[Senate Hearing 114-42]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-42
 
                     EMPOWERING INDIAN COUNTRY: COAL, JOBS, 
                              AND SELF-DETERMINATION

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

                             FIELD HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 8, 2015

                               __________

         Printed for the use of the Committee on Indian Affairs
         
         
         
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                      COMMITTEE ON INDIAN AFFAIRS

                    JOHN BARRASSO, Wyoming, Chairman
                   JON TESTER, Montana, Vice Chairman
JOHN McCAIN, Arizona                 MARIA CANTWELL, Washington
LISA MURKOWSKI, Alaska               TOM UDALL, New Mexico
JOHN HOEVEN, North Dakota            AL FRANKEN, Minnesota
JAMES LANKFORD, Oklahoma             BRIAN SCHATZ, Hawaii
STEVE DAINES, Montana                HEIDI HEITKAMP, North Dakota
MIKE CRAPO, Idaho
JERRY MORAN, Kansas
     T. Michael Andrews, Majority Staff Director and Chief Counsel
       Anthony Walters, Minority Staff Director and Chief Counsel
                            C O N T E N T S

                              ----------                              
                                                                   Page
Field hearing held on April 8, 2015..............................     1
Statement of Senator Daines......................................     1

                               Witnesses

Bates, Hon. Lorenzo, Speaker, Navajo Nation Council..............    22
    Prepared statement...........................................    26
Fox, Hon. Tim, Attorney General, State of Montana................    18
    Prepared statement...........................................    20
Henson, Eric, Senior Vice President, Compass Lexecon; Research 
  Affiliate, Harvard Project on American Indian Economic 
  Development....................................................    32
    Prepared statement...........................................    34
Old Coyote, Hon. Darrin, Chairman, Crow Nation...................     5
    Prepared statement...........................................     8
Small, Jason, Journeyman Boilermaker; Labor Advocate; and 
  Northern Cheyenne Tribal Member................................    29
    Prepared statement...........................................    31

                                Appendix

Buffalo Spirit, Alaina, Enrolled Member, Northern Cheyenne Tribe; 
  Member, Northern Plains Resource Council, prepared statement...    53
Bullock, Hon. Steve, Governor, State of Montana, prepared 
  statement......................................................    51
Navajo Nation, prepared statement................................    52
Tester, Hon. Jon, U.S. Senator From Montana, prepared statement..    51


     EMPOWERING INDIAN COUNTRY: COAL, JOBS, AND SELF-DETERMINATION

                              ----------                              


                        WEDNESDAY, APRIL 8, 2015


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                   Crow Agency, MT.
    The Committee met, pursuant to notice, at 10:30 a.m. in 
room 628, Little Big Horn College Health and Wellness Center, 
Crow Agency, Hon. Steve Daines, U.S. Senator from Montana, 
presiding.
    [Opening prayer and drum ceremony performed.]
    [Introductions by Robert Oldhorn.]

            OPENING STATEMENT OF HON. STEVE DAINES, 
                   U.S. SENATOR FROM MONTANA

    Senator Daines. Thank you for that very warm introduction.
    And I also want to thank all the Crow legislative and 
executive officials that are also here. We are very glad that 
they are here. I understand nearly all of them are here. It is 
a real honor that you have all made it.
    We've got a lot to cover today, and so I call this hearing 
to order.
    Today, the Committee will examine Empowering of Indian 
Country, Coal, Jobs, and Self-Determination.
    It's an honor to be on the Crow Reservation here today 
examining an issue that means a great deal not only to Indian 
Country, but to all Montanans and Americans.
    What gets lost in the debate back in Washington about 
energy development in general, and coal in particular, is what 
it means to real people in real places like Crow Agency, 
Montana, Where this is not some abstract policy, not some 
abstract debate in the halls of Congress, but this is a debate 
about the lives of real people. This is a debate about the 
future of sovereign nations looking to be self-sufficient and 
providing for their own livelihood.
    The key issue for today's hearing, I believe, is jobs and 
the numbers are absolutely staggering.
    According to the Montana Chamber of Commerce and Chairman 
Darrin Old Coyote, who we're going to hear from today, the 
unemployment rate on the Crow Reservation is 47 percent. But 
without the jobs provided by coal production, that number will 
climb to something greater than 80 percent.
    I want to thank the Little Big Horn College for hosting us 
today, and particularly President David Yarlott. Your staff has 
been great to work with, and your facility is beautiful.
    I can tell you this dais up here is so much more beautiful 
than we have back in Washington, D.C. So, truly, it is an honor 
to be here today, and your very, very warm welcome.
    Additionally, Chairman Old Coyote, we appreciate the 
hospitality from the Crow Tribe, not just for this hearing but 
for the last several years.
    I am also grateful to Attorney General Tim Fox for making 
the trip to be here--I know it was an early start for him to 
come down--and for his hard work defending Montana on energy 
policy and a whole host of other issues.
    I also want to thank the Chairman of the Senate Committee 
on Indian Affairs. That's my colleague from Wyoming, Senator 
John Barrasso, along with the ranking member of the Committee, 
Senator John Tester, who couldn't make it to today's hearing.
    It's an honor to work with them on these important issues 
on behalf of Indian County. And I'm glad the members of their 
staff could be here today, including the Committee staff 
directors, Mike and Tony. Thank you for making the trip here.
    Well, today we're going to hear from witnesses who are 
experiencing the effects of bad policy in Washington that was 
developed from a top down approach, rather than listening to 
the folks with opinions that matter most, and that's those 
whose economic well-being depends on the coal industry to 
provide good paying jobs right here in Montana, right here in 
Indian Country.
    Our young people shouldn't have to move far away just to 
make ends meet and raise a family, especially when the 
resources we need to power our schools, our homes, our 
factories across America are right here in our backyard. We 
must be responsible stewards of the land when we develop our 
resources, but we must also be responsible stewards of our 
children's futures.
    So, while we'll hear from our witnesses about the 
devastating effects that the Obama Administration's clean power 
regulations would have upon the ability of Indian Tribes to 
sell their coal, we will also learn about specific 
opportunities to lift Tribal Nations out of poverty and take 
their rightful place as sovereign nations working with the 
Federal Government as a partner, not simply beholden to the 
whims of bureaucrats who live thousands of miles away.
    The EPA was invited to testify at today's hearing, but they 
declined to do so, though, I am grateful that they have sent a 
representative from Helena, EPA State Director, Julie, here to 
listen to the comments from the hearing and from the audience.
    I strongly encourage the EPA to listen closely to those 
most directly affected by their policies and request that 
today's message reaches Washington, D.C.
    Additionally, export terminal projects, currently under 
review by the Corps of Engineers, have the potential to create 
several million dollars of tax revenue for local communities, 
and would ensure that states and Tribal Nations have access to 
new export opportunities in order to get a fair market value 
for their products.
    The decision to approve port terminals especially in the 
Pacific Northwest, should take into consideration the effect on 
impacted Tribal Nations, and the states would benefit from 
access to international markets for products right here in the 
heart of Montana.
    It is my understanding that the Corps of Engineers also has 
a representative here today, which I am thankful for, and I 
hope this hearing will bring to light important information 
considering approval for these export terminals.
    In addition to insuring access to export markets for coal 
produced here in Montana, the Indian Coal Production Tax 
Credit, which expired at the end of 2014, after a one-year 
extension, must be made permanent.
    For those who have spent time on the Crow Reservation, the 
economic benefits are self-evident. The Indian Coal Production 
Tax Credit has worked as a catalyst towards creating jobs and 
fostering tribal self-determination.
    A study of preliminary findings was published in January of 
2014 by the Harvard Project on American Indian Economic 
Development which demonstrated how essential this tax credit is 
to the economy of the Crow Reservation.
    I look forward to learning more about the research findings 
during the course of this hearing today.
    Well, we're a long ways away from Washington, D.C., and you 
know what, that's all right in my book.
    I'll be taking the ideas that we will examine in today's 
hearing back to Congress so the voices of Montanans, the voices 
of the folks out here in Indian Country who are calling for a 
change in how business is done, that their voice will and can 
be heard.
    So, today, we'll be hearing from a great panel. We'll be 
hearing from the Honorable Darrin Old Coyote, Chairman of the 
Crow Tribe of Montana, Crow Agency, Montana.
    Chairman Old Coyote has become a good friend of mine in the 
past couple of years, and I enjoy working with him on issues 
that matter to the Crow people and all Montanans.
    I know that the Chairman here is grateful about his people. 
And I'm proud to have a note from his daughter, Evelyn, who was 
just nine years old when she wrote it and presented it to me 
back in Washington. I have it displayed in my office today back 
in Washington. Evelyn is now 11.
    You know what that note says? It says, ``Please keep the 
coal tax credit going----
    [Applause.]
    --to help me and other Crow kids have a brighter future.'' 
That is out of the mouth of a nine-year old.
    Speaking as the father of four myself, I know that our 
kids' future motivates both me and the Chairman as we work 
together on coal and other issues that matter that we are 
facing here.
    We also have with us today the Honorable Tim Fox, Attorney 
General of Montana and the Montana Department of Justice in 
Helena.
    Attorney General Fox, I'm sure you're glad to be back in 
your home turf. He's a Hardin boy originally. We appreciate you 
made the long trip from Helena to be here today.
    The Attorney General left about 4 o'clock this morning, no 
staff, and he drove down here by himself to be a part of this 
hearing, which we are grateful for.
    Your work on the defending the rights of tribes and the 
development of coal has shown your commitment to this area that 
you call home.
    Attorney General Fox has testified before Congress and the 
EPA's Clean Coal Regulation, and where lucky to have him as an 
advocate for Montana and for Indian Country.
    His work on this is greatly appreciated, and I'm glad to 
have him as a teammate in promoting energy development, even 
though we root for different sides in the Cat/Griz games.
    I have Grizzly bumper stickers on my pickup today because I 
lost a bet last fall. We're going to keep this as bipartisan as 
we can.
    The Honorable Lorenzo Bates, Speaker of the Navajo Nation 
Council, Window Rock, Arizona has made this long trip. Welcome 
to Big Sky Country. We're very glad to have you here. It is an 
honor to have you here to show this isn't just a Montana issue, 
but one that affects tribes in places like Arizona as well.
    Speaker Bates is a strong advocate for coal and energy 
development, and it's great to see another tribal leader who is 
aware of the importance of coal on their economic portfolio.
    I know the Crow Tribe is glad to the Navajo as an ally in 
this fight. Thank you.
    Jason Small is a journeyman boilermaker, labor advocate, a 
member of the Northern Cheyenne Tribe. Jason Small is a 
passionate advocate for resource development.
    I had the pleasure of first meeting him for the first time 
at a Northern Cheyenne Council a couple years ago, where tribal 
leadership there over in Lame Deer told me I was the first 
Republican Congressman to ever meet with them at the tribal 
headquarters in Lame Deer.
    Since that first meeting, Jason and I have become friends, 
and I had the pleasure of giving him a late night tour of the 
Capitol back in D.C. a while ago.
    Jason returned the favor a few months later when he guided 
me through a boiler during spring overhaul at the power plant.
    Jason is a great spokesperson for Montana coal, for the 
opportunities coal holds for Indian Country, and for the 
careers that coal provides to boilermakers, electrical workers, 
and other trades here in Montana.
    And lastly, we have Eric Henson, research fellow, Harvard 
Project on American Indian Economic Development from Boston, 
Massachusetts.
    As we'll hear in his testimony today, Eric Henson and his 
colleagues at Harvard University have done impressive research 
on how the economic situation of Tribal Nations, including the 
Crow Nation, and the importance that coal plays in their 
economic portfolio.
    We are appreciative of him making the long journey to be 
here with us today. And also, as a member of the Chickasaw 
Nation, Mr. Henson brings a valuable academic perspective for 
discussion, and I look forward to your testimony.
    I want to remind the witnesses that your full written 
testimony will be made part of the official hearing record. 
Please keep your statements to approximately five minutes so we 
may have time for questions.
    I look forward to hearing your testimony, beginning with 
Chairman Old Coyote.
    Please proceed.

   STATEMENT OF HON. DARRIN OLD COYOTE, CHAIRMAN, CROW NATION

    Mr. Old Coyote. Senator Daines, I want to thank you, 
Chairman Barrasso, Vice Chairman Tester, and members of the 
Committee for holding this Oversight Field Hearing on Coal, 
Jobs, and Self-Determination.
    My name is Darrin Old Coyote. I am the Chairman of the Crow 
Nation.
    The Crow Nation is honored to host this field hearing in 
Crow Country. We welcome all of our guests, including the 
Navajo Nation, other witnesses, Committee staff, federal agency 
representatives and the public to discuss this important 
subject.
    I would also like to thank President Yarlott of Big Horn 
College for hosting us today.
    As we develop our natural resources and diversified 
revenue, Little Big Horn College has, and will, continue to 
help to provide our tribaal citizens with education and 
training in numerous fields for new job opportunities.
    Today, there are more than 13,000 enrolled citizens of the 
Crow Nation with approximately 9,000 of those residing on or 
near the reservation.
    My administration's goal is to invite more of our citizens 
to return home to their relatives, but we must be able to offer 
homes, jobs and a place to realize their dreams.
    Our employment rate remains too high. It's 47 percent.
    The Crow Nation has 9 billion tons of recoverable coal with 
our longtime mining partner, Westmoreland.
    The existing Absaloka Mine has supplied 180 million tons of 
Crow coal to Midwestern utilities since 1974. From the mine's 
annual production, the taxes and royalties to the Crow Nation 
represent as much as two-thirds of the Crow Nation's non-
federal budget.
    Also, the mine employs a 70 percent tribal workforce, with 
an average annual salary of over $66,000.
    For two generations of the Crow leadership, we have simply 
sought to obtain full value for our coal resource. In fact, the 
last three administrations have testified in Congress that we 
repeatedly face obstacles in development despite consistent 
Crow leadership officials decisions to monetize their coal.
    I, like my predecessors, simply want what is best for the 
Crow people.
    We have a new barrier to Crow coal development. The EPA's 
Clean Power Plan Rule is a major problem for the Crow Nation.
    The EPA did not consult with the Crow Nation, did not 
consider the economic impacts on the Crow Nation, and did not 
provide a less intrusive alternative to the severe effect on 
the Crow people.
    In sum, the EPA violated its trust responsibility to the 
Crow Nation and must provide mitigation and transition time for 
the proposed Clean Power Plan Rule.
    The proposed rule unfairly penalizes Midwest customers that 
currently buy and rely on production of Crow coal for its mix 
of energy production.
    The local Minnesota utility and the powerplant have already 
publicly announced actions to comply with the EPA's plan and 
reduce carbon emissions.
    The net effect will be a substantial loss of that market 
for Crow coal, thereby drastically reducing the Crow Nation's 
operating revenues and causing the loss of basic services and 
much needed employment on the Crow Reservation.
    The Crow Nation has carefully examined its options for 
providing future economic opportunities for its members and has 
elected to monetize its coal asset by continuing to sell it for 
domestic power generation and exporting it to international 
markets.
    The existing and future growth in the international energy 
markets for Crow coal provides an opportunity for the Crow 
Nation to obtain full value for our resource and would offset 
their loss of revenue caused by the EPA's decisions.
    The Crow Nation has partnered with Cloud Peak Energy to 
develop the Big Metal Project and lease up to 1.4 billion tons 
of coal from the Crow Reservation's southeast corner.
    In developing the Big Metal Mine project on Crow lands, the 
Crow Nation has a vital interest in a fact-based, timely 
decision on the Gateway Pacific Terminal project in Whatcom 
County, Washington state as an export terminal for Crow coal.
    While not directly related to the development of the Big 
Metal Mine, a marine export facility is necessary 
infrastructure for supporting the full realization for the Crow 
Nation of the economic opportunity for our coal.
    Crow recognizes attaining the full economic value for the 
Crow coal resource requires meeting existing and future 
international coal energy demand.
    Therefore, Crow interests are aligned with the success of 
the Gateway Pacific Terminal and the connecting rail 
infrastructure.
    Here at the Crow Indian Days and the Crow Nation Coal 
Summit in June, 2014, I invited Cloud Peak Energy, Burlington 
Northern Railway and SSA Marine to Crow Agency to see firsthand 
what coal means to Crow people.
    At the summit, I observed the need for closer collaboration 
between the four partners, with each of us having a better 
chance of success by sharing information and working together 
on the export project.
    This leadership was the start of a mutually supportive 
partnership between the four partners that exist today.
    I would like to address the issue that has been raised by 
export opponents and addressed by Burlington Northern, coal 
dust.
    In fact, coal dust was an issue that Burlington Northern 
first identified a decade ago as a contributer to derailments 
in mine holding areas. After studying the implementation steps 
to counter loads and apply vacuums in coal loading areas, coal 
dust was largely eliminated.
    Burlington Northern Santa Fe has been hauling coal for 
export through the Pacific Northwest for decades, and during 
that time has not received any complaints from a natural 
resource agency about coal dust until after the Gateway Pacific 
Terminal was announced.
    To aggressively address opponents' foundation for lingering 
concerns about coal dust, Burlington Northern Santa Fe took the 
added step to salvage a second vacuum spray facility in Pasco, 
Washington at the east end of the Columbia River Gorge.
    BNSF has also sought an independent third-party system of 
coal dust. The U.S. Department of Transportation, National 
Transportation System Center is currently engaged in a full 
coal dust research study.
    All of these steps represent a comprehensive commitment by 
BNSF to eliminate any various allegations about coal dust.
    The Crow Nation recognizes the national importance of the 
Gateway Pacific Terminal as the best potential new site to ship 
U.S. cargos through U.S. ports.
    Along with partnering with Cloud Peak and BNSF Railway, the 
Crow Nation has partnered with Washington state-based terminal 
developer, SSA Marine.
    SSA Marine has secured 1,500 acres of private property, and 
the heavy impact industrial zone at Cherry Point in Washington 
State. In February, 2011, they submitted applications to 
develop and operate the proposed Gateway Pacific Terminal bulk 
quantity marine shipping facility.
    The terminal is designed to process up to 48 million tons 
of coal, and would be the fourth pier at Cherry Point, located 
next to three existing refineries.
    There are existing heavy industrial utilities and existing 
rail line on the property. Even more important is the naturally 
occurring deep water requiring no dredging to construct a wharf 
that will accommodate deep-draft Capesize bulk cargo vessels.
    Approximately 75 percent of the cost of landing U.S. bulk 
cargo in Asia is related to transportation.
    Shipping U.S. commodities in Capesize vessels can cut 
overall ocean transportation costs by 20 to 30 percent. This is 
an important factor allowing Crow and other U.S. producers to 
be competitive in the growing Asian market.
    The terminal is being designed and engineered to meet 
Washington state's high environmental standards and is already 
undergoing a rigorous evaluation in an EIS.
    The State Environmental Policy Act EIS review is led by 
Whatcom County and the Washington Department of Ecology. The 
U.S. Army Corps of Engineers is the federal lead agency for the 
National Environmental Policy Act EIS.
    The State and Federal EIS will provide the basis for making 
informed decisions on the terminal project.
    Similar to the big metal mine provided for the economic 
future of the Crow Nation, the privately funded Gateway Pacific 
Terminal Project will provide a lift to the local economy 
during construction and a permanent boost in Whatcom County's 
industrial sector with hundreds of new, permanent family-waged 
jobs.
    That is why the Gateway Pacific Terminal Project enjoys 
broad support from the national AFL-CIO, Montana State AFL-CIO, 
Northwest Washington Central Legal Council, to name just a few, 
construction will generate approximately 4,430 direct and 
indirect jobs and nearly $92 million in state and local taxes 
over two years.
    When operating at full capacity, the terminal will sustain 
approximately 1250 permanent direct and indirect jobs and 
generate about $11 million annually in local and state tax 
revenues.
    Investments in export terminals, particularly the Gateway 
Pacific Terminal will improve critical infrastructure and 
create economic wealth to both the Pacific Northwest and for 
the Crow Nation.
    Today, the Crow Nation desires to develop its vast coal 
resources not only for itself, but for our energy partners, the 
surrounding communities and for the United States.
    By developing Crow coal via domestic markets, export 
terminals and coal conversion, we firmly believe that we can 
help ourselves while simultaneously meeting national energy 
goals, achieving energy independence, securing a domestic 
supply of valuable energy, and, reducing the country's 
dependence on foreign oil.
    My administration has been very busy in working to develop 
our coal resources and to remove obstacles to successful 
development.
    I simply desire for the Crow Nation to become self-
sufficient by developing our own coal resources and to provide 
basic services for the health, hopes and future of the Crow 
people.
    It is also important to understand that this is our 
permanent homeland, and we will always take care of it as 
responsible developers.
    With help from you, our historic treaty ally, in leveling 
the energy development playing field, we can achieve my vision 
and both benefit immensely.
    Senator Daines, thank you again for the opportunity to 
testify on this critical subject before you today. Thank you.
    [The prepared statement of Mr. Old Coyote follows:]

  Prepared Statement of Hon. Darrin Old Coyote, Chairman, Crow Nation
I. Introduction
    Good morning. On behalf of the Crow Nation, I want to thank 
Chairman Barrasso, Vice-Chairman Tester, Senator Daines and the members 
of the Senate Committee on Indian Affairs for holding this Oversight 
Field Hearing on Empowering Indian Country. My name is Darrin Old 
Coyote and I am the Chairman of the Crow Nation. I appreciate this 
invitation to provide testimony from the Crow Nation's perspective on 
coal development, an area central to my administration and a topic that 
has unlimited potential to improve the ongoing substandard 
socioeconomic conditions of the Crow people and the surrounding 
communities in southeastern Montana (the northern portion of the Powder 
River Basin) and northern Wyoming.
    I have served as an elected official of the Crow Nation for over 10 
years. Over the past 2 years, with the help of our coal partners and 
the Crow Nation Legislative Branch, we have taken several meaningful 
steps toward the successful development of our coal resources and look 
forward to completing, in the next few years, projects that will 
positively transform my community. My purpose today is to provide a 
brief history of the Crow Nation's resources, to summarize my 
administration's efforts to develop Crow coal in the northern Powder 
River Basin, and to share the benefits and challenges of Crow coal 
development.
II. Brief Overview of Crow Reservation, Land Issues and Resources
A. Brief History of Land and Development Challenges
    The Crow Nation is a sovereign government located in southeastern 
Montana. The Crow Nation has three formal treaties with the Federal 
Government, concluding with the Fort Laramie Treaty of May 7, 1868. The 
Crow Reservation originally encompassed most of Wyoming (including the 
Powder River Basin) and southeastern Montana, totaling 38.5 million 
acres. Through a series of treaties, agreements and unilateral federal 
laws over a 70 year span, Crow territory was reduced by 94 percent to 
its current 2.2 million acre area.
    In addition to substantial land loss, the remaining tribal land 
base within the exterior boundary of the Crow Reservation was carved up 
by the 1920 Crow Allotment Act. In 1919, prior to the Allotment Act, 
there were 2,453 allotments (individual Crow ownership), consisting of 
482,584 acres. By 1935, there were 5,507 Crow allotments, consisting of 
2,054,055 acres (218,136 acres were alienated by 1935). The Big Horn 
and Pryor Mountains were not allotted and still remain reserved for the 
Crow Nation and its citizens.
    Because of allotment and federal probate of Indian property (with 
many Indians dying without wills), the phenomenon of fractionated land 
ownership arose--where several (sometimes hundreds of) owners might 
have varying interests in a single parcel. By 1928, the Meriam Report 
declared the federal allotment policy to be one of the most disastrous 
federal policies of all time. During discussions leading up to the 
Indian Reorganization Act of 1934, one congressman explained the 
fractionating effects of allotment in this fashion:

         ``It is in the case of the inherited allotments, however, that 
        the administrative costs become incredible. . . . On allotted 
        reservations, numerous cases exist where the shares of each 
        individual heir from lease money may be 1 cent a month. Or one 
        heir may own minute fractional shares in 30 or 40 different 
        allotments. The cost of leasing, bookkeeping, and distributing 
        the proceeds in many cases far exceeds the total income. The 
        Indians and the Indian Service personnel are thus trapped in a 
        meaningless system of minute partition in which all thought of 
        the possible use of land to satisfy human needs is lost in a 
        mathematical haze of bookkeeping.'' 78 Cong.Rec. 11728 (1934), 
        cited in Hodel v. Irving, 481 U.S. 704 (U.S.S.D. 1987).

    The Crow land base had been decimated by fractionated ownership of 
various allotments. The Department of the Interior (DOI) estimated that 
over 10 percent of all fractionated lands within Indian country are 
actually within the Crow Reservation (with numerous parcels of allotted 
lands that have more than 10 owners and sometimes more than 100 
owners).
    Recently, the Crow Nation partnered with DOI and meaningfully 
addressed the fractionation issue through implementation of the Cobell 
Settlement. As of March 2016, the Crow Land Buy-Back Program (LBBP) had 
a willing buyer--willing purchaser success rate of 64 percent (Crow 
allottees sold their interests in various parcels of land to DOI in 
trust for the Crow Nation). The Crow LBBP resulted in more than $130 
million paid out to Crow landowners, with more than 240,000 equivalent 
acres purchased for the Crow Nation. The original intent of reducing 
fractionation was accomplished and, simultaneously, the Crow Nation can 
make more of the Crow homeland productive for both residential and 
energy development purposes.
    However, the overall loss of the Crow land base and allotment have 
collectively resulted in checkerboard ownership of reservation lands, 
giving rise to overlapping governmental authority in Indian country 
(federal, state, tribal and local). Sometimes, the land issues become 
cost prohibitive for some project developers. As discussed later, tax 
incentives are critical in order to level the playing field for Indian 
energy projects.
B. Present Land, Population, and Education
    The statistical land ownership resulting from the above described 
legal history (and successful fraction reduction efforts) is 
approximately: 32 percent Crow allotments; 33 percent Crow Nation trust 
and fee land; and 35 percent non-Indian fee land (basically 2/3 of 
surface land is owned by the Crow Nation and individual Crows). 
However, overall, the pattern of surface ownership generally is 
``checkerboard'' with interspersed Crow Nation trust and fee lands, 
Crow allotments and non-Indian fee lands. At times, the checkerboard 
nature of the surface ownership creates challenges, summarized later, 
for developing the subsurface minerals (almost all of which is owned by 
the Crow Nation).
    Today, there are more than 13,000 enrolled citizens of the Crow 
Nation, with approximately 9,000 of those residing within the exterior 
boundaries of the Reservation. Our goal is to invite more of our 
citizens to return home to live and resume tribal relations, but we 
must be able to offer homes, jobs, and a place to find their dreams. 
Our current unemployment rate is 47 percent. The Crow Nation has always 
emphasized higher education and we currently have more than 400 annual 
applications for higher education assistance. Because of federal 
funding limitations and internal budget constraints, however, we can 
only partially fund 90 students each year.
    In addition to providing financial support for education, we have a 
separately chartered tribal college (Little Bighorn College, ``LBHC'') 
that started operations in 1981. Among the hundreds of LBHC graduates, 
many are employed on and around the Crow Reservation in a variety of 
positions including teachers' aides, computer technicians, office 
managers and administrative assistants. At least sixty have completed 
bachelor's degrees and are pursuing professions in education, social 
work, human services, science, nursing, technology, accounting and 
business. As we move forward in developing our coal resources, LBHC can 
help to provide our citizens with training in fields for new job 
opportunities.
C. Coal--Past and Present
    The Crow Nation has very substantial undeveloped coal resources. In 
fact, today, the Crow Indian Reservation contains 2 million acres in 
subsurface mineral rights, including an estimated 9 billion tons of 
coal. The Crow Nation has developed a limited amount of its resource, 
by leasing a portion of its coal reserves for 40 continuous years to 
Westmoreland Resources, Inc. (WRI). WRI owns and operates the Absaloka 
Mine (``Mine''), a 15,000-acre single pit surface coal mine complex 
near Hardin, Montana, on the northern border of the Crow Reservation.
    The Absaloka Mine was developed to supply Powder River Basin coal 
to Midwestern utilities and it has produced over 180 million tons of 
coal since 1974. From the Mine's 5-7 million tons per year of coal 
production, it provides production taxes and royalties to the Crow 
Nation--exceeding $20 million in 2010 when the Mine was operating at 
full capacity. The revenue generated from the Mine represents as much 
as two-thirds of the Crow Nation's non-federal budget.
    Furthermore, WRI employs a 70 percent tribal workforce, with an 
average annual salary of over $66,000, and a total employment expense 
of approximately $18.6 million dollars. The Absaloka Mine is the 
largest private employer within the Crow Reservation. The importance of 
the Mine to the economy of the Crow Reservation cannot be overstated. 
Without question, it is a critical source of jobs, financial support 
and domestically-produced energy. WRI has been the Crow Nation's most 
significant private partner over the past 40 years.
    A recent example demonstrates the importance of the Absaloka Mine 
to the Crow people. A major unplanned outage at the Mine's largest 
power plant customer during 2011-2013 resulted in a 50 percent 
reduction in tribal coal revenue and numerous employment layoffs. This 
recent outage reinforced the need for the Crow Nation to pursue 
multiple coal projects to diversify our revenue base.
III. My Administration's Vision on Energy Development: Potential 
        Benefits
    Given our vast mineral resources, the Crow Nation can, and should, 
be self-sufficient. My goal is clear. My administration desires to 
develop our mineral resources in an economically sound, environmentally 
responsible manner that is consistent with Crow culture and beliefs. 
More than anything, I desire to improve the Crow people's quality of 
life, create a future with good-paying jobs and employment benefits 
within the Crow Reservation, and provide hope and prosperity for the 
next seven generations of Crow citizens.
    My larger vision is to become America's energy partner and help 
reduce America's dependence on foreign oil. Over the next 40 years, the 
World Energy Council predicts that the world will need to double 
today's level of energy supply to meet increased demand. Primary energy 
sources, such as coal, oil and gas, have a finite life and therefore we 
must have an all-of-the-above energy development strategy to meet 
America's needs as well as global demand.
    My administration stands ready to meet the global energy challenge, 
but the future both near and long term, must have coal in its equation. 
With President Obama's recent speech on climate change, we are mindful 
of the increased efforts, policy and otherwise, to restrict coal as a 
domestic fossil fuel source to generate electricity (with domestic coal 
produced electricity being reduced from approximately 50 percent to 40 
percent in less than a decade). Our coal partners and our coal 
economist consistently remind us of the difficult environment for 
domestic coal production.
    Despite the challenging environment, the Crow Nation has 
intensified its efforts to develop its coal resources to diversify its 
revenue streams. With respect to the Absaloka Mine, the Crow Tribal 
Legislature approved and I executed an agreement with WRI in March 2013 
to expand its mining operations with a lease of an estimated 145 
million tons of Rosebud-McKay seam coal resources located adjacent to 
the Mine. This new lease will provide the Crow Nation with long-term 
revenues and employment and sustain the operations of the Mine past 
2020.
    Similarly, in June 2013, the BIA approved another tribally-approved 
agreement with Cloud Peak Energy (CPE) to explore, with options to 
lease and develop an estimated 1.4 billion tons of Crow coal in the 
southeastern corner of the Crow Reservation. This long-term agreement 
will also provide much needed revenue to the Crow Nation, increase 
employment opportunities for Crow and Montana citizens, and diversify 
Tribal revenue sources. However, the CPE project--named Big Metal 
(www.bigmetalcoal.com), is largely dependent on coal exports through 
the Northwest.
    As such, I have directed my administration to investigate and 
pursue coal exports, given the increased coal demand in the Pacific 
Rim. Since 2013, I have sent three Crow delegations to the Northwest to 
meet and work with other tribal nations, investigate proposed coal 
export projects, and then to analyze and follow-up on these recent 
diplomatic discussions and fact-finding trips about possible 
relationships involving Crow coal, transportation, and export terminal 
partners. During the last two trips, which I attended, I invited 
present and potential project partners, as well as tribal leaders from 
Northwest tribal nations, to visit my homeland to see first-hand Crow 
coal development and listen to their concerns.
    The last two summers I have hosted a Crow Nation Coal Summit to 
answer questions about coal transportation issues (coal dust and train 
traffic), jobs (viewing Crow citizens at the Absaloka Mine), 
reclamation and the potential for future export development. We worked 
with our coal partners to provide mine tours of CPE's Spring Creek and 
WRI's Absaloka mine, to provide coal transportation information from 
BNSF Railway (BNSF) representatives, and to have coal export terminal 
questions answered by representatives from SSA Marine, the project 
developers of the proposed Gateway Pacific Terminal marine export 
facility.
    We have been made aware of local concerns regarding coal export 
projects expressed by citizens in the Northwest. That is the reason I 
brought industry, tribal nations and local citizens together to inform, 
educate, and work with each other to address any substantive issues. I 
will continue to work with everyone and respect tribal treaty rights 
and local concerns. However, I strongly feel that non-governmental 
organizations cannot and should not tell me to leave Crow coal in the 
ground; I was elected to provide basic services and jobs to my citizens 
and I will steadfastly and responsibly pursue Crow coal development to 
achieve my vision for the Crow people.
    Finally, with a substantial Crow coal resource, I would like to 
continue to build the first coal-to-liquids (CTL) plant in North 
America with carbon capture and utilization. In fact, in 2008, the Crow 
Nation and our partner signed a project agreement to develop Many 
Stars, a planned coal-to-liquids project that sought to produce up to 
50,000 barrels or more per day of ultra-clean jet and diesel fuel. Crow 
sought to contract with the U.S. Air Force and other local industries 
to supply clean diesel fuel that would meaningfully reduce carbon 
emissions throughout the world, reduce America's dependence on foreign 
oil, and provide a safe and secure domestic fuel supply to our national 
defense.
    Unfortunately, the economic recession hit and an uncertain national 
energy policy made it difficult for the proposed project to proceed. We 
remain hopeful that the Administration can and will support clean coal, 
that technology advancements can create a smaller scale project, and 
that clean coal legislation (discussion draft entitled, ``Native 
American Clean Coal Economic Development Act of 2015'') to provide for 
bonding authority with incentives to industry partners will be 
introduced and passed in this Congress. I am pursuing an all-of-the-
above energy development strategy (hydropower, wind, coal export and 
CTL) but I will need some help in order to effectuate my energy vision.
IV. Challenges and the Need to Level the Playing Field
A. EPA's Clean Power Plan
    The Crow Nation and the Montana Attorney General sent joint 
comments to the EPA on December 1, 2014, to express grave concern about 
the substantial negative impact that the EPA's Proposed Rule, dated 
June 18, 2014, and titled, ``Carbon Pollution Emission Guidelines for 
Existing Stationary Sources: Electric Utility Generating Units,'' will 
have on the Crow Nation, its citizens and resources, and their 
collective future. In sum, both the Proposed Rule dated June 18, 2014, 
and the subsequent and separate proposed Clean Power Plan Rule for 
Indian country dated November 4, 2014, simply ignore the Crow Nation's 
concerns.
    The lack of meaningful government-to-government consultation, as 
required by Executive Order 13175, in developing the aforementioned 
Proposed Rules is telling. Despite minimal tribal outreach (and no 
direct contact with elected Crow Nation officials before the rule was 
proposed), significant substantive policy prescriptions are likely to 
cause serious setbacks to the Crow Nation, potentially over multiple 
generations. The longstanding trust responsibility between the Federal 
Government and the Crow Nation may be violated unless an exception and/
or mitigation of the rule is provided to us.
    The Proposed Rule is a major problem for the Crow Nation. The EPA 
did not consult with the Crow Nation, did not consider the economic 
impacts on the Crow Nation, and did not provide a less intrusive 
alternative to the severe effect on the Crow Nation of this Proposed 
Rule. In sum, the EPA violated its trust responsibility to the Crow 
Nation and must provide a substantive alternative and/or mitigation of 
the Proposed Rule.

        i. The agency failed in its duties to consult with the Crow 
        Nation and to consider the economic effects of the proposal on 
        the Crow Nation.

    As mentioned above, the Crow Nation receives revenues equaling 66 
percent of its annual non-federal budget from severance taxes and 
royalties paid for the mining of coal owned by the Crow Nation at the 
Mine, near Hardin, Montana. Ninety percent of the coal mined from the 
Mine is sold to, and burned at, electrical generating units (EGU) in 
Minnesota. The Proposed Rule strongly encouraged the State of Minnesota 
to demand retirement of the older units of the power plant to meet the 
carbon reduction goals set by the EPA.
    The Proposed Rule also sets higher renewable standards for the 
State of Minnesota to meet by 2030, despite Minnesota law already 
requiring higher levels of renewable energy to be produced by 2020. 
Because the Proposed Rule will unfairly penalize Minnesota and other 
Midwest customers that currently buy and rely on production of Crow 
coal for its mix of energy production, and since the Minnesota EGU have 
already taken action to reduce carbon emissions, the result will be a 
substantial loss of that market for Crow coal.
    That in turn will mean drastic hits to the Crow Nation's operating 
revenues, which will directly cause the loss of services and employment 
on the Crow Reservation. Despite Executive Orders requiring federal 
agencies to engage in substantive consultation with Indian Tribes 
affected by agency proposals, and to consider the impact of proposals 
on economic growth and job creation, the EPA utterly failed to do so 
with respect to the effect of this proposal on the Crow Nation.
    Executive Order 13175 requires agencies to ensure meaningful and 
timely input by tribal officials in the development of regulatory 
policies that affect tribes. In this case, that simply didn't happen. 
Despite representations at Section III.A.5 of the Proposed Rules that 
the ``EPA conducted significant outreach to tribes,'' the actual extent 
of the agency's effort was minimal, at best. Other than a letter 
purportedly sent to the Tribe (a form letter stating, ``Dear Tribal 
Leader''), no one in the agency contacted the Crow Nation directly--
government-to-government--as is required in the aforementioned 
Executive Order and Presidential Memo that implements EO 13175.
    The lack of meaningful consultation is perplexing in light of the 
fact that the Crow Nation is one of only four tribes nationwide that 
owns merchantable coal deposits, and is one of only three tribes (out 
of 566 federally recognized tribes) for whom the mining of coal burned 
in electrical generating units impacted by the proposal is a hugely 
significant piece of the Tribal economy. Because the Crow Nation only 
produces coal with its longstanding development partner and there is 
not a coal-fired power plant on the Crow Reservation, the EPA Proposed 
Clean Power Plan for Indian country (those tribes with EGUs within 
their reservation boundaries) also does not apply.
    The November 4, 2014, Clean Power Plan Rule simply provides an 
option for a tribe to develop its own Section 111(d) plan and, if they 
choose not to, then the EPA would develop a federal plan necessary to 
achieve the EPA's suggested carbon emission reductions in Indian 
country. Since the Crow Nation does not have an EGU on its reservation, 
the Clean Power Plan Rule is inapplicable to the Crow Nation. 
Therefore, both sets of the EPA's Proposed Rules do not address the 
Crow Nation's significant interests impacted as a result of federal 
agency action.
    Furthermore, Executive Order 13563 requires federal agencies to 
propose or adopt a regulation only upon a reasoned determination that 
its benefits justify its costs and to tailor its regulations to impose 
the least burden on society consistent with regulatory objectives. It 
requires that regulations be based on an open exchange of information 
and perspectives among State, local and Tribal officials. Any open 
exchange with Crow Tribal officials would have brought to light the 
impact of the proposal on the Crow Nation and would have highlighted 
the unfairly prejudicial impact of the proposal on the Minnesota 
customer of Crow coal.
B. Practical Challenges
    In addition to the EPA's Clean Power Plan, numerous practical 
problems consistently arise with each proposed Indian coal project. The 
lease approval and development process is burdensome, slow, and 
complicated. Federal regulatory requirements for appraisals, surface 
access approvals and environmental assessments to conduct exploration 
within the Reservation often create significant delays. Further, 
incomplete land records (in some cases BIA records for surface and 
mineral ownership are erroneous, missing and out of date), inadequate 
BIA staffing (e.g., the BIA area office in Billings, Montana, has one 
primary individual to work on environmental issues for eight tribal 
nations), and surface land fractionation (described above) create 
uncertainty that discourages investment and significantly impedes 
project development.
    It is extremely difficult to compete with off-reservation 
development because of these problems. Many companies view these 
additional regulatory and practical burdens as cost prohibitive, even 
with the best efforts of particular BIA employees and the Crow Nation. 
Based on our experience in working with current and prospective coal 
partners, we strongly recommend a two-prong approach to leveling the 
playing field for energy development in Crow country: (i) eliminate 
regulatory obstacles (we provided written support for H.R. 1548, Native 
American Energy Act); and (ii) permanently extend existing tax 
incentives to offset the extra development burdens.
C. Leveling the Playing Field
    There are a few federal tax incentives that encourage investment 
and development in Indian country, but their utility is diminished by 
their short-term nature. Accelerated depreciation and the Indian 
employment tax credit are two examples of such incentives (the latter 
needs some modifications to enhance its effectiveness). These 
incentives, originally enacted in the 1993 Budget Reconciliation Act, 
have been extended year-to-year in the tax extenders package and, as 
such, generally are not relied upon by potential investors with large 
Indian energy projects because of the extended length of time (often 5-
10 years for large coal projects) that development takes before the 
energy commodity is produced. The Crow Nation supports the permanent 
extension of these tax incentives, with modifications, but another more 
specific tax incentive is the most important for Crow coal development.
    The Indian coal production tax credit (ICPTC), originally enacted 
in the 2005 Energy Policy Act, has kept the Absaloka Mine open and 
competitive since 2006. This credit neutralized the threat of a 
potential mine closure and also continued WRI's ability to provide 
critical employment and revenue for essential Crow governmental 
functions. Like the aforementioned tax incentives, it expired on 
December 31, 2014, and continues to be part of the overall tax 
extenders package.
    In order to overcome all of the additional regulatory costs and 
land transaction issues described above, the Crow Nation seeks a 
permanent extension of ICPTC, with a few modifications. We would like 
for the ICPTC to be used against the alternative minimum tax, to extend 
the placed in service date to include the aforementioned projects, and 
to eliminate the unrelated person requirement in the original credit 
(to allow for a CTL project in the future). With these tax incentives 
made permanent, the Crow Nation would have the opportunity to compete 
with others on a level playing field.
V. Market Access for Crow Coal
A. Crow Tribe Interest in Infrastructure
    The Crow Nation has carefully examined its options for providing 
future economic opportunity for its members and has elected to monetize 
its coal asset by continuing to selling it for domestic power 
generation and exporting it to international markets. The existing and 
future growth in the international energy markets for coal provides the 
opportunity for the Crow Nation to obtain full value for their resource 
and would offset their loss of revenue caused by the EPA's decisions.
    In pursuit of exporting Crow coal, the Crow Nation is engaging in 
interstate commerce and international trade. Crow Nation has partnered 
with CPE, BNSF and SSA Marine to gain access to international markets 
and compete with other nations in supplying a secure source of energy 
to meet global demand to United States trading partners.
    Powder River Basin coal is exported out of Canadian ports in 
British Columbia today. In the absence of U.S. port capacity, British 
Columbia ports have been expanding to receive U.S. cargoes. The Crow 
Nation recognizes the national importance of the Gateway Pacific 
Terminal as the best potential new site to ship U.S. cargoes through 
U.S. ports.
B. The Big Metal Mine Project
    The Crow Nation is partnered with CPE on the Big Metal Project. The 
agreement is for the exploration and the option to lease up to 1.4 
billion tons of coal from the Crow Reservation's southeast corner. CPE 
has demonstrated their commitment to both safety and the environment, 
and we appreciate their leadership as one of this country's largest 
coal producers. In addition, CPE has been a good partner with the Crow 
Nation, providing college scholarships to more than 40 Crow students 
and supporting those in need. All of this has happened while CPE has 
worked with the Tribe to complete exploratory drilling, which has been 
ongoing since June of 2014.
    In developing the Big Metal Mine project on Crow lands, the Crow 
Nation has a vital interest in a fact-based, timely decision on the 
Gateway Pacific Terminal project in Whatcom County, Washington as an 
export terminal for Crow coal. While not directly related to the 
development of the Big Metal Mine, a marine export facility is 
necessary infrastructure for supporting the full realization for the 
Crow Nation of the economic opportunity for its coal. Crow recognizes 
attaining full economic value for the Crow coal resource requires 
meeting existing and future international coal energy demand; to that 
end, Crow interests are aligned with Gateway Pacific Terminal's success 
and the connecting rail infrastructure.
C. Energy Poverty and the Global and Asian-Pacific Coal Demand
    Let me address a few key issues pertaining to coal and its place in 
the world's energy portfolio and in the amelioration of energy poverty. 
According to the International Energy Agency, 1.3 billion people are 
without access to electricity. That is 18-percent of the world's 
population or nearly 1 in 5 people. For many of these people, coal-
fueled, low-cost, reliable electricity represents an opportunity to 
climb out of the misery of poverty.
    Coal is an important component of the world's energy portfolio 
until better solutions are arrived at, especially in those countries 
that are in need of electrification to resolve poverty. A key goal of 
the Copenhagen Accord of 2010 is to provide energy to these 
impoverished populations. For the time being, coal is simply an 
essential source of fuel.
    According to the International Energy Agency, global demand for 
coal will increase to more than 9 billion tons of coal by 2019 with 
much of that growth fueled by demand from Asia and India. Since the 
beginning of the 21st century, coal has been the fastest-growing global 
energy source worldwide. According to the U.S.'s Energy Information 
Administration, ``Japan imported nearly 211 million short tons of coal 
in 2013, up from 204 million short tons in 2012, after more coal 
capacity came online.'' In addition, the Japanese are funding coal-
fueled power plants in Japan and throughout Asia, leading to increased 
demand.
    Bill Gates, himself a climate change activist, offered this 
observation on the present need for the use of fossil fuels in 
developing countries: ``[People in poor countries] desperately need 
cheap sources of energy now to fuel the economic growth that lifts 
families out of poverty. They can't afford today's expensive clean 
energy solutions, and we can't expect them to wait for the technology 
to get cheaper.'' Gatesnotes, The Blog of Bill Gates, June 25, 2014
    Independent experts at places like Stanford University state that 
U.S. coal exports will not increase the usage of coal in Asia, but will 
likely replace inferior sources of coal from other countries. As well, 
they have concluded that exporting U.S. coal will not increase 
greenhouse gas emissions and may actually reduce them.
    As long as coal is to be utilized, from an environmental 
perspective, Powder River Basin coal is a preferred alternative (and 
has been called ``clean coal'' by the USGS), because it is lower in 
sulfur, ash, and other contaminants. As well, it is mined under the 
world's highest labor and environmental standards.
    Cloud Peak Energy is the largest U.S. supplier of coal for 
electricity to South Korea. Last year alone, Cloud Peak Energy shipped 
4 million tons to Asian utilities, many of whom are constructing the 
world's most-advanced coal-fueled power plants. According to the U.S. 
Energy Information Administration, ``[c]oal consumption in South Korea 
increased by 55 percent between 2005 and 2012, driven primarily by 
growing demand from the electric power sector.'' South Korean utilities 
are currently adding even more coal-fueled power plants to meet the 
country's increasing need for electricity.
    The increasing demand for power from coal has raised questions 
about air quality impacts, both locally and globally. It is important 
to note that Powder River Basin coal from Crow mines is lower in sulfur 
dioxide and nitrogen oxide, which is better for the environment than 
the coal that is currently mined in Asian countries. Together with 
modern power plant technology being developed in Asia, use of Powder 
River Basin coal may reduce, and not raise, global emissions of air 
pollutants and carbon emissions.
D. Rail Transportation
    BNSF is the leading railroad in the U.S. with a network of 32,500 
route miles, 48,000 employees and 8,000 locomotives. Montana and 
Wyoming are home to over 4,000 BNSF employees and their families. 
Payroll for these two states exceeds $300 million. BNSF is aggressively 
investing to preserve, maintain, and grow capacity across its 28-state 
network with a capital investment plan of over $5 billion in 2014 and 
$6 billion in 2015. Much of this investment is dedicated along its 
major coal routes.
    BNSF Railway serves the Powder River Basin (PRB) region, 
transporting coal to customers throughout the Midwest and southern 
regions of the U.S., as well as to the west coast for export. Since 
2000, BNSF has doubled coal delivery to Eastern customers from 50 to 
100 million tons. In addition, BNSF delivers more coal than any other 
U.S. company, including 57 percent from the PRB region.
    The Federal Railroad Administration determined that 2013 and 2014 
were the safest in U.S. history for freight railroads. With major 
investment in infrastructure, safe operating practices, and a 
comprehensive safety culture, BNSF continues to make great strides in 
their highest priority of safety.
E. Gateway Pacific Terminal
    The Terminal developer, SSA Marine, is a Washington State 
corporation founded in 1949 in Bellingham, Washington. They have grown 
to be the largest privately held terminal operating company in the 
world. In 1991, SSA Marine's subsidiary, Pacific International 
Terminals, Inc., secured the property at Cherry Point, Washington 
State. Since then, they have taken thoughtful steps to develop the 
1,500-acre property located in Whatcom County, 17 miles south of the 
U.S.-Canadian border. Pacific International Terminals has committed to 
develop the Terminal while ensuring that the environment, the community 
and shippers' interests all benefit.
    Pacific International Terminals submitted an application for 
project permits in February 2011 to develop and operate the proposed 
Gateway Pacific Terminal (``Terminal'') as a multi-commodity bulk 
terminal for transshipment of dry bulk commodities between rail and 
marine transportation systems. It is intended to meet the need for a 
West Coast marine shipping facility to serve the transpacific market.
    The Terminal is designed to process up to 54 million tons of dry 
bulk commodities annually, including up to 48 million tons of coal. 
Other potential cargoes are grains, potash and wood bio-fuels. It will 
be the fourth pier at Cherry Point, a designated Heavy Impact 
Industrial zone, located next to the existing BP Cherry Point Refinery, 
the ALCOA--Intalco Works aluminum smelter and Phillips 66 Ferndale 
Refinery.
    Cherry Point is an ideal location for the Terminal. The existing 
heavy industrial utilities and existing rail line are essential for 
efficient operation of the marine shipping facility. Even more 
important is the naturally occurring deep water requiring no dredging 
to construct a wharf that will accommodate deep-draft ``Capesize'' bulk 
cargo vessels. The Terminal is adjacent to a designated international 
shipping corridor that is highly regulated by a Vessel Traffic System 
jointly operated by the U.S. and Canadian Coast Guards for over 40 
years with great success.
    The economies of scale of Capesize vessels allows them to be more 
fuel, carbon, and cost-efficient than smaller ships in moving a ton of 
product. Approximately 75 percent of the cost of landing U.S. bulk 
cargo in Asia is related to transportation. Shipping U.S. commodities 
in Capesize vessels can cut overall ocean transportation costs by 20-30 
percent. This is an important factor allowing Crow and other U.S. 
producers to be competitive in the growing Asian markets.
    The Terminal is being designed and engineered to meet Washington 
State's high environmental standards and is already undergoing a 
rigorous evaluation of the environmental, social, and economic benefits 
and impacts in an Environmental Impact Statement (EIS). The State 
Environmental Policy Act (SEPA) EIS, led by Whatcom County and the 
Washington Department of Ecology. The U.S. Army Corps of Engineers is 
the Federal lead agency for the National Environmental Policy Act 
(NEPA). The State and Federal EIS's will provide the basis for making 
informed decisions on the Terminal project.
    The privately funded Terminal will provide a big lift to the local 
economy during construction, and a permanent boost in Whatcom County's 
industrial sector with hundreds of new, permanent family-wage jobs. 
Construction will generate approximately 4,430 direct and indirect jobs 
and nearly $92 million in state and local taxes over two years. When 
operating at full capacity, the Terminal will sustain approximately 
1,250 permanent direct and indirect jobs and generate about $11 million 
annually in local and state tax revenues. Altogether, with the tax 
revenue and wages during two years of construction plus 10 years of 
full operations, the Terminal would bring more than $1.8 billion in 
revenue to the region.
VI. Conclusion
    Today, the Crow Nation desires to develop its vast coal resources 
not only for itself, but for our energy partners, the surrounding 
communities and for the United States. By developing Crow coal via 
domestic markets, export terminals and coal conversion, we firmly 
believe we can help ourselves while simultaneously meeting national 
energy goals--achieving energy independence, securing a domestic supply 
of valuable energy, and reducing the country's dependence on foreign 
oil. My administration has been very busy in working to develop our 
coal resources and to remove obstacles to successful development.
    I simply desire for the Crow Nation to become self-sufficient by 
developing its own coal resources and to provide basic services for the 
health, hopes and future of the Crow people. With help from you--our 
historic treaty ally--in leveling the energy development playing field, 
we can achieve my vision and both benefit immensely.
    Mr. Chairman and Committee members, thank you again for the 
opportunity to testify on this critical subject before you today. I 
would be happy to answer any questions.
Addendum--Additional Crow Nation Perspective on World Energy Demand and 
        Coal Exports
    The Crow Nation has carefully examined its options for providing 
economic opportunity for its members and has elected to monetize its 
coal asset for export to Pacific Rim countries.

    Global climate issues are an administration priority and the Crow 
people share the President's concern. Coal is an important component of 
the world's energy portfolio until better solutions are arrived at, 
especially in those countries that are in need of electrification to 
resolve poverty. \1\ \2\ A key goal of the Copenhagen Accord of 2010 is 
to provide energy to these impoverished populations. For the time 
being, coal is simply an essential source of fuel. \3\
    Bill Gates offered this observation on the present need for the use 
of fossil fuels in developing countries: ``[People in poor countries] 
desperately need cheap sources of energy now to fuel the economic 
growth that lifts families out of poverty. They can't afford today's 
expensive clean energy solutions, and we can't expect them wait for the 
technology to get cheaper.'' Gatesnotes, The Blog of Bill Gates, June 
25, 2014
    U.S. coal exports will not increase the usage of coal in Asia \4\, 
but will likely replace inferior sources of coal from other countries. 
As long as coal is to be utilized, from an environmental perspective, 
Powder River Basin coal is a preferred alternative (and has been called 
``clean coal'' by the USGS), because it is lower in sulfur, ash, and 
other contaminants. \5\ \9\ As well, it is mined under the world's 
highest labor and environmental standards.
    Exporting U.S. coal will not increase greenhouse gas emissions and 
may actually reduce them. \6\ If the U.S. does not build the port 
capacity to export its own coal, then Canada and/or Mexico are likely 
to do so. \7\
    The Crow need the option of shipping their product through an 
efficient west coast port. The proposed Gateway Pacific Terminal in 
northwest Washington would have a maximum coal exporting capacity of 48 
million metric tons per year. (The facility is being proposed by 
Washington-based SSA Marine, which is the nation's leading shipping 
terminal operator with 125 locations worldwide.) Although this would be 
an economically transformative activity for the Crow people, it would 
constitute a tiny fraction of coal consumption in Asia. \8\
    Crow coal exports will support the purposes of the administration's 
National Export Initiative and NEI/NEXT, and help to increase trade 
with other countries. As well, it is consistent with national policies 
(such as those articulated in the National Defense Authorization Act) 
that aim to support our Asian allies, who need affordable and geo-
politically stable sources of fuel.
    Freedom of interstate commerce and reservation of power to regulate 
commerce (national and tribal nations) to the Congress (as opposed to 
individual states) are foundational principles embedded in Article I, 
Section 3 of the U.S. Constitution. That same section reserves to the 
Congress the exclusive power to regulate commerce ``with the Indian 
tribes.'' The governments of North Dakota, Wyoming, and Montana have 
expressed concerns that the environmental review processes for west 
coast coal export projects are being used to interfere with 
constitutionally protected interstate commerce.
    The export of Crow coal supports the people of the Crow Nation and 
is consistent with the federal government's constitutional and treaty 
trust obligations to the tribe.

    Footnote References--World Energy Demand and Coal Exports

    \1\ The Global Energy Network Institute has confirmed, ``Every 
single one of the United Nations' Millennium Development Goals requires 
access to electricity as a necessary prerequisite.'' The International 
Energy Agency's (IEA) Faith Birol, agrees and states, ``The importance 
of coal in the global energy mix is now the highest since 1971. It 
remains the backbone of electricity generation and has been the fuel 
underpinning the rapid industrialization of emerging economies, helping 
to raise living standards and lift hundreds of millions of people out 
of poverty.''
    Letter from National Mining Association to Export-Import Bank of 
the U.S., November 8, 2013

    \2\ ``Like it or not, coal is here to stay for a long time to 
come.Coal is abundant and geopolitically secure, and coal-fired plants 
are easily integrated into existing power systems.''
    --Maria van der Hoeven, the International Energy Agency's executive 
director, Paris Presentation of the IEA's Medium-Term Coal Market 
Report 2013, December 16, 2013

    \3\ According to Frank Clemente, a retired Pennsylvania State 
University professor, ``Coal is the only fuel that can sustainably meet 
growing global demand at such a scale.'' China has seen the future, and 
it is coal, The Washington Post, December 30, 2010

    \4\ ``By importing U.S. coal, China is not changing the amount of 
coal that it burns. I understand why on an emotional level people don't 
like it. But if you actually understand the economics, and you 
understand how climate change works, it's a non-issue.'' Richard Morse, 
director of research on coal and carbon markets at Stanford University, 
Trading Markets, December 27, 2010

    \5\ ``Not all coal is created equal. The proposed export terminals 
in the Northwest would ship coal that is better for the environment in 
almost every way than the coal mined in East Asian countries like 
China, particularly with regard to sulfur dioxide and nitrogen oxide 
levels.''--Fred Thompson, professor of public management and policy at 
Willamette University, Exporting coal to China is the greenest option, 
The Register-Guard, March 12, 2013

    \6\ ``If Pacific Coast states construct sufficient coal export 
facilities, the United States is likely to sell heaps of coal to Asia 
in the years ahead, but that should cut--not raise--global emissions of 
greenhouse gases, according to Frank Wolak, professor of economics at 
Stanford University and director of Stanford's Program on Energy and 
Sustainable Development.'' Reduce greenhouse gas by exporting coal? 
Yes, says Stanford economist, The Stanford Report, January 15, 2013
    \7\ ``This demand for coal in China appears to be long lived. The 
coal-fired power plants are expensive to build and are designed to last 
a long time, at least 30 years. If the United States does not build 
West Coast ports to ship western coal to Asia, Canada will likely do 
so.'' Reduce greenhouse gas by exporting coal? Yes, says Stanford 
economist, The Stanford Report, January 15, 2013
    \8\ Wood Mackenzie forecasts a worldwide coal demand growth of 5.5B 
tons from 2012 to 2030. [See also IEA data at http://www.iea.org/
aboutus/faqs/coal/]
    The U.S. Energy Information Administration (EIA) projects world 
energy consumption will increase 56 percent from 2013-2040. 


     \9\ Chapter PQ COAL QUALITY AND GEOCHEMISTRY, POWDER RIVER BASIN, 
WYOMING AND MONTANA, By G.D. Stricker and M.S. Ellis in U.S. Geological 
Survey Professional Paper 1625-A, 1999

    Senator Daines. Chairman Old Coyote, thank you.
    Attorney General Fox.

 STATEMENT OF HON. TIM FOX, ATTORNEY GENERAL, STATE OF MONTANA

    Mr. Fox. Senator Daines, I'd like to thank you and Chairman 
Barrasso and Senator Tester for the invitation to speak here 
today. My name is Tim Fox. I'm the attorney general for the 
state of Montana.
    I grew up in Hardin, and have a deep appreciation for the 
history, culture, but most importantly, the people of the Crow 
Nation.
    Like most other Montanans, one thing the Crow people 
treasure is the land that they were born and raised in. I think 
the Chairman just alluded to that.
    And thank you, Chairman Old Coyote, for hosting this 
important hearing.
    Like most other Americans and Montanans, among the things 
that the Crow people would most like to see, for themselves and 
their children, are the opportunities for jobs that will allow 
them to make a reasonable living in the place they grew up so 
they can stay rather than having to move elsewhere of 
necessity.
    The Crow Nation, like the rest of our state, is rich in 
resources. Those resources, including coal, are currently 
providing opportunity for Montanans, including the Crow people 
and, wisely used, will continue to do so.
    I am concerned, though, that we are today seeing political 
and regulatory developments which, though not intentionally 
targeting the Crow Nation and, more generally, all of Montana, 
will, if unchecked, destroy present and future opportunities 
for our people.
    I would like to talk briefly about a couple of those 
developments.
    One of those developments is the U.S. Environmental 
Protection Agency's June 18, 2014 existing source proposal 
under Section 111(d) of the Clean Air Act.
    I joined the attorney generals of 16 other states in 
comments on that proposal, but I also filed separate comments 
with Chairman Darrin Old Coyote of the Crow Nation, and I want 
to talk just a minute about those comments.
    The Crow Nation's coal resources are still largely 
undeveloped, but there is currently one operating mine, the 
Absaloka Mine. And just that one mine provides two-thirds of 
the Crow Nation's annual non-federal budget, and is by far the 
largest private employer on the reservation.
    Unfortunately, one of the very likely effects of the EPA's 
existing source rule would be to kill the market for the coal 
produced by the Absaloka Mine, which is nearly all sold to 
Minnesota utilities. This will, in turn, kill the mine, causing 
drastic loss of services and employment on the Crow 
Reservation.
    The EPA has a legal duty under Executive Order 13175 to 
ensure meaningful and timely input by tribal officials in the 
development of regulatory proposals that affect tribes.
    In the development of its existing source rule proposal, 
EPA went through the motions, issuing two, ``Dear Tribal 
Leader'' form letters, but nobody from the agency contacted the 
Crow Nation directly in a government-to-government contact 
saying, ``Excuse me, but this proposal could, as implemented in 
the State of Minnesota, kill the market for the output from the 
Absaloka Mine, and we'd like to talk to you about that.''
    The Executive Order requires that the EPA ensure meaningful 
and timely input. The agency didn't get that job done before it 
promulgated its proposal, and the agency needs to withdraw the 
proposal and do the consultation it is required to do with the 
people of the Crow Nation.
    The second development I wanted to talk about is the 
importance of keeping open the avenues of interstate commerce 
which coal mined in Montana needs to travel to reach markets 
outside our state, and this affects not only the Absaloka Mine 
in Crow Nation, but the other coal mines in Montana, both 
present and future.
    As a landlocked state, we are dependent on port facilities 
in our sister states for shipping Montana-produced bulk 
commodity products to international markets.
    There is currently an international market for coal mined 
in the northern Powder River Basin, and some coal is, in fact, 
being exported from Montana mines to that market.
    For example, 4.7 million tons of coal was shipped in 2013 
from the Spring Creek Mine through Westshore Terminals in 
British Columbia. But that terminal is at capacity, meaning 
more port capacity is needed to ensure open markets for our 
coal.
    There are three active proposals to construct terminals 
which would provide capacity for shipment of coal from the 
northern Powder River Basin to international markets, two in 
the state of Washington, and one in Oregon.
    The two in Washington, the Millennium Terminal Project at 
Longview and the Gateway Pacific Terminal at Cherry Point, are 
in the permit review and environmental analysis stage.
    The Coyote Island Terminal project in Oregon, which would 
provide a terminal to take coal from rail at Boardman, Oregon 
for transport by barge down the Columbia to Port Westward for 
loadout onto ocean-going vessels, was denied a fill permit by 
the Oregon Department of State Lands, and an administrative 
appeal of that decision is pending.
    My office has been involved in the scoping process for the 
environmental analysis of the Gateway Pacific Project, and we 
are actively tracking the process for that Millennium Project.
    We have actually intervened in the appeal of the permit 
denial for the Coyote Island Terminal, along with the state of 
Wyoming.
    The reason we have taken these steps is to ensure, as our 
sister states make their decisions regarding these port 
proposals, that our state's constitutional right not to have 
the avenues of interstate commence unduly burdened is fully 
protected.
    I know from discussions I have had with Chairman Old 
Coyote, that the Crow Nation shares these concerns.
    As I mentioned a minute ago, one of the effects of the 
EPA's proposed existing source rule would be to close the power 
plants which are the market for the Absaloka Mine, and with 
that possibility looming, the Asian market is the obvious 
alternative market for coal from that mine. But our coal can't 
reach those markets without suitable port facilities in our 
sister states.
    This is a very big concern to our state and for the Crow 
Nation. For the year 2013, the tax revenues collected by the 
state of Montana on coal mined in Montana totaled $78,134,000. 
I have already told you of the economic benefits the Absaloka 
Mine provides to the Crow Nation.
    As domestic markets for Montana and Crow coal are 
diminished by the impacts of political trends and federal 
regulatory initiatives, access to international markets in Asia 
will become critical to the economic welfare of our state and 
the Crow Nation.
    Senator Daines, thank you again for giving me some time 
here today. Thank you again, Mr. Chairman.
    I want to thank my classmate, Doctor Yarlott, for hosting 
this hearing at Little Big Horn College.
    And I say hello to my friends in the Crow Nation and thank 
you for listening to me, and I would be happy to answer any 
questions you may have.
    Thank you.
    [The prepared statement of Mr. Fox follows:]

 Prepared Statement of Hon. Tim Fox, Attorney General, State of Montana
    Senator Daines, members of the Committee, thank you for inviting me 
to speak here today. I'm Tim Fox, attorney general of the State of 
Montana.
    I grew up in Hardin, and have a deep appreciation for the history, 
culture, but most important, the people of the Crow Nation. Like most 
other Montanans, one thing the Crow people treasure is the land they 
were born and raised in. And like most other Montanans, among the 
things they would most like to see, for themselves and their children, 
are opportunities for jobs that will allow them to make a reasonable 
living in the place they grew up, so they can stay rather than having 
to move elsewhere of necessity.
    The Crow Nation, like the rest of our State, is rich in resources. 
Those resources, including coal, are currently providing opportunity 
for Montanans, including the Crow people, and, wisely used, will 
continue to do so. I am concerned, though, that we are today seeing 
political and regulatory developments which, though not intentionally 
targeting the Crow Nation and, more generally, all of Montana, will, if 
unchecked, destroy present and future opportunities for our people. I 
would like to talk briefly about a couple of those developments.
    One of those developments is the U.S. Environmental Protection 
Agency's June 18, 2014 existing source proposal under section 111(d) of 
the Clean Air Act. I joined the attorneys general of sixteen other 
states in comments on that proposal, but I also filed separate comments 
with Chairman Darrin Old Coyote of the Crow Nation, and I want to talk 
just a minute about those comments.
    The Crow Nation's coal resources are still largely undeveloped, but 
there is currently one operating mine, the Absaloka Mine, and just that 
one mine provides two-thirds of the Crow Nation's annual non-federal 
budget, and is by far the largest private employer on the reservation.
    Unfortunately, one of the very likely effects of EPA's existing 
source rule would be to kill the market for the coal produced by the 
Absaloka Mine, which is nearly all sold to Minnesota utilities. This 
will in turn kill the mine, causing drastic loss of services and 
employment on the Crow Reservation.
    EPA has a legal duty under Executive Order 13175 to ensure 
meaningful and timely input by tribal officials in the development of 
regulatory proposals that affect tribes. In the development of its 
existing source rule proposal, EPA went through the motions, issuing 
two ``Dear Tribal Leader'' form letters, but nobody from the agency 
contacted the Crow Nation directly in a government-to-government 
contact, saying, ``excuse me, but this proposal could, as implemented 
in the State of Minnesota, kill the market for the output from the 
Absaloka Mine, and we'd like to talk to you about that.'' The executive 
Order requires that EPA ``ensure'' meaningful and timely input. The 
agency didn't get that job done before it promulgated its proposal, and 
the agency needs to withdraw the proposal and do the consultation it is 
required to do.
    The second development I wanted to talk about is the importance of 
keeping open the avenues of interstate commerce which coal mined in 
Montana needs to travel to reach markets outside our State. As a 
landlocked state, we are dependent on port facilities in our sister 
states for shipping Montana-produced bulk commodity products to 
international markets. There is currently an international market for 
coal mined in the Northern Powder River Basin, and some coal is in fact 
being exported from Montana mines to that market. For example 4.7 
million tons of coal was shipped in 2013 from the Spring Creek Mine, 
through Westshore Terminals in British Columbia. But that terminal is 
at capacity, meaning more port capacity is needed to ensure open 
markets for our coal.
    There are three active proposals to construct terminals which would 
provide capacity for shipment of coal from the Northern Powder River 
Basin to international markets, two in the State of Washington, and one 
in Oregon. The two in Washington, the Millenium Terminal Project at 
Longview and the Gateway Pacific Terminal at Cherry Point, are in the 
permit review and environmental analysis stage. The Coyote Island 
Terminal project in Oregon, which would provide a terminal to take coal 
from rail at Boardman, Oregon, for transport by barge down the Columbia 
to Port Westward for loadout onto ocean-going vessels, was denied a 
fill permit by the Oregon Department of State Lands, and an 
administrative appeal of that decision is pending.
    My office has been involved in the scoping process for the 
environmental analysis of the Gateway Pacific Project and we are 
actively tracking the process for the Millenium Project. We have 
actually intervened in the appeal of the permit denial for the Coyote 
Island Terminal, along with the State of Wyoming. The reason we have 
taken these steps is to ensure, as our sister states make their 
decisions regarding these port proposals, that our State's 
constitutional right not to have the avenues of interstate commerce 
unduly burdened is fully protected.
    I know from discussions I have had with Chairman Old Coyote, that 
the Crow Nation shares these concerns. As I mentioned a minute ago, one 
of the effects of EPA's proposed existing source rule would be to close 
the power plants which are the market for the Absaloka Mine, and with 
that possibility looming, the Asian market is the obvious alternative 
market for coal from that mine. But our coal can't reach those markets 
without suitable port facilities in our sister states.
    This is a very big concern to our State and for the Crow Nation. 
For the year 2013, the tax revenues collected by the State of Montana 
on coal mined in Montana totaled $78,134,334. I have already told you 
of the economic benefits the Absaloka Mine provides to the Crow Nation. 
As domestic markets for Montana and Crow coal are diminished by the 
impacts of political trends and federal regulatory initiatives, access 
to international markets in Asia will become critical to the economic 
welfare of our State and the Crow Nation.
    Senator Daines, members of the committee, thank you again for 
giving me some time here today to speak on behalf of the people of 
Montana. I'm happy to answer any questions you may have.

    Senator Daines. Thank you, Attorney General Fox.
    Speaker Lorenzo Bates.

           STATEMENT OF HON. LORENZO BATES, SPEAKER, 
   NAVAJO NATION COUNCIL; ACCOMPANIED BY RAYMOND SMITH, JR., 
                        COUNCIL DELEGATE

    Mr. Bates. Good morning. My name is Lorenzo Bates. I'm the 
Speaker of the Navajo Nation Council currently serving in my 
fourth term as Council Delegate, and representing the 
communities of Nenahnezad, Newcomb, San Juan, Tiis Tsoh Sikaad, 
Tse'Daa'Kaan and Upper Fruitland.
    I stand before you today representing these communities. 
These communities are directly impacted by the coal economy as 
well as the Navajo Nation as a whole whose future is dependent 
on this natural resource.
    I want first to extend my gratitude, on behalf of the 
Navajo Nation to Chairman Barrasso, Vice-Chairman Tester, 
Senator Daines and the members of the Senate Committee on 
Indian Affairs for holding this Oversight Field Hearing on 
Empowering Indian Country, as well as my brothers and sisters 
of the Crow Nation for hosting these very important talks 
today.
    I am currently serving my 13th year as a Navajo Nation 
elected official, having previously served as Chairman of the 
Navajo Nation Budget and Finance Committee.
    I am deeply grateful to have this opportunity to address 
you here today with this past experience as my guide, as well 
as a guide for the Navajo Nation in our future, despite the 
many challenges that face us as we strive to empower our Nation 
through self-determination and the natural resources given to 
us by the Great Creator.
    The Navajo Nation is a sovereign nation located in the Four 
Corners region of the United States, encompassing over 27,425 
square miles and occupying land in the states of Utah, Arizona 
and New Mexico.
    Of the 500 recognized tribes and 318 reservations, the 
Navajo Nation is the largest, with a population topping 
300,000, and is larger in land mass than 10 of the 50 states.
    The Navajo Nation Government is balanced between three 
branches, including the Executive Branch with a President and 
Vice-president, who are elected by the Navajo people; the 
Legislative branch, with a Navajo Nation Council; five Standing 
Committees; a Speaker; 24 elected officials, representing 110 
communities, who serve on a committee; and the Judicial Branch 
with a Chief Justice and Supreme Court.
    Of the 300,000 members of the Navajo Nation, less than half 
are able to make a living on the Nation, with the others 
choosing to move to one of the larger cities for work. Our 
unemployment rate is well over 50 percent and growing with our 
population as economic development remains stagnate.
    We currently graduate over 2,000 high school graduates each 
year while creating an average of 40 new jobs resulting in dire 
circumstances.
    Currently our General Funds represents one-third of our 
overall budget. For 2015, it was at $175 million, with 
approximately 60 percent of that produced from our coal 
economy. The remainder of our budget is comprised of external 
funds, including the federal, which control up to 43 percent.
    We recently collaborated with the School of Business at 
Arizona State University to study the economic impact of one of 
our two coal mines on the Navajo Nation economy.
    What we found is that our Peabody Coal Mine, together with 
our Navajo Generating Station will boost the Navajo Nation 
economy by over $13 billion over the next 25 years.
    That is just the economic benefits to the Navajo. It does 
not include the economic linkage enjoyed by surrounding 
communities off our reservation.
    Our 2010 Comprehensive Economic Development Strategy 
uncovered the fact that 64 percent of every dollar generated on 
the Navajo Nation is spent off the reservation due to the lack 
of retail outlets located within our Nation.
    The Navajo Nation economy is often compared to as a third 
world country. Speaking before the Navajo Nation Council on 
January 18, 1996, Senator John McCain made the following 
statement:

    L``. . . Each of us shares a strong commitment to promote 
and defend tribal sovereignty, tribal self-governance, and 
tribal self-sufficiency.
    LBut my friends, these things we hold dear, will wither and 
die unless they are watered by a strong reservation economy 
that produces a decent standard of living for all our people. 
Unfortunately, as you well know, economic development success 
stories in Indian Country are still the exception and not the 
rule.
    LMost Americans would be stunned to find out that the basic 
necessities of life they take for granted are solely lacking on 
the Navajo Reservation and in many other Native American 
communities across the Country. No other group of Americans is 
more economically depressed than Native Americans, and no other 
areas in America suffer more from inadequate infrastructure and 
a lack of job opportunities than do Indian Reservations and 
Alaska Native villages.
    LHere at Navajo, your large land-base and membership 
magnify the socio-economic problems that infect much of Indian 
Country. In my lifetime I have been too many places around the 
world and have experienced many terrible living conditions. 
What is so shocking is that the social and economic conditions 
for many Navajos closely resemble those of people living in 
Third World countries.''

    With our high unemployment rate, our lack of income, paved 
roads, modern housing; lower education level; our high poverty 
rate, give our Navajo economy such a resemblance.
    The Navajo Nation has identified four main areas of focus 
within our Navajo Nation Energy Policy as it relates to the 
energy needs of the nation, which will guide decisions during 
the 23rd Navajo Nation Council.
    One, first is to protect and expand upon the current jobs 
and revenues realized by our current energy projects located on 
the Navajo Nation.
    Next is to expand and diversify our energy portfolio and 
transition our energy production into alternative and renewable 
resources to meet the future needs of our people.
    Another area of focus is to ensure that the Navajo people 
have access to residential and commercial electricity here at 
home and with competitive rates.
    Last, but certainly not least, is to strive to keep our 
balance with Mother Nature and the needs of our people. With 
these guiding principles, the Navajo Nation will make decisions 
that are responsible and meet the needs of our Navajo people.
    The Navajo Nation mines approximately 8 to 10 million tons 
of coal each year, down from 13 to 16 million tons before the 
U.S. EPA regulations began to take its toll on our resources, 
and we have billions of tons more to mine to feed our Navajo 
economy.
    Additionally, we produce approximately 3,750 megawatts of 
electricity sold primarily off our Nation, effectively taking 
advantage of hydroelectricity from the Glen Canyon Dam to meet 
our Nation's needs.
    This industry is responsible for more than 2,000 of the 
highest paying jobs on the Navajo Nation and better than 60 
percent of our general revenues. These revenues represent our 
ability to act as a sovereign nation and to meet our own needs 
without a handout through outside jurisdictions.
    It is unthinkable to consider what our people would do 
without these critical funds. In fact, our reliance on these 
resources has led us to invest in the purchase of our Navajo 
mine from BHP this past year to gain greater control of our 
resources and insure the continuation of these vital funds for 
our future generations.
    This purchase was made through our Navajo Transitional 
Energy Company, who, as its name suggests, is mandated to 
transition our Nation into our energy future by investing no 
less than 10 percent of its profits into alternative and 
renewable energy development.
    The consequences of the latest rounds of EPA regulations 
resulted in the shutdown of three of the five power generating 
units at the Four Corners Power Plant and the forced investment 
of a billion dollars in BART retrofits on the remaining two 
units.
    This, in turn, reduced the coal mined at our Navajo mine 
while simultaneously increasing the cost of power generation.
    The Four Corners Power Plant and the Navajo mine were 
poised to discontinue operation this year if it were not for 
the Navajo Nation's purchase of the Navajo mine.
    While we are now in a position to maintain our jobs and 
revenues and possibly increase them from this mine, we are 
being threatened by additional EPA regulations and an unstable 
energy future.
    Across the United States, coal economies are feeling the 
pinch, but not near to the extent as the Navajo Nation. What 
other economy in the United States stands to lose as much?
    Some may call this a war on coal, but from the Navajo 
Nation's perspective, this is a war on the Navajo economy and 
our ability to act as a sovereign nation.
    It is difficult enough working to meet the needs of the 
Navajo Nation with our current resources. I do not dare imagine 
the difficulty that will come with a 50 percent reduction in 
general revenues due to our coal mines shutting down. With our 
current budget heavily subsidized by federal funds, this 
scenario only increases that dependence.
    Many coal critics have argued that we can simply convert 
our power generation to natural gas and renewable energy while 
maintaining our jobs and revenues.
    Similar arguments were made when the Mohave Generating 
Station in Nevada shut down in 2005 cutting our coal supply 
through the Black Mesa pipeline, and we have yet, we have yet 
to see any replacement of those jobs or revenue ten years 
later.
    The challenges of economically producing power through gas 
at the high elevations common on Navajo are enough to 
discourage the investment.
    Navajo is open to solar generation, although it takes 10 
acres per megawatt to produce commercial power and has yet to 
significantly meet market demand.
    Even if these resources were cut, we would still see major 
economic cuts as our coal mines would shut down, which 
represents over, again, 50 percent of our jobs and revenues 
realized through coal power generation.
    The challenges are daunting when we look to the future of 
our Navajo people. Our hope lies in the understanding and 
collaboration of the U.S. government to insure that the 
transition of our Nation's energy resources happens in an 
economically responsible way, considerate of the lives that are 
impacted by the policies written by individuals who have yet to 
visit our Nation.
    We continue to request for government-to-government 
consultation that is on equal ground, cognizant of our needs 
and not merely a box to be checked off on yet another 
government form.
    Our hope lies in the development of alternative clean 
technologies that would effectively bridge the gap between the 
utilization of our coal resources and the environmental 
concerns of the day.
    We implore the U.S. government to work with us to develop 
the financial incentives necessary for investors to bring these 
coal technologies to our reservation where our need is so 
great, where we have a ready workforce, abundant coal 
resources, and the infrastructure to get gasified coal products 
and captured carbon into the market.
    The Navajo Nation wants to be a part of the solution that 
brings the United States closer to energy independence while 
meeting our needs at home.
    We ask that the U.S. government respect the decisions we 
make with our state, tribal and regional partners in response 
to meeting our ever changing environmental regulations while 
maintaining our regional and tribal economies.
    When we are able to work together in a meaningful way we 
can find some middle ground when it comes to our financial 
stability as a nation.
    We want to move forward towards self-reliance by utilizing 
our resources that meet our needs while reducing our dependence 
on external funds from the Federal Government.
    In conclusion, I would like to reiterate the tremendous 
need to work together to meet the needs of our people and not 
to take the easy road in implementing federal standards at the 
peril of local tribal economies.
    Take the time to listen, to truly listen, and understand 
our needs and to work with us to find creative solutions to the 
challenges of our day.
    Allow us the financial incentives necessary to achieve the 
realization of basic necessities, such as home ownership, 
electricity, water, access to improved roads and an education 
for our children so that they may be in a position to do what 
we are unable to do.
    An education that will allow them to participate in the 
transition of our energy resources and the financial know-how 
to compete in the worldwide marketplace.
    I thank you.
    And with your permission, I would like to have my 
colleague, Mr. Raymond Smith, sitting next to me, provide us 
with additional remarks in addition to what I presented here.
    Mr. Smith. Good morning.
    Senator Daines. Good morning.
    Mr. Smith. Thank you, Senator.
    My name is Raymond Smith, Jr. I'm from the Navajo Nation as 
a Council Delegate.
    I'd just like to bring up a couple of keynotes that our 
Nation is experiencing with the coal intrusion.
    We're having technical difficulties--
    Senator Daines. Excuse me, I think what we'll have to do 
with the time is I'll have you submit your comments as written 
record, and have them recorded as part of written testimony, 
but I'm going to have to keep moving ahead here with these 
other witnesses for the time management.
    So, if you could just submit those in a written record. 
Would that be okay?
    Mr. Smith. That's fine with me.
    Senator Daines. Okay. Thank you very much for your 
understanding. I appreciate it.
    The prepared statement of Mr. Bates follows:]

   Prepared Statement of Hon. Lorenzo Bates, Speaker, Navajo Nation 
                                Council
    Good Morning. My name is Lorenzo C. Bates, Speaker of the 23rd 
Navajo Nation Council currently serving in my fourth term as Council 
Delegate representing the communities of; Nenahnezad, Newcomb, San 
Juan, Tiis Tsoh Sikaad, Tse'Daa'Kaan and Upper Fruitland. I stand 
before you today representing these communities that are directly 
impacted by the coal economy as well as the Navajo Nation as a whole 
whose future is dependent on this natural resource.
    I first want to extend my gratitude, on behalf of the Navajo Nation 
to Chairman Barrasso, Vice-Chairman Tester, Senator Daines and the 
members of the Senate Committee on Indian Affairs for holding this 
Oversight Field Hearing on Empowering Indian Country, as well as my 
brothers and sisters of the Crow Nation for hosting these very 
important talks.
    I am currently serving in my 13th year as a Navajo Nation elected 
official having previously served as Chairman of the Navajo Nation 
Budget and finance Committee. I am deeply grateful to have this 
opportunity to address you here today with this past experience as my 
guide and the hope we as a Nation have in our future, despite the many 
challenges that face us as we strive to empower our Nation through 
Self-Determination and the natural resources given to us by the Great 
Creator.
    The Navajo Nation is a sovereign Nation located in the Four Corners 
region of the United States, encompassing over 27,425 Square Miles and 
occupying land in the States of Utah, Arizona and New Mexico. Of the 
500 recognized tribes and 318 reservations, the Navajo Nation is the 
largest with a population topping 300,000 and is larger in land mass 
than 10 of the 50 states.
    The Navajo Nation Government is balanced between three branches 
including the Executive Branch with a President and Vice President who 
are elected by the Navajo people, the Legislative Branch with a Navajo 
Nation Council, five Standing Committees a Speaker and 24 elected 
Council Delegates representing 110 Navajo communities who each serve on 
a Committee and the Judicial Branch with a Chief Justice and Supreme 
Court. Of the 300 thousand members of the Navajo Nation, less than half 
are able to make a living on the Nation with the others choosing to 
move to one of the larger cities for work. Our unemployment rate is 
over 50 percent and growing with our population as economic development 
remains stagnate. We currently graduate over 2,000 high school 
graduates each year while creating an average of 40 new jobs resulting 
in dire circumstances. Currently, our General Funds represent \1/3\ of 
our overall budget at $175 million with approximately 60 percent of 
that produced from our coal economy. The remainder of our budget is 
comprised of external funds from the federal government. We recently 
collaborated with the W.P. Carey School of Business at Arizona State 
University to study the economic impact of one of our two coal mines on 
the Navajo Nation economy. What we found is that our Peabody Coal mine 
together with our Navajo Generating Station will boost the Navajo 
Nation economy by over $13 billion dollars over the next 25 years! That 
is just the economic benefits to Navajo and does not include the 
economic leakage enjoyed by the surrounding communities off our 
reservation. Our 2010 Comprehensive Economic Development Strategy 
uncovered the fact that 64 percent of every dollar generated on the 
Navajo Nation is spent off the reservation due to the lack of retail 
outlets located within our Nation.
    The Navajo economy is often compared to as a third world country. 
Speaking before the Navajo Nation Council on January 18, 1996, Senator 
John McCain made the following statement:

         ``. . . Each of us shares a strong commitment to promote and 
        defend tribal sovereignty, tribal self-governance, and tribal 
        self-sufficiency.
         But my friends, these things we hold dear, will wither and die 
        unless they are watered by a strong Reservation economy that 
        produces a decent standard of living for all our people. 
        Unfortunately, as you well know, economic development success 
        stories in Indian Country are still the exception and not the 
        rule.
         Most Americans would be stunned to find out that the basic 
        necessities of life they take for granted are solely lacking on 
        the Navajo Reservation and in many other Native American 
        communities across the Country. No other group of Americans is 
        more economically depressed than Native Americans, and no other 
        areas in America suffer more from inadequate infrastructure and 
        a lack of job opportunities than do Indian Reservations and 
        Alaska Native villages.
         Here at Navajo, your large land-base and membership magnify 
        the destitution and socio-economic problems that infect much of 
        Indian Country. In my lifetime I have been too many places 
        around the world and have experienced many terrible living 
        conditions. What is so shocking is that the social and economic 
        conditions for many Navajos closely resemble those of people 
        living in Third World countries.''

    With our high unemployment rate; our lack of income, paved roads, 
modern housing and amenities; lower education level; our high poverty 
rate; give our Navajo economy such a resemblance.
    The Navajo Nation has identified four main areas of focus within 
our Navajo Nation Energy Policy as it relates to the energy needs of 
the Navajo Nation, which will guide my decisions during my time as 
Speake of the 23rd Navajo Nation Council; first is to protect and 
expand upon the current jobs and revenues realized by our current 
energy projects located on the Navajo Nation; nest is to expand and 
diversify our energy portfolio and transition our energy production 
into alternative and renewable sources to meet the future needs of our 
people; another area of focus is to ensure that the Navajo people have 
access to residential and commercial electricity here at home and 
within competitive rates; last but certainly not least is to strive to 
keep our balance with Mother Nature and the needs of our people. With 
these guiding principles the Navajo Nation will make decisions that are 
responsible and meet the needs of our Navajo people.
    The Navajo Nation mines approximately 8 to 10 million tons of coal 
each year, down from 13 to 16 million tons before the U.S. EPA 
regulations began to take its toll on our resources and we have 
billions of tons more to mine to feed our Navajo economy. Additionally, 
we produce approximately 3,750 Megawatts of electricity sold primarily 
off our Nation, effectively taking advantage of hydroelectricity from 
the Glen Canyon Dam to meet our Nation's needs. This industry is 
responsible for more than 2,000 of the highest paying jobs on the 
Navajo Nation and better than 60 percent of our General Revenues. These 
revenues represent our ability to act as a sovereign nation and meet 
our own needs without a hand out to outside jurisdictions. It is 
unthinkable to consider what our people would do without these critical 
funds. In fact, our reliance on these resources has led us to invest in 
the purchase of our Navajo Mine from BHP this past year to gain greater 
control of our resources and insure the continuation of these vital 
funds for our future generations. This purchase was made through our 
Navajo Transitional Energy Company, who, as its name suggests is 
mandated to transition our Nation into our energy future by investing 
no less than 10 percent of its profits into alternative and renewable 
energy development. The consequences of the latest rounds of EPA 
regulations resulted in the shutdown of three of the five power 
generating units at the Four Corners Power Plant and the forced 
investment of a billion dollars in BART retrofits on the remaining two 
units. This in turn reduced the coal mined at our Navajo Mine while 
simultaneously increasing the cost of power generation. With the 
economies of scale lost to circumstance, the Four Corners Power Plant 
and the Navajo Mine were poised to discontinue operation this year if 
it were not for our purchase of Navajo Mine. While we are now in a 
position to maintain our jobs and revenues and possibly increase them 
from this mine, we are being threatened by additional EPA regulations 
and an unstable energy future. Across the United States, coal economies 
are feeling the pinch, but not near to the extent as the Navajo Nation, 
what other economy in the United States stands to lose as much? Some 
may call this a war on coal, but from the Navajo Nations perspective, 
this is a war on the Navajo economy and our ability to act as a 
sovereign Nation.
    It is difficult enough working to meet the needs of the Navajo 
Nation with our current resources; I do not dare imagine the difficulty 
that would come with a 50 percent reduction in general revenues due to 
our coal mines shutting down! With our current budget heavily 
subsidized by federal funds, this scenario only increases that 
dependence. Many coal critics have argued that we can simply convert 
our power generation to natural gas and renewable energy while 
maintaining our jobs and revenues. Similar arguments were made when the 
Mohave Generating Station in Nevada shut down in 2005 cutting our coal 
supply through our Black Mesa Pipeline and we have yet to see any 
replacement jobs or revenue ten years later. The challenges of 
economically producing power through gas at the high elevations common 
on Navajo are enough to discourage the investment. Navajo is open to 
solar generation although it takes 10 acres per Megawatt to produce 
commercial power and has yet to sufficiently meet market demand. Even 
if these resources were possible, we would still see major economic 
cuts as our coal mines would shut down which represents over 50 percent 
of our jobs and revenues realized through coal power generation.
    The challenges are daunting when we look to the future of our 
Navajo people, our hope lies in the understanding and collaboration of 
the U.S. Government to insure that the transition of our Nation's 
energy resources happens in an economically responsible way, 
considerate of the lives that are impacted by policies written by 
individuals who have yet to visit our Nation. We continue to request 
for government to government consultation that is on equal ground, 
cognizant of our needs and not merely a box to be checked off on yet 
another government form. Our hope lies in the development of 
alternative clean coal technologies that would effectively bridge the 
gap between the utilization of our coal resources and the environmental 
concerns of the day. We implore the US Government to work with us to 
develop the financial incentives necessary for investors to bring these 
clean coal technologies to our reservations where the need is so great, 
where we have a ready workforce, abundant coal resources and the 
infrastructure to get gasified coal products and captured carbon into 
the market. The Navajo Nation wants to be a part of the solution that 
brings the United States closer to energy independence while meeting 
our needs at home. We ask that the US Government respect the decisions 
we make with our State, tribal and regional partners in response to 
meeting the ever changing environmental regulations while maintaining 
our regional and tribal economies. When we are able to work together in 
a meaningful way we can find some middle ground when it comes to our 
financial stability as a Nation. We want to move towards self-reliance 
by utilizing our resources to meet our needs while reducing our 
dependence on external funds from the Federal Government.
    In conclusion, I would like to reiterate the tremendous need to 
work together to meet the needs of our people and not to take the easy 
road in implementing federal standards at the peril of local tribal 
economies. Take the time to truly listen and understand our needs and 
work with us to find creative solutions to the challenges of our day. 
Allow us the financial incentives necessary to achieve the realization 
of basic necessities such as home ownership, electricity, water, access 
to improved roads and an education for our children so that they may be 
in a position to do what we are unable to. An education that will allow 
them to participate in the transition of our energy resources and the 
financial know how to compete in the worldwide marketplace.

    Senator Daines. Mr. Small.

    STATEMENT OF JASON SMALL, JOURNEYMAN BOILERMAKER; LABOR 
         ADVOCATE; AND NORTHERN CHEYENNE TRIBAL MEMBER

    Mr. Small. Good morning, Senator Daines and members of the 
Committee.
    My name is Jason Small. I am an enrolled member of the 
Northern Cheyenne Tribe, and I'm also a resident on the 
reservation. I am a journeyman boilermaker, a member of 
Boilermaker Local 11 here in Montana.
    And my comments today are based upon my experience working 
in coal-related employment across the nation in the capacity as 
a journeyman welder, boilermaker and also a union steward.
    I am also one of two internationally certified welding 
instructors here in Montana for the boilermakers. I teach at 
the Spencer Benson Welding Trading Center at Colstrip, quite 
frequently, and it assists many young people, especially 
members of the Crow and the Northern Cheyenne Tribes to enter 
the boilermaker trade. That center is financially supported by 
the International Brotherhood of Boilermakers and also PP&L.
    So, first, I'd like to thank you, Senator, for arranging 
this hearing, specifically asking how the Congress can be more 
helpful to tribes, such as the Crow and the Navajo, who are 
developing coal resources, and the Northern Cheyenne, who will 
hopefully pursue this option to address unacceptable rates of 
unemployment and poverty on our reservation.
    As you know, Indian Reservations contain 30 percent of the 
nation's coal reserves west of the Mississippi, and also $1.5 
trillion of energy resources. In my opinion, coal must continue 
to be the mainstay in the energy mix.
    While wind, solar, bio-mass, and hydroelectricity can 
contribute to our national energy needs, it is clear that they 
cannot totally replace coal as a base load power source.
    I am a strong proponent for development of the rich 
Northern Cheyenne coal reserves, recently expressing my reasons 
in a widely publicized Op-Ed piece.
    While development is opposed by some, I firmly believe that 
a majority of the tribal members are favorably inclined. So do 
some of our traditional leaders, such as Tim Lame Woman, who is 
the General District Chairperson for the reservation, and he's 
also a direct descendant of Chief Little Wolf and a member of 
the traditional Elkhorn Scrapers Society.
    Our Tribal President Llevando ``Cowboy'' Fisher promised to 
hold a referendum vote on that question, and I believe it will 
overwhelmingly pass. In a 1990s vote, the majority of the 
tribal members have already said ``yes'' to coal development.
    I believe the main reason it will pass, in my opinion, is 
because of the positive experiences that the Northern Cheyenne 
have had at Colstrip, through employment and other financial 
benefits from agreements related to Units 3 and 4 and the 
Western Energy Coal Mine.
    Presently, about 125 tribal members are employed at PP&L 
generating stations and the mine. Many others have retired and 
are now enjoying a good retirement income that come from these 
sorts of jobs.
    And you have to realize that the people who are still 
working there draw some of the highest hourly wages in the 
state and are thus able to provide very well for their 
immediate families and often extended family members.
    This employment, which started in the 1980s, has 
significantly changed the attitudes of many Northern Cheyenne 
about coal development because it has enabled them to break out 
of poverty.
    In addition, those companies provide scholarships, 
charitable donations and support environmental air quality on 
the reservation to the tune of about $500,000 a year.
    Over the years, the Cheyenne have learned about 
reclamation; developing confidence that the lands can be fully 
restored. Indeed, one of our tribal members actually heads up 
Western Energy's Reclamation Program.
    Under federal and state law, the companies are held to very 
high standards, and many of the Cheyenne have learned that the 
lands disturbed by mining when reclaimed are actually in better 
condition than they were prior to mining.
    Western Energy has received numerous national awards for 
reclamation excellence including the National Institute for 
Urban Wildlife. In addition to federal and state laws, the 
tribes can enact additional laws to protect sacred sites and 
address other tribal concerns related to reservation coal 
development.
    The energy complexes at Colstrip and Crow provide profound 
benefits to the region, state and two reservations. For 
example, economists from the University of Montana provide the 
following statistics:

   The Colstrip generating plants provide 3,740 jobs 
        directly related to energy production in Montana, 3500 
        in eastern Montana alone. An additional 2,688 private 
        sector jobs are related also.

   Personal income from coal-related employment is 
        nearly $363 million statewide.

   PP&L Colstrip employs 363 permanent workers also, 
        which includes 41 tribal members, which is nearly one-
        eighth of the workforce.

   Others are also employed by subcontractors, 
        especially during the outages and overhauls in the 
        spring when there are 680 employed by North American 
        Energy Services alone, and also many of those are 
        Navajo workers that have a huge boilermaker 
        constituency.

   The Western Energy Mine in Colstrip currently 
        employs 80 minorities, and the majority of are them 
        Northern Cheyenne, nearly one-third of the craft 
        workforce. This satisfies an original agreement or an 
        original tribal goal of developing a trained workforce 
        for the day when the Northern Cheyenne would develop 
        their own reserves.

   The beneficial impacts of the Westmoreland Mine at 
        Crow are even more powerful, as Mr. Old Coyote here has 
        already stated.

    In conclusion, I suggest that responsible coal development 
can be a major key enabling the Northern Cheyenne and its 
members to rise out of poverty and achieve self-sufficiency.
    Your national leadership and compassion for the native 
people is essential in this struggle. I ask you to please keep 
up the good fight, and particularly against the unrealistic and 
punitive regulations being pushed by the EPA.
    We know that additional regulations will be mandated. They 
must be pursued in a reasonable manner, though, which will not 
devastate the economy of southeastern Montana and still allow 
for responsible development.
    Thank you for the opportunity to testify, and I will be 
happy to answer any questions you may have.
    [The prepared statement of Mr. Small follows:]

   Prepared Statement of Jason Small, Journeyman Boilermaker; Labor 
             Advocate; and Northern Cheyenne Tribal Member
    Senator Daines and members of the Committee: My name is Jason 
Small. I am an enrolled member of the Northern Cheyenne Tribe and 
reside on the Northern Cheyenne Reservation. I am also a journeyman 
boilermaker, member of Montana's Local 11, and my comments today are 
based upon my experience working in coal-related employment across the 
Nation, including as a union steward. I am also one of two 
internationally certified welding instructors in Montana. I teach at 
the Spencer Benson Welding Training Center, Colstrip, MT which assists 
many young people, especially members of the Crow and Northern Cheyenne 
Tribes to enter the boilermaker trade. That center is financially 
supported by the International Brotherhood of Boilermakers and PPL as a 
way to help people gain a trade, particularly those from the Cheyenne 
Reservation with 70 percent unemployment.
    Thank you Senator for arranging this hearing, specifically asking 
how the Congress can be more helpful to Tribes such as the Crow and 
Navajo who are developing coal resources and the Northern Cheyenne who 
will hopefully pursue this option to address unacceptable rates of 
unemployment and poverty on our Reservation. As you probably know, 
Indian Reservations contain 30 percent of the nation's coal reserves 
west of the Mississippi, an estimated 1.5 trillion dollars of energy 
resources. In my opinion, coal must continue to be the mainstay in the 
energy mix. While wind, solar, bio-mass, and hydro energy can 
contribute to our national energy needs, it is clear they cannot 
totally replace coal as a base load power sources.
    I am a strong proponent for development of the rich Northern 
Cheyenne coal reserves, recently expressing my reasons in widely 
publicized Op-Ed piece. While development is opposed by some, I firmly 
believe that a majority of tribal members are favorable inclined. So do 
some of our traditional leaders such as Tim Lame Woman, General 
District Chairperson for the Reservation, a direct descendant of Chief 
Little Wolf and member of the traditional Elkhorn Scrapers Society . 
Tribal President Llevando ``Cowboy'' Fisher promised to hold a 
referendum vote on that question and I believe it will overwhelmingly 
pass. In a 1990's vote,the majority of tribal members said ``Yes'' to 
coal development, but ``No'' to coal bed methane. Still, our current 
leaders feel that another vote is necessary.
    The main reason it will pass, in my opinion, is because of the 
positive experiences that the Northern Cheyenne have had at Colstrip, 
through employment and other financial benefits from agreements related 
to Units 3 & 4 and the Western Energy Coal Mine. Presently, about 125 
tribal members are employed at PPL Generating Stations and the mine. 
Many others have retired, now enjoying good retirement income. Those 
employees draw some of the highest hourly wages in the State and are 
thus able to provide very well for their immediate families and often 
extended family members. This employment which started in the 1980's 
has significantly changed the attitudes of many Northern Cheyenne about 
coal development because it has enabled them to break out of poverty. 
In addition, those companies provide scholarships, charitable donations 
and support environmental air quality on the Reservation to the tune of 
about $500,000 per year. Over a hundred other tribal members have 
gained college degrees as a result of the PPL and Western Energy 
scholarship programs.
    Over the years, the Cheyenne have learned about reclamation, 
developing confidence that the lands can be fully restored. Indeed Rich 
Spang, a great-great grandson of one our most famous Chiefs, Dull Knife 
heads up Western Energy's Reclamation Program. Under federal and state 
law, the companies are held to very high standards and many of the 
Cheyenne have learned that the lands disturbed by mining when reclaimed 
are actually in better condition than pre-mining. The water comes back; 
the grazing is prime, with all of the traditional plants re-introduced 
and the reclaimed lands is prime wildlife habitat. Western has received 
numerous national awards for reclamation excellence including the 
National Institute for Urban Wildlife. In addition to federal and state 
laws, Tribes can enact additional law to protect sacred sites and 
address other tribal concerns related to reservation coal development.
    The energy complexes at Colstrip and at Crow provide profound 
benefits to the region, State and two Reservations. For example, 
economists from University of Montana provide the following statistics:

   The Colstrip generating plants provide 3,740 jobs directly 
        related to energy production in Montana, 3,500 in eastern 
        Montana. An additional 2,688 private sector jobs are related.

   Personal income from coal-related employment is about 363 
        million.

   PPL Colstrip employs 363 permanent workers, including 41 
        tribal members, one-eighth of the workforce. Others are 
        employed by subcontractors, including during the annual 
        overhaul when 680 are employed by North American Energy 
        Services alone including many Navajo boilermakers.

   The Western Energy Mine, Colstrip currently employs 80 
        minorities, the majority Northern Cheyenne, nearly one-third of 
        the craft workforce. This satisfies an original tribal goal of 
        developing a trained work force for the day when the Northern 
        Cheyenne would develop their own reserves.

   The beneficial impacts of the Westmoreland Mine at Crow are 
        even more powerful and I leave that discussion to Chairman Old 
        Coyote.

    In conclusion, I suggest that responsible coal development can be a 
major key enabling the Northern Cheyenne Tribe and its members to rise 
out of poverty and achieve self-sufficiency. Your national leadership 
and compassion for the native people is essential in this struggle. 
Please keep up the good fight, particularly with the unrealistic and 
punitive regulations being pushed by EPA. While know, that additional 
regulations will be mandated, they must be pursued in a reasonable 
manner which will not devastate the economy of southeastern Montana and 
still allow for responsible development.
    Thank you for the opportunity to testify. I will be happy to answer 
any questions you may have.

    Senator Daines. Thank you, Mr. Small. Mr. Henson.

 ERIC HENSON, SENIOR VICE PRESIDENT, COMPASS LEXECON; RESEARCH 
    AFFILIATE, HARVARD PROJECT ON AMERICAN INDIAN ECONOMIC 
                          DEVELOPMENT

    Mr. Henson. Thank you.
    Thank you, Senator Daines, for holding this hearing, and 
thank you, Chairman, for inviting us all to tribal land.
    To be brief, my name is Eric Henson, a member of the 
Chickasaw Nation, and I think that most people here know, I 
work a couple of jobs.
    I work at an economics consulting firm and we did a study 
about a year ago on the importance of coal development on the 
Crow Nation.
    I also work as a Research Fellow at the Harvard Project on 
American Indian Economic Development, and I have had the great 
privilege to be associated with the Harvard Project for about 
18 years now.
    There are studies in my written comments, but keep in mind 
the principle, and you'll find that continued and expanded coal 
production on Crow lands represents up to $360 to $370 million 
a year to the state economy, more than a thousand jobs, tens of 
millions of dollars in local, state and federal taxes, and most 
importantly, from our perspective, the potential quadrupling of 
the non-federal funds for the Crow Tribe.
    This would be a major benefit for the tribe, to maintain 
and achieve a massive amount of self-sufficiency that it has so 
far been unable to achieve.
    As you've heard, the socio-economic conditions at the Crow 
Reservation are very dire. Per capita income is typically less 
than half of the U.S. average. Official unemployment rates are 
about four times of the United States.
    The unofficial unemployment rate, including people not 
actively seeking jobs, as you've heard, is about six times the 
United States rate.
    Family poverty and childhood poverty can be twice the 
average of the United States, and there are a couple of 
different mechanisms by we can all strive to overcome some of 
these dire economic conditions.
    But first, as you know, is the Coal Production Tax Credit. 
Basic economics tells us that if tax credits are a way to 
decide a particular activity, one might consider the time 
horizon of the tax credit in conjunction with the activity that 
is going to be induced.
    Obviously, coal mining is a long-term activity and, of 
course, a massive upfront investment. And so tax policy is 
aligned in terms of the time horizon. It simply makes more 
sense.
    A permanent tax credit, or one that doesn't have to be 
renewed for decades, aligns itself much better with coal 
production than a temporary credit that is continually up for 
extension.
    Secondly, as you know, uncertainty for coal produced on 
Indian lands, is the ability to access our markets. Basic 
economics tells us that any producer of any good, if they are 
seen liable for their product, basic potential for lower 
prices, greater risk, less investment in any production.
    Given the infrastructure that we face here, and the 
topography and geography we're dealing with, that does in fact 
mean access to the Asian market, and I have some statistics 
about how the total coal demand in the United States is likely 
just to stay flat or decline slightly over the next several 
decades, while growing markets in Asia, China, India and South 
Korea may grow substantially.
    Being able to access those markets would do wonders for the 
coal produced on Crow lands in terms of diversifying the 
consumer base and bring sustainable economic volume to the 
tribe.
    And with that, I'd be happy to yield to the Committees.
    [The prepared statement of Mr. Henson follows:]

   Prepared Statement of Eric Henson, Senior Vice President, Compass 
    Lexecon; Research Affiliate, Harvard Project on American Indian 
                          Economic Development
    I would like to take a moment to thank you for the opportunity to 
visit the land of the Aps alooke and to speak today. 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, MA and 
Tucson, AZ. 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 the Native communities in Canada and the United States.
    \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 
legislation that might impact tax rates applicable to coal production 
on Indian lands.
---------------------------------------------------------------------------
    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 these tribal lands on several occasions.
---------------------------------------------------------------------------
    \5\ A copy of my curriculum vitae has been retained in the 
Committee files.
---------------------------------------------------------------------------
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 more and more 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 for all 
tribes to learn from. \6\
---------------------------------------------------------------------------
    \6\ See the Harvard Project website at http://www.hpaied.org/.
---------------------------------------------------------------------------
    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). Since 1999, we have honored nearly 120 tribal governmental 
initiatives. \7\ HPAIED remains committed to empowering Native Nations 
through identifying the common characteristics of tribes that are 
successfully charting a course towards a socially, culturally, 
politically, and economically healthy future.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
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 
overriding 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, 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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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 United States 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.''
---------------------------------------------------------------------------
    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 
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 record-
        keeping, efficient administration processes, reliable computer 
        networks, and the like.

    Culture Matters: Given the importance of institutions within a 
society, the social norms and worldview 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 understated. \12\ 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.
---------------------------------------------------------------------------
    \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 page 13.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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 
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 how tribal economic investments pay off.

   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 own institutions and runs them 
in congruence with its own culture, 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.
---------------------------------------------------------------------------
    The core tenets of Nation Building, which are required for 
effective economic development, are directly related to the issues that 
bring us here today. Over the past couple of decades, the Crow Nation 
has continued to push for increased autonomy and self-sufficiency and 
has made great strides in its efforts to build a sustainable economy. 
However, ``the economic condition of the Crow is very poor. Jobs number 
few.'' \15\ The Crow's efforts to play an active role in the regional 
economy by developing the tribe's abundant natural resources have 
brought jobs and revenue into the tribal economy, and have also 
benefited Big Horn County and the State of Montana. Similarly, 
proposals to maintain, and potentially expand, mining operations stand 
to substantially benefit the Crow Nation, the County, and the State. As 
noted by Chairman Old Coyote, ``There are vast resources that can be 
developed to improve economic conditions of the Crow.'' \16\ Harvard 
Project researchers, with support from the economics consulting firm 
where I work, recently undertook a study of coal mining on the Crow 
Reservation. Our study explicitly addressed the implications of 
continued/expanded mining for the Tribe, the County, and the State. 
\17\ The complete study (has been retained in Committee files). I next 
summarize our findings and discuss the implications for economic 
development on the Crow Reservation.
---------------------------------------------------------------------------
    \15\ Dennis Zotigh, ``Darrin N. Old Coyote, Chairman: the 
Smithsonian National Museum of the American Indian's Meet Native 
America Series,'' October 31, 2013, at http://blog.nmai.si.edu/main/
2013/10/darrin-n-old-coyote-crow-nation.html.
    \16\ Dennis Zotigh, ``Darrin N. Old Coyote, Chairman: the 
Smithsonian National Museum of the American Indian's Meet Native 
America Series,'' October 31, 2013, at http://blog.nmai.si.edu/main/
2013/10/darrin-n-old-coyote-crow-nation.html.
    \17\ Professor Joseph P. Kalt, The Mining of Crow Nation Coal: 
Economic Impact on the Crow Reservation, Big Horn County, and Montana, 
The Harvard Project on American Indian Economic Development, February 
4, 2014 (hereinafter, ``2014 Kalt Report'').
---------------------------------------------------------------------------
Economic Development and Coal Mining on the Crow Reservation
    Great progress towards sustainable economic development has been 
made on the Crow Reservation in recent years. However, efforts to 
revitalize the tribal economy began from such a low base (in terms of 
very low income levels, high poverty and unemployment rates, alarming 
health indicators, etc.) that much still needs to be done. Consider a 
few basic statistics, illustrated in Figures 1 and 2. As shown in 
Figure 1, between 2006 and 2010, the annual per-capita income of 
American Indians living on the Crow Reservation was $11,987 (compared 
to the U.S. average of $27,334; median household income showed a 
similar divergence). Figure 2 shows that during that same time period, 
when the national unemployment rate was approximately 8 percent, Crow 
unemployment hovered at about 32 percent. \18\ Had we also included 
community members who had already given up searching for work, this 
unemployment rate would have been closer to 47 percent. \19\ As noted 
above, per-capita income levels on the Crow Reservation are less than 
half that on the U.S. average, and family poverty levels reflect this 
same shortfall: During the five-year time period used in our recent 
study of coal development, the family poverty rate for the Crow Nation 
averaged 24 percent which was more than twice that of the average for 
the United States. Sadly, the poverty rate among Crow children during 
the study period was even more pronounced: Childhood poverty rates are 
alarming all across America, but on the Crow Reservation we saw a 39 
percent rate (compared to the 19 percent rate for the United States). 
\20\
---------------------------------------------------------------------------
    \18\ See, e.g., 2014 Kalt Report. According to the Montana 
Department of Labor & Industry, official unemployment on the Crow 
Reservation in 2012 was 25.1 percent (see Crow Nation, ``Crow 
Reservation: Demographic and Economic Information,'' at page 6, October 
2013, at http://lmi.mt.gov/media/9409/rf13-crow-web.pdf). This was 
still dramatically higher than the United States, which had an average 
unemployment rate of 8 percent throughout 2012 (see the U.S. Department 
of Labor, Bureau of Labor Statistics, ``Labor Force Statistics from the 
Current Population Survey,'' 2012, at http://data.bls.gov/timeseries/
LNS14000000).
    \19\ Statement of Darrin Old Coyote, Chairman, Crow Nation, Mining 
in America: Powder River Basin Coal Mining the Benefits and Challenges, 
Before the House Committee on Natural Resources, Subcommittee on Energy 
and Mineral Resources, 113th Congress 2013 (hereinafter, ``2013 Old 
Coyote Testimony''), at page 3.
    \20\ The U.S. Census, American Community Survey (ACS) 5-year data 
were presented because the U.S. Census typically provides the most 
complete and reliable data available. The ACS was utilized to ensure 
the accuracy and reliability of our study of coal development on the 
Crow Reservation. The ACS 5-year data for the years 2006-2010 were 
chosen because 2010 represents the last year that the necessary 
demographic information is available for American Indian or Alaskan 
Native residents on the Crow Reservation (and Off-Reservation Trust 
Land). More recent data (i.e., the ACS 5-year information for 2009-
2013) show the combined demographic information of both American Indian 
or Alaskan Native residents and all other races residing in the area. 
According to these more recent data, combined unemployment on the Crow 
Reservation (and Off-Reservation Trust Land) was 29.2 percent, again 
dramatically higher than that of the U.S. as a whole (which was 9.7 
percent). Family poverty rates were similarly divergent, 22.1 percent 
on the Crow Reservation and trust lands compared to 11.3 percent in the 
U.S. as a whole. As before, the child poverty rate on the Crow 
Reservation and trust lands was far too high, at 39.5 percent on the 
reservation, compared to 21.6 percent in the United States as a whole 
(see the U.S. Census Bureau, 2009-2013 5-Year American Community 
Survey, at http://factfinder. census.gov/faces/tableservices/jsf/pages/
productview. xhtml?fpt=table).
---------------------------------------------------------------------------
    It is striking that such socio-economic conditions were (and are) 
present on the Crow Reservation, despite the tribe's abundance of 
valuable and accessible natural resources. These include 
``approximately 1.2 million acres of grazing land, 150,000 acres of 
dryland farmland, 30,000 acres of irrigated farmland,'' and of course a 
substantial reserve of coal, estimated at 17 billion short tons. \21\ 
We are meeting here today to discuss coal development, and by any 
measure, the potential resource base of the Crow is impressive; the 
recoverable coal reserves in the Crow Nation account for nearly 12 
percent of those in Montana and more than 3 percent of those of the 
U.S. as a whole. \22\ These potential assets offer significant, unique, 
and potentially life-changing opportunities for individual Crow Indians 
and the entire Crow community. These opportunities should arise in the 
form of well-paying jobs, substantial royalty revenues to the tribe, 
and greater access to critical healthcare and social services, to name 
just a few. If the Crow Nation becomes unable to access these 
resources, then what is already a set of complex socio-economic 
challenges could easily degrade further.
---------------------------------------------------------------------------
    \21\ LAO Environmental, Inc., ``Crow Indian Tribe: Resource 
Report,'' at pages 20 and 71, April 15, 2002, reported by the Bureau of 
Land Management, at http://www.blm.gov/style/medialib/blm/mt/field --
offices/miles_city/og_eis/crow.Par.79832.File.dat/minerals.pdf.
    \22\ Montana's recoverable coal reserves are reported as 74.6 
billion short tons and the total coal reserves in the United States are 
reported as 256.7 billion short tons (U.S. Energy Information 
Administration, ``U.S. Coal Reserves with Data for 2012,'' December 16, 
2013, at www.eia.gov/coal/annual/pdf/table15.pdf).
---------------------------------------------------------------------------
    As many already know, Westmoreland Coal Company has leased and 
operated the Absaloka Mine since the 1970s. The mine has been a 
significant part of the local economy ever since. In recent years, the 
Absaloka Mine alone has accounted for nearly two-thirds of the Crow 
Nation's non-federal budget; these are revenues that allow the tribe to 
pay for governmental salaries, provide social services, and to 
supplement federal funding to vital community programs such as Family 
Preservation, Tribal Elders, Head Start, and the Boys & Girls Club. 
\23\
---------------------------------------------------------------------------
    \23\ Although the tribal budget is modest overall, services covered 
by the Crow Nation include important line items such as provision of 
supplemental money for staffing at the BIA-funded police department 
(see, e.g., Special Session of the Crow Tribal Legislature, Approval of 
the Annual Budget for the Operation of the Crow Tribal Government and 
the Expenditure of Tribal Revenue for Fiscal Year 2012, CLB 11-04, 
September 29, 2011, at http://www.crowlaws.org/tribal_legislation_2002-
present, at page 3).
---------------------------------------------------------------------------
    Our 2014 study of coal on Crow lands evaluated the Absaloka Mine, 
and also assessed the potential economic value of the proposed Big 
Metal Project, an ongoing development initiative between the Crow 
Nation and Cloud Peak Energy (``Cloud Peak''). Our research found that 
in 2013, the average annual compensation and benefits for unionized 
Absaloka Mine workers exceeded $91,000 per person. \24\ We found that 
expansion of operations at the Absaloka Mine, and/or initiation of 
mining at Cloud Peak's Big Metal Project, would be expected to create 
an impact of similar magnitude. \25\ However, the benefits of such 
development do not accrue only to the specific workers with jobs in the 
mining industry. We must bear in mind that the economic impacts of 
mining operations on Crow lands extend far beyond just those to the 
local community. Big Horn County, the State of Montana, and the United 
States federal government also receive considerable economic benefits 
from coal produced on the Crow Reservation.
---------------------------------------------------------------------------
    \24\ Salary and benefits data were provided for the 2014 Kalt 
Report by Westmoreland. The average annual salary for the unionized 
workforce at the Absaloka Mine was $56,264. Overtime and benefits, such 
as retirement funding and healthcare provision, brought the average 
annual compensation for all workers at the mine to $91,408.
    \25\ Due to its operation of the Absaloka Mine, employment 
opportunities with Westmoreland have been of great importance to the 
Crow Nation's citizens; roughly 70 percent of the mine's workforce is 
associated with the Crow Tribe (2013 Old Coyote Testimony at page 3). 
The mine typically employs on the order of 100 to 125 Crow Nation 
citizens or affiliated individuals (see, ``Daines introduces bipartisan 
legislation to encourage investment in Indian coal,'' Sidney Herald, 
June 7, 2014, and Statement of Scott Russell, Secretary, Crow Nation, 
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 Congress, April 
1, 2011 (hereinafter, ``2011 Russell Testimony''), at page 11).
---------------------------------------------------------------------------
    Our estimate is that the combined contribution of continued 
operation of the Absaloka Mine, along with the potential mining 
operations of the Big Metal Project, could contribute more than $370 
million dollars annually to what is referred to as Gross Regional 
Product (GRP). \26\ Annual state and federal tax revenues from the 
projects are estimated to be approximately $22.9 million and $21.9 
million respectively. The government of the Crow Nation would likely 
benefit from as much as $107 million in royalties and taxes each year 
(see Figure 3) in addition to $3.75 million in initial option payments 
already received for the Big Metal Project. Such benefits, whether they 
be to the state, county, federal government, or tribal nation, could 
easily be lost if coal development and/or expansion at Crow is 
curtailed.
---------------------------------------------------------------------------
    \26\ GDP is defined by the U.S. Bureau of Economic Analysis as 
``the market value of goods and services produced by labor and property 
in the United States.'' (See the BEA at http://bea.gov/glossary/
glossary_g.htm). GRP is similar to GDP, but it measures the total 
output of an economy within a specific region/area, rather than the 
national economy.
---------------------------------------------------------------------------
    Research has noted that tribes that engage in the natural resource 
industries (such as the Crow Nation) are often overly and unjustly 
burdened by the current system. The Crow have been subjected to these 
burdens in multiple sectors of development. Consider, for a moment, an 
example from the oil and gas industry. In January 2005, the Crow Tribal 
Council approved an oil and gas lease on tribal lands, \27\ but 
development of the resource was blocked until September 2007 due to the 
incomprehensibly slow review and approval process in place at the BIA. 
\28\ Issues with the BIA persist: For example, the Crow Nation reports 
that BIA's records for surface and mineral ownership are repeatedly 
missing or out-of-date. \29\ Bureaucratic inefficiencies, layers of 
regulatory oversight, near-complete 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. \30\ In order to level the playing 
field for tribes, and allow them to overcome such hurdles to self-
sufficiency, federal action can and should be taken at once.
---------------------------------------------------------------------------
    \27\ Clair Johnson, ``Crow Tribe signs lease with oil exploration 
firm,'' Billings Gazette, May 16, 2005, 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, 
http://www.indianz.com/News/2005/008205.asp.
    \28\ 2011 Russell Testimony at page 13.
    \29\ 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.
    \30\ 2014 Kalt Report at page 2.
---------------------------------------------------------------------------
    One such action would be making the Indian Coal Production Tax 
Credit (ICPTC) permanent. Those present today know that the ICPTC 
assists mining firms in absorbing part of the production cost for coal 
operations on reservation land. The potential economic benefits of the 
tax credit include positioning of tribal coal so that it is better able 
to compete in both national and international marketplaces. In 
addition, the tax credit provides an incentive which serves to promote 
expansion beyond current production levels on the Crow Reservation. 
However, this federal tax credit has heretofore been temporary, and has 
thus been consistently threatened. The temporary nature of this tax 
credit has contributed to instability in the limited number of tribal 
economies that rely on coal for their well-being. The uncertainty 
surrounding the tax regime applicable to coal production on tribal 
lands increases risk, and thus contributes to potential under-
investment by mining firms operating within Indian Country (and, among 
those considering operations on tribal lands). Indeed, economics 
teaches that uncertainty around future tax rates can prevent firms from 
undertaking investments which cannot be reversed once they are made, 
and which pay off over long time horizons.
    Although the ICPTC has (temporarily) provided a more level playing 
field for coal mining on the Crow Reservation, the tax credit alone is 
not sufficient to redress the bureaucratic impediments that stymie coal 
production on Native lands. An additional step that is critical for the 
Crow Nation to fully benefit from its coal resources would be securing 
equal access to expanded markets, both domestic and foreign.
    Projected increases in international coal consumption highlights 
the importance of increasing access to foreign markets for coal 
produced on the Crow Reservation (as can be seen in Figure 4). \31\ 
According to the U.S. Energy Information Administration, global 
consumption of coal is expected to increase from 147 quadrillion Btu in 
2010 to 220 quadrillion Btu in 2040 (i.e., a 50 percent increase), \32\ 
while domestic consumption is expected to remain relatively flat. \33\ 
The disparity between the projected growth of global and domestic 
consumption emphasizes the importance of providing Native Nations 
access to international markets. However, the importance of access to 
international markets is not only derived from projected global demand 
growth. As with any product, providers need to mitigate the risks 
associated with having only a limited customer base.
---------------------------------------------------------------------------
    \31\ U.S. Energy Information Administration, ``International Energy 
Outlook 2013,'' July 25, 2013, at http://www. eia.gov/pressroom/
presentations/sieminski_07252013.pdf, at page 6.
    \32\ U.S. Energy Information Administration, ``International Energy 
Outlook 2013,'' July 25, 2013, at http://www. eia.gov/forecasts/ieo/
pdf/0484(2013).pdf, at page 67.
    \33\ U.S. Energy Information Administration, ``Annual Energy Report 
2014: Early Release Overview,'' at http://www.eia.gov/forecasts/aeo/er/
pdf/0383er(2014).pdf, at page 11. Consider the emerging economies of 
China and India. Coal consumption between those two countries has been 
projected to increase from 82 quadrillion Btu in 2010 to 144 
quadrillion Btu in 2040, an increase of 76 percent. Compare this to the 
United States, which consumed 21 quadrillion Btu of coal in 2010 and is 
expected to remain at or below that level through 2040 (see Figure 5). 
The data cited here can be found at the U.S. Energy Information 
Administration, ``International Energy Outlook 2013,'' July 25, 2013, 
at http://www. eia.gov/forecasts/ieo/pdf/0484(2013).pdf, at pages 68-69 
and 71.
---------------------------------------------------------------------------
    The Crow Nation has recently suffered the consequences of only 
being able to access a limited market. In November 2011, the Sherburne 
County Generating Station (``Sherco'') in Becker, Minnesota, suffered a 
turbine malfunction which caused a fire in Unit 3. This fire shut the 
unit down for nearly two years. \34\ The Absaloka Mine was specifically 
developed to supply coal to the Sherco plant. \35\ The temporary 
shutdown of the plant resulted in a loss of approximately 50 percent of 
the Absaloka Mine's coal sales in 2012. \36\ The drop-off in demand for 
coal produced on the Crow Reservation was followed by a curtailment of 
the workforce at the mine, which hurt individual tribal employees of 
the mine, the tribal government, and the community. \37\ This loss 
clearly highlights the risk the tribe faces to its budget as a direct 
result of the Absaloka Mine's limited access to a wide range of 
potential buyers. \38\
---------------------------------------------------------------------------
    \34\ Elizabeth Dunbar, ``Xcel Energy Sherco plant returns to 
service after repairs,'' MPR News, October 21, 2013, at http://
www.mprnews.org/story/2013/10/21/environment/xcel-energy-sherco-plant-
returns-to-service-after-repairs.
    \35\ Tom Lutey, ``Soft Demand for Coal Ripples through Area Mines, 
Plants,'' Billings Gazette, June 24, 2012, http://billingsgazette.com/
news/state-and-regional/montana/soft-demand-for-coal-ripples-through-
area-mines-plants/article_ce7eb1fc-56e9-5a33-aa22-509c3f621ab9.html.
    \36\ Westmoreland Coal Company, FY 2011 Form 10K, at page 22.
    \37\ 2013 Old Coyote Testimony at page 3.
    \38\ There is also increasing pressure for the Absaloka Mine to 
supply a wider range of markets due to policy changes underway at Xcel 
Energy (``Xcel''). Xcel operates the Sherco Power Plant, and is one of 
the most important outlets for coal produced on the Crow Reservation. 
In January 2015, Xcel put forth plans to implement a reduction in coal-
generated electricity at the Sherco plant (from 37 percent in 2015 to 
29 percent in 2030), as part of an effort to transition to more 
renewable energy (see, e.g., David Shaffer, ``Xcel to Double down on 
Renewable Energy in Minnesota,'' Star Tribune, January 2, 2015, at 
http://www. startribune.com/business/287387921.html).
---------------------------------------------------------------------------
    The proposed Big Metal Project will exacerbate the need for access 
to international markets for coal produced on the Crow Reservation. In 
early 2013, Cloud Peak announced an agreement with SSA Marine (``SSA'') 
that provides an option to transport up to 17.6 million tons of coal 
through SSA's planned Gateway Pacific Terminal at Cherry Point 
(``Gateway Pacific''). \39\ Completion of the Gateway Pacific facility 
is subject to obtaining the required permits and estimates for 
commencement of commercial operations appear to target a start date no 
earlier than 2018. \40\ If completed, the Gateway Pacific facility 
would be the key export terminal to reach overseas markets for coal 
produced on the Crow Reservation, and basic economics tells us that a 
more diversified customer-base would mitigate the marketplace risks 
currently faced by those producing (or contemplating production of) 
coal on the Crow Reservation. \41\ A level playing field for production 
on the Crow Reservation translates into more jobs for the citizens of 
the Crow Nation, with a number of benefits spilling over to Big Horn 
County and the State of Montana (e.g., increased tax revenues). \42\ As 
noted above, the combined impact of continued production at the 
Absaloka Mine, along with operations getting underway at the Big Metal 
Project, is projected to be worth as much as $107 million in revenue to 
the Crow Nation's annual budget. This represents a four-fold increase 
in non-federal dollars currently available to the Crow government, and 
will markedly increase the tribe's ability to be self-sustaining and to 
provide for the needs of its citizenry.
---------------------------------------------------------------------------
    \39\ Cloud Peak Energy, ``2013 Annual Corporate Report,'' Gillette, 
WY, 2014, at page 3. Cherry Point is on the northern coast of 
Washington State in Whatcom County, just 17 miles south of the Canadian 
border and approximately 108 miles north of Seattle.
    \40\ Cloud Peak Energy, Press Release, ``Cloud Peak Energy 
Announces Option Agreement with SSA Marine for Capacity at Future Cape 
Size Export Terminal in Pacific Northwest,'' February 13, 2013, http://
investor.cloudpeakenergy.com/press-release/business-development/cloud-
peak-energy-announces-option-agreement-ssa-marine-capacity. Current 
information indicates that final environmental impact statements are 
not going to be issued until 2017 (see, Washington State Department of 
Ecology, ``Environmental Review: Gateway Pacific Terminal at Cherry 
Point Proposal,'' at http://www. ecy.wa.gov/geographic/gatewaypacific/
). According to Cloud Peak, upon completion of the permitting process 
the Gateway Pacific facility must undergo two years of construction 
before it can begin operations, so prior indications of a 2018 start 
date are likely to slip back by more than a year.
    \41\ I note that the Gateway Pacific facility has stirred 
controversy, much of which involves the sovereign territory rights of 
the Lummi Nation of Washington State. The Lummi Nation asserts that 
Gateway Pacific infringes upon its ancestral fishing grounds, which are 
guaranteed by treaty. This is a delicate issue, and deserves respectful 
consideration by all parties involved. As discussed above, tribal 
sovereignty and autonomy are vital to economic growth and building 
well-functioning tribal communities, and these findings of the Harvard 
Project hold for all tribes (Crow, Lummi, and the hundreds of others 
found throughout Indian Country alike).
    \42\ Analysis provided by the House Committee on Ways & Means 
indicates the 10-year cost of the most recent one-year ICPTC extension 
is expected to be $38 million. This decrease in federal tax revenues is 
insignificant in the federal budget, so much so that USA Today has 
commented, ``The budgetary cost of the Indian coal production credit is 
so small it doesn't show up in most Congressional Budget Office 
estimates.'' It is not surprising that a number of Montana's 
legislators have been working to make the ICPTC permanent (see, Gregory 
Korte, ``In Montana, Crow Tribe sees perils to `fiscal cliff'.'' See 
also, USA Today, November 19, 2012, at http://www.usatoday.com/story/
news/2012/11/18/crow-tribe-fiscal-cliff/1706695/. Finally, see the 
United States House of Representatives, Committee on Ways & Means, 
``Section-by-Section Summary of HR 5771, The `Tax Increase Prevention 
Act of 2014','' at https://rules.house.gov/sites/republicans 
.rules.house.gov/files/113-2/PDF/113-HR5771-SxS.pdf).

    Senator Daines. Thank you for your testimony, Mr. Henson.
    We are now going to move into some questions and answers.
    Chairman Old Coyote and Speaker Bates, given the importance 
of coal to your people, I want to ask about the EPA's 
recognition of this when they developed their proposed clean 
power regulation. The EPA has stated they consulted with both 
the Crow and the Navajo Tribes during the formulation for this 
proposal.
    At what stage did the EPA consult with your tribes, and was 
that consultation substantive? Did they take any action as a 
result of your concerns that you brought forward during this 
consultation? Chairman Old Coyote?
    Mr. Old Coyote. We did receive a letter, kind of a general 
letter, kind of a ``Dear Tribal Leader'' letter. It didn't 
specifically talk about our resource or our coal mining or Crow 
people specifically.
    And there's only three tribes in the whole United States 
that developed coal. Navajo, Hopi and Crow are the three 
tribes. And you would think the EPA would come to all three 
tribes to consult on any kind of a coal issue where a coal 
policy that is going to be implemented, or the administration 
could move forward. So, no, there was no consultation.
    We went back to D.C., spoke with the President directly. 
Mr. Bates and I were in the White House speaking with 12 other 
tribal leaders. And so Mr. Bates and I talked about the 
importance of coal. I talked about trying to diversify the use 
of coal.
    And the next day, I was invited back to speak about the 
importance of coal to the Crow people. Invited back the third 
day. So the three days I spoke about coal to the President."
    Finally, I was invited back a fourth time to talk about the 
effects it will have on the Crow people and so they never did 
mention or take into consideration the effect it would have on 
the Crow people if this EPA rule were to be implemented, today.
    Senator Daines. Thanks, Mr. Chairman.
    Speaker Bates?
    Mr. Bates. Thank you for the question.
    That would depend on, Senator, at what level.
    The first level is yes, they have consulted with the Navajo 
Nation to a certain extent.
    To my understanding, there was negotiations; there were 
talks. And when I say at the lower level, I mean staff 
basically.
    Senator Daines. Were you ever involved in those 
consultations?
    Mr. Bates. No.
    Senator Daines. Was the Department of the Interior ever 
involved in those conversations?
    Mr. Bates. No.
    The Department of Justice, as well as our environmental 
protection division were in consultations with the EPA but 
primarily staff.
    And again, to my understanding, Senator, that those 
negotiations, they understood the impact of regulations as it 
pertained to the Navajo Nation in terms of revenue, in terms of 
jobs.
    However, that conspiracy from the local level to the higher 
echelon of the Federal Government has not been taken into 
consideration.
    So, you can look at it in two different ways.
    Yes, but yet no at the end of the day, because whatever is 
decided as it pertains to Indian Country in terms of EPA 
regulations, isn't going to be done by the higher folks in 
Washington, D.C., and most likely, without consideration of the 
impact, in this case, to the Navajo Nation.
    Senator Daines. Thank you, Speaker Bates.
    I want to turn to Attorney General Fox.
    In a broader perspective, the EPA upholds obligations, you 
mentioned Executive Order 13175 in your testimony to, quote, 
``establish regular and meaningful consultations and 
collaboration with tribal officials in the development of 
Federal policies that have tribal implications.''
    What actions should the EPA have taken to be in compliance 
with that Order? In your view, what would regular and 
meaningful consultation look like if they were making an honest 
effort to comply with that Executive Order?
    Mr. Fox. So, Senator Daines, first of all, let me 
reiterate, I don't believe that the EPA did meaningful 
consultation in a timely way with the three tribes that have 
coal production.
    I think it's important to note, too, to distinguish that 
the ``Dear Tribal Leader'' letters, as the Chairman mentioned, 
were very generic. They didn't discuss or give a clue really 
about the impacts to any nation, tribal nation, if they have a 
coal resource. Instead, actually covered issues concerning 
tribal nations that may have a coal-fired generation plant on 
the reservation. Which of course, is not the case here.
    And to be meaningful, I think the most important aspect of 
the Executive Order, it has to be consultation that's 
substantive, that engages the tribe, and that the EPA has done 
some work in advance to identify and determine which tribes may 
have specific circumstances for which consultation may be 
necessary rather than the blanket generic ``Dear Tribal 
Leader'' letter.
    That has to be before the EPA presents, puts pen to paper, 
essentially, on the regulations. They need to consult with the 
tribes, and I believe come to tribal nations and meet with 
leadership. That didn't happen here.
    I think it's also important to note that the Executive 
Order includes language that says where there are issues 
relating to tribal self-government or tribal trust resources, 
that the agency is to explore and use consensual mechanisms, 
including negotiated rulemaking.
    And again, all of that needs to happen before the rules 
were even promulgated.
    The last ``Dear Tribal Leader'' letter occured six days 
before the rules were promulgated. That's not meaningful, nor 
is it timely.
    Senator Daines. And to be clear, I personally called the 
EPA in Washington, D.C., and asked if they had members here, if 
Arizona and Boston could come be a part of this hearing, and 
hear the concern and also testify before this panel, and they 
declined to participate in the hearing.
    Mr. Fox. Senator Daines, I also want to note for the record 
that I wrote personally to the administrator of the EPA asking 
them after they promulgated the rules to have a listening 
session here.
    They had numerous listening sessions across the country. 
The nearest one was Denver. They declined to come here, which I 
think is also telling in terms of their responsiveness to our 
state's and the Crow Nation's concerns.
    Senator Daines. Thank you, Attorney General.
    Speaker Bates, the EPA claimed it created an accommodation 
for coal plants across Indian County in the clean power regs.
    While this is not going to help the Crow Tribe, because 
there's not a power plant here, but their buyers in Minnesota, 
which is subject to the EPA's plan, the Navajo Tribe does have 
a coal plants in their jurisdiction.
    Does the EPA's claimed power plan in Indian Country address 
your tribe's concerns, and is it a workable plan?
    Mr. Bates. No.
    And I say this, again, with all due respect, Senator. In 
the testimony that I provided, I indicated the impact to the 
mining company in terms of jobs and revenue. That same scenario 
applies to the power plants.
    As I indicated again, we had in the Four Corners Power 
Plant, five units. By virtue of the EPA, three of those units 
were shut down. Two are running as we speak. However, the 
retrofits that are required by virtue of the EPA standards, 
will have cost billions, and so that expense is going to be 
passed down to the customers, and it carries over into the 
mining company.
    But, as we speak, production from our mine has been reduced 
significantly. So it does have a negative impact to the Navajo 
Nation in terms of revenue, in terms of jobs, in terms of 
stability of energy.
    Senator Daines. Thank you, Speaker Bates.
    I want to shift gears here and talk about the Indian Coal 
Production Tax Credit discussed here in the testimony.
    Chairman Old Coyote, what has been the effect of the 
expiration of the Indian Coal Production Tax Credit on the 
tribe's coal production, and how would extending that tax 
credit benefit the Crow Tribe?
    Mr. Old Coyote. Well, first of all, the tax credit was 
established in 2006. The EPA set down a rule to close the 
Absaloka Mine down in 2006 because of the high sulfur content.
    Then we went to the Senate, and we were told by the EPA to 
go to the Department of the Interior, they have welfare 
programs we could utilize if they shut down the mine. That was 
heat coming out of the EPA.
    And so we went to Senator Baucus, then, who was the 
Chairman of the Finance Committee, and asked him to help us, 
and that's when he came up with the Indian Coal Production Tax 
Credit.
    Three tribes, as I stated before, are mining coal, and it 
expired in 2012, extended for one year to 2013. But once that 
expired, we saw a $3 million to $4 million reduction in our 
budget.
    Right now, the $4 million reduction in 2013 is starting to 
get into our budget where we're starting to do some furloughs 
and layoffs from the General Fund, and so the effects are real 
for Crow people.
    You know, the unemployment rate is 47 percent, and with 
furloughs and some layoffs will come as a result of not having 
money from the Coal Production Tax Credit.
    Moving forward, it would help level the playing field for 
our partners, Westmoreland, and for every ton of coal that is 
purchased by a company, that tax credit will level the playing 
field for all the bureaucratic red tape they have to go through 
just to mine a ton of coal.
    And I should have brought that red tape with me that says 
all the bureaucratic red tape our partners have to go through 
just to mine a ton of coal.
    And so all the money they spend, all the hurdles they have 
to go through just to mine on Indian land, this will level the 
playing field, and our coal will be favorable in the market, 
and we'll be independent of any intervention.
    And so that's the benefit of going coal.
    Senator Daines. Many thanks, Mr. Chairman.
    Mr. Henson, on December 1, 2014, the House Ways and Means 
Committee estimated that a one-year extension of the Indian 
Coal Production Tax Credit would cost $38 million for ten 
years.
    Yet, your research has shown that the provision stimulates 
hundreds of millions of dollars in GDP.
    The question for you, Mr. Henson, is, given the research 
and the economic impact to the Indian Coal Production Tax 
Credit on the economy growth of the Crow Tribe and the State of 
Montana, what sort of economic multiplier would you say this 
provision would have?
    Mr. Henson. The one slight caveat that I would throw out 
there to answer that question is the study combined the tax 
credit with the continued expanded production so we didn't 
separately parse out the impact of the tax credit versus the 
access to this wider marketplace.
    The quick ``off the cuff'', employees at the Absaloka Mine, 
impacts of the daily cost is $38 million over ten years. That's 
about $4 million a year. Benefits just to the tribe alone is 
more than $100 million single representative year.
    So, the tax credit being aligned with the mine production 
of this type of investment, along with this diversification and 
access to a broader set of customers is a 25:1 payoff.
    Senator Daines. So, conservatively you could parse that 
out, and it's still a very marginal multiplier?
    Mr. Henson. I would guess so, yes.
    Senator Daines. Regarding the permanency of the Indian Coal 
Production Tax Credit, if there's one thing I've learned during 
my relatively short tenure, serving in Washington, D.C., 
there's one thing Congress is good at, is creating uncertainty.
    And the Indian Coal Production Tax Credit is yet another 
example that despite the economic needs, Congress seems to be 
sending mixed signals in its commitment to the Indian Coal 
Production Tax Credit, mixed signals to tribal communities, or 
if there are some incentives, it's only been on a short-term 
basis.
    Mr. Henson, in terms of contract negotiations, business 
planning, what benefits would a permanent extension of this 
provision allow?
    Mr. Henson. Well, any investment in mining is a multi-year 
planning process. It's possible many hundreds of millions of 
dollars that you're asking an investor to make.
    There are a handful of companies currently interested in 
actively negotiating or producing on those lands. So you have a 
willing set of parties, it's much better to have multi-year 
planning processes, investment processes, and production and 
overrun in the several decades.
    So, as I said, it kind of aligns the time horizons with 
their investment.
    If you live in a house 20 or 30 years, it's not really a 
coincidence that mortgages sort of align in terms of the time 
horizon you're looking at.
    It is a similar analogy you might keep in mind here in 
terms of just aligning those incentives with the time horizon.
    Senator Daines. Thank you, Mr. Henson.
    Attorney General Fox, you mentioned in your testimony in 
reference to coal exports, that Montana has a constitutional 
right to not have our interstate commerce unduly burdened by 
other states.
    In your view, does that same right apply to tribes?
    Mr. Fox. I believe it does.
    The Commerce Clause in the United States Constitution, 
Article I, Section 8 Clause 3 specifically mentions tribes, and 
I think it's equally important that states, our sister states, 
be precluded from discriminating in commerce actions, and it's 
equally important to the Crow Nation and the Navajo Nation and 
other coal producing tribal nations as it is to individual 
states like Montana and Wyoming.
    Senator Daines. Thanks, Attorney General Fox. A question to 
Chairman Old Coyote and Speaker Bates.
    We talked about exports today. What impact would expanding 
a possibility coal export have on jobs for your tribes?
    Start with Chairman Old Coyote.
    Mr. Old Coyote. The positive impact for Crow people would 
result in more jobs and more revenue.
    The Army Corps of Engineers is doing a study on that, the 
lead agency on that, so that would have a real positive impact 
on the Crow people to be another source of revenue, and there 
would be more jobs for the Crow people.
    Right now, with just one mine and it is like one egg in the 
basket, and the EPA looking down at the Crow people for their 
coal.
    I think another source of revenue would help the Crow 
people move forward to a better, brighter future.
    Senator Daines. Thanks, Mr. Chairman.
    Speaker Bates.
    Mr. Bates. Thank you, sir.
    As I indicated in my testimony, our production right now is 
from 8 to 10 million tons down from 13 to 16 million. That's 
significant in terms of, jobs.
    When you look at the jobs that are required from 13 to 16 
million tons, we have less jobs as we speak today.
    So, by being able to export, the jobs will return, and the 
revenue will return. It would have a positive impact, Senator, 
if the nation was to go to exports.
    Senator Daines. Thank you, Speaker Bates.
    I want to shift gears here, Mr. Henson. I've heard 
arguments that the Crow Tribe, the Navajo, the state of Montana 
and Wyoming should leave the coal in the ground due to concerns 
about climate change. In fact, it is one of the driving 
arguments against exporting Crow and Montana coal in the Asian 
markets.
    The Gateway Pacific Terminal that was discussed here today. 
Its projection was about 48 million tons of coal per year, 
almost all of it will come from Montana, the Crow, and the 
state of Wyoming.
    It's my understanding that there's a growing demand for 
energy in Asia, and Montana Powder River Basin coal is cleaner 
coal. Why not allow cleaner coal to meet global energy demands? 
What are the impacts on that amount of coal on climate change 
and the Asian market?
    Mr. Henson. That question brings a few thoughts to mind. 
One is, we should keep in mind no one really wants a lump of 
coal for a gallon of gasoline. People want heating for their 
homes or in their offices.
    So, the progress that people really demand in Asia are 
energy for a myriad of uses. And there are 2 billion people in 
India and China only who are, for the most part, growing into a 
middle class society, and those people are going to need a 
massive amount of energy to stay on that path.
    I kind of looked into the statistics for China, India, 
Japan and South Korea. In a single year, those four nations 
consume about 5 billion tons of coal. So the amount that was 
cited here, the 48 million, is less than 1 percent of that.
    Senator Daines. So 48 millions tons of coal coming out of 
coal country here versus 5 billion tons.
    Mr. Henson. For just four countries.
    It's a very small amount. During the course of our study, 
the numbers that we saw for Crow coal amounted to like 3/10th 
of 1 percent.
    Senator Daines. So, to shift gears on coal production from 
Montana, even off the reservation, Attorney General Fox, how 
does the Asian coal and India demand affect the state of 
Montana off the reservation?
    Mr. Fox. Senator Daines, let me first say, the members of 
the Crow Nation are Montanans. They are Americas. Anything that 
affects them affects all of us. It affects me, and it affects 
you, and we need to keep that in mind.
    Certainly Crow coal, when it's mined, doesn't provide 
severance taxes in particular to the state of Montana. 
Obviously Powder River coal does, but Crow coal doesn't provide 
taxes directly to the state.
    But as has been mentioned today, it provides a huge 
economic impact to not only this corner of the state, but the 
entire state. There's jobs, retail purchasing that goes on, and 
all the things that are basically an economic ripple effect, 
and so this is very important to Montana.
    It's important to our state officials. I know there are 
representatives from the Governor's office here who are very 
invested in this issue.
    And I want to thank Jason Smith, who is the Governor's 
tribal liaison, for being here, because I know that we discuss 
these issues with them quite a bit.
    We want to make sure that the economic impacts are not lost 
in this discussion, as the Chairman said, it affects real 
people right here in this area, and those are the people I'm 
most concerned about. This is my home.
    Senator Daines. Thanks, Attorney General Fox.
    Mr. Small, if the coal industry suffers a decline in this 
area, what jobs would be available for boilermakers or other 
union members that currently work in the coal industry?
    Mr. Small. Well, you know, I'm really not aware of any, or 
at least nothing that can bring the financial stability to the 
good-paying jobs that the coal industry brings to this area.
    Senator Daines. So, are there industries in the area that 
you can think of that can absorb these people, or are they 
going to have to leave the area to find a job?
    Mr. Small. Well, I'm sure they'll probably be a few jobs 
around which are a lot lower paying and stuff.
    And again, we'll flood the market with competent people 
that could be doing other things, and I'm sure a lot of them 
will have to leave the area.
    Senator Daines. Mr. Small, will coal development in Indian 
Country be compatible with traditional native values in the 
close relationship with the land?
    Mr. Small. Oh, absolutely.
    I would think the Navajo and the Crow constituency in this 
room right now can attest to that. They can, and it is 
happening already.
    I would believe that any tribes that are wanting to 
develop, if they had concerns they should be able to negotiate 
agreements and also create economic growth.
    Senator Daines. Chairman Old Coyote and Speaker Bates, 
similarly, how would you characterize the relationship between 
coal production and environmental stewardship?
    Chairman Old Coyote?
    Mr. Old Coyote. In our experience out at the Absaloka Mine, 
you know, if you haven't been out there, we invite people to go 
and see where the open pit mine was before and then after.
    Right now in some of the areas, all the reclamation work 
that's done is better than what it was before.
    And, you know, a lot of people don't think that way. They 
have this mentality or mind set that with an open pit, there's 
dirty coal everywhere.
    But once you go out there and see the reclamation work--and 
the people that did the reclamation are tribal members, and so 
they take great pride in doing good work, getting the coal out.
    In the next couple of days here, all the crews that did 
labor, every tribal member will receive payment from that coal 
mine.
    And so, you know, they take great pride not only taking the 
coal out, but also restoring it back to better than what it 
was, and that is what our Crow people are doing.
    Senator Daines. Speaker Bates.
    Mr. Bates. Just to reiterate what the Chairman indicated, 
in the Navajo Nation it's a similar situation when it comes to 
Mother Earth. We are very dear to and will protect Mother Earth 
in whatever is needed to move the Nation forward.
    And as the Chairman indicated, our own Navajo people who 
are within the reclamation division of our coal mine, take 
great pride in bringing those lands back to where they can be 
used for future generations.
    Senator Daines. Thanks you, Speaker Bates.
    Last question. I've heard concerns as I travel around 
Montana about the impacts of coal dust from coal traveling by 
train across towns in Montana.
    Chairman Old Coyote, you talked about what goes on now on 
these coal trains and so forth. Should Montanans be concerned 
about coal dust traveling from rail shipments of Montana coal 
to West Coast terminals?
    Mr. Old Coyote. No, we've never had a problem with coal 
dust here. As long as I can remember, the coal has been 
traveling through the reservation.
    I know for years nobody has ever had a problem with coal 
dust until--the only time we started hearing about coal dust 
was after the Gateway Pacific Terminal was announced, and NGOs 
started making a issue about coal dust. But before that, there 
was no complaints.
    For the last few years, our coal has been going to the 
Midwest, and just recently to the Washington power plant. And 
the coal has been traveling that railroad for years, and 
there's never been a problem.
    Now they're claiming that the coal dust is going to be a 
problem. But it's NGOs that are making this claim, you know, 
regardless of what the NGOs say, Crow people are going to 
continue mining coal, because unless they have an alternative 
to feed my people, to help my people go forward, we're going to 
continue to mine coal.
    Senator Daines. There's an old saying, ``You're entitled to 
your own opinion, but you're not entitled to your own facts.''
    I'm also proud of the fact that it was Montana coal that 
powered all those Detroit-Edison power plants out in the 
Midwest that actually powered the U.S. Bonnefield Manufacturing 
Industry--Montana coal.
    Well, if there are no more comments for today, members of 
the Committee may also submit written questions for the record, 
and the hearing record will be open for two weeks.
    The Montana Chamber of Commerce along with Governor Bullock 
and Senator Tester have also submitted testimony which will be 
included in the official record.
    I want to thank the witnesses for their time and testimony 
today and look forward to bringing these comments back to 
Congress with me as I get back next week.
    You know, we've got a lot of work to do to convince folks 
back there that coal is an essential part of our energy 
portfolio. It is the life blood of the economy in a number of 
parts of the country, including right here on the Crow 
Reservation.
    While we heard about the devastating effects the EPA's 
clean energy regulations would have on our economy, we also 
heard about some concrete steps we can take to ensure the 
stability of the coal industry in Indian County.
    Making the Indian Coal Production Tax Credit permanent 
ought to be an important first step, alongside using Northwest 
ports to ship our coal overseas, adding new consumers for our 
product, and allowing tribes to get a fair market value for 
their coal.
    With that, the hearing is adjourned.
    [Whereupon, at 12:15 p.m., the hearing was concluded.]
                            A P P E N D I X

    Prepared Statement of Hon. Jon Tester, U.S. Senator From Montana
    I would like to thank Chairman Barrasso for scheduling this field 
hearing in Crow country, Montana. I would also like to thank the Crow 
Tribe for their generous hospitality in hosting this special field 
hearing.
    It's important that this Committee continue to look closely at the 
various forms of economic development occurring in Indian County. As we 
all know, each tribal nation is unique, and every reservation or tribal 
community has specific resources available for development.
    The ability for tribes to successfully and responsibly manage their 
natural resources, while building self-determination, is crucial for 
the economic success of Indian Country. I'm glad the Senate Committee 
on Indian Affairs acknowledges these efforts on behalf of tribes, and 
has taken a specific interest in the innovative means of economic 
development that are happening in the Crow Nation. I think it's clear 
that the future of Crow is in energy, and responsible development of 
their resources will benefit the Tribe, the state of Montana, and the 
country as a whole.
    From the time I became a United States Senator in 2006, until 
today, Crow leaders have stressed the importance of the Indian Coal 
Production Tax Credit to their people, in promoting self-sufficiency, 
creating and sustaining jobs, and building a stable base for economic 
development. I have heard the Tribe loud and clear, and I have fought 
for the continuation of this critical tax credit with each passing 
year. I know how important this resource is to the Crow Nation, and I 
will continue to advocate for the credit in Washington.
    The Tribe has worked to develop its coal resources for years. They 
are now showing bold leadership by venturing into new markets and 
diversifying their energy portfolio. I applaud these efforts to ensure 
a strong future for Crow children and grandchildren.
    One example of this innovation is the recently announced 
partnership between the Department of Interior and the Crow Nation to 
enter into an agreement for hydropower development. The Yellowtail Dam 
project stems from the historic Crow Tribe Water Rights Settlement Act 
of 2010. Former Senator Baucus and I worked with the Tribe to ensure 
the hydropower provisions were included in our final legislation. Under 
this important law, the Crow Tribe has the exclusive right to develop 
and market power generation on the Yellowtail Afterbay Dam. This 
agreement will create jobs and a more energy independent future for 
families here in Crow Nation.
    Crow is showing the smart innovation that will help other tribes 
throughout Indian Country realize the potential in their own lands, and 
move towards self-determination. I look forward to the testimony of the 
witnesses today, and in seeing how the Committee can help propel 
economic development for all tribes even further.
                                 ______
                                 
  Prepared Statement of Hon. Steve Bullock, Governor, State of Montana
    Dear Chairman Barrasso and Members of the Senate Committee on 
Indian Affairs:
    Thank you for the invitation to attend the Oversight Field Hearing 
on economic self-determination in Indian Country, provided to my office 
late last week. I am unable to attend as I have had a long-standing 
commitment to visit the Signal Peak Coal Mine, to observe first-hand 
its operations and to meet with management and employees. As a member 
of Montana's Land Board, I have been a strong supporter of the mine.
    Coal continues to be an important source of economic opportunity 
and jobs for Crow Country, and I will continue to support the Tribe's 
efforts to develop their resources. I am also confident that the Crow 
can lead the way in responsible coal development in Indian Country. I 
also congratulate the Northern Cheyenne as they were finally successful 
late last year in passing federal legislation to restore long overdue 
mineral rights, giving them access and the option to develop coal on 
their land.
    Improving the economic health of the sovereign Indian Nations 
within Montana's borders continues to be a focus of my administration. 
The Main Street Montana in Indian Country initiative seeks to 
strengthen state-tribal partnerships to develop infrastructure, 
increase access to capital, and promote economic growth.
    Economic self-determination requires a strong cultural and 
educational foundation, and we have also prioritized our commitment to 
the Montana Indian Language Preservation Pilot Program and other 
innovative approaches to improving education in Indian Country.
    In addition, a healthy economy depends upon clean water and air. 
Montanans know the climate is changing--we're outdoors people and we 
see it happening before our eyes. We also need reliable low-cost 
electricity to power our homes and businesses, and support economic 
growth. It's clear to me that this is not an either/or scenario, as 
some would lead us to believe.
    We can meet the challenges posed by climate change and create good-
paying jobs and a more vibrant economy. That includes within the 
sovereign Indian Nations--whether it's coal or hydropower on the Crow 
Reservation, hydropower on the Flathead Reservation, or harnessing wind 
power which is an opportunity that exists across Indian Country.
    Coal is an important part of our future--it's abundant and 
accessible. As with other fuels, even natural gas, the success of coal 
will require significant public investment and broad public support.
    I feel strongly that Washington DC has not done enough to advance 
clean coal technologies. Instead, the debate there is often about 
whether someone is a ``climate change denier'' or if the President is 
waging a ``war on coal,'' with lawyers and lobbyists leading the 
charge.
    Meanwhile, increasing energy demand--both domestic and 
international--is charting our future course, and we'll need both 
carbon-based and renewable sources of energy in the coming decades. I'm 
proud that Montana is leading the way in much of the clean energy 
research being done in this country. These emerging technologies being 
pioneered on our university and college campuses--including low-carbon 
coal research--will pave the way to a cleaner energy future and the 
good-paying jobs that come with it. Unfortunately, as a country, we 
have not prioritized this research enough.
    Climate change is a global issue, and the United States will play 
an important role in any solution. We should lead, and also recognize 
that we can't solve this issue on our own. With global demand for 
energy forecast to grow, coal is likely to continue to be an important 
resource for other nations as well. I have great respect for the power 
of any state to address policy challenges and meet the needs of its 
citizens as it sees fit. However, I am very concerned when one state 
takes action that could have significant economic consequences for 
Montana. This is especially true for an issue like climate change, 
where action on a much larger scale will be necessary to be successful.
    As the executive of the state, I must protect Montana's interests 
and follow the law. Last December I expressed in writing my concerns 
with the President's Clean Power Plan. In my comments to the proposed 
rule I requested changes to both protect Montana's coal industry and 
strengthen the state's hand in facilitating new economic opportunities 
and jobs for Montanans through renewable energy and energy efficiency.
    I thank the Senate Indian Affairs Committee for coming to Crow and 
holding this hearing. It is important that we maintain positive 
government to government cooperation as the United States, Montana and 
tribal nations continue to responsibly develop our natural resources.
    The promise is in the future. What we know today will be eclipsed 
by tomorrow--whether it's the challenge of integrating wind power and 
other renewables or the carbon emissions associated with coal. We 
simply won't get to a low carbon and secure energy future without 
vision and commitment, grounded in today but unafraid of tomorrow.
                                 ______
                                 
                Prepared Statement of the Navajo Nation
    Elsa Johnson, from Black Mesa and Director of Iina Solutions: Even 
after 50 years, coal mining has not made Navajo rich. We contend with 
contamination, pollution, water depletion, and toxic ponds. Plus our 
poverty and high unemployment still hasn't improved. And, most of our 
people are still hauling water and live without electricity!
    Adella Begaye, nurse and member of Dine CARE: I understand the old 
4 corners mine that Navajo Nation bought for 80 million and thought 
they would generate funds was a mistake, (we told them). Now it is in 
the red for 130 million, coal is being phased out and they cannot even 
sell the coal at a fair price. So Mr. Bates as one of the sponsors 
pushing to buy a mine is now going defunct and we are also liable for 
100 million tons of coal ash.
    Percy Deal, former Council Delegate, resident of Black Mesa, board 
member of Dine CARE and To Nizhoni Ani: My comment is: (1) These giant 
industries that moved onto the Navajo reservations over 60 years ago in 
the four corners and Black Mesa have not brought any job multiplier on 
to the reservation. The jobs are the direct jobs, and they are now 
declining. All businesses that happened over those years are located 
off reservation, not a single one on reservation. (2) These industries 
are controlling the minds of Navajo leadership making them believe 
there is no way we could survive without them, they bring jobs and 
revenues. As results our leadership are all in a capsule believing it 
and that there is no other way. (3) Lorenzo Bates led the Council to 
believe that buying the Navajo mine is the best investment, but things 
are changing now. The Nation is looking for someone to buy their coal, 
there are damages left behind that the federal court is ordering 
cleaned-up and Navajo Nation is left holding that bag. NTEC (Navajo 
Transitional Energy Company) will soon be coming to the Navajo Nation 
asking for approximately $45M. (4) Water and air are contaminated which 
will have to be clean up. (5) Self-Determination on Navajo? Bates and 
LT are at the verge of dismantling a third of the Navajo government. 
Should that happen, no businesses or government will want to come in 
because of the destruction of the Judicial branch.
    These individuals and others also pointed to the recent video 
``Cursed by Coal: Mining the Navajo Nation'' by Vice News: https://
m.youtube.com/watch?v=F4uGCj6knVw&feature=youtu.be. The video lays out 
significant environmental, health, Navajo population displacement, and 
quality of life problems associated with coal development on Navajo 
Nation.
                                 ______
                                 
Prepared Statement of Alaina Buffalo Spirit, Enrolled Member, Northern 
        Cheyenne Tribe; Member, Northern Plains Resource Council
    Chairman Barrasso and Senators of the Indian Affairs Committee,
    My name is Alaina Buffalo Spirit. I am an enrolled member of the 
Northern Cheyenne tribe and a landowner near Birney on the southern end 
of the Northern Cheyenne Reservation. I am also a member of Northern 
Plains Resource Council.
    Thank you for allowing me to submit my perspective on coal 
development in Indian Country today. Today's Field Hearing has a small 
number of hand-picked witnesses. I am afraid those witnesses will not 
truly represent the will of Native peoples, and especially the will of 
my people, the Northern Cheyenne. In particular, I would like to 
emphasize that Jason Small does not speak officially for the Northern 
Cheyenne.
    It is true that the Northern Cheyenne have a weak economy right 
now, and it is true that we need to work to build a stronger, more 
resilient economy. But coal cannot bring prosperity, and it will harm 
our people.
    The 57 Affiliated Tribes of Northwest Indians passed a resolution 
in 2012 stating that they oppose export of coal from Montana and 
Wyoming through the Pacific Northwest. The Lummi have formally asked 
that the government reject the permit to construct the Gateway Pacific 
Terminal because it would violate their treaty rights, disrupt their 
economy, and damage sacred lands. The Northern Cheyenne people have 
never said they want coal to come to their reservation. We are 
surrounded by coal mines and coal plants, and have seen only a worsened 
economy and destruction of our homeland.
    For the record, I am submitting with my testimony two guest 
editorials published in the Billings Gazette last Saturday, April 4, 
2015 (retained in Committee files--see website addresses below), as 
well as the resolution of the 57 Affiliated Tribes of Northwest Indians 
and a letter from the Lummi Nation Business Council to the Army Corps 
of Engineers requesting that the Cherry Point terminal not be 
constructed.
    http://billingsgazette.com/news/opinion/guest/guest-opinion
-northern-cheyenne-future-is-in-sun-wind/article_178e86ca-d024-5802-
8353-7b2304fe05e3.html

    http://billingsgazette.com/news/opinion/guest/guest-opinion
-coal-mining-fails-to-bring-prosperity-to-reservations/
article_22275946-0704-5bab-9c50-eb4ebb515c2e.html
   Letter, dated Jan. 5, 2015 to Col. John G. Buck, Seattle District 
  Commander, U.S. Army Corps of Engineers, from Tim Ballew II, Chair, 
                     Lummi Indian Business Council
    SUBJECT: Lummi Nation Request for Denial of Permit for the Proposed 
Gateway Pacific Terminal Bulk Dry Goods Shipping Facility (Ref. No. 
NWS-2008-260).
    Colonel Buck:
    The Lummi Nation is opposed to the Gateway Pacific Terminal (Ref. 
No. NWS-2008-260) project proposed at Xwe'chi'eXen (Cherry Point). (See 
attached resolution). We are requesting that the U. S. Army Corps of 
Engineers (Corps) take immediate action and deny the permit application 
based, inter alia, on the project's adverse impact on the treaty rights 
of the Lummi Nation. The impacts on the Nation's treaty rights 
associated with this project cannot be mitigated.
    The waters and tidelands impacted by this project are an integral 
part of the usual and accustomed fishing places of the Lummi Nation. 
United States v. Washington, 384 F. Supp. 312, 360-61 (W.D. Wash. 
1974), aff'd, 520 F.2d 676 (9th Cir. 1975), cert. denied, 423 U.S. 1086 
(1976); see also, United States v. Washington, 873 F.Supp., 1422 (W.D. 
Wash. 1994), aff'd in relevant part, 157 F.3d 630, 643-644, 646-47 (9th 
Cir. 1998). As part of the permitting process for this project, the 
Corps is required to ensure that the Nation's treaty rights are not 
abrogated or impinged upon. Northwest Sea Farms v. United States Army 
Corps of Engineers, 931 F. Supp. 1515 (W.D. Wash. 1996).
    Review of the impacts associated with this project, including, but 
not limited to, those analyzed in the Gateway Paddle Terminal Vessel 
Traffic and Risk Assessment Study lead to the inescapable conclusion 
that the proposed project will directly result in the substantial 
impairment of the treaty rights of the Lummi Nation throughout the 
Nations' ``usual and accustomed'' fishing areas. (See attached 
sections). The Lummi have harvested at this location since time 
immemorial and plan to continue into the future. The proposed project 
will impact this significant treaty harvesting location and will 
significantly limit the ability of tribal members to exercise their 
treaty rights. (See attached declarations).
    Additionally, the Lummi Nation has a sacred obligation to protect 
Xwe'chi'eXen based on the area's cultural and spiritual significance. 
The Corps is obligated to comply with the mandates of the National 
Historic Preservation Act, specifically section 106, in evaluating the 
project's potential impacts. This obligation is in addition to the 
Corps' obligations that spring from our treaty rights. The Lummi Nation 
is opposed to this project due to the cultural and spiritual 
significance of Xwe'chi'eXen, and intends to use all means necessary to 
protect it.
    In addition to the proposed project's unacceptable and unavoidable 
impacts to the Nation's access to this significant treaty harvesting 
location, and to the cultural integrity of the site, the proposed 
project location is within an especially rich and fertile marine 
environment that serves as important habitat for a number of forage 
fish, finfish, and shellfish (including several threatened and/or 
endangered species) that are inextricably linked to the Lummi 
Schelangen (``Way of Life''). Anticipated impacts to this significant 
aquatic environment include, but are not limited to, substantially 
increased ballast water discharges and associated risk of introducing 
invasive species, contaminant spills (product, bunker fuel oil, crude 
oil and refined products from adjacent facilities), noise, and vessel 
traffic. The impacts to these critical marine waters from coal alone 
may include: smothering, toxicity, substrate change, accumulation, and 
water quality degradation.
    The devastating environmental impacts associated with this project, 
as well as the trust responsibility of federal ageneies to ensure the 
protection of the treaty rights of the Lummi Nation, mandate the denial 
of any and all permits under the Corp's jurisdiction.

  RESOLUTION #13-47--OPPOSE THE PROPOSALS FOR THE TRANSPORTATION AND 
            EXPORT OF FOSSIL FUELS IN THE PACIFIC NORTHWEST
                                preamble
    We the members of the Affiliated Tribes of Northwest Indians of the 
United States, invoking the divine blessing of the Creator upon our 
efforts and purposes, in order to preserve for ourselves and our 
descendants rights secured under Indian Treaties, Executive Orders, and 
benefits to which we are entitled under the laws and Constitution of 
the United States and several states, to enlighten the public toward a 
better understanding of the Indian people, to preserve Indian cultural 
values, and otherwise to promote the welfare of the Indian people, do 
hereby establish and submit the following resolution:

    WHEREAS, the Affiliated Tribes of Northwest Indians (ATNI) are 
representatives of and advocates for national, regional, and specific 
tribal concerns; and

    WHEREAS, ATNI is a regional organization comprised of American 
Indians/Alaska Natives and tribes in the states of Washington, Idaho, 
Oregon, Montana, Nevada, Northern California, and Alaska; and

    WHEREAS, the health, safety, welfare, education, economic and 
employment opportunity, and preservation of cultural and natural 
resources are primary goals and objectives of the ATNI; and

    WHEREAS, since time immemorial, our economy, culture, religion and 
way of life has centered around our fishing, hunting and gathering 
resources, and the lands and waters on which they depend, and we have 
been, and remain, careful and conscientious stewards over them to 
ensure their continued health and well-being; and

    WHEREAS, the tribes of ATNI depend on the natural resources of this 
region to sustain our way of life, rights to fish, hunt and gather, our 
economies, human health and fulfill our sacred obligation to protect 
our First Foods and our most precious natural resource, water; and

    WHEREAS, the tribes of ATNI have previously adopted Resolution No 
12-53, in September 2012, recognizing the potential impacts of coal 
export terminal proposals that have come to the Northwest and the 
action directed to the Army Corp of Engineers to conduct a full 
regional Environmental Impact Statement (EIS) to address the 
significant cumulative impacts of these proposals, and

    WHEREAS, the Northwest is facing the advancement of more fossil 
fuel exports, including numerous oil-rail proposals in Oregon and 
Washington, which would bring 500,000 barrels of oil a day via rail 
line to and across Northwest waterways as well as expansion of pipeline 
capacity from Alberta to British Columbia and Washington State, and

    WHEREAS, based on review of proposals at these sites these past 
twelve months, the tribes of ATNI believe these energy transportation 
and export proposals will diminish our salmon habitat, our fishing, 
hunting and gathering rights, our treaty, indigenous, and inherent 
rights and resources, our life way, and will destroy sacred places of 
the Pacific Northwest tribes; and

    WHEREAS, the tribes of ATNI respect and honor our Sacred Places 
just as we do our natural resources, including the Lummi Sacred Site 
known as Xwe'Chi 'eXen where our ancestors are at rest, and the sacred 
traditional reef net sites at Cherry Point, Washington; and therefore 
call upon agencies to fulfill their statutory and legal responsibility 
to fully comply with Section 106 of the Historic Preservation Act; and

    WHEREAS, the Northwest Tribes' ancestral industry of fisheries 
relies on sustainable resources that will face detrimental impacts from 
the transportation and export of nonrenewable fossil fuel resources; 
now

    THEREFORE BE IT RESOLVED, that ATNI is in opposition of the 
transportation and export of fossil energy in the Northwest based on 
infringement and endangerment upon indigenous, inherent, and treaty-
protected resources, impacts on human health, economies, sacred places 
and our traditional way of life, and

    BE IT FURTHER RESOLVED, the tribes of ATNI support a strategy to 
document the impacts of these fossil fuel energy transport and export 
proposals, which includes baseline studies of science from a local 
approach, impacts to the economies, as well as legal and policy 
initiatives.

    CERTIFICATION

    The foregoing resolution was adopted at the 2013 Mid-Year 
Convention of the Affiliated Tribes of Northwest Indians, held at the 
Northern Quest Resort and Casino, Airway Heights, Washington ton on May 
13-May 16, 2013 with a quorum present.

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