In-Depth: Sen. John Hoeven (R-ND) introduced this bill to provide Indian tribes with greater autonomy over the management and development of their energy resources:
“Indian tribes should have the same opportunities to develop their natural resources as any other sovereign nation. For years, Washington’s overregulation has hurt tribal energy development and stymied economic growth in Indian Country. This commonsense bill will cut red tape and provide tribes with greater flexibility to develop energy resources to best meet the needs of their local communities.”
Mark Fox, chairman of the Mandan, Hidatsa and Arikara Nation, supports this bill as a way to clear some of the barriers to Indian energy development:
“The MHA Nation appreciates Senator Hoeven’s work to pass Indian energy legislation. Our reservation is in the middle of the most active oil and gas play in the United States, but barriers to Indian energy development stand in our way. This bill would help streamline the permitting process and provide options to tribes so that we can more fully benefit from the development of our resources.”
Clement Frost, chairman of the Southern Ute Indian Tribe, adds that amendments to the 2005 Indian Tribal Energy Development and Self-Determination Act are needed to perfect the Tribal Energy Resource Agreement mechanism:
“Energy development on [tribal] lands generates hundreds of jobs and household incomes to tribal members and surrounding families alike. The 2005 Indian Tribal Energy Development and Self-Determination Act was an important step toward supporting tribal energy development, but amendments are needed to perfect the [TERA] mechanism, which is an important tool to provide willing tribes with a process to govern the development of their energy resources without costly and burdensome secretarial reviews, approvals, and oversight.”
Randy Manion, manager of the Western Area Power Administration Renewable Resource Program at the DOE’s Office of Indian Energy Policy and Programs, notes that TERAs are currently underused due to “a variety of structural, conceptual flaws and issues” with their design:
“[A] big component of S 245 is to try to take a whack at correcting some of what Congress thought it got right in 2005, but clearly became points of contention since the tribes never picked it up and used it as the tool that Congress thought it would be. Now of course, what has happened since that time is we've passed the HEARTH Act, and we have several dozen tribes that are – not only – that either have compacts or have compacts in negotiation under the HEARTH Act for energy development. And I think really the HEARTH Act has pretty much eclipsed and overtaken where the TERAs proposed to be back in 2005… But as tribes consistently tell us, they want as many tools in the toolbox as they can. So if it's worth keeping TERAs on the books, this particular bill proposes to try to fix some of those default – defects. And there are a variety of ways in which they try to do that, including trying to streamline and make more effective the certification process of the tribe entering into the TERA. They are redefining tribal energy resource development organizations, or the bill proposes to do that. It proposes to provide a variety of financial assistance in lieu of activities by the Secretary, and streamlining the process for certification of eligible – a tribe in order to negotiate the TERAs.”
Shawn Reagan, a research fellow at the Property and Environment Research Center (PERC), argues that federal control over tribal lands stunts energy development on these lands and impoverishes tribes:
“[F]ederal control of Indian lands largely deprives tribes of the opportunity to benefit from such wealth. Throughout Indian Country, the vast majority of energy resources are undeveloped. Indian lands are managed in trust by the federal government. Any attempt to explore or develop resources on tribal lands must endure a costly rigmarole of bureaucracy and regulations. Making matters worse, the legacy of the federal trusteeship of Indian lands has left most tribes with complicated property institutions that are virtually anathema to economic growth…. For many tribes, energy development is the primary revenue generator to fund education, infrastructure, and other public services on tribal land. Some also view energy development as a path to promoting tribal self-determination. Revenue from coal development on the Crow reservation in Montana, for instance, enables the tribe to control more of its own affairs apart from the federal government’s trusteeship of Indian lands… Energy development provides just one way for tribes to reestablish the wealth and prosperity that many Native Americans once enjoyed. Tribes are certainly not required to develop their energy resources, but government agencies should not deprive them of the opportunity… Sovereignty alone does not guarantee prosperity. With more control comes a greater responsibility to promote growth that benefits tribal communities and reduces reliance on the federal government. But as long as tribes are denied the right to control their own resources, they will remain locked in poverty and dependence. If tribes are given the dignity they deserve, they will have the opportunity to unleash the wealth of Indian nations.”
Jason Baldes, director of the Wind River Native Advocacy Center, agrees that there are benefits to tribes having control over energy development on reservations. However, he points out that “different tribes have different feelings about oil and gas and natural resource extraction,” which means that some tribes want to invest in renewable resources, rather than fossil fuels, while others will choose to pursue the immediate economic benefit of fossil fuels.
This bill passed the Senate unanimously with the support of seven cosponsors, including six Republicans and one Democrat. It then passed the House Committee on Natural Resources and now awaits a vote by the full House. It has the support of the Mandan, Hidatsa and Arikara Nation, Southern Ute Indian Tribe, PERC, and Heritage Foundation.
A prior version of this bill cleared the Senate in 2016, but Congress wasn’t able to reconcile it with a more controversial House version that was opposed by the White House Office of Management and Budget.
Of Note: In February 2017, the Government Accountability Office (GAO) added Indian energy programs to its 2017 High Risk List, citing inefficient management of Indian energy resources and the Bureau of Indian Affairs’ (BIA) development processes. The GAO reported that the BIA has limited opportunities for tribes and their members to develop energy resources, generate energy revenue, and improve their communities’ wellbeing.
According to the GAO, the BIA’s management shortcomings and other factors, including a complex regulatory framework, tribes’ limited capital and infrastructure, and varied tribal capacity, have hindered tribal energy development and led to missed development opportunities, lost revenue, and jeopardized projects’ visibility. Examples of this include:
Missed development opportunities: According to a tribal official, BIA took 18 months to review a wind lease. According to the developer of the project, the review time caused the project to be delayed and resulted in the project losing an interconnection agreement with the local utility. Without this agreement, the project has not been able to move forward, resulting in a loss of revenue for the tribe.
Lost revenue: According to a tribal official, BIA's review of some of its energy-related documents took as long as 8 years. In the meantime, the tribe estimates it lost more than $95 million in revenues it could have earned from tribal permitting fees, oil and gas severance taxes, and royalties.
Jeopardized viability of projects: One lease for a proposed utility-scale wind project took BIA more than 3 years to review and approve. According to a tribal official, the long review time has contributed to uncertainty about the continued viability of the project because data used to support the economic feasibility and environmental impact of the project became too old to accurately reflect current conditions.
The Energy Policy Act of 2005 included an Indian Energy title, Title V, that was meant to deal with the delays and uncertainties that are inherent in the BIA’s energy leasing process. This bill provided tribes with an alternative way to develop their energy resources. However, tribes have not availed themselves of this new process. Several factors have deterred tribes from seeking tribal energy resource agreements (TERA). These factors include uncertainty about some TERA regulations, costs associated with assuming activities historically conducted by federal agencies, and a complex application process.
Summary by Lorelei Yang
(Photo Credit: iStockphoto.com / miroslav_1)