIA approval, tribes 
have seen development opportunities abandoned. Development efforts not 
completed have effectively forced certain tribes to forego the 
potentially significant revenues that would have started flowing at 
higher price levels.
    \30\ See, e.g., On Improving Tribal-Corporate Relation in the 
Mining Sector: A White Paper on Strategies for Both Sides of the Table, 
HPAIED, April 2014, at http://hpaied.org/sites/default/files/documents/
miningrelations.pdf, at page 91.
    \31\ Joseph P. Kalt, ``The Mining of Crow Nation Coal: Economic 
Impact on Crow Reservation, Big Horn County and Montana,'' February 4, 
2014, at page 2.
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    Due to these bureaucratic inefficiencies and challenges, the BIA is 
not always able to aid tribal energy development to the best of its 
capabilities. The BIA is extremely important for the administration and 
management of tribal land held in trust by the Federal Government, and 
its smooth and timely functioning is essential for tribal energy 
development. An understaffed and overburdened BIA impedes tribes from 
capitalizing on their own resources. In recent discussions I have had 
with those working on the ground in energy development for tribes, I 
have heard differing views on the BIA's role. For example, I have found 
several instances where a lack of funding, staffing, and expertise at 
the BIA acts as a roadblock to the timely energy development that 
tribes seek; I have also found that there are instances where tribes 
look to the BIA for its built-in expertise and assistance in leasing 
oil and gas properties, and report that the area BIA office works 
quickly and efficiently.\32\ As tribal experiences with the BIA are not 
positive across the board, it is important to reduce inefficiencies and 
streamline the BIA's approval and appraisal process. This can be 
accomplished by using Federal appropriations to provide the BIA with 
more of the funding it needs to increase its staff and expertise and by 
providing incentives for quick and timely action by existing BIA 
offices.
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    \32\ I note that the positive BIA feedback I have recently heard 
involves energy leases on tribal lands that are not reservation lands.
---------------------------------------------------------------------------
    Other options to alleviate the congestion at the BIA include the 
possibility of administering block grants and/or setting up additional 
offices that serve as ``one-stop shops'' for tribes for appraisals, 
regulation enforcement, and administration of lands held in trust by 
the Federal Government. In recent discussions I have had with tribes 
engaged in energy development, the idea of block grants, or funding 
directly to certain tribes to carry out functions typically performed 
by the BIA, was largely well-received as a potential way to improve 
efficiency in tribal leasing for energy development. These types of 
grants could provide a given tribe with a fixed amount of funding for 
the tribe to hire third-party appraisers, to hire experts to assist in 
negotiating agreements with outside investors and developers, and to 
review royalty rate provisions and distribute royalty payments.\33\ 
Consider the bottleneck that the appraisal process has often become. By 
giving tribes funding to cover what it costs to do the appraisals 
itself, in some circumstances the BIA could alleviate the backlog in 
reviewing lease applications, and reduce the financial burden of 
increasing its own staffing to handle a larger number of applications 
(and overcome existing backlogs where such backlogs exist). 
Additionally, more ``one-stop shop'' offices like the Federal Indian 
Minerals Leasing Office (``FIMO'') situated at the Four Corners Region 
serving the Navajo, Hopi, Ute and Zuni Tribes should be set up. This 
office is the first of its kind, and both its proximity to tribes and 
its understanding of conditions on the ground uniquely position it to 
help streamline and accelerate projects on tribal lands.\34\ Directing 
funding to the establishment of such offices could be beneficial to 
energy development for tribes by further alleviating congestion at the 
BIA and providing tribes with more accessible expertise.\35\
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    \33\ U.S. Department of the Interior, ``Tribal Grant Program to 
Assess, Evaluate and Promote Development of Tribal Energy and Mineral 
Resources.''
    \34\ Office of Natural Resources Revenue, Department of the 
Interior, ``Federal Indian Minerals Office,'' March 31, 2016 at http://
www.onrr.gov/IndianServices/fimo.htm.
    \35\ Another ``one-stop shop'' is the still-nascent Indian Energy 
Service Center in Denver, CO. The Service Center will include personnel 
from several relevant segments of the Department of the Interior, and 
is expected to provide expertise, policy guidance, standardized 
procedures, and technical assistance as needed by tribes (see, e.g., 
Written Testimony of Lawrence Roberts, U.S. Government Accountability 
Office Report, ``Indian Energy Development--Poor Management by BIA has 
Hindered Energy Development on Indian Lands,'' Before the U.S. Senate 
Committee on Indian Affairs, October 21, 2015). While the ``one-stop 
shops'' noted here might be beneficial, there are also potential 
drawbacks to consider. If not executed properly, these offices may 
exacerbate existing bottlenecks to energy development by simply 
consolidating them into one location, such as Denver. Offices of this 
type may also draw experienced technical advisers away from field 
offices where those personnel might have made a greater impact working 
more directly with the tribes located nearer the area offices.
---------------------------------------------------------------------------
    Energy development is an important goal for tribes, and granting 
them the ability to capitalize on their own resources without Federal 
impediments will go a long way toward improving socioeconomic 
conditions for a number of tribes. This is evidenced by the significant 
gains in wealth for those tribes who have been able to develop and 
operate their own energy projects and by the significant losses for 
those tribes whose efforts have been stymied by failures in the current 
Federal system for oversight of these important energy developments. 
Streamlining energy development and minimizing Federal oversight that 
is inefficient will empower tribes to control their own lands in a more 
efficient and beneficial manner. At the same time, it is important to 
proceed with any new legislation in a way that maintains the trust 
responsibility held by the U.S. Government toward the tribes. The goal 
is not to upend the balance of responsibility but to create a business 
optimal environment for the tribes and help them benefit from the 
resources on their lands. There are several ways to work toward this, 
such as extending the subsurface leasing provisions included in H.R. 
538 to tribes beyond the Navajo Nation, by providing the BIA with more 
funding to increase its staff and reduce the backlog of lease 
applications, by providing block grants to tribes for third-party 
appraisers, and by establishing more ``one-stop shop'' offices such as 
the FIMO.
    The efforts I have described here can help promote the development 
of Native American energy resources, resulting in benefits to Native 
Nations and individual tribal citizens, through both enhanced economic 
development opportunities and more efficient exploitation of the energy 
resources we are all collectively fortunate to have within the 
boundaries of the United States. Clearly, this is an issue that is 
worthy of serious consideration by the U.S. Congress, and I thank you 
for allowing me to take part in this important discussion.

                                 ______
                                 

    The Chairman. Thank you.
    I appreciate all five of you for coming and sharing these 
concepts with us, both written as well as oral recommendations.
    Now, under Rule 3(e), we have the opportunity for asking 
questions, a 5-minute limit for each of the questions, but once 
again we can be pretty flexible with that situation here.
    I am going to ask Mr. Westerman if he would like to start 
the questioning process.
    Mr. Westerman. Thank you, Mr. Chairman. I would also like 
to thank the witnesses for their time today and for their 
enlightening testimony. I mentioned I was a freshman, so a lot 
of this is a learning experience to me, and it is beneficial to 
be here and to hear what is happening out in the real world.
    Mr. Ferguson, you discussed woody biomass projects and how 
they are needed not only for economic development but also to 
keep forests healthy, and you also talked about how tribes are 
better at managing timberland than the Federal Government. I 
had a classmate in forestry school who was the president of the 
Intertribal Timber Council, and he has testified before this 
committee before. I would say that the data that I have seen 
from him, as well as other data, strongly supports what you 
said about tribes being better timberland managers.
    In my home state of Arkansas, we have a lot of forests 
there, and in my district it is about 86 percent forested. We 
have a problem in Arkansas, the fact that we are growing so 
many trees. If you take everything that is harvested, 
everything that dies or is destroyed by fire, and then look at 
what grows every year, there is about 15 to 16 million tons 
more of timber in my state right now than there was at this 
time last year. To put that in perspective, every minute our 
forests grow a new truckload of logs. So, there is a huge 
abundance of wood in my state, and I know that is true in many 
other places because we are seeing a lot of forest fires.
    I think it is very safe to say that we are at a point right 
now where the forests need industry much more than the industry 
needs forests, because there is so much timber out there. When 
we talk about the benefits of a healthy forest, to keep those 
forests working and productive and to reduce insects, disease, 
infestation, and ultimately forest fires, we need a home for 
that biomass when we take it off of there.
    Do you believe that forests are less healthy, and the 
environment is in turn less healthy and robust under the 
current administration's forest management policies than it 
would be under a tribal management policy?
    Mr. Ferguson. I do. I am going to lean on Cody for more of 
the technical answers on that. But from what I have seen 
growing up in the forestry industry and working as a forestry 
tech for our tribe, I have to agree with everything you said. 
It is apparent on our border with the Federal lands in the 
Northwest, the Colville and the Okanogan National Forests, that 
the overstocking and--I don't want to call it mismanagement--
but the under-managing has created very bad health issues and 
fire hazards. If you were to come to our reservation, we could 
show you that.
    Just north of our border, just as we have stated, the 
health of that forest is in decline. Ours is growing well.
    Mr. Desautel. A lot of the problems we face with Federal 
land managers is they seem to think that there is one treatment 
to fix forest management. Everybody who manages forests 
understands that that is not a static forest. There is always 
change. So, a forest management activity needs to continue over 
time. One forest health treatment does not fix that problem 
forever. In the tribe's management we look at 15-year re-entry 
cycles to make sure that we continually manage those acres. We 
are managing different acres on every entry. We have good 
diversity to supply all the ecological needs we have for water 
quality, fish habitat, wildlife habitat, cultural plants, those 
types of things, along with healthy forests that are resilient 
to fires.
    What we saw last year, we burned in 2015 upwards of 250,000 
acres on a 1.4 million-acre reservation, which is huge. But we 
also saw a lot of beneficial fire because of the management 
that we have done. We had good early species composition, trees 
that are very resilient to fire. We had stands that had very 
low stocking. We had opportunities to go in there to catch 
those fires, but we had a lack of fire-fighting suppression----
    Mr. Westerman. So, you were using good forest management to 
keep your forest healthy. But for your neighbor, a Federal 
forest that may not be managed as well, the insects, the 
disease, the fires, it does not recognize your boundaries.
    You mentioned a great point about how forests are dynamic 
and constantly changing and need management.
    Mr. Chairman, are we going to do a second round of 
questions, or should I finish up?
    The Chairman. No, we will do more.
    Mr. Westerman. OK. I will come back again.
    The Chairman. Why don't you both take a seat in front of 
the microphones? Thank you for sacrificing your chair.
    Let me go to each of you, if I could. One of the things 
that we are talking about in our committee is the concept of 
consultation, which is in law but sometimes not necessarily 
used. Can I ask you your experience dealing with both BIA and 
BLM, the Department of the Interior, on how consultation is 
working? Is it being done? Is it effective? Could it be 
improved? Very quickly, and then I will go through some 
specifics.
    So, Mr. Olguin, with the Southern Utes, has the Federal 
Government been effective in their consultation? Could it be 
improved?
    Mr. Olguin. From my perspective, and I think speaking on 
behalf of the Southern Ute Tribe, there is always going to be 
room for improvement. Nothing is perfect. When we look at 
consultation, there are so many things that come into play, 
whether that is the NACRA, the NEETHA, the air quality, the 
clean water. There are so many environmental components that it 
really begs the question of are we doing enough to ensure 
tribes are consulted on matters that are significant and 
important, especially when it comes to areas of territory and 
historical use as far as sites and area.
    The Southern Ute, as an example, covering the western third 
of the state of Colorado, that is a lot of country to cover 
from the standpoint of consultation, with a lot of sites that 
are significant to us as mountain people. But at the end of the 
day, some agencies do better than others. When it comes to the 
point of the tribes themselves, they also have to play a very 
significant role in this consultation. Receiving a notice or 
receiving a letter just does not meet the letter of 
consultation as far as the process. It is a dual-pronged 
approach where tribes have to be at the table as well to ensure 
they provide adequate and significant consultation back to the 
agencies.
    The Chairman. Mr. Glenn, you have a different kind of 
situation up in Alaska than they have on the reservations. Just 
respond to that same thing about does consultation work.
    Mr. Glenn. Once again you have saved me many words in my 
own answer. Consultation exists on the North Slope with the 
Federal Government, in my case most directly with the Bureau of 
Land Management and the Bureau of Ocean Energy Management. It 
does happen, and it does include Alaska's Native Village 
Corporations, and even some of the municipalities.
    Where I find a weakness in the consultation is in several 
ways. At the same time that consultation is invoked, the agency 
seems to be apologizing for the fact that they are not doing a 
very good job at it. ``Give us some time, we are practicing, 
this is all kind of new to us.'' It seems that their approach 
to consultation is, ``This is what we are going to do, and we 
are here to tell you we are going to do it,'' rather than 
meeting with us upstream of the crystallization of their idea, 
whatever it is, and having us be informed as to how they got to 
that idea, having us affect it one way or another with our 
local knowledge, local expertise, and then being a true 
consultation.
    So again, the letter that says we are making a meeting and 
this is a consultation where we have no effect on what they 
were going to do anyway, that sounds paternalistic and very 
ineffective.
    The Chairman. We have to do something a little bit 
differently here.
    Mr. Denetsosie, let me ask you a specific one. There is 
going to be a bending and flaring rule coming out here. Has the 
Navajo Nation been consulted by BLM on anything with that 
potential rule going forward?
    Mr. Denetsosie. I have seen the tribal leader letters, and 
I know that the Navajo Nation had a committee member that 
attended those meetings. We did that.
    The Chairman. I understand there are going to be 
consultation sessions with Interior, Justice, and Army that 
they have scheduled in the next few months. Do you know if this 
is going to be a topic of that conversation?
    Mr. Denetsosie. No, I don't.
    The Chairman. I only have 45 seconds. Mr. Westerman, let me 
go back to you for questions. I have a few more for some of the 
other witnesses, as well.
    Mr. Westerman. Thank you, Mr. Chairman.
    I want to go back to the woody biomass for a moment. We 
talked about how important keeping our forests healthy is and 
the science behind it. It is good for the environment, it is 
good for the economy, better air, better water, better wildlife 
habitat, to get more recreational opportunities. There is not a 
downside to having healthy forests, and that includes on the 
environmental side.
    So, with that in mind, do you believe that the Federal 
Government is allocating enough resources to research and 
demonstration projects, like you mentioned, for woody biomass 
compared to other renewable fuels?
    Mr. Desautel. I think there is adequate research, but the 
research tends to point at the same thing. The woody biomass 
utilization is often a cost. It is not necessarily something 
that is economically viable by itself. If you mix it with other 
forest management activities, I think that is where you have an 
opportunity. You can use some of the revenue generated from 
commercial timber harvests to cover some of the costs of non-
commercial harvests.
    A lot of the national forests that we see up in Washington, 
at least, seem to trend toward non-commercial treatments, I 
think, just because they are less controversial. They think 
they can get those through the NEPA process because people 
understand them for fuel treatments, but a lot of times those 
treatments are non-commercial. They remove a small amount of 
biomass, and they are not necessarily effective for very long 
from what we see from fuel treatments in----
    Mr. Westerman. One of the drivers in that is the fact that 
the energy market is not very well developed around woody 
biomass. I went to the National Foundation around the research 
labs trying to see if they were doing any research on how to 
better capture and extract the energy that is in the woody 
biomass, and there was one project they took me to see at the 
Lawrence Livermore Lab in Berkeley where they are actually 
breaking the biomass down into simple sugars that can be 
digested into a whole spectrum of chemicals and fuels, which 
has great core economic backbone to it. It would make it cost 
effective to go out and harvest woody biomass if you had a 
developed market like that.
    But it appears to me that we are not out getting enough 
resources to develop those markets. We are relying on old 
combustion technology to burn this and make steam and 
electricity. So, I think we need to push for more research and 
more demonstration projects.
    Also, this Administration--and this baffles me because we 
know the environmental benefits of having healthy forests--they 
are very lethargic in recognizing the scientific natural 
process of photosynthesis and recognizing woody biomass is a 
carbon-neutral material, like most other developed countries 
have done.
    Do you think this is in any way hindering the development 
of woody biomass as a fuel?
    Mr. Desautel. Yes, I would agree with that. We have looked 
at what the traditional methods are economically, but there 
would be other markets, and the investment costs of this is I 
think the biggest driver. We have looked at a biomass facility 
because we harvest a lot of wood annually, about 77 million 
board feet a year, which produces a lot of ton wood and 
residues, but it is about $100 million per facility, up to $120 
million per facility, and we don't know how many megawatts it 
will produce. But again, that is a huge investment, and you 
need long-term guarantees on supply to make that kind of 
investment. I think that is why this 20-year commitment for a 
stewardship contract is a huge part of what would ultimately 
bring in an outside investor to build that type of facility.
    Mr. Westerman. That is right. We have seen a lot of wood 
facilities close down, particularly in the West. If you try to 
get investors to come in and utilize this biomass, they are 
just not going to invest that kind of money if there is not 
some assurance that they can have a forest for their facility 
or the life cycle of the facility. That is definitely another 
issue I think we need to work on federally, on Federal forests, 
to make sure that we have a large landscape-wide stewardship 
contract.
    Mr. Chairman, I will yield back, and I promise to have a 
question about something other than woody biomass next time.
    The Chairman. That is OK. You can keep doing the forestry 
side. That is your forte.
    I am going to go back to consultation because that is 
something on which I am still unsure. Let me ask Mr. Olguin and 
Mr. Glenn again, you both talked about H.R. 538. The White 
House issued a statement of administration policy opposing that 
bill, in part because it removes oversight for appraisal of 
Indian lands or trust assets.
    You described how the Interior Department appraisal process 
has been problematic, at best. I guess the question I have is, 
before that administrative policy was actually set--Mr. Glenn, 
let me ask you--did anyone in the Administration talk to you 
before they came up with that policy? The same thing for Mr. 
Olguin. Did anyone talk to someone in your tribe before they 
actually came up with their policy statement?
    Mr. Glenn. No.
    The Chairman. OK. That is easy enough.
    Mr. Olguin. I don't recall off the top of my head. I don't 
think so. Of course, for us, we do our own appraisals.
    The Chairman. That becomes troubling as well.
    Let me go to the Navajo Oil and Gas Company. APD stands for 
what again, Mr. Denetsosie?
    Mr. Denetsosie. Application for Permit to Drill.
    The Chairman. As you were talking about that, I cannot look 
at this in any other way than actually something more than just 
a tax on the resources of the Navajo land. Am I looking at this 
unfairly? It is not really a user fee. It is actually a tax 
just to generate money for the Federal Government?
    Mr. Denetsosie. Well, I know that BLM does very minimal 
work on the Application for Permit to Drill on Navajo, and the 
project preview office does all the studies for that.
    The Chairman. So, your nation is actually doing the effort 
there?
    Mr. Denetsosie. Right, all of it.
    The Chairman. And they get the money.
    Mr. Denetsosie. So, I see it as a tax, too.
    The Chairman. Mr. Henson, let me ask you a question once 
again. You talked about how different areas are treated 
differently. I think one of the issues, when you were talking 
about how it is about 45 days for permitting that you all can 
do versus what the state can do, the 4 to 6 years the BIA is 
coming up with the permitting, and it is common in some areas, 
it is not common in other areas. Some areas are faster than 
others. Is this simply based on the incompetence of the Federal 
Government, that when you are so far away from the area that 
you simply had too much land to manage and it is not going to 
be done efficiently or effectively? Or is this a by-product of 
staffing decisions? Is the delay because of staffing, or is it 
both of them?
    Mr. Henson. I think it is probably several things. One is 
just kind of aligning the incentives track. If you work in 
private industry and you have a deadline, you work very hard to 
meet it. If you have little incentive and little potential 
upside from getting through a large backlog in a quick and 
rapid manner, then you just do not have any incentive to do so.
    So, I think some of it is incentives, the dislocation of 
potential upside from development happening from those who have 
the decisionmaking authority. I have heard quite a lot just in 
the last few months from different tribes out West about how 
hard it is to attract the right kind of staff, which in a low 
price environment for oil and gas it might be the best time in 
which you could potentially hire people. Denver, Houston, New 
Orleans--there are plenty of folks walking around looking for 
jobs these days that have the right kind of expertise. But the 
Federal H.R. apparatus is not necessarily set up to identify 
those folks, convince them to move to somewhere like Durango, 
Colorado, take up a new job working for the Feds, even though 
their skills would be the right set of skills.
    You have kind of a mismatch in H.R. policies, a mismatch in 
the skills available, and funding issues. The BIA is under-
funded in plenty of different ways. The allocation of the risk 
and reward, I think, is the critical thing from the economics 
perspective, because you do not have an incentive to work 
really hard to get that backlog solved when you work for the 
Federal Government far, far away.
    The Chairman. Mr. Olguin, you were talking to me about 
staffing situations you have there. As long as BIA has to 
provide that, there is a problem. But I am assuming the tribe 
could actually do that work. You are already there. You are 
effective. You could handle that one.
    Mr. Olguin. Yes. In fact, we do a majority of the work for 
the Bureau of Indian Affairs as staff, and it is really that 
concept of what do we have to do to help you help us. That is a 
model we have been using for quite a few years. Along that 
line, what it really entails is because the agency has 
struggled with finding competent people, qualified people, 
people who understand the responsibilities when it comes to 
realty work, because there is no training program out there in 
tribal energy development when it comes to paperwork, we are 
seeing some very good opportunity with the San Juan College 
School of Energy where they are developing this curriculum 
right now. It is a long time coming, but when the tribe has to 
step in and do the work--and in our case it is very fortunate 
that we have hired good people, competent people, and pay them 
well, because an issue that does come into play is that the 
Federal system is underpaid.
    When you look at competition, they are looking for 
competitive jobs in the Durango area. Of course, the cost of 
living is very high there. When the Bureau does advertise 
positions, people do show interest. When they get to the point 
of actually accepting the job, all of a sudden they find out 
the cost of living is too high, they cannot afford to move 
there, so they decline the position. It is a recurring cycle.
    We have also experienced situations where not every region 
handles realty functions the same. Each region is different. 
What people learn through on-the-job training is different. 
Some folks do get transferred or get assigned to different 
regions. They bring that skill set with them, but it may not 
fit with the region where they end up working. So, the 
conflicts do create themselves in that respect as well.
    The Chairman. Thank you.
    Let me change the rules here. I have two more questions. 
Let me just throw them out, and then you can finish off the 
questioning.
    Mr. Westerman. All right.
    The Chairman. For as long as you need to.
    Look, I appreciate what you are doing. Obviously, 
consultation was one of the issues that I would like to see 
done differently. Obviously, the process that we go through I 
would like to see done smoothly, faster, differently. You are 
talking here about how a devolution of these decisions probably 
is the only way you can do it, because Indian Country is not 
monolithic. There are differences in every one of those.
    I have two other specific issues to go into, if I could.
    Mr. Glenn, there are Members of the House, even some 
members of our committee, who have co-sponsored efforts to try 
to make the Slope, the coastal areas and ANWR a wilderness area 
or a national monument. They don't ever talk to you guys about 
that? And does your area support any of that kind of approach?
    Mr. Glenn. In general, we oppose setting aside huge swaths 
of land for any reason because even with the best of 
intentions, it ends up unfairly limiting our people, the 
residents, for any purpose into the future in some 
unanticipated way. We set aside a huge corner of our ocean for 
a bird called the spectacled eider who hardly nests there in 
comparison to where it nests elsewhere. So, we cannot develop 
any of our land that directly abuts that coastline. We cannot 
access the coastline by any kind of marine transportation 
because we are in critical habitat, nesting birds.
    Wilderness issues are difficult for us. They present 
subsistence access problems in the name of protecting the 
environment. Our own people cannot hunt on top of the tundra 
for caribou in summertime. We have become more like wards of an 
agency rather than citizens of our own land. So, we generally 
oppose wilderness and national monuments, and we oppose the 
unnecessarily excessive critical habitat designations. We are 
the ones who depend on the animals more than anyone else, and 
we know what would or would not jeopardize their condition. In 
the name of protecting them, the critical habitat designations 
do not improve their living environment one iota, and yet they 
reduce our ability to access our own land.
    So, the short answer, again, is no.
    The Chairman. One of my passions back in Congress is the 
concept of federalism. I do think that is the solution to our 
country's problems. But it also applies here with Indian 
Country as well, even though the concepts are not necessarily 
always talked about in the same sentence. But the idea of 
federalism, it is not liberal, it is not conservative policy. 
It is not either small government or big government. It is 
simply giving people the choices of having what they want in 
their particular area without impacting someone else.
    So, if there is a state that wants a robust government, 
fine, let them do it, just so it does not impact my state. We 
get to make decisions for ourselves. It seems like we are 
saying basically the same thing with a lot of these areas in 
Indian Country. If we can actually allow you to make those 
decisions for yourselves according to your circumstances, those 
will be better decisions, those will be wiser decisions, those 
will be more effective decisions simply because people want it.
    Sometimes when we talk about federalism, people's eyes 
glaze over. They don't really understand the term. It is that 
essay they did not write when they were a junior in high 
school. But what it actually means to me is, as I told a group 
of 20-something bloggers once, I said federalism is like an app 
for government, and all of a sudden they got excited and their 
fingers started dancing on the computer. I still don't know 
what I told them.
    But it seems that the more you can actually give those 
decisions, devolve that decision down, especially when we have 
reservations, Indian Country, that already is a sovereign, the 
more we can do that, the better off we would be, and we simply 
are not moving in that direction.
    I just want to ask one other question, Mr. Ferguson. You 
talked about forest lands that are under-managed, which I think 
is probably a good term to use in Washington State. It impacts 
Idaho, Montana, wherever the Forest Service is dominant. As I 
am looking at that, there are two factors that I look at with 
the Forest Service which makes it difficult for them to manage 
their land.
    The first one deals with the cost of fighting wildfires, 
which is ever-growing. The second biggest cost the Forest 
Service has is the litigation. I guess one of the questions I 
have is why is that litigation issue not as big in Indian 
Country as it is on Federal forest land, and is there not 
something we could do to try to mitigate that litigation?
    I think in every bill we have had, we have tried to deal 
with the concepts of litigation. If we cannot bring the 
litigation threat into check, I don't know how we can ever 
provide enough money for actually not under-managing the forest 
lands.
    Do you want to address that, and do you feel comfortable 
doing that?
    Mr. Ferguson. I think I would feel more comfortable with 
Cody. He has dealt with more of this than I have. Just to let 
the committee know, I was last minute asked to come.
    The Chairman. We appreciate you coming regardless of when 
you were asked.
    Mr. Desautel. Mr. Chairman, the biggest difference in NEPA 
for us, and I think what helps us get through the process 
faster, is our scope of public is limited to the tribal 
membership. While we hear a lot of the same concerns we hear 
from other special interest groups, those groups are just 
smaller. The BIA requires if you are going to appeal a project, 
that you have to put up a cash bond and you have to show a 
vested interest in the project, which I think is very critical. 
A lot of times what you see in Federal projects is some college 
student from New Hampshire opposes the project just because 
they are environmentally friendly and don't understand what the 
benefits of the project are. So, I think that is the biggest 
difference between them, is the scope of who the public is and 
the requirements of what you have to do if you want to oppose a 
project.
    The Chairman. Thank you for adding that, which I think is 
good because, Mr. Westerman, that was part of your bill, wasn't 
it?
    Mr. Westerman. It was.
    The Chairman. OK. I will let you have the last round of 
questions.
    Mr. Westerman. Thank you again, Mr. Chairman.
    We addressed issues earlier where the Federal Government or 
this Administration has greatly under-performed. Where I am 
from, we say actions speak louder than words. The words I hear 
from this Administration is it is all about protecting the 
environment. We have to keep this for future generations. But 
the actions on the ground are not part of protecting the 
environment or helping out future generations, or helping 
current generations get out of poverty.
    Mr. Chairman, I think this goes along with what we were 
just talking about. You referenced the Administration's 
opposition to H.R. 538 earlier. I would just like to quote what 
the Administration said, why they oppose H.R. 538. They said, 
``It would undermine the public participation and transparency 
of review of projects on Indian lands under the National 
Environmental Policy Act, set unrealistic deadlines, remove 
oversight for appraisals of Indian lands for trust assets, 
prohibit awards under the Equal Access to Justice Act, or 
payment of fees or expenses to a plaintiff from the judgment 
fund and energy-related actions.''
    When they say it would prohibit awards under the Equal 
Access to Justice Act, I am not sure if everybody understands 
what that means, that the Federal Government will pay you to 
sue the Federal Government. The Administration, I think it is 
more about protecting special interests than protecting the 
environment and preserving it for future generations.
    So, as we transition from their under-performance more to 
their over-reach, we see that a lot of these regulations, 
particularly with the tribes, are duplicative. There are 
already regulations and rules in place to address the issues 
that the Federal Government is coming in and trying to put 
layers on top of layers.
    I just want to open it up to the panel to maybe talk about 
some of the specific duplicative regulations and how they 
directly impact what you are trying to do on the tribal lands 
from a cost standpoint and a development standpoint. Does 
anybody want to jump on that first?
    Mr. Glenn. I have a couple of examples. Thank you.
    I think that no one has done more in recent times to 
elevate the visibility of tribes than this Administration at 
the very top. But at the same time, at the administrative 
levels, we have encountered so many instances where issues of 
duplicative safeguarding or duplicative actions in the name of 
safeguarding start to take multiple bites at the apple, overly 
excessive, to the detriment, like you said, of the people who 
are living there and not really helping the stated goal of 
safeguarding the environment for future generations. So, there 
is a disconnect there.
    One example is mitigation, wetlands mitigation or 
mitigation in general, which says if you disturb an acre of 
environment over here with a project, you should preserve an 
acre of environment over there, somewhere else, some similar 
landscape classification system. Sometimes they use a 
multiplier; if you disturb 1 acre, you have to save 3, or 5, or 
10 acres, depending on the classification of the landscape, 
which sounds like a pretty good system if you somehow have an 
ability to weigh in on what should be the exchange rate.
    But my problem with the overall concept of mitigation is 
you have multiple agencies looking for mitigation for the same 
project. So, you will have Wetlands mitigation, Corps 
mitigation, NEPA mitigation, Fish and Wildlife Service 
mitigation, overall BLM mitigation. Now each one of their 
agencies are taking their pound of flesh from the same project, 
and the project can only tolerate so much. It has its own 
checks and balances. One of them includes whether or not it is 
financially viable. If you start to overly burden a project 
with mitigation, even with the best of intentions, then away 
goes the project, and now you have people who are hurting for 
more industry. They are in more poverty. They are in need of 
more Federal programs. So, on a big, global scale, good 
intentions end up with bad results, and mitigation is just one 
example.
    Mr. Westerman. I would like to say, in the forestry sector, 
we are loving the trees to death and not doing what we need to 
help them.
    Mr. Henson. I have one thing on what the layers of overlap 
are and what the impacts are. I think you were trying to 
address this here, but it kind of gets lost a little bit in the 
shuffle, and that is how incredibly important energy projects 
are for certain tribes.
    I think for the Crow, two-thirds of the tribal budget is 
not directly from Federal dollars. It comes from the single 
production line they have in the mine. We heard some factoids 
about how, for the Jicarilla Apache, 90 percent of their tribal 
budget is oil and gas production. Today, we heard for the 
Southern Ute, 30 percent of the tribal budget is on-reservation 
oil production and gas production. For the Navajo, 90 percent 
of the workforce is Native.
    One thing that happens when you stymie the next development 
is you prevent the hiring of that next 90 percent of Native 
workers. In lots of places where the unemployment rate is 
really high, sometimes the best jobs available in terms of 
skill set, pay, employment security, really do depend on these 
types of projects. So, to the extent you can help bring tribes 
into their next energy development project, you are really 
talking about real people, real jobs, living wages, important 
impacts on the individual tribal citizens that I think kind of 
gets overlooked a bit.
    And the second layer of that is one of the great things 
about a lot of the revenues that these things generate, because 
they tend to go into the tribal general funds, is they allow 
things like we heard mentioned by Mr. Glenn, diversification 
into a wide array of industries, sectors, and diversification 
of energy development. Not all your development is in Alaska 
and small towns. You are able to really diversify your 
portfolio of investments and secure long-term revenues, long-
term job security, and long-term educational opportunities for 
a wide range of people. A lot of that does not depend on the 
next mine shaft at Navajo, but on your ability to use those 
revenues very broadly.
    So, I encourage you to keep that in mind as you continue to 
work on these kinds of bills.
    Mr. Westerman. I appreciate that insight, Mr. Henson. You 
hit directly on the point that what seems like a good idea from 
a building in Washington, DC, has real impact out on the ground 
across the country and affects real people's lives. The 
duplicativeness of mitigation and all the other ways that 
projects get loaded up with regulations ultimately kill these 
projects. Without them, we are not going to see economic 
development the way we would like to.
    Mr. Glenn. May I expand on Mr. Henson's point with an 
example, a real-world example from the North? Which is that he 
is correct that there are a lot of unseen ripple effects of the 
presence or absence of industry in the region. In our case, the 
industry is the oil and gas industry. Yet, if you look at the 
largest employers of people in our region, it is the home rule 
government, the North Slope Borough, and the North Slope 
Borough School District. Yet, 100 percent, or 99.9 percent, of 
the tax base for the operational and capital budgets of those 
governments is the presence of industry in the region. So, even 
our schools are being built because of the presence of industry 
in our region, and our safe water, our electricity, our 
runways, our roads, and our health clinics are funded because 
we have a tax base which in our case is the oil and gas 
industry. It is doubly so for our region, for the Native 
corporations and for the local government. Thank you.
    Mr. Westerman. Cody?
    Mr. Desautel. If I could just add a little bit, I don't 
think it is just the regulations that are the issue, but 
sometimes we get policy. For example, the Secretary will order 
3336 about sage grouse. We have seen a lot of issues that will 
affect Indian Country, especially as we move toward--well, 
hopefully we don't move toward it, but as we move toward this 
risk-based management funding allocation. That is a Secretarial 
Order from the Secretary of the Interior that will have 
detrimental impacts to all tribes in the West, because it will 
shuffle funding and resources to those areas that are critical 
sage grouse habitat.
    I understand that is more an oil and gas issue, but we 
should deal with oil and gas issues if that is the case and not 
try to hide that behind sage grouse habitat.
    Mr. Westerman. I would argue that that is regulation 
because that is not a bill that we debated, or that I, or Rob, 
or anybody in the U.S. Senate voted on. That is an unelected 
bureaucrat writing policy, which is what a regulation is.
    With that, I will yield back, Mr. Chairman.
    The Chairman. I had never heard of sage grouse before in my 
life. Thank you for saying that, especially because I think 
there will be some announcements either today or tomorrow to 
deal with that specific issue, so I thank you.
    I thank everyone for being here. You were right in saying 
for me this is a significant issue because I come from one of 
the two states that allows no gaming, whatsoever. For my Native 
Americans within the state of Utah, this is an essential issue 
if there is going to be economic development on their 
reservation land.
    I want to thank the New Mexico legislature for working with 
us and allowing us to use their facilities.
    I want to thank the law enforcement here for your calm 
professionalism and the kindness with which you handled these 
things. Somebody went to a lot of effort to make signs, and I 
didn't even get a chance to see them.
    [Laughter.]
    The Chairman. Maybe when you show me back the video, 
because I think one mentioned me. Can I actually get that later 
on to put in the office? Never mind. Forget it.
    [Laughter.]
    The Chairman. To the five gentlemen, or six, who came and 
testified today, thank you so much for traveling here to do 
that. I would let you know that members of the committee may 
have other questions. That means Westerman and I. You may be 
bored tonight and come up with something else. I don't really 
think you are going to be worried about that, but our Committee 
Rules do say that if we do have questions, we may send those to 
you, and we would appreciate a timely response to them.
    The committee hearing under Rule 4(h), the record for the 
committee will be open for 10 business days for those 
responses, if there are any, and for anything else you would 
like to add to the record at the same time.
    And I appreciate the audience being here, as well as the 
staff for setting this up and doing everything so 
professionally. I thank you for your presence.
    I think this has been a very good hearing, at least for me. 
I have some new insights and some things I really want to move 
forward on as we go into the future.
    If there is no other business, the committee will stand 
adjourned. Thank you.

    [Whereupon, at 11:30 a.m., the committee was adjourned.]

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