[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
TRIBAL AUTONOMY AND ENERGY DEVELOPMENT: IMPLEMENTATION OF
THE INDIAN TRIBAL ENERGY DEVELOPMENT AND SELF-DETERMINATION ACT
=======================================================================
OVERSIGHT HEARING
before the
SUBCOMMITTEE ON INDIAN AND INSULAR AFFAIRS
of the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
Thursday, September 28, 2023
__________
Serial No. 118-65
__________
Printed for the use of the Committee on Natural Resources
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
or
Committee address: http://naturalresources.house.gov
_________
U.S. GOVERNMENT PUBLISHING OFFICE
53-643 PDF WASHINGTON : 2024
COMMITTEE ON NATURAL RESOURCES
BRUCE WESTERMAN, AR, Chairman
DOUG LAMBORN, CO, Vice Chairman
RAUL M. GRIJALVA, AZ, Ranking Member
Doug Lamborn, CO
Robert J. Wittman, VA
Tom McClintock, CA
Paul Gosar, AZ
Garret Graves, LA
Aumua Amata C. Radewagen, AS
Doug LaMalfa, CA
Daniel Webster, FL
Jenniffer Gonzalez-Colon, PR
Russ Fulcher, ID
Pete Stauber, MN
John R. Curtis, UT
Tom Tiffany, WI
Jerry Carl, AL
Matt Rosendale, MT
Lauren Boebert, CO
Cliff Bentz, OR
Jen Kiggans, VA
Jim Moylan, GU
Wesley P. Hunt, TX
Mike Collins, GA
Anna Paulina Luna, FL
John Duarte, CA
Harriet M. Hageman, WY
Grace F. Napolitano, CA
Gregorio Kilili Camacho Sablan,
CNMI
Jared Huffman, CA
Ruben Gallego, AZ
Joe Neguse, CO
Mike Levin, CA
Katie Porter, CA
Teresa Leger Fernandez, NM
Melanie A. Stansbury, NM
Mary Sattler Peltola, AK
Alexandria Ocasio-Cortez, NY
Kevin Mullin, CA
Val T. Hoyle, OR
Sydney Kamlager-Dove, CA
Seth Magaziner, RI
Nydia M. Velazquez, NY
Ed Case, HI
Debbie Dingell, MI
Susie Lee, NV
Vivian Moeglein, Staff Director
Tom Connally, Chief Counsel
Lora Snyder, Democratic Staff Director
http://naturalresources.house.gov
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SUBCOMMITTEE ON INDIAN AND INSULAR AFFAIRS
HARRIET M. HAGEMAN, WY, Chair
JENNIFFER GONZALEZ-COLON, PR, Vice Chair
TERESA LEGER FERNANDEZ, NM, Ranking Member
Aumua Amata C. Radewagen, AS Gregorio Kilili Camacho Sablan,
Doug LaMalfa, CA CNMI
Jenniffer Gonzalez-Colon, PR Ruben Gallego, AZ
Jerry Carl, AL Nydia M. Velazquez, NY
Jim Moylan, GU Ed Case, HI
Bruce Westerman, AR, ex officio Raul M. Grijalva, AZ, ex officio
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CONTENTS
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Page
Hearing held on Thursday, September 28, 2023..................... 1
Statement of Members:
Hageman, Hon. Harriet M., a Representative in Congress from
the State of Wyoming....................................... 1
Leger Fernandez, Hon. Teresa, a Representative in Congress
from the State of New Mexico............................... 3
Statement of Witnesses:
Baker, Hon. Melvin J., Chairman, Southern Ute Indian Tribe,
Ignacio, Colorado.......................................... 5
Prepared statement of.................................... 6
Questions submitted for the record....................... 12
Desautel, Cody, Executive Director, Confederated Tribes of
the Colville Reservation, Nespelem, Washington............. 12
Prepared statement of.................................... 14
Questions submitted for the record....................... 16
Lovesee, Nicholas, Director of Policy, Native American
Finance Officers Association, Washington, DC............... 17
Prepared statement of.................................... 19
Questions submitted for the record....................... 22
Becker, Bidtah, Chief Legal Counsel, Office of the President
and Vice President, Navajo Nation, Window Rock, Arizona.... 23
Prepared statement of.................................... 24
Questions submitted for the record....................... 25
OVERSIGHT HEARING ON TRIBAL AUTONOMY AND ENERGY DEVELOPMENT:
IMPLEMENTATION OF THE INDIAN TRIBAL ENERGY
DEVELOPMENT AND SELF-DETERMINATION ACT
----------
Thursday, September 28, 2023
U.S. House of Representatives
Subcommittee on Indian and Insular Affairs
Committee on Natural Resources
Washington, DC
----------
The Subcommittee met, pursuant to notice, at 10:21 a.m., in
Room 1334 Longworth House Office Building, Hon. Harriet Hageman
[Chairwoman of the Subcommittee] presiding.
Present: Representatives Hageman, LaMalfa, Carl, Westerman;
and Leger Fernandez.
Ms. Hageman. The Subcommittee on Indian and Insular Affairs
will come to order. Without objection, the Chair is authorized
to declare a recess of the Subcommittee at any time.
The Subcommittee is meeting today to hear testimony on
Tribal Autonomy and Energy Development: Implementation of the
Indian Tribal Energy Development and Self-Determination Act; I
like that name. Under Committee Rule 4(f), any oral opening
statements at hearings are limited to the Chairman and the
Ranking Minority Member. I therefore ask unanimous consent that
all other Member's opening statements be made part of hearing
record if they are submitted in accordance with Committee Rule
3(o).
Without objection, so ordered.
I will now recognize myself for an opening statement.
STATEMENT OF THE HON. HARRIET M. HAGEMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WYOMING
Ms. Hageman. This camera is kind of in our way, and I
apologize for that. We will try to fix that next time.
Tribes and individual Indians control roughly 56 million
acres of land, much of which holds untapped energy and mineral
potential. For example, 30 percent of the coal reserves west of
the Mississippi River are found on tribal lands. An additional
approximately 44 million acres of land in Alaska are owned in
fee simple by Alaska Native corporations who have also sought
to develop mineral and energy resources on those lands.
These untapped resources can be a key revenue source for
tribes, particularly in rural areas, and can increase the U.S.
supply of energy. And several tribes have chosen to develop
those resources for the benefit of their tribes, tribal
members, and surrounding communities. However, development of
projects on tribal trust lands requires jumping through more
hoops, more bureaucracy, and involves more agencies than on any
other type of land. We need to change that.
A tribe must also go through the Bureau of Indian Affairs
as well as any other applicable Department of the Interior
agencies and receive approval before any energy project can
move forward. This increases costs for developing any projects,
surface or subsurface, on Indian lands and impacts private
investment opportunities that a tribe may want to pursue.
Congress has worked toward easing these restrictions to
provide a more even playing field for our tribes, and in 2005,
Congress authorized the Tribal Energy Resource Agreements, or
TERAs, as a way to give tribes more autonomy over energy
projects on their lands. Once a tribe has established a TERA
and had it approved by the Department of the Interior, a tribe
could enter into energy project agreements with developers
without the need for Secretarial approval for each project.
Yet, tribes had more questions than answers after regulations
governing the creation of TERAs were finalized, and no tribe
has chosen to go through the process to implement one.
In an effort to streamline the TERA process, as well as
benefit other tribal energy goals, Congress passed the Indian
Tribal Energy Development and Self-Determination Act amendments
in 2018. Despite its passage, issues with the TERA process have
remained and no tribe has yet entered into these agreements.
Other provisions of the 2018 law were either not fully
implemented, like the Biomass Demonstration Project, or were
not fully taken advantage of, like the extended leasing
authority provisions.
I look forward to talking with our witnesses as each have
dealt with the difficult energy development landscape for
tribes. It is important that we hear from the Indian tribes
about the barriers, remaining issues, and what future
activities they wish to seek to meet energy autonomy.
As I have said before, expanding the ability of tribes to
use their land in ways without needing to come to the
government for approval is crucial for furthering self-
determination and economic security. Each tribe is uniquely
situated within their lands, their culture, and their history.
Tribal governments already seek to make the best decisions for
their members, for their social, cultural, and economic
security.
Congress has a responsibility to all Americans to work
toward abundant, affordable energy and ensure tribes are able
to develop their energy resources as best suits the needs and
desires of each community. Energy development on tribal lands
is not only beneficial for our tribes but for the United States
as a whole, for each and every one of us. We need an all-of-
the-above energy strategy, and I do not think that this can be
accomplished without the partnership of federally recognized
tribes.
Thank you to the witnesses for being with us today. I look
forward to our discussion and I look forward to continuing this
conversation about what tribal autonomy and energy policy
should be in the future.
The Chair now recognizes the Ranking Minority Member for
any statement.
STATEMENT OF THE HON. TERESA LEGER FERNANDEZ, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW MEXICO
Ms. Leger Fernandez. Thank you so much, Madam Chair, and
good morning to everybody. [Speaking Native language], and
thank you to our witnesses for joining us today. I only know
good morning in a few languages, including Navajo.
The Federal Government has a trust responsibility to
promote tribal self-government and sovereignty of American
Indians and Alaska Natives, including their ability to develop
their economy and their natural resources. Today's hearing will
focus on the need to uphold that responsibility and improve the
Acts that we just heard about, because we know that the Tribal
Autonomy and Energy Development Acts are not working, or else
tribes would be using them.
And I have worked with tribes for over three decades on
both renewable energy and fossil fuel projects. I worked on
trying to get one of those TERAs written and passed. But
throughout those decades, I always heard the same thing, tribes
want and need to be in control of their projects. Everybody is
shaking their heads up and down because we know that is a fact.
Tribes have incredible opportunities for energy development,
and when tribes are in control, we know they do a better job
protecting their environment and cultural resources.
An interesting fact. All of us in this room know that
tribes have nearly 7 percent of the nation's potential for
large-scale clean energy projects like solar, window, and
geothermal. We know tribes don't come anywhere near to meeting
that potential. But there is no reason they shouldn't. Our job
here in Congress is to give tribes the opportunities to realize
that potential.
Last year, Congress took positive steps to support tribal
energy development, particularly through the Inflation
Reduction Act. The IRA increased funding for the Tribal Energy
Loan Guarantee Program from about $2 billion to $20 billion to
support tribal investment in energy-related projects. And
unlike the TERA, we are seeing tribes take advantage of that
funding.
It also provided tribes access to direct-pay tax
incentives. As we know, before the IRA, existing tax incentives
didn't work for tribes because you are governmental and don't
pay those taxes. This change will help tribal energy projects
build more quickly and affordably through our existing clean
energy programs.
The IRA also provided $150 million for the Tribal
Electrification Program. This program provides tribes with
financial and technical assistance for getting zero emission
electricity to their homes. I always like to say, we need to
build that Route 66 of renewable energy so we can transport
over the grid what we need to the people who need it.
Unfortunately, all of our witnesses today know too well
that many tribes continue to face barriers accessing all of our
programs and the resources needed for energy development. For
example, states receive administrative funding for energy
projects, but tribes often don't. Federal agencies have
oversight over nearly every significant land transaction on
tribal lands: appraisals, leasing, permits, rights-of-ways, and
environmental reviews.
Renewable energy developers may find it takes twice as long
to develop a project in Indian Country than elsewhere. The
volume of bureaucratic red tape and lack of coordination deters
investment in energy development, and the Chair and I share the
concern of addressing that.
In 2017, Congress amended the Indian Tribal Energy and
Self-Determination Act to provide direction and clarity so
tribes could be afforded the same opportunities as states and
localities. But did they really help? We still don't have a
tribe utilizing the TERA. I think because, in my experience,
the TERA sort of replicated all of the bureaucratic red tape
that was already in existence. So, we need to do more. We need
to continue to work on simplification so tribes can take
advantage of this.
I truly look forward to hearing from our witnesses. I have
worked with several of your tribes on different issues over the
years, and I am very curious as to what you think we could do
best.
But I also want to raise that we are barreling toward a
government shutdown right now. I am going to ask you how a
government shutdown will impact an already lengthy process for
getting approvals. I hope we don't have it, but once we get
past a government shutdown, we know there will be an even
bigger backlog. And I am very concerned about proposed cuts to
the Department of the Interior and will also want to hear your
thoughts on whether we should increase funding so that we could
get more of these projects approved and what potential cuts
would mean to getting your projects approved.
With that, I yield back, and thank you very much.
Ms. Hageman. Thank you. I will now introduce our witnesses
for our panel.
The Honorable Melvin J. Baker, Chairman, Southern Ute
Indian Tribe, Ignacio, Colorado; Mr. Cody Desautel, Executive
Director, Confederated Tribes of the Colville Reservation,
Nespelem, Washington; Mr. Nicholas Lovesee, Director of Policy,
Native American Finance Officers Association, Washington, DC;
and Ms. Bidtah Becker, Chief Legal Counsel, Office of the
President and Vice President, Navajo Nation, Window Rock,
Arizona.
Thank you for being here. We appreciate your willingness to
come and talk to us about these extremely important issues.
Let me remind the witnesses that under Committee Rules,
they must limit their oral statements to 5 minutes, but their
entire statement will appear in the hearing record. To begin
your testimony, please press the ``talk'' button on the
microphone. We use timing lights. When you begin, the light
will turn green. When you have 1 minute left, the light will
turn yellow. At the end of 5 minutes, the light will turn red,
and I will ask you to please complete your statement. I will
also allow all witnesses in the panel to testify before Member
questioning.
The Chair now recognizes Chairman Melvin Baker for 5
minutes.
STATEMENT OF THE HON. MELVIN J. BAKER, CHAIRMAN, SOUTHERN UTE
INDIAN TRIBE, IGNACIO, COLORADO
Mr. Baker. [Speaking Native language.] Good morning.
Welcome, everybody.
Good morning, Chair Hageman, Ranking Member Leger
Fernandez, and other Committee members.
My name is Melvin Baker, Chairman of the Southern Ute
Indian Tribe. Thank you for allowing us to speak here today on
behalf of the Tribe.
For decades, our tribal leaders have come before
congressional committees to discuss the prudent development of
energy resources in Indian Country. The subject of today's
hearing is tied to issues of tribal sovereignty.
Our Tribe has just under 1,500 members. Our Reservation
consists of approximately 700,000 acres of land in Southwestern
Colorado with over 300,000 surface acres of the Reservation
held in trust. The Tribe is also the beneficial owner of
additional severed mineral estates held in trust for the Tribe.
The Tribe has developed a record of sound managerial
experience and business practice. The Southern Ute Indian Tribe
was the first in the nation with a AAA credit rating. We are
the largest employer in Southwest Colorado and our members have
jobs, health insurance, and the opportunity to obtain a college
or vocational degree. Our elders have stable retirement
benefits, and our investment portfolio is diverse in energy and
non-energy assets both on and off the Reservation that span 16
states. We are on the way to providing our grandchildren and
their grandchildren the opportunity to maintain our Tribe, our
culture, and our lands in perpetuity.
Through the use of Federal self-determination policy, our
Tribe has learned that we can do a better job of developing
programs and providing services to our members than Federal
agencies can. Conservation is fundamental to our Ute identity,
and we have been proactive in overseeing the environmental
protection of our lands while effectively managing our energy
resources.
In 1990, the Tribe established a water quality program to
protect and preserve the quality of the Tribe's water resources
by regulating the discharge of pollutants in the tribal waters.
In 2012, the Tribe pioneered the Nation's first tribal clean
air program. Other departments within the Tribe assist in
monitoring wildlife enhancement, habitat, and preserving
culture and archeologically resources.
Federal law still requires Federal review and approval of
most basic realty transactions occurring on tribal trust lands.
Realty transactions trigger an environmental review under NEPA.
The NEPA review second guesses the Tribal Council's decisions
on how to best use our tribal trust lands and cause significant
delays and lost opportunities.
In 2016, the Tribe spent significant time and funding on a
supplemental EIS for energy development. The Federal agency co-
leading with the Tribe had removed itself. This has been left
unresolved and the Tribe does not have a clear path forward.
To eliminate administrative delays and in recognition of
the ability of tribal governments to protect their own
interests, Congress authorized tribes to exercise greater
control over their land through the HEARTH Act. Our Tribe's
environmental review code and service leasing code received
Secretarial approval under the HEARTH Act earlier this year.
Obtaining timely approval of oil and gas leases and
developmental permits has also been challenging. The Energy
Policy Act of 2005 has not been as successful as the HEARTH Act
since no tribe has submitted a Tribal Energy Resource
Agreement, or TERA, to the Secretary for final review and
approval. A TERA is a bilateral agreement with the Secretary
negotiated with the tribe that allows the tribe to contract and
approve energy agreements and leases without further Secretary
approval.
Our Tribe submitted input in 2014 to the Senate Committee
on Indian Affairs as to why no tribe had entered into a TERA.
One of the reasons is that the BIA regulations minimize tribal
authority reserving to the Federal Government an array of
functions called inherent Federal functions, an undefined term
that deluded the Act's goal of fostering tribal decision making
and self-determination.
Despite positive amendments to the law in 2018, still no
tribe has entered into a TERA. Energy-producing tribes like the
Southern Ute are still waiting for promised clarification
regarding inherent Federal functions. The lack of clarity on
this item shows a disregard by the Interior for the ambiguous
objectives of Congress. It also undermines the time, expense,
and the lost opportunities associated with participating in the
uncertain TERA process.
I trust this testimony provides backgrounds about how TERAs
became embraced in law and how Interior's regulations were
developed. We still believe that TERAs are a valuable option
for tribes, including our Tribe, should clarification be
provided on inherent Federal function.
I would like to thank the Committee for the opportunity to
present this testimony this morning.
[Speaking Native language.] Thank you.
[The prepared statement of Mr. Baker follows:]
Prepared Statement of the Honorable Melvin J. Baker, Chairman, Southern
Ute Indian Tribal Council
I. INTRODUCTION
Good morning, Chair Hageman, Ranking Member Leger-Fernandez, and
other Committee members. I am Melvin J. Baker, Chairman of the Southern
Ute Indian Tribal Council, the governing body of the Southern Ute
Indian Tribe. It is an honor to appear before you today to discuss a
subject of major importance. For decades, our Tribal leaders have come
before Congressional committees and subcommittees to discuss the
prudent development of energy resources in Indian Country. Prudent
development of Tribal energy resources allows Tribal economies to grow
and also helps meet the energy needs of the American people. The
subject of today's hearing is tied to issues of Tribal sovereignty. I
trust that our comments will be of value to the Committee.
In this testimony, I will describe our Reservation and how energy
development has affected our people. I also want to share with you our
role in seeking passage of the Indian Tribal Energy Development and
Self-Determination Act of 2005 (25 U.S.C. Sec. Sec. 3501-3506) and the
amendments to that law enacted in 2018. The job of making that
legislation work for Tribes is not over, and I want to share with you
what we see as obstacles to its effectiveness. With that, let me first
describe our Tribe and where I come from.
II. THE SOUTHERN UTE INDIAN TRIBE AND OUR RESERVATION
As the oldest inhabitants to what is now the State of Colorado our
Tribe has just under 1,500 members. Our Reservation consists of
approximately 700,000 acres of land located in southwestern Colorado,
near the Four Corners area. Some 311,000 surface acres of the
Reservation are held in trust by the federal government for the benefit
of the Tribe; however, the Tribe is also the beneficial owner of
additional severed mineral estates held in trust for the benefit of the
Tribe within the Reservation. Although the bulk of the Reservation
involves tribal trust lands, interspersed throughout the Reservation
are federal, state, and private lands, as well as some Indian allotted
lands.
Through financial discipline and farsighted leadership, the Tribe
has developed a record of sound managerial experience and business
practice. For instance, the Tribe was the first Tribe in the nation
with a AAA+ credit rating, which was earned through years of steady
governance and successful business management. The path to successful
economic development has had significant challenges. Fifty years ago,
our Tribal Council had to suspend the practice of distributing per
capita payments to Tribal members because the Tribe could not afford
them. Today the Tribe is the largest employer in southwest Colorado
with more than 1,000 employees. The Tribe provides health insurance for
its Tribal members and operates its own health clinic. The Tribe funds
educational opportunity so that all members may obtain a college or
vocational degree and runs its own Montessori Academy for elementary
and middle school children. The campus of our Tribal headquarters is
dotted with state-of-the art buildings, including a justice center,
museum, and recreational health facility. This success was not an
accident; it is the product of sustained effort and discipline.
Without question, the Tribe's economic success has been tied to
development of the Tribe's oil and gas resources. Successful
development of those resources, principally coalbed methane gas
(``CBM''), has resulted in a higher standard of living for our Tribal
members. Our members have jobs. Our educational programs provide
meaningful opportunities at all levels. Our elders have stable
retirement benefits. We have exceeded our financial goals, and we are
well on the way to providing our grandchildren and their grandchildren
the opportunity to maintain our Tribe, our culture, and our lands in
perpetuity.
Successful energy development has also enabled the Tribe to invest
in diverse, non-energy projects, strengthening the foundation for long-
lasting economic prosperity. For example, the Tribe has made real
estate investments in multiple markets. These investments include
residential, commercial, industrial, and hotel properties in
California, Colorado, Texas, Kansas, Illinois, Ohio, Florida, Maryland,
New Jersey, and Tennessee. Even greater diversification is reflected in
the Tribe's investments in managed private equity funds involving
hundreds of portfolio companies. Returns on these investments have
spurred further economic growth for the Tribe, which would not have
been possible but for the Tribe's active efforts to control and develop
its energy resources.
III. TAKING CONTROL OF OUR OWN RESOURCES: TRIBAL SOVEREIGNTY AND SELF-
GOVERNMENT
Indian self-determination has been the hallmark of federal Indian
policy since 1970, and our Tribe has learned that we can do a better
job of developing programs for the Tribe and providing services to our
members than federal agencies can. In some instances, the Tribe has
chosen to enter into ``638 contracts'' under the Indian Self-
Determination and Education Assistance Act, 25 U.S.C. Sec. Sec. 5301,
et seq., which authorizes the Tribe to do the tribally-related work of
federal agencies and receive the federal funding that would have gone
to a federal agency to perform that function. In other instances, the
lack of federal funding or focus has required the Tribe to simply fill
the void with its own programs and services.
Energy development on our lands has evolved over time. Our
Reservation is part of the San Juan Basin, which has been a prolific
source of oil and natural gas production since the 1940s. Beginning in
1949, the Tribe began issuing mineral leases under the supervision of
the Secretary of the Interior. For decades, we maintained a passive
role, receiving modest royalty revenue, but we were not engaged in any
comprehensive resource management planning.
That changed in the 1970s as we and other energy resource Tribes in
the West recognized the potential importance of monitoring oil and gas
companies for lease compliance and keeping a watchful eye on the
federal agencies charged with managing our resources. In 1974, the
Tribal Council placed a moratorium on oil and gas development on the
Reservation until the Tribe could gain a better understanding and more
control over that process. The moratorium on leasing remained in place
for 10 years while the Tribe compiled information and evaluated the
quality and extent of its mineral resources.
A series of events in the 1980s laid the groundwork for our
subsequent success in energy development. In 1980, the Tribal Council
established an in-house Energy Department, which spent years gathering
historical information about our energy resources and lease records. In
1982, following the Supreme Court's decision in Merrion v. Jicarilla
Apache Tribe, 455 U.S. 130 (1982), the Tribal Council instituted a
severance tax, which has produced more than $900 million in revenue for
the Tribe over the last four decades.
With the enactment of the Indian Mineral Development Act of 1982,
25 U.S.C. Sec. Sec. 2101-2108, (``IMDA''), we carefully negotiated
mineral development agreements with oil and gas companies involving
unleased lands and insisted upon flexible provisions that vested the
Tribe with business options and greater involvement in resource
development. Because the Tribe's leaders believed that the Tribe could
do a more thorough job of monitoring the royalty payment practices of
oil and gas companies, shortly after passage of the Federal Oil and Gas
Royalty Management Act of 1982, 30 U.S.C. Sec. Sec. 1701, et seq., the
Tribe entered into a cooperative agreement with the Minerals Management
Service (``MMS'') (later named the Office of Natural Resource Revenue)
permitting the Tribe to conduct its own royalty accounting and auditing
under that agency's ultimate oversight. The Tribe's award-winning
royalty audit program has been instrumental in recovering tens of
millions of dollars of delinquent royalties, interest, and civil
penalties.
In 1992, we started our own gas operating company, Red Willow
Production Company, which was initially capitalized through a
Secretarially-approved plan for use of $8 million of tribal trust funds
held by the Secretary as part of a settlement of our reserved water
right claims. Through conservative acquisition of on-Reservation
leasehold interests, we began operating our own wells and received
working interest income as well as royalty and severance tax revenue.
Today, Red Willow successfully operates hundreds of wells on the
Reservation. It has also been a regional leader in successful
development of horizontal drilling in coal formations, which has
increased CBM production volumes while dramatically decreasing adverse
surface impacts.
In 1994, we participated with a partner to purchase one of the main
pipeline-gathering companies on the Reservation. Today, the Tribe is
the majority owner of Red Cedar Gathering Company, which provides
gathering, processing, and treating services throughout the
Reservation. Ownership of Red Cedar Gathering Company allowed us to put
the infrastructure in place to further develop and market CBM from
Reservation lands and has provided a significant source of revenue for
the Tribe.
Just as we have relied economically on oil and gas development, we
have also been active in overseeing environmental protection. In 1990,
the Tribe established a Water Quality Program to protect and preserve
the quality of the Tribe's water resources through management of
various Clean Water Act programs. With support from the U.S.
Environmental Protection Agency (``EPA''), the Tribe has established
its own water quality standards and is actively involved in regulating
the discharge of pollutants into tribal waters on the Reservation. In
2012, the Tribe became the first tribe in the country to operate its
own clean air program pursuant to the Federal Clean Air Act, 42 U.S.C.
Sec. Sec. 7401, et seq. Other departments within the Tribe's
governmental organization assist in monitoring wildlife, enhancing
habitat, and preserving cultural and archaeological resources on the
Reservation.
IV. MORE RECENT EXAMPLES OF TRIBAL SELF-DETERMINATION
Despite the Tribe's decades-long success in managing its own
affairs and conducting complex business transactions, both on and off
the Reservation, federal law and regulations still require federal
review and approval of the most basic realty transactions occurring on
the lands held in trust for the Tribe. Federal approval constitutes
federal action, which triggers environmental review under the National
Environmental Policy Act (``NEPA''), 42 U.S.C. 4332(2)(C), even for
simple and straightforward realty transactions. In addition to second-
guessing the Tribal Council's decisions on how to use its tribal trust
lands, federal agency NEPA review can cause significant delays and lost
opportunities.
To eliminate administrative delays, and in recognition of the
ability of Tribal governments to protect their own interests, Congress
has taken steps in recent years authorizing Tribal governments to
exercise greater control over Tribal lands. Under the HEARTH Act, for
example, once tribal regulatory and environmental review procedures
have been approved by the Secretary of the Interior, Tribes may make
final decisions in issuing tribal surface leases without prior review
and approval of the Secretary. See 25 U.S.C. Sec. 415(h), Helping
Expedite Affordable and Responsible Tribal Homeownership Act of 2012,
Pub. L. No. 112-151, 126 Stat. 1150 (``HEARTH Act''). Our Tribe's
comprehensive environmental review code and surface leasing code
received Secretarial approval under the HEARTH Act earlier this year.
That approval does not extend to mineral leasing, however. As addressed
below, the Indian Tribal Energy Development and Self-Determination Act,
which does address mineral leasing, is more complicated than the HEARTH
Act in terms of transferring final approval authority over energy
agreements and development from the Secretary to Tribes.
V. THE INDIAN TRIBAL ENERGY DEVELOPMENT AND SELF-DETERMINATION ACT OF
2005
Just as Tribes had encountered delays in obtaining Secretarial
approval of surface leases, obtaining timely approval of oil and gas
leases and associated developmental permits has often been challenging.
More than 20 years ago, in a memorandum dated June 30, 2002, our legal
counsel informed the legal counsel for the Senate Committee on Indian
Affairs, as follows:
The problems with Secretarial approval of tribal business
activities include an absence of available expertise within the
agency to be helpful . . . . Some structural alternative is
needed. The alternative should be an optional mechanism that
allows tribes to elect to escape the bureaucracy for mineral
development purposes, provided the Secretary has a reasonable
indication that an electing tribe will act prudently once cut
free.
Congress responded to the concerns of energy producing Tribes in the
course of revising the Nation's energy policy.
The Energy Policy Act of 2005, 42 U.S.C. Sec. Sec. 15801, et seq.,
contains a separate, stand-alone Indian energy chapter, ``Title V--the
Indian Tribal Energy Development and Self-Determination Act.'' See Act
of August 8, 2005, Public L. No. 109-58, Title V, 119 Stat. 764-779
(amending Title XXVI of The Energy Policy Act of 1992 (25 U.S.C.
Sec. Sec. 3501-3506)). Significantly, Title V authorizes an Indian
tribe, in its discretion, to negotiate a bilateral agreement with the
Interior Secretary, known as a Tribal Energy Resource Agreement
(``TERA''), governing the rights and responsibilities for mineral
leasing of tribal trust lands. See 25 U.S.C. Sec. 3504. Once a TERA is
approved by the Secretary, that tribe would be free to negotiate and
grant energy-related leases, enter into energy-related business
agreements, and issue rights-of-way for such things as pipelines and
electric transmission facilities without prior Secretarial review and
approval. For various reasons, some of which are identified below, no
Tribe has submitted a TERA to the Secretary for final review and
approval.
After passage of the TERA legislation, the Senate Committee on
Indian Affairs held hearings in which it sought input from energy
producing Tribes as to why no Tribe had entered into a TERA. Our Tribe
submitted formal comments addressing that issue. In our comments of
April 30, 2014, we identified the following potential reasons for why
no TERA had been consummated:
1. The BIA regulations implementing Title V's TERA provisions (25
C.F.R. Part 224) minimized the scope of authority that
could be obtained by a TERA tribe by reserving to the
federal government an array of functions--called ``inherent
federal functions''--an undefined term that potentially
diluted the act's goal of fostering tribal decision-making
and self-determination.
2. Unlike ``638 contracts'' carried out by Indian tribes under the
Indian Self-Determination and Education Assistance Act, the
TERA legislation provided no funding to Indian tribes even
though TERA-contracting tribes would be assuming duties and
responsibilities typically carried out by the United
States.
3. One of the statutory conditions for a TERA, the establishment of
a tribal environmental review process, requires public
comment, participation, and appellate rights with respect
to specific tribal energy projects, which some tribes
considered to be an unacceptable opening of tribal
decisions to outside scrutiny, including from individuals
with no local connection to the affected tribe or project.
4. The statutory standards for measuring a tribe's capacity to enter
into a TERA were vague and unclear.
5. The extensive process of applying for and obtaining a TERA was
simply too time-consuming and distracting to merit
disruption of ongoing tribal governmental challenges.
Although it took several years following those hearings before
changes were made, in 2018 Congress amended the TERA statute in several
significant ways. See Act of Dec. 18, 2018, ``Indian Tribal Energy
Development and Self-Determination Act Amendments of 2017,'' Public L.
No. 115-325 Sec. 103, 132 Stat. 4445-4465 (amending Section 2604 of the
Energy Policy Act of 1992 (25 U.S.C. Sec. 3504) (``2018 Amendments'').
VI. 2018 AMENDMENTS TO THE TERA STATUTE
The 2018 Amendments addressed many of the concerns that had been
raised by Tribes related to implementation of TERAs. For example, in
determining what Tribes were qualified to enter into a TERA, Congress
replaced the vague requirement of demonstrated ``capacity to regulate
the development of energy resources,'' with a more concrete test of
successful administration of ``638 contracts'' involving ``management
of tribal land or natural resources'' for a period ``not less than 3
consecutive years.'' 2018 Amendments, Sec. 103(a), see 25 U.S.C.
Sec. 3504(e)(2)(B)(XII)). On another point, although Congress retained
the requirement that a TERA Tribe develop environmental review
procedures as a condition for entering into a TERA, the nature of those
tribal environmental review procedures was refined to provide the
public notification of and a reasonable opportunity to comment on
``significant environmental impacts of the proposed action.'' Id., see
25 U.S.C. Sec. 3504(e)(2)(C)(i)). As to funding, Congress directed that
Tribes with approved TERAs will receive from the Secretary the amounts
that would have been expended but were not expended ``as a result of an
Indian tribe carrying out the activities'' under a TERA. Id., see 25
U.S.C. Sec. 3504(g)(1). To facilitate the processing of a TERA
application, Congress also imposed a 271-day deadline on the
Secretary's disapproval of a TERA, which, if not met, would result in
automatic approval of the TERA. Id., see 25 U.S.C. Sec. 3504(e)(2)(A).
In addition, the 2018 Amendments expanded the scope of approvable
tribal actions that could be taken under a TERA to include transactions
involving electric generation, transmission, and distribution
facilities (including those associated with renewable energy) (25
U.S.C. Sec. 3504(a)(B)(i)) and transactions involving processing and
treating facilities involving production from tribal lands
(Sec. 3504(a)(B)(ii)). The 2018 Amendments confirmed that pooling or
communitization agreements could be approved by a Tribe under a TERA
(25 U.S.C. Sec. 3504(a)(1)(C)). Collectively, the 2018 Amendments,
which were adopted by unanimous consent in both the House and the
Senate, reflected significant changes contributing to the
attractiveness of TERAs as an option for electing Tribes. To be sure,
as with the original 2005 enactment, TERA Tribes would be principally
responsible for the business consequences of the negotiated terms of
their business agreements; however, similar provisions had not
deflected Tribes from seeking HEARTH Act approvals for surface leasing.
Despite the positive changes contained in the 2018 Amendments, no Tribe
has yet entered into a TERA with the Secretary.
VII. THE SECRETARY'S IMPLEMENTING REGULATIONS AND INHERENT FEDERAL
FUNCTIONS
The TERA provisions contained in the 2005 Act directed the
Secretary to adopt implementing regulations within 1 year of the
effective date of the legislation, i.e., by August 8, 2006. See 25
U.S.C. Sec. 3504(e)(8). Recognizing the challenges that the Interior
Department would have in meeting that deadline, our Tribe volunteered
to assist the Secretary in preparing a preliminary set of draft
regulations, and then-Assistant Secretary James Cason accepted that
offer. In collaboration with representatives from the Department of the
Interior, including the Interior Solicitor's office, a small working
group proceeded with that task, and a preliminary draft was submitted
to the Secretary's representative in early 2006. The product generated
by that working group assisted the Secretary in developing proposed
regulations that would later be subject to comment and refinement under
the rulemaking process prescribed by the Administrative Procedures Act.
The Secretary issued implementing regulations on March 10, 2008 (73
Fed. Reg. 12, 821).
At the outset, we recognized that administrative delays associated
with proposed federal agency approvals were not limited simply to
minerals agreements or rights-of-way, but often involved the subsequent
issuance of operational permits related to those documents. For
example, the approval of an oil and gas lease or IMDA minerals
agreement by the BIA, did not have any effect on the timing of the
Bureau of Land Management's approval of an application for a permit to
drill a well on those affected lands. With that in mind, we sought to
authorize a Tribe to seek, not just mineral lease approval, but other
Interior agency authority needed to implement such a lease. The working
group was supportive of that approach. When the final implementing
regulations were issued, however, 25 C.F.R. Sec. 224.52(c) stated as
follows:
[A TERA may] include assumption by the tribe of certain
activities normally carried out by the Department, except for
inherently Federal functions . . . .
(emphasis added). The term ``inherently Federal functions'' was not
defined in the Secretary's implementing regulations. Despite repeated
efforts to get meaningful clarification from the Interior Department as
to what that exception means, we have been unable to do so.
Among other provisions in the 2018 Amendments, Congress explicitly
provided that in its TERA application a tribe could:
at the option of the Indian tribe, identify which functions, if
any, authorizing any operational or development activities
pursuant to a lease, right-of-way, or business agreement
approved by the Indian tribe, that the Indian tribe intends to
conduct.
25 U.S.C. Sec. 3504(e)(B)(iii)(XIII). Following enactment of the 2018
Amendments, the Secretary was again directed to promulgate implementing
regulations, and, in light of the statutory language set forth above,
that rulemaking provided another opportunity to find out what the
Department would preclude a tribe from undertaking under a TERA. In
response to comments submitted during that rulemaking, the BIA stated
as follows:
D. Inherently Federal Functions
Comment: Several Tribes and other commenters expressed the need
to define ``inherently Federal functions'' to clarify what
functions are not available for Tribes to undertake in a TERA.
According to these Tribes, a definition is necessary for
several reasons, including to address issues, provide
certainty, and ensure consistency of interpretation. A few
requested that the definition exclude basic minerals
development functions, like applications for permits to drill,
thereby allowing Tribes to undertake these functions through
TERAs . . . .
Response: The Department has undertaken efforts to define
``inherently Federal functions'' based on years of Tribal input
and anticipates releasing a list of functions that it has
determined to be ``inherently Federal'' in the near future.
BIA, ``Tribal Energy Resource Agreements,'' Final Rule, 84 Fed. Reg.
69602 (Dec. 18, 2019). Our Tribe and all energy producing Tribes are
still waiting for that promised clarification just as we have been
waiting since 2008.
We anticipate, when confronted with questions about ``inherent
Federal functions'' that Interior will say something to the effect of,
``Submit your application; tell us what you want to undertake, and
we'll see if we can work it out.'' If that is Interior's position, it
shows a clear, institutional disregard for the unambiguous objectives
of Congress. It also grossly underestimates the time, expense, and lost
opportunities associated with participating in required pre-application
meetings (which we undertook several years ago), preparing a detailed
application, negotiating final terms of a TERA, only to be potentially
confronted at the end of that process with a stop sign saying that a
critical aspect of our proposed TERA is now a closed opportunity. With
deep respect for the Secretary, we do not believe that is what Congress
intended, and we hope that greater clarity on this critical point can
be obtained.
CONCLUSION
We hope this testimony provides background about how the concept of
a TERA became embraced in law and how Interior's regulations were
developed. We still believe that TERAs are a valuable option for many
Tribes, including our Tribe. Again, we are most appreciative of the
opportunity to present this testimony.
______
Questions Submitted for the Record to the Hon. Melvin J. Baker,
Chairman, Southern Ute Indian Tribe
The Hon. Melvin Baker did not submit responses to the Committee by the
appropriate deadline for inclusion in the printed record.
Questions Submitted by Representative Westerman
Question 1. Can you further expand on your written testimony and
explain further how the Southern Ute tribal members' standard of
living, economically, culturally, and socially has improved over the
last four decades as a result of the tribe taking an active role in
developing energy resources?
Question 2. Are there other specific barriers the Southern Ute
Indian Tribe has experienced when seeking to develop energy projects on
Indian lands? And beyond simply instituting a Tribal Resource Energy
Agreement, what other solutions exist for getting rid of or lessening
barriers to developing projects on Indian lands?
______
Ms. Hageman. I thank the witness for his valuable
testimony.
The Chair now recognizes Mr. Cody Desautel for 5 minutes.
STATEMENT OF CODY DESAUTEL, EXECUTIVE DIRECTOR, CONFEDERATED
TRIBES OF THE COLVILLE RESERVATION, NESPELEM, WASHINGTON
Mr. Desautel. Thank you. Good morning, Chair Hageman,
Ranking Member Leger Fernandez, and members of the Committee.
My name is Cody Desautel, and I am the Executive Director
for the Confederated Tribes of the Colville Reservation. I also
serve as the President of the Intertribal Timber Council, but
today I am testifying in my capacity in representing the
Colville Tribe.
I appreciate the opportunity to testify on the
implementation of the Indian Tribal Energy Development and
Self-Determination Act of 2017, which was signed into law on
December 18, 2018. As explained in my written statement, the
Colville Tribes developed Section 202 of the Act which
established the Tribal Biomass Demonstration Project.
Unfortunately, when the committees of jurisdiction in the
Senate considered the bill in early 2017, they failed to update
the authorization dates for the project. This error meant that
when the Act became law, the project authority would expire in
Fiscal Year 2021, less than 3 years from the date of the
enactment. That unexpectedly short authorization window proved
to be an insufficient amount of time for the Secretaries to
implement the project authority and for any tribe to utilize
it.
The Tribal Biomass Demonstration Project remains an
important tool for Indian tribes, not only for biomass energy
utilization but also for forest management. The project is
unique in that it directs the Secretaries to enter into at
least four projects with Indian tribes annually for each year
of the authorization. The prescriptive nature of the authority
was intended to ensure that agreements that the tribes proposed
would ultimately be entered into by the Secretaries.
The Tribes' expertise with the Tribal Force Protection Act,
Federal land managers are often not motivated to negotiate
agreements with tribes, and this authority was intended to
address that issue. Congress enacted the Tribal Force
Protection Act in 2004 and over the first decade only six
projects were completed. The project authority also allows
biomass agreements to have terms of up to 30 years.
This was intended to ensure that Indian tribes that wished
to participate in the development of a biomass project could
provide a reliable supply of biomass over a long period from
adjacent Federal lands. The economics of biomass projects that
require longer term contracts to make those projects
economically viable. This is essential if new infrastructure is
to be constructed in areas where it currently does not exist.
The Colville Tribes is currently working with the Myno
Carbon Corporation on a supply agreement to provide biomass
from the Colville Tribes on reservation forests for a planned
carbon removal facility in Kettle Falls, Washington. The
planned facility is expected to remove 90,000 metric tons of
CO2 per year in the form of biochar and avoid
200,000 metric tons of CO2 emissions per year. The
Biomass Demonstration Project authority would assist this
project and similar biochar projects by ensuring an adequate
supply of biomass.
The project also directs the Secretaries to incorporate
tribal on-reservation management practices on the project lands
at the Tribe's request. As the Committee is aware, many Federal
lands that are adjacent to tribal trust lands require fuels
reduction and restoration activities.
Since 2015, more than half of the 1.4 million acre Colville
Reservation has burned as a result of massive wildfires. The
undermanaged conditions on some Federal lands adjacent to the
Colville Reservation contributed to the severity of at least
one of these fire events. The Colville Tribes did not receive
any air tanker or suppression resources until the 2015
NorthStar fire had burned 100,000 acres because those resources
were already committed to fires on Federal lands.
The NorthStar Fire eventually burned for 57 days and burned
217,000 total acres and 800 million board feet of timber, which
in today's market would be worth approximately half-a-billion
dollars. Although the Reservation saw more than 250,000 acres
burn in 2015, the post-fire severity experienced on the
Reservation was lower than that on adjacent Federal land
because of the forest health and fuels treatments the Tribe
carried out in previous decades.
The project authority provides Indian tribes with a
valuable tool not only for biomass projects but also for
protecting on-reservation forests from wildfire and insect
dangers from adjacent Federal forest lands. Congress should
renew the project authority and extend its authorization to
allow Indian Country to fully realize its potential.
I would be happy to answer any questions the Committee may
have. Thank you.
[The prepared statement of Mr. Desautel follows:]
Prepared Statement of Cody Desautel, Executive Director, Confederated
Tribes of the Colville Reservation
On behalf of the Confederated Tribes of the Colville Reservation
(``Colville Tribes'' or the ``CCT''), I appreciate the opportunity to
testify on the implementation of the Indian Tribal Energy Development &
Self Determination Act of 2017 (the ``Act''), which was signed into law
in December 2018.
Beginning in 2011, the Colville Tribes developed what ultimately
became Section 202 of the Act, the Tribal Biomass Demonstration Project
(``Project''). Unfortunately, when the committees of jurisdiction in
the Senate considered the bill in early 2017, they failed to update the
authorization dates for the Project. This error meant that when the Act
became law on December 18, 2018, the Project authority would expire in
fiscal year 2021, less than three years from the date of enactment.
That unexpectedly short authorization window proved to be an
insufficient amount of time for the Secretaries to implement the
Project authority and for any Indian tribe to utilize it.
The Colville Tribes urges the Committee to update the dates in the
Project to enable Indian tribes to utilize the authority. The
Intertribal Timber Council, of which the Colville Tribes is an active
member, has also recommended that the Project authorization dates be
updated in the next Farm Bill. As explained below, the Colville Tribes
is a participant in a planned biomass and biochar project in
northeastern Washington that would benefit by utilizing the Project
authority.
Background on the Colville Tribes
The Confederated Tribes of the Colville Reservation is a
confederation of twelve aboriginal tribes and bands from across eastern
Washington state, northeastern Oregon, Idaho, and British Columbia. The
present-day Colville Reservation is in north-central Washington state
and was established by Executive Order in 1872. The Colville
Reservation covers approximately 1.4 million acres, an area slightly
larger than the state of Delaware. The CCT has nearly 9,300 enrolled
members, making it one of the largest Indian tribes in the Pacific
Northwest and the second largest in the state of Washington. About half
of the CCT's members live on or near the Colville Reservation. Of the
1.4 million acres that comprise the Colville Reservation, 913,000 acres
are forested land and 652,308 of those forested acres are commercial
timber land. Because of this, healthy forest management is critical to
the Colville Tribes and its membership.
In addition to the on-reservation forests, the former North Half
\1\ of the Colville Reservation includes significant acreage of
Colville National Forest land where the Colville Tribes possess
reserved rights for hunting, fishing, and gathering. Approximately 40
miles of Forest Service land in the North Half is contiguous to the
northern Reservation boundary. The Colville Tribes and the Colville
National Forest have carried out Tribal Forest Protection Act projects
on Colville National Forest land and have worked cooperatively to
prevent fire and disease on Forest Service lands. Despite the CCT's
positive working relationship with its Forest Service neighbors, more
tribal authority to carry out or direct activities on adjacent federal
lands is needed. The Biomass Demonstration Project would benefit the
Colville Tribes and other similarly situated tribes and local
communities by allowing tribes to have an increased management role on
federal lands that border reservation lands.
---------------------------------------------------------------------------
\1\ In 1891, many of the various aboriginal Indian tribes and bands
of the Colville Indian Reservation approved the Agreement of May 9,
1891, under which the Colville Tribes ceded the North Half, which
consists of roughly 1.5 million acres. However, the 1891 Agreement also
reserved to the Colville Tribes and its citizens several important
rights to the area, including the rights to hunt and fish. The ceded
North Half is bounded on the north by the U.S.-Canadian border, on the
east by the Columbia River, on the west by the Okanogan River, and on
the south is separated from the south half of the Colville Indian
Reservation by a line running parallel to the U.S.-Canadian border
located approximately 35 miles south thereof.
---------------------------------------------------------------------------
Wildfires on the Colville Reservation
The Colville Tribes has endured multiple major wildfire events
during the past decade that have collectively burned more than half of
the Colville Reservation's land base. In 2015, the North Star and
Okanogan Complex fires collectively burned more than 255,000 acres on
the Colville Reservation and more than 800 million board feet of
timber, making it the most destructive wildfire event in terms of loss
of timber on any Indian reservation in recorded history.
In 2020, the Washington Labor Day Fires burned the most acres
(330,000) over a 24-hour period in Washington state's history. Two of
those fires, the Cold Springs and the Inchelium Complex fires, burned
nearly 200,000 acres on the Colville Reservation and caused one
fatality. Nearly 80 homes and 70 other structures also burned.
Two separate but related factors increased the severity of some of
these fire events on the Colville Reservation. The first was the
undermanaged condition of some federal forest lands in the North Half
and the surrounding areas. The other was the fact that air tankers and
other suppression resources were tied up on other fires on those
undermanaged areas and prohibited those suppression resources from
being deployed to suppress fires on the Colville Tribes' on-reservation
trust forest land. These concerns highlight why Congress should renew
and extend the Biomass Demonstration Project authority in the Act.
The Biomass Demonstration Project
The Biomass Demonstration Project in section 202 of the Act amended
the Tribal Forest Protection Act of 2004 to authorize projects for
Indian tribes on federal lands adjacent to tribal lands that are under
the jurisdiction of the Secretary of the Interior or the Secretary of
Agriculture. Section 202 also separately authorized biomass
demonstration project authority for Alaska Native Corporations on
federal lands adjacent to Alaska Native Corporation land.
Section 202 is unique in that it directed the Secretaries to enter
into at least four projects with Indian tribes annually for each year
of the authorization (one annually for ANC projects). The projects
could have terms of up to 30 years. This was intended to ensure that
Indian tribes that wish to participate in the development of a biomass
project could provide a reliable supply of biomass over a longer period
from adjacent federal lands. The economics of biomass projects have
required longer term contracts to make the projects economically
viable, which is essential if new infrastructure is to be built in
areas where it currently does not exist.
Section 202 also directs the Secretaries (at tribes' request) to
incorporate tribal on-reservation management practices on the project
lands. As the Committee is aware, many federal lands that are adjacent
to tribal trust lands require fuels reduction or restoration
activities--activities that Indian tribes are uniquely suited to
perform because of tribes' experience managing their own forests and
natural resources. This was one of the motivating factors for the
Colville Tribes in developing the provision.
Allowing tribal management planning principles to be incorporated
in these projects will also ensure that protection of cultural
resources and sacred sites will receive the attention that they
deserve. These cultural resources typically are not accounted for in
federal land management plans. For example, the CCT manages certain
areas of its on-reservation forests to promote growth of huckleberries,
a culturally significant food for the Colville Tribes.
The Biomass Demonstration Project remains a viable tool for energy
projects. The Colville Tribes is currently working with the Myno Carbon
Corporation on a supply agreement to provide biomass from the CCT's on-
reservation forests for a planned carbon removal facility in Kettle
Falls, Washington.
As explained in more detail on the Myno Carbon Corporation's
website,\2\ the planned facility will intake approximately 183,000 Bone
Dry Tons (BDT) of sustainably harvested timber waste feedstock to
produce 40,000 BDT of biochar, which is anticipated to generate 18MW of
renewable electricity. The planned facility is expected to remove
90,000 metric tons of C02e per year in the form of biochar and avoid
200,000 MT of C02e per year by mitigating slash pile burning and
downstream emission reductions from biochar application.
---------------------------------------------------------------------------
\2\ See https://mynocarbon.com/myno-wins-bid-to-build-first-large-
scale-carbon-removal-facility/
For tribes that wish to construct their own biomass or biochar
facilities, the Project authority will provide them an enhanced ability
to obtain financing by providing a pathway for a long-term supply of
---------------------------------------------------------------------------
biomass from federal lands.
The Project authority provides Indian tribes with a valuable tool
not only for biomass projects, but also for protecting on-reservation
forests from wildfire and insect dangers from adjacent federal forest
lands. The Project authority should be renewed and its authorization
extended to allow Indian Country to fully realize its potential.
______
Questions Submitted for the Record to Cody Desautel, Executive
Director, The Confederated Tribes of the Colville Reservation
Questions Submitted by Representative Westerman
Question 1. Your written testimony recommended that Congress
reauthorize the biomass demonstration program.
1a) How long do you think a reauthorized tribal biomass
demonstration project should run for?
Answer. When the Colville Tribes originally drafted the provision,
the demonstration project had a five-year authorization. With the
benefit of hindsight, however, and considering the lengthy processes
for the U.S. Forest Service to consider and act on agreements and the
potential for compliance with the National Environmental Policy Act
(NEPA), the Colville Tribes recommends the project be authorized for at
least seven years.
1b) How far out should Congress put the implementation date of a
biomass demonstration project to ensure there is enough time for tribes
to participate?
Answer. Section 202 of Pub. L. 115-325 requires the Secretary of
Agriculture and the Secretary of the Interior to ensure that the
criteria for biomass demonstration projects are publicly available by
not later than 120 days after the date of enactment. Both Secretaries
made guidance publicly available by the spring of 2019.
It may be advisable, however, to provide a deadline for the
Secretaries to determine whether a proposed project meets the criteria
and is considered as one of the projects for a given fiscal year. I
would be happy to discuss this with the Committee and provide
recommendations on how to include this concept in a reauthorization.
Question 2. In your testimony you cited the need for further tribal
authority regarding management activities on adjacent federal lands.
Could you expand on how a biomass or biochar project could address this
issue?
Answer. Facilities that utilize biomass or biochar provide a market
for biomass, which makes removal of biomass from forests more
economically viable. Without a facility that can pay for biomass
material, there are few, if any, economical options to utilize the
material. Additional tribal management authorities, such as the Biomass
Demonstration Project, can assist in the development of biomass or
biochar facilities by providing a reliable supply of biomass, which
will assist in obtaining financing to build the facilities. Also, prior
to passing of BIL and IRA forests were limited in their ability to
enter into agreements by available funding at the forest, or
supplemental funding from the regional office or Washington office.
That limitation is likely to occur again once the additional BIL and
IRA funding is spent. Having markets for traditionally non-commercial
material should reduce the cost of restoration activities, and increase
the number of acres that can be treated.
2a) Would an up and running biomass or biochar project have
prevented the devastation to the Colville Reservation suffered during
the 2015 North Star fire?
Answer. A biomass or biochar project would likely not have
prevented all the devastation the North Star fire caused on the
Colville Reservation due to the extremely dry conditions and high winds
and the fact the Colville Tribes actively manages it forests in the
first instance. Had a biomass project been in place on adjacent federal
lands, however, it is likely that more suppression resources would have
been available on the Colville Reservation before the North Star fire
reach 100,000 acres and mitigated the fire's on-reservation impact.
2b) And how could an up and running biomass or biochar project also
assist with post-fire restoration?
Answer. Many post fire restoration activities include the removal
of dead or dying timber to reduce future fuel loading and decrease the
risk to the staff and public. While those trees have value for roughly
one year for local sawmills, once that timeline is over there isn't a
market for those forest products. A biomass or biochar facility could
make use of that material, extending the timeline for this work and
provide a source of revenue that offsets the costs of restoration. This
benefit is in addition the market created for traditionally non-
commercial forest products generated during forest restoration
activities.
Question 3. How would a biochar or biomass project be able to use
low value hazardous fuels to benefit active forest management for the
Colville Tribes' forests and adjacent federally managed forests?
Answer. A biochar or biomass project would provide a market for the
material, making removal of the biomass from the on-reservation or
federally managed forest land more economically viable. Adding value to
traditionally non-commercial material also allows limited funding to be
stretched across additional acres, which should increase the pace and
scale of current restoration efforts on both tribal and federal
land.rese
Question 4. Are there other specific barriers the Confederated
Tribes of the Colville Reservation has experienced when seeking to
develop energy projects on Indian lands? And what other solutions
should Congress consider for getting rid of or lessening barriers to
developing projects on Indian lands?
Answer. For biomass related energy projects, the two main barriers
have been (a) the reticence of federal officials to utilize all the
discretionary authority that they possess when evaluating proposed
projects, and (b) the timelines associated with the NEPA process and
the potential for third party appeals for projects located on off-
reservation federal land. For on-reservation energy projects involving
forestry resources, Congress can be helpful by delegating to tribes the
authority to permit and approve the projects with triggering the NEPA
process.
______
Ms. Hageman. I thank the witness for his testimony and will
note that I also believe that the Federal Government must do a
better job of managing its resources in order to protect yours.
The Chair now recognizes Mr. Nicholas Lovesee for 5
minutes.
STATEMENT OF NICHOLAS LOVESEE, DIRECTOR OF POLICY, NATIVE
AMERICAN FINANCE OFFICERS ASSOCIATION, WASHINGTON, DC
Mr. Lovesee. Thank you so much, Madam Chairwoman, Ranking
Member Leger Fernandez, and members of the Indian and Insular
Affairs Subcommittee.
My name is Nicholas Lovesee. I am Director of Policy for
the Native American Finance Officers Association (NAFOA) and
would like to thank you for the time to speak with you today
about tribal autonomy and energy development.
Over the past 2 years, NAFOA has made tribal energy
development and policy a focus of our organization and a goal
of ours to help increase tribes' ability to participate in the
new energy economy and help unlock the massive energy potential
of Indian Country.
There are two points I really want to stress before
continuing. First, there should be a focus on leveling the
playing field in ensuring that tribes have a fair opportunity
to compete. Fair. Second, NAFOA is energy source agnostic. A
crucial part of tribal self-determination is being allowed to
make the decisions based upon the unique needs and situations
of any individual tribe.
First, I would like to talk about the Loan Program Office
(LPO). Last summer, as part of the Inflation Reduction Act,
they made an important change of allowing the Loan Program
Office to offer loans directly. Previously, they had to go
through a third party. This is an important change and
hopefully will help decrease some of the friction in the
process of offering loans.
Additionally, they changed from $2 billion to $20 billion
the amount of loans for the LPO to be able to offer. These
changes are a major step forward. Unfortunately, we have yet to
see LPO grant any loans and there are unnecessary stumbling
blocks in the way.
Also, in the IRA were provisions limiting the use of
appropriated funds by making the loans subject to Federal
support restrictions. DOE has heard from Congress and tribes
that this restriction creates uncertainty when trying to get
loans to projects through the LPO program.
Also, part of the IRA, Congress made an exciting, well, I
guess I am kind of stretching the definition of exciting,
change to the tribal energy development by allowing tribes to
access the Federal direct pay clean energy tax credits. Adding
up these bonuses, these credits potentially enable a tribe to
cover 70 percent of a project's cost.
NAFOA has been working with the Department of Treasury to
ensure that information about these changes in tax credits are
available to all tribes that are interested in taking advantage
of them. However, it has been slow to get guidance out and this
has caused a number of programs to enter essentially a holding
pattern while they wait to find out what is going to be
available with direct pay credits.
For almost a year now, tribes have had to wait for Treasury
to release guidance. And even though they have started the
process, they haven't completed it, and there are still
important questions remaining outstanding.
Another important area that is blocking tribal energy
development is the lack of decision making on tribally
chartered corporations. NAFOA participated with TETRAA and NCAI
as part of a Department of Treasury ``Dear Tribal Leader''
letter sent around in May of this year. Per the Department of
Treasury's letter, presently there is no guidance addressing
the Federal tax status of corporations chartered under tribal
law that may be wholly owned, majority owned, or jointly owned
by tribes.
In response to substantial tribal leader requests for
guidance on this question for over 30 years, Treasury's Office
of Tax Policy is seeking tribal leader feedback. Why is this
important to tribal energy development? As anyone who has
worked in the energy industry knows, that how you structure
these partnerships can be just as important as what the project
is itself, whether it is being able to defer risk, whether it
is about who owns the project, being able to seek financing.
These are important questions that remain uncertain, and these
are all part of the problems that play into tribal energy
development issues.
Another area that doesn't get enough talk, in my opinion,
is staffing. There is a severe lack of staff that understand
both tribal energy and also just energy in general, they don't
have enough staff to work with experience in tribes and also in
energy.
A good example of this would be COVID where a number of the
departments had to quickly staff up to deal with the millions
and millions of dollars that Congress was nice enough to
appropriate. But they didn't have enough people who understood
tribal issues, and we spent a lot of the last 2 years working
with the staff to try to help them understand, because many of
these offices had never dealt with tribal issues before.
I want to thank everyone for their time today and we look
forward to working with Congress and the Committee on any
potential future legislation. Thank you.
[The prepared statement of Mr. Lovesee follows:]
Prepared Statement of Nicholas Lovesee, Director of Policy, Native
American Finance Officers Association (NAFOA)
Good morning, Chairwoman Hageman, Ranking Member Leger Fernandez,
Committee Chairman Westerman, Ranking Member Grijalva, and Members of
the Indian & Insular Affairs Subcommittee and Natural Resources
Committee. My name is Nicholas Lovesee, I am Director of Policy for the
Native American Finance Officers Association (NAFOA) and I would like
to thank all of you for your time today and for the opportunity to
speak with you about Tribal Autonomy and Energy Development. Over the
past two plus years NAFOA has made tribal energy development and policy
a focus of our organization and a goal of ours to help increase tribes'
ability to participate in the new energy economy and help unlock the
massive energy potential of Indian Country, which for too long has gone
untapped.
There is one point I want to stress before continuing, there should
be focus on leveling the playing field for tribes to have a fair
opportunity to compete. At NAFOA, we hear repeatedly from both member
and non-member tribes, ``we don't want anything more than anyone else,
we want to ensure that we have a fair shot''. As we've seen over and
over, when tribes are able to compete on a fair playing field, they
succeed.
Lastly, as an organization, NAFOA is energy source agnostic. A
crucial part of tribal self-determination is being allowed to make
decisions based upon the unique needs and situation of any given tribe,
and it should be up to tribes and tribal members to decide what the
best solutions are for their unique needs and situations. Just like for
states, there is no ``one size fits all'' solution for tribes.
Loan Program Office (LPO)
Last summer, NAFAO testified before the House Energy & Commerce
Committee on the Department of Energy's Loan Program Office (LPO)
program. At the time, LPO had just been granted the ability to give
direct loans to tribes, rather than guarantee loans that a tribe would
receive. However, it was a temporary situation and there was
uncertainty as to whether LPO would be able to continue to maintain
that option. Fortunately, the Inflation Reduction Act (IRA) made the
change permanent and increased the total amount of loans that could be
offered, going from $2 billion to $20 billion. These changes were major
steps forward for the LPO program and could have a huge potential
impact on tribal energy development opportunities.
Unfortunately, we have yet to see LPO grant any loans and there are
unnecessary stumbling blocks still in the way. For example, the
Inflation Reduction Act (IRA) included a provision limiting the use of
appropriated funds by making the subject to a federal support
restriction. DOE has heard from Congress and tribes that this
restriction creates uncertainty when trying to get loans to projects
through the LPO program.
Elect/Direct Pay
As part of last summer's IRA, Congress made an exciting change to
tribal energy development by allowing, for the first time, tribes to
access the federal Direct Pay, clean energy tax credits. Adding up all
the bonuses, these credits potentially enable a tribe to cover 70% of a
project's cost. NAFOA has been working with the Department of the
Treasury to ensure that information about these changes and tax credit
opportunities is available to all tribes that are interested in taking
advantage of them.
However, as exciting as Direct Pay possibilities are, there have
been some major roadblocks put in the way of accessing them. First,
following passage of the IRA there has been almost a hold placed on
many tribal energy projects as developers and tribes have adopted a
``wait and see'' approach to Direct Pay changes. Without guidance from
Treasury and the IRS, no one is really sure what to make of these
Direct Pay provisions for tribes, how they would be implemented, and
what they actually mean in practical terms. For almost a year now we've
seen this holding pattern and while Treasury has released some
guidance, there are still key questions outstanding and many of the
tribes and developers that I've spoken with are hesitant about what the
landscape will look like going forward. Even the financing side of a
project is impacted and slowed while we wait for Direct Pay guidance
and rules, as tribes have an option to receive lending based on Direct
Pay credits.
Another major issue the lack of technical assistance that IRS and
Treasury can offer tribes. To this point, tribes do no file federal
income tax. So how would they access a federal income tax credit
payment? Our understanding from IRS statements is that they do not have
the legal authority to provide this assistance. There needs to be an
authorization that will allow IRS to give in-depth information and
technical assistance to tribes, similar to the types of technical
assistance available with many other tribal programs, as well as a
place where tribes can go to ask for guidance or clarification.
Tribally Chartered Corporations
On the 18th of last month, NAFOA submitted consultation comments in
partnership with the Tribal Economic Tax Reform Advocacy Alliance
(TETRAA) and the National Congress of American Indians (NCAI) as part
of a Department of Treasury and IRS ``Dear Tribal Leader'' letter sent
around on May 15th of this year. The purpose of the letter and
consultation was to seek guidance on the tax status of tribally
chartered corporations, including those that are just jointly owned by
a tribe. This is a problem that tribal leaders have asked to be
addressed for decades. Per the Department of the Treasury's letter:
Presently, however, no guidance addresses the Federal tax
status of corporations chartered under Tribal law that may be
wholly owned, majority owned, or jointly owned by a Tribe. In
response to substantial Tribal leader requests for guidance on
this question for over thirty years, Treasury's Office of Tax
Policy is seeking Tribal leader feedback to inform its
understanding of Tribally chartered corporations.
Why is this relevant for today's hearing and tribal energy
development? As anyone who's worked in the energy industry or around
energy projects knows, the ownership structures and entities of energy
projects can make a massive impact on the profitability and/or
viability of a given project. How tax credits are assigned, liability
protections, ownership and investment stakes, and more all play key
roles in the life cycle of energy projects and the current situation
creates uncertainty and liabilities.
Unfortunately, tribes have been dealt an unfair hand. Going back to
the Direct Pay, currently IRS is not able to offer the required
technical assistance on tax filings that many tribes need or will need.
This will require a change in authorization, just to bring the
assistance to parity with the types of technical assistance already
available to other programs.
Tribal Energy Development Issues
Another issue that doesn't get nearly enough attention is the
shortage of experts and staffing when it comes to tribal energy
development. There are plenty of experts in the energy industry and
sector, but very few have any kind of experience working with tribes or
tribal governments, and often don't even know the first place to start
or where to take their issues. On the flip side, there are plenty of
tribal experts who can tell you inside-and-out how tribal governments
work, the unique issues tribes and tribal members face, and how to best
address issues that tribes are used to facing. However, there is a
shortage of those types of tribal staff and experts that have
experience working in the energy sector.
We recently lived through a good example of this with COVID-19. To
deal with the sudden influx of COVID funding, various Departments
throughout the Administration had to ``staff-up'' and were finding
themselves responsible for millions of dollars in aid to Indian
Country, many of which had never dealt with tribes or tribal issues
before. There was a shortage of experienced people from which these
Departments were able to hire and at NAFOA we spend a significant
amount of time these past three years having to educate staff on how to
reach tribes and tribal members, what they needed to know about working
in Indian Country, how to solve the issues they were facing, and more.
I want to stress than in almost all cases these were extremely
competent, smart, hardworking, and dedicated staff, but from the
outside looking in, it appeared as though they were thrown into the
deep end of a pool and told ``now swim!''
Another unique situation that has created unique barriers for
tribes is the land into trust system, and these are barriers that non-
tribal energy developers don't face. When testifying before the Senate
Committee on Indian Affairs this past March, NAFOA stated:
I have repeatedly heard that delays in approvals by the Bureau
of Indian Affairs of rights-of-ways, permits, and leases
increases costs of tribal projects, delays projects
unnecessarily, and sometimes, directs projects onto neighboring
non-tribal fee lands. Beyond energy, these delays impact
broadband and other infrastructure projects. Congress can
improve the efficiency of these processes by putting authority
back into the hands of tribal governments where they wish to
exercise it. Archaic and stifling rules regarding tribal land
use can tie-up the process in red tape and discourage
investments. In some cases, BIA requests could take up to two
years, which can be the end to of any economic, development
project. According to the GAO, the permitting review process
under the BIA can take two times as long as the Bureau of Land
Management.
Two years for a permitting review is a lifetime for many energy
projects and developers and financers sometimes decide ``why put up
with this when I can do a different energy project that won't face
these issues?''
One of the solutions that NAFOA has recently been working on is
legislation that would give tribes more control over permitting and
regulations on their own land. States are allowed to set regulations,
why can't tribes? If tribes want to create a situation that is
attractive to developers or capital, they should have that option.
Being able to create an environment where energy projects are
economically attractive to businesses is going to be a huge step
forward in making tribal energy projects a reality.
This would also help ease the business ``friction'' that exists for
tribal energy projects and development. Sadly, some companies and
developers look at working with tribes as ``adding headaches'' or
hurdles and not as an advantageous partner. This creates issues not
just in financing, but in trying to bring on additional partners so
that tribes don't have to do a project alone and accept the full burden
of a project's risk, a huge ask for almost any tribe but especially
smaller ones.
Lastly, there is a disconnect between Washington, D.C. and the
realities tribal governments face. In April, NAFOA hosted its Spring
Conference here in D.C. and we were very fortunate to have a strong
turn-out of Administration and government staff. However, while they
discussed a wide range of programs and monies available, there was a
sentiment of ``that's nice, but how are we supposed to access it.''
There needs to be more done to make these programs practically
accessible. During COVID the amount of information flooding the field
was nearly impossible for tribes to keep up with, from application
deadlines to changes in guidance to new opportunities.
Conclusions
Again, tribal energy is not about more or special, it is about
creating a level and fair playing field and certainty. The good news is
that there is a lot of excitement for tribal energy development.
Webinars and information sessions that NAFOA hosts are widely attended,
and we often receive information requests about different energy
programs, grants, credits, and possibilities from both members and non-
members. Tribal energy development is a massive opportunity, not just
for Indian Country but the United States as a whole, it is estimated
that the 53 million acres of Indian lands are host to 20% of Americas
conventional energy resources, as well as holding the potential for
vast renewable energy resources.
NAFOA is eager to work with the Subcommittee and Members to help
ease the energy transition and allow all tribes an opportunity to
participate in the new energy economy we are building.
______
Questions Submitted for the Record to Nicholas Lovesee, Director of
Policy, Native American Finance Officers Association
Questions Submitted by Representative Westerman
Question 1. Your testimony mentioned that having a level playing
field and allowing tribes to purse whatever energy projects will best
benefit their individual tribal communities and people. In your
experience, which energy sources or other energy resources are tribes
seeking to develop the most, and what are reasons for the preference
that tribes have provided to you?
Answer. Fortunately, there is an interest in Indian Country for a
diverse array of energy project, both renewable and traditional. On the
renewable front, it would appear that more tribes are interested in
solar than anything else, this is partly due to geography and that
there are more contractors and experts available in the solar field at
the moment. For traditional energy there is a stronger interest in oil
and gas production.
Again, I would add much of the interest is shaped by a tribe's
geography, local resources, individual needs, size (this includes
factors such as land area, economy, and membership numbers), and
location (more urban vs more rural). Each tribe faces a unique set of
circumstances, and what is attractive or economical to tribes in one
area might be a poor investment for a similar tribe in a different part
of the country.
1a) Do you think tribes would be interested in more expansive
sources if some projects were easier to develop or had less federal
bureaucracy to wade through?
Answer. From what I have heard from tribes and contractors, there
would be an increased interest in energy projects of all types if there
was less federal bureaucracy, especially if questions related to
federal projects, tax credits, regulations, and more were answered in a
timely manner that considers both the needs of tribes and the intent of
Congress. Unfortunately, in the current environment we don't know how
interested various tribes will be in many different areas of energy
development because one look at the difficulty managing all the federal
rules, regulations, and programs kills projects before they even get
off the ground.
Another factor that would increase tribal interest in energy
projects is increased tribal control over rules and regulations for
projects on tribal lands. Allowing tribes to set their own regulatory
standards will enable them to decide what is right for their unique
situation and be more in line with the government-to-government
relationship that the United States has with tribes. Additionally, it
would help with the gridlock for permitting and approvals, which take
almost twice as long at the Bureau of Indian Affairs (BIA) than at the
Bureau of Land Management (BLM).
In general, on tribal issues there is not enough federal assistance
to tribes to help navigate these complex rules and regulations, and
this is especially true when it comes to tribal energy projects. The
complexity makes it nearly impossible for tribes to find a safe place
to start and again highlights the need for more experts that understand
both Indian Country's unique challenges and the energy industry.
Again, thank you for your interest and work on this important
topic. I look forward to continuing to work with you and your staff on
this topic, as well as any other topic that NAFOA might be helpful
with. If there is any additional information or help that we can
provide, please do not hesitate to contact us.
Sincerely,
Susan Masten,
Interim Executive Director
______
Ms. Hageman. I thank the witness for his testimony.
The Chair now recognizes Ms. Bidtah Becker for 5 minutes.
STATEMENT OF BIDTAH BECKER, CHIEF LEGAL COUNSEL, OFFICE OF THE
PRESIDENT AND VICE PRESIDENT, NAVAJO NATION, WINDOW ROCK,
ARIZONA
Ms. Becker. [Speaking Native language.] Good morning, Chair
Hageman, and Ranking Member Leger Fernandez. I think she is the
only one who understood me just now, so appreciate that.
As the Chair mentioned, my name is Bidtah Becker, and I am
Legal Counsel to President Nygren and Vice President Richelle
Montoya of the Navajo Nation. President Nygren sends his
regards. He is very busy. Started the week in Alaska at a
tribal transportation meeting and I am not even sure where he
is today, that is how busy he is.
Energy has been super critical to the Navajo Nation's
economy for 100 years now. I am going to share one story, just
one of many. The United States was very critical in standing up
something called the Navajo Generating Station that supplied
power to Los Angeles, Phoenix, Las Vegas. Not a single electron
was used on the Navajo Nation.
The United States was critical in both the plant site lease
that was on the Nation, and on ensuring that coal leases were
developed between the Hopi Tribe, the Navajo Nation, and the
Peabody Coal Mine. The Navajo Nation and the Hopi Tribe
expected that plant to stay open until 2044. It shut down in
2019. And I share that story because it is critical to our
conversation, really everything that has been talked about
today.
We lost a thousand direct jobs, lots of coal royalty,
around $40 million a year we lost. But the lesson we learned
from that is, we cannot be at the mercy of outside entities
when it comes to the jobs and revenue on the Navajo Nation. One
of President Nygren's key priorities is ensuring that as we
continue down this energy development portfolio that the Navajo
Nation has some ownership role in that so that we have a say
instead of watching these jobs disappear.
The Act does allow for all Tribal Nations to take over
mineral leasing. And we have been asked repeatedly why haven't
we done that. One of the challenges of why we aren't currently
pursuing taking over mineral leasing is there are databases of
valuable information that the Department of the Interior holds.
And we have been informed that if and when we take over mineral
leasing, we will lose access to that information.
That is really akin to what Mr. Lovesee is talking about,
about the types of expertise that are needed for energy
development. And I could not underscore enough what he
mentioned about business structure, because one of the things
we learned when the Navajo Generating Station closed was, we
should not have been surprised it was closing. There were
people that were anticipating this, but at the time we didn't
have the expertise to foresee that.
Another challenge is, I am going to call it limited
technical assistance that the Department of Energy provides.
And I recognize that at this point I am stepping into areas
that are uncomfortable because the committees have jurisdiction
over certain agencies. We would really benefit from the
extensive and very technical expertise from the Department of
the Interior.
Ms. Hageman. I am sorry, I didn't hear that. Could you
bring your microphone just a bit closer? Benefit from what?
Ms. Becker. We would benefit from the extensive technical
expertise that the Department of Energy could provide that we
wouldn't necessarily find in the Department of the Interior.
Everything that Mr. Lovesee said underscore, highlight. Energy
is a big field, right? You have transmission, you have business
structure, you have taxes. Those skills are not necessarily all
found in the Department of the Interior.
Again, I recognize that I am stepping into areas that
perhaps could be uncomfortable because of types of
jurisdiction, but there are more agencies that do energy
development, right, than just Interior and Energy. USDA plays
an important role in that.
I guess what I will end with is a great quote, and
Representative Leger Fernandez may remember the great dean,
Fred Hart, of the UNM School of Law. When I was a youngster
without all this gray hair, he said, ``The problem with Federal
Indian law is that it is national in nature.'' It is national
in nature. Boy, this was an Irish guy from Boston who is
teaching a Navajo girl, and he was spot on.
Thank you for your time. I really appreciate it and stand
for questions.
[The prepared statement of Ms. Becker follows:]
Prepared Statement of Bidtah N. Becker, Legal Counsel, Navajo Nation
Office of the President and Vice-President
Ya,at,eeh Chair Hageman, Vice Chair Gonzalez-Colon, and Members of
the Committee, my name is Bidtah Becker and I serve as the Chief Legal
Counsel to Navajo Nation President Buu Nygren and Vice-President
Richelle Montoya. I have had extensive experience with the Navajo
Nation's natural resources and energy development activities during my
twenty-one (21) years with the Navajo Nation. Over the years I have
served in both legal and non-legal roles including directing the Navajo
Nation Division of Natural Resources.
Energy has been critical to the Navajo Nation economy for decades.
As we celebrate the Navajo Nation Council's centennial year, we are
reminded that the Navajo Nation Council was first created at the
request of the United States to approve oil and gas leases. In more
recent times, the Navajo Nation was home to the Navajo Generating
Station which was the largest coal fired power plant west of the
Mississippi. It was commissioned in 1974 and the United States played a
critical role in standing up the Navajo Generating Station and
developing coal leases between the Navajo Nation and the Hopi Tribe
with the Peabody Coal Company. The coal mine's sole customer was the
Navajo Generating Station. Stewart Udall, Secretary of the Interior,
penned a letter at the time praising the economic benefits and
opportunities that the Generating Station and the coal mine would
provide.
In 2017, to the Navajo Nation's surprise the owners of the Navajo
Generating Station announced it would shutter the facility in 2017
rather than operating until 2044 as expected. The owners needed
sufficient comfort through new agreements to keep the Generating
Station open for two additional years to 2019. I served as the lead
negotiator for the Navajo Generating Station Extension Lease that kept
the Generating Station open to 2019.
In 2019, the Generating Station was closed along with the coal
mine. These closures led to the loss of 1,000 direct jobs and 3,000
indirect jobs. In addition, in 2019 the school district where the coal
mine was located lost 300 students or nearly 10% of the district's
enrollment. The Navajo Nation and the Hopi Tribe both lost significant
revenue with the loss of the coal royalties.
I share this story because it is relevant to the Indian Tribal
Energy Development & Self-Determination Act. One of the key lessons for
the Navajo Nation is to not recreate the situation where the Nation is
at the mercy of others for energy development on the Nation when the
livelihoods of Navajo people are at stake. One of President Nygren's
priorities is that the Navajo Nation have an ownership role in energy
development so that when hard decisions need to be made concerning the
livelihood of Navajo people, the Navajo Nation has a voice in the
decision.
The Act allows the Navajo Nation and other Native Nations to
develop regulations so that the Native Nations can issue mineral
leases, including oil and gas leases. The Act also allows for the
Department of the Interior (Department or DOI) to provide technical
support in the development of those leasing regulations. The Act,
however, does not address the services that DOI provides to the Navajo
Nation when we are making leasing decisions. Specifically, the
Department, including the Bureau of Indian Affairs (BIA), Bureau of
Land Management (BLM), and Office of Natural Resource Revenue (ONRR),
have lease, production and royalty databases that include well and
lease information, production formations, production volumes, sales
volumes, commodities pricing, major portion price analyses, index zone
pricing, royalties, economic data, contract data, regional pricing
forecasts--and so much more--that the Navajo Nation will not have
access to if it should decide to take over its own mineral leasing
process. Without access to these data sets, the Navajo Nation's
effectiveness at negotiating and overseeing mineral leases, including
compliance, will be greatly, and negatively, affected. The Navajo
Nation has confirmation from the Office of the Solicitor staff who
advise ONRR that that Nation will lose access to these data sets if we
issue our own mineral leases.
As mentioned, the current Navajo Nation Administration is
interested in more than the issuance of mineral leases related to
energy development. There are certainly mineral leases that do not
involve energy development but when it comes to energy related mineral
leases, the Nation has learned the difficult way what ensues when the
Nation does not have a management voice.
Another challenge with the Indian Tribal Energy Development & Self
Determination Act is that it is focused only on the Department of the
Interior. The Navajo Nation could benefit greatly from expertise and
more expansive technical assistance within the Department of Energy.
The Navajo Nation signed a Memorandum of Understanding with the
Department of Energy last December to assist with navigating the many
federal funding opportunities available for energy transition. The
Navajo Nation is located in a geographically key area for energy
development in the Southwestern United States and is blessed with vast
and a variety of natural resources. One of the areas where the Nation
could benefit from DOE technical assistance is understanding the energy
market and getting out in front of new and developing technologies,
especially related to a carbon neutral future.
One of the things the Subcommittee could consider is granting
several federal departments and agencies the discretion to work with
Native Nations. Importantly, these federal entities could be empowered
to meet the unique and specific needs of the Nations. It goes without
saying that the needs of the Navajo Nation for energy development are
very different than the needs of a Native Nation located in the
Northwestern United States. I understand how challenging it can be to
grant discretion to federal entities. At the same time, I am reminded
on a regular and reoccurring basis of the words of the late Dean Fred
Hart of the University of New Mexico School of Law: the problem with
federal Indian law is that it is national in nature.
Thank you for your time. I look forward to further Subcommittee
discussions that can address energy development issues facing the
Navajo Nation and Native Nations in general. As this Subcommittee
appreciates, I know of no other community more interested and committed
to protecting the lands of the United States and ensuring self-
sufficiency than Native Peoples. We have been here from time immemorial
and the majority of us plan for our communities to be living and
thriving on this land forever. Ahehee, (Thank you).
______
Questions Submitted for the Record to Bidtah Becker, Chief Legal
Counsel, Office of the President and Vice-President, Navajo Nation
Questions Submitted by Representative Westerman
Question 1. Your testimony mentioned that one of President Nygren's
priorities is for the Navajo Nation to have an ownership role in energy
development. How has Navajo Transitional Energy Company (NTEC) been a
part of this move towards ownership in energy development, and what
have been the benefits to Navajo Nation of establishing the NTEC?
Answer. The Navajo Nation took ownership created NTEC in response
to the prior owner of the Navajo Mine announcing it was going to close
the mine. By establishing NTEC, the Navajo Nation took ownership of the
sole mine that provides coal to the Four Corners Generating Station.
The Navajo Nation preserved the coal royalties and on Navajo Nation
jobs associated with the mine and power plant, which totals about 800
jobs. Since the purchase of the mine several years ago, NTEC has
ventured into new areas and is currently engaged in several discussions
concerning both off Navajo Nation and on Navajo Nation energy projects.
1a) Can you expand on what that ownership role for Navajo Nation
practically looks like in the future?
Answer. The ownership role allows the Navajo Nation to have a say
in when and how to close important employers on the Nation. It also
allows the Navajo Nation to know as soon as possible when employers are
possible shutting down. The shutdown of the Navajo Generating Station
(NGS) resulted in the loss of 1,000 direct jobs on Navajo Nation jobs
and 3,000 indirect jobs. If the Nation had been an owner of NGS, it
would have known sooner what the owners' plans were and could have
begun working on worker placement programs so that these individuals
could continue to be employed on the Navajo Nation.
1b) What would be the ideal managing situation look like for Navajo
Nation?
Answer. The ideal managing situation will be unique to each energy
project. That being recognized, the ideal managing situation allows the
Navajo Nation to have a say in not only how to protect Navajo Nation
jobs but also to ensure the Navajo communities are heard and their
concerns are adequately responded to. It also helps ensure the
development of an on Navajo Nation economy.
Question 2. Your testimony mentioned that access to several
agencies' databases would be crucial to fully carry out the expanded
leasing authorities included in the Indian Tribal Energy Development
and Self Determination Act Amendments of 2017.
2a) Could you provide further information to the committee
regarding what the Department of the Interior Solicitor staff provided
as the reason(s) the Navajo Nation would lose access to the data if the
Nation decided to issue its own mineral leases?
Answer. The Navajo Nation staff spoke with the Office of Natural
Resources Revenue who reported the decision from the Office of the
Solicitor. The reasons for the Solicitor's decision were not shared
with the Navajo Nation staff.
2b) While a lack of access to the lease, production, and royalty
databases is mentioned prominently in your testimony, could you expand
on any other issues that would impact the Navajo Nation's use of these
expanded leasing authorities?
Answer. The Navajo Nation Minerals Department currently
collaborates with the Bureau of Land Management (BLM), Office of
Natural Resources Revenue (ONRR), and Bureau of Indian Affairs (BIA) in
managing mineral leases. For the most part, these are complicated
leases to manage and ONNR provides very valuable assistance. For
instance, regulations concerning the appropriate valuation of royalty
price change over time as the energy market develops. This type of
real-world energy market engagement requires a specialized staff that
is employed through ONNR. When considering taking over mineral leasing
authority, the Minerals Department is and has struggled with developing
the appropriate staffing and finding the funds to ensure this
appropriate staffing for valuation alone. Even when considering
contracting valuation services, the Navajo Nation Minerals Department
has been unable to find the resources necessary to meet the standard of
service it currently expects.
This is why access to the databases referenced above is so
important. ONNR has a royalty collection database that ensures a
monthly reporting for each producer on the Nation. This includes but is
not limited to what is produced, sales volume, sales values, royalty
values, including deductions, and more. The Navajo Nation has yet to
determine how it can replace this ONNR database in the event it takes
over all mineral leasing.
BLM also has a database that provides production reports. The BLM
system works together to compare ONNR data with BLM data. BLM reports
well level data and ONNR report lease level data. These two reports are
then compared and shared with Mineral hyper accurate reporting. Again,
in imagining how to take over mineral leasing, the Minerals Department
struggles to determine how to replace this hyper accurate data.
The Minerals Department is committed to tribal sovereignty and is
currently considering taking a small slice of mineral leasing authority
over, and specifically sand and gravel leasing. This is because the
database services are not as critical to sand and gravel reporting and
lease management as they are for oil and gas. Reporting is required
from sand and gravel companies but because it is above ground, it is
easier to monitor the production.
It is important to note that the Minerals Department is committed
to tribal sovereignty and last year the Navajo Nation Council passed
the necessary laws for the Minerals Department to eventually obtain
primacy over surface mining reclamation from the Office of Surface
Mining. The Navajo Nation is poised to become the first tribal nation
to take over primacy of surface mining regulation in the United States.
This is important to note because Minerals has been able to figure out
staffing needs for other of its programs so as to take over roles of
the federal government. Mineral leasing has been more elusive.
Question 3. President Nygren testified earlier this Congress
against the mineral withdrawal around Chaco Canyon because it would be
detrimental to Navajo allottees that have allotted land within the
withdrawal area and rely on revenues from oil and gas production to
make ends meet. Looking at that decision from a different perspective:
Does this withdrawal affect the overall energy resource development for
Navajo Nation?
Answer. The Navajo Nation is currently reviewing how the withdrawal
affects the overall energy resources development for the Nation.
3a) In addition, please expand on how this withdrawal affects other
energy projects on Navajo lands.
Answer. The Navajo Nation is currently reviewing how the withdrawal
affects other energy projects on Navajo lands.
Question 4. Are there other specific barriers the Navajo Nation has
experienced when seeking to develop energy projects on Indian lands?
And what other solutions should Congress consider for getting rid of or
lessening barriers to developing projects on Indian lands?
Answer. Specific barriers can include certain regulatory reviews
and timing. Meaning if regulatory reviews are too slow, the Nation may
not capture the market opportunity.
Something Congress could consider is granting discretion to
agencies when they are working specifically on Indian land. The purpose
of discretion would be able to, among other things, consider the
various benefits occurring on Indian Land that might be lost if
regulatory reviews are unnecessarily delayed. As things stand, all
projects are treated as essentially equal for many regulators. To
respond to the market, some projects need to be evaluated more quickly
than others, and without losing the quality of the review.
______
Ms. Hageman. I have to go to a different committee, and
then I will come back and ask my questions. Thank you very
much.
Mr. LaMalfa [presiding]. Thank you again. It is kind of
nice to be back in the old Chair seat for the Indian Affairs
from years ago.
I want to thank our witnesses again for your testimony and,
of course, for your time and travel.
Let's move into Member questions. I will bypass myself for
now. Let's go to our Ranking Member for her 5 minutes.
Ms. Leger Fernandez. Thank you so very much for both the
written testimony that we had all read but also for emphasizing
I think some of the very key areas.
Perhaps, I am going to start about the issues that have
been raised by NAFOA, which is a national organization, but I
do know that you work on trying to keep all of the different
tribal interests in play. And I wanted to actually touch a bit
on some of the issues that you raised that I think we need to
go back and look at getting the guidance out, and are there
things that we need to do at a congressional level, and it
might not be in this Committee.
The great thing about this Committee, Ms. Becker, is we
have oversight. We cannot legislate, but we sure can raise
issues with the other Federal agencies, including the need for
a tribal task force with all of the different agencies,
bringing the kind of expertise they have in their unique areas.
And this Administration has done that a lot. They keep calling
it the whole of government approach. I don't know if I am crazy
about the tag line they use, but the idea of pooling what is
necessary from each of those areas to get these projects going.
I think that there is a concern I have about, there are two
levels of expertise that we need. We need the expertise at the
Federal level, the agency level, in order to address how do you
actually go about issuing a lease since we have so many
different--you know, is it an IMDA (Indian Mineral Development
Act), is it an old lease, new lease, et cetera. But also, we
need to make sure that there is expertise available to the
tribe for them, and that could be a funding issues that we need
to do.
So, Mr. Lovesee, can you tell us a little bit more? Because
I want to get this money out, right. We need to get this money
out. We need to get you using it. I think you said it in your
written testimony, but could you tell us the two things that
you want us to do, and it might not be this Committee, so we
can get the tribes the money they need to do these projects
that America needs.
Mr. Lovesee. First of all, I would like to thank you,
ma'am, because last year you were very instrumental in NAFOA
being in front of the House Energy Committee and testifying on
LPO.
The two things that I would recommend is first, we need to
sit down and figure out what can we do to create a positive
business atmosphere for tribes so that companies or any outside
group isn't looking at the negatives of working with the tribal
government, but they are looking at the positives. And I would
imagine it is very frustrating for all the Members sometimes to
do something like direct pay or like LPO changes and still not
have enough projects going forward, and people like myself
saying, well, what can we do next instead of thanking you for
what you did. But it needs to be kind of a whole effort looking
at it rather than just a little bit here, a little bit there.
What can we do to really create a positive situation overall?
And then secondly, I would say again, and it is not a very
exciting thing, but staffing is so important because we need to
get people in the tribes who represent the tribe's interest
instead of having just a consultant come in and say this is
what needs to be built. We need people who are in the tribes
that understand energy from front to back.
Ms. Leger Fernandez. Yes. And because we have little time,
I am going to say in some ways I am going to--and you know the
way CERT (Council of Energy Resource Tribes) played a
particular role like that because they might not have always
needed to be in the tribe because the tribe might not always
have, except for some tribes, a continuous development, but
then that ability of a trusted agency back in those days of a
certain namesake.
We are talking a bit about when people go to Southern Ute,
they know they are dealing with a tribe incredibly versed in
the business world and incredibly successful.
But, Chairman, I was also struck by in your testimony how
important it was for you to make sure you controlled the
protection of the environment and the cultural resources. Can
you give us a quick example of that? And then I did want to get
to this question on staffing, what would a shutdown look like?
So, if you could perhaps be quick, and then I am going to do a
maybe yes or no round.
Mr. Baker. Yes, thank you, Ms. Fernandez. I think, it
really starts with our past leaders, their visions, how they
moved forward and how we are always going to protect the land
and the cultural resources, and everything. But what can we do
better tomorrow for our people?
So, again, as I sit as the Chairman, it is still
maintaining that consistency of we are going to protect that
land at all cost. We have our water quality, air quality, we
have our own standards that surpass the state of Colorado's, so
everything that comes through, we are always about cultural
resources, protecting the land, taking care of our elders, our
children, just everything.
I mentioned it as it is like the past leaders are building
a house, and they built that foundation, and it is up to us
today to finish that house, doing it in the right way, but
utilizing their expertise that started this whole process.
Ms. Leger Fernandez. Well, thank you very much. I have run
out of time, so I will do it this way. If a shutdown would
negatively impact the tribe or the tribes you serve, will you
raise your hand?
Thank you. I yield back.
Mr. LaMalfa. Thank you. The gentlelady yields back. I will
now recognize Mr. Carl for 5 minutes.
Mr. Carl. Thank you, Mr. Speaker. Well, OK, Chairman.
[Laughter.]
Mr. Carl. Do you want to be Speaker? We will get you in
line.
[Laughter.]
Mr. Carl. I don't think anybody wants that job on either
side of the aisle.
[Pause.]
Mr. Carl. To the Indian Nation, I may not be the right
person on this Committee, because I don't understand why as a
Nation you have to come and ask for permission from the Federal
Government to do something with your own land because we, the
Federal Government, are the ones that put you on that land to
start with. I think you should have the ability to determine
your own future.
I grew up around two Creek Indians. Mr. Pruitt was one of
them, and I can't remember the second one's name. One of them
did not have electricity and did not have water in his home, by
choice. That may seem odd to some people in this room, but he
was linked to his Native roots. I learned a lot from that man.
Another man was a trapper who had come down from Michigan
and he taught me how to trap, and we trapped hundreds and
hundreds of beavers, and I learned from that man. And he had
some very peculiar ways versus my ways, but I learned from that
man. But he was where he wanted to be in that moment, in that
time.
I don't understand why we as a Federal Government think
that we are so high and mighty that we can tell an Indian
Nation, period, what they can do or what they cannot do. It
frustrates me because the tribes that I work with and the
Navajos I have been getting very close to lately, they are more
than capable of running their own businesses and doing their
own things.
So, I would encourage you to start pushing back on the
Federal Government. You have the power, and the power is in the
votes. You don't get what you want from up here, look at the
person, including me, look at the people that are unwilling to
work for you and get them out of office. Get people on this
Committee that want to work with you.
Now, you are talking about needing information from the
Department of Energy, there is no reason why you shouldn't have
that information. That is your land. Taxpayer's money paid for
that information and that information should be yours. I don't
understand why we can't--oh, we are so important. We have a
bill loss bureaucracy around it. We have to have another
meeting, to have another meeting, to have another meeting.
This is like serving on a board of the Southern Baptist
Convention, I am telling you; it is all about more meetings. It
is not that complicated. Turn me loose.
What other group of people in America has to live by the
rules that you have to live by? Tell me. I am telling you it is
a modern-day term of slavery, and we need to start calling it
what it is and quit being nice about it.
And I got that off my chest. And I have found out I do have
Indian roots. My tribe has long been gone, but it is OK, I
still have Indian roots. I still have a little fire in myself.
OK, I am sorry.
Let's see. Chairman Baker, from your testimony, it is
obvious that the Ute Indian Tribe has benefited from long-term
planning and forward thinking about how to develop and use your
resources. Can you discuss how the Tribe goes about making
these big decisions and how these decisions may have been
impacted by the Federal barriers?
Mr. Baker. OK, yes. We have a department of the Tribe that
is called the Growth Fund and within that we have our energy
department. We have some very, very knowledgeable people. I
mean, we hire them to do a good job. They have done an awesome
job. They really push.
And the way it works is whenever they come up with an
acquisition or a deal they want to move forward on, we have in
the middle what is called the Growth Fund Management Committee,
so it goes to the next level. It has to have their approval
before it can come to Tribal Council for final approval. And at
that meeting, we will discuss or we can question that
committee, that group, anything we want before we make a final
approval. And it has to be in the best interest.
And I just praise our teams. We have been so successful,
and they do a diligent, awesome job for us.
Mr. Carl. Thank you. I want you to understand there is good
and bad in all cultures and all races, and it is good and bad.
I have been exposed to nothing but good in the tribal
community. Please take advantage, use me. I can be a voice. But
we have to be one voice. We have to be one voice to be heard.
So, get together, figure out how you can use me, or I will
get out of the way if that is the case. But thank you for your
patience with the Federal Government because I don't think you
need the Federal Government.
With that, I yield back.
Mr. LaMalfa. Thank you, Mr. Carl. And, colleagues, if you
wish, it looks like we might have a little time to do a second
round of questioning since our panel is----
Voice. We may not.
Mr. LaMalfa. Or may not. Who has the gavel?
[Laughter.]
Mr. LaMalfa. I just got elevated to Speaker a while ago.
But anyway, it is something we can consider, perhaps. I will go
ahead and recognize myself for 5 minutes as hopefully our Chair
gets back from the other committee in a moment as well.
I am pleased to be able to represent far Northern
California where we have many, many tribes that are represented
there, and the issues are common with being remote areas, or
energy, minerals, timber, other resource development is the
best option for tribes and everyone else in a district in an
area like that.
So, when we take in the testimony from our witnesses today,
I note that there are many similarities between the
complications and the roadblocks that the tribes cite and along
with what everybody else in my district cites as well, too,
with rural governments run into that, and just roadblock after
roadblock. You have common themes such as a process of approval
that extends for years without even a clear end in sight.
Regulations that require their own special training to even
remotely understand them. Phrases and carveouts which are
nonsensical to the average person and left completely undefined
by our Federal agencies.
So, we need to address these problems because the great
harm it is going to put on Indian Country and Rural America in
general without ability to economically develop except maybe
tourism, right? Tourism is great, but we have to actually
produce wealth that comes from the land. I am a farmer in my
real life, so I get that as well.
Let me toss a question. Mr. Baker, Congress tried to
improve the tribal energy development agreements in 2017, we
took a shot at it, but it really hasn't worked out to be as
fruitful as we had hoped. So, you are pursuing a resource
agreement under these new rules and regs that were finally put
in place in 2019. So, what difficulties have you faced already,
what difficulties would smaller tribes with fewer economic
resources face than what you have available?
Mr. Baker. Well, I think of what you mentioned, the
setbacks, the things that we can work on together. But today is
a new world, today is a new day. I am thankful that they are
working with us and trying to move forward. I mean, I think
every tribe is different, the setbacks, the things that we can
or cannot do.
But I just can't praise enough in all of my testimonies
that, again, here we are together with our leaders, and working
together with you to be a better tomorrow. Enough is enough. I
think it is long overdue, and we have to all work together to
do a better job. And as I mentioned, every tribe is different,
so they all have their own challenges.
Mr. LaMalfa. Certainly. And some have better ability to
roll with the punches on that than others, but nobody should
have to, as Mr. Carl was passionately talking about, why do you
even have to be here to begin with if you are an autonomous
federally recognized government. That is very frustrating for
all of us.
Let's see, where was I at as I made the jump. For Mr. Baker
and Ms. Becker, both of your tribes have been successful in
developing some amount of energy or mineral resources, but in
your experience across the board, what are the barriers that
separate tribes that can develop their own resources on their
own land and those who can't? What do you find are the
differences between tribes that have had success and not? Let
me go to Ms. Becker, give you a chance first, then we will come
to Mr. Baker.
Ms. Becker. Thank you for the question. As Mr. Lovesee
said, it is essentially an unequal playing field because of the
permitting that we need to go through with the Federal
Government. Even when we take over land leasing, which the
Navajo Nation has done, and we can issue our own land leases,
there are sub-elements where we still have to go back to the
Federal Government and get their approval.
I am going to point out one example because it touches on
the whole spectrum of energy, and that is we are struggling
right now with getting tree cutting permits from--and I see
your reaction, Mr. Carl. We are struggling with that. I was
just told by our Navajo tribal utility authority that is using,
thank you, Congress, some of the American Rescue Plan Act
funding to get electricity to people who would like
electricity, and they have hit a log jam in getting a tree
cutting permit out of the Bureau of Indian Affairs.
That is one example of how even after we take over leasing
we still have to go back to the Federal Government.
Mr. LaMalfa. I am running out of time. I appreciate that
comment, because in my own district, the town of Paradise,
which 90 percent of it burned in what was known as the Camp
Fire, 85 lives lost. Five years later, they are still trying to
remove dead trees, and get permitting, and get a NEPA, and all
this and all that. They removed some of the hazardous trees
already, thankfully, but there is still a lot of work to be
done.
Mr. Desautel from Colville, I heard you, too, with what you
are dealing with, because we have many, many 6-digit or larger
fires. I had a 7-digit fire, a 1-million-acre fire 2 years ago
known as the Dixie Fire. And it boils down to Federal land is
not being managed in a way that makes for a good neighbor. What
you were saying, good results happen on managed lands, even
when they are adjacent to unmanaged ones, because we saw that
in Paradise where a wildfire hit a managed area, the fire
knocked right down. I hear you. We are going to keep after it.
I will yield back, Madam Chair. I didn't have such a tough
gavel when I ran it.
[Laughter.]
Ms. Hageman [presiding]. I am tough on people.
I recognize myself for my 5 minutes of questions. Thank
you.
What you have described is I think the epitome of the old
adage that the government is always trying to fix its last
solution. And I really do look forward to working with you to
find better solutions that actually meet the needs of the
tribes rather than merely giving lip service to what it is that
you need. The heavy hand of the Federal Government is just
simply unacceptable, and the fact that it can take this amount
of time for you to get the permits or the approvals that you
need is just simply, again, I am going to use the word
unacceptable.
Also, Ms. Becker, you indicated that perhaps you were going
to raise issues that were a little bit uncomfortable. If we
don't have uncomfortable discussions, we are not going to have
any discussions at all. If our agencies are failing our tribes
at addressing these energy issues that are not only critical to
you but critical to the United States of America, then we are
failing everybody.
I want to thank you for what you do in Wyoming, for what
your Tribe does in Wyoming. You guys are a fabulous neighbor, a
fabulous producer. We appreciate how you operate, and we
appreciate what every one of you are trying to do in terms of
improving this situation for your tribal members.
Mr. Baker, the TERA concept seems to hold a lot of promise
for those tribes like the Southern Ute that want more control
over resource decisions on your own lands. However, no tribe
has yet submitted one to the Department of the Interior for
approval. Can you elaborate on your testimony a little bit and
discuss more about the inherent Federal function issue that has
affected your Tribe's decision on whether to submit a TERA and
why it is important to solve it?
Mr. Baker. Well, again, as we mentioned, no tribe has
entered that. I think our Tribe has been asking for
clarification for many years on that. And it does make an
impact on how we are going to move forward. But, again, it just
appears that with the TERA regulations, it is like saying we
are going to play a game but the government is not telling us
the rules of the game. Why do we want to waste time and money?
We have already done that in the past where we put a lot of our
staff ahead to try to get ahead of this and it really boiled
down to nothing.
So, for us, it was a loss of funding. And I think we have
to move cautiously how we are going to do things. And we have
held back on some of that because, again, we don't know the
rules, we just are not working together. I feel that the
Federal Government is not doing their part.
I mean, it should be a simple answer. It should be a simple
question. And, again, as we sit here today, that is what we are
all here for as leaders to talk. How can we see a better
tomorrow? How can we work together?
And you all know the challenges of every tribe are
different, so help us get through it. And with that, I believe
our own tribes, they work with each other. They ask how did you
do that, how did you do this. They meet, at certain meetings
they talk about these issues, the challenges. But it just seems
like for years nothing has ever come out of it, and that is why
they are really being cautious on not moving forward.
Ms. Hageman. And I take it that you are seeking
clarification from Federal agencies, but that clarification has
not been forthcoming?
Mr. Baker. Right.
Ms. Hageman. OK. So, then I am going to challenge the four
of you, and I am going to ask you to do something for us. I
would like you to put together the checklist, or the
information, or the documentation of what you believe our
agencies should be doing. You bring that to us and then let's
see if we can solve it from your standpoint.
Because if these agencies are not moving forward with the
projects, or you are not able to move forward with the
projects, because the agencies are neither clarifying, nor
responding, nor dealing with the individual situations that
every single one of your tribes have or any other tribe around
this country, then we need to solve it from the ground up.
Coming to Washington, DC and saying that the Department of the
Interior or the Secretary of the Interior is not giving us the
information, we know that, and that is the frustration that we
have.
I want your help in knowing what I need to ask the
Secretary of the Interior to do. Tell us how to make these
programs better, and we will try to fix them. This should never
be at top-down approach. We need to come to you and say, how do
we go about making sure that we do get the permits that we need
to be able to remove the trees? Why in the world would it take
years to do that?
That is an absolute absurdity and it kind of demonstrates
how broken this place can be, but it is also why I have worked
as hard as I have to try to return autonomy to the tribes
because you are the ones who can make the better decisions that
are going to be in the best interest of your members and you
are actually going to be able to succeed to accomplish
something. So, help us help you. I am all ears. I will work
with you.
Mr. Baker, what is your response?
Mr. Baker. Yes. And I would like to say the Southern Ute
Tribe would like to work with the Committee to address the
issue to bring clarity and certainty to the TERA idea. Again,
you mentioned how can we help you help us, and that is one of
our philosophies even working with the local BIA. There are a
lot of things we cannot get done, and we have to the point
where we are asking the BIA how can we help you help us.
We have to work together. We are, as a tribe, reaching out
because we need things to move along, but you are not doing it.
We always get the excuses of they don't have the
professionalism. Well, the tribes do. We do. But you are
holding us back. How can you help us help us.
And, again, just indicating that the Tribe would be willing
to work with how we can bring certainty to the TERA.
Ms. Hageman. I have a lot more questions I wanted to ask
you, and I kind of got on my soapbox, but I am going to tell
you, I am two floors above here. You come here and you come and
talk to my staff, and we will sit down, and we need to make
that list. We need to have an idea of where to go because I
don't have the answers, but you do. So, help us fix this.
And with that, I will call on our Chairman, Mr. Westerman,
for his 5 minutes of questioning.
Mr. Westerman. I am not sure I want to follow that.
[Laughter.]
Mr. Westerman. Thank you to the witnesses for being here
today. This is an issue or an area that is very important to my
role as Chairman of the Committee and to the outlook that we
are trying to lead the whole Resources Committee and especially
this Subcommittee. And I want to commend the Subcommittee
Chair, Representative Hageman, for the excellent work that she
is doing in putting together hearings like this on tribal
sovereignty.
I have told folks when we talk about tribal sovereignty, it
is not just talk, we want to see action. And the reason you all
have been selected for this panel, or invited to be here today,
is because you come from an area where I would say there is a
lot less talk and a lot more action. You are getting things
done, whether it is in resource management, or finance, or
whatever area you work in.
And I had the good privilege to be out and visit the
Colville Tribe last year and traveled around and looked at some
of the great work that is being done there, and I thought, this
needs to be replicated. But also, was a little frustrated
because of the boundaries and barriers that were being put in
place by people far away from the Colville Tribe, and I saw so
much more potential.
And, Mr. Desautel, I know that you all are working on an
agreement for a planned biochar facility in Kettle Falls, which
is a beautiful place, by the way. But can you further expand on
how new biochar and/or biomass projects can benefit the
management of tribal forests?
Mr. Desautel. Sure. I think when you look at tribes across
the West, many of them have leaned on timber as a source of
revenue to support their tribal government for decades, but
there has not been a place for those non-merchantable forest
products. And now we recognize that not only are those a source
of revenue, but they are a source of fuel that has fueled
wildfires that have damaged Indian Country for the last couple
decades in particular.
So, if we can find a way to utilize those materials in a
cost-efficient way or potentially even a way that generates
some additional revenue for the Tribe, that would be a huge
opportunity for the Tribe to improve management and resilience
on their own lands. But with the authorities Congress has given
us over the last few years with the Tribes' ability to work
with its partnering Federal agencies, we can do that work not
only on our land but on adjacent Federal land, too.
So, I think there is a great opportunity if you can develop
the infrastructure and the markets that make good use of those
non-commercial forest products that right now are going up in
flames contributing to global warming and burning down
communities.
Mr. Westerman. Yes. And how could a reauthorized tribal
biomass project specifically help development at Kettle Falls?
Mr. Desautel. When we look at the development of a project
like that, the infrastructure costs are huge, so financing for
that is something that is going to take probably 2 or 3 years
to work through, and I am sure the payback timeline is going to
be a couple decades. So, you have to have a supply commitment
that matches the payback timeline of that facility. When you
are looking at roughly 20 years for a facility like that to pay
for itself, you have to ensure that you have supply for that
over that time.
You have seen mills close over the last couple decades
because of that and many of them never reopen because they just
couldn't secure the financing they needed because historically
a lot of that wood came from Federal forests and there is just
no confidence that that will happen in the future. But if you
can enter into these long-term supply agreements, there is some
confidence by the banking industry that those loans will be
paid, that those facilities will operate.
And if we have that authority--the problem is that we had 5
years to do it. That is a pretty short timeline to put together
projects that are in the neighborhood of $50 to $100 million to
build and the capacity and contracting capacity that you need
to add is substantially bigger, and it takes time to do that.
So, I think if we have a reauthorization, hopefully it is
for a longer period of time and hopefully permanent at some
point. I hope the intent of the pilot project was just to test
its concept, and in the long-term it would just be a tool we
put in our toolbox.
Mr. Westerman. And as was talked about, when we were out,
we saw some of the tracks that you all had managed, and done a
phenomenal job with, and I guess it was that fire in 2015 that
had firefighters tied up on unmanaged Federal forest. So, not
only did the failure to manage the adjacent Federal forest
result in that forest being destroyed, it took resources away
from fighting the fire on land that you all had done a good job
of managing.
And you are exactly right, if we can use this biomass to
make energy, it is good for the forest, it is good for the
economy, it is good for the environment, and a whole host of
benefits that you get from that. But I understand the
complexities of trying to build the project that can be
millions and millions of dollars and not having any certainty.
And, Mr. Lovesee, I am going to give you just a couple of
minutes to talk about, or seconds, I guess. How important is it
from a financial standpoint when somebody comes in to do a
project to have the certainty that you are going to have the
resources to be able to do that project?
Mr. Lovesee. I mean, certainty is everything when it comes
to a project. And, unfortunately, we are still in the process
of figuring out what partnerships can be done. There are even
issues right now with what the IRS can provide as far as
guidance when doing some of the projects and some of these
partnerships.
We have been trying to work with Treasury on that, but I
know that they have even said they need to come back and talk
with Congress about the authorization to even be able to answer
tribes' questions, because right now there is nowhere tribes
can go when it comes to being able to get some of these
questions answered, as far as being able to work with what
partnerships and what financing options they have available,
especially for something like direct pay credits. There is
nowhere they can go on the Federal Government side.
So, it is everything. I mean, you can't do an energy
project if you don't know where your financing is going to come
from or what it is going to look like 5, 6 years down the road.
And, unfortunately, we are just not there.
Mr. Westerman. Madam Chair, I would just add that if we
could just clear the way so they could do what they do best and
take the barriers away, they are so far ahead of our Federal
land managers in so many places that I have traveled around the
country and visited that we are missing a huge opportunity by
not empowering our tribal partners to do more of what they do
best.
And I am way out of time, so I yield back.
[Laughter.]
Ms. Hageman. But, Mr. Chairman, I want to thank you for
being here today and joining us on what I think is one of the
more important panels that we have had.
The future of energy production, and our tribal autonomy,
and the future of your communities is really at stake with some
of the things we are talking about today.
I thank the witnesses for your valuable testimony and the
Members for their questioning.
The members of the Committee may have some additional
questions for the witnesses, and we will ask you to respond to
those in writing. Under Committee Rule 3, members of the
Committee must submit such questions to the Committee Clerk by
5 p.m. on Tuesday, October 3, 2023. The hearing record will be
held open for 10 business days for these responses.
If there is no further business, without objection, the
Committee stands adjourned.
[Whereupon, at 11:26 a.m., the Subcommittee was adjourned.]
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