[Senate Hearing 114-240]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-240

                    THE GAO REPORT ON INDIAN ENERGY 
DEVELOPMENT: POOR MANAGEMENT BY BIA HAS HINDERED DEVELOPMENT ON INDIAN 
                                 LANDS

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 21, 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
Hearing held on October 21, 2015.................................     1
Statement of Senator Barrasso....................................     1
Statement of Senator Daines......................................     5
Statement of Senator Franken.....................................     4
Statement of Senator Heitkamp....................................    53
Statement of Senator Hoeven......................................     4
Statement of Senator Lankford....................................    55
Statement of Senator Tester......................................     2

                               Witnesses

Cuch, Cameron J., Vice President of Government Affairs, Crescent 
  Point Energy U.S. Corporation..................................    32
    Prepared statement...........................................    34
Olguin, Hon. James ``Mike'', Tribal Council Member, Southern Ute 
  Indian Tribe...................................................    18
    Prepared statement...........................................    20
Roberts, Lawrence S., Principal Deputy Assistant Secretary, 
  Indian Affairs, U.S. Department of the Interior................     6
    Prepared statement...........................................     8
Rusco, Frank, Director, Natural Resources and Environment, U.S. 
  Government Accountability Office...............................    12
    Prepared statement...........................................    13
Stafne, Hon. Grant, Councilman, Fort Peck Assiniboine and Sioux 
  Tribes.........................................................    26
    Prepared statement...........................................    27

                                Appendix

Chapoose, Shaun, Chairman, Ute Indian Tribe of the Uintah and 
  Ouray Reservation Business Committee, prepared statement.......    71
Fox, Hon. Mark, Chairman, Mandan Hidatsa and Arikara Nation, Fort 
  Berthold Reservation, prepared statement.......................    63
Response to written questions submitted by Hon. Steve Daines to 
  Lawrence S. Roberts............................................    76

 
                    THE GAO REPORT ON INDIAN ENERGY 
    DEVELOPMENT: POOR MANAGEMENT BY BIA HAS HINDERED DEVELOPMENT ON 
                              INDIAN LANDS

                              ----------                              


                      WEDNESDAY, OCTOBER 21, 2015


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m. in room 
628, Dirksen Senate Office Building, Hon. John Barrasso, 
Chairman of the Committee, presiding.

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

    The Chairman. I will ask the witnesses to please head to 
the table in order to testify and we will move along with the 
hearing.
    As the witnesses are taking their seats, I am going to call 
to order this hearing. We will examine today the Government 
Accountability Office June of 2015 report on Indian Energy 
Development. I requested this report on January 4th, 2014, for 
several reasons. Energy development holds much promise for 
Indian communities. According to the Department of the 
Interior, in 2014, revenues for tribal energy development 
exceeded $1.1 billion dollars. That figure should be much 
higher.
    Over the years, this Committee has received concerns from 
Indian tribes and energy developers regarding the complexity of 
Federal regulation and decision-making relating to Indian 
lands. These issues either drive up costs and drive away 
developers or delay the payment of royalties to Indian land 
owners. In fact, the Government Accountability Office report 
noted that one private energy developer reported that an oil 
and gas well developing Indian resource generally costs almost 
65 percent more for regulatory compliance than a similar well 
for private resources.
    In another instance highlighted in the report, an eight-
year delay by the Bureau of Indian Affairs in reviewing tribal 
documents caused the tribe an estimate $95 million in lost 
permitting fees, severance tax and royalty revenues. To improve 
energy development on Indian lands, we needed to get to the 
bottom of this complexity and the delays.
    This report confirms several issues this Committee has been 
working to address in a bipartisan way. On January 21st, 2015, 
the Vice Chairman, Senator Tester, and I introduced S. 209, the 
Indian Tribal Energy Development and Self-Determination Act 
Amendments of 2015. This bill would reduce much of the 
bureaucracy and delays associated with the Secretarial review 
of leases, business agreements and rights-of-way for Indian 
energy development.
    The Committee unanimously passed this bill and it is being 
hotlined for Senate consideration. Congress needs to pass this 
bill this year so the tribes may begin energy development 
without these continued delays.
    Other management and interagency challenges were 
highlighted in the report. I look forward to hearing from the 
Department of Interior on the progress made in addressing these 
issues.
    I just want to remind the Department of the Interior that 
when we send out invitations to testify, they are non-
transferable. There is an expectation that when we confirm 
appointees to these bureaus that these appointees will be 
responsive to the Committee and come back to testify upon 
request.
    Mr. Roberts, I know you are the messenger for the Interior 
Department today. Please pass on my remarks to the Secretary.
    The GAO report noted the overlap of agency responsibilities 
in Indian energy development. It stands to reason that 
officials with overlapping responsibility would be responsive 
to this Committee.
    With that, I would like to welcome the witnesses and I look 
forward to the testimony.
    Senator Tester, any opening statement?

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

    Senator Tester. Yes, thank you, Mr. Chairman, and thank you 
for holding this hearing on energy development in Indian 
Country today. We have had similar hearings in the past to 
discuss Indian energy bills, the delays in energy development 
on tribal lands. This hearing is in that same vein. I think it 
is warranted, as we discussed. The GAO's recent report 
detailing concerns with Indian energy development.
    Quite frankly, it is the same conversation we have had on 
these issues for quite a while. I remember when Senator Dorgan 
was sitting in your chair, and it was earlier on in his 
chairmanship. We had a visit about dysfunction in energy 
development in Indian Country. The Department of Interior has 
not been good at enabling tribal energy development. And the 
GAO report echoes what tribes have been saying for years.
    There are staffing issues. The BIA doesn't have enough 
staff to process all the leases. The staff it does have isn't 
always qualified to work specifically on oil and gas or 
renewable energy project leases. Staffing issues probably start 
with funding. You can't always hire the right staff if the 
agencies don't have the funding that they need to hire those 
staff.
    But it is also a process issue. Tribes and the GAO report 
talk about delays due to the lack of proper information systems 
and multiple agencies being involved. I just don't understand 
why this is this difficult. We have trust responsibilities to 
help tribes develop their resources. I would think that 
responsibility would mean tribes should be getting in on the 
ground floor any time there is a boom in the industry or new 
markets open up.
    But that doesn't happen. Tribes are always several steps 
behind and we need to get this done in a more prompt way.
    I remember Senator Dorgan, when the Bakken was first being 
developed, talking about oil wells everywhere except in Indian 
Country. That is unacceptable. I think the primary solution is 
to get as much of the decision-making as possible in the hands 
of tribes. They know their resources and their communities' 
priorities. Self-governance has proven to be an effective 
policy for the last 40 years.
    That is why I co-sponsored the Indian Energy bill with the 
Chairman to help fix the Tribal Energy Resource Agreement 
process. TERAs would give tribes the authority to develop their 
own energy resources without further involvement from the DOI.
    But since the passage of the 2005 Tribal Energy Bill that 
created TERAs, no tribe has entered into one. There are a 
number of reasons for that. I think it is a good idea to fix 
the TERA process, but I am more than happy to go straight to 
the HEARTH Act-like model for tribal energy if that is what we 
need to do. That model has worked for surface leasing, and I 
think tribes would make it work for minerals.
    I would like to hear what the witnesses today think about 
that. I am fine with doing both, fixing the TERA process and 
utilizing the HEARTH Act model as an alternative. If we can 
only pass a tribal energy bill once in 10 or 15 years, I want 
to do as much as we can to improve energy development in Indian 
Country.
    I also want to commend the Administration for its proposal 
to coordinate energy development by placing all the agencies 
under one roof. If you are going to have multiple agencies 
involved, the least you can do is put them in a room together 
to make sure they are talking to one another. But if we don't 
have the right people involved, the right process in place and 
the right funding behind the idea, it simply is not going to be 
efficient.
    That is why I am glad we are having this hearing today. We 
need to get out of this rut so the tribes can develop their 
resources. I think everyone wants that to happen. So I hope we 
hear some new ideas, some good ideas today about how to address 
these issues.
    Finally, I want to thank Grant Stafne for coming all the 
way out from Fort Peck Indian Reservation. Energy development 
in the past has been a big driver of Fort Peck's economy, and 
it can be again in the future. You have been serving your 
community on the council for a number of years now. I want to 
commend you for that. I look forward to getting your input 
today. I am glad you came. I want to make sure the Committee 
and the Congress are giving the tribes and the BIA the tools 
they need for success.
    I appreciate everyone who is going to speak today. I look 
forward to the question rounds. Once again, the 2,000-mile hike 
you made, Grant, we appreciate it.
    The Chairman. Thank you very much, Senator Tester. Since 
you mentioned Senator Dorgan, we have two Senators from North 
Dakota on the Committee right now. You will remember that map 
of the State of North Dakota that he brought to this Committee. 
It showed all of the oil and gas activity and the energy 
activity. There was a big area that was completely blocked off, 
and we wondered how it was that the resources had followed such 
a perfect line as not being there.
    In fact, the resources were there but just were being 
blocked. So I appreciate the continued efforts in a bipartisan 
way with the two Senators from North Dakota here who are 
clearly aware of the situation.
    Any other members have opening statement they would like to 
make? Senator Franken.

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

    Senator Franken. Actually, Mr. Chairman, I don't have one 
prepared, but we have had these hearings, very dramatic 
hearings, on things like suicide, child suicide. And there is a 
vicious circle in terms of housing and economic development and 
addictions and domestic violence. When you are housed with 
another family, exponentially being exposed to that.
    One thing that I think we all agree on is there is nothing 
like economic development. When we heard from Pine Ridge, from 
Red Lake, the conclusion they came to is that we have to do 
everything we can to create economic development. This 
testimony says that there is energy there, both in renewable 
and in non-renewables. I want energy projects in Indian Country 
to create jobs, create economic activity so that we can do 
something to break this cycle. Anything we can do. I don't 
care, you know me, I am Mr. Global Warming is a Real Problem. 
But if they find a coal mine on a reservation, let's use it.
    So I want to do everything I can----
    The Chairman. Save that videotape.
    [Laughter.]
    Senator Franken. Oh well. I wanted to jolly up the 
Chairman.
    The Chairman. Oh, well, we are inviting you to sit on this 
side of the dais. Come on over.
    [Laughter.]
    Senator Franken. There is also sun, there is also wind. To 
me, there is nothing more important than finding a way to get 
jobs in Indian Country. This is definitely a way that we can do 
it. That is my opening statement.
    The Chairman. Senator Hoeven?

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

    Senator Hoeven. Mr. Chairman, just picking up on comments 
made by both yourself and the ranking member, in 2008 I was 
Governor in North Dakota and signed an agreement with the Three 
Affiliated Tribes. At that time, there was one well on the 
Three Affiliated Tribes' reservation.
    Essentially what that agreement did is it brought parity 
between the regulation on and off the reservation, so that the 
regulations off-reservation in North Dakota and on the 
reservation in North Dakota were the same. Since then, they 
have drilled hundreds of wells. I think now if the Three 
Affiliated Tribes were an independent State, they would be the 
ninth largest oil-producing State in the Nation.
    So if we find a way to make it easier to do business, 
companies respond. Investments are made, jobs are created, 
Senator Franken. So that is what this hearing today is about.
    It is not just the investment to produce more energy. That 
investment also produces better environmental stewardship, 
because we get the investment in the new technologies and the 
gathering systems and the pipelines we need in order to move 
gas to market rather than throwing it off, which I look very 
much forward to talking about.
    I thank both of you for calling this hearing today.
    The Chairman. Thank you, Senator Hoeven. Senator Daines?

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

    Senator Daines. Thanks, Mr. Chairman. I want to thank you 
as well as Ranking Member Tester for this hearing today.
    As I travel across Indian Country in Montana, I hear about 
the challenges associated with energy development. Senator 
Franken, I look forward to touring with you the coal operations 
at the Crow Reservation in Montana. We have more recoverable 
coal than any State in the Union.
    Senator Franken. Let me be clear. I am sorry to interrupt 
you. But that coal in Indian Country would replace coal being 
mined elsewhere in Wyoming.
    [Laughter.]
    Senator Daines. There are always conditions.
    But to that point, the unemployment rate today on the Crow 
Reservation is north of 40 percent. Without those coal-mining 
jobs, the unemployment rate is over 80 percent. This is a key 
to future prosperity, certainly in these energy jobs.
    I too want to welcome Councilman Stafne. Thanks for making 
the long trek from Montana, from the Fort Peck Reservation. As 
you are going to hear in his written testimony, it is rich in 
oil and gas reserves coming from that Bakken Formation that the 
Governor, now Senator from North Dakota was talking about, the 
Bakken Three Forks Formation. It also has significant wind 
potential as well.
    As the GAO report and the witnesses are going to tell us 
today, energy development in Indian lands is laden with red 
tape. It is expensive. It is detracting investors. It ignores 
the most important responsibility of the Federal Government to 
uphold its trust responsibility with Indian nations. Frankly, I 
think it is a disgrace that the Federal Government has not done 
more to ensure that our Indian nations can foster their own 
tribal sovereignty doing the best they can to create a better 
livelihood for their members.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Daines.
    I want to welcome the witnesses again, and remind you that 
your complete statements will be part of the record and ask you 
to keep your statements to five minutes or less.
    Today we are going to hear from Mr. Larry Roberts, who is 
Principal Deputy Assistant Secretary of Indian Affairs at the 
Department of the Interior; Mr. Frank Rusco, Director, Natural 
Resources and Environment, U.S. Government Accountability 
Office; the Honorable James ``Mike'' Olguin, who is the Tribal 
Council Member from the Southern Ute Indian Tribe in Colorado; 
Mr. Grant Stafne, who has been welcomed by your two Senators 
from Montana; and Mr. Cameron Cuch, who is the Vice President 
of Government Affairs, Crescent Point Energy, U.S. Corporation, 
from Denver.
    Mr. Roberts?

 STATEMENT OF LAWRENCE S. ROBERTS, PRINCIPAL DEPUTY ASSISTANT 
   SECRETARY, INDIAN AFFAIRS, U.S. DEPARTMENT OF THE INTERIOR

    Mr. Roberts. Thank you, Chairman Barrasso, Vice Chairman 
Tester, members of the Committee.
    My name is Lawrence Roberts. I am the Principal Deputy 
Assistant Secretary for Indian Affairs at the Department of 
Interior. I am a member of the Oneida Nation of Wisconsin. I 
thank you for the opportunity to testify today.
    I have with me today BIA Director Mike Black, Acting 
Director of Indian Energy and Economic Development Office; Jack 
Stevens and our Division Chief, Steve Many Deeds, and staff 
from his office.
    As many of you have noted in your statements, energy is 
critically important to tribes. Commercial and community scale 
tribal energy development is a priority for this Administration 
because it provides significant economic and social benefits to 
tribes and individual Indians.
    Working closely with tribes, we have seen revenues from 
tribal energy development grow from just under $400 million in 
2009 to over $1.9 billion in 2014. While most of the increase 
in the revenue has been in the area of conventional energy, 
several tribes are now well situated to develop substantial 
renewable energy resources, including solar and wind energy.
    The Bureau of Indian Affairs and the Indian Energy and 
Economic Development Office work closely with the tribes 
testifying today. The Southern Ute is a well-recognized leader 
in the field, and their testimony speaks to the importance of 
retaining committed and engaged local staff, such as agency 
superintendent Priscilla Bancroft.
    At Fort Peck, we recently provided a substantial grant to 
investigate potential petroleum reserves that exist on the 
reservation and make recommendations as to where new 
opportunities are located. We have also installed our NIOGEMS 
system at the tribal energy office and at the BIA agency 
office. Our work with the Ute Tribe has included providing 
staff to work on site to expedite well permitting, onsite 
inspections and environmental review, as well as installing the 
NIOGEMS system at the tribal energy office.
    Our work across Indian Country touches on all aspects of 
energy development. At this moment, we are either funding or 
providing technical assistance to energy and mineral projects 
in over 70 different tribal communities. For example, we have 
funded business planning for the Salish and Kootenai Tribes on 
their hydroelectric project.
    More recently, we have seen growing interest in smaller 
renewable energy projects, ranging from 250 kilowatts to 3 
megawatts. The projects are distinguished from those utility-
scale projects where power is sold and used off-reservation.
    These smaller projects have lower capital expense, they 
allow for 100 percent tribal ownership, benefits accrue locally 
and provide an alternative to high local energy rates. For 
example, we have assisted the Blue Lake Rancheria in developing 
a small scale biomass combined heat and power facility that 
will generate modest income and jobs.
    Senator Tester spoke about the success under the HEARTH 
Act. Congress's enactment of that HEARTH Act in 2012 has been 
extremely successful. Over 20 tribes have utilized the HEARTH 
Act for many business, solar and wind energy developments. The 
HEARTH Act is an example of how Congress and the Administration 
can work together to foster tribal self-governance and self-
determination in energy development.
    The GAO report makes a number of recommendations that we 
agree with and that we are working to implement. For example, 
we agree that GIS mapping and a tracking system is exceedingly 
important. The Department's NIOGEMS system is a tool that can 
provide this mapping and tracking service for oil and gas 
development. We are working to improve it to include other 
forms of energy development.
    NIOGEMS is available to our other Federal agencies. It is 
available to tribes and it is available to our local staff on 
the ground. It is used at a number of locations, including Wind 
River, Navajo, Jicarilla Apache and others. In addition, we are 
actively working with BLM to identify the needs for cadastral 
surveys. Further, we agree with GAO's recommendation to develop 
TERA guidance and to evaluate the effectiveness of our capacity 
grants.
    As the GAO report underscores, the Department and Congress 
working together can do much to promote tribal energy 
development. For example, Assistant Secretary Washburn 
testified last Congress on what is now Chairman Barrasso's 
bill, S. 209. There is a lot the Department likes about that 
Act, and there is a need to improve the 2005 Act.
    Finally, the GAO report underscores the lengthy review 
times and the need to improve efficiency and transparency. We 
have sought to address this problem by proposing in the 2016 
budget to establish an Indian Energy Service Center located in 
Denver, Colorado. That would include personnel from the various 
Interior agencies that must coordinate energy development in 
Indian Country, including BIA, IEED, the Office of Natural 
Resource Revenue, BLM, and the Office of Special Trustee.
    Thank you for providing this opportunity to testify today. 
The Department will continue to work with tribes to promote 
energy development and will continue to work closely with this 
Committee as well as our Federal and State partners to address 
energy development issues and solutions. I am happy to answer 
any questions the Committee may have.
    [The prepared statement of Mr. Roberts follows:]

 Prepared Statement of Lawrence S. Roberts, Principal Deputy Assistant 
       Secretary, Indian Affairs, U.S. Department of the Interior
    Chairman Barrasso, Vice-Chairman Tester, and Members of the 
Committee, my name is Lawrence Roberts and I am the Principal Deputy 
Assistant Secretary of Indian Affairs at the Department of the Interior 
(Department). Thank you for this opportunity to testify on the June 
2015, GAO Report ``Indian Energy Development, Poor Management by BIA 
Has Hindered Energy Development on Indian Lands.''
    Energy is critically important to tribes. Commercial and community 
scale tribal energy development is a priority for this Administration 
because it provides significant economic and social benefits to tribes, 
and individual Indians. The Administration has worked very hard to help 
tribes assess, develop and market conventional energy resources, while 
also assisting supporting tribes as they explore development of 
renewable energy resources, such as wind and solar energy. Working 
closely with tribes, we have seen revenues from tribal energy 
development grow from just under $400 million when President Obama took 
office in 2009 to over $1.1 billion in 2014. While most of the increase 
in revenue has been in the area of conventional energy, several tribes 
are also now well-situated to develop substantial renewable energy 
resources, including solar and wind energy. We will continue to support 
tribes in both areas, conventional and renewable, to ensure that tribes 
play a crucial role in America's energy future.
    Yet, as the GAO report shows, the Department and Congress, working 
together, can do much more to promote tribal energy development. As 
discussed in more detail below, the Department largely agrees with 
GAO's recommendations and, despite fiscal challenges, we are working to 
implement widespread improvements. We have been working hard to address 
each of the subjects raised by the GAO report and have substantial 
progress to report. For example, the GAO report underscores the lengthy 
review times and the need to improve efficiency and transparency. We 
have sought to address this problem by breaking down the silos that 
create obstacles to close coordination in the federal bureaucracy. As 
detailed in the President's 2016 Budget, the Department proposes to 
establish an Indian Energy Service Center (Service Center) centrally 
located in Denver, Colorado, to address this need. The Service Center 
will include personnel from the various Interior Agencies that must 
coordinate energy development in Indian Country including the Bureau of 
Indian Affairs (BIA), the Office of Indian Energy and Economic 
Development (IEED), the Office of Natural Resource Revenue (ONRR), the 
Office of the Special Trustee for American Indians (OST), and the 
Bureau of Land Management (BLM). The Service Center would provide 
expertise, policy guidance, standardized procedures, and technical 
assistance across a broad spectrum of services. The idea has been well-
received by energy-producing tribes because it would provide a 
centralized, one-stop shop for energy services.
    The GAO Report provides seven (7) recommendation areas. My 
testimony today will summarize how we are working to implement 
solutions in those areas and conclude with further detail about the 
Indian Energy Service Center

    Recommendation 1: To ensure it can verify ownership in a timely 
manner and identify resources available for development, BIA should 
take steps to complete its GIS mapping module in TAAMS.

    The GAO report recommended that the Geographic Information System 
(GIS) mapping module be added to the Trust Asset and Accounting 
Management System (TAAMS). TAAMS represents a significant, long-term 
investment in the Department's efforts to meet its trust 
responsibility. As we explained in our discussions with GAO, TAAMS was 
not designed as a geospatial mapping system, but simply to reflect 
legal descriptions as they appear on documents recorded as required by 
federal law.
    We agree, however, that GIS mapping of Indian lands is exceedingly 
important. As we discussed with GAO, the Department has developed the 
National Indian Oil and Gas Evaluation Management System (NIOGEMS), 
which is a map-oriented GIS computer application, for managing 
reservation lease, well, and production data for oil and gas and other 
energy/mineral resources. NIOGEMS assists energy producing Indian 
tribes by allowing tribal, BIA and other Interior resource managers to 
gain ready access to financial, realty, geo-technical information and 
complex resource data aggregated from other data systems/sources, for 
tracking and making decisions on leasing, developing, and managing 
energy/mineral resources.
    NIOGEMS incorporates aggregated data and presents information in 
concise user-friendly data view and map-based forms, and allows 
generation of reports, sharable maps, and data extractions for use in 
other analytical software. While no system is perfect, NIOGEMS has 
helped us improve our performance of our responsibilities to Tribes and 
individual trust owners. As the DOI's Inspector General's Report No.: 
CR-EV-BIA-0001-2011 stated in its list of promising technologies and 
practices for oil and gas in Indian country:

         ``[T]he National Indian Oil and Gas Evaluation Management 
        System (NIOGEMS) . . . represents a significant improvement 
        over the current Trust Asset and Accounting Management System 
        database for managing oil and gas activities, including leasing 
        and production data, by incorporating geospatial information as 
        well as a digital mapping capability. The Wind River Agency in 
        Wyoming reported a tenfold improvement in productivity for 
        certain realty activities after implementing NIOGEMS.''

    NIOGEMS can provide regularly updated mapped ownership tracts, 
energy Leases, as well as BLM agreements data for Tribes, BIA agencies, 
and supporting federal agencies for a large set of reservations. Staff 
also develops and gathers an array of Indian energy resource data, for 
regional areas and in detail on a reservation project area basis. For 
the reservations supported in NIOGEMS, this data is combined in the 
NIOGEMS database to meet the need for comprehensive data to identify 
ownership and resources available for energy development, particularly 
oil and gas. Though it began with oil and gas related information, 
NIOGEMS is expanding to include additional energy/mineral resource data 
and supporting functionality. We will begin visiting reservation sites 
to train staff on how to log onto NIOGEMS from the Albuquerque server.
    We are also taking steps to develop a land boundary and ownership 
repository that will be incorporated into TAAMS for all tribal lands. 
Our goal is that legal land descriptions entered in TAAMS from these 
conveyance documents will be regularly extracted and aligned with BLM 
survey data to produce GIS products that illustrate current Indian land 
ownership. In sum, we are continuing to invest heavily in TAAMS and 
related systems that have improved our ability to meet our various 
responsibilities. We are committed to avoiding past mistakes and having 
the technical resources that we need to manage vast tribal resources 
successfully.

    Recommendation 2: To ensure it can verify ownership in a timely 
manner and identify resources available for development, BIA should 
work with BLM to identify cadastral survey needs.

    In more than a century since the establishment of Indian 
reservations, the federal government has not yet fully surveyed all 
Indian reservation lands. For example, in the nearly 150 years since 
establishment of the Navajo Reservation, portions of that reservation 
have never been fully surveyed. A survey is an important step in 
developing a full inventory of trust resources. The GAO report 
recommended that the BIA and BLM work together to identify cadastral 
survey needs. As in years past, the BIA and the BLM, in a coordinated 
and focused effort, have prepared a Reimbursable Service Agreement 
(RSA) between the two agencies to identify and deliver survey-related 
products and services needed to identify and address the realty and 
boundary issues, in terms of asset/resource protection, of American 
Indian and Alaska Native Trust beneficiaries. Moreover, in February of 
2015, the President asked Congress for $2.791 million for Fiscal Year 
(FY) 2016 to fund this effort. Absent a budget, it is unclear when the 
fuding will be available. However, the Department agrees that this is 
an urgent need in the BIA, particularly where reservations and trust 
lands lay along a river or where the river created the border. Such 
landmarks tend to move creating uncertainty as to ownership. During FY 
2015, the BIA and BLM held quarterly meetings to discuss the cadastral 
survey needs, along with specific requests and the development of a 
mechanism to collect survey requests from the field. The BLM continues 
to provide boundary solutions by utilizing innovations in survey 
technology. Planning meetings between the BIA and the BLM will continue 
in FY 2016. A methodology to collect survey needs has been established 
and further refinement of the data collection will be completed by the 
end of FY 2016.

    Recommendation 3: To improve the efficiency and transparency of its 
review process, BIA should develop a documented process to track its 
review and response times.

    The GAO report recommended the BIA should develop a process to 
track BIA review and response times. As the recommendation applies to 
oil and gas leasing, the BIA will make a concerted effort to implement 
a tracking and monitoring effort in compliance with regulatory 
requirements to demonstrate timely reviews and approvals within the 
system of record, TAAMS. This will assist the BIA's field offices with 
maintaining a single current and accurate system. The goal is to have 
tracking mechanisms in TAAMS by the end of FY 2017. Additionally, IEED 
uses a formal Internal Control Review process for ensuring timely 
review of Indian Minerals Development Act of 1982 (IMDA) agreements for 
oil, gas, and other minerals. Under these procedures, IEED must 
identify all major risks that would prevent the review of agreements 
from meeting a deadline, and then to establish procedures (controls) to 
eliminate identified risks. The IEED's time line for reviewing 
agreements and providing technical comments (including economic 
analysis of negotiated agreement terms) is 30 days.

    Recommendation 4: To improve the efficiency and transparency of its 
review process, BIA should enhance data collection efforts to ensure it 
has data needed to track its review and response times.

    The GAO report recommended that the BIA enhance data collection for 
its tracking of BIA review and response times. We are working hard and 
investing heavily to improve tracking. In addition to the TAAMS 
enhancements, NIOGEMS currently tracks permits, rights of way, and 
environmental studies associated with energy development. The next 
version of NIOGEMS, scheduled for implementation in the next few 
months, will provide the user with the ability to develop ad hoc 
tracking.

    Recommendation 5: Provide additional energy development-specific 
guidance on provisions of TERA regulations that tribes have identified 
to Interior as unclear.

    The Department agrees with the report's recommendation that it 
provide additional energy development-specific guidance on provisions 
of TERA regulations that tribes have identified to the Department as 
unclear. IEED and our Office of the Solicitor believe that this clarity 
can be best achieved by amending the IMDA to insert tribal self-
determination language similar to that found in the Helping Expedite 
and Advance Responsible Tribal Homeownership (HEARTH) Act of 2012. The 
HEARTH Act permits tribes to lease surface trust lands for renewable 
energy purposes absent approval by the Department, by implementing 
their own leasing regulations. The Department respectfully asks 
Congress to make this possible in the conventional energy arena by 
amending the law to match the HEARTH Act provisions. We would be happy 
to work with your staff on such an amendment.
    The GAO report highlights the need to track the benefits of its 
Tribal Energy Development Capacity (TEDC) grant program and to 
determine whether these grants have enabled tribes to develop the 
administrative and technical capacity to enter into Tribal Energy 
Resource Agreements (TERAs). To address the deficiencies identified in 
the GAO report, the Department modified this grant program to 
complement the HEARTH Act. In recognition of the growing need for 
tribal regulatory infrastructure since passage of the HEARTH Act, the 
Department reformed the program to encourage tribes to establish the 
legal infrastructure to regulate energy-related activities, including 
the adoption of commercial codes, establishment of electrical utility 
authorities, and enactment of energy-related regulations. For example, 
of the ten TEDC grants that the Department disbursed at the close of FY 
2015, half were awarded to equip Tribes to establish tribal utility 
authorities, a substantial step in assuming sovereign control of 
electrical resources.

    Recommendation 6: To ensure the TEDC grant program is effective in 
moving tribes closer to developing the capacity needed to pursue TERAs, 
IEED should take steps to develop a documented process for evaluating 
the effectiveness of TEDC grants.

    The Department will establish an evaluation process involving 
program staff and other stakeholders to gauge the extent to which TEDC 
grants have increased tribal capacity to enter into a TERA. We will 
seek feedback from tribal leaders, project managers, consultants and 
others on features of the program that are problematic. We will work 
with them to find ways to cure the deficiencies that they have 
identified. We will also reevaluate TEDC's efficacy at the close of 
each fiscal year. Staff will monitor the progress of each grant and 
furnish technical assistance to each grantee, identifying and 
addressing any problems while grant projects are still in process. 
Moreover, the Department will administer an anonymous, follow-up online 
survey with tribal stakeholders on the effectiveness of each grant, 
which will include questions related to progress in developing 
capacity, challenges or concerns, and suggestions for improvement. The 
information gathered from this survey will assist staff to guide 
further improvements in the TEDC grants.

    Recommendation 7: To ensure the TEDC grant program is effective in 
moving tribes closer to developing the capacity needed to pursue TERAs, 
IEED should take steps to identify features of the TEDC grant program 
that could limit the effectiveness of the program to help tribes 
eliminate capacity gaps.

    In response to the GAO report's Recommendation 7, the IEED staff 
will establish two methods to help identify features of the TEDC 
program that could limit the effectiveness of the program in addressing 
capacity gaps. The first method will be to seek TEDC feedback by 
reaching out directly to stakeholders such as tribal council members, 
tribal leadership, consultants and others. The IEED will compile and 
evaluate responses to establish effective solutions to the deficiencies 
recognized through the TEDC stakeholder outreach. The second method 
would be an internal reevaluation of effectiveness of the TEDC program 
at the end of each closing fiscal year. The IEED staff will be 
responsible for project monitoring and for providing technical 
assistance to the TEDC grant recipients. Staff and recipients will 
possess firsthand knowledge of the deficiencies limiting the grants' 
effectiveness after the first year of project monitoring. The IEED 
staff will then evaluate these findings to create solutions and make 
adjustments to the program.
    Sixty (60) days after the 2015 TEDC solicitation closure or at the 
end of FY 2015, IEED staff plans to begin initial outreach for 
evaluating the effectiveness of TEDC grants, and for identifying the 
features of the TEDC grant program that could limit the effectiveness 
of the program to help tribes eliminate capacity gaps. At the end of FY 
2016, IEED staff will follow up with a second outreach and re-evaluate 
the effectiveness of TEDC grants.
Moving Forward: Indian Energy Service Center
    As noted above, the Department will be implementing the Indian 
Energy Service Center, if funded, in FY 2016. As identified in the 2015 
GAO report, the increased demands of oil and gas development have 
challenged the existing staff and management structure in providing 
timely efficient services. To address this demand, an interagency team 
from the BIA, IEED. ONRR, BLM, and OST have collaborated on solutions. 
The role of the Indian Energy Service Center would be to maintain a 
responsive, administrative and technical capacity, that when needed, 
can bolster local or regional staff faced with surging workload thus 
avoiding or eliminating backlogs.
    The proposal reflects the spirit of the White House Council on 
Native American Affairs, which seeks to break down barriers between 
federal agency ``silos'' and also builds on recent innovations such as 
the IEED's detailing of critical personnel to Fort Berthold, the rapid 
contracting of services by the Federal Indian Minerals Office at 
Navajo, and the BLM's ``Tiger Team'' formed to address backlog 
Applications for Permit to Drill at Fort Berthold. By adopting some of 
these short-term innovations, improving protocols, and building up a 
technical specialist corps that can collaborate across agency lines, we 
can efficiently institutionalize these types of rapid response efforts 
to ensure sustainable, scalable and timely, delivery of service, both 
to Indian country and the nation.
    The Indian Energy Service Center would improve performance of 
federal trust responsibilities in energy development. As proposed, it 
would provide technical and administrative functions that require 
minimal field presence. By fulfilling a support role for field offices 
through regional/state level offices, the field personnel would be able 
to focus on the local issues and challenges that accompany rapid 
expansion, making the Department and its many components more 
responsive to urgent needs in energy development.
    The Indian Energy Service Center would support numerous units, 
including the BIA regional offices; the BLM field and state offices; 
the OST fiduciary trust officers and regional trust administrators; and 
ONRR. The Indian Energy Service center would expedite the leasing, 
permitting, developing, and reporting for oil and gas development on 
Indian trust lands. Fundamental to this effort is responsiveness to 
Indian mineral owners (tribal or individual) and coordination between 
Federal agencies. In support of this mission, the Indian Energy Service 
Center would serve as a processing center for certain nationwide trust 
functions where this service is more efficiently provided by an off-
site work team in support of agencies and field, regional, or state 
offices. The Indian Energy Service Center would also dispatch expertise 
to the impacted agency or field office to evaluate the situation and 
make a determination how best to address the workload, particularly 
when the pending workload directly affects income being generated for 
beneficiaries.
Conclusion
    Thank you for providing this opportunity to showcase the myriad 
efforts being made at the Department to improve energy development on 
Indian lands. The Department will continue to work with Tribes to 
promote energy development and will continue to work closely with this 
Committee as well as our federal and state partners to address energy 
development issues and solutions.
    Thank you also for focusing attention on this important topic. I am 
available to answer any questions the Committee may have.

    The Chairman. Thank you, Mr. Roberts. Now we turn to Mr. 
Frank Rusco.

          STATEMENT OF FRANK RUSCO, DIRECTOR, NATURAL 
          RESOURCES AND ENVIRONMENT, U.S. GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Mr. Rusco. Thank you. Chairman Barrasso, Vice Chairman 
Tester and members of the Committee, I am happy to be here 
today to discuss the results of our report on Indian energy 
development.
    As you know, there is great potential for the development 
of energy resources on tribal and Indian lands, including 
hydroelectricity, oil and gas, and wind and solar. When we look 
at a map of energy development, you will see development 
happening all around and up to tribal and Indian lands. But 
with only a few exceptions, such energy development stops right 
at the borders.
    In our recent report to this Committee, we found numerous 
challenges facing tribes and individual Indians that own energy 
resources and want to develop them. Key among these challenges 
are that the Bureau of Indian Affairs has failed to perform its 
duties in an efficient and thorough way to review and approve 
energy development, to identify Indian land owners and to hire 
and retain key skilled staff who have the expertise to evaluate 
energy-related documents.
    The consequence of BIA's mismanagement is that numerous 
energy development projects languish for months or even years 
without proper review, without appropriate communication 
between the agency and the applicants and without even 
explanation for such delays. To be fair, in doing our work, we 
found many dedicated BIA staff and managers who were trying 
their best to adapt to the changing energy landscape. However, 
they have not received the support they need from BIA 
headquarters or the Department of the Interior to build the 
capacity needed to perform these required tasks.
    Meanwhile, the Country has seen an explosion of energy 
development over the last five to ten years on private, State 
and Federal lands. For example, State renewable energy 
portfolio standards for electric utilities have sparked a boom 
in wind and solar development. Many tribal lands have great 
potential for developing wind and solar projects, but the lack 
of a functional approval and permitting process at BIA has 
contributed to what amounts to a staggering loss of opportunity 
for tribes and Indian land owners.
    Once State renewable energy portfolio standards are met, 
the opportunity will be gone. So the clock is ticking for BIA 
to fix its management problems.
    Similarly, oil and gas resources exist on many tribal and 
Indian lands, but the recent resurgence of such development in 
the United States has largely passed these lands by. When an 
oil and gas company can deal with private, State or Federal 
land and resource owners, they are able to make development 
plans in which the steps needed for approval are known and the 
time frames are reasonable or at least predictable. Sadly, this 
is not the case when dealing with BIA. In fact, BIA does not 
track its review and response times, so the agency itself 
cannot predict how long these processes take.
    In our recent report, we found that a number of challenges 
have hindered the ability and willingness of tribes to seek 
Tribal Energy Resource Agreements, or TERAs, which Congress 
created to allow tribes to take charge of more of the elements 
of energy development on their lands. These challenges include 
uncertainty about TERA regulations, unreimbursed costs of 
assuming activities that have been historically conducted by 
Federal agencies, and the complex application process.
    For example, TERA has not defined inherently Federal 
functions, a provision in the TERA regulations. As a result 
tribes interested in seeking TERA approval do not have clear 
guidance on which functions they would take over from Federal 
agencies and which would remain inherently Federal.
    Congress has also directed in TERA to help tribes develop 
the capacity needed to pursue TERAs. They found that TERAs' 
approach to tribal capacity-building was not well developed and 
lacked documented processes for evaluating the effectiveness of 
such capacity building.
    We are currently doing additional work for this Committee, 
looking at BIA's human capital challenges and evaluating what 
BIA is doing to resolve these issues.
    I will be happy to answer any questions you may have. Thank 
you.
    [The prepared statement of Mr. Rusco follows:]

  Prepared Statement of Frank Rusco, Director, Natural Resources and 
           Environment, U.S. Government Accountability Office
    Chairman Barrasso, Vice-Chairman Tester, and Members of the 
Committee:
    I am pleased to be here today to discuss our recent report on the 
development of Indian energy resources. \1\ As you know, Indian energy 
resources hold significant potential for development and, for some 
Indian tribes and their members, energy development already provides 
economic benefits, including funding for education, infrastructure, and 
other public services. According to Department of the Interior 
(Interior) data, in fiscal year 2014, development of Indian energy 
resources provided over $1 billion in revenue to tribes and individual 
Indian resource owners. However, even with considerable energy 
resources, according to a 2014 Interior document, Indian energy 
resources are underdeveloped relative to surrounding non-Indian 
resources.
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    \1\ GAO, Indian Energy Development: Poor Management by BIA Has 
Hindered Energy Development on Indian Lands, GAO-15-502 (Washington, 
D.C.: June 8, 2015).
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    Development of Indian energy resources is a complex process that 
may involve a range of stakeholders, including federal, tribal, and 
state agencies. Interior's Bureau of Indian Affairs (BIA), through its 
various regional, agency, and other offices, has primary authority for 
managing Indian energy development and, in many cases, holds final 
decisionmaking authority. Federal management and oversight of Indian 
energy development is to be conducted consistent with the federal 
government's fiduciary trust responsibility to federally recognized 
Indian tribes and individual Indians. \2\ However, in recent decades, 
Indian tribes and individual Indians have asserted that Interior has 
failed to fulfill its trust responsibility, mainly with regard to the 
management and accounting of tribal and individual trust funds and 
trust assets. For example, Interior recently settled numerous ``breach 
of trust'' lawsuits, including Cobell v. Salazar, one of the largest 
class action suits filed against the United States. \3\
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    \2\ The federal trust responsibility is a fiduciary obligation on 
the part of the United States to federally recognized Indian tribes and 
tribal members. The Supreme Court has recognized a general trust 
relationship with Indian tribes since 1831. See Cherokee Nation v. 
Georgia, 30 U.S. (5 Pet.) 1 (1831). The trust responsibility originates 
from the unique, historical relationship between the United States and 
Indian tribes and consists of the ``highest moral and legal 
obligations'' that the federal government must meet to ensure the 
protection of tribal and individual Indian lands, assets and resources, 
but is legally enforceable only to the extent it is specifically 
defined by federal laws. See Seminole Nation v. United States, 316 U.S. 
286, 296-297 (1942), and United States v. Jicarilla Apache Nation, 564 
U.S. __, 131 S. Ct. 2313 (2011). Letter
    \3\ Cobell v. Salazar was a class action lawsuit initially filed in 
1996 by Elouise Cobell, a member of the Blackfeet Tribe, and others 
against the federal government concerning Interior's management of 
individual Indian trust fund accounts. Those accounts contain funds 
from leases of Indian land, some of which involve energy development. 
The settlement in Cobell required congressional authorization, which 
was provided in the Claims Resolution Act of 2010, Pub. L. No. 111-291, 
 101, 124 Stat. 3064, 3066 (2010).
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    Federal policy has supported greater tribal autonomy and control by 
promoting and supporting opportunities for increased tribal self-
determination and self-governance, including promoting tribal oversight 
and management of energy resource development on tribal lands. For 
example, in 2005, Congress passed the Indian Tribal Energy Development 
and Self-Determination Act (ITEDSA), part of the Energy Policy Act of 
2005, to provide an option for federally recognized tribes to exercise 
greater control of decisionmaking over their own energy resources. \4\ 
The ITEDSA provides for interested tribes to pursue a Tribal Energy 
Resource Agreement (TERA)--an agreement between a tribe and the 
Secretary of the Interior that allows the tribe, at its discretion, to 
enter into leases, business agreements, and right-of-way (ROW) 
agreements for energy resource development on tribal lands without 
review and approval by the Secretary. However, no tribe has entered 
into a TERA with Interior, and shortcomings in BIA's management that we 
identified in our June 2015 report highlight the need for tribes to 
build the capacity to perform the duties that would enable them to 
obtain greater tribal control and decisionmaking authority over the 
development of their resources. \5\
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    \4\ Federally recognized tribes have a government-to-government 
relationship with the United States and are eligible to receive certain 
protections, services, and benefits by virtue of their unique status as 
Indian tribes.
    \5\ GAO-15-502.
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    In this context, my testimony today discusses the findings from our 
June 2015 report on Indian energy development. Accordingly, this 
testimony addresses the factors that have (1) hindered Indian energy 
resource development and (2) deterred tribes from seeking TERAs. In 
addition, I will highlight several key actions that we recommended in 
our report that Interior can take to help overcome challenges 
associated with the administration and management of Indian energy 
resources.
    To conduct the work for our June 2015 report, we reviewed and 
synthesized literature including more than 40 reports, conference 
proceedings, hearings statements, and other publications from federal 
and tribal governments; industry; academics; and nonprofit 
organizations. We also obtained available data on key dates associated 
with the review and approval of energy-related documents for planned or 
completed utility-scale renewable projects from several BIA regional 
and local officials, tribal officials, and industry representatives. 
Further, we interviewed a nongeneralizable sample of stakeholders 
representing 33 Indian tribes, energy development companies, and 
numerous federal agencies and organizations, including officials from 
BIA, Office of Indian Energy and Economic Development, Department of 
Energy, National Renewable Energy Laboratory, and the Bureau of Land 
Management (BLM). \6\ We did not evaluate tribal activities or actions 
to govern the development of their resources or assess any potential 
barriers to energy development such actions or activities may pose. Our 
June 2015 report includes a detailed explanation of the scope and 
methodology used to conduct our work.
---------------------------------------------------------------------------
    \6\ Within BIA, we interviewed officials from all 12 BIA regional 
offices and 9 BIA agency offices.
---------------------------------------------------------------------------
    We conducted the work on which this testimony is based in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives.
Shortcomings in BIA's Management and a Variety of Other Factors Have 
        Hindered Indian Energy Development
    Factors, such as shortcomings in BIA's management and additional 
factors generally outside of BIA's management responsibilities--such as 
a complex regulatory framework, tribes' limited capital and 
infrastructure, and varied tribal capacity--have hindered Indian energy 
development. Specifically, according to some of the literature we 
reviewed and several stakeholders we interviewed, BIA's management has 
three key shortcomings.
    First, BIA does not have the data it needs to verify ownership of 
some oil and gas resources, easily identify resources available for 
lease, or easily identify where leases are in effect, inconsistent with 
Interior's Secretarial Order 3215, which calls for the agency to 
maintain a system of records that identifies the location and value of 
Indian resources and allows for resource owners to obtain information 
regarding their assets in a timely manner. The ability to account for 
Indian resources would assist BIA in fulfilling its federal trust 
responsibility, and determining ownership is a necessary step for BIA 
to approve leases and other energy-related documents. However, in some 
cases, BIA cannot verify ownership because federal cadastral surveys--
the means by which land is defined, divided, traced, and recorded--
cannot be found or are outdated. It is additionally a concern that BIA 
does not know the magnitude of its cadastral survey needs or what 
resources would be needed to address them.
    We recommended in our June 2015 report that the Secretary of the 
Interior direct the Director of the BIA to take steps to work with BLM 
to identify cadastral survey needs. \7\ In its written comments on our 
report, Interior did not concur with our recommendation. However, in an 
August 2015 letter to GAO after the report was issued, Interior stated 
that it agrees this is an urgent need and reported it has taken steps 
to enter into an agreement with BLM to identify survey-related products 
and services needed to identify and address realty and boundary issues. 
In addition, the agency stated in its letter that it will finalize a 
data collection methodology to assess cadastral survey needs by October 
2016.
---------------------------------------------------------------------------
    \7\ GAO-15-502.
---------------------------------------------------------------------------
    In addition, BIA does not have an inventory of Indian resources in 
a format that is readily available, such as a geographic information 
system (GIS). Interior guidance identifies that efficient management of 
oil and gas resources relies, in part, on GIS mapping technology 
because it allows managers to easily identify resources available for 
lease and where leases are in effect. According to a BIA official, 
without a GIS component, identifying transactions such as leases and 
ROW agreements for Indian land and resources requires a search of paper 
records stored in multiple locations, which can take significant time 
and staff resources. For example, in response to a request from a 
tribal member with ownership interests in a parcel of land, BIA 
responded that locating the information on existing leases and ROW 
agreements would require that the tribal member pay $1,422 to cover 
approximately 48 hours of staff research time and associated costs. In 
addition, officials from a few Indian tribes told us that they cannot 
pursue development opportunities because BIA cannot provide the tribe 
with data on the location of their oil and gas resources--as called for 
in Interior's Secretarial Order 3215. Further, in 2012, a report from 
the Board of Governors of the Federal Reserve System found that an 
inventory of Indian resources could provide a road map for expanding 
development opportunities. \8\ Without data to verify ownership and use 
of resources in a timely manner, the agency cannot ensure that Indian 
resources are properly accounted for or that Indian tribes and their 
members are able to take full advantage of development opportunities.
---------------------------------------------------------------------------
    \8\ Board of Governors of the Federal Reserve System, Growing 
Economies in Indian Country: Taking Stock of Progress and Partnerships, 
A Summary of Challenges, Recommendations, and Promising Efforts (April 
2012). This report was the result of a series of workshops that 
included nine federal agencies, four Federal Reserve Bank partners, and 
representatives from 63 Indian tribes. The effort was focused on 
economic development in Indian Country.
---------------------------------------------------------------------------
    To improve BIA's efforts to verify ownership in a timely manner and 
identify resources available for development, we recommended in our 
June 2015 report that Interior direct BIA to take steps to complete GIS 
mapping capabilities. \9\ In its written comments in response to our 
report, Interior stated that the agency is developing and implementing 
applications that will supplement the data it has and provide GIS 
mapping capabilities, although it noted that one of these applications, 
the National Indian Oil and Gas Evaluation Management System (NIOGEMS), 
is not available nationally. Interior stated in its August 2015 letter 
to GAO that a national dataset composed of all Indian land tracts and 
boundaries with visualization functionality is expected to be completed 
within 4 years, depending on budget and resource availability.
---------------------------------------------------------------------------
    \9\ According to Interior's 2014-2015 performance plan, it was to 
incorporate a GIS mapping component into its Trust Asset and Accounting 
Management System in fiscal year 2014.
---------------------------------------------------------------------------
    Second, BIA's review and approval is required throughout the 
development process, including the approval of leases, ROW agreements, 
and appraisals, but BIA does not have a documented process or the data 
needed to track its review and response times. \10\ In 2014, an 
interagency steering committee that included Interior identified best 
practices to modernize federal decisionmaking processes through 
improved efficiency and transparency. \11\ The committee determined 
that federal agencies reviewing permits and other applications should 
collect consistent data, including the date the application was 
received, the date the application was considered complete by the 
agency, the issuance date, and the start and end dates for any 
``pauses'' in the review process. The committee concluded that these 
dates could provide agencies with greater transparency into the 
process, assist agency efforts to identify process trends and drivers 
that influence the review process, and inform agency discussions on 
ways to improve the process.
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    \10\ In 2014, an interagency Steering Committee developed in 
response to Executive Order 13604 identified best practices to 
modernize federal decision-making processes. The committee found that 
federal agencies reviewing permits and other applications should 
collect consistent data, including the date the application was 
received, the date the application was considered complete by the 
agency, the issuance date, and the start and end dates for any 
``pauses'' in the review process.
    \11\ This government-wide initiative was developed in response to 
Executive Order 13604 and was led by an interagency Steering Committee, 
which is composed of Deputy Secretaries or their equivalent from 12 
federal agencies, including the Department of the Interior. In 2014, 
the Steering Committee released an implementation plan for the 
Presidential Memorandum on Modernizing Infrastructure Permitting. 
Executive Order 13604 calls for agencies to improve federal permitting 
and review processes.
---------------------------------------------------------------------------
    However, BIA does not collect the data the interagency steering 
committee identified as needed to ensure transparency and, therefore, 
it cannot provide reasonable assurance that its process is efficient. A 
few stakeholders we interviewed and some literature we reviewed stated 
that BIA's review and approval process can be lengthy. For example, 
stakeholders provided examples of lease and ROW applications that were 
under review for multiple years. Specifically, in 2014, the Acting 
Chairman for the Southern Ute Indian Tribe testified before this 
committee that BIA's review of some of its energy-related documents 
took as long as 8 years. In the meantime, the tribe estimates it lost 
more than $95 million in revenues it could have earned from tribal 
permitting fees, oil and gas severance taxes, and royalties. According 
to a few stakeholders and some literature we reviewed, the lengthy 
review process can increase development costs and project times and, in 
some cases, result in missed development opportunities and lost 
revenue. Without a documented process or the data needed to track its 
review and response times, BIA cannot ensure transparency into the 
process and that documents are moving forward in a timely manner, or 
determine the effectiveness of efforts to improve the process.
    To address this shortcoming, we recommended in our June 2015 report 
that Interior direct BIA to develop a documented process to track its 
review and response times and enhance data collection efforts to ensure 
that the agency has the data needed to track its review and response 
times. In its written comments, Interior did not fully concur with this 
recommendation. Specifically, Interior stated that it will use NIOGEMS 
to assist in tracking review and response times. However, this 
application does not track all realty transactions or processes and has 
not been deployed nationally. Therefore, while NIOGEMS may provide some 
assistance to the agency, it alone cannot ensure that BIA's process to 
review energy-related documents is transparent or that documents are 
moving forward in a timely manner. In its August 2015 letter to GAO, 
Interior stated it will try to implement a tracking and monitoring 
effort by the end of fiscal year 2017 for oil and gas leases on Indian 
lands. The agency did not indicate if it intends to improve the 
transparency of its review and approval process for other energy-
related documents, such as ROW agreements and surface leases--some of 
which were under review for multiple years.
    Third, some BIA regional and agency offices do not have staff with 
the skills needed to effectively evaluate energy-related documents or 
adequate staff resources, according to a few stakeholders we 
interviewed and some of the literature we reviewed. For instance, 
Interior officials told us that the number of BIA personnel trained in 
oil and gas development is not sufficient to meet the demands of 
increased development. In another example, a BIA official from an 
agency office told us that leases and other permits cannot be reviewed 
in a timely manner because the office does not have enough staff to 
conduct the reviews. We are conducting ongoing work for this committee 
that will include information on key skills and staff resources at BIA 
involved with the development of energy resources on Indian lands.
    According to stakeholders we interviewed and literature we 
reviewed, additional factors, generally outside of BIA's management 
responsibilities, have also hindered Indian energy development, 
including

   a complex regulatory framework consisting of multiple 
        jurisdictions that can involve significantly more steps than 
        the development of private and state resources, increase 
        development costs, and add to the timeline for development;

   fractionated, or highly divided, land and mineral ownership 
        interests;

   tribes' limited access to initial capital to start projects 
        and limited opportunities to take advantage of federal tax 
        credits;

   dual taxation of resources by states and tribes that does 
        not occur on private, state, or federally owned resources;

   perceived or real concerns about the political stability and 
        capacity of some tribal governments; and

   limited access to infrastructure, such as transmission lines 
        needed to carry power generated from renewable sources to 
        market and transportation linkages to transport oil and gas 
        resources to processing facilities.

A Variety of Factors Have Deterred Tribes from Entering into TERAs
    A variety of factors have deterred tribes from pursuing TERAs. 
Uncertainty associated with Interior's TERA regulations is one factor. 
For example, TERA regulations authorize tribes to assume responsibility 
for energy development activities that are not ``inherently federal 
functions,'' but Interior officials told us that the agency has not 
determined what activities would be considered inherently federal 
because doing so could have far-reaching implications throughout the 
federal government. According to officials from one tribe we 
interviewed, the tribe has repeatedly asked Interior for additional 
guidance on the activities that would be considered inherently federal 
functions under the regulations. According to the tribal officials, 
without additional guidance on inherently federal functions, tribes 
considering a TERA do not know what activities the tribe would be 
assuming or what efforts may be necessary to build the capacity needed 
to assume those activities.
    We recommended in our June 2015 report that Interior provide 
additional energy development-specific guidance on provisions of TERA 
regulations that tribes have identified as unclear. \12\ Additional 
guidance could include examples of activities that are not inherently 
federal in the energy development context, which could assist tribes in 
identifying capacity building efforts that may be needed. Interior 
agreed with the recommendation and stated it is considering further 
guidance but did not provide additional details regarding issuance of 
the guidance.
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    \12\ GAO-15-502.
---------------------------------------------------------------------------
    In addition, the costs associated with assuming activities 
currently conducted by federal agencies and a complex application 
process were identified by literature we reviewed and stakeholders we 
interviewed as other factors that have deterred any tribe from entering 
into a TERA with Interior. Specifically, through a TERA, a tribe 
assuming control for energy development activities that are currently 
conducted by federal agencies does not receive federal funding for 
taking over the activities from the federal government. Several tribal 
officials we interviewed told us that the tribe does not have the 
resources to assume additional responsibility and liability from the 
federal government without some associated support from the federal 
government.
    In conclusion, our review identified a number of areas in which BIA 
could improve its management of Indian energy resources and enhance 
opportunities for greater tribal control and decisionmaking authority 
over the development of their energy resources. Interior stated it 
intends to take some steps to implement our recommendations, but we 
believe Interior needs to take additional actions to address data 
limitations and track its review process. We look forward to continuing 
to work with this committee in overseeing BIA and other federal 
programs to ensure that they are operating in the most effective and 
efficient manner.
    Chairman Barrasso, Ranking Member Tester, and Members of the 
Committee, this concludes my prepared statement. I would be pleased to 
answer any questions that you may have at this time.

    The Chairman. Thank you so much for your insightful and 
helpful testimony. It is a staggering loss of opportunity, to 
take your words.
    Next we will hear from the Honorable James ``Mike'' Olguin, 
who is a Tribal Council Member from the Southern Ute Indian 
Tribe. Welcome back to the Committee.

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

    Mr. Olguin. It is a pleasure. Good afternoon, Chairman 
Barrasso, Vice Chairman Tester and Committee members.
    Thank you for the opportunity to provide a statement on 
behalf of the Southern Ute Indian Tribe regarding BIA 
supervision of Indian energy development. And thank you for 
commissioning this important report.
    My name is Mike Olguin. I am an elected member of the 
Southern Ute Indian Tribal Council, which is the governing body 
of the Southern Ute Indian Tribe.
    The Tribe was very happy to cooperate with GAO staff and a 
few of the report's key points here bear repeating. According 
to the report, BIA's mismanagement of oil and gas resources led 
to an industry preference to acquire oil and gas leases on non-
Indian lands over Indian lands.
    The Tribe is not surprised by this conclusion, since 
development on the reservation involves three Federal agencies 
and compliance with a multitude of Federal statutes that do not 
apply on adjacent fee land. The BLM's new hydraulic fracturing 
rule would dramatically compound this problem if it ultimately 
goes into effect.
    In addition, permitting costs are much higher on tribal 
lands than on fee lands. While the GAO report noted that the 
BLM's drilling permit fee is $6,500, as of today that fee is 
actually $9,500. A permit from the State of Colorado to drill 
in adjacent fee land is free. This disparity creates a problem 
that is made worse on reservations like our Tribe's, where 
tribal land and non-Indian fee land are arranged like a 
checkerboard and oil and gas operators can develop non-Indian 
fee land for less time and money, all while depleting Indian 
minerals.
    There is no improvement in sight. Entering into a Tribal 
Energy Resource Agreement, or TERA, could help address delays 
caused by Federal oversight. Despite the Tribe's repeated 
request for clarification on what constitutes a Federal 
inherent function, the Tribe learned that the Interior 
officials told GAO that the agency has no plans to provide 
additional clarification.
    If BIA can't help itself, it should readily accept 
assistance from tribes when offered. The GAO report makes 
perfectly clear that the BIA does not have the resources to 
meet the Tribe's needs. The Tribe has the resources and has 
made countless offers to assist the BIA, but the BIA has 
repeatedly resisted these offers for reasons that are not 
particularly compelling.
    For example, the Tribe tried to assist with its Trust Asset 
Accounting Management System, TAMS, only to be told that it was 
not permissible for the tribe to assist unless it has a P.L. 
638 contract in place. The Tribe tried to assist with 
organizing the records at the Southern Ute Agency but the 
Bureau said tribal employees did not have the expertise 
necessary to assist, and that the employees needed to have 
background checks. Those checks took months to complete and 
required a 160-mile round trip drive to be fingerprinted and 
have a photograph taken for facial recognition, and an hour-
long interview with an OPM contract investigator.
    Time and time again, the Bureau held up its trust 
responsibility to the Tribe as a reason it could not allow the 
Tribe to assist. Shouldn't the trust responsibility analysis 
start with common sense? Who is the Bureau afraid to sue if the 
Bureau didn't require these background checks? The Bureau's 
circular reasoning, we can't allow the Tribe to assist in 
cleaning up tribal records, or they might not sue us for not 
requiring them to have the required background checks, was 
illogical, patronizing and contrary to the Tribe's best 
interests, as articulated by the Tribe.
    Trust responsibilities of the BIA to the Tribe must be 
modified so that the agency can provide support for the Tribe's 
decisions. Many months after the Office of Trust Records' 
assessment report, after the arrival of a new, helpful agency 
superintendent, the Bureau has entered into a P.L. 638 contract 
with the Tribe to scan and organize the agency's files before 
they are sent to the archives. The scanning project utilizes 
less than $100,000 from the Department of Interior and more 
than $1 million of tribal money and the dedication of tribal 
staff.
    The Southern Ute Agency's belated cooperation on this 
project is a radical change from past practice. The Bureau's 
past attempts to protect the Tribe from itself are patronizing, 
at best, and a breach of trust, at worst. What is more is that 
they don't make sense.
    In this instance, upholding a trust responsibly did not 
require the Bureau to find millions of dollars and staff to 
meet the Tribe's needs. All it required was facilitating the 
Tribe's efforts by removing the meaningless requirements like 
facial recognition scans, so that the Tribe could take care of 
the problem itself.
    The Tribe is well-equipped to define and articulate its 
best interests. Yet the ethic of the Bureau is to second guess 
and overrule it. It does not make sense, particularly given the 
Bureau itself cannot meet the Tribe's needs. The Bureau must be 
more flexible.
    Lastly, Southern Ute recognizes the Bureau cannot be all 
things to all tribes, and each tribe is different. But that 
trust responsibility means different things to different 
tribes. Each agency must try to understand the needs of the 
tribes that it serves, and the Bureau should not try to rely on 
a one size fits all approach. For example, the inflexibility of 
TAMS has been cited numerous times as an excuse for delays. On 
the other hand, because the BIA lacks the technology required 
to manage the Tribe's resources adequately, the Tribe's 
department of energy has scanned its entire set of files and 
developed its own data base in-house, complete with a GIS 
module that TAMS lacks. It is the juxtaposition, like these, 
the disparity between the Tribe's technological acumen as 
compared to the Bureau's technical paralysis, that make the 
inherent Federal function requirement all the more patronizing 
and meaningless.
    With that, the shortcomings of the BIA are not fresh 
revelations. As you know, last week the House did pass the 
Native Energy Act, which would tackle many of these problems 
identified in the GAO report. The Tribe supports that bill and 
supports Chairman Barrasso's Indian Tribal Energy Development 
and Self-Determination Act Amendments.
    With that, we are ready to answer any questions. Thank you.
    [The prepared statement of Mr. Olguin follows:]

   Prepared Statement of Hon. James ``Mike'' Olguin, Tribal Council 
                   Member, Southern Ute Indian Tribe
    Good afternoon Chairman Barrasso, Vice Chairman Tester, and 
Committee members. Thank you for the opportunity to provide a statement 
on behalf of the Southern Ute Indian Tribe regarding BIA's supervision 
of Indian Energy Development, and thank you for commissioning this 
important GAO report.
    My name is Mike Olguin. I am an elected member of the Southern Ute 
Indian Tribal Council, which is the governing body of the Southern Ute 
Indian Tribe. The Tribe occupies the Southern Ute Indian Reservation 
(Reservation) in southwest Colorado. The Reservation comprises 
approximately 700,000 total acres and its boundaries include 
approximately 311,000 surface and mineral acres of land held in trust 
by the federal government for the benefit of the Tribe. As a result of 
the complex history of the Reservation, the Tribe also owns severed oil 
and gas minerals and coal estates on additional portions of the 
Reservation that are held in trust by the United States.
    The Tribe had spent a great deal of time with staff from the 
Government Accountability Office who prepared this report. Tribal 
officials and staff met with GAO auditors and provided information 
regarding the Tribe's experience with the Bureau of Indian Affairs. The 
Tribe was pleased with the final product and would like to take this 
opportunity to focus on some of the key points and share with you 
stories of the Southern Ute Indian Tribe's experience.
Indian Energy--Conventional and Renewable--has Enormous Potential for 
        Indian Tribes and their Members in Terms of Jobs and Household 
        Incomes
    The Southern Ute Indian Tribe is a great example of the positive 
impacts of Indian energy development. Less than fifty years ago the 
Tribal Council had to end the practice of distributing per capita 
payments to tribal members because the Tribe could not afford them. 
Today the Tribe provides health insurance for its tribal members, 
promises all members a college education, and has a campus dotted with 
state-of-the art buildings. This success was not an accident. Without a 
prolonged effort to take control of its natural resources in the face 
of numerous obstacles, including BIA mismanagement, the Southern Ute 
Indian Tribe would not be the economic powerhouse that it is today. In 
1974 the Tribal Council placed a moratorium on oil and gas development 
on the Reservation until the Tribe could gain better understanding and 
control over the process. That moratorium remained in place for 10 
years while the Tribe compiled information and evaluated the quality 
and extent of its mineral resources. As part of that process, in 1980, 
the Tribe created its Department of Energy. Because the Tribe's leaders 
believed that the Tribe could do a better job of monitoring its own 
resources than federal agencies did, shortly after passage of the 
Federal Oil and Gas Royalty Management Act of 1982, the Tribe entered 
into a cooperative agreement with the Minerals Management Service 
permitting the Tribe to conduct its own royalty accounting and 
auditing. These acts of energy development self-determination are key 
to the Tribe's economic success.
    The Tribe is a leader in Indian Country with a demonstrated and 
sterling record of business and administrative acumen. The Tribe is the 
only tribe in the nation with a AAA+ credit rating, which was earned 
through years of successful and prudent business transactions. Though 
the Tribe has a diversified economic development strategy, energy 
development remains the key component of the Tribe's strategy. 
Approximately thirty percent of the Tribe's income comes from energy 
development on the Reservation. Accordingly, barriers to energy 
development--including BIA's poor management--have a direct bearing on 
the Tribe's economic success. That in turn has a direct bearing on the 
health and welfare of the Tribe's 1,500 members.
The Federal Role in Indian Energy Development has Enormous Impact--
        Largely Negative--on Revenue for the Southern Ute Indian Tribe 
        from Reservation Energy Development
    The Tribe has achieved its stature at times with the assistance of, 
but often in spite of, the BIA's role in Indian energy development. 
According to the GAO Report, in 2012, the Department of the Interior's 
Inspector General found that weaknesses in BIA's management of oil and 
gas resources contributed to a general preference by industry to 
acquire oil and gas leases on non-Indian lands over Indian lands. This 
conclusion comes as no surprise to the Tribe, who is all too aware of 
this reality. The Tribe's wholly owned oil and gas company has had to 
weigh the uncertainties associated with BIA administrative delays and 
the quality of BIA and BLM management decisions when considering 
whether to invest in energy development on Tribe's own lands or off the 
Reservation. The Tribe is hopeful that the GAO's conclusion in this 
regard brings additional attention to this problem. The GAO noted that 
``According to Interior officials, while the potential for oil and gas 
development can be identical regardless of the type of land ownership--
such as state, private, or Indian--the added complexity of the federal 
process stops many developers from pursuing Indian oil and gas 
resources for development.'' In addition to a cumbersome process than 
involves not one but three federal agencies (BIA, BLM and ONRR), 
development of minerals on Indian lands also requires compliance with 
NEPA and the National Historic Preservation Act, which can add 
significant delay. Based on an interview with a private investment 
firm, GAO learned that an oil or gas well that develops Indian 
resources generally costs almost 65 percent more for regulatory 
compliance than a similar well developing private resources. The BLM's 
new hydraulic fracturing rule, currently stayed by the U.S. District 
Court in Wyoming, would dramatically compound this problem if it 
ultimately goes into effect.
    These regulatory compliance costs are magnified when oil is trading 
around $50 a barrel, as it is now. The State of Colorado, which issues 
drilling permits on fee lands, typically issues a permit in 
approximately 45 days. If the permit is not issued with 75 days, the 
operator has a right to a hearing. In comparison, on tribal lands, BLM 
issues the permits to drill, which typically take four to six months. 
There are no regulatory commitments to a processing timeframe; 
operators must just wait. In addition, permitting costs are much higher 
on tribal lands than on fee lands. While the GAO Report noted that the 
BLM's drilling permit fee is $6500.00, as of today that fee is actually 
$9500.00, and none of that money goes to the Tribe. In comparison, a 
state drilling permit in Colorado is free. These disparities create a 
problem that is exacerbated on reservations like the Southern Ute 
Indian Reservation, where tribal land and non-Indian fee land are 
arranged like a checkerboard, and oil or gas operators can develop on 
non-Indian fee land for less time and money, all-the-while depleting 
Indian minerals.
    Despite the Tribe's decades-long success in managing its own 
affairs and conducting highly complex business transactions, both on 
and off of the Reservation, federal law and regulations still require 
the BIA to review and approve even the most basic realty transaction 
occurring on the lands held in trust for the Tribe on the Reservation. 
The Tribe must generally wait upon approval from the Agency, which will 
invariably delay a proposed tribal project. These delays are 
exacerbated by the fact that the Agency approval often constitutes a 
federal action, which triggers environmental and other review 
requirements, even for simple and straightforward realty transactions. 
In essence, the Tribe's own lands are treated as public lands, and, if 
federal approval is involved, no action--not even some initiated by the 
Tribe itself--can occur until the federal government has analyzed the 
potential impacts.
    In order to eliminate these delays and in recognition of the 
Tribe's ability to protect its own interests and assets without 
assistance from the BIA, the statutory and regulatory requirements for 
BIA approval of tribal transactions must be modified so that BIA review 
and approval of realty-related tribal projects is not required. 
Entering into a Tribal Energy Resource Agreement (TERA) would-at least 
in theory-address this problem, but despite the Tribe's repeated 
requests for clarification of the TERA process, and in particular, for 
clarification on what constitutes an ``inherent federal function'' for 
which the Tribe would not be allowed to assume authority under the 
Department's regulations, the Department of the Interior has refused to 
provide guidance. The Tribe now learns in the GAO Report that 
``Interior officials told GAO that the agency has no plans to provide 
additional clarification.'' The Tribe notes that this is a problem 
Interior created for itself, as the term ``inherent federal functions'' 
is only contained within Interior's regulations, and is found nowhere 
in the Indian Tribal Energy Development and Self-Determination Act, the 
statute through which Congress created TERAs.
Tribes like Southern Ute that Actually Practice Self-Determination 
        Still Need the BIA to be Effective, Efficient, and Responsive 
        to the Tribe's Needs When it Comes to Federal Functions
    The BIA, particularly at the local Southern Ute Agency office, has 
been underfunded and understaffed for decades. As a result, the review 
and approval process often causes substantial delays that damage the 
Tribe and its interests. At one point in time several years ago, the 
Tribe estimated that delays associated with the review and approval of 
pipeline projects had cost the Tribe over $90M in lost revenue. To make 
up for the BIA's shortcomings and ensure that tribal business can 
continue, the Tribe has committed tribal staff and resources to 
ensuring that the work needed to be done by the BIA to approve 
transactions can be completed in a timely manner.
    Unfortunately, none of the GAO Report's Recommendations for 
Executive Action address the problem of underqualified and untrained 
staff. The Department of the Interior's comments stated that the 
development of an Indian Energy Service Center will solve this problem, 
but this solution still will not solve the problem at a local level. In 
addition, before an Indian Energy Service Center is implemented, there 
should be a review of existing organizations (e.g., various offices and 
services provided by the OST) that were created to assist in the wake 
of the Cobell lawsuit.
    The high cost of living in the Durango area is often cited as the 
reason that the Bureau cannot attract candidates to staff the Southern 
Ute Agency, yet the Bureau does not advertise locally and in forums 
where local people look for jobs in the area. If flight risk and high 
cost of living make it difficult to attract staff who will stay here, 
why would the Bureau not look to candidates who already live in and are 
committed to this Region, and then provide training?
If BIA Cannot Help Itself, it Should Readily Accept Assistance from 
        Tribes when Offered
    ``What is it that we need to do, to help you help us?'' is a common 
refrain in meetings between the Southern Ute Tribal Council and Bureau 
officials. The Southern Ute Indian Tribe has implored the BIA to accept 
the Tribe's countless offers to assist. BIA has repeatedly resisted 
those offers for reasons that are not particularly compelling. The 
GAO's report makes perfectly clear that the BIA does not have the data, 
resources, technological capabilities, or staffing to meet the needs of 
tribes. The Bureau also has no apparent incentive to meet tribal needs. 
\1\ The Tribe has data, resources, staffing, technological 
capabilities, and the incentive to improve the situation. To help with 
the backlog in processing transactions, the Tribe has attempted to 
assist with Trust Asset Accounting Management System (TAAMS) encoding, 
only to be told that it was not permissible for the Tribe to assist 
unless it has a 638 contract. \2\ This fact was only communicated after 
the Bureau led the Tribe on for several years, requiring technology 
expenditures and requiring and conducting extensive background checks 
for tribal employees who would be assisting.
---------------------------------------------------------------------------
    \1\ This appears to be a systemic issue. The Tribe's few positive 
experiences with the BIA in the past decade are limited to positive 
interactions with motivated, committed, engaged individual Agency 
employees, such as the Tribe's new Agency Superintendent, Priscilla 
Bancroft.
    \2\ The Tribe has repeatedly told the Bureau that it will not enter 
into a 638 contract for realty functions unless and until the Bureau 
organizes its records. The lack of a 638 contract is nevertheless 
heralded as the reason the Tribe cannot assist with TAAMS encoding.
---------------------------------------------------------------------------
    When the Agency's records were discovered to be in utter disarray, 
and after an OTRA audit resulted in findings of records in jeopardy, 
the Tribe tried to assist the Bureau with cleanup and organization. 
However, the Tribe was told that tribal employees assisting with the 
Tribe's records needed to have extensive background checks, and that 
the tribal employees did not have the knowledge and expertise necessary 
to assist. The Tribe had several of its employees go through the 
background check process, which involved a long application, a 160 mile 
round trip drive to be finger-printed and have a photograph taken for 
facial recognition, and an hour-long interview with an OPM contract 
investigator. This process took many months. The Tribe even hired local 
museum archivists to conduct a training on archival techniques for 
Agency and tribal staff so that the Bureau would allow tribal staff to 
handle the tribal records that had been desecrated by the Bureau for 
decades. Time and time again the Bureau held up its trust 
responsibility to the Tribe as the reason it could not allow the Tribe 
to assist. This circular reasoning (if we let the Tribe, without proper 
background checks and training, assist us in organizing and 
inventorying the irreplaceable historic records that we have 
haphazardly thrown in open cardboard boxes on the floor below shelves 
of industrial size bottles of toilet bowl cleaner, they might sue us 
for not upholding our trust responsibility to protect their records 
from tribal staff who do not have the requisite background checks and 
training) was illogical, maddening, patronizing, and contrary to the 
Tribe's best interests, as articulated by the Tribe.
The Trust Responsibilities of the BIA to the Tribe must be Modified so 
        that the Agency Can Provide Support for and Enforcement of the 
        Tribe's 
        Decisions Rather than Delay the Implementation of those 
        Decisions
    Many months after the OTRA report, after the arrival of a new, 
helpful Agency Superintendent, the Bureau has entered into a PL 93-638 
contract which allows the Tribe to, largely with the Tribe's own 
funding, scan and organize the Agency's files before they are sent to 
the American Indian Records Repository. The records will be prepared 
and scanned using 300 dpi scanners. The electronic files will be sent 
off site, where they will be organized in accordance with the Bureau's 
filing protocol, the 16 BIAM, which has been only loosely followed at 
the Southern Ute Agency in past decades. The electronic files will then 
be indexed into the Tribe's proprietary Geographic Information System 
(GIS). This scanning project, which utilizes less than $100,000 from 
the Department of the Interior and more than $1M of tribal money and 
the dedication of tribal staff, is well worth the money to the Tribe. 
The Southern Ute Agency's belated cooperation on this project brings a 
sigh of relief and a radical change from past practice. The Bureau's 
past attempts to protect the Tribe from itself are patronizing at best, 
and a breach of trust, at worst. The Tribe is well-equipped to define 
and articulate its best interests, yet the ethic of the Bureau is to 
second-guess and overrule it. This does not make sense, particularly 
given that the Bureau itself cannot meet the Tribe's needs. The Bureau 
must be more flexible.
The BIA Cannot Be All Things to All Tribes, but in Consultation with 
        Tribes, it Should Identify Those Things It Will Do and then 
        Endeavor to do them Extremely Well
    Southern Ute recognizes that the Bureau cannot be all things to all 
tribes, and that each tribe is different. Too, the trust responsibility 
means different things to different tribes. This underscores the need 
for each Agency to endeavor to truly understand the needs of the tribes 
that it serves, and to work toward responding to those needs. This will 
mean that the Bureau will not be able to rely on a one-size-fits-all 
approach. The Bureau is not particularly well equipped for flexibility, 
unfortunately. For example, the Southern Ute Indian Tribe, as well as 
operators on the Reservation, prefer to handle an operator's rights-of-
way all at once. This utterly rational approach allows the Tribe to 
more easily monitor the end date and renegotiate renewals when an 
operator's hundreds of rights-of-way are handled together. However, 
when the Southern Ute Indian Tribe presented one of these ``global 
rights-of-way'' packages to the Southern Ute Agency for approval, it 
took the Agency approximately four years to approve them. The Tribe 
later learned that the biggest hurdle to prompt approval was that there 
was no effective way to enter the rights-of-way into TAAMS. The 
unwieldiness of TAAMS has been cited numerous times as an excuse for 
delays in energy transaction processing and as an excuse for why the 
Bureau cannot assist the Tribe. If this system is so fundamental to the 
Bureau's ability to function, why did the Bureau select and contract 
for a system that is so poorly designed and so inadequate?
    The GAO Report identified problems with TAAMS. As the Report noted, 
``BIA does not have geographic information system (GIS) mapping data 
identifying resource ownership and use of resources, such as existing 
leases. Interior guidance identifies that efficient management of oil 
and gas resource relies, in part, on GIS mapping technology because it 
allows managers to easily identify resources available for lease and 
where leases are in effect. However, BIA's database for recording and 
maintaining historical and current data on ownership and leasing of 
Indian land and mineral resources (TAAMS), does not include a GIS 
mapping component.'' The Report noted that ``according to a BIA 
official, without a GIS component, the process to identify transactions 
such as leases and ROW agreements for Indian land and resources can 
take significant time and staff resources to search paper records 
stored in multiple locations.''
    To improve access to critical mineral resource information, the 
Tribe's Department of Energy has scanned its entire set of files and 
developed an associated GIS system that allows each document to be 
linked to a location on a map. Together the store of digital documents 
and the GIS make up the Department of Energy's Land Information 
Management System and represents a major improvement to tribal 
operations. Basically, because the BIA lacks the technology required to 
manage the Tribe's energy resources adequately, the Tribe developed its 
own database in-house, complete with the GIS module that TAAMS lacks. 
It is juxtapositions like these--the disparity between the Tribe's 
technological acumen as compared to the Bureau's technological 
paralysis--that make the ``inherent federal function'' requirement all 
the more patronizing and meaningless.
    The shortcomings of the BIA are not fresh revelations and, as you 
know, last week the House passed the ``Native Energy Act'' (H.R. 538), 
which would tackle many of the problems identified in the GAO report. 
The Tribe supports that bill as it supports Chairman Barrasso's 
``Indian Tribal Energy Development and Self-Determination Act 
Amendments'' (S. 209). With a short calendar remaining in 2015, we hope 
the Senate takes up S. 209 in the days ahead.
    Thank you for the opportunity to appear before you today. I would 
be happy to answer any questions the Committee may have.

    Attachment

           Supplemental Statement of James M. ``Mike'' Olguin
    Chairman Barrasso, Vice Chairman Tester, and Committee members, on 
behalf of the Southern Ute Indian Tribe, I would again like to thank 
you for allowing us to participate in this Oversight Hearing. The 
Committee's review of the GAO Report on BIA's management of energy 
development on Indian lands signaled bi-partisan recognition that the 
current system of managing energy development in Indian country is 
simply unacceptable. During the hearing on October 21st, members of the 
Committee asked questions and received testimony on several matters 
that are deserving of additional comment. Specifically, the items we 
wish to address are: (1) shortcomings in the BIA's land records system; 
(2) the dilemma of withholding ``inherent federal functions'' from 
tribal administration; and (3) the role of the BIA in advocating tribal 
best interests to sister agencies. We respectfully request that you 
consider our Tribe's supplemental comments on these subjects.
1. The Records System for Indian Land Title Is Grossly Inadequate
    The GAO Report found that the BIA ``does not have the data it needs 
to verify ownership of some oil and gas resources, easily identify 
resources available for lease, or easily identify where leases are in 
effect.'' GAO Report at 18. Quite separate from the slow conversion of 
the BIA's automated land records system, the Trust Asset and Accounting 
Management System (TAAMS), to facilitate GIS mapping, the underlying 
deficiency in verifiable land and mineral ownership records is a 
foundational concern with enormous ramifications. Based on the 
experience of Southern Ute, we understand that the BIA has never 
successfully completed the importation of historic, hard-copy title 
records into the TAAMS system. Further, because successful encoding of 
historic or current transactional documents into TAAMS is an 
administrative condition to such documents actually being recorded in 
the BIA's Land Title and Records Offices (LTROs) (the official regional 
locations for maintaining land title records), whether a critical 
document actually exists in the official LTRO records depends--not on 
its timely delivery for recording--but rather on whether the BIA 
personnel have had the time and training to convert the written 
document into TAAMS data. At Southern Ute, backlogs in TAAMS encoding 
have correspondingly diminished the reliability of LTRO as the 
definitive source for ascertaining Indian land title. We sincerely hope 
that our concern regarding this matter derives from circumstances that 
are localized and anomalous, but we respectfully urge the Committee to 
delve deeper into this issue. It is the fundamental, bedrock trust 
function of the BIA to maintain accurate records of Indian land 
ownership.
2. The Secretary's Unwillingness to Permit Tribes to Assume 
        ``Inherently Federal Functions'' Stymies Congress' Intent Under 
        Either TERAs or HEARTH Act Approaches
    Commencing several years before passage of the Energy Policy Act of 
2005, the Southern Ute Indian Tribe was one of several tribes 
advocating the creation of a statutory vehicle by which an electing 
tribe, with demonstrated capacity, could obtain Secretarial approval to 
bypass the Secretarial approval requirements for energy leases, rights-
of-way and other business agreements. The reasons for seeking this 
optional statutory mechanism reflected the reality that the capacity 
and sophistication of some tribes and the complexity of their 
transactions (such as monetization of Section 29 non-conventional fuel 
tax credits) had simply outstripped the expertise of BIA. As debate 
began, however, multiple issues were identified by various tribes and 
non-tribal groups, including: applicability of NEPA, development of 
tribal environmental review procedures, public comment opportunity, 
waivers of trust responsibility, retrocession of TERAs, and tribal 
capacity determinations. The resulting TERA statute embodied in the 
Indian Tribal Energy Development and Self Determination Act (25 U.S.C. 
 3504) is a complicated and daunting vehicle for achieving what was 
intended to be a simple objective.
    While the TERA statute addresses many matters, Congress recognized 
that the Secretary would need to supplement those provisions with 
implementing regulations and directed that the Secretary promulgate the 
regulations within one year of passage of the statute. 25 U.S.C.  3504 
(e)(8). Recognizing that such deadlines are sometimes missed (it took 
11 years for the Secretary to promulgate regulations supplementing the 
Indian Mineral Development Act of 1982, only ten and a half years 
overdue), the Southern Ute Indian Tribe offered the services of its 
staff and attorneys to take a preliminary stab at creating a conceptual 
draft. The BIA not only accepted the Tribe's offer, but also assigned 
officials from the Office of Indian Energy and Economic Development and 
the Solicitors' Office to participate in the preliminary process.
    The immediate question confronted by the drafting participants was 
whether the permissible scope of a TERA might include the regulatory 
and administrative functions typically performed by the BIA or BLM in 
implementing a Secretarially approved energy lease, right-of-way or 
business agreement. For example, if a tribally approved oil and gas 
lease under a TERA still required BLM approval of an Application for 
Permit to Drill, could the Secretary authorize a TERA tribe to review 
and approve the APD? With support from the highest levels of the BIA, 
the participants were encouraged to maximize the potential scope of the 
TERA, consistent with the statutory language and Congress' intent.
    Upon completion of the initial drafting, the participants delivered 
the conceptual document to the BIA, which gave the BIA a head start in 
preparing draft regulations later circulated for public comment in 
conformity with the Administrative Procedures Act. To the consternation 
of tribal participants, the draft published regulations and the final 
TERA regulations carved an undefined exception from the potential scope 
of a TERA by withholding ``inherently Federal functions'' from the 
ancillary administrative activities that could be undertaken by a TERA 
tribe in overseeing activities on a non-federally approved lease, 
right-of-way or business agreement. 25 C.F.R.  224.53(e)(2). Despite 
repeated efforts to obtain an explanation from the BIA about what 
``inherently Federal functions'' means in the context of the potential 
scope of a TERA, the Tribe has been stonewalled. The GAO was also 
unsuccessful in obtaining clarification on this point because ``the 
agency has not determined what activities would be considered 
inherently federal . . . and doing so could have far-reaching 
implications throughout the federal government.'' GAO Report at 32. 
Indeed, when questioned at the Oversight Hearing about the BIA's 
unwillingness to clarify this non-statutory exception to the scope of a 
TERA, the Secretary's representative, Principal Deputy Assistant 
Secretary, Indian Affairs Lawrence S. Roberts, provided little 
assurance that an interested tribe will ever have advanced knowledge 
about the potential scope of a TERA.
    Significantly, as Deputy Assistant Secretary Roberts reminded the 
Committee, Assistant Secretary Washburn has previously advocated 
extension of the HEARTH Act (25 U.S.C.  415(h)) to energy related 
leases, rights-of-way, and business agreements, as a preferable 
alternative to clarifying the TERA statute or regulation. The HEARTH 
Act is clearly a simpler mechanism for removing Secretarial approval 
requirements than the TERA statute. However, in attempting to address 
post-approval administrative powers, the TERA regulations are much more 
ambitious than the HEARTH Act for a reason; the administrative 
functions and approvals related to energy project operations interplay 
directly with the performance of energy lease obligations and those 
administrative activities are also points of delay in energy resource 
development in Indian country. If the HEARTH Act is extended to energy 
development, we believe that Indian country and Congress will demand a 
clearer understanding of what ``inherently Federal functions'' are and 
why they may not be assumed by capable tribes.
3. As Evidenced in the BLM's Rulemaking for Hydraulic Fracturing, It Is 
        not Apparent That BIA Has Been an Effective Advocate for Tribal 
        Best Interests in Sister Agency Rulemaking
    Because of the importance of oil and gas development to our Tribe, 
we participated in every stage of consultation offered by the BLM 
regarding its proposed hydraulic fracturing regulation beginning in 
January of 2012. Frankly, BLM was not forthright about the advanced 
status of its rulemaking activities when it began those discussions 
with tribes, and it never seriously entertained repeated tribal 
recommendations that its rule separately address Indian lands from 
public lands or that tribes be afforded an opportunity to opt-out of 
its rule. As recently found by United States District Court Judge 
Skavdahl, ``The BLM had already drafted a proposed rule by the time the 
agency initiated consultation with Indian tribes in January of 2012.'' 
Order on Motions For Preliminary Injunction at 39, Doc. 119, Sept. 30, 
2015, Wyoming v. United States Department of the Interior, Case No. 
2:15-CV-043-SWS (D. Wyoming). Additionally, in granting a preliminary 
injunction suspending the rule, Judge Skavdahl determined that ``the 
BLM summarily dismissed legitimate tribal concerns, simply citing its 
consistency in applying uniform regulations governing mineral resource 
development of Indian and federal lands and disavowing any authority to 
delegate regulatory responsibilities to tribes.'' Id.
    Although not discussed in the Wyoming case, the Southern Ute Indian 
Tribe and other energy producing tribes had also made repeated requests 
to the BIA to intervene with BLM on behalf of tribes. At a hastily 
assembled meeting with BIA officials who were attending the annual NCAI 
meeting in Nevada in June of 2013, a room full of tribal 
representatives brought the pending BLM rule to the attention of BIA 
officials, who seemed unfamiliar with the fact that the rule was 
pending. Tribal concerns at that time were evidenced by the adoption of 
NCAI Resolution No. REN-13-077, which called for separation between 
regulation of Indian lands and public lands and greater deference to 
tribal sovereignty. At various subsequent occasions in 2013 and 2014, 
tribal representatives traveled to Denver and Washington, D.C. to 
communicate their concerns, not just to BLM, but to urge BIA to speak 
on their behalf in this matter. To the very end, BLM refused to 
consider treating Indian lands and public lands differently or allowing 
electing tribes to opt out of the rule. To be sure, the final BLM rule 
did set up a waiver mechanism permitting the applicable State BLM 
Director to permit a tribe or state to substitute its own rules for 
BLM's, but only upon a finding that such a rule meets the federal 
objectives of the BLM rule. The BLM Director's determination is 
entirely discretionary and not subject to administrative challenge 
under the currently enjoined BLM rule.
    It is possible that the referenced waiver provision is due in part 
to BIA involvement; however, we were never advised of that involvement. 
We were disappointed by the lack of visible support of the BIA for our 
position. We also believe that, because of its unique expertise and 
responsibilities, it should be active in assisting tribes when the 
actions of sister agencies implicate legitimate tribal interests.
Conclusion
    We respectfully thank you for the opportunity to address these 
matters and look forward to working with you in the future with regard 
to Indian energy issues.

    The Chairman. Thank you very much, Mr. Olguin.
    Mr. Stafne?

     STATEMENT OF HON. GRANT STAFNE, COUNCILMAN, FORT PECK 
                  ASSINIBOINE AND SIOUX TRIBES

    Mr. Stafne. Good afternoon, Chairman Barrasso, Vice 
Chairman Tester and members of the Committee.
    My name is Grant Stafne. I serve as a member of the Tribal 
Executive Board of the Assiniboine and Sioux Tribes of the Fort 
Peck Reservation.
    On behalf of Chairman A.T. Stafne, I thank the Committee 
for holding this important hearing. It highlights the GAO 
findings concerning Indian energy development, namely, that 
poor management by BIA has hindered energy development on 
Indian lands.
    The Fort Peck Reservation lies within the western part of 
the Williston Basin, which include the oil-producing formation 
commonly known as the Bakken and Three Forks Formation. 
Estimates are that Bakken and Three Forks collectively hold 24 
billion barrels of potentially recoverable crude oil, 20 
billion barrels in oil and 40 billion barrels in natural gas. I 
am here today to provide specific recommendations that I hope 
the Committee will help implement, because as for the Fort Peck 
Reservation, the GAO findings are all true.
    At Fort Peck, we have experienced long delays by the Fort 
Peck agency in processing mineral leases, appraisals and 
requests for drilling permits, raising Federal permit and 
rights-of-way fees and other energy development costs well 
above off-reservation fee lands, sometimes setting rates three 
times the going rate in our area. And poor allocation of agency 
personnel who can expedite permits, rights-of-way and other 
Federal requirements.
    We have considerable experience in oil and gas development, 
dating to the 1950s. It is simply unacceptable to my tribe that 
agency shortcomings have resulted in missed development 
opportunities for tribes, lost revenues and jeopardization of 
otherwise viable energy projects. The United States must do a 
better job of honoring its trust obligations to all tribal 
nations in the field of natural resource development. The 
Departments of Interior and Energy should work together more 
closely.
    We make the following six recommendations. One, improve the 
BIA's administration of energy development. This starts with 
having qualified and trained personnel in realty appraisals and 
permitting being detailed to the relevant BIA agency and 
regional offices. Energy developers will not pursue otherwise 
viable tribal energy leases if they fear they will be subject 
to delays and arbitrary fees and costs that they do not 
encounter off-reservation.
    Two, reduce oil and gas fees. BLM currently charges $6,500 
for a permit application to drill on Indian and tribal trust 
lands. The State of Montana charges $75 to process the same 
kind of permit on State fee land. Had Congress known this, we 
doubt it would have set so high a fee as to discourage energy 
development on tribal trust lands.
    Three, ensure that the lease bid deposits are placed in 
interest-bearing accounts. This was done historically and 
should be reinstituted.
    Four, eliminate dual taxation. As the GAO report found, 
dual taxation hinders oil and gas development on Indian lands 
as a result of the wrongly-decided Supreme Court decision in 
Cotton Petroleum that allows States to tax certain activities 
by non-Indian companies on Indian and tribal trust lands. This 
discourages economic activities on tribal lands. Cotton was 
wrongly decided. We ask Congress once again to pass legislation 
returning full taxing authority to tribal governments.
    Five, eliminate barriers to wind energy and other renewable 
energy projects. Our reservation provides a great opportunity 
for wind development, but ever-changing national energy polices 
and the lack of inexpensive and accessible transmission line 
capacity hinders wind energy development at Fort Peck.
    Six, develop environmentally and culturally sustainable 
energy projects. We fully support job creation initiative and 
economic development opportunities when such activities are 
balanced with longstanding ranching and farming activities and 
a sacred commitment to preserve our tribal homelands.
    In conclusion, we do not suggest the elimination of Federal 
oversight over tribal energy projects. We ask, however, that 
the Federal Government do its job more efficiently and with 
greater consultation with tribal governments.
    [Phrase in Native tongue.]
    [The prepared statement of Mr. Stafne follows:]

    Prepared Statement of Hon. Grant Stafne, Councilman, Fort Peck 
                      Assiniboine and Sioux Tribes
I. Introduction
    My name is Grant Stafne, and I am a member of the Tribal Executive 
Board of the Assiniboine and Sioux Tribes of the Fort Peck Reservation. 
Tribal Chairman AT Stafne and my fellow Tribal Executive Board members 
send their best wishes and thanks to Chairman Barrasso, Vice Chairman 
Tester, and the Committee for holding this important oversight hearing 
on the GAO's report on the effects of BIA's management on development 
on Indian Lands, GAO-15-502, Indian Energy Development: Poor Management 
by BIA has Hindered Energy Development on Indian Lands (``Report'').
    The Fort Peck Reservation consists of over two thousand square 
miles of land in northeastern Montana. The Assiniboine and Sioux Tribes 
and individual Indians own about one million acres of land. Over 6,700 
Tribal members and non-member Indians live on the Reservation, along 
with over 3,200 non-Indians. We have been developing oil and gas 
reserves on our Reservation since the early 1950s.
II. The Opportunities and Challenges of Energy Development on the Fort 
        Peck Reservation
    The Fort Peck Reservation lies within the western part of the 
Williston Basin, which includes many oil producing formations, 
including what is commonly known as the Bakken formation and the Three 
Forks formation. Since the 1950s, a major part of the Tribes' economy 
has been based on oil and gas development. In the 1950s, the Tribes 
began to lease substantial amounts of Tribal mineral lands to non-
Indian companies for oil and gas development. In the oil boom of the 
1970s and early 1980s, we asserted much greater control over this 
process, insisting on increased royalty rates for new Tribal leases, 
and entering into service contracts where the Tribes hired a private 
company to explore and develop Tribal oil and gas for our own benefit. 
We also imposed a Tribal severance tax on energy development. During 
the early 1980s, Tribal revenues from oil and gas lease rents and 
royalties came to over $8 million in some years. Over the last two 
decades, oil and gas development on the Fort Peck Reservation has 
tapered off significantly.
    However, the development of horizontal drilling techniques allows 
for better access to known oil and gas reservoirs in the Bakken and 
Three Forks formations on our Reservation. These reserves were 
previously inaccessible due to the low porosity and low permeability of 
the Bakken and Three Forks rock formations containing the oil and gas, 
which made it difficult to extract the product using conventional 
vertical drilling techniques. The oil and gas is essentially trapped in 
the dense rock formation and cannot be extracted merely by drilling 
downward. Instead, the oil and gas must be released through horizontal 
drilling and a process called hydraulic fracture stimulation or more 
commonly ``fracking.'' An April 2008 U.S. Geological Survey Report 
determined that horizontal drilling and fracturing techniques could 
provide access to 3 to 4.3 billion barrels of recoverable oil in the 
Bakken formation alone. In 2011, Continental Resources Inc., a 
petroleum liquids producer in the U.S., declared that the ``Bakken play 
in the Williston Basin could become the world's largest discovery in 
the last 30-40 years.'' Continental estimates the Bakken and Three 
Forks collectively hold 24 billion barrels of potentially recoverable 
crude oil equivalent: 20 billion in oil and 4 billion in natural gas. 
While much of the recent Bakken play has focused on reserves in North 
Dakota, it is now moving back to Montana and to the Fort Peck 
Reservation in particular.
    Even though the recent drop in the price of oil presents an 
additional obstacle to development of our oil and gas resources, the 
Fort Peck Tribes sees this technological advance as an opportunity for 
our Tribal government--working in close collaboration with our Federal 
trustee--to use the bounty of our natural resources to create jobs and 
spur sustainable economic development to erase the persistently high 
rates of unemployment and poverty on our Reservation. Despite our best 
efforts over the past decades to develop our natural resources in an 
economically and environmentally sustainable manner, the difficulty of 
tapping these reserves, along with the challenges of dealing with 
multiple jurisdictions, have made it difficult for our Tribal 
government to make a significant dent in the unemployment and poverty 
that still plague our Reservation. We can and must do better, but this 
will only happen if our Federal trustee works with us to avoid the 
mistakes of the past. Unfortunately many of the factors identified in 
the recent GAO report on Indian Energy Development have had direct 
impacts on the pace of development of the oil and gas resources on our 
Reservation.
    For example, the Report identifies the nature of ``checkerboard'' 
and fractionated land interests as a serious problem. See, e.g., Report 
at 28. Like most reservations in Montana, our Reservation was opened to 
homesteaders a century ago, with trust and fee lands interspersed in a 
``checkerboard'' ownership pattern. Consequently, the development of 
lands and resources within our Reservation is subject to oversight from 
many federal, state and tribal agencies and laws. If done properly and 
with respect for tribal sovereignty, federal government oversight and 
regulation should not unduly impede energy development or infringe on 
the proper exercise of Tribal governmental authority on our 
Reservation. Unfortunately, our experience has taught us that federal 
involvement is not always helpful, particularly in the field of energy 
development.
    Federal and state agencies often do not coordinate well with one 
another or with tribal agencies. And as the Report identifies, this 
leads to long delays in the approval of required paperwork and in the 
implementation of tribally-beneficial energy development policies. 
While there are many excellent, highly-motivated officials in the 
Department of the Interior (DOI) and the Department of Energy (DOE) 
working to provide useful technical assistance to tribes, too often 
this technical expertise does not make it down to the BIA Regional 
Offices and Agencies on the reservations. BIA Regional and Agency staff 
often do not have adequate technical expertise in the complex field of 
energy development, and they do not always appreciate that ``time is of 
the essence'' when it comes to energy development. Our experience lines 
up with the Report's findings on the need for more--and better trained 
and resourced--staff to work on Indian energy issues.
    The Fort Peck Agency's long delays in processing mineral leases and 
other critical energy development paperwork often frustrate our energy 
development plans and serve only to push oil, gas, and other types of 
energy and mineral development off the Reservation. In fact, BIA 
approval of oil and gas leases can take so long that Indian probate 
cases have been known to open and close before any BIA action is ever 
taken. Time is money to energy producers. Federal inaction can often be 
as bad as wrong action, and we have found instances where the BIA has 
simply failed to carry out its trust responsibility by waiting months, 
even years, to act on mineral leases, appraisals, requests for drilling 
permits, and other documents requiring prompt action.
    Just as time is money to energy producers, money is money to energy 
producers. If the costs of ``on-reservation'' energy production is much 
higher than the cost of ``off-reservation'' energy production, energy 
producers will naturally locate where it is less expensive to operate. 
We have already seen this pattern in the Williston Basin and do not 
want to see it continue. Federal permit fees and other energy 
development costs should not be vastly higher on tribal lands than they 
are on state lands. By and large, the market should decide these costs 
and fees, not federal bureaucrats.
    The United States must do a better job of honoring its trust 
obligation to all tribal nations in the field of natural resource 
development. As discussed in the recommendation section below, DOI and 
DOE policymakers should work together to place knowledgeable oil and 
gas development experts at every BIA Agency where tribes are actively 
working to develop oil production in the Bakken and Three Forks 
formations. These locally-based experts could help the BIA Agency staff 
improve their turn-around time for required approval of a wide-range of 
energy-related documents. These experts should also be qualified to aid 
tribal leaders and BIA officials in planning for (and identifying 
funding resources for) the critical transportation infrastructure 
needed to support energy development in a safe manner. We have 
witnessed the damage created on the Fort Berthold Reservation to the 
Tribal road systems when oil production truck traffic increased rapidly 
with no corresponding increase in the transportation infrastructure 
needed to support it. Roads were destroyed and lives were lost in 
preventable traffic accidents.
    Congress and the Administration have important roles to play in 
helping all tribes gain the benefits of sound and sustainable 
development of the Bakken and Three Forks formations. Congressional 
support for reservation-based transportation infrastructure, road 
maintenance and traffic safety program funding are critical to the safe 
and efficient development of the Bakken and Three Forks oil fields. 
Energy development activities also need to be coordinated with law 
enforcement officials, employee training center directors, 
environmental protection officials, school superintendent, and housing 
program directors so that the great crush of new people and economic 
activity on the Reservation does not overwhelm the Tribes' limited 
governmental resources in these areas. Fort Peck Tribal members must 
also be adequately trained and equipped for jobs in the oil and gas 
industry.
    Greater federal funding assistance and technical support for the 
Tribal law enforcement, housing, environmental, career training, and 
educational programs will help us ensure that the many positives that 
come from sound energy development are not overshadowed by the negative 
consequences of traffic congestion, traffic safety concerns, and 
environmental damage.
    Our Tribal government is entrusted with protecting our homelands 
for the next seven generations. We have a duty to our ancestors to 
ensure that the land they fought to preserve for us is maintained in a 
culturally and environmentally sound manner to sustain our people for 
generations to come. Thus, as we consider the positive job creation and 
economic development potential of Bakken energy development or other 
major projects such as the Keystone XL Pipeline, we have a 
corresponding duty to ensure that these projects are carefully planned 
and studied to ensure that they do not put our sacred sites at risk or 
otherwise imperil the sacred trust we have to preserve our homelands 
for future generations.
III. Recommendations for Improving Reservation-Based Energy 
        Development
    This hearing is timely and important. The Tribes believe the 
specific recommendations set out below will help ensure that tribal 
nations--indeed the entire Nation--will be in a better position to 
capitalize on the great economic and job creation opportunity presented 
by the Bakken and Three Forks oil plays. These recommendations will 
also help tribal nations become engines of economic growth in the 
broader field of energy development--including renewable energy 
development--for the benefit of all.
A. Improve BIA's Administration of Energy Development
    The GAO Report identified the BIA's review and response times and 
the cost of permitting as hindering energy development. Report at 21, 
27. We agree. However, in addition to the length of time it takes for 
the BIA Agency to act on leases, permits and other paperwork, a great 
area of concern is the deficiencies within the BIA's Realty Division. 
Specifically, there is not a certified realty appraiser at the Fort 
Peck Agency. Consequently, the BIA's assessed values for rights-of-way 
and well-pad sites are sometimes 300 percent what they should be. For 
example, the Fort Peck Energy Company (FPEC), which the Tribes' former 
energy development arm, paid $15,000 each for two well-pad sites. This 
price may be consistent with the amounts now paid in North Dakota, 
where major development activities are already ongoing, but it is 
inconsistent with normal appraising practices in a place where oil has 
not yet been located in paying quantities. FPEC paid this fee under 
protest because it did not have the luxury of time to dispute the BIA's 
actions. Available drilling rigs are in high demand and difficult to 
get so FPEC had to secure the well-pad sites even though it strongly 
disagreed with the BIA Agency assessment. This is but one example of 
our Federal trustee charging a tribally-owned corporation an improper 
assessment due to a lack of oil development expertise and appraisal 
experience.
    We have encountered the same difficulty in securing rights-of-way 
(ROW) for oil exploration activities. We are aware of one company that 
has cancelled its plans to develop two wells on the Fort Peck 
Reservation because the BIA Agency staff insisted on a ROW fee in 
excess of $28,000, which is far more than would be paid off-
reservation. While it is of course important that allottees and our 
Tribal trust lands receive fair compensation for ROW usage, it is 
equally important that appraisals are not so unfair or arbitrary that 
they discourage legitimate oil exploration activities. In the Tribes' 
view, these fees were arbitrary and were based on the unreasonable 
judgment of BIA personnel who are not trained appraisers. This lack of 
technical expertise discourages energy development on the Fort Peck 
Reservation because potential developers fear they will be subjected to 
arbitrary fees and costs they do not encounter off the Reservation.
    Private business interests have often complained to our Tribal 
Executive Board that they do not like to deal with BIA Agency staff 
that too often seems uninterested in working with private companies in 
a fair, timely, and efficient manner. More must be done to enhance the 
technical capacity and expertise of Fort Peck Agency staff in the areas 
of energy development, land use, and ROW appraisals.
    Senior DOI and DOE officials should work together to place highly-
motivated, well-trained technical staff at the Fort Peck Agency and all 
other BIA Agencies located on Indian reservations within the active 
Bakken and Three Forks formation oil plays. These teams would be 
similar to the ``one-stop'' technical assistance team established on 
the Fort Berthold Agency and should include not only trained oil and 
gas lease specialists, but also a ROW specialist, a trained appraiser, 
and a geologist with oil and gas development experience. More than any 
other single recommendation, we believe this action will help seize 
this once-in-a-lifetime economic development opportunity for the Fort 
Peck Tribes, for other Tribes in the region, and for our Nation as a 
whole.
B. Reduce Oil and Gas Fees
    Although this hearing is concentrated on BIA, it is important to 
note that another disincentive to drilling on Indian allottee and 
tribal trust lands is the $6,500 that the BLM charges for a permit 
application to drill on federal land, including Indian and tribal trust 
lands. In FY 2010, Congress increased this fee from $4,000 to $6,500. 
In theory, this fee is intended to cover the BLM's cost of processing 
the drilling permit application. However, the fee is highly 
disproportionate to the $75 that the State of Montana charges to 
process the same kind of permit on State fee land, which is analogous 
to the differential fee problem identified in the report. See Report at 
27. We see no good reason for the BLM fee to be so high on Indian and 
tribal trust lands and doubt Congress even considered the potential 
negative impact on oil and gas development in Indian Country when it 
made this change in the law. Economic development in Indian country 
should not be used to off-set the federal deficit.
C. Ensure that Lease Bid Deposits are Placed in Interest-bearing Trust 
        Accounts
    The Tribes also seek congressional support for legislation--or at a 
minimum renewed pressure for administrative action--to ensure that bid 
deposits for oil and gas lease sales on Indian and tribal trust lands 
are once again held in interest-bearing accounts. Historically, bid 
deposits were held in interest-bearing trust accounts and, upon 
Secretarial approval of the lease or contract, both the principal and 
interest were paid to the tribal and individual Indian landowners. 
However, DOI policy changed several years ago despite our strong 
protests. Now, the DOI holds bid deposits and other advance payments 
made by successful bidders in non-interest-bearing federal accounts 
until the lease or contract is approved by the Secretary.
    As noted above, it can unfortunately take months and sometimes even 
years for a successful bidder to secure BIA approval of a mineral 
lease. Consequently, these bid deposits sit idle in federal accounts 
without earning interest for the beneficial land-owner, whether a tribe 
or an Indian allottee. By the time the funds are finally paid to tribes 
and individual Indian landowners, the value of the bid deposit has been 
eroded by inflation.
    In the Tribes' view, the DOI's current practice is illegal and 
contrary to the federal trust responsibility. Our Tribal leadership has 
discussed this matter with senior BIA and DOI Office of Trust Fund 
Management officials, but they have responded by stating that they do 
not believe they have the statutory authority to place these funds at 
interest. At the same time, these officials agreed that bid deposit 
funds should start earning interest once the successful bidder is 
selected, and that tribes and individual Indians should not bear the 
costs of the time that it takes for the BIA to review and approve 
leases.
    Although the Tribes believe DOI has sufficient legal authority and 
a clear trust obligation to place bid deposit funds at interest now, 
legislation mandating it would solve the problem once and for all and 
avoid future litigation over DOI's improper handling of these funds.
D. Eliminate Dual Taxation
    As the Report identifies, the problem of dual taxation is a serious 
hindrance to oil and gas development on Indian lands. Report at 29-30. 
The Fort Peck Tribes were one of the first Tribes in the country to 
institute a severance tax on oil and gas development on our 
Reservation. However, the 1989 U.S. Supreme Court decision in Cotton 
Petroleum Corp. v. New Mexico, 490 U.S.163 (1989), allows States to tax 
certain activities by non-Indian companies on Indian and tribal trust 
lands. When Cotton applies to allow States to impose taxes in addition 
to tribal taxes, economic activity on tribal lands is discouraged. 
Tribal and State taxes are owed for energy development activities in 
Indian Country where only State taxes must be paid for energy 
development elsewhere. This double taxation creates a serious 
disincentive to energy and mineral development on Tribal lands and is 
inconsistent with well-established federal policies designed to promote 
Tribal economic development and self-sufficiency.
    Our Tribal government has long urged Congress to overturn the 
poorly decided Cotton decision and to bar State taxation of commercial 
activities on Indian and tribal trust lands, but Congress has 
repeatedly failed to act. Therefore, the only way we could avoid the 
disadvantage Cotton creates was either to forego our right to tax 
energy development on Reservation lands altogether or seek to enter 
into an innovative tax sharing agreement with State of Montana.
    As an example of our Tribes' leadership in this area, we reached an 
historic tax-collection and tax-sharing agreement with the State of 
Montana on March 25, 2008. While we are pleased with this agreement and 
believe it presents a model for other tribes to follow, we also 
continue to believe it is a poor substitute for congressional action. 
Simply put, the Cotton ruling was wrongly decided. We ask Congress once 
again to pass legislation returning full taxing authority to tribal 
governments for commercial activities on Indian and tribal trust lands.
E. Eliminate Barriers to Wind Energy and Other Renewable Energy 
        Projects
    The Fort Peck Tribes believe further development of wind energy is 
an important part of America's energy independence. Montana is one of 
the five windiest states in the union and the Fort Peck Reservation in 
northeast Montana presents one of the greatest opportunities for wind 
energy development in the entire State. With the support of the DOE and 
other federal agencies, the Fort Peck Tribes spent many years 
researching and quantifying our wind energy resources, and we know that 
the potential energy that can be derived from wind power is 
considerable. With proper support from the Federal government and 
better connections to transmission lines on the national energy grid, 
we could attract reputable business interests to partner with us to 
develop commercially viable and sustainable wind energy projects on the 
Fort Peck Reservation.
    Unfortunately, we and many others in Montana who wish to develop 
our wind energy resources are severely hampered by ever-changing 
national energy policies and by a lack of inexpensive and accessible 
transmission line capacity. Tribal wind energy projects cannot get off 
the ground if there is no commercially viable way to get our abundant 
wind power to energy consumers. Many of the transmission lines in 
Montana were built and are maintained by the Western States Power 
Authority (WAPA), a federal agency. In 2005, Congress directed the 
Secretaries of the Army and the Interior to conduct the Wind and 
Hydropower Feasibility Study (WHFS), which was completed in 2009, to 
determine the feasibility of blending wind generation with hydropower 
on the Missouri River, and to evaluate tribal wind generation. While 
the WHFS concluded that a 350MW Tribal Wind Demonstration Project was 
not feasible, it recommended studying facilities under 300MW and 
indicated that WAPA believed economic risk could be mitigated through 
the development of a 50MW facility, if authorized and funded prior to 
2015. Unfortunately, neither WAPA nor Congress has undertaken the 
development of a Tribal Wind Demonstration Project. Congress should now 
take action to authorize and fund a Tribal Wind Demonstration Project 
at Fort Peck and throughout Indian country generally, as its next step 
in obtaining American energy independence.
F. Develop Environmentally and Culturally Sustainable Energy Projects
    Finally, related to our interest in wind energy development is our 
foundational belief that all economic development projects must be 
undertaken in ways that protect and enhance our Tribal homelands, 
sacred sites, and cultural resources. We fully support job-creation 
initiatives and economic development opportunities that allow us to 
develop our natural resources and improve the quality of life for our 
Tribal members. However, all of our development efforts must be 
balanced with our sacred commitment to preserve our Tribal homelands 
and to protect the spiritual and cultural heritage which our ancestors 
suffered so much to preserve for future generations. The people 
residing on our Reservation need clean land, water, and air in order to 
live and work in a healthy environment. In addition, ranching and 
farming are vital industries on the Fort Peck Reservation, so they too 
must be able to coexist and thrive alongside energy development. 
Otherwise, we have simply promoted one important Tribal industry at the 
expense of others, which would make no sense, economic or otherwise.
    As a Tribal government, we endeavor to support only those 
initiatives that are done in a manner that is backed by sound science 
and that minimizes potential adverse impacts to our Tribal lands and 
resources. Moreover, while we have suggested improved technical 
capacity and responsiveness within the federal government, as well as a 
reduction in certain fees that we believe should be decided by market 
conditions, we do not suggest the elimination of federal oversight over 
any projects that have an impact on Indian trust resources and 
sovereign tribal governments. We ask that the Committee continue to 
provide oversight regarding Federal agencies' administration of 
programs that impact energy development on Indian reservations to help 
ensure that Tribes and our Federal trustees can work together to 
further Tribal priorities and both improve and protect our communities.
    We thank the Committee for allowing us to submit testimony on this 
critical issue and look forward to working with Congress and the 
Administration to make real progress toward energy independence in 
Indian Country.

    The Chairman. Thank you so much for your testimony.
    Now if I could call on Mr. Cuch. Thank you.

        STATEMENT OF CAMERON J. CUCH, VICE PRESIDENT OF 
   GOVERNMENT AFFAIRS, CRESCENT POINT ENERGY U.S. CORPORATION

    Mr. Cuch. Good afternoon, Chairman Barrasso, Vice Chairman 
Tester, and members of the Committee on Indian Affairs.
    My name is Cameron Cuch, and I am Vice President of 
Government Affairs at Crescent Point Energy, U.S. Corporation. 
I am also a member of the Uinta Indian Tribe at Uinta and Ouray 
Indian Reservation, Utah. Thank you for the opportunity to 
testify on our company's experiences developing new tribal oil 
and gas resources in the Uinta Basin of eastern Utah.
    We have made a significant investment in Ute tribal oil and 
gas properties. However, the regulatory uncertainty with the 
inability to predict project permitting times and a shifting 
landscape of regulatory requirements is frustrating Crescent 
Point's ability to cost effectively develop tribal oil and gas 
resources. From our perspective, the incentive for oil and gas 
operators to make long-term investments on tribal lands would 
be greatly improved if operators were able to work directly 
with individual tribes in the permitting and development of 
these projects, rather than having to work through the BIA as 
an intermediary.
    Crescent Point is one of Canada's largest oil producers. As 
of 2012, it has been one of the largest producers in Utah. In 
2012, Crescent Point saw a tremendous opportunity to partner 
with the Ute Tribe by acquiring Ute Energy Upstream Holdings, 
an oil and gas company majority owned by the Ute Tribe and a 
private equity partner in Houston, Texas. Our corporate 
development strategy is focused on long-term growth and cost-
effective full field development. One of the primary components 
of achieving cost effective development is regulatory certainty 
and the ability to predicted permitting times and requirements.
    Crescent Point paid $861 million to acquire Ute Energy. One 
of the primary targets of Crescent Point's acquisition was the 
right to develop in and around the Randlett area, an area that 
was covered by an exploration development agreement between Ute 
Energy and the Ute Tribe. To date, Crescent Point has made a 
total investment of $1.6 billion in the Uinta Basin. We 
currently operate 349 wells in the Basin, 64 of which are 
tribal. We have long-term plans to develop roughly 1,000 
additional Ute tribal wells.
    The delays and uncertainties we have experienced in 
obtaining drilling permits and other authorizations is 
jeopardizing our future development plans. During 2015, it has 
taken an average of 405 days for Crescent Point to receive a 
drilling permit from BLM and BIA for tribal wells. In contrast, 
it has taken the State of Utah only 73 days on average to issue 
Crescent Point drilling permits for private and State-managed 
lands.
    The permitting delays have resulted in lost revenue to the 
Tribe and jeopardized economic viability of certain projects. 
Given the precipitous drop in crude oil prices between 2014 and 
2015, many of the wells we would have drilled in 2014, had we 
been able to obtain permits, are uneconomic in today's price 
environment and we have elected to defer drilling these 
locations.
    We estimate that the lost revenue to the tribe for these 
wells is approximately $2.3 million in royalty and $800,000 in 
severance tax per well even in today's low oil prices. We have 
also run into Federal resistance to the Tribe's plans to 
develop oil and gas resources located along the Duchesne River 
and its tributaries, which bisect the Randlett EDA area. Under 
pressure from EPA and Fish and Wildlife Service and over the 
Tribe's objection, BIA has indicated that it will not allow 
development within the flood plain, which makes up roughly 30 
percent of the Randlett EDA area.
    Under a full development scenario, we estimate that the Ute 
Tribe will lose $571 million in royalties and $148 million in 
severance taxes if the BIA ultimately disallows flood plain 
development. In sum, we believe that many of the permitting 
delays and additional burdens to development are a result of 
poor coordination among BIA and the other Federal agencies. We 
also believe that the BIA is overly deferential to these other 
agencies to the detriment of tribal interests.
    For operators, there would be a substantial benefit to 
being able to work directly with tribes without numerous 
Federal intermediaries. We suggest that tribes be authorized to 
lead energy project permitting with BIA playing a technical 
support function, but without having to go through the onerous 
process of entering into a TERA. We have observed that this 
sort of arrangement is already happening informally and a 
formal adoption of this practice would allow for tribes to 
ensure environmentally responsible oil and gas development in a 
manner consistent with tribal objectives.
    From an operator's perspective, consolidation of decision-
making authority within individually affected tribes will 
increase efficiencies and regulatory certainty, increasing our 
incentives to invest in tribal projects.
    In closing, I would like to thank Chairman Barrasso and 
Vice Chairman Tester and the members of the Committee for the 
opportunity to present these issues on behalf of Crescent Point 
Energy. I am happy to respond to any questions or provide 
further information. Thank you.
    [The prepared statement of Mr. Cuch follows:]

  Prepared Statement of Cameron J. Cuch, Vice President of Government 
            Affairs, Crescent Point Energy U.S. Corporation
    Good afternoon Chairman Barrasso, Vice-Chairman Tester and Members 
of the Committee on Indian Affairs. My name is Cameron Cuch and I am 
Vice President of Governmental Affairs at Crescent Point Energy U.S. 
Corporation (``Crescent Point'').
I. Executive Summary
    Crescent Point has made a significant investment in exploring for 
and developing oil and gas resources owned by the Ute Tribe of the 
Uintah and Ouray Reservation in Eastern Utah. However, the regulatory 
uncertainty associated with an inability to predict project permitting 
times and a shifting landscape of regulatory requirements is 
frustrating Crescent Point's ability to cost-effectively develop Tribal 
oil and gas resources. From our perspective, the incentives for oil and 
gas operators to make long term investments in the development of 
Tribal oil and gas resources would be significantly improved if 
operators were able to work directly with individual Tribes in the 
permitting and development of these projects, rather than having to 
work through BIA as a federal intermediary.
    We believe that Tribes are in the best position to manage and make 
decisions about development of their resources and that BIA should be a 
strong advocate for Tribal self-governance. However, we have often seen 
BIA defer to other federal agencies' views on resource development 
issues that, at times, have been contrary to Tribal goals, management 
plans and regulations. We believe that Tribes should be empowered to 
take over management of certain aspects of energy development that will 
allow the Tribe to achieve its own internally-determined goals and 
objectives while still providing for robust environmental review and 
protections.
II. Development Opportunities--Corporate Approach
    Crescent Point is one of Canada's largest light to medium oil 
producers. We are publicly traded (New York and Toronto Stock 
Exchanges) and are headquartered in Calgary, Alberta with a U.S. 
headquarters in Denver, Colorado. We entered the U.S. in 2011 with a 
significant acquisition in North Dakota and followed in 2012 with a 
large acquisition in the Uinta Basin of Eastern Utah, which included 
contractual interests in a number of properties on the Uintah and Ouray 
Reservation. Our primary operations are currently located in 
Saskatchewan, Alberta, North Dakota and Utah. Our average production in 
2015 has been 165,500 barrels per day, with approximately 20,000 coming 
from the United States, 15,000 of which are produced in the Uinta 
Basin.
    Crescent Point has a three-part business strategy that we have 
implemented for the purpose of ensuring consistent returns to our 
shareholders: (1) acquisition of high-quality, large resource-in-place 
pools with the potential for upside in production, reserves, technology 
and value; (2) management of risk by maintaining a conservative balance 
sheet with significant underutilized lines of credit and a 3.5 year 
hedging program; and (3) development of our large, low risk drilling 
inventory to maintain production, reserves and dividends. A primary 
component of Crescent Point operations is our commitment to 
environmental responsibility and conducting our business in a manner 
that minimizes our impact on the air, land and water surrounding our 
operations.
    We generally fund our acquisitions internally and strive to 
maximize shareholder return with long-term growth, dividend income and 
cost-effective field development. One of the primary components of 
achieving cost-effective development is regulatory certainty and the 
ability to predict permitting times and requirements.
a) Considerations for Corporate Investment--Partnership with the Ute 
        Tribe
    In 2012, Crescent Point acquired Ute Energy Upstream Holdings, LLC 
(``Ute Energy''), majority-owned by the Ute Tribe of the Uintah and 
Ouray Reservation (``Ute Tribe'') and a private equity partner based in 
Houston, Texas. Ute Energy was formed in 2005 in order to provide a 
vehicle to efficiently develop Tribal oil and gas resources to generate 
revenue for the Tribe. Exhibit 1 shows an overview of the Uintah and 
Ouray Reservation. In 2010, Ute Energy and the Tribe entered into the 
Randlett Exploration and Development Agreement (EDA), which gave Ute 
Energy the right to explore for and develop Tribal oil and gas 
resources within a geographically defined area around the small town of 
Randlett, Utah. The Tribe executed the EDA under the authority granted 
by the Indian Mineral Development Act of 1982, 25 U.S.C.   2101-2108, 
which specifically authorizes Tribes to enter into agreements with 
private industry to develop their natural resources for the purpose of 
achieving economic independence. As required by the Indian Mineral 
Development Act, the EDA was approved by BIA. The EDA area can be seen 
on Exhibit 2. Exhibit 3 shows Indian Country and the external 
boundaries of the Uintah and Ouray Reservation.
    When Crescent Point acquired Ute Energy, one of the primary assets 
of interest was the Randlett area and the exploration and production 
opportunities created under the EDA. We believed that the BIA-approved 
EDA would enable us to explore and develop the Randlett area in a 
phased and predictable manner under which we would operate existing 
wells while at the same time exploring the area in anticipation of 
full-field development. Crescent Point has had a number of positive 
experiences working with First Nations in Canada, and believed the 
opportunity to partner with the Ute Tribe would be a substantial 
benefit to Crescent Point. Because of these considerations, Crescent 
Point paid a total of $861 million to acquire Ute Energy. Crescent 
Point also operates one township in the Rocky Point Exploration and 
Development Agreement area, which lies directly west of the Randlett 
EDA area.
    To date, Crescent Point has made a total investment of $1.658 
billion in the Uinta Basin, including a $689 million investment in 
development capital. We currently operate 349 wells in the Uinta Basin, 
64 of which are Tribal wells, and the remainder of which are located on 
private and federal lands. We have also paid over $5 million to Tribal 
companies for support services, including water hauling, road and well 
pad construction and roustabout services. In addition, we employ a 
number of Tribal members and roughly 30 percent of our Uinta Basin 
field staff are American Indians, Alaska Natives and Hawaiian 
Islanders.
    We currently have applications pending for 203 drilling permits in 
the Uinta Basin, 95 of which are Tribal. Additionally, BIA is 
finalizing a Programmatic Environmental Assessment that will enable the 
drilling of up to 300 additional Tribal wells and we recently initiated 
an Environmental Impact Statement for all of our Uinta Basin assets, 
which will analyze the impacts of developing 725 Tribal wells.
    Crescent Point has made a significant investment to develop oil 
from Ute Tribal lands and is committed to being a responsible and cost-
effective partner with the Tribe. However, the delay and uncertainties 
that we have experienced in obtaining permitting approvals and 
authorizations from the BIA has had a substantial negative impact on 
our ability to develop Tribal oil and gas resources and, thereby, 
generate income for the Tribe.
III. Permit Challenges, Economic Impacts and Project Viability
    As Crescent Point began to undertake exploration and development 
within the Randlett EDA area, we encountered a number of challenges to 
obtaining permits, largely related a lack of inter- and intra- agency 
coordination, duplicative review processes, and long review periods. 
This is particularly true in the context of drilling permits, which 
requires that BIA manage and coordinate consultations between several 
federal agencies.
a) The Permitting Process
    Under federal statutes and regulations, and unless a Tribal Energy 
Resource Development Agreement (TERA) has been entered into pursuant to 
the Energy Policy Act of 2005, in order to permit a well on Tribal 
lands, an operator must receive a federal drilling permit. To initiate 
the process, the operator must request drilling permit approval from 
BIA. Because this constitutes ``federal action,'' BIA must comply with 
NEPA, even in cases where BIA has already approved of the development 
in general by, among other things, authorizing an EDA. BIA will then 
require that an appropriate NEPA analysis be performed, usually an 
Environmental Assessment, the costs of which are paid by the operator. 
During the NEPA process, a number of other federal agencies may become 
involved in review of the document. For operations on the Uintah and 
Ouray Reservation, the United States Fish and Wildlife Service will 
consult on the document under Endangered Species Act Section 7 
authority and the Environmental Protection Agency will often consult on 
air and water quality issues.
    Once the Environmental Assessment is completed, a process that, in 
the best of situations, takes roughly 8 months, BIA will issue a 
decision record. Once BIA issues the decision record, permitting is 
handed over to BLM because federal regulations require that BLM perform 
all downhole analyses and is the agency that ultimately issues the 
drilling permit. BLM must then provide a NEPA concurrence and process 
the permit application. Thus, in order to receive a drilling permit, at 
least two federal agencies, and often four or more, will have had the 
opportunity to weigh in on the proposal.
    Because of the numerous agencies involved, the wait times 
associated with obtaining permits is often substantial and in almost 
all instances impossible to predict. Further, because of the multiple 
opportunities for inter-agency comments, BIA often receives comments 
from these other agencies proposing numerous project modifications and 
mitigation measures that were not contained in the initial proposed 
action. All of this adds substantial time and cost to the permitting 
process.
b) Permit Approval Timing
    During 2015, it has taken an average of 405 days for Crescent Point 
to receive a drilling permit from BLM and BIA for Tribal wells. This is 
down slightly from 2014, when it took an average of 427 days. In 
contrast, the State of Utah averaged 73 days to issue Crescent Point a 
drilling permit to drill on private or State-managed lands during the 
same time period. In 2014, it took an average of 121 days for the State 
of Utah to issue a drilling permit. See Exhibit 4.
c) BIA Concurrence to BLM Issuance
    Even after BIA has approved the NEPA documentation required to 
authorize a drilling permit, BLM concurrence times take an average of 
135 days, and have taken as long as 203 days. Exhibit 5 shows the 
additive delays associated BLM concurrence times.
    By comparison, Crescent Point estimates that it takes a total of 4-
6 months to receive all authorizations necessary, including performing 
environmental analyses, to develop oil and gas projects with First 
Nations. Similarly, we estimate that it takes, on average, one day for 
the provincial government to approve drilling permits that have been 
authorized by First Nations. These projects require concurrence and 
approval from just one Canadian governmental agency.
d) NEPA-Timing Delays Lead to Either Delayed or Lost Revenue to the 
        Tribe
    The considerable amount of time it takes BIA and BLM to complete 
NEPA analyses and issue permits has resulted in, at best, delay of 
projects and income to the Tribe and, at worst, project scale-back and 
cancellation. Given the precipitous drop in crude prices between 2014-
2015, many of the wells that we would have drilled in 2014 had we been 
able to obtain permits are uneconomic in today's price environment.
    For example, we submitted an application for a permit to drill the 
Ute Tribal 9-30-3-2E well on May 22, 2013. BIA issued a decision record 
on the NEPA Environmental Assessment on February 21, 2014. Building in 
a generous amount of time for approval, Crescent Point estimated that 
we would receive the permit in April of 2014 and would drill and 
complete the well during May and June, with first production coming on 
line in July. However, we did not receive an approved permit until 
September 12, 2014, which would have put us on track to receive first 
production from the well in January 2015. Unfortunately, between June 
and October of 2014, oil prices plunged, taking our rate of return on 
the well from 37 percent with a payout in just 2.2 years to 13.7 
percent with a payout in 5.9 years. With the precipitous drop in oil 
prices, Crescent Point elected to postpone drilling the 9-30-3-2E, 
something that we would have done had we received the permit as 
anticipated in April 2014. See Exhibit 6.
    Crescent Point also experienced considerable delay and extra costs 
associated with obtaining permits to conduct a seismic data acquisition 
in the Randlett EDA area. In June of 2013, Crescent Point submitted an 
application to conduct the seismic operation, completion of which would 
be of substantial benefit to the Tribe because it would allow Crescent 
Point to drill more profitable wells and because Crescent Point agreed 
to share the data directly with the Tribe. Department of Interior 
policies provide for a NEPA categorical exclusion for seismic 
operations, \1\ under which NEPA review is not required unless 
``extraordinary circumstances'' are identified by the lead agency.
---------------------------------------------------------------------------
    \1\ 516 DM 10  10.5(G):
---------------------------------------------------------------------------
    Although BIA initially indicated that the project would be 
permitted under a categorical exclusion, after four months of inaction 
and under significant pressure from the U.S. Fish and Wildlife Service 
and the Bureau of Reclamation (who had surface management authority 
over a very small portion of the project area), BIA informed Crescent 
Point that it would be required to complete an Environmental Assessment 
based on the potential impacts the data acquisition could have on plant 
and animal species. One of the primary issues the Fish and Wildlife 
Service was concerned with was potential impacts to the Uinta Basin 
Hookless Cactus, a small cactus listed under the Endangered Species 
Act, but with prolific populations in the Uinta Basin. Although the Ute 
Tribe has adopted a regulation concerning the cactus, which requires 
setbacks from cactus populations and the payment of funds directly to a 
Tribal cactus mitigation fund administered by the Tribe, the Fish and 
Wildlife Service pushed for adoption of the federal guidelines 
concerning cactus setbacks and insisted that payments be made to the 
nationally-administered conservation fund. \2\ Ultimately, after 
significant push-back from Crescent Point, it was agreed that 
mitigation funds would be split between the Tribe and the federal 
conservation fund.
---------------------------------------------------------------------------
    \2\ The Ute Tribe can obtain access to the national funds, but must 
apply to the federal government in order to receive them.
---------------------------------------------------------------------------
    Crescent Point had initially planned to conduct the seismic 
acquisition during the fall and winter of 2013-2014; however, the 
Environmental Assessment was not completed until the summer of 2014 and 
we did not receive permits until the end of September 2014. Although 
the Environmental Assessment ultimately concluded that the data 
acquisition would not have a significant impact on the human 
environment and Crescent Point won an award for its environmental 
stewardship on the project from the State of Utah, a permitting process 
that should have taken several months under a categorical exclusion 
took over 15 months to complete, delaying our seismic acquisition by 
one year. Had we been able to conduct the seismic acquisition as 
planned, we would have had usable data during the 2014 drilling season, 
which would have enabled us to drill more accurate and profitable wells 
with a smaller surface impact.
e) Regulatory Uncertainty Jeopardizes the Viability of Projects
    The Randlett EDA area is bisected by the Duchesne River and several 
tributaries. Although BIA approved the EDA, which provides for 
development of all areas within the EDA boundaries, BIA has become 
increasingly less willing to allow surface disturbance within the 100-
year floodplain. As demonstrated on Exhibit 2, roughly 30 percent of 
the Randlett EDA area is within the 100-year floodplain and 7,404.7 
acres of floodplain within the EDA area are located on Ute Tribal and 
allotted lands.
    We note that it is common to develop oil and gas resources within 
100-year floodplains and there are no federal regulations addressing 
floodplain development. In cases where floodplain development occurs, 
Crescent Point has implemented a robust system of protocols to protect 
against damages in the case of a flood event. Nonetheless, during the 
development of the Randlett Programmatic Environmental Assessment, 
which analyzes the impacts of drilling up to 300 Tribal wells, in 
response to comments BIA received from the Environmental Protection 
Agency and the Fish and Wildlife Service, BIA developed a so-called 
``Resource Protection Alternative'' under which no wells could be 
developed within the floodplain. This is in spite of the fact that the 
Ute Tribe has adopted a regulation governing oil and gas development 
within floodplains that expressly authorizes such development and has 
publicly supported development of all locations in the Randlett EDA 
area. Under the Resource Protection Alternative, 29 wells were removed 
from analysis because of their proximity to the floodplain. The removal 
of these 29 wells will result in a loss of $66.5 million in royalties 
to the Tribe and $23 million in Tribal severance tax. We anticipate 
that the Resource Protection Alternative will be the selected 
alternative when the decision record is issued later this year.
    If Crescent Point continues to full field development of the 
Randlett area and BIA does not approve development of resources within 
the floodplain, we estimate that the Tribe will lose $571.14 million in 
royalties and $148.38 million in lost severance taxes.
f. Shifting Federal Regulation and Executive Action
    In addition to the regulatory uncertainty created by unpredictable 
project permitting timelines, the relentless pace of executive branch 
rulemaking affecting Tribal lands has substantially impacted our 
ability to develop economic Tribal wells. These changes have included 
new Secretarial Onshore Orders 3, 4, and 5, new Secretarial Orders 
regarding Tribal consultation at FWS, the BLM's hydraulic fracturing 
rule, and the Environmental Protection Agency's rule defining waters 
within Clean Water Act jurisdiction.
V. Nature of the Mineral Estate
    As shown on Exhibit 7, much of the land within the Randlett area, 
as with the rest of the Uintah and Ouray Reservation, is made up of a 
checkerboard of parcel ownership, with parcels owned by the Tribe, 
private owners, the federal government, the State of Utah and 
individual Tribal allottees. In addition, there is a substantial amount 
of split estate, particularly areas with Tribal surface overlying 
federal minerals.
    Presently, there is very little development of Ute Tribal oil and 
gas resources. There is, however, currently substantial development of 
federal oil and gas resources underlying Tribal surface. In these 
cases, the Tribe bears the burdens associated with oil and gas 
development, but does not share in the benefits. In contrast, the 
development proposed by Crescent Point will directly benefit the Tribe 
by developing Tribal minerals from Tribal surface. We believe that the 
BIA does not appropriately consider the financial benefits that 
development of oil and gas resources will provide for the Ute Tribe 
when reviewing permit applications and NEPA documents, and instead 
focusses only on potential negative environmental consequences. BIA 
should distinguish between projects involving development of Tribal 
minerals, from which the Tribe will benefit greatly, and projects on 
Tribal surface that develop federal minerals, from which the Tribe will 
experience the negative consequences associated with oil and gas 
development without any of the benefits.
    Because of the large amount of time and lack of certainty 
associated with obtaining permits to drill Ute Tribal wells, in certain 
instances Crescent Point has been forced to drill wells on private 
lands within the Randlett area rather than on nearby Tribal parcels. In 
a large number of cases, this is simply a function of our inability to 
obtain permits to drill Tribal wells within a reasonable timeframe and 
our need to develop wells for the benefit of our shareholders and keep 
a drilling rig in operation. If there were assurances in place that we 
could obtain drilling permits within specified timeframes, our 
incentive to drill wells on Tribal rather than private parcels would 
increase substantially.
    Finally, and while this is not the primary factor for Crescent 
Point, we note that it is substantially less expensive to obtain 
permits to drill wells on private minerals than Tribal minerals. We 
estimate that the average hard costs of permitting a well on Tribal 
surface to Tribal minerals are approximately $41,000. In contrast, the 
average hard costs of permitting a well on private surface to private 
minerals are $20,500. The primary differentials are the federal permit 
fee and the costs of performing the NEPA analysis. The breakdown of 
these costs is shown on Exhibit 8.
VI. Agency Failures and Proposed Solutions
    Many of the permitting delays Crescent Point has experienced relate 
to strained BIA budgets and agency inability to appropriately staff 
projects and commit the resources necessary to ensure that economic 
development projects can be approved within reasonable timeframes. We 
believe that much of the delay associated with permitting is a result 
of poor coordination among the BIA and the other federal agencies with 
which it must consult on project approvals. We are further concerned 
that because of limited budgets, BIA is unable to appropriately staff 
offices with enough personnel knowledgeable about energy development. 
Because of this, we believe that overworked BIA personnel are often 
overly deferential to other, more powerful and better funded agencies, 
sometimes to the detriment of Tribal interests.
    On several permitting projects we have observed that, in spite of 
decades of federal agency guidance outlining agencies' obligations to 
consult with Tribes, there is a fundamental failure on the part of 
other federal agencies to engage in meaningful consultation with 
Tribes. BIA should be the agency tasked with ensuring that consultation 
is occurring and that Tribal sovereignty is being respected. And, we 
note that several agencies within the Department of the Interior have 
recently faced significant criticism for their failure to take their 
consultation obligations seriously and, indeed, a federal court 
recently enjoined BLM's hydraulic fracturing rule in part because of a 
failure to substantively engage in Tribal consultation. Nonetheless, we 
have observed BIA receive and concede to pressure from other federal 
agencies on several occasions, the result of which has been increased 
permitting times and costly project modifications that have neither 
been requested nor approved of by the Tribe. We believe this is related 
to understaffing at BIA agency offices and a lack of direction from BIA 
leadership empowering BIA personnel to stand up to these other federal 
agencies and decline proposed project modification when they do not 
correlate to Tribally-set policies and regulations.
a) Tribal Lands treated as Public Lands
    We have observed a failure on the part of many of the federal 
agencies with which BIA must interact on permitting approvals to 
understand the distinction between Tribal lands and federal public 
lands. We have routinely observed these agencies attempt to 
inappropriately impose federal land use restrictions and policies on 
Tribal lands. For example, although U.S. Fish and Wildlife Service 
regulations and policies are clear that Tribal lands are not federal 
public lands and that Tribes should not be forced to bear a 
disproportionate burden for species conservation, the Fish and Wildlife 
Service regularly proposes permit restrictions for Tribal projects that 
are identical to the restrictions proposed for projects on federal 
lands. Rather than refuse to adopt these proposals, BIA often agrees 
and includes them as additional permitting requirements or conditions 
of approval.
    This occurred recently on an Environmental Assessment prepared by 
BIA for 11 wells in the Randlett area. Following consultation with the 
Fish and Wildlife Service, BIA attached a number of conditions of 
approval to the permits requiring onerous setbacks and mitigation 
requirements applicable to operations in the vicinity of Uinta Basin 
Hookless Cactus populations and in areas that could serve as potential 
Yellow-billed cuckoo habitat. These additional requirements, which are 
neither mandated by federal law or regulation, were facially 
inconsistent with Tribal regulations and substantially increased the 
costs of the project. In addition, BIA has recently sought public 
comment on several Environmental Assessments analyzing development of 
purely Tribal resources. Federal regulations do not require public 
comment on Environmental Assessments, and BIA generally has a policy 
not to solicit input from the public at large on Tribal projects. This 
policy makes sense from a Tribal sovereignty perspective, as members of 
the public who are not Tribal members should have not say over Tribal 
development projects. However, in response to comments BIA received 
from the Environmental Protection Agency, BIA has decided to seek 
public comment on the last 3 Environmental Assessments it has prepared.
b) Proposed Solutions
    We believe that Tribes are in a much better position to perform 
environmental analyses, require project modifications and craft best 
management practices and resource conservation plans than the BIA and 
that, in many cases, Tribes are already performing many of these 
functions informally.
    While the GAO report pointed out that some BIA offices do not have 
staff with the skills needed to effectively manage Indian mineral 
development, many Tribes have staffs that possess these qualifications. 
The Ute Tribe has numerous highly trained employees who can perform 
many of these tasks in a manner that is consistent with Tribal 
management policies and goals. For example, the Tribe's Fish and 
Wildlife Department has 5 biologists on staff, compared to BIA's Uintah 
and Ouray Agency, which employs none. We believe that the Tribe's Fish 
and Wildlife Department can perform many of the plant and wildlife 
consultations the U.S. Fish and Wildlife Service currently performs in 
a more efficient manner. Similarly, the Ute Tribe's Energy and Minerals 
Department had a budget of $2.3 million in 2014 and has 25 employees 
working on energy development reviews, royalty issues, land work and 
regulatory compliance. Further, as pointed out by the GAO report, BIA 
lacks GIS systems and other data identifying ownership of resources and 
resource uses and authorizations. However, the Ute Tribe has this 
information as well as a GIS database system for the vast majority of 
Reservation lands.
    We believe that the resources the Ute Tribe already possesses 
should be put to greater use by allowing the Tribe increased authority 
over energy-related decisionmaking. In particular, we think that a 
mechanism should be developed that would allow for the following:

   Automatic deference to Tribal resource management and 
        conservation plans. At present, Tribal resource management and 
        conservation plans are considered, if at all, only during the 
        NEPA process and we have found that BIA is often unaware of the 
        existence of Tribal resource management and conservation plans 
        that directly address matters under review.

   Replace Endangered Species Act Section 7 consultation, which 
        requires BIA to consult with the Fish and Wildlife Service any 
        time a proposed action might affect a listed or candidate 
        species or its habitat, with Tribal consultation and issuance 
        of a Tribal resource permit.

   Tribal facilitation of right-of-way preparation. Presently, 
        all right-of-way applications must go through BIA, which does 
        not have the personnel or data necessary to efficiently process 
        such applications. In contrast, the Ute Tribe has adequate 
        personnel and data systems in place to process these 
        applications within a much shorter timeframe.

VII. TERAS
a) Operators Working Directly with Tribes Can Provide Greater 
        Regulatory Certainty
    As an operator, Crescent Point questions whether TERAs, as provided 
for under the Energy Policy Act of 2005, can realistically improve the 
efficiencies associated with development of Tribal oil and gas 
resources. From our perspective, we believe that TERAs are overly 
complex and that time has shown that they are not a useful tool to 
improve BIA efficiencies related to energy development. Nonetheless, 
for operators, there is a substantial benefit to being able to work 
directly with Tribes without numerous federal agency intermediaries. We 
would very much like to see a mechanism in place that would allow for 
direct Tribal approval and decisionmaking authority on Tribal oil and 
gas projects. We believe that the regulatory certainty this would 
provide would create a substantial incentive to invest in oil and gas 
development on Tribal lands.
    We suggest that the Committee consider development of a program 
under which individual Tribes can assume responsibility for certain 
aspects of energy development without needing to enter into a TERA. As 
previously suggested, we think that, for example, the Ute Tribe is in a 
very good position to assume responsibility for management of plant and 
wildlife considerations associated with energy development. Under this 
approach, individual Tribes could decide which aspects of energy 
development they would like to assume, without having to take on the 
onerous task of entering into a TERA. We also suggest that the 
Committee also consider a mechanism under which Tribes could enter into 
TERAs for specific geographic locations, such as locations where they 
own both the surface and the mineral estate. This would allow Tribes to 
concentrate resources on areas in which they receive the benefit of oil 
and gas development and not on areas where there interest is limited to 
the surface.
    We also believe that determinations about whether a Tribe has the 
capacity to regulate all or certain aspects of energy development 
should be made at the individual BIA agency office, rather than at the 
Region or the Office of Indian Energy and Economic Development. BIA 
agency offices regularly work with Tribes and know whether individual 
Tribes are ready to take over management of energy development.
b) Coordination Between Tribes and Operators Can More Effectively and 
        Efficiently Develop Appropriate Mitigation Measures to Address 
        Tribal Resource Concerns
    In addition to the efficiencies and regulatory certainty that would 
accompany a direct working relationship between operators and Tribes, 
we also believe that there would be a substantial benefit to 
consolidating project decisionmaking authority within the individually 
affected Tribe. Not only would this significantly decrease the overlap 
and inefficiencies associated with the need to obtain BIA approval for 
permits, but we believe that Tribes are often in a better position than 
the federal government to make decisions about management of their 
resources. From an operator's perspective, this will increase the 
incentive to invest in Tribal projects by allowing us to work 
collaboratively with our Tribal partners to tailor project components 
to meet Tribal objectives and to react quickly to changing 
circumstances without a federal intermediary.
    In closing, I would like to thank Chairman Barrasso and Vice 
Chairman Tester and the Members of the Committee for the opportunity to 
present these issues on behalf of Crescent Point. I firmly believe that 
there are numerous opportunities for Tribes and private industry to 
work together to develop Tribal energy resources in an environmentally 
responsible manner and according to Tribally-set objectives and 
policies. All operators and Tribes need from the federal government to 
accomplish this goal is less federal oversight of Tribal decisionmaking 
and more opportunities for direct management by Tribes.
    Attachments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    The Chairman. Thank you so much to each of you for your 
testimony. We will start with some questions. I believe Senator 
Hoeven is first.
    Senator Hoeven. Thank you, Mr. Chairman. Thanks to both you 
and the Ranking Member for holding this important hearing 
today.
    Mr. Roberts, how are you responding to the GAO findings on 
the backlog on right-of-way approvals in Indian Country?
    Mr. Roberts. Some of the things that we are doing on right-
of-way approvals is we put out a proposed rule on rights-of-way 
to streamline that process. That rule is well on its way to 
being finalized. The comment period is closed.
    We are hoping that that rule, which has had a lot of tribal 
engagement and a lot of public comment, that that rule will 
streamline the process. A couple of years ago now, 2012, we 
updated our leasing regulations. Those leasing regulations are 
very deferential to tribal decision-making in terms of those 
agreements and those sorts of things.
    Our proposed rule for the right-of-way regulations sort of 
took the same path, I will say. Like I said, we are hoping to 
finalize those right-of-way regulations in the near future. We 
think that will be a big improvement.
    Senator Hoeven. When do you anticipate finalizing it, and 
do you anticipate it having significant impact in reducing the 
backlogs?
    Mr. Roberts. We hope to finalize it as soon as we can.
    Senator Hoeven. Which would be when?
    Mr. Roberts. I don't know, Senator.
    Senator Hoeven. A year? Two years?
    Mr. Roberts. Before this Administration ends, hopefully.
    Senator Hoeven. So less than a year?
    Mr. Roberts. Less than a year. Well, more than a year, but 
yes.
    Senator Hoeven. Okay. So within the next year, and you 
think it will have a significant impact?
    Mr. Roberts. I do. I think it will be very helpful.
    Senator Hoeven. The Chairman of this Committee has authored 
and submitted the Indian Trial Energy Development and Self-
Determination Act to streamline the application process for 
right-of-way approvals. I am pleased to co-sponsor it, as are 
other members of this Committee, in a bipartisan fashion. Are 
you supportive of that legislation? Are you willing to help get 
it passed and enacted into law?
    Mr. Roberts. Kevin Washburn, the Assistant Secretary, 
testified on, I think, identical legislation last Congress. He 
identified a number of areas where the Administration is 
supportive and some areas where we had concerns. We suggested, 
for example, that the legislation, rather than having a 
capacity determination, that we try to streamline that 
legislation to be similar to what is done in the HEARTH Act.
    Senator Hoeven. I am not sure what that means. My concern 
is that this process is not moving forward. I listened to both 
the Chairman and the Ranking Member talk about how former 
members of this Committee expressed concern about the very same 
problem that we are expressing concern about today.
    So how are we going to get beyond talking about this 
problem and maybe doing something a year from now to actually 
getting something accomplished today?
    Mr. Roberts. Senator, we do hope to finalize those 
regulations as soon as we can on rights-of-way in terms of the 
Chairman's bill. We have testified on that in the last 
Congress. We are supportive of a number of provisions in that 
bill. If it is enacted into law, we will certainly implement 
it.
    Senator Hoeven. Are you willing to work with the States to 
avoid some of the duplication, for example, in the hydraulic 
fracturing rule that Interior has brought forward, and give the 
tribes more discretion in the right-of-way process?
    Mr. Roberts. In terms of hydraulic fracking, as I am sure 
everyone is aware, that is subject to litigation at this point 
in time. I will note that the final rule on hydraulic fracking 
provided an opportunity for BLM to issue modifications to the 
rule if a tribe or a State would come to BLM to talk about 
those modifications. So I know that the rule is in litigation 
right now. It is not being implemented. That is about all I can 
say on that.
    Senator Hoeven. But you would support that flexibility for 
States and tribes?
    Mr. Roberts. The flexibility was in the final rule.
    Senator Hoeven. Right. And you would support acting on that 
and empowering tribes to use that flexibility and giving them 
more discretion?
    Mr. Roberts. Sure.
    Senator Hoeven. Mr. Rusco, what is your recommendation to 
move this along? How do we get this going faster?
    Mr. Rusco. Well, we don't want to comment on ongoing 
legislation.
    Senator Hoeven. Well, I don't mean just the legislation. I 
mean action, reducing the backlog and getting activity 
expedited.
    Mr. Rusco. I think that some things that have worked, we 
have encountered similar problems with BLM and their management 
of oil and gas on Federal lands, not as extreme as what we 
found here. But some of the things that worked were pulling 
qualified staff with the right skills from other locations and 
bringing them to places where there were hotspots. They did 
that in North Dakota, they brought people in to reduce a 
backlog. It was very effective in doing so.
    We are going to have to do something like that, because 
there are many offices that just plain don't have the right 
staff to do the job.
    Senator Hoeven. Thank you.
    The Chairman. Senator Tester?
    Senator Tester. Thanks, Mr. Chairman. First things first, 
Mike, great haircut. I am just telling you.
    [Laughter.]
    Senator Tester. The Department has been, we have been doing 
energy development for 100 years or longer in tribal. It is 
true that this Administration has tripled the number of leases 
in Indian Country. But we are still not where we need to be.
    I had mentioned in my opening statement that the TERA 
agreements, no tribe has taken advantage of them. Mr. Olguin 
said that they had asked for clarification and the BIA and 
Larry, tell me, they didn't want to give any? The statement by 
Mike -
    Mr. Roberts. Senator, I understand his statement that, the 
statement that he made was whether the Department would provide 
guidance on what is an inherent Federal function. The GAO 
raised that issue and I think we are committed to providing 
guidance on what is not an inherent Federal function, to 
provide more clarity.
    So for example, when we are contracting with tribes under 
638 contracts, for example, if there is a Federal approval that 
is needed at the end, a number of tribes are successfully 
implementing the Federal program up to the point of approval. 
So we will provide guidance on what is not an inherent Federal 
function.
    Senator Tester. So what is the problem? I mean, I am not 
talking about the TERAs. I do want to get out there, because I 
think the tribes are asking for something, you just can't say 
no. So that is good. But what is the real problem here? Is it 
that the BLM has their fingers in the cookie jar on this stuff 
and that the BIA has to do their thing and the permitting costs 
more money than it does on fee land? This can be fixed. You 
have to tell us how to fix it. So tell us how to fix it.
    Mr. Roberts. There are a lot of challenges that GAO raised, 
both within our lane and outside of our lane, quite frankly. I 
think every member of this panel touched upon the fact that we 
are dealing with a complicated land ownership situation, 
fractionation, allotment. The allotment policy passed in the 
1880s. It leads to a lot of our difficulties here today.
    If we can make some headway, and we are making headway on a 
lot of different fronts, in restoring tribal homelands, 
consolidating lands, those sorts of things will help in the big 
picture. In the small picture, in terms of oil and gas 
development and energy development, we need to and we are more 
closely collaborating within the Federal family.
    But I think one answer, Senator, very clearly is what Kevin 
Washburn testified to in the last Congress, which was a HEARTH 
Act approach for oil and gas development. The HEARTH Act is 
working in Indian Country. Like I said, we have over 20 tribes 
that have taken advantage of the HEARTH Act.
    So when a tribe that has taken advantage of the HEARTH Act 
for let's say, surface leasing of lands for wind or solar 
development, those approvals no longer need to come back to the 
Department of Interior. The tribes can approve those projects.
    So some of the things that the GAO report highlighted----
    Senator Tester. Will be done with the HEARTH Act, if we get 
that model passed or you get that model through rule.
    So okay, Mr. Rusco spoke of pulling qualified staff within 
the BLM and the high growth areas. Do you have that capability?
    Mr. Roberts. No, we have a very hard time.
    Senator Tester. Why do you not have that?
    Mr. Roberts. Because we can't compete with the private 
sector.
    Senator Tester. You mean you can't hire people because your 
wage is not high enough?
    Mr. Roberts. That is right.
    Senator Tester. Okay. So is that an Office of Personnel 
Management problem or is that a budgetary problem?
    Mr. Roberts. It may be a budgetary problem, it may be a 
statutory problem. That is not to say that we don't have great 
staff.
    Senator Tester. I am not saying that. What I am asking is 
that if you don't have enough great staff.
    Mr. Roberts. Right.
    Senator Tester. And that is what I heard you say.
    Mr. Roberts. Yes.
    Senator Tester. When you put your budget forth to us, did 
it include enough dollars for hiring the folks you needed?
    Mr. Roberts. It included increases for realty services, it 
included increases for an oil and gas -
    Senator Tester. What impact did sequestration have on that 
budget?
    Mr. Roberts. Significant. It was across the board. 
Operating under a continuing resolution, we are stuck now until 
December 11th. We have a very limited budget. We have 
memorandums of agreement and are ready to go on the oil and gas 
service center once we get a budget.
    Senator Tester. I have to do this, if you will just give me 
this flexibility, because Grant is here, and there was just one 
question I wanted to ask. You had six recommendations. I 
appreciate that, by the way. I like solutions. Thank you for 
that, Grant.
    Can you tell me how much earnings Fort Peck has lost 
because the deposits are not held in interest-bearing accounts?
    Mr. Stafne. Substantial. As a former Federal employee, we 
used to have special deposit accounts. Oil and gas companies 
would come onto our reservation and bid on hundreds, thousands 
of tracts. When they bid on those tracts, they were required to 
bring a portion of the money and we would put that in special 
deposit accounts until the leases were approved. That sometimes 
took six, seven, eight months.
    By the time they were distributed or disbursed to the 
rightful land owners, it was pretty good revenue for the land 
owners. Senator, I cannot give you a figure, but just from what 
I said, you can imagine what that impact would be.
    Senator Tester. Excuse me, Mr. Chairman, who did that? Why 
isn't this still being done this way?
    Mr. Roberts. I can get you an answer to that. I don't know 
the answer to it.
    Senator Tester. Okay, thank you.
    The Chairman. Thank you, Senator Tester. Senator Daines?
    Senator Daines. Thanks, Mr. Chairman. I want to explore the 
challenges regarding responsible energy development in Indian 
Country and talk about possible solutions. I know, Councilman 
Stafne, you have some ideas there as well. Senator Barrasso, I 
think, has a good bill to strengthen the tribes' abilities to 
control their own destinies and have more authority in 
developing their own energy.
    I remind members of this Committee the House recently 
passed H.R. 538, the Native American Energy Act, with a very 
strong bipartisan vote of 254 to 173, which includes some good 
provisions to streamline permitting processes and make some 
worthwhile improvements in the BIA such as appraisals and 
ensuring the seven regional offices are going off the same 
playbook, some standardization.
    The GAO report mentions one challenge to Indian energy 
development, and that is a lack of access to energy tax credits 
in Indian Country. Senator Tester and I have introduced a bill 
to make permanent the Indian Coal Production Tax Credit to 
incentivize on Indian reservations for energy development where 
it is already too costly and where it is needed most.
    Questions I have, I will start with Mr. Cuch and Mr. 
Olguin. You both mentioned frustration with meaningful 
consultation with the BIA and other Federal agencies regarding 
energy projects. In particular, you mentioned the hydraulic 
fracturing rule. We know in Montana, and especially in 
Councilman Stafne's neck of the woods, how important that 
technology, hydraulic fracturing, has been in unlocking 
prosperity for rural communities.
    My question is, could you expand on the challenges 
associated with the hydraulic fracturing rule? Let me start 
with Mr. Cuch.
    Mr. Cuch. The new proposed rule we find to be duplicative 
of what States already provide. It means added time and cost to 
our operations to be able to follow those new regs, wherever 
they may end up being. So that would be my comment related to 
that.
    Senator Daines. Mr. Olguin?
    Mr. Olguin. For us, the challenge is as far as 
consultation. It did occur from the very beginning, when we 
didn't feel we had fruitful consultation on what the BLM rule 
was going to be comprised of, let alone what it was going to 
become. We ended up at the point where we drafted our own 
regulation, passed it through tribal resolution and we are at 
the point now where we have filed suit against BLM for their 
regulation being imposed on tribal lands. So we are in 
litigation now.
    There is a stay from the judge and with that, we are 
working on settlement.
    Senator Daines. So why don't you think you receive 
meaningful consultation? My experience has been, meaningful 
consultation by the bureaucracy tends to be, well, we received 
a letter, we had a meeting, we had a cup of coffee, we came to 
a conference room. But it seems like you are not being listened 
to in terms of the substance of your proposals and argument.
    Mr. Olguin. That is true. When we look at the initial, it 
was a PowerPoint presentation of here is what hydraulic 
fracturing is. Well, we know what hydraulic fracturing is, we 
have been doing it for 50 years. So it wasn't necessarily that 
we needed an education component. We need to understand, what 
is the rule, what was the rule intended to do, and let's have 
this meaningful conversation face to face, discuss the issues, 
argue back and forth, if that is what it takes, but come to an 
understanding that we are talking the same thing.
    Senator Daines. So do you believe that these agencies 
understand what meaningful consultation really is?
    Mr. Olguin. Yes, I think they do today.
    Senator Daines. Why aren't you being heard?
    Mr. Olguin. Well, today we are because of the lawsuit.
    Senator Daines. But that seems to be a failure in their 
process that we should be trying to avoid the course and have 
the meaningful consultation up front.
    Mr. Olguin. I am not sure. I have my own speculation but I 
really don't know.
    Senator Daines. Mr. Roberts, did the BIA work with BLM on 
the implications of the hydraulic fracturing rule in Indian 
Country?
    Mr. Roberts. The implications?
    Senator Daines. Right. There is a disconnect here, there 
are implications, there are consequences.
    Mr. Roberts. It is BLM's rule, I know that it is in 
litigation. There is not a whole lot, unfortunately, I can say 
about that. As the Honorable Mr. Olguin said, we are in 
settlement discussions with the tribe on their lawsuit.
    Senator Daines. The BIA, do you work with these other 
agencies like the BLM to ensure that the tribal trust 
responsibility is upheld appropriately? I don't think it has 
been upheld appropriately.
    Mr. Roberts. Sure. We do work with the other Federal 
agencies. That is one of the things that we are trying to 
incorporate in the service center. So the service center, if we 
get funding from Congress to move forward with that, it will be 
BLM, it will be ONR, it will be BIA. We will all be co-located, 
so that we are all working together.
    Senator Daines. That is an activity. I am looking for 
results. It looks like what has happened here has been a 
failure in that process, where the tribe is saying they don't 
believe they really experienced meaningful consultation.
    Mr. Roberts. There is really not a lot at this point, 
again, because it is in litigation, Senator, I can't really 
comment on the adequacy of consultation in that process.
    Senator Daines. Thank you.
    The Chairman. Thank you, Senator Daines. Senator Heitkamp?

               STATEMENT OF HON. HEIDI HEITKAMP, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Heitkamp. Thank you, Mr. Chairman.
    Mr. Roberts, would you agree with the statement that the 
lands that are managed by the Bureau of Indian Affairs and by 
BLM for the tribes and for individual members of the tribes are 
not public lands?
    Mr. Roberts. They are different than our normal public 
lands.
    Senator Heitkamp. Yes or no. They are not public lands.
    Mr. Roberts. We hold them in trust for the tribes.
    Senator Heitkamp. That is right. And I think that is the 
crux of the problem here. These are not public lands.
    But yet they get treated all the time as if they are, as if 
they are minerals that are owned by the people of the United 
States, as opposed to minerals that are owned by sovereign 
nations and by the people of sovereign nations. Until we really 
start appreciating that there is a differentiation here, I 
think we will always be at this table arguing this point over 
and over and over again.
    You can say, well, this was set up, because there is this 
trust obligation. But the facts that were revealed in the 
Cobell litigation tell us that fiduciary obligation and that 
trust obligation hasn't been well managed, it continues to not 
be well managed by the Department of Interior.
    Mr. Roberts. Senator, I can assure you that we take our 
trust responsibilities very seriously. It was this 
Administration that settled the Cobell litigation. It is this 
Administration that has settled over 80 trust settlements with 
tribes.
    Senator Heitkamp. I understand that. I am trying to make a 
point which is historic. It is not just about this 
Administration. We constantly try and deal with the facts that 
are in front of us instead of looking at this in an historic 
context, which is that these are minerals that belong to a 
different sovereign nation. Just as you shouldn't require an 
EIS for the State to drill on, lease its own minerals, I don't 
know why we are in this situation, delaying permits and 
delaying leases and delaying the things that need to be done, 
when you have elected tribal governments that have that 
responsibility.
    I think that is an historic anomaly. But that is why we are 
here. We are here because of the structure that we have set up 
here in Congress that manages minerals that are owned by people 
other than the people of the United States. Obviously, citizens 
of the United States, but not in the context of traditional BLM 
minerals.
    I want to get to the employment issue that Senator Tester 
raised. I have done a lot of work on this with OPM. We have 
been able to get various accommodations from OPM through the 
Department of Defense. We are working now with USDA. Department 
of Interior has been really slow to work with us to try and 
make sure that OPM is doing what they can to deal with high 
cost of living and low participation rates in the Federal 
workforce. We can't get this work done until we staff to get 
this work done.
    So I want a commitment from you, Mr. Roberts, that you will 
take back to Department of Interior my frustration that we 
continue to work on this but we haven't gotten very far in 
terms of making sure that we get salary adjustments that will 
add to the workforce.
    Mr. Roberts. Absolutely, Senator.
    Senator Heitkamp. Just a final point, I don't have a lot of 
time left. Mandan, Hidatsa and Arikara Nation has counted 100 
steps and up to seven agencies who provide a permit for 
drilling on tribal land. Let me repeat that. A hundred steps 
and up to seven agencies. I am glad that you are talking about 
centralizing this. It is what some of the tribes have done. I 
think the tribe's proposal, the Mandan, Hidatsa and Arikara 
proposal is to provide a director to oversee permitting 
requirements for all the agencies involved.
    Would creating this office under your plan resolve staffing 
issues, and having one point of accountability for the tribes 
to actually, instead of trying to deal with Fish and Wildlife, 
trying to deal with BLM, trying to deal with a myriad of 
Federal agencies, shouldn't there just be one person 
accountable in all of this?
    Mr. Roberts. That is the design of the service center. You 
are right, Senator, we heard that from tribes and we have 
consulted with tribes. It was their idea for the service 
center. So we are trying to implement that.
    Senator Heitkamp. This is incredibly frustrating, because 
the time when we could have been producing oil at $100 a 
barrel, that opportunity, as we look at oil prices now at $45. 
If you are looking at, from the standpoint of a production 
company or a drilling company, and you have all the headaches 
of trying to work through 100 different steps and seven 
agencies, you are not going to drill in Indian Country.
    I would like at some point somebody to really examine this 
issue of going back and just thinking about this differently. 
It is not public land. It is land that is owned by sovereign 
nations. It is land that is owned by members of sovereign 
nations. A lot of the system was set up to be paternal and kind 
of dictate. There is nothing that would recommend in the past, 
and I am not saying it is this Administration, but when you go 
past, that would recommend that we have really fulfilled our 
fiduciary obligation or our trust obligation to either 
individual members of the tribe or the tribe themselves.
    So there is no doubt there is a legitimacy to the 
frustration that we see today and we continue to see. So this 
needs to be resolved maybe in a broader context.
    The Chairman. Thank you, Senator Heitkamp. Senator 
Lankford?

               STATEMENT OF HON. JAMES LANKFORD, 
                   U.S. SENATOR FROM OKLAHOMA

    Senator Lankford. Thank you all for your testimony. And on 
what Senator Heitkamp was just saying, I couldn't agree more. 
We have to be able to streamline this process. There should be 
ongoing conversation, rather than hearing it again and again 
and again and saying, there is a problem. There has to be some 
conversation to say, how do we actually resolve this, so it is 
not an ongoing conversation.
    Let me ask a follow-up as well, to what Senator Daines was 
talking about also. Mr. Roberts, before the BLM released their 
frack rule, did the BLM consult with BIA and say, we are about 
to do this rule, what would be the consequences in Indian 
Country if this rule is released? Did that conversation occur?
    Mr. Roberts. My understanding is that BIA participated in 
some of the consultations, if not all of them. I don't have the 
details for you, Senator, today. But I think there was 
coordination between BIA and BLM.
    Senator Lankford. Was there a conversation between BIA and 
back to BLM during that consultation to say, here is what the 
financial consequences will be to tribes if this rule is 
imposed?
    Mr. Roberts. I don't know.
    Senator Lankford. Was there an estimate of the financial 
consequences on tribes and the effect on jobs if that rule is 
imposed? Was there any study that was done or any conversation 
or BIA advising BLM, if you do this, this is the consequences 
on tribes?
    Mr. Roberts. I don't know, Senator.
    Senator Lankford. How can we find out? Obviously there is 
this trust responsibility to make sure that we are managing 
that. When that rule is being discussed behind closed doors, we 
trust BIA to actually speak out on behalf and say, if BLM does 
this and imposes this on tribes, here is the effect of it. That 
is important to know how that is being fulfilled.
    Mr. Roberts. I would be happy to follow up with you, 
Senator.
    Senator Lankford. Please do. We would love to have some 
notes on that, just the back and forth on that. For instance, 
when EPA and Corps of Engineers are discussing the Waters of 
the U.S. Rule, there was swapping back and forth between the 
attorneys. We have those documents, how they swapped back and 
forth and were having those internal conversations. We would 
like to know how BIA was advising that back to BLM.
    Let me ask this as well, dealing with Osage and the Osage 
Nation area and Osage County in Oklahoma. It is a unique energy 
issue, because of the mineral rights in that area. I would be 
confident that you are aware of some of the issues there. BIA 
earlier this year released new regulations for conducting 
operations in Osage County. During that time period of 
releasing those new regulations, royalties had dropped in half 
during that time period. It has been a very significant change 
on that.
    Can you give me an update on the status of the suit and 
newly released regulations that may be pending for Osage?
    Mr. Roberts. I just know that it is still in litigation. 
There has been a stay. Mike Black, the Director of BIA, has 
been thoroughly involved with this. He has been working with 
Kevin and I on this. I know we are in close coordination with 
your staff as well, Senator.
    Senator Lankford. Do you know if BIA will put out new 
regulations for the Osage mineral stay, if that is in the 
conversation?
    Mr. Roberts. I don't know.
    Senator Lankford. Can you help me understand something that 
has happened recently in the Osage area? My understanding is 
BIA has decided that all permit applications, activity reports, 
historical information about production activity, individual 
wells, has now been taken into BIA and is considered to be 
private information that is inaccessible. If someone wants to 
get a history of a well, now rather than that being available, 
they have to get a FOIA request to get background information 
on a well.
    Do you know if that is true?
    Mr. Roberts. I think it is true. I think the staff at Osage 
are, obviously they have to comply with Federal law. My 
understanding is that there were some instances where perhaps 
information as not, was being provided without a FOIA request. 
But we do need our staff to provide the information in 
accordance with law. That is what I understand our staff is 
doing now, Senator.
    Senator Lankford. So let me help with the hurdle here 
again. Not only is it more expensive to then do production in 
Indian Country, not only does the permitting take five times 
longer, but now if you are interested in buying that well, you 
can't just go get the information. One county over, you could 
actually go online and get that information if it is anywhere 
else in the State, and be able to find it, if you want to get 
it and deal with production. Now you also have to jump through 
a FOIA request hurdle on this as well.
    Mr. Roberts. My understanding is that we are working with 
staff to make as much of the publicly-available information 
available to the public without a FOIA request.
    Senator Lankford. I am just trying to figure out why 
suddenly you have to go through a FOIA request hurdle. Why was 
that even a consideration for publicly-available information, 
what has been historically publicly-available, now a new hurdle 
has been added to a million other hurdles that are there?
    Mr. Roberts. My understanding, Senator, is that some of the 
information that was being released may have contained Privacy 
Act information. So we obviously don't want that to occur. We 
are looking at that information now. We will try to put out as 
much publicly-available information as possible. I know 
Director Black and his staff have been at Osage both last week 
and this week.
    Senator Lankford. Has any of that information been lost? Do 
you know if all that information has been retained? Is there 
any missing information on any of the wells?
    Mr. Roberts. I am not aware of any missing information, 
Senator.
    Senator Lankford. Obviously there are multiple issues as we 
deal with Osage. It is a unique issue but it is characteristic 
of what is happening in a lot of the energy development along 
this. The greater number of hurdles that are placed there, the 
incentive is go somewhere else. That directly affects what is 
happening in Osage County. That directly affects the tribe. 
That directly affects everything in Indian Country across my 
State and other States as well.
    The more hurdles, the more expensive this is, the longer 
the process, the more people say, I will go next door. Which 
has a direct effect, in this case, just on headright owners 
there, where it has been cut in half just this year. So there 
are significant effects that are happening. We are trying to 
figure out, how do we help the tribe and how do we provide some 
sort of level stability, and where are we going to be able to 
get efficiency in the process and who is an advocate for the 
tribes to be able to say to other agencies, if you do that, 
here is how it hurts. Let's find a way to be able to except out 
the tribes so this doesn't make a hard process even harder.
    I yield back.
    The Chairman. Thank you, Senator Lankford. Senator Franken?
    Senator Franken. Let's make a hard process easier. It 
should be easier to do energy projects on Indian land than 
anywhere else. Because we have a trust responsibility.
    Mr. Roberts, do you disagree with anything in the GAO 
report?
    Mr. Roberts. Senator, as I testified, we are implementing 
almost all the recommendations. The one thing that I would say, 
an area of disagreement with the GAO report is more a small 
picture than big picture. The GAO report basically says we 
should have GIS mapping capability that is provided to tribes. 
And that it should be in a certain system of records.
    What we have responded to GAO is that we have that system. 
It is called the NIOGEMS system. It is freely available to 
tribes. In fact, we are utilizing it at a number of 
reservations today. I am more than happy to have our staff, who 
are familiar with that, work with your staff to show you. 
Because it is state of the art.
    You can go on, for example, Fort Berthold----
    Senator Franken. Okay, I got that. But I am struck with the 
staggering loss of opportunity, as well as the Chairman was. 
And you sense the frustration here. We here on Indian Affairs, 
we are the ones who hear this testimony. We are the ones who 
hear the testimony about youth suicide. We are the ones who 
hear about the inability to get housing. We are the ones who 
hear that we can't get law enforcement because we don't have 
housing, that families have to double up because there isn't 
housing.
    We are so frustrated. Then it is hard to argue for funding 
which you need when you are having reports like Mr. Rusco's 
that say the BIA is not operating efficiently. That is another 
catch-22. Why should we fund the Bureau of Indian Affairs? The 
Bureau of Indian Affairs isn't doing its job if it is 
dysfunctional.
    We all want to see this happen yesterday. I want your 
pledge that you will get this done in terms of making this 
process more efficient, so that we can help you. Secretary 
Moniz was testifying about the budget a while ago in the Energy 
Committee. By the time it got to me, I think I had all the time 
I needed so I just said, is there anything you want to say? He 
said, yes, we put $11 million loan guarantee for Indian energy. 
This is something that Congress authorized a loan guarantee 
program in the Department of Energy, dedicated to tribal energy 
development, in 2005. It has never been funded.
    The President included $11 million for the program in his 
budget request this year. My staff has talked to the Chairman's 
staff about this. He expressed concern that it was just 
renewables that would be in this. Again, I said ``a coal 
mine,'' as painful as that is for me to say, a coal mine, oil, 
gas. I would love my colleagues to urge the appropriators to 
appropriate that. They have already resolved, without it, they 
finished their package. But I want an amendment to get this $11 
million, which can leverage $90 million, $100 million in 
projects in Indian Country.
    But I want to be able to say, going forward, that we will 
be able to do these projects. I think a loan guarantee will 
help get these projects done. Do you agree on that?
    Mr. Roberts. Yes, sure. Absolutely.
    Senator Franken. Okay. Mr. Rusco, can I ask you what the 
barriers would be to, say, doing a solar project in Arizona for 
a tribe? Just give us a typical, let's say a tribe wants to 
start a solar project. There is plenty of sun. I am sorry to go 
over my time here.
    I have been in Arizona in the summer. It is just sun. Let's 
say a tribe wanted to do that. What barriers would you see? Can 
you paint a picture for us?
    Mr. Rusco. I think Senator Heitkamp said it much better 
than I could. You have to deal with multiple agencies, and you 
will have to do that on their time and go through their 
processes. There is nobody to turn to to guide you through that 
process.
    There is a good example in the Federal Government of a 
permitting process that actually works where there is a one-
stop shop, and it is not a small group in one State, it is the 
Federal Energy Regulatory Commission for permitting pipelines. 
You go across multiple Federal and private jurisdictions, you 
have to go to all the resource agencies and you have to get all 
kinds of permits and studies and all that sort of thing.
    But FERC coordinates with all the agencies and makes sure 
that they are understanding the process and they are guiding 
the applicant through the process from step one all the way to 
the end. That kind of a model can work. I am not making a 
recommendation. I don't know how to fix it.
    Senator Franken. Would you write that piece of legislation 
for me and have it on my desk tomorrow? Or on the Chairman's?
    [Laughter.]
    Mr. Rusco. Absolutely.
    The Chairman. Al Franken for pipelines.
    Senator Franken. Well, I am for pipelines. We have 
pipelines, and they need to be approved, so that we don't have 
what happened in Enbridge, in Michigan. You need pipelines, 
especially because we have a lot of Bakken oil coming through 
Minnesota by rail and taking space that could deliver farm 
produce or product.
    Don't get me wrong, I am for pipelines. I just want to see 
it easier to do this. It should be easier in Indian Country 
than anywhere else. That should be our goal. Thank you.
    The Chairman. Thank you so much, Senator Franken.
    Mr. Roberts, I want to go back to something you said. Why 
is the DOI opposed to Southern Utes doing their own fracking 
rule? Doesn't the DOI support sovereignty of the tribes?
    Mr. Roberts. This matter is in litigation, Chairman. I will 
say that the fracking rule provided a process, a variance 
process, a process where the tribes could work through BLM or 
States, for that matter, and utilize tribal regulations for 
fracking.
    The Chairman. Mr. Rusco, your report on Indian energy 
development identified poor management by the BIA as an 
impediment to Indian energy development. A number of us picked 
up on your staggering loss of opportunity comment. Your written 
testimony noted one tribe estimated that approximately $95 
million in potential revenues from royalties, permitting fees, 
severance taxes was lost due to agency delays.
    Can you elaborate a little bit on the extent of the effects 
on tribes and tribal members as a result of this agency's 
management shortcomings?
    Mr. Rusco. Unfortunately, the record-keeping and the 
information systems can't give you a comprehensive picture. But 
I can give you some examples. We talked to a tribe trying to 
develop a wind project, wind energy project. And for years they 
had gone through trying to get approval through BIA for the 
basic permits. They had a purchase power agreement, they had a 
utility willing to pay them for the power.
    It took so long to do that that after several years, in the 
middle of this process, the tribe went ahead and went through 
the process of getting, of implementing the HEARTH Act in order 
to bypass that. That was faster than actually getting through 
the other process.
    But they didn't actually still get the project built. 
Because by the time all the delays took place, the purchase 
power agreement expired. So now they are looking for a new 
buyer. I don't think you can estimate the value that these 
kinds of delays cost, because if you miss the train, it is not 
coming back through sometimes. You have a case where you are 
buying power from a bunch of places, and when they are bought 
up, you are not on the list any more.
    Oil and gas is not that different. If an area is being 
developed and they are building infrastructure and if all that 
gets done and the service companies move out and the pipelines 
that are going to be there are there, and now you want to 
develop a new area, you have to ramp it all up again. This is 
what the delays cost.
    The Chairman. And $100 oil versus $50 oil in terms of the 
potential.
    Mr. Rusco. Exactly.
    The Chairman. Secretary Roberts, the GAO report highlighted 
that the BIA faces limitations in staff expertise needed to 
administer energy development functions. We have heard 
testimony indicating that the number of agency personnel 
trained in oil and gas development work isn't sufficient to 
meet the demands of the increased energy development on Indian 
lands.
    What is the BIA doing now to ensure proper staff expertise 
is available to assist the tribes and their energy partners in 
developing resources?
    Mr. Roberts. We are utilizing every incentive that is 
available to us for hiring. As I said, we are competing with 
private companies and corporations. We are also losing great 
folk from the Bureau to tribal leadership positions and other 
positions.
    So we are working actively to fill those. But it is a 
matter of competing with industry.
    The Chairman. I think members of the Committee find it 
troubling from the GAO report that the Bureau of Indian Affairs 
doesn't have the data needed to verify ownership of oil and gas 
resources, that data isn't readily available to identify 
resources available for lease or identify where the leases are 
in effect. The report noted that in some cases, agency 
personnel would have to search paper records stored in multiple 
locations to find the data. The Department's response letter to 
the GAO from August of this past year noted that a national 
data set of all Indian land tracts with visualization 
functionality is expected to be completed, they say, within 
four years.
    What is the BIA going to do in the interim when tribes and 
tribal members need the data to develop their energy resources?
    Mr. Roberts. We are working as hard as possible, Senator. 
It is a matter of limited resources. I know that on a number of 
reservations where there are significant oil and gas resources, 
we do have those, we do have that technology, and tribes are 
using the NIOGEMS system to track not only - we can go to a 
parcel of land, we can say, okay, here is when the application 
came in, here is when it was issued, here is when the APD was 
issued, here is where they are in the NEPA process. We can do 
some of those things. We can't do it nationwide, that is right.
    But with our resources that we have, we are trying to move 
as quickly as possible.
    The Chairman. Mr. Olguin, your written testimony 
highlighted several frustrating instances that your tribe 
experienced in trying to develop its resources. The tribe found 
that the BIA records were in disarray, staff were untrained, 
staff were underqualified. Likewise the existing system for 
tracking rights-of-way was unwieldy. The tribal energy resource 
agreement would authorize the tribe to develop its energy 
resources, which may include tracking the rights-of-way and 
leases.
    Could you just explain how would your tribe benefit if you 
had a tribal energy resource agreement in place?
    Mr. Olguin. What it would do, it definitely would give us 
the ability to approve a lot of things on our own, particularly 
these leases and rights-of-way and put control in the tribe's 
hands. Along that line, I believe that with a lot of those 
factors that come into play with the deficiencies, it gives the 
tribes the capability and capacity to really manage its own 
affairs on its own terms. We still have to realize, we are 
still going to be stuck with what is inherent Federal 
functions. That is still going to be a key component, even if 
the TERA issue came forth.
    We haven't applied, we are thinking about applying. We are 
thinking about pushing that envelope to either get an approval 
or a denial to test the system to see if it is going to work.
    The Chairman. Mr. Cuch, you have a map of Utah next to you. 
Your written testimony noted that it takes approximately 405 
days for your company to receive a drilling permit from the 
Bureau of Land Management and the BIA for tribal wells, 
correct?
    Mr. Cuch. Correct.
    The Chairman. Meanwhile, it takes 73 days, or it takes over 
a year to get it from BLM and the BIA, only 73 days, a little 
over two months, to receive a permit from the State of Utah for 
a well in non-tribal areas. So there is an 11-month difference 
there in the permitting time. It is almost a year difference.
    What additional risks or costs are incurred by the tribe 
and your company because of delays associated with the 
development of tribal wells?
    Mr. Cuch. Certainly time is an issue. One of the things we 
have witnessed is that the BIA, they handle the rights-of-way 
and the NEPA. So the NEPA process is really what takes probably 
the longest amount of time. There are a lot of consultations 
that take place with outside Federal agencies that often add to 
additional mitigation requirements and things like that, that 
they require. That has been a challenge.
    We found that the BIA often sort of defers to these outside 
agencies, rather than saying, this is the proposed action, the 
tribe is good with it, we would like to move forward. We think 
that the BIA could be a stronger advocate for tribes.
    Another thing I will share with you is that, and I can't 
speak for the Ute Tribe, I am a tribal member, I am here on 
behalf of industry, but what we have witnessed is that the 
tribe has a much bigger budget than BIA. They have the staff on 
hand, at their Energy and Minerals Department. They have a very 
sophisticated government. They have a fish and wildlife 
department of their own. They have several biologists on staff. 
They have a natural resources department. We think they are 
fully capable of handling those environmental projects, which 
would do away with that Federal action piece.
    So already, the tribe has taken over the right-of-way 
piece. If you look at Exhibit 4, you will see that we have 
actually had some decreases in time. It is not here, it is in 
your packet. That is largely because the tribe has taken over 
the right-of-way function and the BIA at the agency are 
supportive of working with the tribe to handle that aspect.
    Then of course, the other additional delay is kind of to my 
right, where you see an additional amount of time, 176 to 203 
days, from when the BLM receives the right-of-way and NEPA 
concurrences for them to do their part for the down-hole 
analysis. We need to see better coordination, we think, between 
the agencies, to ensure that tribal projects are getting 
prioritized and are getting support from the various agencies 
who share the trust responsibility that BIA has.
    The Chairman. Your companies make significant investments, 
$1.5 billion in the Uinta Basin, including 64 Ute tribal wells, 
your company has applications pending I think for about 95 more 
wells for the Ute Tribe, and an environmental process underway 
for over 1,000 more tribal wells in the Basin. The testimony 
stated that under Federal law unless a tribe has a tribal 
energy resource agreement pursuant to Title V of the Energy 
Policy Act of 2005, an operator will have to obtain a Federal 
drilling permit. But because of the delay and the uncertainties 
in obtaining permitting approvals, authorization from the BIA, 
that there is a substantial negative impact on your ability to 
develop tribal oil and gas resources and generate income for 
the tribe.
    So how would the tribe and your company benefit if the 
tribe had this tribal energy resource agreement that we are 
talking about today?
    Mr. Cuch. Well, certainly it is up to the tribe to decide 
if that is the route it wants to go. But I think they are fully 
capable of taking over and being in a position to enter into a 
TERA where they would take a greater role in the permitting 
process. In our testimony, we have shared several examples of 
how the current process has led to delays and has impacted 
revenues to the tribe. I think it is important to understand 
that tribes are governments without a tax base, so they largely 
require this revenue to support core government services to the 
members.
    Again, one of the biggest challenges we are seeing is that 
there are a lot of outside Federal intermediaries that as well 
as administrative rulemakings, that are sort of adding to the 
difficulty to develop tribal resources. I think as Senator 
Heitkamp mentioned, tribal lands are not public lands. I think 
the Bureau could do a lot to try and work to educate those 
other agencies so they understand that and also be willing to 
take a stronger stance with those agencies to move tribal 
projects forward.
    The Chairman. I want to thank each and every one of you for 
being here. Obviously this is an area where there is a lot of 
interest. You had 13 different United States Senators here 
today to hear what you had to say. Some had to come and go, 
some may actually want to have questions in writing that they 
will submit to you.
    The hearing record will remain open for two weeks for 
additional testimony and some follow-up. I want to thank each 
of you for being here today as witnesses. The hearing is 
adjourned.
    [Whereupon, at 4:05 p.m., the hearing was adjourned.]

                            A P P E N D I X

   Prepared Statement of Hon. Mark Fox, Chairman, Mandan Hidatsa and 
               Arikara Nation, Fort Berthold Reservation
I. Introduction
    Chairman Barrasso, Vice-Chairman Tester and Members of the 
Committee, thank you for the opportunity to testify on the Government 
Accountability Office's (GAO) report entitled ``Indian Energy 
Development: Poor Management Has Hindered Energy Development on Indian 
Lands.'' My name is Mark Fox. I am the Chairman of the Mandan Hidatsa 
and Arikara Nation (MHA Nation) of the Fort Berthold Reservation.
    The MHA Nation appreciates the Chairman's oversight and 
investigation into the barriers we face every day as we work to develop 
our energy resources, mitigate the impacts of energy development, 
protect our homelands and provide for our members. The GAO report 
requested by the Chairman is an important piece in the Committee's 8 
years of investigations into the barriers to Indian energy development. 
With the GAO report and volumes of testimony from tribes, tribal 
organizations and our industry partners, it is time to take action to 
resolve these issues. The MHA Nation agrees with and supports the 
comments of many of the Senators who attended the hearing that Congress 
and the Bureau of Indian Affairs (BIA) should take action on these 
issues immediately.
    Passage of Chairman Barrasso's bill, S. 209, the Indian Tribal 
Energy Development and Self-Determination Act Amendments of 2015, would 
be an important step forward. In addition, now that Congress has passed 
a budget, the MHA Nation asks for the Committee's support of the 
Administration's $4.5 million budget proposal for an Indian Energy 
Service Center in Denver, Colorado. The proposed Service Center would 
go a long way to resolving many of the issues identified in the GAO 
report.
    The MHA Nation knows the issues highlighted in the GAO report first 
hand. The MHA Nation and our Fort Berthold Reservation are in the heart 
of the Bakken Formation--still one of the most active oil and gas plays 
in the United States. Our Reservation, located in west-central North 
Dakota, is the equivalent of about the 7th highest producing oil and 
gas state in the Country. In less than 7 years, North Dakota, including 
our Reservation, became the second highest producing state in the 
Country. Only Texas produces more. Currently, there are 8 drilling 
rigs, more than 30,000 semi-trucks, and more than 1,300 oil and gas 
wells producing about 200,000 barrels of oil per day on our 
Reservation. The MHA Nation struggles daily with BIA, BLM and other 
Federal agencies for every single permit needed to get oil and gas 
wells into production and to keep them operating.
II. GAO Report
    The GAO report confirms years of testimony by Indian tribes and our 
energy partners before this Committee and the House Natural Resources 
Subcommittee on Indian Insular and Alaska Native Affairs. The MHA 
Nation and other tribes have long expressed frustration about the 
Federal government's overly complex energy permitting process, a lack 
of BIA staff and expertise to approve energy permits, and a lack of 
financing for energy projects on Indian lands. GAO's June 2015 report 
confirms our frustrations.
    The GAO report found that the following factors have hindered 
Indian energy development: (1) shortcomings in BIA management of Indian 
energy development including a lack of comprehensive data, a lack of 
staff and a lack of energy expertise; (2) an overly complex regulatory 
framework; (3) fractionated ownership interests; (4) a lack of capital 
and tax credits; (5) dual taxation of Indian energy resources by state 
governments; (6) lack of tribal capacity to oversee energy development; 
and, (7) limited tribal or reservation infrastructure. GOV'T 
ACCOUNTABILITY OFFICE, INDIAN ENERGY DEVELOPMENT--POOR MANAGEMENT BY 
BIA HAS HINDERED ENERGY DEVELOPMENT ON INDIAN LANDS 18 (June 2015). The 
Tribe asks that the Committee consider and approve legislation that 
would address these issues.
    The two most important actions the Committee could take to address 
the issues identified by GAO would be to prevent state dual taxation of 
Indian energy resources and enact our proposal for an Indian Energy 
Regulatory Office. Preventing state dual taxation would ensure that 
Tribes receive the full benefit of their Indian energy resources, 
including maximum needed tax revenue to mitigate energy impacts, 
support tribal self-determination and tribal infrastructure. Enacting 
our proposal for an Indian Energy Regulatory Office would streamline 
permitting and increase Indian energy staffing and expertise. Our 
testimony focuses on these two solutions to the issues raised by the 
GAO report.
III. Providing Tribes with the Full Value of Energy Resources
    The GAO report found that state dual taxation hindered Indian 
energy development. GAO concluded that ``dual taxation of Indian energy 
resources by state governments'' was one of the reasons why ``Indian 
energy resources are underdeveloped relative to surrounding non-Indian 
resources.'' Id. at 29 to 30. State dual taxation takes the revenues 
that tribes need to exercise self-determination over their energy 
resources and provide tribal infrastructure to support energy 
development. Tribes cannot take over significant roles in energy 
permitting without the tax revenues that every other government relies 
on to staff government offices and support infrastructure.
    Enacting the Indian Mineral Leasing Act of 1938, the Indian Mineral 
Development Act of 1982 and the Indian Tribal Energy Development and 
Self-Determination Act of 2005, Congress intended for Indian tribes to 
receive the full value of their energy resources. Congress intended for 
development of these tribal trust resources to provide tribes with 
financial resources, fund tribal government activities, promote 
economic development and provide on-reservation jobs. Congress did not 
intend that State governments would directly benefit from the 
development of tribal trust resources or receive a windfall by taxing 
development of those resources.
    Yet, that is exactly what is happening. States are collecting taxes 
from the development of Indian trust resources while providing little 
to no on-reservation benefits. In 1989, the Supreme Court questioned 
whether Congress intended for tribes to receive the full benefit of 
their resources. Finding the Congress did not speak clearly on this 
issue, the Supreme Court allowed state dual taxation of Indian energy 
resources. Notably, the affected Tribe was not even a party to the 
case. Congress should resolve this issue by passing legislation that 
affirms that Indian mineral development laws are intended to ensure 
that tribes receive the full benefit their resources, and this includes 
the full benefit of the tax revenue derived from energy production.
    Currently, state dual taxation forces tribes into tax agreements 
with states to share taxes from energy development on reservation 
lands. Without these tax agreements, state taxation doubles the tax 
rate for development of Indian energy resources and stifles 
development. Only by agreeing to give up half or more of their tax 
revenues can tribes ensure that energy development on reservation lands 
is competitive with surrounding lands.
    At the same time, tribal governments must pay for the heavy burdens 
that energy development puts on tribal government in all areas, 
including destruction of roads, increased crime, hazardous spills, and 
an overall burden on government infrastructure. Because Tribes are not 
able to maximize available tax revenue to mitigate these impacts, they 
must in many cases use royalty revenue. This is unjust. Tribes should 
not have to give up tax revenue because of dual state and local 
taxation when they are faced with the brunt of the burden that comes 
with energy development.
    The case of the MHA Nation demonstrates the impact of dual state 
taxation. Job and development killing dual state taxation forced us 
into an unfair tax agreement with the State of North Dakota whose 
coffers are so full they have a $3.6 billion surplus and created 
investment accounts that exceed a billion dollars whose funds cannot be 
spent until 2017. In addition:

   From 2008 to the present, the State is approaching $1 
        billion in tax revenues from energy production on tribal trust 
        land.

   During this time period, the State took the majority of the 
        tax revenues from energy production on the Reservation--over 51 
        percent of all of the tax revenues.

   Over the next five years, the State will get about $1 
        billion more in taxes from tribal resources.

   The State does not report how these funds benefit the 
        Reservation.

   We do know that in 2011 the State collected about $82 
        million in taxes from energy development on the Reservation, 
        but spent less than $2 million on state roads on the 
        Reservation and zero on tribal and BIA roads.

   In addition, we do not collect a dime in taxes from 
        pipelines that cross the Reservation because pipeline operators 
        pay taxes to the counties, even though we bear the expense of 
        cleaning up spills and regulating activity.

    To make matters worse, in the Spring of 2015, the North Dakota 
State legislature unilaterally voted to reduce tax rates which also 
lowers the revenues the MHA Nation will receive. We estimate that over 
the next 20 years we will lose $700 million under the new lower tax. We 
are not running budget surpluses like the State. The MHA Nation needs 
tax revenue to provide the infrastructure needed to support the energy 
industry.
    To provide the tribes with the resources we need to exercise self-
determination over our energy resources, the Committee should consider 
and approve legislation affirming that Indian mineral leasing status 
are intended to provide tribes with the full benefit of their energy 
resources. The following amendments should be added to S. 209, the 
Indian Tribal Energy Development and Self-Determination Act Amendments 
of 2015, as it is considered on the Senate floor:

    Sec. XX. Amendments to Indian Mineral Leasing.

    (a) Act of March 3, 1909.-The twelfth undesignated paragraph under 
the heading ``COMMISSIONER'' of title I of the Act of March 3, 1909 (25 
U.S.C. 396), is amended--

          (1) by striking ``That all lands'' and inserting the 
        following:

        ``(a) Leases.-All land''; and

          (2) by adding at the end the following:

         ``(b) Leases approved under this Act shall provide Indian 
        tribes and Indian mineral owners with the maximum governmental 
        and economic benefits associated with mineral leasing and 
        development, including all revenue derived therefrom, to 
        encourage tribal self-determination and economic development on 
        Indian lands.

         ``(c) Within one hundred and eighty days of the date of 
        enactment of this Act, the Secretary of the Interior shall 
        promulgate rules and regulations to facilitate implementation 
        of this Act.''

    (b) The first section of the Act of May 11, 1938 (25 U.S.C. 396a), 
is amended--

          (1) by striking ``That hereafter unallotted lands within'' 
        and inserting the following:

         ``(a) Leases.-Effective beginning on May 11, 1938, the 
        unallotted land within''; and

          (2) by adding at the end the following:

         ``(b) Leases approved under this Act shall provide Indian 
        tribes and Indian mineral owners with the maximum governmental 
        and economic benefits associated with mineral leasing and 
        development, including all revenue derived therefrom, to 
        encourage tribal self-determination and economic development on 
        Indian lands.

         ``(c) Within one hundred and eighty days of the date of 
        enactment of this Act, the Secretary of the Interior shall 
        promulgate rules and regulations to facilitate implementation 
        of this Act.''

    (c) The third section of Indian Mineral Development Act of 1982 (25 
U.S.C. 2102), is amended--

          (1) by adding at the end the following:

         ``(c) Agreements approved under this Act shall provide Indian 
        tribes and Indian mineral owners with the maximum governmental 
        and economic benefits associated with mineral leasing and 
        development, including all revenue derived therefrom, to 
        encourage tribal selfdetermination and economic development on 
        Indian lands.

         `(d) Within one hundred and eighty days of the date of 
        enactment of this Act, the Secretary of the Interior shall 
        revise and promulgate rules and regulations to facilitate 
        implementation of this Act.

    (d) Section 2604 (h) of the Energy Policy Act of 1992 (25 U.S.C. 
3503 (h)) is amended--

          (1) by adding at the end the following:

         ``(c) Agreements approved under this Act shall provide Indian 
        tribes and Indian mineral owners with the maximum governmental 
        and economic benefits associated with mineral leasing and 
        development, including all revenue derived therefrom, to 
        encourage tribal selfdetermination and economic development on 
        Indian lands.

         ``(d) Within one hundred and eighty days of the date of 
        enactment of this Act, the Secretary of the Interior shall 
        revise and promulgate rules and regulations to facilitate 
        implementation of this Act.

IV. Indian Energy Regulatory Office
    Almost as important as the problem of dual taxation is a continued 
lack of Federal staff, expertise and coordination in the processing of 
Indian energy permits. The MHA Nation supports BIA's efforts to create 
an Indian Energy Service Center to coordinate and support Indian energy 
permitting, however, much more is needed. In addition to the BIA's 
effort, the MHA Nation asks that the Committee support and pass 
legislation to create an Indian Energy Regulatory Office.
    The MHA Nation's proposal for an Indian Energy Regulatory Office 
was developed in coordination with the Coalition of Large Tribes and 
supported by the National Congress of American Indians. This proposal 
and resolutions support it are attached to my testimony. Legislation 
creating an Indian Energy Regulatory Office would provide BIA the 
authority it needs to ensure that its Service Center is a success. Our 
proposal would:

   require all of the agencies involved in Indian energy 
        permitting to co-locate staff in a single office;

   provide a Director with the authority to reach across 
        Federal agencies to get permits approved;

   direct the office to be guided by basic Indian trust 
        principles that have been lost in the current unorganized 
        Federal system for overseeing energy development on Indian 
        lands and prevent application of public land standards to 
        Indian lands; and,

   provide resources within Interior and BIA for the efficient 
        processing of Indian energy permits and approvals.

    Our proposal would solve most if not all of the BIA management 
problems identified by GAO. By centralizing BIA support for Indian 
energy development, BIA could generate comprehensive data for the 
ownership and use of resources, develop a centralized tracking system, 
and provide a home within BIA for Indian energy staff and expertise.
    Congress provided similar authority for federal public lands 10 
years ago in Section 365 of the Energy Policy Act of 2005. Section 365 
established a number of Permit Processing Improvement Offices in 
regions with high oil and gas permitting activity on federal public 
lands. These pilot offices were then made permanent by S. 2440 in the 
113th Congress. The same support should be provided for Indian lands. 
Particularly given that the benefits of energy development far exceed 
the benefits on Federal lands. Energy development on Indian lands 
provides jobs, economic development, revenues for tribal governments, 
and, if managed properly, long-term investment reservation 
infrastructure.
V. Conclusion
    The GAO report concluded that, ``The development of Indian energy 
resources has the potential to provide significant benefits to Indian 
tribes, tribal members, and the Nation through both tribal economic 
development opportunities and by contributing to the Nation's energy 
production.'' However, GAO found that a number of factors, including 
poor management by BIA, limits the ability of Tribes to developer their 
resources. GAO recommended that, ``Federal policy calls for providing 
enhanced self-determination and economic development opportunities for 
Indian tribes by promoting tribal oversight and management of energy 
resource development on tribal lands.''
    In addition to GAO's findings and 8 years of testimony from Indian 
tribes, the Committee should follow the calls for action from the many 
Committee members who attended the hearing and spoke passionately about 
the need for changes in the management of Indian energy development. 
Legislative changes are needed to provide the staff, expertise and 
resources to for the Federal government to effectively oversee and 
manage Indian energy resources. Change is also needed to ensure that 
tribes receive the full benefit from developing their resources and 
have the tax revenues needed take over portions of the permitting 
process and exercise self-determination in the development of our 
resources.
    Thank you for the opportunity to provide this testimony.

    Attachments

           COALITION OF LARGE TRIBES--RESOLUTION # 1-5-21-14
Title: A New Interior Office to Promote Indian Energy, Sovereignty, 
        Self-Determination and American Energy Independence
    WHEREAS, the Coalition of Large Tribes (COLT) was formally 
established in April 2011, and is comprised of tribes with a large land 
base, including the Mandan, Hidatsa and Arikara Nation (MHA Nation), 
the Oglala Sioux Tribe, the Crow Tribe, the Navajo Nation, the Sisseton 
Wahpeton Sioux Tribe, the Blackfeet Tribe of Montana, the Rosebud Sioux 
Tribe, the Ute Indian Tribe, the Shoshone-Bannock Tribes, the Colville 
Confederated Tribes, Spokane Tribe, and the Cheyenne River Sioux Tribe. 
COLT is chaired by Chairman Tex Hall of the MHA Nation; and
    WHEREAS, COLT was organized to provide a unified advocacy base for 
tribes that govern large trust land bases and that strive to ensure the 
most beneficial use of those lands for the tribes and individual Indian 
landowners; and
    WHEREAS, several COLT members are currently located in the Bureau 
of Indian Affairs' (BIA) Phoenix, Rocky Mountain, Great Plains, and 
Albuquerque Regions and are energy producing tribes or are among those 
tribes with potential for energy production that rely or might rely in 
the future on conventional or renewable energy resource development to 
support infrastructure, economic development, jobs, government revenues 
and income; and
    WHEREAS, at the COLT DC Impact Meetings held in Washington, D.C. 
from March 5 to 6, 2014, with a quorum present, COLT adopted Resolution 
#3-3-6-14 entitled ``Request that the Department of the Interior Create 
a New Office for Energy Producing Tribes;'' and
    WHEREAS, the United States Congress is currently considering and 
the Department of the Interior (DOI) and the Bureau of Indian Affairs 
(BIA) are currently developing a proposal for a new Indian energy 
office; and
    WHEREAS, it is in the best interest of COLT to provide the 
Congress, DOI and BIA with additional information and detail about the 
proposed office to ensure that the office will effectively serve Indian 
tribes; and
    WHEREAS, COLT proposes to amend Section 2602(a) of the Energy 
Policy Act of 1992 (25 U.S.C. 3502(a)) to create a new Indian Energy 
Regulatory Office (Office) that would be centrally located in Denver, 
Colorado and utilize and refocus the existing staff, resources and 
office space of the Office of Indian Energy and Economic Development's 
(OIEED) Division of Energy and Mineral Development; and
    WHEREAS, establishing the Office in Denver, Colorado provides 
adequate housing and ease of recruiting new employees to a major 
metropolitan area, and proximity to other federal agencies involved in 
the energy permitting process; and
    WHEREAS, the Office would be established within the Secretary's 
Office, similar to the Indian Water Rights Office, to ensure that the 
Director of the Office has authority over the various agencies 
involved; and
    WHEREAS, the Office would serve as a new BIA Regional Office that 
energy producing Indian tribes may voluntarily select to replace an 
Indian tribe's existing BIA Regional Office for review and approval of 
all energy related projects and would not result in duplicative review 
and approval of energy projects; and
    WHEREAS, the Office would not replace current BIA Regional Offices 
nor the Farmington Federal Indian Minerals Office authorities and 
responsibilities except for those energy producing Indian tribes that 
elect to utilize the Office; and
    WHEREAS, the Office would provide energy resource assessments and 
feasibility studies, technical assistance and training in energy 
development proposal review, increase federal permitting capacity and 
permit streamlining, provide support for permitting conducted by 
federal Agency and Field Offices, improve coordination within Interior 
agencies and with other Departments, provide technical assistance and 
training in the oversight and management of energy and financial 
resources, and ensure that Indian lands are not managed according to 
Federal public land management standards; and
    WHEREAS, Indian tribes seeking greater DOI support in the areas of 
energy development, oversight, management, proposal review and energy 
related financial management could elect to be served by this Office or 
could elect to contract the functions of this Office in a manner 
consistent with P.L. 93-638; and
    WHEREAS, existing BIA Regional Offices would continue to provide 
Indian tribes that have elected to utilize the new Office with support 
and oversight for all non-energy related issues; and
    WHEREAS, to coordinate and streamline permitting, the Office would 
also include staff from other DOI agencies and offices involved in 
energy permitting on Indian lands, including: the Bureau of Indian 
Affairs, the Bureau of Land Management, the Office of Valuation 
Services, the Office of Natural Resources Revenue, the Fish and 
Wildlife Service, the Office of Special Trustee, the Office of the 
Solicitor, mining engineering and minerals realty specialists from the 
Office of Surface Mining, and any other DOI offices involved in energy 
permitting on Indian lands; and
    WHEREAS, the establishment of the Office would utilize existing 
funding and resources from the OIEED's Division of Energy and Mineral 
Development and from each of the agencies and offices listed above, and 
allow for supplemental funding from industry partners in addition to 
new federal appropriations; and
    WHEREAS, within one year or less, the Office would enter into 
agreements with other Federal agencies to coordinate and streamline 
permitting, including: the Environmental Protection Agency, the United 
States Department of Agriculture, and the Army Corps of Engineers; and
    WHEREAS, on May 21, 2014, the Senate Committee on Indian Affairs 
approved with amendments S. 2132, a bill to amend the Indian Tribal 
Energy Development and Self-Determination Act of 2005 and for other 
purposes, however, the bill, as amended, would only study energy 
permitting delays for a year, meanwhile, Congressional action is 
immediately needed to reform and restructure federal oversight and 
permitting of Indian energy development.
    NOW, THEREFORE, BE IT RESOLVED, COLT calls upon Congress to pass 
legislation and that DOI take administrative action pursuant to a 
Secretarial Order to establish and implement an Indian Energy 
Regulatory Office as described in this resolution and the attached 
legislative proposal; and
    BE IT FURTHER RESOLVED, COLT calls upon Senator Tester, the 
Chairman of the Senate Committee on Indian Affairs, and other members 
of the Committee and the Senate to work with COLT and amend S. 2132 
before it comes to the Senate floor to include the attached legislative 
proposal; and
    BE IT FINALLY RESOLVED, this resolution shall be the policy of COLT 
until it is withdrawn or modified by subsequent resolution.
CERTIFICATION
    This resolution was enacted at a duly called meeting of the 
Coalition of Large Tribes held in Washington, D.C. on May 21, 2014, at 
which a quorum was present, with 4 members voting in favor, 0 members 
opposed, 0 members abstaining.

   Proposed Legislative Language for Indian Energy Regulatory Office
    Section 2602(a) of the Energy Policy Act of 1992 (25 U.S.C. 
3502(a)) is amended--

    (1) by redesignating paragraph (3) as paragraph (4);

    (2) by inserting after paragraph (2) the following:

    ``(3) INDIAN ENERGY REGULATORY OFFICE.--

        " ``(A) ESTABLISHMENT.--To assist the Secretary in carrying out 
        the Program, the Secretary shall establish an `Indian Energy 
        Regulatory Office' within the Secretary's Office to be located 
        in Denver, Colorado. The Office shall utilize the existing 
        resources of the Department's Office of Indian Energy and 
        Economic Development Division of Indian Energy and Mineral 
        Development.

         ``(B) DIRECTOR.--The Office shall be led by a Director who 
        shall be compensated at a rate equal to that of level IV of the 
        Executive Schedule under section 5315 of title 5, United States 
        Code and who shall report directly to the Deputy Secretary.

         ``(C) FUNCTIONS.--The Office shall serve as a new Bureau of 
        Indian Affairs (BIA) Regional Office that energy producing 
        Indian tribes may voluntarily select to replace an Indian 
        tribe's existing BIA Regional Office for the following 
        functions:

          (i) notwithstanding any other law, oversee, coordinate, 
        process and approve all Federal leases, easements, right-of-
        ways, permits, policies, environmental reviews, and any other 
        authorities related to energy development on Indian lands.

          (ii) support BIA Agency Office and tribal review and 
        evaluation of energy proposals, permits, mineral leases and 
        rights-of-way, and Indian Mineral Development Agreements for 
        final approval, conducting environmental reviews, and 
        conducting surface monitoring;

          (iii) review and prepare Applications for Permits to Drill, 
        Communitization Agreements and well spacing proposals for 
        approval, provide production monitoring, inspection and 
        enforcement, and oversee drainage issues;

          (iv) provide energy related technical assistance and 
        financial management training to BIA Agency Offices and tribal;

          (v) develop best practices in the area of Indian energy 
        development, including, standardizing energy development 
        processes, procedures, and forms among BIA Regions and Agency 
        Offices;

          (vi) minimize delays and obstacles to Indian energy 
        development and,

          (vii) provide technical assistance to Indian tribes in the 
        areas of energy related engineering, environmental analysis, 
        management and oversight of energy development, assessment of 
        energy development resources, proposals and financing, 
        development of conventional and renewable energy resources.

         ``(D) RELATIONSHIP TO BUREAU OF INDIAN AFFAIRS REGIONAL AND 
        AGENCY OFFICES.--

          (i) The Office shall have the authority to review and approve 
        all energy related matters for those tribes that elect to 
        utilize the Office, without subsequent or duplicative review 
        and approval by other BIA Regional Offices or other Interior 
        agencies. Existing BIA Regional Offices shall continue to 
        oversee, support and provide approvals for all other non-energy 
        related matters for those tribes that elect to utilize the 
        Office.

          (ii) BIA Agency offices and Bureau of Land Management (BLM) 
        State and Field offices shall continue to provide regional and 
        local services related to Indian energy development including, 
        local realty functions, on-site evaluations and inspections, 
        direct services as requested by Indian tribes and individual 
        Indian and any other local functions to related to energy 
        development on Indian lands.

          (iii) The Office shall provide technical assistance and 
        support to the BIA and BLM in all areas related to energy 
        development on Indian lands.

         ``(E) DESIGNATION OF INTERIOR STAFF.--The Secretary shall 
        designate and transfer to the Office existing staff and 
        resources of the Division of Energy and Mineral Development, 
        the Bureau of Indian Affairs, the Bureau of Land Management, 
        the Office of Valuation Services, the Office of Natural 
        Resources Revenue, the Fish and Wildlife Service, the Office of 
        Special Trustee, the Office of the Solicitor, mining 
        engineering and minerals realty specialists from the Office of 
        Surface Mining, and any other Interior agency or office 
        involved in energy development on Indian lands to provide for 
        the review, processing and approval of:

          (i) permits and regulatory matters under the Indian Mineral 
        Leasing Act of 1938 (25 U.S.C.   396a et seq.), the Indian 
        Mineral Development Act of 1982 (25 U.S.C.   2101 et seq.), 
        the Indian Tribal Energy Development and Self-Determination 
        Act, included as Title V of the Energy Policy Act of 2005 (25 
        U.S.C.   3501 et seq.), the Surface Mining Control and 
        Reclamation Act of 1977 (30 U.S.C.   1201) and its provisions 
        on Tribal Primacy; the Indian Right-Of-Way Act of 1948 (25 
        U.S.C.  323 to 328) and its implementing regulations at 25 
        C.F.R. Part 169, leasing provisions of 25 U.S.C. 415, and 
        surface leasing regulations at 25 C.F.R. Part 162;

          (ii) the consultations and preparation of biological opinions 
        under section 7 of the Endangered Species Act of 1973 (16 
        U.S.C.  1536) (ESA);

          (iii) the preparation of analyses under the National 
        Environmental Policy Act of 1969 (42 U.S.C.   4321 et seq.) 
        (NEPA); and,

          (iv) providing technical assistance and training in various 
        forms of energy development on Indian lands.

         (F) MANAGEMENT OF INDIAN LANDS.--The Director shall ensure 
        that all environmental reviews and permitting decisions comply 
        with the United States' unique legal relationship with Indian 
        tribal governments as set forth in the Constitution of the 
        United States, treaties, statutes, Executive Orders, and court 
        decisions, and are exercised in a manner that promotes tribal 
        authority over Indian lands consistent with the federal policy 
        of Indian Self-Determination. The Director shall also ensure 
        that Indian lands shall not be considered to be Federal public 
        lands, part of the public domain or managed according to 
        federal public land laws and policies.

         ``(G) INDIAN SELF-DETERMINATION.--Programs and services 
        operated by this Office shall be provided pursuant to contracts 
        and grants awarded under the Indian Self Determination and 
        Education Assistance Act of 1975 (25 U.S.C.  450f).

         (H) TRANSFER OF FUNDS.--To establish the Office and advance 
        these efforts, the Secretary shall authorize, for a period of 
        not to exceed two years, the expenditure or transfer of such 
        funds as are necessary from the annual budgets of:

          (i) the Bureau of Indian Affairs;

          (ii) the United States Fish and Wildlife Service;

          (iii) the Bureau Land Management;

          (iv) the Office of Surface Mining;

          (v) the Office of Natural Resources Revenue; and,

          (vi) the Office of Mineral Valuation.

         ``(I) BASE BUDGET.--Following the two year periods described 
        in (G) above, the combined total of the funds transferred 
        pursuant to those provisions shall serve the base budget for 
        the Office.

         ``(J) APPROPRIATIONS OFFSET.--All fees generated from 
        Applications for Permits to Drill, inspection, nonproducing 
        acreage, or any other fees related to energy development on 
        Indian Lands shall, commencing on the date the Office is 
        opened, be transferred to the budget of the Office and may be 
        utilized to advance or fulfill any of its stated duties and 
        purposes.

         ``(K) REPORT.--The Office shall keep detailed records 
        documenting its activities and submit an annual report to 
        Congress detailing, among others:

          (i) the number and type of federal approvals granted;

          (ii) the time it has taken to process each type of 
        application;

          (iii) the need for additional similar offices to be located 
        in other regions; and, (iv) proposed changes in existing law to 
        facilitate the development of energy resources on Indian lands, 
        improve oversight of energy development on Indian lands.

         ``(L) COORDINATION WITH ADDITIONAL FEDERAL AGENCIES.--Within 
        one year of establishing the Office, the Secretary shall enter 
        into a memorandum of understanding for the purposes 
        coordinating and streamlining energy related permits with--

          (i) the Administrator of the Environmental Protection Agency;

          (ii) the Assistant Secretary of the Army (Civil Works); and,

          (iii) the Secretary of Agriculture.

   The National Congress of American Indians--Resolution #ANC-14-011
TITLE: Supporting and Providing Additional Detail for New Bureau of 
        Indian Affairs Regional Office to Serve Energy Producing Tribes

    WHEREAS, we, the members of the National Congress of American 
Indians of the United States, invoking the divine blessing of the 
Creator upon our efforts and purposes, in order to preserve for 
ourselves and our descendants the inherent sovereign rights of our 
Indian nations, rights secured under Indian treaties and agreements 
with the United States, and all other rights and benefits to which we 
are entitled under the laws and Constitution of the United States, to 
enlighten the public toward a better understanding of the Indian 
people, to preserve Indian cultural values, and otherwise promote the 
health, safety and welfare of the Indian people, do hereby establish 
and submit the following resolution; and
    WHEREAS, the National Congress of American Indians (NCAI) was 
established in 1944 and is the oldest and largest national organization 
of American Indian and Alaska Native tribal governments; and
    WHEREAS, several Tribes located in the Phoenix Region, the Rocky 
Mountain Region, the Great Plains Region and the Southwest Region, as 
well as the Alaska Native communities, and are energy producing tribes 
or among those tribes with potential for energy production that rely or 
might rely in the future on mineral revenue income for infrastructure, 
economic development, jobs and income from the development of their 
mineral resources; and
    WHEREAS, at the 2013 Annual Session of NCAI held at Cox Business 
Center from October 13 to 18, 2013 in Tulsa, Oklahoma with a quorum 
present, the General Assembly adopted Resolution #TUL-13-012 entitled 
``Requesting the Bureau of Indian Affairs Create a New Regional Office 
for Energy Producing Tribes;'' and
    WHEREAS, the United States Congress is currently considering and 
the Department of the Interior (DOI) and the Bureau of Indian Affairs 
(BIA) are currently developing a proposal for a new Indian energy 
office; and
    WHEREAS, it is in the best interest of NCAI to provide the 
Congress, DOI and BIA with additional information and detail about the 
proposed office to ensure that the office will effectively serve Indian 
tribes; and
    WHEREAS, NCAI proposes to amend Section 2602(a) of the Energy 
Policy Act of 1992 (25 U.S.C. 3502(a)) to create a new Indian Energy 
Regulatory Office (Office) that would be centrally located in Denver, 
Colorado and utilize and refocus the existing resources and office 
space of the Office of Indian Energy and Economic Development's (OIEED) 
Division of Indian Energy and Mineral Development; and
    WHEREAS, establishing the Office in Denver, Colorado provides 
adequate housing and ease of recruiting new employees to a major 
metropolitan area, and proximity to other federal agencies involved in 
the energy permitting process; and
    WHEREAS, the Office would be established within the Secretary's 
Office, similar to the Indian Water Rights Office, to ensure that the 
Director of the Office has authority over the various agencies 
involved; and
    WHEREAS, the Office would replace current BIA Regional Office 
authorities and responsibilities for energy producing Indian tribes, 
and would not result in duplicative review and approval of energy 
projects; and
    WHEREAS, the Office would provide energy resource assessments and 
feasibility studies, technical assistance and training in energy 
development proposal review, increase BIA permitting capacity and 
permit streamlining, support for permitting expertise within BIA Agency 
Offices, improved coordination with other agencies, technical 
assistance and training in the oversight and management of energy and 
financial resources, and ensure that Indian lands are not managed 
according to Federal public land management standards; and
    WHEREAS, Indian tribes seeking greater BIA support in the areas of 
energy development, oversight, management, proposal review and 
financial assistance could elect to be served by this Office; and
    WHEREAS, existing BIA Regional Offices would continue to provide 
Indian tribes utilizing the new Office with support and oversight for 
all non-energy related issues; and
    WHEREAS, to coordinate and streamline permitting, the Office would 
also include staff from other DOI agencies and offices involved in 
energy permitting on Indian lands, including: the Bureau of Land 
Management, the Office of Mineral Evaluation, the Office of Natural 
Resources Revenue, the Fish and Wildlife Service, the Office of Special 
Trustee, the Office of the Solicitor; and
    WHEREAS, the establishment of the Office would not increase the 
deficit because it would utilize existing Federal resources in Denver, 
Colorado and existing funding from each of the agencies and offices 
listed above; and
    WHEREAS, the Office would enter into agreements with other Federal 
agencies to coordinate and streamline permitting, including: the 
Environmental Protection Agency, the United States Department of 
Agriculture, and the Army Corps of Engineers.
    NOW THEREFORE BE IT RESOLVED, that NCAI requests that Congress pass 
legislation requiring the Secretary of the Interior to establish and 
implement an Indian Energy Regulatory Office as described in this 
resolution and as reflected in the attached legislative proposal; and
    BE IT FURTHER RESOLVED, that this resolution shall be the policy of 
NCAI until it is withdrawn or modified by subsequent resolution.
CERTIFICATION
    The foregoing resolution was adopted by the General Assembly at the 
2014 Mid-Year Session of the National Congress of American Indians, 
held at the Dena'ina Civic & Convention Center, June 8-11, 2014 in 
Anchorage, Alaska, with a quorum present.
                                 ______
                                 
Prepared Statement of Shaun Chapoose, Chairman, Ute Indian Tribe of the 
            Uintah and Ouray Reservation Business Committee
Introduction
    Chairman Barrasso, Vice-Chairman Tester and Members of the 
Committee, thank you for the opportunity to testify on the Government 
Accountability Office's (GAO) report entitled ``Indian Energy 
Development: Poor Management Has Hindered Energy Development on Indian 
Lands.'' My name is Shaun Chapoose. I am the Chairman of the Business 
Committee for the Ute Indian Tribe of the Uintah and Ouray Reservation. 
The Ute Indian Tribe consists of three Ute Bands: the Uintah, the 
Whiteriver and the Uncompahgre Bands. Our Reservation is located in 
northeastern Utah.
    The Tribe appreciates the Chairman's request for GAO's 
investigation into issues that hinder Indian energy development. GAO's 
report provides an important perspective on an issue that the Committee 
has been studying since 2008. The GAO report cites a number of issues 
that the Committee and Congress could solve through legislation and 
increased budgets that reflect the value of Indian energy resources. 
The Tribe agrees with and supports the comments of many of the Senators 
who attended the hearing that Congress and the Bureau of Indian Affairs 
(BIA) should take action on these issues immediately.
    In fact, proposals that would address some of the issues cited in 
GAO's report are already before Congress. Senator Barrasso's bill, S. 
209, the Indian Tribal Energy Development and Self-Determination Act 
Amendments of 2015, would streamline the process for a tribe to obtain 
a Tribal Energy Resource Agreement (TERA) to achieve greater tribal 
control over energy resources, would provide needed financing 
opportunities for Indian energy projects, and would create 
opportunities for tribal hydroelectric, biomass and weatherization 
projects. In addition, the President's FY 2016 Budget includes a 
request for $4.5 million dollars to establish an Indian Energy Service 
Center in Denver, Colorado that would streamline and support permitting 
work in local BIA offices. The Tribe supports these proposals and asks 
Congress to take action to pass these proposals.
    In addition to the proposals currently before Congress, much more 
is needed to address the fundamental problems revealed in the GAO 
report. The GAO report found that the following factors have hindered 
Indian energy development:

   shortcomings in BIA management of Indian energy development 
        including a lack of comprehensive data, a lack of staff and a 
        lack of energy expertise;
   an overly complex regulatory framework;
   fractionated ownership interests;
   a lack of capital and tax credits;
   dual taxation of Indian energy resources by state 
        governments;
   lack of tribal capacity to oversee energy development; and,
   limited tribal or reservation infrastructure.

    GOV'T ACCOUNTABILITY OFFICE, INDIAN ENERGY DEVELOPMENT--POOR 
MANAGEMENT BY BIA HAS HINDERED ENERGY DEVELOPMENT ON INDIAN LANDS 18 
(June 2015). The Tribe asks that the Committee follow up on GAO's 
report and this oversight hearing by considering and reporting to the 
Senate floor additional legislation to address all of these issues.
    The Ute Indian Tribe itself has provided the Committee and members 
of Congress more than 32 legislative proposals, many with no cost to 
the government, that would address the full range of issues raised in 
GAO's report. The GAO report highlights what we have long known, 
``Indian energy resources are underdeveloped relative to surrounding 
non-Indian resources.'' It is also important to note, that the report 
does not just focus on BIA. GAO also cited to the Bureau of Land 
Management (BLM), the Fish and Wildlife Service (FWS), the 
Environmental Protection Agency (EPA), the National Environmental 
Policy Act (NEPA), and the Endangered Species Act (ESA) as a part of 
the ``complex regulatory framework'' that limits Indian energy 
development. Id. at 15-18.
    It has been almost 8 years since former Senator Dorgan called for 
reform of the bureaucratic permit approval process for Indian energy. 
He reported that a single oil and gas well must navigate a 49-step 
process involving at least 4 understaffed federal agencies. Since 
Senator Dorgan highlighted these issues there have been numerous 
Congressional hearings, testimony and roundtables. There is an 
extensive Congressional record and, as seen at this oversight hearing, 
there is also much agreement about the need for change.
Ute Indian Tribe's Experience with Energy Development
    The Ute Tribe is a major oil and gas producer and knows these 
issues all too well. Production of oil and gas began on our Reservation 
in the 1940s and has been ongoing for the past 70 years with 
significant periods of expansion. The Tribe leases about 400,000 acres 
for oil and gas development. We have about 7,000 wells that produce 
45,000 barrels of oil a day. We also produce about 900 million cubic 
feet of gas per day. And, we have plans for expansion. The Tribe is in 
process of opening up an additional 150,000 acres to mineral leases on 
our Reservation with an $80 million investment dedicated to 
exploration.
    The Tribe relies on its oil and gas development as the primary 
source of funding for our tribal government and the services we 
provide. We use these revenues to govern and provide services on the 
second largest reservation in the United States. Our Reservation covers 
more than 4.5 million acres and we have about 3,000 members living on 
the Reservation. The Tribe is also a major employer and engine for 
economic growth in northeastern Utah.
    Tribal businesses include a bowling alley, supermarket, gas 
stations, feedlot, an information technology company, manufacturing 
plant, and Ute Oil Field Water Services, LLC. Our governmental programs 
and tribal enterprises employ 450 people, 75 percent of whom are tribal 
members. Each year the Tribe generates tens of millions of dollars in 
economic activity in northeastern Utah.
    The Tribe takes an active role in the development of its resources, 
however, despite our progress, the Tribe's ability to fully benefit 
from its resources is limited by the federal agencies overseeing oil 
and gas development on the Reservation. For example, we need 10 times 
as many permits to be approved. Currently, about 48 Applications for 
Permits to Drill (APD) are approved each year for oil and gas 
operations on the Reservation. We estimate that 450 APDs will be needed 
each year as we expand operations.
    As the oil and gas companies who operate on the Tribe's Reservation 
often tell the Tribe, the federal oil and gas permitting process is the 
single biggest risk factor to operations on the Reservation. In order 
for the Tribe to continue to grow and expand our economy all of the 
issues raised by the GAO report need to be addressed. We request that 
the Committee take action beyond the issues addressed in S. 209. We 
need legislation that will address all of the agencies involved in the 
energy permitting process on Indian lands and will open up energy 
programs at the Department of the Energy to Indian tribes.
Addressing BIA's Management of Indian Energy Development
    The most promising solution to many of the issues raised by GAO 
would be to establish and fund an Indian Energy Regulatory Office that 
would overcome management issues, develop comprehensive data, and 
provide a home within the Administration for Indian energy staff and 
expertise. This Office would address the current lack of focus by 
providing a single office responsible for Indian energy permitting. The 
Tribe asks that the Committee approve legislation to create an Indian 
Energy Regulatory Office that would co-locate staff from all the 
agencies involved in one office to coordinate and streamline Indian 
energy permitting, and to provide the staff, expertise and resources 
needed for energy permitting. This Office could follow the FERC 
permitting model cited by GAO at the hearing.
    The Ute Indian Tribe, the Coalition of Large Tribes (COLT), and the 
National Congress of American Indians (NCAI) all support establishing 
this new Indian Energy Regulatory Office within the Department of the 
Interior. The Office would be located in Denver, Colorado and utilize 
many existing resources to provide staff and expertise that would 
support energy permitting at the local level. The Office would provide 
the focus, expertise and resources needed so that Indian tribes can 
effectively participate in this important part of the economy and 
contribute to the Nation's domestic energy supply.
    The Ute Indian Tribe and other tribes are also working with the BIA 
on its proposed Indian Energy Service Center. The Service Center is 
similar to our proposal, however, the Service Center proposal does not 
provide a Director who has all the authority necessary to issue permits 
and approve energy development on Indian lands--everything from 
permitting oil and gas wells, to environmental review of renewable 
energy and transmission projects. Instead, the Service Center relies on 
Memorandums of Agreement between the agencies. While we support the 
BIA's efforts, legislation is needed to provide the Director of this 
Office the authority to reach across agencies to get things done.
    We also need legislation to ensure that either the Service Center 
or the Office we propose fulfills basic Indian trust principles that 
have been lost in the current unorganized Federal system for overseeing 
energy development on Indian lands. In particular, our legislative 
proposal directs that Indian lands are not public lands. Both Congress 
and Interior have been clear on this point in the past, however, over 
time, Federal agencies have attempted to apply public land management 
standards to Indian lands.
    Current examples of treating Indian lands like public lands include 
the application of the National Environmental Policy Act (NEPA) to 
Indian lands, BLM's attempt to regulate hydraulic fracturing on Indian 
lands, and FWS's implementation of the ESA on tribal lands without 
considering tribal interests and the Federal government's trust 
responsibility. Legislation is needed to affirm the trust status of 
Indian lands, ensure Indian lands are managed according to Federal 
trust management standards as opposed to public land management 
standards, and finally provide the resources needed at Interior and BIA 
for the efficient processing of Indian energy permits and approvals.
    The Office we are proposing is long overdue. Congress provided 
similar authority for federal public lands 10 years ago in Section 365 
of the Energy Policy Act of 2005. Section 365 established a number of 
Permit Processing Improvement Offices in regions with high oil and gas 
permitting activity on federal public lands. These pilot offices were 
then made permanent by S. 2440 in the 113th Congress.
    The same support should be provided for Indian lands. Particularly 
given that the benefits of energy development far exceed the benefits 
on Federal lands. Energy development on Indian lands provides jobs, 
economic development, revenues for tribal governments, and, if managed 
properly, long-term investment reservation infrastructure. Attached to 
my testimony are NCAI and COLT resolutions in support of this Office as 
well as proposed legislative text.(See attachments printed Mark Fox's 
prepared statement)
Addressing Other Factors Hindering Indian Energy Development
    A number of other legislative reforms are needed to address the 
full range of issues raised in the GAO Report. Many of these are 
already before the Committee. In prior Congresses and in response to 
requests by former Senator Akaka, Senator Barrasso and, on the House 
side, Congressman Young, the Tribe developed 32 legislative proposals 
to improve Indian energy permitting, coordination and financing. These 
proposals were highlighted in hearings before the Senate Committee on 
Indian Affairs and the House Subcommittee on Indian, Insular and Alaska 
Native Affairs. To follow up on the GAO report and to finally make a 
difference in Indian energy development, the Tribe asks that the 
Committee consider and pass a variety of other legislative reforms.
    Below we highlight legislative reforms that would address gaps in 
the current system, clarify the authority of tribal governments to 
oversee energy activities on tribal lands and increase the resources 
available to tribes to address all aspects of energy development on 
tribal lands. The Tribe has already submitted legislative text to the 
Committee for these reforms. These reforms include:

   ensuring that Communitization Agreements do not delay 
        royalty payments;

   including tribes in well spacing decisions on Indian lands;

   ensuring that EPA's new regulation of minor sources in 
        Indian Country will not impede energy development;

   setting aside a portion of existing energy efficiency 
        funding for Indian tribes;

   setting aside a portion of existing weatherization funding 
        for Indian tribes;

   streamlining environmental reviews on Indian lands by 
        providing tribes with ``treatment as a sovereign'' status under 
        the National Environmental Policy Act (NEPA);

   clarifying that Indian lands are not public lands and 
        therefore are not subject to NEPA;

   preventing BLM's hydraulic fracturing regulations, designed 
        for public lands, from applying to Indian lands; and,

   supporting the capture and beneficial use of Indian energy 
        in remote locations through distributed generation and 
        community transmission on Indian lands.

    Through these legislative reforms, the Committee could address more 
of the issues raised in the GAO report and further unlock the potential 
of Indian energy development.
    Delayed Royalties Due to Communitization Agreements. The Secretary 
of the Interior has delegated the approval of oil and gas Communization 
Agreements to BLM. Instead of creating new unneeded regulatory 
responsibilities, like its hydraulic fracturing rule, BLM should 
fulfill its current obligations to timely review and approve 
Communitization Agreements. The Committee should require 
Communitization Agreements to be submitted at the time an Application 
for Permit to Drill is filed. This is possible when the oil and gas 
resource is well known. When this is not feasible, BLM should require 
that royalty payments from producing wells be paid within 30 days from 
the first month of production into an interest earning escrow account.
    Under current law, royalties are due within 30 days of the first 
month of production. However, without any authority, BLM has allowed 
royalty payments to be delayed for months and years pending the 
approval of Communitization Agreements. This violation of the law 
cannot be allowed to continue. The Tribe asks that the Committee 
consider and approve legislation to address BLM's delays in payments of 
oil and gas royalties due to approval of Communitization Agreements.
    Inclusion of Tribes in Well Spacing Decisions. Instead of treating 
Indian lands like public lands, BLM should commit staff resources to 
actually regulating well spacing on Indian lands and involving Indian 
tribes in oil and gas well spacing decisions. Currently, BLM defers the 
ability to determine well spacing on Indian lands to state well spacing 
forums and practices. Although BLM ultimately approves the oil and gas 
well spacing that was originally proposed in state forums, BLM should 
defer to and directly consult with Indian tribes in spacing 
determinations on Indian lands. BLM's current practice ignores its 
Federal authority, its trust responsibility to Indian tribes, and takes 
away any benefits that a tribe could have received by determining its 
own well spacing on its reservation lands.
    The Tribe asks that the Committee consider and approve legislation 
that would direct BLM to enter into oil and gas well spacing agreements 
with Indian tribes. These agreements would provide tribes every 
opportunity to participate in and ultimately determine spacing units on 
its reservation. The opportunity to participate in well spacing 
decisions and ultimately determine well spacing on Indian lands would 
involve tribes in an important aspect of regulating oil and gas 
development.
    Minor Source Regulation in Indian Country. Require EPA to delay 
implementation of its new synthetic minor source rule for two years to 
ensure appropriate staffing is in place to administer any new 
permitting requirements.
    Energy Efficiency Reforms. Despite a longstanding state energy 
efficiency program, there is no ongoing program to support tribal 
energy efficiency efforts. Tribal governments have the same energy 
efficiency needs as state governments. The Tribe asks the Committee to 
direct the Department of Energy to allocate not less than 5 percent of 
existing state energy efficiency funding to establish a grant program 
for Indian tribes interested in conducting energy efficiency 
activities.
    A tribal energy efficiency program could be modeled after the 
successful Energy Efficiency Block Grant (EEBG) program. Despite its 
success, the EEBG program was only funded one time--under the American 
Reinvestment and Recovery Act of 2009. To ensure an ongoing source of 
funding for tribal energy efficiency efforts, tribes should be provided 
a portion of the funding for state energy efficiency efforts. This 
program could lower tribal governmental energy costs and ultimately 
lower the Federal funding used by tribes to administer Federal programs 
at the local level.
    Weatherization Reforms. The Tribe asks that the Department of 
Energy's weatherization program be reformed consistent with the Federal 
Government's trust responsibility and to recognize the weatherization 
needs of Indian tribes. Under current law, the Department of Energy 
requires Indian tribes to obtain Federal funding through state 
governmental and non-profit entities administering weatherization 
programs. Tribes can only receive direct funding from the Department of 
Energy if a tribe can prove that it is not receiving funding that is 
equal to what the state is providing its non-Indian population. 
Currently, out of 566 federally recognized tribes, only two tribes and 
one tribal organization receive direct weatherization funding from 
Department of Energy. As a result, tribes are effectively excluded from 
the Federal Government's weatherization program.
    Weatherization funding does not benefit tribal homes for a number 
of other reasons. In particular, Indian tribes lack energy auditors to 
assess the weatherization needs of Indian homes. The Department of 
Energy's weatherization program must be reformed to provide direct 
funding to tribal governments, provide training for energy auditors in 
Indian Country and to reflect the unique weatherization needs of tribal 
homes. These reforms are needed to get weatherization funding to those 
who need it most. While the Tribe appreciates the weatherization 
changes included in Senator Barrasso's bill, S. 209, much more is 
needed.
    Environmental Review of Energy Project on Indian Lands. As the GAO 
report concludes, the environmental review of energy projects on Indian 
land is more extensive than on comparable private lands. This extensive 
review acts as a disincentive to development on Indian lands 
particularly given the understaffed Federal agencies overseeing Indian 
energy development. Similar to the Clean Water Act, Clean Air Act and 
others, the Committee could amend the National Environmental Policy Act 
(NEPA) to include treatment as a sovereign (TAS) provisions. The new 
provision would allow a tribe to submit an application to the Council 
on Environmental Quality and once approved, federal authority for 
completing environmental reviews would be delegated to tribal 
governments.
    Clarify that Indian Lands are not Public Lands Subject to NEPA. The 
10th Circuit Court of Appeals, in Davis v. Morton, 469 F.2d 593 (1972), 
equated Indian trust land to public lands and thus treats leases on 
Indian trust land as a major federal action subject to NEPA. The Court 
stated that exempting Indian lands from NEPA ``would preclude all 
federal lands from NEPA jurisdiction, something clearly not intended by 
Congress in passing the Act.'' Davis supports a sweeping interpretation 
of NEPA's application in Indian country and questions the fundamental 
differences between Indian lands and public lands. The Tribe asks that 
he Committee clarify that Indian lands are not ``public lands'' held in 
trust for the people of the United States. Indian lands are held in 
trust or restricted status for the use and benefit of the Indian tribes 
and its members. All other ``federal lands'' would still be subject to 
NEPA.
    BLM Hydraulic Fracturing Regulations. BLM's hydraulic fracturing 
regulations are based on public policy standards set out in the Federal 
Land Policy and Management Act standards. Not trust standards used to 
manage Indian lands. The Committee should approve legislation prevents 
BLM from regulating hydraulic fracturing on Indian Lands. For example, 
the Committee could including language that ``prohibits any Department 
of the Interior rule regarding hydraulic fracturing, used in oil and 
gas development or production, from having any effect on land held in 
trust or restricted status for Indians, except with the express consent 
of its Indian beneficiaries.''
    Distributed Generation and Community Transmission. The Tribe also 
asks that the Committee support new and emerging ways for tribes to 
beneficially use our energy resources and provide energy security for 
our communities. We need a new approach to capture and not waste 
valuable resources that are too far from existing transmission 
networks. The Tribe asks that the Committee direct the Department of 
Energy to conduct no fewer than 10 distributed energy demonstration 
projects to increase the energy resources available to Indian and 
Alaska Native homes, communities, and government buildings. Priority 
should be given to projects that utilize local resources, and reduce or 
stabilize energy costs.
Conclusion
    The GAO report highlights the need for accountability and reform in 
Indian energy permitting. The GAO report concluded that, ``The 
development of Indian energy resources has the potential to provide 
significant benefits to Indian tribes, tribal members, and the Nation 
through both tribal economic development opportunities and by 
contributing to the Nation's energy production.'' Id. at 35. However, 
GAO found that a number of factors, including poor management by BIA, 
limits the ability of Tribes to developer their resources. Id. GAO 
recommended that, ``Federal policy calls for providing enhanced self-
determination and economic development opportunities for Indian tribes 
by promoting tribal oversight and management of energy resource 
development on tribal lands.'' Id. at 36.
    The Tribe asks that the Committee take action to improve the 
agencies and laws that we must work with to develop our energy 
resources. There was agreement at the hearing that action is needed 
now. Thank you for the opportunity to provide this testimony.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Steve Daines to 
                          Lawrence S. Roberts
    Mr. Roberts, as I expressed at the hearing, the tribal trust 
relationship must be upheld appropriately and meaningful consultation 
with tribes must take place between the Bureau of Indian Affairs and 
tribes regarding energy projects and also as federal agencies issue 
regulations that affect them. The Hydraulic Fracturing rule, which we 
discussed, is a perfect example. You responded describing the Indian 
Energy Service Center as an aid to the current inadequacy in tribal 
consultation.
    Question. Among the vast hurdles to energy development in Indian 
Country, I have heard from some tribes that BIA personnel is a 
particular stumbling block to getting approval for energy projects. 
Whether it's an expertise or a bandwidth issue, staffing challenges are 
a consistent theme. Regardless, most tribes seem to prefer to have BIA 
personnel focused on energy development on the ground in regional and 
field offices. Especially because this Center would require 
appropriations from Congress and would be located in Denver, CO, far 
away from Montana Indian Country, can you explain what specific results 
would be achieved in Montana Indian Country? Have you established goals 
for the energy project review process, such as improving timelines for 
review, measuring cost and staff hours saved, and determining how 
tribal consultation would be improved amongst other federal agencies?
    Answer. The mission of the Indian Energy Service Center (IESC) is 
to provide a wide suite of support services to the Bureau of Indian 
Affairs (BIA) Agencies and Regional Offices; Bureau of Land Management 
(BLM) Field Offices and State Offices; Office of the Special Trustee 
for American Indians (OST) Fiduciary Trust Officers and Regional Trust 
Administrators; and the Office of Natural Resources Revenue (ONRR) for 
purposes of expediting the leasing, permitting, developing, and 
reporting for oil and gas development on Indian trust lands. 
Fundamental to this effort is responsiveness to trust mineral estate 
owners (tribal and allotted) and coordination between Federal agencies. 
In support of this mission the IESC would:

   Serve as a processing center for expediting nationwide trust 
        functions where this service is more efficiently provided by an 
        offsite work team in support of agencies and field, regional 
        and state offices.

   Provide direct support, technical advice and contractual 
        services to:

  --Help formulate and develop consistent policy, rules, regulations, 
        and business processes;

  --Identify and assist with implementation of best practices for 
        deployment throughout the appropriate bureau or office;

  --Develop statements (scope of work) and funding for contracts to 
        provide direct services in support of energy development.

  --Address impediments restricting the timely development of energy 
        resources.

   Consult, coordinate, and collaborate to promote resource 
        sharing between Interior Bureaus, tribes and Indian land owners 
        in the resolution of issues that impede energy development.

   Serve as a center point for collaboration with other Federal 
        bureaus for expediting energy development.

   Support tribal consultation on energy development for BIA, 
        BLM, ONRR, and OST.

   Provide a program assessment and evaluation of existing 
        program operations.

   Conduct training of Interior employees that have a role in 
        energy programs.

    As capacity is built, the IESC will perform work for which it has 
developed expertise in support of the Department's energy and mineral 
development responsibilities. The IESC work will be prioritized with 
input from the affected bureau or agencies and adjusted as IESC builds 
capacity.
    The IESC has requested each of the BIA Regional Offices to identify 
their needs to help expedite energy development and leasing activities. 
The BIA Rocky Mountain regional office specifically requested training, 
records management, data entry and examination, field work for 
abandoned well reclamation, and responding to Indian mineral owner 
inquiries. IESC support in these areas will allow for the BIA Region 
and agencies to focus on the day to day energy development activity on 
reservations. In addition, there were perceived benefits to co-locating 
the IESC with the existing Office of Indian Energy and Economic 
Development's Division of Energy and Minerals Development, which has 
been taking the lead for Indian Affairs in the past several years to 
fill the gap for Indian energy.

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