[Senate Hearing 111-430]
[From the U.S. Government Publishing Office]
S. Hrg. 111-430
INDIAN ENERGY AND ENERGY EFFICIENCY
=======================================================================
HEARING
before the
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
OCTOBER 22, 2009
__________
Printed for the use of the Committee on Indian Affairs
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COMMITTEE ON INDIAN AFFAIRS
BYRON L. DORGAN, North Dakota, Chairman
JOHN BARRASSO, Wyoming, Vice Chairman
DANIEL K. INOUYE, Hawaii JOHN McCAIN, Arizona
KENT CONRAD, North Dakota LISA MURKOWSKI, Alaska
DANIEL K. AKAKA, Hawaii TOM COBURN, M.D., Oklahoma
TIM JOHNSON, South Dakota MIKE CRAPO, Idaho
MARIA CANTWELL, Washington MIKE JOHANNS, Nebraska
JON TESTER, Montana
TOM UDALL, New Mexico
AL FRANKEN, Minnesota
Allison C. Binney, Majority Staff Director and Chief Counsel
David A. Mullon Jr., Minority Staff Director and Chief Counsel
C O N T E N T S
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Page
Hearing held on October 22, 2009................................. 1
Statement of Senator Barrasso.................................... 2
Statement of Senator Cantwell.................................... 3
Statement of Senator Dorgan...................................... 1
Statement of Senator Franken..................................... 7
Statement of Senator Johanns..................................... 6
Statement of Senator Murkowski................................... 4
Prepared statement........................................... 5
Statement of Senator Udall....................................... 6
Witnesses
Gray, Hon. James Roan , Chairman, Indian Country Renewable Energy
Consortium Board of Directors; Chairman, Osage Nation.......... 29
Prepared statement........................................... 31
Herrera, Hon. Steve, Tribal Council Member, Southern Ute Indian
Tribe; accompanied by Tom Shipps, Legal Advisor................ 37
Prepared statement........................................... 39
Levings, Hon. Marcus, Chairman, Three Affiliated Tribes of the
Fort Berthold Reservation; Secretary, Council of Energy
Resource Tribes (CERT)......................................... 8
Prepared statement........................................... 10
Sampson, Jr., Hon. Ralph, Chairman, Yakama Nation................ 41
Prepared statement........................................... 43
INDIAN ENERGY AND ENERGY EFFICIENCY
----------
THURSDAY, OCTOBER 22, 2009
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 2:15 p.m. in room
628, Dirksen Senate Office Building, Hon. Byron L. Dorgan,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
The Chairman. Let me thank my colleagues for dispensing of
those two items of business. And let me say, as we begin this
process once again, this Committee is not going to be in the
business of trying to recognize what is an Indian tribe or who
belongs to an Indian tribe or who doesn't, or who should we
recognize as a tribe. That is not something I think we should
routinely do. These two cases I think were unique.
And now I will close the business meeting formally, and we
will open the hearing. Let me describe, if I might, the purpose
of the hearing today.
This hearing is about Indian Energy and Indian Energy
Efficiency. Today's hearing follows up on an Indian energy
hearing that we held on May 1st, 2008. And at that hearing, the
Committee received testimony on the obstacles that Indian
tribes face in developing energy resources. We are now focused
on trying to find solutions to those problems. Following the
May 1st hearing, the Committee met with tribes from across
Indian Country on energy issues, worked with the Administration
to try to improve implementation of Indian programs, and now we
are holding this hearing today.
Vice President Barrasso--excuse me, Vice Chairman----
[Laughter.]
The Chairman. I want to elevate my colleague here.
Vice Chairman Barrasso and I released an Indian Energy and
Energy Efficiency concept paper. We also announced a series of
Indian energy roundtables to discuss the concept paper. Our
staff have conducted eight roundtables throughout Indian
Country. We have done that because we believe consultation is
the hallmark of this Committee in our work with the tribal
governments around the Country.
The energy roundtables were designed to engage Indian
leaders, tribal members and their energy partners to discuss
the concept paper. This hearing is another step. The concept
paper identified three major obstacles: number one, antiquated
laws and cumbersome regulations; number two, the lack of tribal
access to the transmission grid; and number three, the lack of
available financing and incentives for investment for Indian
tribal energy projects.
As I said before, there is substantial energy available on
Indian lands across this Country. Too little of it is being
developed because there are cumbersome procedures and all kinds
of roadblocks. We want to find a way to unlock the opportunity.
Nowhere in this Country is there a greater need for the jobs
that will come from substantial and robust economic development
from these energy resources.
And yet, what we have discovered is, in our experience
working with the Three Affiliated Tribes' Reservation in North
Dakota, a 49-step process. You want to get a permit to drill an
oil well on an Indian reservation, it is going to take you
much, much, much, much longer than if you want to get a permit
to drill anywhere else in my State. And I have shown the map
previously of this circumstance. The circumstance has changed
for the better, but that map shows all those little areas where
wells have been dug, and that middle part is the Indian
reservation. You will see there is much, much more activity
north and south and west and much less activity on the Indian
reservation.
Why? Because there is less oil on the reservation? No, not
at all. It is much harder to drill there, because you have to
go through a long process with the Interior Department, I
believe four separate agencies in the Interior Department, to
get a permit to drill for oil.
It ought to be as easy to get a permit to drill for oil on
that Indian reservation as it is to the west of it, the north
of it and the south of it. That is what we need to fix. Now,
Chairman Levings is one of the witnesses today, and he very
much, for his tribe, wants robust development, just as all of
his neighbors do around him. That was almost blank at the first
part of this year on the Indian reservation. We are making a
little progress. But there is much more to do.
So let me say to my colleague, Senator Barrasso, I think
the paper that we have put out, it is a working paper, it has
been a good start. I look forward to the witnesses today at
this hearing to talk about their view of this and what we
should do to proceed to move forward.
Senator Barrasso, do you want to comment?
STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. I would like to do that, Mr. Chairman,
and I want to thank you for holding this very important hearing
on one of really this Committee's highest priorities. Earlier
this year, I met with the Joint Business Council of the Eastern
Shoshone and Northern Arapaho Tribes in Fort Washakee, Wyoming.
Tribal leaders emphasized to me and to our staff, our combined
staff, how important energy development is to the economy of
the Wind River Indian Reservation.
Wyoming, as is North Dakota, is very blessed with abundant
resources, including energy resources, that this Country
desperately needs. This Committee can address key issues that
will improve the Northern Arapaho and the Eastern Shoshone
Tribes' ability to develop their energy resources, just as you
are dealing with in North Dakota and in places around the
Country.
This will be win-win situation, improving economic
development on the reservation and supplying important
resources, Mr. Chairman, to the Nation. As you know, at this
Committee's Indian energy round tables, tribes and individuals
have made it clear that increasing Indian energy development is
critical to improving the economies on our reservations.
During the roundtables, the subject of NEPA paperwork was
discussed again and again. I am referring, of course, to the
National Environmental Policy Act. It is my understanding that
Congress intended NEPA to apply to decisions relating to use on
Federal public lands. Since then, Federal courts have
interpreted NEPA to apply to decisions by the Secretary
regarding Indian lands. We have been hearing that NEPA impacts
the tribes' goals to develop their trust resources, including
their energy resources.
So it is my hope, Mr. Chairman, as it is yours, that we can
address this, that we can address those many impediments that
you have mentioned that prevents development on Indian lands.
With that said, I want to thank our witnesses for being here.
Many have traveled long distances. I look forward to the
hearing today.
The Chairman. Senator Barrasso, thank you very much.
I want to recognize other Senators for brief comments.
Senator Cantwell?
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman. Thank you for
calling this important hearing today.
It is important that Indian Country be part of the debate
on the need for a greener energy economy. I appreciate your
efforts to construct an Indian energy bill that will maximize
the efforts of tribes across our Country.
I would also like to thank Chairman Ralph Sampson of the
Yakama Nation for traveling all the way to Washington to give
testimony here today. I would like to thank the rest of the
witnesses.
The Yakama Nation Reservation covers 1.3 million aces and
contains numerous possible sources for renewable energy. The
tribe is exploring biomass, wind, hydro resources and
considering the potential for various renewable energy
projects. The nation has recently started its own public
utility district, and in order to produce and sell power to the
reservation, making this work for the Yakama Nation.
Indian Country has the potential to provide a huge amount
of renewable resources. That potential needs to be tapped. At
least 77 reservations have the potential for wind energy
production, and many others utilize biomass and solar.
Nationally, 14 percent of Indian households on reservations
have no access to electricity. This clearly must change.
These renewable resources hold the potential to both raise
the living standards and the quality of life for those Indian
households currently without access to electricity and also to
contribute to our broader national energy and climate policies.
The development of renewable resources holds the key, I
believe, to a green economy and sources of millions of jobs for
Americans. I commend Chairman Sampson and the Yakama Nation for
their leadership and foresight on this issue. I look forward to
hearing his testimony and that of the other witnesses, and
working with you, Mr. Chairman, on moving legislation from this
Committee.
Thank you.
The Chairman. Thank you very much.
Senator Murkowski?
STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman. I appreciate
the opportunity to say a few comments today and for your
leadership and yours, Senator Barrasso, on this issue. When we
passed the Energy Policy Act back in 2005, I think we were all
happy that it contained the provision in it that it did, Title
V, which created the offices within Department of Interior and
Energy that was designed to help Natives and energy
development. The provisions that authorized up to $2 billion in
loan guarantees for both fossil and renewable energy
development on Native lands, these were for reservations both
on the lower 48 and Alaska Native Corporation lands up in
Alaska.
But I have been disappointed in how the Act has been
implemented thus far. While Interior does have an Indian Energy
and Economic Development Office, the Office hasn't encouraged
tribes to enter into mineral leases and other energy
development agreements. At Energy, the Office of Indian Energy
Policy was established, but then wasn't funded for a period of
years. While the Office did provide a few grants, DOE still has
not implemented its Indian Loan Guaranty program.
We recognize, I think, that the aid to Indians and Natives
nationwide to help them develop the likely, very huge energy
resources that are on their land, whether it is oil or gas or
coal, oil shale, you have the wind, solar, geothermal, it is
just about everything can be very helpful. But the aid that has
been made available has been not only underwhelming but almost
non-existent. I certainly appreciate and support the efforts to
try to remedy the deficiencies that we have discovered since
that Energy Act in 2005, whether we do it as a standalone bill
or as part of additions to an energy bill that has already been
considered by the Energy Committee and is waiting consideration
by the Floor.
There are some things that you have laid forth, Mr.
Chairman, in the paper that you have put forth. I support many
of them, such as the issue of transmitting siting, making sure
that our tribes have more ability to influence these
transmission siting decisions across the reservations. Many of
the other provisions I certainly support.
I do want to make sure that the provisions extend aid to
Natives and their Native corporation representatives in Alaska.
I think that should be easy to accomplish and we want to work
with you on that.
I have more extended comments that I want to include in the
record. I probably won't be able to stay for the whole hearing,
because I am heading off to our largest convention of Alaska
Natives, which is being held tomorrow morning. So if you see me
leave early, it is not because of lack of interest in this
subject. We want to work with you and support you.
Thank you, Mr. Chairman.
[The prepared statement of Senator Murkowski follows:]
Prepared Statement of Hon. Lisa Murkowski, U.S. Senator from Alaska
In 2005 when we worked to pass the Energy Policy Act, I believe we
were both happy that the bill contain in Title V, provisions that
created offices inside the Departments of Interior and Energy intended
to help Natives in energy development on Native lands--reservations in
the Lower 48 and on Alaska Native corporation lands in Alaska.
I have been very disappointed with how the Act has been implemented
so far. While Interior does not have an Indian Energy and Economic
Development Office, the Office has not really encouraged tribes to
enter into mineral leases and other energy development agreements.
At Energy, the Office of Indian Energy Policy was established, but
not funded for several years. While the office did provide a few grants
this past year, DoE still has not implemented its Indian loan guarantee
program.
The aid to Indians and Natives nationwide to help them develop the
likely huge energy resources on their lands: oil, gas, coal, and oil
share, and wind, solar, geothermal, biomass and in some cases hydro,
has been not only underwhelming, but almost non-existent.
I certainly support your efforts to try to remedy the deficiencies
discovered since 2005, either in a standalone bill or as part of
additions to an energy bill that has already been reported by the
Energy Committee and is still awaiting floor consideration.
There are few complexities. Given that we have already moved in
Energy to separate part of the loan guarantee programs from DoE and
give them a new Clean Energy Development Administration, it is hard to
know how exactly to mesh these changes until we see if CEDA is going to
pass, or if the loan program is going to remain at DoE.
I personally would like to see more grant aid available for energy
development on reservation and Native corporation lands. I agree that
generating capital to finance and build energy projects is often hard
on Indian lands since the tax incentives we generally provide to the
private sector for energy development don't translate well in Indian
Country and in Alaska.
Obviously finding the money to pay for those grants is the big
program, since a template for the grants was approved in 2007 in the
Energy Independence and Security Act when we created the Renewable
Energy Deployment Grant program. We just haven't funded it, either
through appropriations or in last winter's stimulus bill, or returned
it to its intended national focus. Maybe the Renewable Electricity
Standard that is pending approval in the energy bill may help slightly.
But I don't think it will be the full answer.
I strongly support giving Indian tribes more abilities to influence
transmission siting decisions across reservations. And I support many
of the other suggestions in your' and Senator Barrasso's concept paper
this summer. I do want to make sure that the provisions extend such aid
to Natives and their Native corporation representatives in Alaska, but
that should be easy to accomplish. I also want to make sure they do not
create logistic problems for Indian allotees in the Lower 48 given the
terms of the existing Indian Mineral Development Act.
I thank the Chairman and the Vice Chairman for your hard work on
these issues. I will leave early to catch a flight to Alaska to address
the annual Alaska Federation of Natives, our largest gathering of
Alaska Natives. So if you see me leave early, it is not because of a
lack of interest in this subject. I look forward to working with you on
these important issues. Thank you, Mr. Chairman.
The Chairman. Thank you very much.
Senator Udall?
STATEMENT OF HON. TOM UDALL,
U.S. SENATOR FROM NEW MEXICO
Senator Udall. Thank you very much, Mr. Chairman, and
thanks for holding this important hearing.
Tribal lands comprise approximately 5 percent of the
Nation's land base and contain 10 percent of the Nation's
energy resources. They also provide tremendous promise to help
the United States meet its renewable energy goals. According to
DOE, tribal wind potential can provide 20 percent of the
installed electric power that was generated in the United
States in 2004. Tribal solar energy potential can provide 4.5
times the installed electric power that was generated in the
United States in 2004.
In addition, the land of Indian tribes contain tremendous
amounts of sustainable biomass material. But really, the point
here is tribes need the assistance to do this and to move
forward with development. We made an attempt, as Senator
Murkowski has said, in Title V of the 2005 Energy Bill. But
what we have done has been inadequate. A title was established
at the Department of Interior and Department of Energy to
assist tribes in energy development, but the mandate has only
been partially implemented. DOI set up an Office of Indian
Energy and Economic Development to provide technical assistance
and loan guaranties to tribes. The loan guaranty program is
greatly under-funded. The Department of Energy set up an Office
of Indian Energy Policy and Programs to assist tribes, but the
office was not funded for two years, and has only had a
director with no staff.
Also, none of the Recovery Act money was dedicated to these
types of tribal projects. So we need to do better by the tribes
in terms of assisting them with the development of their energy
resources.
Thank you, Mr. Chairman. I yield back.
The Chairman. Senator Udall, thank you.
Senator Johanns?
STATEMENT OF HON. MIKE JOHANNS,
U.S. SENATOR FROM NEBRASKA
Senator Johanns. Mr. Chairman, thank you very much. Let me
just say, as that map was displayed, I think that tells the
story. Obviously, something is not working here in a rather
magnificent way. You have all of this development all around
the Indian reservation, and yet there on the reservation, the
development does not occur.
Bottom line is, we want development to occur. The tribes
want development to occur. We are in agreement on that. I think
we are also in agreement that it has to be the whole host of
possibilities, not just drilling for fossil fuels, wind and
solar, and maybe nuclear, a whole host of opportunities exist
if we can somehow figure out the right combination here.
I must admit, I am becoming more and more convinced that it
really is all about implementation and how we somehow overcome
the roadblocks that exist, whether they are financial, whether
they are just part of the culture of the process that you have
to go through. So my hope is today that as you testify, and I
thank the witnesses for being here, that maybe you give us a
little bit of insight on where are those speed bumps, where are
the absolute roadblocks, where is it impossible to move
forward, and see if there is something that we can do in a
legislative way that will help with that implementation
problem.
Let me just wrap up and say to the Chairman and the Ranking
Member, I really do appreciate their leadership in bringing
this forward. I think this is such a key economic opportunity.
Those who know my background know that I am not a fan of
gambling. It is too dependent on the economy. When things are
going well, there is a financial stream there. When things
aren't going well from an economic standpoint, people lose
their jobs. They are out of work. At a time when they most need
that employment, that employment is in jeopardy.
So I am hoping that this is an opportunity for us to try to
improve economic circumstances on our reservations across the
Country. Thank you.
The Chairman. Thank you very much.
The Senator from Minnesota?
STATEMENT OF HON. AL FRANKEN,
U.S. SENATOR FROM MINNESOTA
Senator Franken. Thank you, Mr. Chairman, thank you, Vice
Chair Barrasso, for holding this very important hearing.
I want to thank the witnesses for coming, and I want to
apologize. I have to leave in 10 minutes for a meeting on
health care.
Back at home, a number of our tribes have been implementing
advanced energy strategies. I want to thank the Chairman, who
has been very supportive of these initiatives in his other
roles as Chairman of Energy and Water Appropriations, of that
subcommittee. One example can be found on the White Earth
Reservation. The White Earth Tribe has developed a local
alternative energy initiative. They have worked out agreements
with some of our rural electric cooperatives and farmers in the
region. The result is a 20 kilowatt wind turbine at Waubun,
Minnesota, and they have plans to expand production and feed
energy into the grid.
Part of White Earth's integrated strategy includes reducing
energy consumption through conservation and distributive energy
projects. They have also started a solar training program on
the reservation to train members in the use of solar power
installations in their homes.
But this isn't just isolated in Minnesota to the White
Earth Tribe. Across Minnesota, tribes are working with local
municipalities to develop regional as well as tribal energy
plans. I am sure the folks at White Earth and other Minnesota
tribes would love to highlight their work and provide useful
insights like you, maybe at a roundtable in Minnesota. But that
is why we are here today, to figure out ways to assist tribes
in developing and producing their own energy. This is critical
for so many reasons. A few weeks ago I attended a tribal summit
in Shakopee, Minnesota. Over 23 tribes came together to discuss
ways in which Indian Country can finally realize self-
determination. Most of the summit focused on ways to rebuild
what attendees referred to as the infrastructure of nationhood.
I think that is a very apt phrase, the infrastructure of
nationhood. I think we can all agree that energy is one of the
primary ingredients of infrastructure.
I look forward to hearing from the panelists. My staff will
remain here and take notes. I hope to get back from this
meeting. We look forward to hearing from you on how we can best
promote tribal energy and how we can best remove barriers to
the development of that energy.
In particular, I am interested in the panel's view on how
to tweak our current energy laws to encourage more sustainable
energy production, increase access to transmission lines, help
tribes gain access to financing for clean energy projects. I
look forward to working with both the Chair and the Vice Chair
on this important legislation, and thank you again for calling
the hearing, and thank you for your testimony.
The Chairman. Thank you very much.
We have four witnesses today. We appreciate your patience
and appreciate very much your being here.
The first is the Honorable Marcus Levings, who is the
Chairman of the Three Affiliated Tribes in North Dakota. He is
also Secretary of the Council of Energy Resource Tribes
Executive Board. The Council of Energy Resource Tribes was
founded in 1975. They participated in the development of tribal
provisions on the Indian Mineral Development Act of 1982 and
the Energy Policy Act of 2005 and the Energy Independence and
Security Act of 2007.
Chairman Levings has been deeply involved in energy
production and a wide range of energy issues. He is a real
leader on these issues and I appreciate his coming to
Washington today. I was with Chairman Levings on Saturday on
his reservation, where we did a groundbreaking for a health
clinic that was promised to the tribe 60 years ago, when the
Elbow Woods Hospital was submerged underwater as a result of
the dams that were placed on the Missouri River. The Elbow
Woods Hospital was gone, it was underwater. And it was promised
that it would be replaced. Sixty years later, we had a
groundbreaking for what will be a wonderful health care clinic.
That is thanks to Chairman Levings' insistence and
determination.
Mr. Chairman, thank you for being here. You may proceed.
STATEMENT OF HON. MARCUS LEVINGS, CHAIRMAN, THREE AFFILIATED
TRIBES OF THE FORT BERTHOLD
RESERVATION; SECRETARY, COUNCIL OF ENERGY
RESOURCE TRIBES (CERT)
Mr. Levings. Good afternoon, Chairman Dorgan, Vice Chairman
Barrasso and members of the Committee on Indian Affairs. My
name is Marcus Dominick Levings. My Hidatsa name is eh-Bah-Dah-
Gish, White Headed Eagle. I am the elected tribal chairman of
the Three Affiliated Tribes of the Fort Berthold Indian
Reservation in North Dakota, with 11,000 duly enrolled members.
In June of 2009, I was elected Secretary of the Council of
Energy Resource Tribes on behalf of the Three Affiliated Tribes
and 57 member Indian tribes. I am pleased to submit for the
Committee's consideration the following statement regarding
energy development, environmental stewardship and job creation
in Indian Country.
Today's hearing follows the May 2008 hearing entitled
Indian Energy Development and no fewer than eight Indian energy
roundtable to solicit the views and comments of Indian tribes
on the committee's Indian energy concepts paper, formally
issued in September. American Indian energy resources hold
enormous potential to create tens of thousands of jobs, good-
paying jobs, generate substantial revenue for the tribal owners
and aid in development of tribal economies. The Three
Affiliated Tribes and our mineral allottees reside on what is
commonly known as the Bakken Shale clay. This mineral play has
the potential to contribute vast amounts of crude oil and
natural gas to the national economy, and will vastly improve
the economic and quality of life to our enrolled members who
have historically been one of the poorest populations in the
state of North Dakota.
American Indian tribes in the lower 48 States, especially
those in the Rocky Mountain West, own an enormous amount of
energy resources. In addition to enormous amounts of non-
renewable resources, primarily oil, natural gas, coal and coal-
bed methane, Indian tribes have a significant development
potential in renewable sources of energy, such as wind, solar,
hydro, biomass, geothermal and others.
In September 2009, CERT submitted to the Committee its
views and analysis of the May 2009 Indian Energy Concepts
paper. Attached to this statement is a copy of those views and
analysis. I would like to share a few of the issues that the
Three Affiliated Tribes have with regard to the Indian Energy
Concepts paper. In the interest of time, I will focus on just
three of these issues.
First, the Three Affiliated Tribes have actively engaged
our Federal energy industry partners to expedite the leasing
and permitting practices that have thus far stymied efforts to
fully develop the energy resources of the Fort Berthold
Reservation. We are extremely grateful to Chairman Dorgan,
along with Senator Conrad and Congressman Pomeroy, who have
been instrumental in installing the virtual One Stop Shop to
consolidate the current 49-step process it takes to develop
mineral resources on Indian lands.
We have begun to see the benefits of this process. The
regulatory and administrative burden upon mineral development
on Fort Berthold caused considerable economic harm, as tribe
and mineral allottees were unable to benefit fully from the
period of high crude prices that we experienced not more than
12 months ago.
While we are grateful for the assistance of the Indian
Affairs Committee, it is also imperative that such fixes to the
leasing and permitting process on Indian lands also include all
agencies that have a duty to the Indian trust beneficiaries. It
is not just the Bureau of Indian Affairs that has a trust
responsibility to our tribes and our enrolled members, but the
entire Federal Government.
The Bureau of Land Management, the Environmental Protection
Agency and others should also be placed in the one-stop shops,
as they have a vital and important role in the development of
trust minerals. It is not just t ability to drill an oil and
gas well that is at issue, as Indian Country is subject to an
enormous body of law and regulation that make it very difficult
to develop without effective and timely interagency
communication and cooperation. NEPA, the Clean Air Act, the
Clean Water Act and other laws make Indian energy development a
costly and time-consuming endeavor that serves as the principal
deterrent for much of the private industry to enter Indian
Country.
Second, the lack of suitable infrastructure in Indian
Country also has a tremendous negative impact on the ability to
develop all our energy resources: oil, gas and renewable energy
resources. The lack of suitable roads, electrical transmission
lines and oil and gas gathering systems and pipelines creates
an enormous economic barrier to our development.
It is imperative that the tribes, Congress and industry
look to cost-effective solutions to allow the level of
development that can only improve our overall natural energy
resources. Too often, we have been forgotten when this
Country's infrastructure is improved through existing Federal
funding and are only encountered when Indian Country has a
resource to offer the rest of the Nation. We are respectfully
asking and reminding this Committee that Indian energy
development must include as a base the improvement of the
infrastructure in Indian Country that is so often taken for
granted in the rest of the United States.
Finally, I would like to address the issue of adequate
staffing in all agencies that have a role in development of
Indian energy in Indian Country. It is too often the occurrence
in Federal agencies that take a lead role, i.e., the Bureau of
Indian Affairs, to recruit, hire and promote individuals who do
not have the education and/or experience in the area of energy
development, particularly in the highly specialized area of
Indian Country. Many of the bureaucratic delays and legal
entanglements are caused by individuals who could not even fill
a similar position in private industry. Yet we are forced to
work with those individuals as the principal agents of our
Federal trustee.
Often, our tribal members encounter those same individuals
in training sessions where, given their title and
responsibilities, should in fact be teaching the same courses.
We cannot and should not be subject to the standard Federal
merry-go-round where current and former Federal employees are
merely promoted or transferred to important positions where
their decisions impact the economic futures of Indian tribes
and our allottees.
The Federal Government should have the same employment
standards as the very industry which they are hired to regulate
upon. The fiduciary duty of the Federal Government as our
trustee demands no less.
Mr. Chairman, that concludes my prepared statement, and I
again thank you for the opportunity to present the views of
CERT. I would be happy to answer any questions you may have.
[Phrase in native tongue.]
[The prepared statement of Mr. Levings follows:]
Prepared Statement of Hon. Marcus Levings, Chairman, Three Affiliated
Tribes of the Fort Berthold Reservation; Secretary, Council of Energy
Resource Tribes (CERT)
Good afternoon Chairman Dorgan, Vice Chairman Barrasso, and members
of the Committee on Indian Affairs. Before addressing the issues of
Indian Energy and Energy Efficiency, I want to thank you for your
strong leadership in helping Indian tribes and their members meet the
many challenges they face including health care, law enforcement,
unemployment, and others.
Background on the Council of Energy Resource Tribes
I am Marcus Levings, Chairman of the Three Affiliated Tribes of the
Fort Berthold Reservation in North Dakota. In June 2009 I was elected
Secretary of the Council of Energy Resource Tribes (CERT). On behalf of
the 57 member Indian tribes of CERT, I am pleased to submit for the
Committee's consideration the following statement regarding energy
development, environmental stewardship, and job creation in Indian
Country.
CERT was founded in 1975 by tribal leaders when our country was in
the midst of what was then known as the ``Arab Oil Embargo,'' put in
place by the Organization of Petroleum Exporting Countries in response
to America's support for Israel in the 1973 Arab-Israeli War. The
embargo caused higher prices for heating oil and gas and contributed to
the economic recession that lasted for the ensuing 7 years.
Back then, our national leaders promised that we would ``end our
dependence on foreign oil'' and return America to a position of
unquestioned strength in the world. Nearly, 35 years later our
dependence on foreign sources of energy has never been greater.
The core mission of CERT is to support member tribes enhance their
management capabilities and prudent development of their energy
resources to build sustainable economies and strong political
institutions.
The Historic Role of the Committee in Energy Legislation
For many years, the Committee on Indian Affairs has recognized the
important economic role of renewable and non-renewable energy resource
development in Indian country.
Beginning in 1999, the Committee worked with the Indian Tribal
Energy Network in conceptualizing and drafting what became the Indian
Tribal Energy Development and Self-Determination Act of 2005. This
comprehensive Indian energy law was included in the massive Energy
Policy Act of 2005.
This was followed by the Committee's key role in fashioning Indian
provisions in the Energy Independence and Security Act of 2007, as well
as important Indian amendments that were included in energy legislation
considered earlier this year by the Senate Energy and Natural Resources
Committee. \1\
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\1\ The EPAct of 2005 (Pub.L. 109-58) and the EISA 2007 (Pub.L.
110-240) both contain provisions favorable to Indian tribal energy
development and environmental management.
---------------------------------------------------------------------------
Today's hearing follows the May 2008 hearing entitled ``Indian
Energy Development,'' and no fewer than 8 Indian Energy Roundtables to
solicit the views and comments of Indian tribes on the Committee's
Indian Energy Concepts Paper formally issued in September.
The Economic Importance of Indian Energy Development
American Indian energy resources hold enormous potential to create
tens of thousands of good-paying jobs, generate substantial revenue for
the tribal owners, and aid in the development of tribal economies. An
often-overlooked aspect of Indian energy is that it helps satisfy the
American economy's need for a reliable energy supply. The Southern Ute
Indian Tribe in southwest Colorado, for instance, produces 1 percent of
the natural gas that is used by the American people and American
business. In less than 20 years, the tribe's gas operations have
evolved to be among the most sophisticated in the country and are
managed by the various tribally-owned energy companies.
Based on information provided by the U.S. Department of the
Interior's Office of Indian Energy and Economic Development (OIEED), in
2007 energy and mineral resources generated over $574 million in
royalty revenue paid to individual Indians and tribes. Moreover, income
from energy and minerals has increased 260 percent since 2002. The
OIEED expects these trends to continue and so does CERT.
There are good reasons to be optimistic that Indian tribal energy
development will continue to expand in other tribal communities. These
reasons include the following:
1. Enormous tribal reserves of oil, gas, coal, wind, solar,
geothermal and other resources;
2. The likely long-term pricing environment for energy
products; and
3. The enactment by Congress pro-production energy policies.
The OIEED estimates that an additional 15 million acres of
undeveloped traditional energy mineral resources and over 22 million
acres of undeveloped renewable energy resources exist on individual
Indian and tribal lands. If these estimates are correct, additional
billions of dollars in revenue would likely be generated to the
individual and tribal owners.
More specifically, the OIEED's analysis finds that the potential
remaining resources to be realized through new development on Indian
lands reveal the following:
------------------------------------------------------------------------
Commodity Potential Resource
------------------------------------------------------------------------
Oil 5.3 billion bbls
Gas 25 billion mcf
Coal 53.7 billion tons
Coalbed Methane 12.7 million mcf
Wind energy 535 billion kWh/year
Solar energy 17,600 billion kWh/year
Woody biomas 3 billion kWh/year
Hydroelectric 5.7 million kWh/year
Geothermal 21 million kWh/year
------------------------------------------------------------------------
One merely witness the phenomenal success of the Southern Ute
Indian Tribe, the Ute Tribe of the Uintah and Ouray Reservation in
northeast Utah, and the Osage Nation in eastern Oklahoma to understand
that American Indian energy resources, developed properly, can
transform Indian economies and assist tribes in achieving real and
lasting self-determination.
Tribal Energy Resources and the Pricing Environment
American Indian tribes in the lower 48 states--especially those in
the Rocky Mountain West--own an enormous amount of energy resources.
With the current Federal restrictions on exploring for energy in the
Great Lakes, the eastern portion of the Gulf of Mexico, the California
coastline, and the Alaska National Wildlife Refuge (ANWR), Indian
tribal resources and lands in the Rocky Mountain West present one of
the most significant opportunities for domestic production in the
United States.
In what is now a dated analysis, in 2001 the U.S. Department of the
Interior (DoI) estimated the total dollar value of energy produced from
Indian tribal lands for the period 1934-2001 to be $34 billion. These
revenues derived from 743 million tons of coal, 6.5 billion cubic feet
of natural gas, and 1.6 million barrels of oil. In terms of undeveloped
reserves and undiscovered resources, the DoI projected that Indian
tribal lands could prospectively generate $875 billion, derived from 53
billion tons of coal, 37 billion cubic feet of natural gas, and 5.3
million barrels of oil.
These projections were made in 2001 and in the intervening 8 years,
the price of energy products has increased significantly. Present-day
revenue projections would be nearly $1.5 trillion.
Enactment of New Energy Laws in 2005 and 2007
On August 8, 2005, President Bush signed into law the Energy Policy
Act of 2005 (Pub.L. 109-58) which included as title V the Indian Tribal
Energy Development and Self-Determination Act. The new law authorizes a
variety of Federal technical and financial assistance to participating
Indian tribes and seeks to reduce administrative obstacles at the
Federal level to encourage greater levels of energy development on
tribal lands.
This tribal energy law does not discriminate in terms of favoring
renewable over non-renewable resources or vice versa. Instead, the law
leaves the development decisions to the tribal owner and the market.
Similarly, in 2007, Congress enacted and the President signed the
Energy Independence and Security Act (``EISA'', Pub.L. 110-140) which
contains significant opportunities for Indian tribes and tribal
colleges to receive research, development, and production grants
related to renewable and alternative energy development. The Act
authorizes tens of billions of dollars for these purposes and
represents the most significant energy research law to be enacted in
years.
The American Recovery and Reinvestment Act of 2009
In February 2009, President Obama signed into law the American
Recovery and Reinvestment Act (ARRA). The ARRA included $16.8 billion
for ``Energy Efficiency and Renewable Energy,'' a broad category that
includes $3.2 billion for Energy Efficiency and Conservation Block
Grants. The ARRA also provided $5 billion for the Weatherization
Assistance Program, and $4.5 billion for Electricity Delivery and
Energy Reliability. This latter program is related to expenses
necessary to electricity delivery and energy reliability of the energy
infrastructure energy storage research and development, demonstration
and deployment, and facility recovery. In addition, $100 million is
allocated for ``worker training.''
The ARRA also provided $6 billion for the Innovative Technology
Loan Guarantee Program.
These funds are crucial because, in addition to enormous amounts of
non-renewable resources, primarily oil, natural gas, coal, and coal bed
methane, Indian tribes have significant development potential in
renewable sources of energy such as wind, solar, hydro, biomass,
geothermal, and others.
Reliable information suggests that the vast majority of potential
renewable energy projects in Native communities are modest in size and
more akin to the community development scale than the commercial
utility scale. As a result, most of these projects might only require
an environmental assessment and not a full-blown environmental impact
statement under the National Environmental Policy Act (NEPA). More
often than not, these projects require Federal support to fund the
construction costs in order for them to proceed to construction.
Proposal for a ``National Tribal Energy Efficiency Initiative''
With the support of this Committee and the congressional
appropriators, a ``National Tribal Energy Efficiency Initiative'' would
(1) generate an enormous number jobs in the short-run and long-run; (2)
be reasonable in terms of cost; (3) have superior environmental impacts
in Indian country; and (4) produce greater economic benefits for
virtually every Indian tribe and have the greatest impact on the tribes
with the largest number of poor and working poor families.
The initiative CERT has in mind would be something along the lines
of a ``National Tribal Energy Efficiency Initiative'' that could fund
virtually every Indian tribe. The initiative would be massive but, if
properly structured, would maximize the use of local labor and local
Indian contractors.
In addition to home weatherization, the initiative could include
all tribal government buildings and Federal facilities located on
tribal lands. The high cost of heating and cooling because of poorly-
constructed and poorly-insulated buildings equipped with highly
inefficient lighting and H-VAC systems erodes program budgets, reduces
services and produces environments that are not healthy for workers or
for people who use access the facilities. It would dramatically reduce
the operating and maintenance costs for health clinics, hospitals,
schools and tribal colleges, tribal administrative buildings, and other
structures on tribal lands.
The initiative would also have an immediate impact on the utility
bills for heating for the most vulnerable Indian populations in the
Northern tier of the country from the Pacific Northwest to Maine, the
Tribes of the Four Corners Area, and the poor families of the Oklahoma
Indian Tribes. And for the desert southwest Tribes, their weather
related issues come in the summer months. Regardless of their
geography, all of the Tribes have vulnerable populations: the elderly,
infants and the disabled.
In a relatively short period of years, the initiative would
transform Indian Country from among the most energy inefficient to
among the more energy efficient and would lead to better health, more
efficient programs and more competitive tribal economies. The energy
savings could be measured in real dollars because the good thing about
energy efficiency is that the savings are not one-time occurrences but
accrue year after year. Even a massive Federal expenditure in an
initiative of this type would be repaid in savings in 3 to 5 years, and
would continue for another 10 to 20 years, depending on building
maintenance.
For this initiative to succeed, the funding would need to be
administered through an agency that is able to direct the money very
quickly to each interested Indian Tribe. One way to expedite the
funding process would be to convene regional ``pre-application
workshops'' so interested and eligible Indian tribes could respond
appropriately to the agency distributing the funding. If the funds were
routed through the Administration for Native Americans (ANA) in the
Department of Health and Human Services, that agency would do a superb
job of fund distribution with minimal red-tape because it has a
demonstrated ability to move money very quickly into tribal programs.
The ANA has a network of regional and national technical assistance
contractors already in place to provide the workshops and hands-on
technical assistance to ensure every interested and eligible Indian
Tribe has the best chance to access the program.
In addition to CERT, there are other national Indian organizations
that could be of assistance in mobilizing Indian contractors and the
local pool of Indian labor such as the National Council on Tribal
Employment Rights (NCTERO) which has a national network of local TERO
offices that have data on the local workforce and the relationship with
labor unions for training and apprenticeship programs, as well as data
on local, Indian-owned companies. The National Center for American
Indian Enterprise Development (NCAIED) has an excellent network of
larger Indian and tribal construction companies as well as a network of
major private sector companies, such as Home Depot, that might be
included in such an initiative to supply the material needed for these
activities.
Indian Energy Project Development
The new energy laws were signed into law in 2005 and 2007 and the
regulations to implement them are now in effect. For the past five
fiscal years, the Congress has appropriated funds for the Department of
Interior's Office of Indian Energy and Economic Development and the
Department of Energy's Office of Indian Policy and Programs, both of
which are charged with administering the new laws.
Nonetheless, and as the Committee has identified in its Indian
Energy Concepts Paper, many challenges to more vigorous energy
development remain.
Responses to the Committee's Indian Energy Concepts Paper
In September 2009, CERT submitted to the Committee its views and
analysis of the May 2009 Indian Energy Concepts Paper. Attached to this
statement is a copy of those views and analysis.
Conclusion
Mr. Chairman, that concludes my prepared statement and I again
thank you for the opportunity to present the views of CERT. I would be
happy to answer any questions you may have.
Attachment
The Chairman. Chairman Levings, thank you very much. We
appreciate your being here.
Next, we will hear from the Honorable James Roan Gray. He's
the Chairman of the Indian Country Renewable Energy Consortium
Board of Directors and Chairman of the Osage Nation.
Mr. Roan Gray, we appreciate your coming to town to
testify.
STATEMENT OF HON. JAMES ROAN GRAY, CHAIRMAN, INDIAN COUNTRY
RENEWABLE ENERGY CONSORTIUM BOARD OF
DIRECTORS; CHAIRMAN, OSAGE NATION
Mr. Gray. Good afternoon, Chairman Dorgan, Vice Chairman
Barrasso, members of the Committee. I am Jim Gray, of the Osage
Nation, Principal Chief. I would like to thank you for inviting
me to present as Chairman of the Indian Country Renewable
Energy Consortium today.
Chairman Dorgan, I want to express special thanks to you
and the Committee for the willingness to play a critical
leadership role in developing a comprehensive concept paper
setting forth important proposals to achieving our central,
shared objective, making sure that we set an effective
foundation for tribes and Native corporations to participated
on a level playing field in this emerging green economy.
The Consortium has presented more detailed written remarks,
and I respectfully request they be made part of the hearing
record.
The Chairman. Without objection.
Mr. Gray. Just generally speaking, I would just like to
make some basic observations. I think the first is that
unlocking the renewable energy potential throughout Indian
Country is essential, and it is something that is not new. It
is something that has been discussed for many years. Experts
agree that somewhere between 10 to 15 percent of the wind
potential resources are on Indian lands. And that percentage is
doubled for solar.
It is simply not possible, as the Administration
recognizes, for the Nation to achieve our renewable energy
goals that the President has laid out without the serious
development of those resources in Indian Country. This is a
sober reality.
Second, there is a hunger for Indian Country to develop the
renewable resources because it is consistent with our
traditional values.
Third, there are presently impediments to effective and
prompt development of renewable energy resources on tribal
lands. As a result, tribes are severely disadvantaged through
really no fault of their own. The Consortium's principal goal
is to even the playing field, so that those opportunities can
be laid out working within their own structure or with private
industry.
Fourth, the Consortium recognizes that renewable energy
development is a generational opportunity. We understand that,
as I am sure you will agree, renewable energy development is no
ordinary opportunity, but one that comes along every generation
or so. It can be part of a solution to the grinding poverty
that still exists on many tribal communities.
Fifth, now is the time to act. The energy provisions in the
energy legislation will set a foundation for renewable energy
development for at least the next few decades. If tribes are
not effectively included, we will be locked out of this
important generational opportunity.
There are solutions and impediments for development of
renewable resources in Indian Country. The proposals of the
Consortium are detailed in our written submission, but I should
review a few. Finally, ICREC is not asking for special perks or
treatment for tribes. Quite the opposite is true. Essentially
what we want to do is to streamline the policies so that the
opportunities are consistent with what's going on as you
demonstrated so effectively with your map. So our policy
priorities in our written testimony will delineate a long list
of proposals. We will not reiterate those here, but I would
like to reiterate a few that we believe are key.
First is streamlining. The streamlining process at Interior
and Energy, presently there are long delays in the federal
approval and permitting process that make investments in tribal
projects less attractive. It takes two to four years longer to
build wind or solar resources in Indian Country because of the
many bureaucratic steps that have to be taken. Development in
Indian Country will greatly suffer. If we do not streamline the
processes, we will not unlock this extraordinary potential.
And the Consortium fully supports your one-stop shop idea.
As other tribes have indicated to you throughout the Country,
the Three Affiliated Tribes is not unique in the sense that
there are many bureaucratic steps that often delay development
on Indian lands. So there needs to be a process to create a
NEPA policy that is not a hindrance but more of a tool and a
shield to protect those resources on tribal lands, as well as
to not to hinder development. It is past time for Interior to
provide a specific checklist for approval of right-of-way for
leases.
Transmission. Inadequate transmission infrastructure and
capacity on Indian lands, in addition to difficult access to
transmission on and from Indian lands, is a huge obstacle. Even
with the development of wind and solar power, without effective
transmission capacity, those projects will stay on the
Reservation, never to be a part of the grid. Further,
permitting WAPA and BPA to give tribes priority in queuing is
fair in light of the amount of WAPA and transmission lines on
Indian lands.
We could also show a different map, one that shows the
transmission grids that go around reservations. The very simple
reason of the leasing process and the right-of-way process has
just made it impossible for development to take place without a
commitment from the United States to see that those
transmission lines are effectively put in Indian Country.
Financing. Current financial incentives are ill-fitting
instruments in much of Indian Country and thus act as a
disincentive for tribes' capital investment in projects on
their lands and with their own resources. What makes renewable
projects feasible are tax credits, investment tax credits,
production tax credits, new market tax credits. But tribes
don't pay the relevant taxes where these issue become relevant.
So they cannot use the principal means of the incentivized
investment. We would like to be able to monetize those tax
credits in a way that can give tribes a partnering investment
opportunity throughout Indian Country in these renewable
projects.
The final word, administrative changes. We need to fill
those positions that are still left open. The Energy Policy Act
has not been implemented. One example is the Department of
Energy's Office of Indian Energy Policy and Programs, was
authorized under the 2005 OEPA. This program was intended,
among other things, to permit far greater interagency
coordination to facilitate tribal access in DOE programs. But
it was not implemented carefully or it wasn't completely
implemented at all. Actually, we do need to fill those
positions that are still open. But the Administration has taken
no action on the OEPA in nine months, no director, and it
languishes in Intergovernmental Affairs, where it has no
oversight of policies or programs.
In conclusion, renewable energy represents an unrivaled
opportunity to break the cycle of poverty in many tribal
communities. But we have to make sure there is a level playing
field. Tribes can compete with private developers, so long as
they are not disadvantaged. The time to act is now.
I thank you for the opportunity to speak and I would be
happy to answer any questions.
[The prepared statement of Mr. Gray follows:]
Prepared Statement of Hon. James Roan Gray, Chairman, Indian Country
Renewable Energy Consortium Board of Directors; Chairman, Osage Nation
Introduction
Good afternoon, Chairman Dorgan, Vice-Chairman Barrasso and Members
of the Committee, thank you for inviting me as Chairman of the Indian
Country Renewable Energy Consortium (``ICREC'' or ``Consortium'') here
today to provide testimony to the Committee on this most critical of
issues--unlocking the extraordinary clean energy development potential
of Indian Country. I am Chief Jim Gray, I appear before you today as
the Chairman of the Consortium.
I would be remiss Chairman Dorgan if I did not also express my deep
gratitude to you for taking such a leadership role in developing
concepts and a comprehensive concept paper setting forth commendable
ideas to ensure that Indian Country will be included in the emerging
green economy. The Consortium views the Concept Paper an important
starting point. We are encouraged by this Committee's leadership and
foresight in understanding that unlocking the renewable energy
potential on tribal lands and throughout Native territory is key to
meeting the general National objective of energy independence and
reducing carbon emissions.
I want to start today by telling you a little bit about our
coalition. ICREC is a not-for-profit entity established this year. Our
Consortium has combined the extraordinary expertise of Indian Country
and its allies along with a geographically-diverse group of tribal
governments and tribal and Alaska Native Corporations, all of whom have
a great interest in and are actively pursuing various aspects of
renewable energy development. The Consortium is a unified voice and
seeks to ensure that Indian Country will have a seat at the policy-
making table in this extraordinary generational opportunity. The
Consortium recognizes the hurdles that have inhibited development of
our renewable resources to date. These impediments will continue to
impede if unaddressed. But, taking great advantage of the enormous
expertise and dedication from people throughout Indian Country, the
Consortium has worked hard to find effective solutions--ways to
overcome the impediments before us.
Chairman Dorgan, Consortium members understand the gravity of this
present endeavor. We understand, as I'm sure you will agree, renewable
energy development is no ordinary opportunity, but one that comes along
every generation or so. Working together with your leadership and that
of the President, we are confident that we can forge policies that will
make certain that Indian Country is not left out as it has been in
times past with other emerging development opportunities. There is much
at stake in this effort, and the ICREC members are here to say in a
loud, sober, unified and clear voice, we stand ready to work with you
to set the proper foundation for this future.
We are cognizant that the future, if effective policy choices are
made, may be bright indeed for many tribal communities. There is
tremendous potential for renewable energy development in Indian
Country. We also know the present reality: actual projects have been
slow to materialize. This is due to a variety of obstacles ranging from
overly complex and burdensome lease approval processes to difficult
transmission access and ill-fitting financial incentives. In light of
the national strategic importance of renewable energy resources and the
vast undeveloped renewable resources in Indian Country, coupled with
the potential significant benefits of working with tribal governments,
the Consortium has identified a number of policy options that will
remove these obstacles. Let us be clear on one critical point at the
outset--ICREC is not asking for special perks or treatment. Quite the
opposite is true. Present policies, for a variety of reasons we will
discuss in greater detail below, place our members and Indian Country
generally in a distinctly disadvantageous position. The policy
suggestions the Consortium is advocating are in furtherance of evening
the playing field so that Indian Country can fairly compete in this
emerging clean energy economy.
Under current law, Indian Country faces primary policy challenges
in the renewable energy and infrastructure development in the following
broadly defined categories:
I. LEASING & SITING--Indian lands lease review & approval
processes can easily take as many as two to three years longer
than the comparable processes for projects outside of
reservations, even in comparison with projects on Federal
lands; and there is a desperate need to streamline approval
processes, clarify and coordinate renewable energy development
and renewable transmission siting and leasing processes on
Federal and Indian lands;
II. TRANSMISSION INFRASTRUCTURE--Inadequate transmission
infrastructure and capacity on Indian lands, in addition to
difficult access to transmission on and from Indian lands, and
obstacles to access to public energy grids, present significant
hurdles to renewable energy development in Indian country;
III. FINANCING--Current financial incentives are ill-fitting
instruments in much of Indian Country and thus act as a
disincentive to tribes' capital investment in projects on their
own lands and with their own resources; and
IV. FEDERAL PROGRAMS--Indian energy programs are not
effectively structured to support renewable energy deployment
in Indian country.
In greater detail below, we discuss these challenges facing Tribes
and Native Corporations in developing, investing in and owning
renewable energy projects. * In addition we set forth specific
legislative solutions and discuss some of the ideas outlined in the
Committee's Concept Paper.
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* Because ICREC has focused its efforts at this juncture to support
policies and priorities related to primarily commercial renewable and
transmission projects, our recommendations also primarily reflect
potential commercial solutions to the unique and important challenge
that face Indian Country.
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I. Leasing and Siting
CHALLENGES & CONCERNS: It is widely understood that the enhancement
of the Nation's renewable energy development, will rely heavily on the
private sector. Indeed, the vast majority of the proposals being
considered are some combination of incentivizing the private sector,
creating new opportunities for private-public partnerships and public
dollar investment.
Attracting private capital, as always, will remain competitive.
Development, in turn, which can move from concept to actual energy
generation most promptly will have important competitive advantages.
Put another way, in renewable development, as in so many other things,
time is indeed money and to attract money, those who have built-in
delays will be far less competitive.
Yet, tribal development presently, suffers from many delays not
attributable to tribes themselves but because of inefficient federal
policies and practices. Consequently, these delays must be addressed if
tribes are going to compete on an even playing field. We understand, of
course, renewable projects sited and financed in Indian Country are a
new phenomenon. But we also believe it essential that to not hamper
development, new rules and procedures must be put in place to make
projects timely, and hence, economically viable. Older leasing rules
and paradigms which were designed to protect the Indian public and
environment from non-renewable energy development are often, in a word,
obsolete. Such approaches are not always necessary nor the best-fit for
renewable projects. And we are fighting time. These two challenges
alone suggest we begin to look towards innovative ways to stimulate
renewable development on Indian lands.
Investors, developers and Tribes who seek to invest capital on
renewable projects are finding that the lack of clarity with respect to
trust and Indian land lease reviews and permitting, and the often
severe delays and extraordinary and unpredictable length of time
involved in such federal reviews and the federal issuance of permits,
serve as a great disincentive to capital deployment.
Developer commitments and capital flow along the paths of least
resistance. As federal agencies and states make it easier to site and
permit projects on federal and state lands, creating more transparent
and predictable processes, it is not surprising that capital will be
more attracted to those projects and away from Indian projects,
especially when under current systems, projects can take anywhere from
2-5 years longer on tribal and other trust lands. The challenge then is
clear--to be competitive, there must be streamlining of the processes
and greater transparency.
Recommendations & Solutions
A. The One Stop Shop is a concept whose time has come. We fully
support the Committee's efforts and the Administration's establishment
of ``one-stop-shops.'' Specifically, we strongly support creation of a
one shop for Tribal renewable energy and transmission development and
the establishment of clear rules with strict timelines so that leasing
and permitting can be both predictable and prompt.
B. Streamline the Appraisal Process and/or allow for third-party
appraisals with Tribal consent, even if just for renewable and
transmission projects to stimulate deployment.
C. Authorize Long Term and Renewable Transmission Leases. An
amendment to 25 U.S.C. Sec. 415 authorizing 25-year leases with an
option to renew for an additional 25-years for renewable energy
projects (projects defined as eligible for tax credits under IRS
sections 45 and 48) and transmission projects substantially benefiting
renewable projects without additional Secretarial approval.
D. Extend the Allowable Length of Section 17 Corporations Lease
Terms. Extend current authorization by Tribal corporations chartered
under the Indian Reorganization Act Section 17 to lease lands and to
extend the current terms of leases up to at least 50 years for eligible
renewable and renewable transmission projects.
II. Transmission
CHALLENGES & CONCERNS: It is no secret that one of the critical
challenges facing our Nation generally in facilitating the growth of
renewable development is transmission. It doesn't really matter how
much energy you can generate if you cannot transmit that energy to
viable markets. That is as true in Indian Country as anywhere.
Although a significant transmission and federal hydropower
footprint run throughout Indian Country, ironically, in virtually every
instance, tribal renewable projects experience great difficulty in
securing access to the transmission infrastructure on their lands This
presents one of the most significant impediments to Indian renewable
development--securing connectivity between Tribal renewable energy
projects and electric markets. Put another way, a necessary
precondition to unlock the potential for renewable energy development
in Indian Country is access to commercial markets.
Closer and more meaningful national collaborations with Indian
Country and the Federal Government with respect to access, use and
planning for future expansions of our critical national transmission
system is essential. So far, tribal voices have not been adequately
included in the national discourse on transmission build-out. It is
essential that any clean energy statute ensure that tribes are on equal
footing to states in making the critical transmission infrastructure
decisions.
Recommendations & Solutions
A. Authorize expansions of federal transmission with specific
authorization to enter into Power Marketing Administration ``public''/
private/tribal partnerships for new lines and expansions of lines
within current corridors for the specific purpose of rapid deployment
of renewable energy on Indian lands. Authorizing both the Western Area
Power and Bonneville Power Administrators, as they are currently
authorized, to allow other entities to participate in the financing,
construction and ownership projects; but with new authority to provide
priority to the participation of entities which have partial or full
ownership by a Tribe, Native corporation or tribal enterprise. In
addition, specific authorizations to allow tax-exempt bonding authority
to Tribes as a financing tool to acquire equity and ownership positions
in said public-private-tribal transmission projects would provide an
additional tool to address this concern.
B. Create a Tribal Preference for Transmission Capacity And Queuing
For Transmission Projects. Authorize queuing and capacity preference
related to FERC-approved new transmission projects, for transmission
rights and interconnections for Tribal and Alaskan Native renewable
projects located in empowerment zones and HUB zones in Indian Country
or authorize eligibility for any federal incentives by virtue of their
status as Indian lands. Additionally, direct federal PMAs, as they
undertake queue reform including cluster studies and similar
assessments through the end of 2010, to advance applications for
projects sited on Indian lands that have met the relevant criteria for
interconnection requests.
III. Financing
CHALLENGES & CONCERNS: As tax-exempt entities, tribal governments
have a very limited ability to employ current tax-based credits and
other financial incentives for renewable energy development--the
primary drivers for renewable investment in the United States. Tribes
and native communities often want to own and control critical renewable
energy infrastructure. However, if they cannot utilize the incentive
tools of tax credits, ownership is generally not feasible and
prohibitive. The answer is making the tax credits fungible or tradable
otherwise tribes are at serious disadvantage and inability to use tax
credits will remain a further hindrance to renewable project
development in Indian Country.
The rationale behind the series of renewable energy tax incentives
enacted over the years is fairly clear--to spur new investment in order
to drive technology innovation, to incentivize investment into new
generation cleaner energy development and to take advantage of
economies of scale for manufacturing.
As with many policy objectives, the intended effects and the
practical effects are not in all cases the same. Tribal governments are
keenly aware of their differences from other governmental counterparts.
Those differences, as these policies were initially contemplated and
designed, are not adequately addressed by current policies and do not
begin to address a rapidly emerging interest and priority for Tribes to
diversify and invest in (and control) their own renewable energy
projects.
The fundamental challenges for Tribes to compete with other
governmental entities not to mention investor counterparts are
unfortunately not solved with a single fix. Rather, there are targeted
approaches that can significantly level the playing field in the near
term. The complexity of the answers is better understood when
understanding the practical effect of the current situation as well as
and surveying some attempts to `fix' the situation in the past, namely
two specific impediments:
Third-Party Non-Tribal Investment and Ownership of Renewable Projects
To economically develop a renewable project, efficiently utilizing
the investment tax credit (or production tax credit or other very
important financial incentives) is essential. So essential in fact that
it is causing most Tribes, looking to develop and invest into these
projects, to bring on tax partners who can utilize these credits. But
this is a Catch-22 of sorts for the tribes--they need the partner to
take advantage of the tax credit, but for an extraordinary long period
of time the Tribal governments is, in essence, losing significant
control over their own critical infrastructure. Under present law,
because the tax credits follow the capital investment and ownership on
a pro rata basis throughout the term of the tax credits, the ownership
and control of the project must be in the taxable owner partner. Simply
put, Tribes can not monetize tax credits efficiently to offset any tax
liabilities. This presents a disincentive for Tribes to own a project,
much less invest in it, and presents a confounding and exasperating
challenge.
Rather than wait for all of the natural resources to be developed
around them, Tribes are being faced with the question of whether to (1)
wait until the law changes so they can control and invest in their own
projects, and watch renewable development happen without them (and
ostensibly saturate the market) or (2) accept third party tax
investment, development and ownership--once again taking a passive
position. Although some are choosing the latter and innovating creative
compensation strategies to attempt to offset the inequities, it does
not change the essential fact that third parties once again own
critical infrastructure on Indian lands.
Tribal-Specific Hurdles to Issue Clean Renewable Energy Bonds (CREBs)
The creation and authorization of the Clean Renewable Energy Bonds
(CREBs), a financial incentive created in the Energy Policy Act of
2005, and its inclusion of Tribes as eligible entities was a positive
step forward in attempting to level the competitive playing field
between consumer-owned utilities and other eligible entities (e.g.,
municipals, electric cooperatives, and Tribal governments) and tax
investors whose benefits from these provisions is straightforward. The
purpose of the CREBs program was to provide an incentive specifically
for these entities to invest in new renewable electricity generation
facilities.
However, there are a few inaccurate assumptions made about Tribes
in comparison to other governmental or non-profit entities authorized
to issue CREBs which make the issuance of CREBs by Tribes for renewable
projects very difficult, a fact which accounts for the few Tribal
applications for the initial allocations. Municipal entities and
electric cooperatives can effectively make the most of CREBs because
both have tax-based governmental subsidies and/or rate-based entities,
either of which can provide the securitizations necessary for pre-
project capital flow. Tribes, with the exception of very few, do not
enjoy the resources to collateralize or fund pre-cash flow based on
rate-based revenues and almost none have a sufficient tax base. Supreme
Court cases have exacerbated this lack of Tribal tax base recently by
allowing states to tax on Indian lands and limiting Tribal taxation of
non-Indians on reservations.
In short, while the purpose of this program is commendable and
addresses the inequities between consumer-owned utilities and private
investors, the practical effect on authorized Tribal entities has made
this a program that falls short in addressing the fundamental
challenges facing Tribal governments.
Recommendations & Solutions
A. Require implementation of the DOE Indian Energy Loan Guarantee
Program ($2 billion) which is already authorized by the Energy Policy
Act of 2005. And if any centralized incentive program is authorized in
either statute or by the Secretary, whether it be a green bank or other
restructured DOE program, that loan guarantee funds be segregated for
Indian Country projects and coordinated by the DOE Office of Indian
Energy Policy and Programs.
B. Authorize Production Tax Credits (IRS Section 45) to be
Assignable. Incentivize Tribal and Alaska Native investment via
transferability of IRS section 45 production tax credits between Tribes
(and intertribal energy development entities) and their partners within
a defined legal relationship. Congresswoman Herseth-Sandlin (SD) has
introduced as stand-alone version of this request, titled the Fair
Allocation of Internal Revenue Credit for Renewable Electricity
Distribution by Indian Tribes Act of 2009 (H.R. 2982).
C. Authorize Investment Tax Credits (IRS Section 48) to be
Assignable. Incentivize Tribal and Alaska Native investment via
transferability of IRS section 48 investment tax credits between Tribes
(and intertribal energy development entities) and their partners within
a defined legal relationship.
Or in the alternative, the ICREC recommends the possible inclusion
of these assignability authorizations in the section of the Code where
these tax credit incentives emanate. IRS Section 38--General Business
Credits, be amended by the addition of one subsection as follows:
D. Proposed new Section 38(e):
(e) Indian Tribes, and Alaskan Native village governments--
An Indian tribe and Alaskan Native village government, or
qualified intertribal energy development entity, as a lessor of
property may elect to treat the lessee of such property as
having purchased such property for purposes of the credits
provided for in Section 45 and Section 48, even if the property
would not otherwise be Section 38 property in the hands of such
Indian tribe, Alaskan Native village or qualified intertribal
energy development entity.
Proposed language addition at end of Section 168(h)(2)(A):
A Qualified Facility under Section 45 and Energy Property
under Section 48 shall not be characterized as Tax-Exempt Use
Property as the result of an ownership interest by an Indian
tribal government.
E. Authorize a Permanent Extension of the Indian Wage Credit
and Accelerated Depreciation Allowance. These have been
relatively uncontroversial provisions which put in place and
reauthorized over the years and are a tremendous help in both
attracting and optimizing capital to projects in Indian
Country. Businesses cannot effectively plan with only annual
reauthorizations of these incentives.
F. Amend P.L. 98-369 section 60(b)(c) to Allow Loss Transfers
by Alaska Native Corporations. Incentivize Tribal and Alaska
Native Investment via loss transferability between Native
Corporations and Tribes and their partners within a defined
legal relationship.
G. Reauthorize (a Tribal) Renewable Energy Production
Incentives (REPI)--reauthorize the REPI for Tribal Projects for
production tax credit (PTC) projects in order to provide a non-
tax credit financial incentive for renewable energy electricity
produced and sold by qualified renewable energy generation
facilities that can be used in conjunction with New Markets Tax
Credits and accelerated depreciation allowances on Indian
lands.
H. Reauthorize Grants-in-Lieu-of-Tax Credits And Authorize
Eligibility For Tribes. If there is any reauthorization of this
program which was established in section 1603 of the American
Recovery and Reinvestment Tax Act of 2009, authorize specific
eligibility of Indian Tribes and Alaska Native Corporations in
this program.
IV. Federal Programs
CHALLENGES & CONCERNS: Indian Country renewable energy &
transmission projects are positioned to be one of the most significant
economic and infrastructure development opportunities in decades. With
Tribal communities economically hamstrung by inadequate infrastructure,
no tax base and population growth outpacing infrastructure growth--
energy and infrastructure development that will not just provide new
revenue streams but also attract capital investments in manufacturing,
new sustainable employment and a new hope to tribal communities
deserves a dedicated focus and coordination by the agencies that serve
Indian Country.
Many provisions in the Energy Policy Act of 2005 remain not only
unfunded but inadequately implemented. It is no surprise then that the
provision have not served the purpose for which Congress enacted them.
To support current renewable and transmission initiatives in Indian
Country requires immediate implementation of these statutory
provisions.
One important example to help illustrate the point is The
Department of Energy's Office of Indian Energy Policy and Programs
(OIEPP). This program was intended, among other things, to permit for
far greater intra-agency coordination and facilitate tribal access to
DOE programs. But the OIEPP Office was implemented woefully. Although
authorized by Congress for a $20 million budget, only this year have
funds been requested. The OIEPP Director in the last Administration
directed only himself; he had no staff; he had few resources; he
oversaw no programs. Indeed, although under the Act he was to have a
robust office with oversight of ``policy and programs,'' he has no line
authority over any programs. Needless to say, this must change.
The Department of Interior also plays a critical role. Bureau of
Indian Affairs' realty staff will need far greater and more intensive
training and support to handle the influx of new technology and
commercial agreements otherwise this will continue to be a bottleneck
and limit renewable project development.
Recommendations & Solutions
A. Department of Energy Office of Indian Energy Policy & Programs.
We need to fill the political position of the Director of OIEPP. The
fact that it has not been filled, going into our ninth month of this
Administration, and we still have not come close to filling this
position is unacceptable. Moreover, that there is so little focus on a
position which is such a priority for tribes is, in and of itself,
proof positive of the centrally critical role this Office, properly
staffed and funded, could play at DOE. Moreover, if we were to look at
the plain language of the authorized statutory language--a Director was
authorized which implies that the Director should have basic direction
authority over Indian energy policies and programs. So far the OIEPP
Director has only languished under DOE's Intergovernmental offices--
with non policy or program oversight. That too must change. Although we
recognize that the Office has not been appropriated the funds
authorized in past years, and the Office of Intergovernmental has
stepped in to administratively host the position in the past
administration--the fact remains that it was authorized to stand alone
and, moreover, it authorized Director to direct Indian energy policy
and programs and we call for it to be not just filled but to also be
restructured to fill this very important policy and programmatic role.
B. Department of Interior/Indian Lease Support. For renewable and
energy infrastructure projects on Indian lands, for the Department of
Interior, it remains a basic fact that in order to secure rights to a
project and site any sort of renewable investment, the base agreement
on Indian lands will involve a lease and/or right of way agreements. We
fear an even greater bottleneck at the Bureau of Indian Affairs unless
additional training and resources are devoted to ensuring prompt
approval of leases and right of way grants. Among other things, BIA
should provide tribes with a specific checklist of material they need
and develop timelines for the approval process. Transparency and
predictability are key virtues and should be central objectives in
BIA's evaluation, processing and approval of the myriad of pre-
development, development, construction and operational agreements
necessary for any commercial project. The Bureau of Indian Affairs
needs additional, updated and adequate support for the new and complex
set of tasks it will be charged with during this wave of clean energy
development--support that will help it retain and fulfill its central
trust responsibility as well as support that will help Tribes fulfill
the promise set before us today.
About Indian Country Renewable Energy Consortium
In 2009, the Indian Country Renewable Energy Consortium was
formalized as by its original founding members--the Cherokee Nation,
the Lower Sioux Indian Community, Oneida Nation of Wisconsin, Osage
Nation of Oklahoma and Sealaska Corporation. Since its formation, other
Tribes and tribal entities have joined as members, including Tribes and
tribal corporations whose reservations are located in the Dakotas to
the Pacific Northwest to Southwest States to California.
The founding Tribes made a collective decision to focus on policy
matters now actively before the Administration and Congress. Many of
the founders, including Osage Nation which is testifying on behalf of
the Consortium today, are Tribes which already have energy production
but are seeking to, as the country is, diversify its energy economy
through clean energy development. While the Tribes involved in ICREC
have long lived in harmony with their natural surroundings and indeed
thrived by utilizing their natural, often renewable, resources, they
now are looking at the sun's, wind's and water's abundance as the
source of greater self-sufficiency and accordingly self-governance.
ICREC members are optimistic that this time tribes will share in the
emerging economic opportunity. Working with this Congress and this
Administration, we are confident to find a way to bring some equity and
opportunity to Indian Country in this new clean energy frontier.
Conclusion
ICREC is representative of not only the member Tribes, but
representative of numerous Tribes who are interested, already invested
in or able to invest in renewable energy projects in Indian Country--to
finally have an opportunity to be an equity participant and owner in
Tribal projects. Economic development and diversification cannot grow
in Indian Country unless the infrastructure is there to support it and
unless Tribes can play a significant part in the ownership and control
of infrastructure Until that happens, the cycle continues.
Renewable energy represents an opportunity to break this cycle of
passive economic participation by Tribes in a sector that has, for
obvious philosophical and cultural reasons, stimulated tremendous
interest by Indian Country and also stimulated tremendous interest by
industry to site projects in Indian Country. An intriguing twist of
history has placed reservation lands in some of the most arid and
windiest areas of the country. In addition, often by use of coercive
tactics, transmission siting has often occurred on tribal lands. These
two factors now present unrivaled opportunities to Tribes to finally
develop some of the best class wind and solar resources not just in
North America but the world.
This Administration and this Congress has made sincere attempts to
make investment and siting of renewables more economically feasible.
The recommendations and opportunities discussed today will ensure that
Indian Tribes, tribal enterprises and Alaska Native Corporations will
be participants. We look forward to continuing to work with you to make
this a reality.
Thank you.
The Chairman. Chief Gray, thank you very much. We
appreciate your being here.
Now we will hear from the Honorable Steve Herrera, who is a
Tribal Council Member from the Southern Ute Indian Tribe in
Colorado. Mr. Herrera, thank you very much for being with us.
You may proceed.
Let me say that the entire statement will be in the record.
We are taking your summaries, of course, but your entire
statement will be made a part of the permanent record of the
Committee.
STATEMENT OF HON. STEVE HERRERA, TRIBAL COUNCIL MEMBER,
SOUTHERN UTE INDIAN TRIBE; ACCOMPANIED BY TOM SHIPPS, LEGAL
ADVISOR
Mr. Herrera. Chairman Dorgan, thank you for allowing us to
speak today, Vice Chairman Barrasso and the rest of the
Committee. It is an honor for the Southern Ute Tribe to be
called on to provide testimony today. And it is a personal
honor for me to be here as well.
Today I am accompanied by Mr. Tom Shipps, who is a
longstanding legal advisor for the Southern Ute Tribe with 30
years experience. His firm was employed first in 1968, so we
have a lot of help from that firm in all of our aspects of our
governing and our oil and gas revenues.
Today I would like to give a little background of the tribe
and its history. We have approximately 1,447 tribal members.
Our reservation encompasses 700,000 acres in the southwest of
Colorado. We have a checkerboard reservation, which incorporate
fee land, trust land and other lands as well.
History of the oil and gas success. My written testimony
contains more detail about the steps our tribe has taken in
natural gas development. But I will summarize some of that
history today. In 1949, the tribe began leasing and was in the
role of a passive royalty owner. In 1980, the tribe created its
own energy department. The purpose was to study and collect
data on the resources under the ground in which we knew there
was resources but we did not know what, how much resources
there were and how much reserves there might have been.
In the late 1980s, we negotiated flexible mineral
agreements under the Indian Mineral Development Act. In 1992,
we actually formed our own gas company, which is called Red
Willow Production Company, which actually provides most of the
revenue to the Southern Ute Tribe.
In 1994, with help from a partner, we purchased an on-
reservation pipeline gathering and treating company called Red
Cedar Gathering Company. Today we have operations in
approximately 10 States and the Gulf of Mexico and most of
these have been remarkably successful. Success in energy has
translated to a better life for our tribal members. This
Committee has a very big responsibility and we appreciate
everything that has been done to date. Hopefully we can get
through some of these hurdles.
Representatives from our tribe have been part of an ad hoc
working group of Indian tribes and organizations to review
problems in Indian Country related to energy development and
potential situations. We are generally supportive of the ad hoc
working group and responses to the committee staff's concept
paper. Today I would like to bring special attention to a few
items that we have. Item number one is the tribal energy
resource agreements. The Energy Policy Act of 2005, Title V,
establishes opportunity for electing tribes to contract with
the Secretary to remove energy-related approvals from the
Secretary Congress intended to be a broad and flexible win.
The Department of Interior passed implementing regulations
that accepted inherent Federal functions from what could be
included in a TERA. Inherent Federal functions is not defined
in the regulations and it is believed that we need to define
those in order to move forward. In fact, to date, I do not
believe that there have been any tribes who have entered into a
TERA. It is believed that because of the inherent Federal
functions concept or exemption, this is one of the reasons why.
Number two, NEPA review, related Interior approval, leases
and rights-of-way applications for permits to drill and other
land related to approvals unduly delays decision-making and
opportunities in Indian Country. Solutions in this area range
from removing tribal land decisions from NEPA to allowing
tribal environmental review procedure to be a substitute for
NEPA review or alternatively, set mandatory deadlines for
completion of reviews. Indian lands should not be treated like
public lands.
Number three, granting, perfecting and establishing
priority of security interest in Indian lands associated with
energy projects. There is no clear, simple system. This is an
impediment to access to commercial capital.
Number four, absence of diversity, jurisdiction, and access
to Federal courts for Indian tribes, tribally-owned entities
and those who contract with them also independent to commercial
capital and contracting with third parties.
Mr. Chairman, I would like to again thank you for allowing
the Southern Ute tribe to provide testimony today. We look
forward to working together to identify current and historical
road blocks and removing those to help tribes develop their own
lands and become successful in obtaining financial success for
their membership as well as the Country. Thank you.
[The prepared statement of Mr. Herrera follows:]
Prepared Statement of Hon. Steve Herrera, Tribal Council Member,
Southern Ute Indian Tribe
Good afternoon Chairman Dorgan, Vice Chairman Barrasso, and members
of the Committee on Indian Affairs. I am Steve Herrera an elected
member of the Southern Ute Indian Tribal Council, the governing body of
the Southern Ute Indian Tribe. Unfortunately, our Chairman, Matthew
Box, is unable to attend this hearing on the Southern Ute Indian
Tribe's behalf because of an important, previously scheduled, medical
appointment. However, the Tribal Council and the Chairman have
designated me to appear before you today on behalf of the Southern Ute
Indian Tribe. In addition to our tribe being honored by your invitation
to testify, it is a great personal honor to appear before you today.
Also with me is Tom Shipps, whose firm has served as general legal
counsel for our tribe since 1968. Mr. Shipps has represented us on
energy matters for more than 30 years. He has testified before this
Committee on several occasions and has worked cooperatively with
Committee members and staff throughout his distinguished career. If
needed in answering questions, I would like to call upon him for
assistance.
As a final introductory matter, our tribe would like to thank the
Committee, not only for its work on behalf of tribes in the energy
arena, but also for it leadership on numerous issues that affect Indian
people throughout this Country, including law enforcement and health
care.
Background
The Southern Ute Indian Reservation, the exterior boundaries of
which were confirmed by Congress in 1984 (Pub. L. No. 98-290, 98 Stat.
201), consists of approximately 700,000 acres of land located in
southwestern Colorado in the Four Corners Region. The land ownership
pattern within our Reservation is complex and includes tribal trust
lands, allotted lands, non-Indian patented lands, federal lands, and
state lands. Based in part upon the timing of issuance of homestead
patents, sizeable portions of the Reservation lands involve split
estates in which non-Indians own the surface but the tribe is
beneficial owner of oil and gas or coal estates. In other situations,
non-Indian mineral estates are adjacent to tribal mineral estates.
These land ownership patterns have significant implications when
considering energy mineral development ranging from the potential for
drainage to jurisdiction. Historically, we have established solid
working relationships with the State of Colorado and local governmental
entities, which have minimized conflict and emphasized cooperation.
Our reservation is a part of the San Juan Basin, which has been a
prolific source of oil and natural gas production since the 1940s.
Commencing in 1949, our tribe began issuing leases under the
supervision of the Secretary of the Interior. For several decades, we
remained the recipients of modest royalty revenue, but were not engaged
any active, comprehensive resource management planning. That changed in
the 1970s for our tribe as energy resource tribes in the West
recognized the potential importance of monitoring oil and gas companies
for lease compliance and maintaining a watchful eye on the federal
agencies charged with managing our resources. A series of events in the
1980s laid the groundwork for our subsequent success in energy
development. In 1980, the Tribal Council established an in-house Energy
Department, which spent several years gathering historical information
about our energy resources and lease records. In 1982, following the
Supreme Court's decision in Merrion v. Jicarilla Apache Tribe, our
Tribal Council enacted a severance tax, which has produced more than
$500 million in revenue over the last three decades. After Congress
passed the Indian Mineral Development Act of 1982, we carefully
negotiated mineral development agreements with oil and gas companies
involving unleased lands and insisted upon flexible provisions that
vested our tribe with business options and greater involvement in
resource development.
In 1992, we started our own gas operating company, Red Willow
Production Company, which was initially funded through a Secretarially
approved plan for use of $8 million of trust funds received in
settlement of reserved water right claims. Through conservative
acquisition of on-Reservation leasehold interests, we began operating
our own wells and received working interest income as well as royalty
and severance tax revenue. In 1994, we participated with a partner to
purchase one of the main pipeline gathering companies on the
Reservation. Today, our tribe is the majority owner of Red Cedar
Gathering Company, which provides gathering and treating services
throughout the reservation. Ownership of Red Cedar Gathering Company
allowed us to put the infrastructure in place to develop and market
coalbed methane gas from Reservation lands and gave us an additional
source of revenue. Our tribal leaders recognized that the peak level of
on-Reservation gas development would be reached in approximately 2005,
and, in order to continue economic growth, we expanded operations off
the Reservation.
Today, the Southern Ute Indian Tribe, through its subsidiary energy
companies, conducts sizeable oil and gas activities in approximately 10
states and in the Gulf of Mexico. Despite the recent downturn in energy
commodity prices, we continue to be successful and growing. We are the
largest employer in the Four Corners Region. We are also diversifying
into other areas, including renewable energy development. Along the
way, we have encountered and overcome numerous obstacles, some of which
are institutional in nature. We have also worked actively with this
Committee over the decades in an effort to make the path easier for
other tribes to take full advantage of the economic promise afforded by
tribal energy resources.
These economic successes have allowed us to provide a higher
standard of living for our tribal members than many would have thought
possible a generation ago. Our members have jobs. Our educational
programs provide meaningful opportunities at all levels. Our elders
have stable retirement benefits. We have exceeded many of our financial
goals, and we are well on the way to providing our children and their
children the potential to maintain our tribe and its lands in
perpetuity.
Indian Energy Initiative
One persistent theme reflected in the last thirty years of our
tribe's history is the notion that ultimately we are the best
protectors of our own resources and the best stewards of our own
destiny; provided that we have the tools to use what is ours and
reasonable access to opportunities extended to other members of
society. Though recognizing the critical historical importance of the
federal trust responsibility, we also see on a daily basis the
immobility that arises from forced reliance on a pervasive system of
protection that is underfunded, understaffed, and often of questionable
competence. Congress has created many paths for tribes to assume
increased control over the governmental institutions that affect the
daily lives of tribal members, and our tribe has taken advantage of
many of them. The shift in roles, however, is particularly difficult
when the systems that are being transferred are broken. Even for our
tribe, which has achieved remarkable success, the challenges and
responsibilities of preserving our culture, our tribal community, and
our remaining attributes of sovereignty are daunting. We believe that
this Committee knows that improvements can be made in fostering
effective tribal governance and opportunity, and that when recognized,
impediments to tribal success can be removed. It is for all of those
reasons that we have participated actively in recent discussions
related to problem-solving in the energy arena, and we hope that our
ideas will be of value to the Committee.
Representatives of our tribe have participated actively in an ad
hoc working group of energy producing tribes and associated
organizations, which has responded to the initial energy concept paper
prepared by this Committee's staff. Although we have been involved in
discussions related to all of the issues contained in the initial
concept paper, we have also identified some specific items that we hope
will be addressed by the Committee and, potentially, in legislation.
First, with respect to Title V of the Energy Policy Act of 2005, we
were vocal advocates for the Tribal Energy Resource Agreement (TERA)
mechanism approved by Congress. We believe that the Secretary's
regulations implementing those provisions undermined much of what
Congress intended by eliminating ``inherent Federal functions''--an
undefined term in the regulations--from the scope of functions that
could be assumed by a tribe. To be sure, the Director of the Office of
Indian Energy and Economic Development has encouraged us to prepare a
proposed scope for a Southern Ute TERA, and we may yet prepare one. We
do request, however, that the Committee examine this issue and obtain
some clear understanding from the Administration as to how this
regulatory restriction is to be interpreted.
Second, we strongly believe that National Environmental Policy Act
(NEPA) review mandated in the course of a federal agency's
consideration of approval or disapproval of tribal land use decisions
and related activities discourages tribal energy development, whether
renewable or non-renewable. We have provided several suggestions for
mitigating the unintended adverse consequences of NEPA review on Indian
lands. Those suggestions include removing Indian lands from NEPA
review, utilization of alternative tribal environmental review
processes, and commanding expeditious review by Federal agencies
involved in decisions affecting tribes or their lands.
Third, one impediment to access to commercial capital related to
tribal energy projects involves the absence of an effective, clear
system for issuing security interests in tribal lands in a way that
will confirm a first priority in the event of default. We urge the
Committee to investigate the relationship of the BIA Land Title and
Records system and its function, if any, in perfecting or providing
assurances of priority of encumbrances and security interests with
respect to tribal energy projects.
Fourth, we request that this Committee initiate review and
communicate with other applicable committees the absence of access by
tribes or parties contracting with tribes to federal courts under
diversity jurisdiction. This limitation imposes institutional obstacles
to tribes who wish to provide for effective and commercially acceptable
judicial mechanisms for dispute resolution, yet who are unwilling to
default to state courts in the resolution of potential contractual
disputes.
Conclusion
In conclusion, the Southern Ute Indian Tribe is honored to appear
before you today. We intend to remain active participants in this
process as it develops, and we believe that our experiences have
contributed to a unique perspective on matters related to energy
development in Indian country.
The Chairman. Mr. Herrera, thank you very much for being
here.
Finally, we will hear from the Honorable Ralph Sampson,
Chairman of the Yakama Nation, Indian tribe in Toppenish,
Washington. Mr. Sampson, welcome. You may proceed.
STATEMENT OF HON. RALPH SAMPSON, JR., CHAIRMAN, YAKAMA NATION
Mr. Sampson. Thank you, Mr. Chairman and members of the
Committee. Good afternoon.
My name is Ralph Sampson, Jr. I am Chairman of the
Confederated Tribes and bands of the Yakama Nation. Also, I am
Chairman of the Board of Directors for Yakama Power, the Yakama
Nation's publicly-owned utility. Our utility has been
delivering power since 2006, and serves four average megawatts.
We are actively growing to serve the entire reservation and
working to provide renewable energy generation to the
Northwest.
We support many of the ideas of the committee concept paper
and greatly appreciate this Committee's willingness to assist
tribes. We would like to see five obstacles of energy
development addressed by this or other legislation, and we have
experienced all of these problems first-hand in forming our
utility and working as a public utility.
The first is in dealing with the National Environmental
Policy Act implementation. The Bureau of Indian Affairs and the
Yakama Nation require environmental assessments that follow
NEPA process for all major projects on the Yakama Reservation.
What is frustrating is that the BIA's sister Federal agencies
are requiring separate NEPA reviews of our environmental
assessments. The original NEPA process takes six months to a
year, only to have the various programs within the Government
repeat the same process, doubling the time involved. This is
done at the USDA under the Rural Utilities Service, RUS, and at
Bonneville Power, the Administration and the Department of
Energy.
We understand and encourage the protection of the
environment, as we are stewards of our land also. But this
process places an undue burden on the tribal projects. We need
a process that requires these other Federal agencies to
participate in the original NEPA process, not to oversee what
has already been done or to simply provide comments instead of
repeating that whole process.
Second, despite statutory language encouraging Federal
agencies to purchase renewable energy, especially from Indian
tribes, whenever we attempt to sell our renewable energy to
Federal agencies operating within our reservation, we get
nowhere. The failure means our local economy was not stimulated
and the Federal incentive for renewable energy on our
reservation evaporated.
We need a Federal regulation or programs with teeth to
support the development of Indian renewable energy and the
purchase of power by Federal agencies, especially those
operating on our reservation. One potential solution would be
to have Federal agencies that acquire Indian renewable energy
and delivers it to key trading hubs for use with other Federal
agencies.
Third, we would encourage that any legislation that is
proposed and or enacted would be supported in the budgeting
process. The Energy Act of 2005 promoted the production of
renewable energies by providing money in various grants and
loans, but failed mainly because many of the provisions of the
Act had never been funded.
Fourth, based on their experiences, tribes need statutory
language that makes it clear that when the BIA transfers title
or control of a Federal irrigation project, small hydro
turbines and related substations or local distribution lines to
a tribe, language in transmission contracts between the BIA and
its sister Federal power marketing agencies, namely BPA and
WAPA, cannot be used to prevent such transfers simply because
the transmission contracts fail to contemplate such unique
circumstances in Indian Country.
Federal law makes it clear that empowering the tribe to
manage their own affairs on their reservations and to pursue
development of renewable energy are primary Congressional
goals.
Finally, that leads to our last issue. The Yakama Nation,
through our tribal utility, Yakama Power, paid to examine,
rebuild and restore three hydro power turbines on the Wapato
Irrigation Project, a federally-owned and operated irrigation
project. The irrigation project benefits both the Yakama Nation
and many non-Indian farmers who farm the majority of these
irrigated lands. Built in the 1930s and 1940s, the turbines
have nameplated capacities of 4.2 megawatts.
The sale of the renewable energy from these turbines will
provide revenues back to the Federal irrigation projects for
project-wide repair and maintenance. The BIA has never had the
funds to repair these old turbines. This has only been made
possible because Yakama has used $3.2 million of its own
utility's money with the understanding that if we couldn't get
the money back any other way, the $3.2 million would be repaid
to our utility from the sale of energy. But if that happens,
our utility cannot expand, or this Federal irrigation project
will not have the money from the energy sales to cover its
long-deferred maintenance for quite some time.
We attempted to apply for a DOE grant for the development
of small scale hydro projects that would have covered this debt
that the Federal Government owes us. But because of a
technicality in the law, the projects have FERC license. We are
not eligible, we didn't have a FERC license because this is a
Department of Interior project and thus exempt from FERC
licensing.
Any help that we can get recovering this money from the
Federal Government would be much appreciated, whether in fixing
the DOE grant requirements so that non-FERC licensed projects
are eligible or providing a one-time appropriation to the BIA
to repay the money.
Ultimately, perhaps Committee members could assist in
getting a waiver form FERC requirements for using their money
only for FERC-licensed hydro projects. I appreciate this
opportunity to speak before the Committee.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Sampson follows:]
Prepared Statement of Hon. Ralph Sampson, Jr., Chairman, Yakama Nation
Good afternoon, my name is Ralph Sampson, and I am the Chairman for
the Yakama Nation Tribal Council, and the Chairman of the Board of
Directors for Yakama Power, the Yakama Nation owned utility. Our
utility has been delivering power since 2006, and serves 4 average
megawatts. We are actively growing to serve the entire reservation, and
are working to provide renewable energy generation to the northwest.
We support many of the ideas in the Committee's concept paper and
greatly appreciate this Committee's willingness to assist tribes. We
would like to see five obstacles to energy development addressed by
this or other legislation.
The first is in dealing with National Environmental Policy Act
implementation. The Bureau of Indian Affairs and the Yakama Nation
require environmental assessments that follow NEPA, for all major
projects on the Yakama Reservation. What is frustrating is that the
BIA's sister federal agencies are requiring separate NEPA reviews of
our Environmental Assessments. The original NEPA process takes six
months to a year, only to have the various programs within the
government repeat the same process, doubling the time involved. This is
done at USDA under the Rural Utilities Services or RUS, at the
Bonneville Power Administration, and the Department of Energy. We
understand and encourage the protection of the environment, but this
process places an undue burden on tribal projects. We need a process
that requires these other federal agencies to participate in the
original NEPA process or to simply provide comments instead of
repeating the NEPA process.
Second, despite statutory language encouraging federal agencies to
purchase renewable energy, especially from Indian tribes, whenever we
attempt to sell our renewable energy to federal agencies operating
within our Reservation, we get nowhere. This failure means our local
economy was not stimulated and the federal incentive for renewable
energy on our Reservation evaporated. We need a federal regulation or
program with teeth to support the development of Indian renewable
energy and the purchase of that power by federal agencies especially,
those operating on Indian reservations. One potential solution would be
to have a federal agency that acquires Indian renewable energy and
delivers it to key trading hubs for use by other federal agencies.
Third, we would encourage that any legislation that is proposed and
or enacted, would be supported in the budgeting process. The Energy Act
of 2005, promoted the production of renewal energies by providing money
in various grants and loans, but failed mainly because many of the
provisions of the Act have never been funded.
Fourth, based on our experiences, tribes need statutory language
that makes it clear that, when the BIA transfers title or control of a
federal Indian irrigation project's small hydro turbines and related
substations and local distribution lines to a tribe, language in
transmission contracts between the BIA and its sister federal power
marketing agencies, BPA and WAPA, cannot be used to prevent such a
transfer simply because the transmission contracts failed to
contemplate such unique circumstances in Indian country. Federal law
makes it clear that empowering the tribes to manage their own affairs
on their reservations and to pursue development of renewable energy are
primary Congressional goals.
Finally, that leads to our last issue. The Yakama Nation through
its tribal utility, Yakama Power, paid to examine, rebuild, and restore
three hydropower turbines on the Wapato Irrigation Project, a federally
owned and operated Indian irrigation project. This irrigation project
benefits both the Yakama Nation and many non-Indian farmers who farm
the majority of these irrigated lands. Built in the 1930s and 1940s,
the turbines have a nameplate capacity 4.2 megawatts. The sale of the
renewable energy from these turbines will provide revenues back to this
federal irrigation project for project-wide repairs and maintenance.
The BIA has never had the funds to repair these old turbines. This was
made possible only because the Yakama's used 3.2 million dollars of its
utility's money with the understanding that, if we couldn't get the
money back any other way, the $3.2 million would be repaid to our
utility from the sale of the energy. But if that happens, our utility
cannot expand, and this federal Indian irrigation project will not have
the money from the energy sales to cover its long deferred maintenance
for quite some time.
We attempted to apply for a DOE grant for the development of small
scale hydro projects that would have covered this debt that the Federal
Government owes us. But because of a technicality in the law, that the
project have a FERC license, we weren't eligible. We didn't have a FERC
license because this is a Department of Interior project and, thus,
exempt from FERC licensing.
Any help we can get in recovering this money from the Federal
Government would be much appreciated, whether in fixing the DOE grant
requirements so that non-FERC licensed projects are eligible or any
providing a one-time appropriation to the BIA to repay the money.
I appreciate this opportunity to testify and if I can answer any
questions, please let me know.
The Chairman. Mr. Sampson, thank you very much. We
appreciate the testimony that all four of you have given.
I am going to, in the interest of time, because Senator
Murkowski has to leave, I am going to recognize Senator
Murkowski first for questions, then I will recognize Senator
Udall and then I will complete questions following that.
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman. I appreciate
the courtesy to my schedule.
And gentlemen, I appreciate your testimony here this
afternoon. There is certainly a recurring theme that each of
you have raised. You have talked about the NEPA issues, you
have talked about just the regular process that seems to
strangle many good projects. And then of course, at the end of
the day, it always comes down to how we are going to finance
this, how we are going to make this happen.
We have a situation up in the State of Alaska right now,
Cook Inlet Region is looking to build a 60 megawatt farm, and
they are also looking to move forward on a demonstration
project that would provide for coal gasification technology to
advance. But what they are finding is that there is no Federal
aid that is currently available. So they have to figure out how
they piece this together internally. That, as we all recognize,
is very, very difficult.
I think it was you, Mr. Gray, that suggested that typically
what we do around here is we advance tax credits, production
tax credits, and that is one way to facilitate projects. But
with the tribes, that is not a mechanism that can be realized.
You have suggested perhaps monetization of those credits.
I direct this to all of you in terms of what you think that
we can do, particularly given what we are seeing right now with
the very tight credit markets, how can we better facilitate the
financial end of some of the roadblocks that we are seeing with
Indian energy projects right now? Mr. Gray?
Mr. Gray. Thank you for the question. I really do want to
just add to the urgency that exists in Alaska that most people
may not be aware of, that in Native villages in Alaska, that
the electrical costs for heating their homes is often ten times
the national average. So the burden is twice as hard on them to
find renewable resources.
To the extent that we can tweak the law to make it possible
for tribes who have limited capital investment capacity to be
able to partner with industry that has the capacity to do this,
this gives the tribes what we would call an investment
capability into a project. By monetizing some of the tax
incentives and the production tax credits and the investment
tax credits, the tribes would be a full partner in many ways to
participate in these projects. This would ensure at least the
production of these renewable resources.
The problem that I continue to see, that I am certain is
probably just as evident in Alaska as it is in the lower 48,
and that is that the electrical grid needs a major overhaul in
this Country. Much like the Federal highway system needed a
major commitment from the United States to see it through, the
electrical grid provides not only development opportunities but
capacity building for individual tribes across the Country who
have often been left out of the whole process over the years,
just because of the bureaucratic issues that we have raised
already.
So those two issues seem to be the big, important ones. The
bonding authority for tribes to be able to issue bonds to be
able to finance these kinds of projects is also critical to the
development of sustainability. And having a degree of tribal
control over the development and allocation of electrical
resources.
Senator Murkowski. Mr. Herrera, do you have anything that
you wanted to add on that? I know you have certainly been keyed
in on the financial transaction aspect of it.
Mr. Herrera. Yes, ma'am, and thank you very much for asking
the question.
Some of the projects that are not seen or followed through
with are because of a lack of financial backing is in some
cases attributed to lack of recording for the monetization or
the potential for the financial backer to make sure that they
have access to that land if there is a foreclosure or if there
is a potential for the tribe to become delinquent. So one of
the things that we think is, we need to set up a recording and
monitoring of these lands so that whenever a financial backer
comes onto the reservation, that we can actually show that they
have first right of refusal or there is actually some monetary
amounts that they can recapture from this investment. Because
they pretty much stay away from it if they aren't assured that
they can actually recoup their money.
So being able to have a system in place to ensure that they
understand and it is actual that there is a method for them to
recoup their money, or at least to make sure that they don't
lose the investment in whole.
Senator Murkowski. Mr. Levings, I understand that you had
participated in crafting at least certain parts of the 2005
Energy Act. It was not just me, I think Senator Udall noted it,
I think it is recognized that much of what we had hoped was
going to materialize from that 2005 Energy Act, when it comes
to the Indian energy title, we haven't seen. Do you have any
specific suggestions as to how we could have made it work
better or in hindsight now, what we should have done
differently?
Mr. Levings. Senator Murkowski, I wasn't involved in that,
I don't believe.
Senator Murkowski. Okay, well, we are giving you credit for
that.
[Laughter].
Mr. Levings. The one-stop shop, though, Senator, I was
involved with.
Senator Murkowski. Maybe that was it.
Mr. Levings. I guess I am kind of a grass roots chairman,
as my colleagues here and fellow presidents and chairs and
council members and councilwomen across Indian Country. I came
up from the bottom. I was a realty specialist in Warm Springs,
Oregon, back in 1990 and 1991. I did work in oil and gas as a
land man. And now to come full circle as chairman, to see all
of the hurdles and the red tape and the bureaucratic process,
it is amazing that oil industry comes to Indian Country.
The 49 Steps, for instance, that Chairman Dorgan, he got
those right from our people on the ground at the agency.
Senator Murkowski. You weren't making up the numbers?
Mr. Levings. No, it is actual. Then you almost had a 50th
step with the EPA guideline that they were going to try to
implement on Fort Berthold. It is really frustrating, because
every morning I wake up and I look out the west window where I
live. I am about half a mile from the reservation border on the
western side by Keene and Charleston. And there is a derrick
standing up on the ground. Twenty days later, there is a 30-
foot flare of natural gas flaring. They move the rig southwest,
I would say, a quarter of a mile, and they are drilling there.
And then there is another flare. And they are just going right
down the line. And it is on fee land off the reservation.
I am looking on my land, my grandparents' land, the Wells
place, the Levings place, Bird Bearers, Banks, all the way down
to the buttes, and it is dark. But off the reservation, it is
light to the west, it is just a horizon. It is like coming up
into a city horizon. You go north, same difference. I can look
out my porch on the east side of the home, on the north side,
it is just lights up there. And that is just from my front
steps.
Now, my elders, they see this day in and day out. And their
words are this, Chairman, I signed the lease. I am going to get
my bonus and I am going to spend it, but I am never going to
see royalties. I am going to die before I see my royalties. And
three of those grandmas have passed on.
That is our frustration. So that photo, that map up there
is reality. And on the reservation, as many tribal leaders will
attest to, when things go bad, you blame the council and you
blame the chairman. And right now, that is the problem that we
have, there is a lot of finger-pointing. When that happens, it
gets a connotation that you are not doing enough. So any time I
am requested to be here to give the grass roots, what is really
happening, here I am. Because I need to pass the message along.
With the 2005 opportunity, I don't know why we wouldn't try
it. Because Fort Berthold, the Mandan, Hidatsa and Arikara, we
want to try anything and everything. There is a TERA provision
in there. The second opportunity would be to 638 contract the
Bureau of Indian Affairs' realty program.
But the problem I have on Fort Berthold is in 1986, they
had a referendum. And the people voted not to do that. So 2009,
I would have to send it back to the Mandan, Hidatsa and Arikara
11,000 membership and ask them, is it safe to do it today.
Because that would provide us an opportunity to do our own
paperwork.
However, the Federal Government still has to sign off on
those leases and permits. So, Senator, in the long and short of
it, I am really frustrated.
Senator Murkowski. We hear your frustration. But you are
clearly doing more than just working at the grass roots. You
are obviously representing your people well, and I thank you
for your testimony.
Thank you all. Thank you, Mr. Chairman.
The Chairman. Senator Udall.
Senator Udall. Thank you, Mr. Chairman. Thank you for
allowing me to go at this point.
Let me just follow up, Chairman Levings, with you. As you
know, and you were here when Senator Dorgan put the chart up,
you should know you have a real champion in him.
Mr. Levings. Yes.
Senator Udall. He has put that chart up many times, when
Larry Echo Hawk was here, when Secretary Salazar was here. He
is trying to shake the bureaucracy and get things done with
you. He is really making an attempt, I think, to cut through
the bureaucracy and get things done.
One of the things, in light of talking about bureaucracy
that I would like to ask, if any of you on the panel have any
experience with this, when we passed the 2005 Energy Bill, one
of the provisions to try to cut through bureaucracy allowed
tribes to enter into mineral leases without day to day
oversight from the Secretary. But apparently, no tribe has
applied for this program. Do any of you have any sense of why
that has happened, why that provision hasn't helped us move
this along? Please, go ahead, Mr. Gray, go ahead, or Chairman
Levings.
Mr. Gray. We affectionately refer to it as the war on TERA
back home in Indian Country, largely because people are in the
mind set that there is a lot of things that tribes give up in
way of the trust responsibilities that often should come with
some kind of balancing. This is what we get in return for
giving up certain portions of our trust responsibilities.
Tribes haven't been able to really find that balance very
equitable. I think that many times that we, especially those
treaty tribes, certainly do hold those trust responsibilities
very near and dear to their heart as a generational obligation
that they pass down from their elders to their children. And
anyone who breaks that agreement is highly criticized back
home.
The critical elements of the Tribal Energy Resource
Agreements require us to give up certain responsibilities to
the United States or waive the liability of the United States
on certain projects. And while the details of each individual
TERA may be different from tribe to tribe, the overall message
that tribes got from that agreement is that there is a lot of
liability that the United States does not any longer want to
absorb in developing tribes' energy resources.
Because of that, I think tribes are stuck in limbo, saying,
well, short of that, what can we do? Because no one wants to go
to that ultimate step of being the first one to go through the
chute, as they say. I would say that right now, that is
probably the biggest reason.
Senator Udall. Please, Chairman Sampson, go ahead.
Mr. Sampson. Thank you. I would like to agree with Chairman
Gray that it is true that it is, I take an oath of office just
like you do. It is within our oath that we are to uphold the
treaty of June 9th, 1855, the Yakamas with the United States of
America. In that treaty, there are trust responsibilities that
are obligating the United States to uphold to. By signing onto
that, we would be relinquishing some of the trust
responsibilities. That is mainly the main course why you
haven't seen the Yakama Nation sign onto that.
Senator Udall. Please, Councilman Herrera.
Mr. Herrera. Thank you, Senator Udall. Thank you for the
question.
We feel that along with comments that have been heard
already is that it is a government responsibility. We have been
in that mode for a very long time. Of course, there is a lack
of funding in all aspects of the oversight and the
responsibility of the Government to take care of the tribal
organizations or tribal members and tribes as well. One of the
other aspects is, it is difficult for a certain tribe to go
ahead and enter into this type of agreement with actually some
comprehension of, what does this mean for all of Indian
Country.
So if we go into it and there is negative impacts that are
seen in the future, it is one of those things where we really
have a hard time, and we are apprehensive to doing it, because
there could be some negative connotations that are going to be
seen throughout Indian Country, and definitely no tribe wants
to be set in the forefront of establishing negative impacts to
the rest of the tribes in the United States.
Senator Udall. Thank you. Chairman Levings?
Mr. Levings. Senator Udall, the Three Affiliated Tribes,
the Mandan, Hidatsa and Arikara, have heard the problems, heard
the stumbling blocks, the hurdles. And we took care of many of
those in 1997 under the support of Chairman Dorgan and Senator
Conrad and Congressman Pomeroy. They established an opportunity
for Fort Berthold to change the mineral ownership requirement
for a lease from 100 percent criteria to 51 percent. That was
one of the hurdles.
The second one was we had a dual taxation in the State of
North Dakota. So the tribal council and the Governor and the
legislative body for North Dakota worked that out. We have an
MOU on tax, there is one tax and we divvy it up and we work
through it. Of course, it was respectively to not waive any
sovereignty.
Then we also did a regulation. This month, or shortly into
November, Governor Hoeven and I are going to sign that document
in the tribal chambers. So we are doing everything we can to
remove the uncertainty for the industry. We are working here
with Chairman Dorgan and the one-stop shop to make it perfect,
is probably the word that I am looking for, because right now,
it is not staffed yet. There are some things that have to do.
The TERA itself, I am willing to try it. I was ready and
willing to go with the MOU with the State, with a one-stop shop
with them. But I wanted to give Chairman Dorgan his all due
attention, because he said he was going to give me that
opportunity to streamline. And I believe it is going to get
done. Because Chairman Dorgan can build bridges. There is one
built at Fort Berthold, and it cost $50 million and he got it
done. So that is not an issue.
[Laughter.]
The Chairman. It's not a bridge to nowhere, right?
[Laughter.]
Mr. Levings. So he can move mountains as well, if we need
Rocky Mountains moved, he can do it.
So what I am doing as a chairman is trying to let you know
that we appreciate everything that has been accomplished. But
the problem that I have is our elders are passing away. And
they are making their premonitions come true, their predictions
and their comments. Before I left, I had a fellow councilman
tell me about his aunt and his uncle, who just can't get to
that drilling. And they see it happening all around the
reservation.
So we are willing to try TERA. But like Chief Gray said,
the jury is still out. What are they going to provide to the
tribe, what trust responsibility are they going to give us? And
then on the 638 concept, which is similar to a TERA but
different, you would still need to have the area office sign
off for Federal officials. So you are pretty much just
preparing the paperwork and they are still signing off. So I
guess in Federal lands, we understand there are a lot of
issues.
But when you have fee land right across the way, everything
is going fine. And then you come to us and it stops. It is
really tough, because a lot of these oil companies are turning
their lease back. Three years have burned, four years have
burned, and now they are coming to us and saying, do you want
these? We can't get the permit.
Thank you, Senator Udall.
Senator Udall. Thank you very much.
Let me thank the entire panel. I think all of you have as
leaders been excellent advocates for your tribes and for your
people. Thank you very much, and I yield back, Mr. Chairman.
The Chairman. Senator Udall, thank you very much, and
thanks for your continuing interest in these issues. I know
that your State has an abiding interest in these issues as
well.
Let me ask, if we can put the chart back up that shows the,
and in many ways, this is a metaphor for the entire Country,
that Indian land is treated different than other lands. And
particularly when it comes to energy development, to have the
Indian nations left behind in development means that they are
denied the opportunity that comes with that development, the
opportunity for the royalties and the revenue, but also for the
jobs and so on.
[The information referred to follows:]
So this shows oil and gas wells that are being dug or have
been dug on the Reservation. Frankly, it shows we have made a
little progress, because it wasn't very long ago that the map
of the Indian reservation showed a big vast area of gray with
very little energy activity. You will see that around the
Reservation there are a lot of oil wells that have been
drilled. Wells are now producing oil. So when the Chairman and
his tribal council brought this to my attention, I immediately
wondered why, why is this the case, how can this happen? If
ever there is a need to go into the Bakken Formation and drill,
you would think the most significant need is on the Indian
reservation. The Bakken Formation exists throughout that
reservation as it does north, south and west.
And what I discovered was a 49-step process, I believe it
was 49 steps by the Interior Department, with four separate
agencies inside the Department that were required to give their
individual stamp of approval. And if an oil company wanted to
come on the reservation and get a permit to drill, it meant
that it was going to take them much, much, much longer to get a
permit if they ever did get a permit than going a mile and a
half off the reservation and in five to seven days, just like
that, getting a permit to drill.
Now, that is unbelievable to me. So when I learned that, it
has taken, I understand now, two years to get 24 wells drilled
on the reservation. When I learned that, I met with the
Interior Secretary, we put together an initiative called a
virtual one-stop shop, tried to get the four agencies working
together. And I think there has been some progress. But
Chairman Levings, tell me, what more is necessary? Have they
streamlined the 49 step process? Have they hired what they have
promised to hire to make the one-stop shop work? Tell me what
is necessary.
Mr. Levings. There are four posts that they have
advertised. They filled one, but they didn't fill it with an
expert. They filled it with a manager, which I guess is okay,
but we need an oil and gas expert. We borrowed one from the
Denver office, Jeff Hunt, and he is great. We need about four
or five of his capacities and abilities.
But the three other posts aren't filled. Then as soon as
they are filled, he is going back to Denver and the one-stop
shop. Dawn Charging has been hired, she means well, she is a
tribal member, but she doesn't have the oil and gas background.
So she respectfully hears our words.
Out of the Aberdeen area, they had a one-person show doing
these permits for all these 40 companies. And it just wasn't
happening. So they reassigned him to do a programmatic document
for Mandaree segment and west segment. But they put three new
people on to do the permits themselves. So that changed things
overnight. In a matter of two weeks, they did 22 permits. So
that was a step in the right direction, and I commend Bob
Middleton with the Washington, D.C. office and Mike Black from
the area director's office. But that was needed some time ago.
What I think they need to do is detail in some people from
Chief Gray's area or the Billings office and get them in there
to help on this effort, whether it is four, six or maybe more,
just to get us to where we need to go. Because the winter is
coming upon us. And if you recall last winter, Chairman Dorgan,
it was tough in North Dakota. I don't think we dug out until
April, somewhere in there. So we have that issue of walkovers
now. Walkovers aren't going to happen when the snow hits, so we
are going to have to wait.
But as far as the initial progress, I think we are patient
and we know that it is going to happen, it is going to take
place. But those are some opportunities I think they can do.
Within the Department itself, our words and our testimony
are accurate. They transferred in, detailed in people who never
worked in realty prior. And they were learning on the job. My
words are true, because I did interview a couple of them, and
they said, well, I got detailed in from Aberdeen. I never
worked in permits before, I used to be in probate. Well,
probate is over here and oil and gas is over there. And
respectfully I said, well, I will help to do the best I can to
give you any insight. Then the realty officer, first post on
oil and gas. And she is the one who is going and sitting side
by side with my staff at these lectures and trainings.
So it is the Bureau type of rules, I guess, on transfers
and details. But they need to probably provide the best resumes
versus, well, they are just a GS-9 and they are qualified, so
send them up there. That was kind of the issue, Chairman.
The Chairman. I don't want you to be patient any more. I
will, following this meeting today, be in touch with the BIA
and try to understand from them, why is it representations were
made about what they were going to do and why those positions
haven't been filled with qualified people with experience. It
is not satisfactory to me to say, here is what we pledged to do
to get this moving and then not to have them do it. There are
so many broken promises. You don't need more broken promises
from the agencies that have told us explicitly, we will fix
this.
So tomorrow, we will be at those agencies to try to
understand why it is you have been told that, here is the
staffing level, we are going to get you people, and they don't
get you all the people you need, number one, and number two,
the people they get you aren't experienced. That is
unsatisfactory to me.
Mr. Gray?
Mr. Gray. Thank you, Chairman.
The question that you identified that is going on at Three
Affiliated is something that is going on across Indian Country.
That is that we do need a concerted effort from the
Administration to recruit and hire and retain qualified
individuals with the expertise in the areas that they are asked
to work in.
When you talk about one-stop shop, I just want to throw out
to you for your consideration to take a look at the Osage
Agency, which has been in effect a one-stop shop for many years
now. This one agency serves the dual functions that the BLM
serves on other reservations, as well as MMS, as well as the
trust responsibilities that are carried out through the BIA and
OST. The sole purpose of really trying to accomplish a one-stop
shop can be undermined simply by the fact that you have the
wrong people in the right positions.
With the limited funding that has been made available for
recruitment and training and retaining these individuals to
work in these fields, some of the areas in Indian Country are
in the most remote areas of the United States. To recruit the
best people that you can in the industry is going to be very
difficult without some incentives.
I would like you to consider that the agency, that BIA
consider doing something like IHS does, of funding through a
scholarship program that allows individuals to be able to work
off their school loans on an Indian reservation working in that
specific field. That might be one, that might be a longer term
solution to an immediate problem that we have.
But I think a lot of it stems from the one issue that I did
bring up in my testimony, which had to do with the DOE position
that after nine months, is still not filled. As you mentioned
before, there are 49 steps, well, not only are there 49 steps
just getting the leads, but there is also multiple overlapping
jurisdiction of different agencies, from the Fish and Wildlife
Department to the EPA, to DOE, DOI.
There are a variety of different agencies with acronyms
overlapping that could impact the lease as well. If that
position was filled and staffed and given the kind of director
authority that the Energy Policy Act of 2005 actually
envisioned, it might address some of these issues from a
WASHINGTON level that could impact the local agencies around
the Country.
The Chairman. You are saying the Osage Agency works,
functions, is a model. Is that staffed with BIA personnel,
Interior personnel?
Mr. Gray. Yes, it is. And it has been operating that way
for a number of years now. The hope is that we can actually use
that as a model for other tribes to look at. I certainly invite
the Committee to send a representative down there to check out
the operations. It could prove to be worthwhile.
The Chairman. Where is that located again?
Mr. Gray. Pawhuska, Oklahoma.
The Chairman. Mr. Herrera?
Mr. Herrera. Yes, Chairman Dorgan, thank you very much.
I would just like to also comment on the NEPA review and
some of the troubles that the Southern Ute Tribe has gone
through as well. On fee lands, just outside the reservation,
and even within the reservation, the State actually allowed 80
acre spacing, where it was 160 acre spacing. So we got more
wells on the same amount of land.
In order for the tribe to do this, we have just actually
got through the NEPA process that took two and a half years,
and it actually took over a million dollars of our own money
just to get this done. When it comes to the Bureau of Indian
Affairs function, we actually have employed some of the ex-
employees who are tribal members to do functions when it comes
to realty and all the functions, when we are trying to drill
locations. So those are funded by the tribe already. We haven't
had a superintendent up until recently, for the last five
years. And in reality, there are only three people at this
agency, where before you could go down there and probably see
about 14, 20 people there. It is just understaffed.
The Chairman. You haven't had a superintendent for five
years?
Mr. Herrera. Prior to this last, we just got one recently.
And in closing, I think that in reality, I understand the trust
responsibility from the Government. But we need to understand
that if it is not going to be funded, we need to make sure that
the roadblocks are taken out of the way, so that we can go
ahead and do our business as we need to. It is imperative that
we are able to get this stuff done because our tribal members
are dying. They are in dire need. If the roadblocks are still
there, we are not going to be able to do what we need to do to
make sure that our lives and the lives of our children and
children's children are taken care of in the future, sir.
The Chairman. The three items that we identified in the
report, the concept paper, are antiquated laws and cumbersome
regulations, we are talking about that; lack of tribal access
to the transmission grid, and I would also include in that any
conveyance grid, of pipelines in the case of oil and natural
gas; and then lack of available financing and incentives for
investment by tribal energy projects, all of which we think are
dilemmas that need to be addressed and all of which in some
ways thwart full development.
I don't think any of us are suggesting just essentially,
get rid of all of the 49 steps and let anybody do whatever they
want at any moment. That is probably not possible and not
advisable. But it is the case that we need to try to understand
what is thwarting development and how do we address those
challenges so that we have robust development on tribal lands.
Mr. Sampson?
Mr. Sampson. Thank you, Chairman Dorgan. I just wanted to
make a comment. Before I came up here this afternoon, I made a
stop down at the Office of Indian Energy and Economic
Development and spoke with them about a project that the Yakama
Nation has under review at the present time. I checked into
their loan program to fund this project. I was informed by the
gentleman there that they only have $100 million for the whole
Nation there within their program for funding sources for
fiscal year 2010. For our project alone would take half the
whole budget for the United States, that we were proposing. I
just can't see that there is enough funding that should be
shoveled toward that agency, of all agencies, to help us
develop our resources here within our reservations. It is
severely underfunded.
The guaranteed loan program is fine. But then that allows
the, requires the tribes to come up with the capital
investments to come up with the big dollar projects that are
out there to develop.
So I think this program does need a good kick in the pants
there to get it some fund toward the tribes at the reservation
levels. We could probably see more projects being developed if
they did have more funding.
Thank you, Mr. Chairman.
The Chairman. I think one of the common themes we hear
across the Country is that on Indian lands, because they are
different and unique, we have the requirements of so many
different steps. I don't think my State is unique, that if you
are in my State, and wish to drill on private lands or even
State lands, you will very quickly get a drilling permit. You
file an application and pay a small fee and get a drilling
permit in not very many days.
That is not the case if you aspire to drill on the Indian
reservations. We should find ways, it seems to me. My point is,
I believe that is not the case just in North Dakota. I believe
that is the case across America with respect to Indian lands.
If that is the case, then I appreciate that there may be a
model at the Osage Nation. But my guess is that at almost every
reservation where there is the potential for substantial energy
development we face the same myriad of steps and the same
bureaucracy that moves very, very slowly.
In Interior, I think in our State there are four different
agencies of Interior that have to come to bear on these things.
Each take their time. There seems to be no urgency on any of
them. Then we get an agreement to do a one-stop shop, and you
hire people that don't really have experience. So then it takes
a while for them to understand and learn and get trained.
That is just not satisfactory. We need to do much, much
better.
I think what I am going to do as a result of these
discussions, I am going to ask Secretary Salazar if he will
appoint one person in the Interior Department to work with this
Committee, one person as a coordinator, representing the
Secretary himself, to work with us to solve these problems and
so that one person understands there is responsibility to get
something done, and there is a time line to get something done.
Otherwise, this will just go on forever. People on Indian lands
that want to develop energy will continue to be frustrated. So
we don't want to walk into the future that way. We want to
begin to solve problems.
The purpose of this hearing really is to evaluate what, in
the concept paper, can come from these discussions that could
result in some legislation to move this along. I think some of
the answers are in legislation. But I think some of the answers
are as well just in administrative decisions to make agencies
work the way we would expect them to work, with some dispatch,
some coordination, so that you can work together to get
something done.
Mr. Levings?
Mr. Levings. Chairman Dorgan, the concept of partnering,
the industry is with us, and we are with them. They wanted to
accompany, one time, 15, 20 companies strong, and they said, we
want to come there and fill that Committee room up with you,
and I said, no, that is my job. And they are looking out for
the allottees just as hard as I am and the tribe in general.
Two, these expos we have had, whether it is a State expo
with the oil producing counties, or it is the tribe expo or the
Bureau of Indian Affairs expo, we all come together and we
brainstorm. The distinction is huge. On Wednesday, I signed a
lease for a company, we have ownership in fee lands as well. I
signed a lease on a Wednesday, they pulled the drilling rig in
on a Thursday. That is how quick it is. On one of our wells
that is on trust land, we approved it in January of 2005, they
pulled the rig in in April of 2008. That is the big difference,
Mr. Chairman.
The Chairman. I think that describes it in stark detail.
First of all, let me say I appreciate all four of you
traveling some distance to be with us. Senator Barrasso and I,
as a result of the concept paper, as well as our staffs, are
trying to determine with this concept paper, what do we move
forward. And having a hearing of this type is very helpful. I
think it might be useful for us to take a look at the Osage
Nation model, as you suggest. All of us believe everything that
exists back home for all of us is a model. But I but you are
right, that you have a good functioning system, and we want to
take a look at that.
It does, in many respects, no matter what the location,
require skilled people with experience, and who also are
determined to try to make something happen. The bureaucracy, I
use that term advisedly, doesn't always work that way.
Bureaucracy means big organizations. There is corporate
bureaucracy, there is Government bureaucracy. It is hard to get
the bureaucracy to turn on a dime and to move and understand
there is an urgency.
But we want to try to at least substantially improve things
as we go forward on energy development. It is in the Nation's
interest. We have an energy security need. We have a national
security need to develop energy. And it is also certainly in
the interest of the First Americans who live on reservations
that have great amounts of energy to contribute and whose
citizens especially need the revenues that come from that
energy and the jobs. It seems to me, if we can begin to
streamline this and provide some solutions, it will be
beneficial in a dozen different ways to this Country.
Mr. Gray, do you have a final comment?
Mr. Gray. Yes. Just to add to your suggestion that possibly
somebody from the Department of Interior is appointed to work
directly with this Committee on this issue, I would just like
to suggest that maybe you identify someone from the Department
of Energy who could work directly with the Committee on this.
The Chairman. That is a good suggestion.
I thank you again, and this Committee is adjourned.
[Whereupon, at 3:47 p.m., the Committee was adjourned.]