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TRIBAL PROSPERITY AND SELFDETERMINATION THROUGH 

ENERGY DEVELOPMENT 

OVERSIGHT FIELD HEARING 

BEFORE THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

Tuesday, October 4, 2016 at Santa Fe, New Mexico 

Serial No. 114–54 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.fdsys.gov 

or 

Committee address: http://naturalresources.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

ROB BISHOP, UT, Chairman 

RAU ́ L M. GRIJALVA, AZ, Ranking Democratic Member 

Don Young, AK 

Louie Gohmert, TX 

Doug Lamborn, CO 

Robert J. Wittman, VA 

John Fleming, LA 

Tom McClintock, CA 

Glenn Thompson, PA 

Cynthia M. Lummis, WY 

Dan Benishek, MI 

Jeff Duncan, SC 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Doug LaMalfa, CA 

Jeff Denham, CA 

Paul Cook, CA 

Bruce Westerman, AR 

Garret Graves, LA 

Dan Newhouse, WA 

Ryan K. Zinke, MT 

Jody B. Hice, GA 

Aumua Amata Coleman Radewagen, AS 

Thomas MacArthur, NJ 

Alexander X. Mooney, WV 

Cresent Hardy, NV 

Darin LaHood, IL 

Grace F. Napolitano, CA 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Gregorio Kilili Camacho Sablan, CNMI 

Niki Tsongas, MA 

Pedro R. Pierluisi, PR 

Jared Huffman, CA 

Raul Ruiz, CA 

Alan S. Lowenthal, CA 

Donald S. Beyer, Jr., VA 

Norma J. Torres, CA 

Debbie Dingell, MI 

Ruben Gallego, AZ 

Lois Capps, CA 

Jared Polis, CO 

Wm. Lacy Clay, MO 

Vacancy 

Jason Knox, Chief of Staff 

Lisa Pittman, Chief Counsel 

David Watkins, Democratic Staff Director 

Sarah Lim, Democratic Chief Counsel 

(III) 

CONTENTS 

Page 

Hearing held on Tuesday, October 4, 2016 ............................................................ 1 

Statement of Members: 

Bishop, Hon. Rob, a Representative in Congress from the State of Utah ... 1 

Prepared statement of ............................................................................... 3 

Westerman, Hon. Bruce, a Representative in Congress from the State 

of Arkansas .................................................................................................... 3 

Statement of Witnesses: 

Denetsosie, Louis, President and CEO, Navajo Nation Oil and Gas 

Company, Window Rock, Arizona ................................................................ 20 

Prepared statement of ............................................................................... 21 

Ferguson, Hon. Jack, Confederated Tribes of the Colville Reservation, 

Representative, Intertribal Timber Council, Nespelem, Washington ....... 11 

Prepared statement of ............................................................................... 13 

Glenn, Richard, Executive Vice President, Lands and Natural Resources, 

Arctic Slope Regional Corporation, Barrow, Alaska .................................. 15 

Prepared statement of ............................................................................... 17 

Henson, Eric, Senior Vice President, Compass Lexecon, Research 

Affiliate, Harvard Project on American Indian Economic Development, 

Tucson, Arizona ............................................................................................. 23 

Prepared statement of ............................................................................... 25 

Olguin, Hon. James M. ‘‘Mike’’, Tribal Council Member, Southern Ute 

Indian Tribe, Ignacio, Colorado ................................................................... 5 

Prepared statement of ............................................................................... 7 

(1) 

OVERSIGHT FIELD HEARING ON TRIBAL 

PROSPERITY AND SELF-DETERMINATION 

THROUGH ENERGY DEVELOPMENT 

Tuesday, October 4, 2016 

U.S. House of Representatives 

Committee on Natural Resources 

Santa Fe, New Mexico 

The committee met, pursuant to call, at 10:00 a.m., at 490 Old 

Santa Fe Trail, Santa Fe, New Mexico, Hon. Rob Bishop [Chairman 

of the Committee] presiding. 

Present: Representatives Bishop and Westerman. 

The CHAIRMAN. Hi. Thank you all for being here. I appreciate 

you coming and joining us in this official committee hearing today. 

I actually had to wait until it was after 10:00 just because of tradition, but you should know, by my time, we are still 8 minutes 

early. So, it may be after 10:00, but this is my time. 

The committee is meeting today to hear testimony on the following topic: ‘‘Tribal Prosperity and Self-Determination through 

Energy Development.’’ Under Committee Rule 4(f), oral opening 

statements at the hearing are limited to the Chairman, Ranking 

Member, and any other Member who happens to be here, so we 

will all get a chance to say something. 

I ask unanimous consent that all Members’ opening statements 

be made a part of the hearing record if they are submitted to the 

Clerk by 5:00 p.m. or if they say them here in the actual meeting. 

And hearing no objection, that is so ordered. 

So, let me begin with my opening statement, if I could. 

STATEMENT OF THE HON. ROB BISHOP, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF UTAH 

The CHAIRMAN. I first want to thank the Legislature of New 

Mexico for their kindness and cooperation in allowing us to use this 

facility. I understand this is the Natural Resources Committee 

room for New Mexico, in which case, this is the appropriate place 

for us to be. So, thank you for allowing us to borrow your facilities 

for this hearing, and particularly when this is a busy time. 

We are gathered here to review what I think is an important 

topic. It is an issue at its core that deals with human dignity, selfdetermination, and opportunity. These concepts underlie the 

relationship between government and people, and this particular 

relationship is a little bit different because tribes and the Federal 

Government are both sovereigns. A failure to understand this fundamental difference on the part of the Federal agencies is one of 

the reasons why I think we are here today. 

Increasingly, the Federal Government treated tribal lands like 

they are Federal lands. Rather than working with tribes to promote 

self-governance, Federal agencies have imposed a cumbersome web 

of blanket mandates and policies where consultation is merely an 

2 

afterthought, not the first step in the process. In many cases, this 

is taking place despite policy from Congress to devolve control over 

trust lands to the rightful Indian owners. 

For Native communities, the decision to develop their energy resources can provide a multitude of economic, educational, and 

infrastructural benefits. Some tribes have stated that revenues 

from energy development fund up to 90 percent of their government operations. 

Unfortunately, nearly every aspect of energy development on 

tribal lands is influenced or controlled by the Federal Government, 

a policy stemming from some old notions that some people cannot 

manage their own resources, which is totally inaccurate. 

Many of the laws and regulations that apply to Indian Country 

are complex and cumbersome, increasing development costs and 

causing delays and uncertainty to the development of resources on 

tribal land. 

When a tribe wants to lease its trust lands to drill an oil well, 

that lease is not valid until it is approved, if it is ever approved, 

by the Interior Department, which imposes an array of regulatory 

obstacles and investor uncertainty. 

Further, if any tribe wishes to enter into an agreement with a 

private company, the parties must go through an onerous 49-step 

process which involves more than 15 Federal agencies and offices 

and unelected bureaucrats to acquire a permit for an energy development project. 

As many tribal representatives have testified before Congress, it 

is not uncommon for several years to pass before any determination 

is made by Interior on whether energy development projects may 

move forward. This often leads to less development on Indian lands 

than on adjacent Federal property, and definitely less than on private property. 

Many tribes, rich in land and natural resources, suffer unemployment rates up to 50 percent or higher. They live in some of the 

most impoverished conditions known in America today. The bipartisan Federal policy of promoting tribal self-determination 

launched by President Nixon in 1970 cannot be fully realized as 

long as there are paternalistic Federal laws and policies that remain on the books or, as we have seen, Federal agencies that act 

beyond what I think is their proper authority. 

Today’s hearing is intended to let a number of Native leaders, as 

well as an economist, tell us about the impacts of energy development on tribal lands. This is a source of legislation that the House 

has passed, and the Senate passed. I would like to see it passed 

in both bodies of the Congress so we can move forward in this particular area, but I would also like to see us change the overall policy, so that our goal is actually to develop the resources that are 

here, so that tribal areas have the same benefit of those resources 

that private and state lands currently have. 

I want this to be both a positive sketch of how tribes are managing their resources for the benefit of their communities, and a 

critical analysis of what more needs to be done with the Federal 

obstacles that stand in the way of that development. 

[The prepared statement of Mr. Bishop follows:] 

3 

PREPARED STATEMENT OF THE HON. ROB BISHOP, CHAIRMAN, COMMITTEE ON

NATURAL RESOURCES

I first want to thank the Legislature of New Mexico for their kindness and cooperation in allowing this committee to borrow their State Capitol facilities for this 

hearing, particularly during a busy time for them. 

We have gathered here to review an important topic. The issue at its core deals 

with human dignity, self-determination and opportunity. These concepts underlie 

the relationship between government and people. In this particular relationship, it’s 

different. 

Why? The relationship between tribes and the Federal Government is between 

sovereigns. A failure to understand this fundamental difference on the part of 

Federal agencies is one reason why we are here today. 

Increasingly, the Federal Government has treated tribal lands like they are 

Federal. Rather than work with tribes to promote self-governance, Federal agencies 

have imposed a cumbersome web of blanket mandates and policies where consultation is a mere afterthought. In many cases, this is taking place despite congressional 

policy to devolve control over trust lands to their Indian owners. 

For Native communities, the decision to develop their energy resources can provide a multitude of economic, educational, infrastructural benefits. Some tribes have 

stated that revenues from energy development fund up to 90 percent of their 

government operations. 

Unfortunately, nearly every aspect of energy development on tribal lands is influenced or controlled by the Federal Government, a policy stemming from old notions 

that Natives are incapable of or unwilling to manage their resources. Many of the 

laws and regulations that apply to Indian Country are complex and cumbersome, 

increasing development costs and causing delays and uncertainty to the development of energy resources on tribal land. 

When a tribe wants to lease its trust lands to drill an oil well, the lease is not 

valid until it is approved—if it is approved—by the Interior Department, which imposes an array of regulatory obstacles and investor uncertainty. 

Further, if any tribe wishes to enter into agreements with a private company, the 

parties must go through an onerous 49-step process which involves more than 15 

Federal agencies and offices—unelected bureaucrats, to acquire a permit for energy 

development projects. 

Many tribal representatives have testified before Congress that it is not uncommon for several years to pass before any determination is made by the Interior on 

whether energy development project may be able to move forward. This often leads 

to less development on Indian lands than adjacent Federal and private lands. 

Many tribes rich in land and natural resources suffer unemployment rates of 50 

percent and higher and live in the most impoverished conditions known in America 

today. The bipartisan Federal policy of promoting tribal self-determination launched 

in President Nixon’s 1970 ‘‘Special Message on Indian Affairs’’ cannot be fully realized as long as paternalistic Federal laws and policies remain on the books, or, as 

we’ve seen, Federal agencies act beyond their authorities. 

Today’s hearing is intended to let a number of Native leaders, as well as an economist, tell us about the impacts of energy development on Indian lands. I want this 

to be both a positive discussion about how tribes are managing resources for the 

benefit of their communities, and a critical analysis of what more needs to be done 

with the Federal obstacles that stand in their way. 

The CHAIRMAN. I appreciate everyone being here. I look forward 

to the testimony. 

I will yield to Mr. Westerman if he wants to say a few words in 

opening. 

STATEMENT OF THE HON. BRUCE WESTERMAN, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF 

ARKANSAS 

Mr. WESTERMAN. Thank you, Mr. Chairman. I would also like to 

thank the state of New Mexico and the New Mexico legislature for 

hosting us today, and I would like to thank Chairman Bishop for 

his work in getting out in these field hearings across the country. 

4 

I know he spends a lot of time doing that, and it is an honor to 

be here with him today. 

Like Chairman Bishop, I served in my state legislature in 

Arkansas. But before I did that, the first elected office I held was 

on the school board. I was just discussing earlier with someone 

about how I firmly believe that government is most effective when 

it is closest to the people, and those decisions that are made locally 

have a big impact on local communities. The further away the government gets from the decisions that are being made, the more 

overbearing, unrealistic, and unattainable are the goals that need 

to be accomplished. 

When I ran for Congress—and I am in my first term—my 

campaign slogan was ‘‘less hassle, more freedom,’’ and it was about 

this very kind of issue where Americans want to live their lives 

with less hassle from the Federal Government, and they want to 

have more freedom to raise their families, to create jobs, to grow 

communities, and sometimes we get in the way of that in the 

Federal Government, which I think is the classic example of what 

is happening here with over-reach. 

When we look at poverty, the number-one anti-poverty program 

has always been a job, and it is the local entities, it is the tribes, 

it is the businesses that create jobs. But when they are working in 

an environment where they cannot create jobs, that hurts everyday 

people who are just trying to make a living and raise their families. 

So, I hope that we can move forward here and put the decisionmaking where it belongs, and that is in the hands of the tribes and 

the local community. 

With that, I yield back, Mr. Chairman. 

The CHAIRMAN. Thank you. I appreciate that, and thank you for 

joining us here, Mr. Westerman, and coming from Arkansas to do 

it. 

I want to thank the witnesses who are going to be here to 

provide testimony, both orally as well as for the record. Let me introduce them to you all at the beginning. 

First, the Honorable James M. Olguin, who is a Tribal Council 

Member from the Southern Ute Tribe. Thank you for being with us 

again. 

The Honorable Jack Ferguson, Confederated Tribes of the 

Colville Reservation. He is also a representative on the Intertribal 

Timber Council. Appreciate you being here. 

Mr. Richard Glenn, who is the Executive Vice President, Lands 

and Natural Resources for the Arctic Slope Regional Corporation. 

Thank you for coming from Alaska to be down here. 

Mr. Louis Denetsosie. Did I come close to that? I didn’t come 

close at all, did I? 

[Laughter.] 

The CHAIRMAN. But anyway, he is a significant player in this 

issue as the President and CEO of the Navajo Nation Oil and Gas 

Company. So, I thank you even though I slaughtered your name. 

I thank you for being here to give your testimony. 

And Mr. Eric Henson, who is a Senior Vice President for 

Compass Lexecon and a Research Affiliate for the Harvard Project 

on American Indian Economic Development. 

For the five of you, thank you for being here. 

5 

Many of you have testified before. This is still a congressional 

hearing, so we will run it under the rules of a congressional hearing. Anything that you have to add as far as written testimony will 

obviously be part of the record. Oral testimony should be limited 

to 5 minutes. 

This is a smaller gathering. We don’t have that many people 

here. Usually, I am a stickler with that and I try to cut you off 

when the 5 minutes ends. I am not going to do that this time, unless you go way beyond that. We can be a little bit more generous 

as far as the timing because I do appreciate you taking the time 

to be here. 

But we have the lights in front of you for you to utilize. When 

the red light lights, it is trouble time. 

With that, I am going to recognize Mr. Olguin first to give oral 

testimony that will be in addition to your written testimony. And 

once again, I am so grateful for you being down here. I appreciate 

it very much. 

Mr. Olguin. 

STATEMENT OF THE HON. JAMES M. ‘‘MIKE’’ OLGUIN, TRIBAL 

COUNCIL MEMBER, SOUTHERN UTE INDIAN TRIBE, IGNACIO, 

COLORADO 

Mr. OLGUIN. Thank you. Good morning, Chairman Bishop and 

distinguished members of the committee. My name is Mike Olguin, 

and I am the treasurer and a member of the Southern Ute Indian 

Tribal Council. It is my great honor to appear before you today on 

behalf of the Southern Ute Indian Tribe. Our reservation is located 

several hours from here in southwestern Colorado. 

As the premiere natural gas producer in the United States, the 

Southern Ute Indian Tribe is a great example of the positive impacts of Indian energy development. We became involved in oil and 

gas development on our reservation in the 1940s, and we have increased our participation in the development process, doing aggressive effort to assume control over our mineral resources. 

In 1982, we enacted a severance tax by which we have collected 

$800 million over the last three decades. In 1992, the tribe started 

Red Willow Production Company, which operates wells on the 

reservation. In 1994, the tribe partnered to create Red Cedar 

Gathering Company, which provides gathering and training 

services throughout the reservation. 

Less than 50 years ago, the Tribal Council had to suspend the 

practice of distributing per-capita payments to tribal members because the tribe could not afford them. Today, the tribe conducts 

sizable oil and gas activity in 10 states and is the largest employer 

in the Four Corners region. Today, the tribe provides health insurance for its tribal members and promises all members a college 

education. 

The tribe is the only tribe in the Nation with a Triple-A-plus 

credit rating from Standard and Poor’s. Approximately 30 percent 

of the tribe’s income comes from energy development on the reservation. There is no question that energy resource development 

has put the tribe, our members, and the surrounding community 

on a more stable economic footing. 

6 

We can tell you firsthand that Federal oversight often impedes 

tribal self-determination. Despite decades of success in managing 

our own affairs and conducting highly complex business transactions on and off the reservation, the tribe remains subject to 

Federal regulations that require Federal review and approval of 

even the most basic transactions. This causes delays and subverts 

tribal economic development. 

For example, the BLM issues building permits on tribal lands, 

which takes 4 to 6 months. The state of Colorado issues building 

permits on private lands, which typically takes 45 days. Building 

permits on tribal lands cost $9,500, while building permits on private lands are free. Operators obviously prepare to drill on private 

lands, and, unfortunately for Southern Ute, our reservation is a 

combination of tribal and private lands. 

We are here to tell you that willing and able tribes should be allowed greater authority over energy development on tribal lands. 

The tribe has consistently demonstrated that it can complete major 

projects more quickly and effectively than Federal agencies can. 

Yet, the same agencies often hinder or flat-out refuse the tribe’s 

efforts to assist in carrying out their functions. 

For example, after a 2014 Office of Trust review and audit report 

revealed massive mishandling by the BIA of the tribe’s historical 

records at the Southern Ute Agency, the tribe made countless offers to assist the BIA in solving the problem. Months after the 

problem was revealed, the BIA finally entered into a 638 contract 

authorizing the tribe to scan and organize the files at the agency. 

Interior provided $250,000 to fund the contract, while the tribe contributed more than a million dollars of its own money and its tribal 

staff to complete the scanning project. 

As another example, the tribe has a streamlined process of approving in a single transaction renewals of all rights-of-way that an 

operator has on the reservation, usually numbering in the hundreds. This allows the tribe to easily monitor expiration dates and 

negotiate renewals. When the tribe presented one of these rightsof-way packages to the Southern Ute Agency for approval, it took 

the agency approximately 4 years to approve the package because 

there was no way to enter the rights-of-way into the Department’s 

Trust Asset and County Management System, or TAMS. 

To overcome this inadequacy of the BIA realty function, the tribe 

created its own GIS system known as the Land Information 

Management System. This system allows the tribe to scan realty 

records into its database, where each document has a location on 

the map, a function that TAMS lacks. 

It is perfectly clear that the BIA does not have the data, 

resources, technological capabilities, or staffing to meet the needs 

of the tribe. Meanwhile, the tribe has the capability and, most importantly, the incentive to improve the situation. 

In conclusion, like other energy tribes, the Southern Ute Indian 

Tribe’s economic prosperity is due in large part to responsible 

energy development. The Southern Ute Indian Tribe, like many 

other tribes, is well-equipped to responsibly develop its own energy 

resources to achieve ever-increasing self-determination. The tribe 

respectfully suggests that in some instances the best way for the 

7 

United States to uphold its trust responsibility would be to step 

aside. 

The tribe appreciates the efforts of this committee and others to 

encourage tribal self-determination through economic and energy 

development. Thank you for this opportunity to appear before you 

today, and I would be happy to answer any questions. 

[The prepared statement of Mr. Olguin follows:] 

PREPARED STATEMENT OF THE HONORABLE JAMES M. ‘‘MIKE’’ OLGUIN, TREASURER, 

SOUTHERN UTE INDIAN TRIBAL COUNCIL ON BEHALF OF THE SOUTHERN

UTE INDIAN TRIBE

INTRODUCTION

Chairman Bishop and distinguished members of the committee, my name is Mike 

Olguin and I am the Treasurer and a Member of the Southern Ute Indian Tribal 

Council. Appearing before you today on behalf of the Southern Ute Indian Tribe is 

a great honor. 

The Southern Ute Indian Reservation consists of approximately 700,000 acres of 

land located in southwestern Colorado, approximately 311,000 acres of which is held 

in trust by the Federal Government for the benefit of the Tribe. As a result of the 

complex history of the Reservation, the Tribe also owns severed oil and gas minerals 

and coal estates on additional portions of the Reservation that are held in trust by 

the United States. The Tribe, which is comprised of just over 1,500 members, is a 

leader in Indian Country with a demonstrated and sterling record of foresight and 

business acumen. The Tribe is the only tribe in the Nation with an AAA+ credit 

rating, which was earned through years of steady governance and successful and 

prudent business transactions. Though the Tribe has a diversified portfolio, energy 

development remains a key component of the Tribe’s strategy. Approximately 30 

percent of the Tribe’s income comes from energy development on the Reservation. 

Accordingly, we are well positioned to speak to the relationship between energy development, prosperity, and tribal self-determination. 

CAREFUL PLANNING LED THE SOUTHERN UTE INDIAN TRIBE TO BECOME THE PREMIER

INDIAN TRIBAL NATURAL GAS PRODUCER IN THE UNITED STATES

The Southern Ute Indian Tribe is a great example of the positive impacts of 

Indian energy development. Our Reservation is part of the San Juan Basin, which 

has been a prolific source of oil and natural gas production since the 1940s. 

Beginning in 1949, the Tribe began issuing 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 in any comprehensive resource management 

planning. That changed in the 1970s as we and other energy resource tribes in the 

West recognized the potential importance of monitoring oil and gas companies for 

lease compliance and keeping a watchful eye on the Federal agencies charged with 

managing our resources. In 1974, the Tribal Council placed a moratorium on oil and 

gas development on the Reservation until the Tribe could gain better understanding 

and control over the process. That moratorium remained in place for 10 years while 

the Tribe compiled information and evaluated the quality and extent of its mineral 

resources. 

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, the Tribal Council enacted a severance tax, 

which has produced more than $800 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 the Tribe with 

business options and greater involvement in resource development. Because the 

Tribe’s leaders believed that the Tribe could do a better job of monitoring its own 

resources than Federal agencies, shortly after passage of the Federal Oil and Gas 

Royalty Management Act of 1982, the Tribe entered into a cooperative agreement 

with the Minerals Management Service permitting the Tribe to conduct its own 

royalty accounting and auditing. 

In 1992, we started our own gas operating company, Red Willow Production 

Company, which was initially capitalized through a Secretarially approved plan for 

8 

use of $8 million of tribal trust funds received by our tribe 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, the Tribe is the majority owner of Red Cedar Gathering Company, which 

provides gathering, processing, and treating services throughout the Reservation. 

Ownership of Red Cedar Gathering Company allowed us to put the infrastructure 

in place to further develop and market coal bed methane gas from Reservation lands 

and provided 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 our economic growth, we expanded operations off the 

Reservation. 

These acts of energy development through self-determination are key to the 

Tribe’s economic success. Today the Southern Ute Indian Tribe, through its subsidiary energy companies, conducts sizable oil and gas activities in approximately 

10 states and in the Gulf of Mexico. Today we are the largest employer in the Four 

Corners Region. Energy resource development has unquestionably had a great positive impact on the Tribe, our members, and the surrounding community. The regional community college even has a new associate degree program in Tribal Energy 

Management, and because of the Tribe’s vast experience in this realm, the college 

has enlisted the Tribe’s assistance and input. 

INDIAN ENERGY DEVELOPMENT HAS AN ENORMOUS IMPACT ON THE ECONOMIC

PROSPERITY OF TRIBES AND THE LIVELIHOOD OF INDIVIDUAL TRIBAL MEMBERS

Less than 50 years ago the Tribal Council had to suspend the practice of distributing per capita payments to tribal members because the Tribe could not afford 

them. Today the Tribe provides health insurance for its tribal members, promises 

all members a college education, and has a campus dotted with state-of-the art 

buildings. This success was not an accident. Without a prolonged effort to take control of its natural resources, the Southern Ute Indian Tribe would not be the 

economic powerhouse that it is today. Our energy-related economic successes have 

resulted in a higher standard of living for our tribal members. Our members have 

jobs. Our educational programs provide meaningful opportunities at all levels. Our 

elders have stable retirement benefits. We have exceeded many of our financial 

goals, and we are well on the way to providing our grandchildren and their grandchildren the opportunity to maintain our Tribe and its lands in perpetuity. 

Along the way, we have encountered and overcome numerous obstacles, some of 

which are institutional in nature. We have also collaborated with Congress 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. As we have stated 

repeatedly to anyone who will listen to us, ‘‘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.’’ Successful energy development, in spite of institutional obstacles, has also enabled the Tribe to invest in diverse, non-energy projects, laying the 

foundation for long-lasting economic prosperity. For example, the Tribe has made 

real estate investments in 11 markets located in 8 states. These investments include 

residential, commercial, industrial, and hotel properties throughout California, 

Nevada, Colorado, Texas, Kansas, Illinois, Ohio, and Maryland. Return on these investments has spurred further economic growth for the Tribe, which would not have 

been possible but for the Tribe’s active efforts to control and develop its energy 

resources. 

FEDERAL OVERSIGHT OFTEN IMPEDES TRIBAL SELF-DETERMINATION

The Tribe has achieved its stature despite the Federal Government’s stifling role 

in Indian energy development. We have been carrying this same message to Capitol 

Hill since at least 2002. A memorandum from our legal counsel to the Senate 

Committee on Indian Affairs’ legal counsel dated June 30, 2002 states: 

The problems with Secretarial approval of tribal business activities include 

an absence of available expertise within the agency to be helpful . . . Some 

structural alternative is needed. The alternative should be an optional 

mechanism that allows tribes to elect to escape the bureaucracy for mineral 

development purposes, provided the Secretary has a reasonable indication 

that an electing tribe will act prudently once cut free. 

9 

More than a decade later, the Tribe’s long-standing concerns were supported by 

the findings of a 2015 GAO Report that weaknesses in the Bureau of Indian Affairs’ 

(BIA) management of oil and gas resources contributed to a general preference by 

industry to acquire oil and gas leases on non-Indian lands over Indian lands. This 

conclusion comes as no surprise to the Tribe, which is all too aware of this reality. 

For example, the state of Colorado, which issues drilling permits on fee lands, typically issues a permit in approximately 45 days. If the permit is not issued within 

75 days, the operator has a right to a hearing. In comparison, on tribal lands, BLM 

issues the permits to drill, which typically take 4 to 6 months. There are no regulatory commitments to a processing time frame; operators must simply wait. In addition, permitting costs are much higher on tribal lands than on fee lands. The 

BLM’s drilling permit fee is $9,500, and none of that money goes to the Tribe. In 

comparison, a state drilling permit in Colorado is free. These disparities create a 

problem that is exacerbated on reservations like the Southern Ute Indian 

Reservation, where tribal land and non-Indian fee land are arranged like a checkerboard, and oil or gas operators can develop on non-Indian fee land for less time and 

money, all-the-while depleting Indian minerals. 

Despite the Tribe’s decades-long success in managing its own affairs and conducting highly complex business transactions, both on and off of the Reservation, 

Federal law and regulations still require Federal review and approval of even the 

most basic realty transaction occurring on the lands held in trust for the Tribe on 

the Reservation. Federal involvement invariably delays a proposed tribal project. 

These delays are exacerbated by the fact that a Federal approval often constitutes 

a Federal action, which triggers environmental and other review requirements, even 

for simple and straightforward realty transactions. In essence, the Tribe’s own lands 

are treated as public lands, and, if Federal approval is involved, no action—not even 

some initiated by the Tribe itself—can occur until the Federal Government has analyzed the potential impacts. In order to eliminate these delays and in recognition 

of the Tribe’s ability to protect its own interests and assets without assistance from 

Federal agencies, the statutory and regulatory requirements for Federal approval of 

tribal transactions must be modified so that Federal review and approval of realtyrelated tribal projects is not required. 

The Energy Policy Act of 2005 offered a new and creative alternative to this situation in the form of ‘‘Tribal Energy Resource Agreements’’ (TERAs), which are essentially bi-lateral agreements between an electing tribe and the Secretary of the 

Interior that would govern energy resource development on Indian lands. Under an 

approved TERA, a tribe would have the authority to negotiate and enter leases, 

business agreements, rights-of-way and other agreements without the prior review 

or approval of the Secretary. 

Entering into a TERA would—at least in theory—address the problems the Tribe 

has faced. However, the implementing regulations diminished the scope of authority 

to be obtained by a TERA tribe by preserving the Federal Government’s prerogative 

in carrying out an array of functions—called ‘‘inherently Federal functions’’ in the 

vernacular—an undefined term that could render the Act’s goal of fostering tribal 

decision making and self-determination practically meaningless. Despite the Tribe’s 

repeated requests for clarification of the TERA process, and in particular, for clarification on what constitutes an ‘‘inherently Federal function’’ for which the Tribe 

would not be allowed to assume authority under the Department’s regulations, the 

Department of the Interior has refused to provide guidance. Fortunately, Indian energy legislation currently pending would address other inefficiencies in the TERA 

process, but does not address the ‘‘inherently Federal function’’ dilemma. 

The Department is also hoping that its ‘‘one stop shop’’ (the Indian Energy Service 

Center) will help address the problem of delays in energy transaction processing on 

Indian lands, but the Tribe has opposed this idea since its inception out of concern 

that it could pull already scarce staffing resources from local agencies. Insufficient 

staffing at the Southern Ute Agency is a long-standing problem, and the Regional 

Office has told the Tribe it could take up to 4 years to obtain the cost of living adjustment needed to help attract qualified staff. For a time, the Southern Ute 

Agency’s realty staff consisted of one administrative assistant. If the creation of the 

Indian Energy Service Center will serve as another obstacle to strengthening local 

agencies, the Service Center will be no solution at all. The Tribe has recently 

learned that the Service Center is now open for business, but the Tribe has not received official notification of its opening and neither the Tribe nor the Southern Ute 

Agency have received instructions as to how to utilize the Center. 

10 

WILLING AND ABLE TRIBES SHOULD BE ALLOWED GREATER AUTHORITY OVER ENERGY

DEVELOPMENT ON TRIBAL LANDS

Some tribes do not need or desire the current level of Federal interference and 

‘‘oversight’’ in tribal energy development, and in some instances like at Southern 

Ute, the Federal ‘‘oversight’’ is a massive and quantifiable impediment to the Tribe’s 

ability to develop its own resources. The Tribe has consistently demonstrated that 

it can successfully complete major undertakings more quickly and effectively than 

Federal agencies can. 

For example, after a 2014 Office of Trust Review and Audit (OTRA) report revealed the massive mishandling of the Tribe’s priceless, historical trust and realty 

records at the Southern Ute Agency, and after months of the Tribe virtually begging 

Interior to be allowed to help solve the problem, the BIA finally entered into a 

P.L. 93–638 contract that authorized the Tribe to (largely with the Tribe’s own 

funding) scan and organize the Bureau’s own files at the Southern Ute Agency before they would be sent to the American Indian Records Repository. The electronic 

files will then be sent off site, where they will be organized in accordance with the 

Bureau’s filing protocol, the 16 BIAM, which has been only loosely followed at the 

Southern Ute Agency in past decades. The electronic files are then being indexed 

into the Tribe’s proprietary Geographic Information System (GIS). This scanning 

project, which utilizes $250,000 from the Department of the Interior and more than 

$1M of tribal money and the dedication of tribal staff, is well worth the money to 

the Tribe. The Tribe is well-equipped to define and articulate its best interests, yet 

the ethos of Federal agencies is to second-guess and over-rule it. This makes no 

sense, particularly given that Federal agencies cannot themselves meet the Tribe’s 

needs, and in at least this instance, was the cause of the problem. 

As another example, the Southern Ute Indian Tribe, as well as operators on the 

Reservation, prefer to handle the renewal of an operator’s rights-of-way all at once. 

This utterly rational approach allows the Tribe to more easily monitor the end date 

and renegotiate renewals when an operator’s hundreds of rights-of-way are handled 

together. In one instance, the Tribe was even able to leverage the renewals to require an operator on the Reservation to replace several grandfathered high pollutant-emitting 1950s-era compressor engines in lieu of paying compensation for the 

right-of-way renewal. However, when the Tribe presented one such ‘‘global rightsof-way’’ package to the Southern Ute Agency for approval, it took the Agency approximately 4 years to approve it. The Tribe later learned that the biggest hurdle 

to prompt approval was that there was no effective way to enter the rights-of-way 

into the Department’s Trust Asset and Accounting Management System (TAAMS). 

The unwieldiness of TAAMS has been cited numerous times as an excuse for delays 

in energy transaction processing and as an excuse for why the BIA cannot assist 

the Tribe. The problem with the TAAMS system is well documented. (See U.S. Gov’t 

Accountability Office, GAO–15–502, Indian Energy Development: Poor Management 

by BIA Has Hindered Energy Development on Indian Lands; Office of Inspector 

General, U.S. Dep’t of the Interior, Report No.: CR–EV–BIA–0011–2014, Bureau of 

Indian Affairs’ Southern Ute Agency’s Management of the Southern Ute Tribe’s 

Energy Resources.) 

To improve access to critical mineral resource information and to avoid being 

hamstrung by TAAMS, the Tribe’s Department of Energy has scanned its entire set 

of files and developed an associated GIS system that allows each document to be 

linked to a location on a map. Together the store of digital documents and the GIS 

make up the Tribe’s Department of Energy’s ‘‘Land Information Management 

System’’ and represents a major improvement to tribal operations. Basically, because the BIA lacks the technology and sophistication required to manage the 

Tribe’s energy resources adequately, the Tribe developed its own database in-house, 

complete with the GIS module that TAAMS lacks. Juxtapositions like these—the 

disparity between the Tribe’s technological acuity as compared to Interior’s technological bankruptcy—make the ‘‘inherent Federal function’’ requirement all the more 

patronizing and meaningless. 

‘‘What is it that we need to do, to help you help us?’’ is a common refrain in meetings between the Southern Ute Tribal Council and Interior officials. The Tribe has 

implored the BIA in particular to accept the Tribe’s countless offers to assist. BIA 

has repeatedly resisted those offers for reasons that are not particularly compelling. 

It is perfectly clear that the BIA does not have the data, resources, technological 

capabilities, or staffing to meet the needs of tribes. The Tribe has data, resources, 

staffing, technological capabilities, and the incentive to improve the situation. 

The Department constantly cites lack of resources as the reason for delays, but 

in the Tribe’s experience, it sometimes seems as if more Federal resources are expended trying to thwart the Tribe’s exercise of self-determination than are spent 

11 

supporting the Tribe. For example, when the Agency’s records were discovered to 

be in utter disarray, and after an OTRA audit resulted in findings of records in jeopardy, the Tribe tried to assist the Bureau with cleanup and organization. However, 

the Bureau told the Tribe that because of its trust responsibility, tribal employees 

assisting with the Tribe’s records needed to have extensive background checks, and 

staff from the BIA’s Albuquerque Area Office met with tribal representatives in 

Ignacio to explain that the tribal employees did not have the knowledge and expertise necessary to assist. To address this, the Tribe had several of its employees go 

through the Department’s background check process, which involved a long application, a 160-mile round trip drive to be finger-printed and have a photograph taken 

for facial recognition, and an hour-long interview with an Office of Personnel 

Management contract investigator. This process took many months, as did the negotiation of an MOU to establish the parameters within which the Tribe could provide 

assistance. The Tribe even hired local museum archivists to conduct training on archival techniques for Agency and tribal staff so that the BIA would allow tribal staff 

to handle the tribal records that had been desecrated by the BIA for decades. Time 

and time again the BIA held up its trust responsibility to the Tribe as the reason 

it could not allow the Tribe to assist. 

CONCLUSION

Like other energy tribes, the Southern Ute Indian Tribe’s economic prosperity is 

due in large part to responsible energy development, and because of the Tribe’s 

energy resources, tribal members have education, health, and employment benefits 

they would not likely otherwise have. The Southern Ute Indian Tribe, like many 

other tribes, is well-equipped to utilize its own energy resources, particularly if 

given ever-increasing self-determination, and if limited Federal resources are used 

to encourage those efforts rather than stifling them. The Tribe respectfully suggests 

that in some instances, the best way for the United States to uphold its trust responsibility would be to step aside. The Tribe appreciates the continued efforts of 

this committee and others to encourage tribal self-determination through economic 

and energy development. 

The CHAIRMAN. Thank you. I appreciate your willingness to be 

here. 

[Disturbance in Hearing Room.] 

The CHAIRMAN. I am sorry. This is a congressional hearing, and 

this kind of demonstration is not allowed in Congress. So, if you 

would walk away, I would appreciate it. 

Voice of LAW ENFORCEMENT OFFICER. I will ask you again to 

leave. There are no signs allowed in here, so you are going to be 

asked to leave. So, would you do that, please, before you are removed? Are you not going to leave? It is simply a yes or no question. Please leave. You guys need to go. You guys need to leave. 

Please do that. Are you going to leave on your own, or are we going 

to have to remove you? Come on, let’s go. 

The CHAIRMAN. All right. Now, we will continue to see how real 

people can actually be helped in this situation. 

Mr. Ferguson, you are the next witness. We appreciate you being 

here. You are recognized for 5 minutes for your presentation. 

STATEMENT OF THE HONORABLE JACK FERGUSON, 

CONFEDERATED TRIBES OF THE COLVILLE RESERVATION, 

REPRESENTATIVE, INTERTRIBAL TIMBER COUNCIL, 

NESPELEM, WASHINGTON 

Mr. FERGUSON. Good morning, Chairman Bishop and members of 

the committee. My name is Jack Ferguson, and I am a member of 

the Colville Business Council, which is the governing body of the 

Colville Confederated Tribes of the Colville Reservation. I also 

serve as the Colville Tribes’ delegate to the Intertribal Timber 

12 

Council. My testimony today is on behalf of both the Colville Tribes 

and the ITC. I am joined today by Cody Desautel, the Land and 

Property Director for the Colville Tribes, who will be able to 

answer any type of questions. 

As explained in my written statement, both Colville Tribes and 

ITC urge Congress to authorize new tools to promote tribal biomass 

development and forest help on Federal forest land. The Colville 

Reservation is located in North Central Washington State and 

covers 1.4 million acres. More than 920,000 of those acres are 

forest land, and the reservation borders two national forests. 

Colville Tribes has explored woody biomass opportunities in the 

past and continues to evaluate opportunities to make use of onreservation and neighboring forest land. 

Between fuel costs, hauling distance, access to power grid, and 

fluctuating incentives for renewable energy, profit margins are 

razor thin for forest biomass energy. Having a reliable wood supply 

is absolutely critical for tribes and outside investors to connect resources to biomass projects. 

The Colville Tribes developed the Tribal Biomass Demonstration 

Project which is included as Section 6 in Congressman Don Young’s 

Native American Energy Act. It would amend the Tribal Forest 

Protection Act to require Federal agencies to enter into long-term 

contracts with Indian tribes to allow the tribes to develop biomass 

resources on Federal lands. 

Existing authorities authorize but do not direct Federal agencies 

to enter into such arrangements. This new language would change 

that and provide a more certain wood supply. It would also authorize tribes to use on-reservation forest management practices on 

those Federal lands that are included in the demonstration 

projects. 

As this committee has examined in prior areas, tribal forest management practices are much more sustainable, effective, and efficient than those of Federal land managers. We believe that this 

new demonstration project authority, if enacted into law, would 

provide certainty of wood supply and enhance forest health on 

Federal lands. The ability to enter into agreements with terms 

longer than 10 years, the current limit under existing authorities, 

will greatly contribute to the ability of Indian tribes to secure financing and otherwise develop biomass projects. 

The Colville Tribes and the ITC urge the committee to ensure 

that this provision is included in any final version of a national 

energy bill. 

Congress should provide additional tools to expedite harvesting 

of small-diameter logs and improve forest health on Federal lands. 

Beyond the biomass demonstration project, the Colville Tribes and 

the ITC also believe that Congress should enact additional tools 

that would accelerate the harvest of small-diameter timber on 

Federal lands. Several of these tools are currently being discussed 

as part of the House-Senate Conference on the national energy bill. 

For example, time lines could be added to ensure that the tribes 

are able to meaningfully utilize the Tribal Forest Protection Act. 

Only a handful of TFPA projects have been implemented in the last 

12 years since enactment. Part of the reason is that Federal 

13 

agencies do not have firm deadlines to complete scoping and 

planning work for these projects. 

Like many other reservations, the Colville Reservation’s forests 

face imminent threat from pests that have infected large areas of 

the Colville and Okanogan National Forests, specifically the spruce 

budworm and mountain pine beetle. Some of the affected areas are 

currently just a few miles north of our reservation boundary. Wild 

land fire from neighboring Federal lands also continues to pose a 

danger to the Colville Reservation. Many areas of the neighboring 

national forests contain overstocked stands with fuel loadings well 

outside historic ranges. When fires occur on these stands, they are 

extremely difficult to manage. 

The ITC and the Colville Tribes also support the use of 638 

contracting for all Federal departments to allow tribes to directly 

conduct TFPA projects to protect their lands and communities. This 

authority, also under current discussion in the House and Senate 

energy conference, would allow tribes to bring more of their knowledge of the landscape to Federal forest management. In the future, 

the Colville Tribes would also like to see additional authority to 

conduct and contract other Forest Service activities under 638 

authority. 

Finally, ITC and the Colville Tribes support the provisions in the 

Tribal Forestry Participation and Protection Act that authorize the 

Secretaries of Agriculture and Interior to work with tribes to carry 

out additional forest health projects using the Federal laws and 

regulations that are currently used on tribal trust forests. Again, 

in our experience, Indian tribes are far superior forest land managers than Federal agencies. 

The Colville Tribes and the ITC thank the committee for convening this hearing. This concludes my testimony and I will be 

happy to answer any questions that members of the committee 

may have. 

[The prepared statement of Mr. Ferguson follows:] 

PREPARED STATEMENT OF JACK FERGUSON, MEMBER, COLVILLE BUSINESS COUNCIL, 

CONFEDERATED TRIBES OF THE COLVILLE RESERVATION AND BOARD MEMBER, 

INTERTRIBAL TIMBER COUNCIL

Good morning Chairman Bishop and members of the committee. My name is Jack 

Ferguson and I am a member of the Colville Business Council, the governing body 

of the Confederated Tribes of the Colville reservation (‘‘Colville Tribes’’ or the 

‘‘CCT’’). I also serve as the Colville Tribes’ delegate to the Intertribal Timber 

Council (‘‘ICT’’). My testimony today is behalf of both the Colville Tribes and the 

ITC and focuses on the need for Congress to authorize new tools to promote tribal 

biomass development and forest health on Federal forest land. 

Although now considered a single Indian tribe, the Confederated Tribes of the 

Colville Reservation is a confederation of 12 aboriginal tribes and bands from all 

across eastern Washington State. The present day Colville Reservation covers approximately 1.4 million acres and its boundaries include parts of Okanogan and 

Ferry Counties. The CCT has more than 9,400 enrolled members, making it one of 

the largest Indian tribes in the Pacific Northwest and the second largest in the state 

of Washington. About half of the Colville Tribes’ members live on or near the 

Colville Reservation. Of the 1.4 million acres that comprise the Colville Reservation, 

more than 922,240 acres are forested land. 

The Colville Reservation originally consisted of nearly 3 million acres and included all of the area north of the present day Reservation bounded by the 

Columbia and Okanogan Rivers. This 1.5-million-acre area, referred to as the 

‘‘North Half,’’ was opened to the public domain in 1891 in exchange for reserving 

hunting and fishing rights to the CCT and its members. Most of the Colville 

National Forest and significant portions of the Okanogan National Forest are 

14 

located within the North Half. Both forests are contiguous to most of the northern 

boundary of the Colville Reservation. 

THE NEED FOR RELIABLE WOOD SUPPLY FOR BIOMASS PROJECTS

Between fuel costs, hauling distance, access to the power grid, and fluctuating 

incentives for renewable energy, profit margins are razor thin for forest biomass energy. As such, certainty of wood supply is absolutely critical for tribes or third party 

financiers to invest resources in biomass projects. 

The Colville Tribes developed the Tribal Biomass Demonstration Project, which is 

included as section 6 in the Native American Energy Act (H.R. 538) and was included in versions of that legislation introduced in prior Congresses. Section 6 would 

add a new section to the Tribal Forest Protection Act of 2004 (‘‘TFPA’’) that would 

establish a 5-year demonstration project. The demonstration project would require 

the Secretaries of Agriculture and Interior to enter into contracts or other agreements with Indian tribes to promote biomass energy production by providing 

reliable supplies of woody biomass from Federal land. 

The demonstration project in H.R. 538 would require the applicable Secretary to 

enter into at least four new projects during the 5-year authorization that meet the 

requisite eligibility criteria—a total of 20 projects. Existing authorities authorize, 

but do not direct, Federal agencies to enter into such arrangements. It would also 

allow for tribal management practices to apply to areas included in contracts or 

agreements entered into under demonstration projects. As this committee has examined in prior hearings on Indian forest management, tribal forest sustainable management practices are much more effective and efficient than those of Federal land 

managers. 

Contracts or agreements entered into under the demonstration project could have 

maximum terms of 20 years, with the ability to renew for additional 10-year terms. 

The ability to enter into agreements with terms longer than 10 years—the current 

limit under existing authorities—will greatly contribute to the ability of Indian 

tribes to secure financing and otherwise develop biomass projects. 

The demonstration project is also included in S. 209, which is part of the HouseSenate conference on the Energy Policy Modernization Act (EPMA). Mandatory 

agreements with Federal land management agencies like those provided in the 

Tribal Biomass Demonstration Project would be extremely helpful in providing some 

level of certainty of wood supply and enhancing forest health on Federal lands. The 

Colville Tribes and the ITC urge the committee to ensure that this provision is included in any final version of the EPMA. 

CONGRESS SHOULD PROVIDE ADDITIONAL TOOLS TO EXPEDITE HARVEST OF SMALL

DIAMETER LOGS AND IMPROVE FOREST HEALTH ON FEDERAL LANDS

Additional tools should be provided to Federal agencies to accelerate and sustain 

the production of small diameter material available for biomass projects and to otherwise improve forest health on Federal lands. Like the Native American Energy 

Act, many of these tools are currently being discussed as part of the House-Senate 

conference on the EPMA. Examples include: 

• Timelines for TFPA Projects: The TFPA currently allows tribes to request 

forest health treatments be conducted on Federal land adjacent to tribal 

forests. However, only a handful of TFPA projects have been implemented in 

the 12 years since enactment. Like many other reservations, the Colville 

Reservation’s forests face an imminent threat from pests that have infected 

large areas of the Colville and the Okanogan National Forests, specifically the 

spruce budworm and mountain pine beetle. Some of the infected areas are 

currently just a few miles north of our Reservation boundary. Wildland fire 

from neighboring Federal lands also continues to pose a danger to the Colville 

Reservation. Many areas of the neighboring national forests contain overstocked stands with fuel loadings well outside historic ranges. When fires 

occur on these stands they are extremely difficult to manage and pose an extreme risk to the CCT’s trust lands. 

The ITC and the U.S. Forest Service have worked to improve TFPA implementation and there is a growing number of projects in the pipeline. Both the 

ITC and the Colville Tribes supports provisions in H.R. 2647, the House 

substitute amendment to EPMA, and Senator Daines’ ‘‘Tribal Forestry 

Participation and Protection Act’’ that would improve the certainty and timeliness of TFPA projects. 

15 

• 638 Authority for TFPA: The ITC and the Colville Tribes support the use of 

‘‘638’’ contracting for all Federal departments to allow tribes to directly conduct TFPA projects to protect their lands and communities. This authority, 

also under current discussion in the EPMA conference, would allow tribes to 

bring more of their knowledge of the landscape to Federal forest management. 

In the future, the Colville Tribes would also like to see additional authority 

to contract other Forest Service activities under 638 authority. 

• Tribal management pilot project: Finally, ITC and the Colville Tribes support 

the provisions in the ‘‘Tribal Forestry Participation and Protection Act’’ that 

authorize the Secretaries of Agriculture and Interior to work with tribes to 

carry out additional forest health projects using the Federal laws and regulations that are currently used on tribal trust forests. This is a discretionary, 

limited authority under which tribes and Federal land managers can replicate 

lessons and efficiencies found on tribal forests. This authority could also be 

used to implement section 6 of the Native American Energy Act and promote 

biomass. 

The Colville Tribes and the ITC appreciates the committee convening this hearing 

and its interest in expanding tribes’ ability to develop energy resources. 

The CHAIRMAN. Thank you. I appreciate that. 

We next turn to Mr. Glenn of the Arctic Slope Regional 

Corporation. 

STATEMENT OF RICHARD GLENN, EXECUTIVE VICE 

PRESIDENT, LANDS AND NATURAL RESOURCES, ARCTIC 

SLOPE REGIONAL CORPORATION, BARROW, ALASKA 

Mr. GLENN. Thank you, Chairman Bishop, Member Westerman, 

and fellow panelists and guests. My name is Richard Glenn. I am 

the Vice President for Lands and Natural Resources—— 

The CHAIRMAN. I am sorry. You are going to be interrupted 

again. I apologize for that. 

[Disturbance in hearing room.] 

The CHAIRMAN. All right. Before you start again, let me express 

my appreciation to the law enforcement here in New Mexico for 

handling this in a very nice, calm, and easy way, and hopefully no 

one will interrupt you again. 

Mr. Glenn, why don’t you start over again? 

Mr. GLENN. Thank you, Mr. Chairman. 

Mr. Chairman, Member Westerman and committee members, 

staff, and my panel guests, I am from Barrow, Alaska, the northern-most part of the state. I work for Arctic Slope Regional 

Corporation as the Vice President of Lands and Natural Resources. 

Our region contains eight communities. They are not connected by 

any roads, in an area about the size of Montana. Our residents are 

In ̃upiat Eskimos. They rely on a clean environment for a subsistence lifestyle from the river, the land, and the ocean. And we also 

rely on energy development for the communities that we can come 

home to from our subsistence activities. 

ASRC was created by the Alaska Native Claims Settlement Act 

of 1971. It owns about 5 million acres of land on the North Slope, 

much of it with energy and mineral potential. 

The story in Alaska is a little bit different, but I am thankful 

that the Southern Ute story was told before mine because I get to 

save a little bit of time. There are a lot of parallels between our 

two stories, but the Alaska story is a little bit different. 

16 

Briefly, the indigenous leadership of Alaska sanctioned the formation of our tribes. The same leadership at first opposed and then 

abided by the terms of the Native Claims Settlement Act, which extinguished aboriginal title to lands. Tribes continue to exist but, in 

general, tribes do not own lands in our region. The land ownership 

of formerly tribal land now exists in these Native-owned regional 

and village corporations. 

In addition to that, we use the tools of the state government to 

exercise influence and control and to benefit from the presence of 

any industry in our region. In our case, the only industry that was 

present was the oil and gas exploration industry. 

In 1972, the residents of our region voted to form a borough, a 

county-like government to tax the presence of industry in our region and to use the taxes to provide quality-of-life improvements to 

our communities, to exercise permitting and zoning controls, and 

basically to build communities from scratch. 

This story in and of itself is a story of self-determination. But 

interwoven with this story is the story of the regional corporation 

and its ownership of mineral lands. Most of the oil and gas produced on Alaska’s North Slope has been produced on state lands, 

which has been great for tax benefits and for jobs, but there is no 

royalty involved directly to our Native corporations. It was not 

until the year 2000 that lands began to produce natural resources 

that were owned jointly by the state and our Native people. 

Yet, this small, brief time of production has yielded great benefits both to the Native people in our eight communities and to the 

Alaska Natives statewide in Alaska. It can be summarized by the 

history of production from the Alpine field located in the Colville 

River Delta. This is Alaska’s Colville River. In this case, we have 

joint ownership of the subsurface by the state and the Alaska 

Natives of the area, and we have this little bit of socialism programmed into the Settlement Act that says for any Native regional 

corporation that hosts mineral wealth, 70 percent of that wealth 

shall be distributed to all the other regions of the state; and hopefully, if there is mineral wealth elsewhere, 70 percent of their 

wealth is distributed similarly. In this way, there is a fishnet fabric 

of sharing of resource revenue. 

So, over the course of its production, the alpine field on Nativeowned lands in Alaska has distributed about a billion dollars to 

Alaska Natives statewide. If you use the 70/30 formula, about several hundred million, actually equaling tens of millions of dollars 

a year has directly benefited Alaska’s North Slope Native people. 

We have used this resource revenue to bootstrap our Native 

Corporation to advance and evolve into other areas. We are doing 

things beyond resource development, and we are engaged in commercial enterprises across the country. 

The story of our history is different, yet, we are a region that depends on resource development. We have shepherded it and controlled it to the greatest degree possible, and the story continues. 

We are involved in continued exploration of gas and oil resources 

in our region, and we have improved the quality of life for the 

residents of our small communities. 

Thank you. 

[The prepared statement of Mr. Glenn follows:] 

17 

PREPARED STATEMENT OF RICHARD K. GLENN, EXECUTIVE VICE-PRESIDENT FOR

LANDS AND NATURAL RESOURCES, ARCTIC SLOPE REGIONAL CORPORATION

My name is Richard Glenn and I am a resident of Barrow, on Alaska’s North 

Slope. I serve as Executive Vice President for Lands and Natural Resources of 

Arctic Slope Regional Corporation (ASRC). 

ABOUT ASRC

The Arctic Slope Regional Corporation is 1 of 12 land-owning Alaska Native 

regional corporations representing created at the direction of Congress under the 

terms of the Alaska Native Claims Settlement Act of 1971 (ANCSA). ASRC’s region 

is the North Slope of Alaska and encompasses 55 million acres (the informal names 

‘‘North Slope’’ and ‘‘Arctic Slope’’ are geographically identical and are alternately 

used when one or the other has become more associated with a given usage or is 

a part of a formal name). The North Slope region includes the villages of Point 

Hope, Point Lay, Wainwright, Atqasuk, Barrow, Nuiqsut, Kaktovik, and Anaktuvuk 

Pass. The North Slope residents of the villages that I have named are also citizens 

of the North Slope Borough, a home-rule municipality. The residents are largely 

In ̃upiat (North Alaskan ‘‘Eskimos’’); and they comprise many of the shareholder 

owners of ASRC. North Slope village residents depend on subsistence resources from 

the land, rivers and ocean, as they have for millennia. Within this large region 

ASRC also holds title to approximately 5 million acres of surface and subsurface estate conveyed to it by ANCSA, much of it with energy, mineral and other resource 

potential. Among many other efforts, ASRC pursues and benefits from natural resource development on and near its lands. Energy development of Native-owned and 

State-owned lands is a major component of the success of ASRC and its region. 

Energy resource development and in some cases energy resource ownership have 

provided for substantial gains in economic self-determination for ASRC’s growing 

shareholder base of approximately 13,000. 

Under ANCSA, Congress created Native corporations, including ASRC, as profitmaking entities ‘‘to provide benefits to its shareholders who are Natives or descendants of Natives or to its shareholders’ immediate family members who are Natives 

or descendants of Natives to promote the health, education or welfare of such shareholders or family members.’’ Consistent with this unique mandate, ASRC is committed both to providing sound financial returns to our shareholders in the form of 

jobs and dividends, and to preserving our In ̃upiat way of life, culture and traditions, 

including the ability to hunt for food to provide for our communities. A portion of 

our corporate revenues are invested in initiatives that aim to promote and support 

an educated shareholder base, healthy communities and sustainable local economies. Our perspective is based on the dual realities that our In ̃upiat culture and 

communities depend upon a healthy ecosystem and the subsistence resources it provides and upon present and future oil and gas development as the foundation of a 

sustained North Slope economy. Perhaps however it is useful to see how Native 

corporations are related to Alaska Native tribes and local communities and 

governments. 

WHY ALASKA IS DIFFERENT: NORTH SLOPE LAND AND RESOURCE OWNERSHIP

Mr. Chairman and committee members, the present layers of local government, 

resource ownership and representation in our region can be very confusing for outsiders, even for those who are familiar with tribal relations and governance. A brief 

review may be helpful for some and is included in my written testimony. 

The Native-occupied lands of northern Alaska were never ceded away by any 

treaty nor lost in any battle. The Treaty of Cession, which ratified the United 

States’ 1867 purchase of Alaska from Russia recognized that the Native residents 

of Alaska existed and had rights. Following Alaska’s purchase, however, the Alaska 

Natives’ land rights remained in limbo for generations. While Alaska was still a territory, the Federal Government appropriated massive swaths of land with little regard for the land ownership rights of the Natives who lived there (In the Arctic 

Slope region there were two: In 1926—the formation of the 23-million acre Naval 

Petroleum Reserve No. 4 by President Harding, and in 1960—the formation of the 

8-million acre Arctic National Wildlife Range by President Eisenhower.). 

Statehood in Alaska, in 1959, similarly overlooked aboriginal land and resource 

ownership rights. The state did allow for the formation of city (and eventually borough) governments which could tax, zone, and offer community improvements within their areas of authority, but offered no method to validate the assertion of 

aboriginal title. Against this land ownership vacuum, the exploration for energy resources around known oil and gas seeps on the North Slope intensified in the 1960s, 

18 

including the gobbling up of North Slope lands by the young state of Alaska for its 

own benefit. Tensions rose and eventually action was taken at the Federal level. In 

1966 Interior Secretary Stewart Udall declared that no oil would be developed and 

no more state lands would be conveyed to Alaska until the issue of aboriginal title 

was resolved. The ‘‘land freeze’’ occurred right before the discovery of the massive 

Prudhoe Bay oil field in 1968–69. The terms of ANCSA were negotiated and debated 

in Congress and eventually ratified by December of 1971. 

The result was the extinguishment of aboriginal land title in Alaska and the formation of land-owning Native regional and village corporations. The land base represented a fraction (in ASRC’s case about 10 percent) of the land that was originally 

claimed by the Natives. The Federal Government offered a cash settlement as additional compensation. With the land base and cash settlement as startup assets, the 

ANCSA corporations were intended to succeed as profitable corporations delivering 

benefits to their Alaskan Native shareholders. 

Briefly, the indigenous leadership of the people of the North Slope sanctioned the 

formation of what were to become federally-recognized tribes. The same leadership 

at first opposed, and then abided by the terms of ANCSA, which extinguished aboriginal title. Some lands with resource potential were conveyed back to the Arctic 

Slope Native corporations, along with an additional cash settlement. The Federal 

and state governments took the remainder of the lands, a taking which still pains 

many of those who argued for or against the terms of ANCSA before ratification. 

Those of us who came of age during these years are of mixed views on this history. 

For the most part the leadership that negotiated the terms of ANCSA and my colleagues and I at ASRC today have been trying to make the best of the Act for the 

benefit of our shareholders. 

Using myself as an example: By virtue of Indian Law, ANCSA law, and State law, 

I am a tribal member, a city and Borough resident, and a village and regional corporation shareholder. My tribe today possesses many rights similar to those of other 

Indian tribes, but in general owns no land or natural resources. My city and more 

predominantly my borough governments provide civic infrastructure and quality of 

life improvements to communities inhabited largely by our tribal members but also 

comprised of citizens of other ethnic groups. And my village and regional corporations own title to ANCSA-conveyed lands and natural resources, and have formed 

for-profit operating subsidiaries that offer employment and dividend benefits to 

their shareholders. The institutions that represent us are thus split into three broad 

swaths, yet braided together like rope and operate on our behalf. 

ENERGY DEVELOPMENT AS A TOOL OF SELF-DETERMINATION—THE NORTH SLOPE

BOROUGH

The 1972 formation of the North Slope Borough, a state-chartered home-rule 

government, was largely driven by the interest of the In ̃upiat community in protecting our traditional way of life and exercising permitting, zoning and taxation 

controls on the industry that was to develop after the Prudhoe Bay discovery. The 

foundational goals of the North Slope Borough were to protect the environment and 

to use local government tools to improve the quality of life in communities within 

its boundaries. 

By using a strong permitting and zoning process, the Borough today (as it has 

ever since its inception) regulates energy development on its terms to the greatest 

degree possible. The Borough then taxes the real property value of the pipelines, 

drill rigs, and other oil field production and transportation infrastructure. The 

Borough uses the infrastructure-derived tax proceeds to build, operate and maintain 

local education facilities and quality of life improvements (airstrips, roads, reliable 

power, improved housing and health care centers) in every one of the villages of our 

region. 

The presence of the oil and gas industry in our region is the economic base for 

what have become improvements to our cities and towns. Our community is empowered by oil and gas development. The North Slope Borough employs the largest 

number of village residents on the North Slope; maintains its own Department of 

Wildlife Management, which invests heavily in protecting our subsistence resources; 

and maintains stringent permitting requirements for oil and gas companies that operate within our region. Our people therefore depend on a healthy Arctic environment to support subsistence species (caribou, waterfowl, marine mammals, fish and 

others), and also depend on a healthy energy industry to provide the tax base that 

fuels the North Slope Borough government operations. While these dependencies appear to be in conflict, it is the view of many on the North Slope that it is a totally 

appropriate one. 

19 

NATIVE OWNERSHIP OF LANDS AND NATURAL RESOURCES: THE ASRC STORY

For ASRC North Slope energy development presented a related but different set 

of opportunities and issues. The lands conveyed to ASRC, some 5 million acres in 

total are located in areas that either have known resources or are highly prospective 

for oil, gas, coal, and minerals. Some of the lands are remote and very distant from 

areas of current exploration and production. The State and Federal lands of the 

North Slope also contain similar energy resource potential. In fact the overwhelming 

majority of lands developed in Alaska to date have been on state-owned lands. The 

supergiant Prudhoe Bay (initial production in the 1970s) and Kuparuk River (1980s) 

fields were discovered and developed on state-owned lands, for example. Their development was a boon to the North Slope Borough tax base and to local Alaska Native 

corporation contractors offering jobs in oilfield construction and operations. Generations of ASRC shareholders and North Slope village residents have explored job 

opportunities in the development of state-owned North Slope fields. But the development of the state-owned lands offered no direct royalty benefits to the shareholders 

of ASRC. 

Exploration and development of oil and gas resources moved westward from the 

Prudhoe Bay/Kuparuk fields and eventually toward and into the Colville River 

delta. Finally, in the mid-1990s oil discoveries were made on Colville River delta 

lands that were owned jointly by the state of Alaska and Alaska Natives of ASRC 

(subsurface) and the Kuukpik Corporation (the surface landowner which was the 

ANCSA village corporation representing the people of the Colville River delta village 

of Nuiqsut). Facilities were carefully planned and constructed over the next 10 years 

and in 2000 production finally began from the ARCO Alaska Inc.-operated Alpine 

oil field. ASRC became a royalty revenue owner. Since production began, the Alpine 

oil field and its related satellite fields have produced a half a billion barrels of quality crude oil that has been shipped down the Trans Alaska Pipeline along with oil 

from the Prudhoe/Kuparuk and related fields that continue to produce to this day. 

Other Kuukpik/ASRC lands are slated for additional production. 

The royalty benefits from the Alpine and satellite fields and from fields yet to 

produce represent tens of millions of dollars of benefits per year to ASRC and its 

shareholders over the lifetime of production. In addition a much larger portion of 

the royalty revenue has been distributed to all of the regional and village corporations of the state of Alaska by virtue of a provision in ANCSA that mandated for 

the sharing of natural resource wealth between all ANCSA corporations. The Act 

states in general, that Seventy Per Cent (70 percent) of natural resource royalty revenue received by a given regional corporation (and this includes oil, gas, minerals 

and timber resources) be shared amongst all the ANCSA regional corporations within Alaska, who must also share with the respective village corporations within their 

regions. As a result of its Colville River delta royalty position and the terms of 

ANCSA, ASRC has shared over a billion dollars to date with other ANCSA corporations in Alaska. Energy development has thus been a part of the economic selfdetermination of every Alaska Native who is a member of a village or regional 

corporation. 

ECONOMIC SELF-DETERMINATION OF ALASKA’S NORTH SLOPE ALASKA NATIVES

In summary, the development of oil and gas resources in our region has fostered 

a stable local tax base that provides local education and community improvements 

that would otherwise be lacking or furnished at great expense by the Federal 

Government and other agencies. The development of Native-owned lands has provided a regular stream of royalty revenue that has allowed ASRC to grow its nonroyalty subsidiaries. Today, royalty revenue is a significant, but not the only or even 

the largest contributing sector to ASRC’s bottom line, and ASRC has become the 

largest privately owned corporation in Alaska. Meanwhile, ASRC distributes a significant portion of its annual net income to its shareholders in regularly distributed 

dividends. 

The relationship with energy resources does not stop at the shoreline. The village 

of Wainwright, for example, is located within the ASRC region about 90 miles west 

of Barrow, Alaska. Wainwright’s Native village corporation, Olgoonik, has been involved in the preliminary stages of Arctic OCS development. Since 2007, Olgoonik 

has supported oil industry activities with marine mammal observers, communications coordination between the industry and subsistence hunters, and crew change 

and supply support services. Olgoonik also has managed marine science studies in 

the Chukchi and Beaufort Seas. Other village corporations as well as ASRC itself 

have made similar inroads in this field of work. 

And ASRC, along with six of our village corporations, created its own offshore development company, Arctic In ̃upiat Offshore (AIO). Where else in America does 

20 

BOEM find indigenous people investing proactively in offshore development so they 

may be positioned to assure that development benefits their communities while also 

protecting their way of life and culture? AIO representatives believe, by the way, 

that for the Bureau of Ocean Energy Management to set aside vast areas of the 

Beaufort and Chukchi Seas, or to give up completely on its Arctic Outer Continental 

Shelf program, would be to completely fail our Arctic communities who are not 

afraid to admit that they depend upon successful new exploration and production 

for the survival of our communities and our Native enterprises. 

ASRC itself is engaged in the exploration and development of lands that are not 

part of its ANCSA conveyance. It is leasing and exploring state and federally owned 

lands much like the major oil companies that have dominated the history of North 

Slope exploration and production. Success in private exploration has the potential 

to yield many new benefits to the shareholders of ASRC. 

In some parts of the world and some parts of America, indigenous people have 

been reduced to conservation refugees within their own homelands. Energy development on Alaska’s North Slope has provided the wellspring for the growth of 

economic self-determination of the Natives of Alaska’s North Slope and the whole 

state of Alaska. We have formed a home-rule government in our own region and 

diversified and grown ASRC into a multi-billion dollar corporation thanks in large 

part to successful exploration and development of Native-owned lands. To me, this 

sounds like the definition of economic-self determination. 

The CHAIRMAN. Thank you. 

Next we will have Mr. Denetsosie from the Navajo Oil and Gas 

Company. We recognize you for 5 minutes, please. 

STATEMENT OF LOUIS DENETSOSIE, PRESIDENT AND CEO, 

NAVAJO NATION OIL AND GAS COMPANY, WINDOW ROCK, 

ARIZONA 

Mr. DENETSOSIE. Thank you. Chairman Bishop, members of the 

committee, members of the public, and fellow presenters, good 

morning. My name is Louis Denetsosie. I am the CEO and 

President of the Navajo Nation Oil and Gas Company. It is a corporation owned by the Navajo Nation. I should mention that I am 

also former Attorney General for the Navajo Nation. 

Right now, NNOGC produces over a million barrels of oil a year 

on the Navajo Nation, operates an 87-mile crude oil pipeline, and 

operates c-stores on the Navajo Nation. We have 84 employees, and 

that is down from about 115 since the oil prices went south. 

I thank you for the opportunity to testify here on the important 

topic of tribal prosperity and self-determination through energy development. The Navajo Nation is really a major story in Indian 

Country. When the Navajos came back from the Bosque Redondo, 

they had 3 million acres. Now they have 17 million acres, and that 

is through the leadership and the culture of the people that managed to do this, and the Navajo has always reinvented itself. Unfortunately, our tribe became very dependent on coal, oil, and gas and 

the resource curse, and it is really time for the Navajo Nation to 

reinvent itself again. I heartily agree with Mr. Olguin. It is time 

for the government to step aside to let the Indian Nations do their 

thing. 

They are very self-reliant. They have been in business with 

themselves and with the surrounding communities. So, in my testimony here today, I would like to shed some light on the barriers 

and regulatory hurdles faced by the oil and gas industry and how 

Congress can help spur more economic activity by eliminating 

these barriers. 

21 

The main thing with the legislation that is pending for reconciliation before Congress—and that is H.R. 538 and Senate Bill 209— 

we would like to see those reconciled and sent to the President for 

his signature. There are some very important provisions in there, 

and one of them is to allow Navajo to issue its own leases. 

The Navajo Nation government is a very sophisticated government. It has its own laws to protect the environment. There is even 

fracking legislation pending in the Navajo Nation Council today. 

They face many of the same issues that are faced on the outside. 

But the Navajo Land Department and other executive branches of 

the Navajo Nation, they do a comprehensive and thorough job of 

performing environmental, archaeological, biological, and cultural 

resource studies of the impacts on the environment from oil and 

gas extraction, and that includes impacts from applications for 

permits to drill. 

We would like this legislation to clarify the Nation’s authority to 

issue its own oil and gas leases, and at the same time clarifying 

that and allowing the Nation to issue applications for permits to 

drill. They already approve them anyway. But let’s remove all 

these different layers of regulation by the BIA and the Bureau of 

Land Management and do away with these redundant approvals 

that are required to issue permits, seismic permits and drilling permits. It takes a minimum of 4 years to start a drilling program on 

Navajo. That is really how it goes. Navajo has helium resources 

sitting in the ground right now. We can’t even touch it. 

Therefore, we urge very strongly that the legislation be 

reconciled and amendments to 25 U.S.C. 415(e) be passed by the 

Council. 

As another example, BLM last week announced that they are ad- justing the fee for APDs to $9,610. Well, I have been the Attorney 

General, and as a member raised on the Navajo Nation, I just object to BLM collecting that money on our land, especially when the 

Navajo people do all the work for the issuance of those permits. 

That should rightfully go to Navajo. They can collect it on BLM 

land, fine. But in this case, that should not apply to Navajo at all, 

and I am sure it is the same with other tribes. 

With regard to Senate Bill 209, there will be changes to the requirements for entering into energy resource agreements, or 

TERAs. One of the provisions in there is the creation of the Tribal 

Energy Development Organization. That is an entity that would be 

majority owned by the tribal landowner. Under that TERA, the 

tribe can issue leases and rights-of-way to the TEDO, much like 

NNOGC, without further BIA approval. Every tribe is a little bit 

different, but we like these options, and that should also go 

forward, too. 

There are very many issues facing Indian Country. I probably 

have more time but I like to be brief and make my pitch for reconciling that legislation. Thank you very much. 

[The prepared statement of Mr. Denetsosie follows:] 

PREPARED STATEMENT OF LOUIS DENETSOSIE, CHIEF EXECUTIVE OFFICER, NAVAJO

NATION OIL AND GAS COMPANY

Good morning. I am Louis Denetsosie, President and CEO of the Navajo Nation 

Oil and Gas Company (‘‘NNOGC’’) and a member of the Navajo Nation. I am also 

a former Attorney General for the Navajo Nation. NNOGC produces over a million 

22 

barrels of oil a year on the Navajo Nation and operates an 87 mile crude oil pipeline 

and a number of c-stores and service stations on the Navajo Nation. NNOGC 

currently has 84 employees, virtually all of them tribal members. 

Thank you for the opportunity to testify on the important topic of Tribal 

Prosperity and Self Determination through Energy Development. The Navajo 

Nation has been a major producer of coal for electricity generation and oil and gas 

in the Four Corners region of the reservation. The downturn in these industries has 

already had an adverse impact on the Navajo Nation economy as well as NNOGC 

and will continue to do so in coming years, therefore it is gratifying to have the 

Congress address these issues. 

It is hoped that my testimony here will shed some light on some of the barriers 

and regulatory hurdles faced by the oil and gas industry in Indian Country and how 

Congress can spur more economic activity by lowering these barriers, including enacting legislation pending for reconciliation by the House of Representatives and the 

Senate. 

NNOGC is in support of the legislation passed by the House of Representatives 

in H.R. 538 (Oct. 8, 2015), titled ‘‘An Act to facilitate the development of energy on 

Indian lands by reducing Federal regulations that impede tribal development of 

Indian lands, and for other purposes,’’ and similar legislation passed by the Senate 

in S. 209, titled ‘‘An Act to amend the Indian Tribal Energy Development and Self 

Determination Act of 2005, and for other purposes.’’ Enactment of a reconciled 

version of these two pieces of legislation by Congress, and particularly the amendments to 25 U.S.C. § 415(e), is of tremendous importance to the Navajo Nation and 

NNOGC. The House version of those amendments is preferable from a selfdetermination perspective, as it would leave any requirement for a 10 year development period for oil and gas leases to be placed in an operating agreement or lease 

in the discretion of the Navajo Nation. 

Removing the Bureau of Indian Affairs from the mineral lease approval process 

will eliminate unnecessary and burdensome layers of Federal regulation. The 

Navajo Nation has a sophisticated three-branch government. Through its Land 

Department and other executive branch agencies, the Navajo Nation comprehensively and thoroughly performs environmental, archaeological, biological and 

cultural resource studies of impacts on the environment from proposed oil and gas 

extraction, including impacts from applications for permit to drill (‘‘APDs’’). 

Clarifying the Navajo Nation’s authority to issue its own oil and gas leases and 

drilling permits will remove additional layers of regulation by the Bureau of Indian 

Affairs and the Bureau of Land Management (‘‘BLM’’). Due to the redundant approvals that are required at present, it takes approximately 4 years to initiate a 

drilling program in Indian Country. That delay can make oil and gas exploration 

and production simply uneconomic on the Navajo Nation, and has been a significant 

hindrance to energy development by NNOGC. I therefore urge that reconciled legislation adopting the amendments to 25 U.S.C. § 415(e) be passed by the House of 

Representatives. 

I would also like to note to the committee that just last week the BLM announced 

that it is adjusting the fee for APDs on tribal lands to $9,610. As a tribal member, 

I have no objection to the collection of this fee on BLM lands but any fees collected 

for APDs issued on Navajo land should go to the Navajo Nation. The Navajo Nation 

performs the vast majority of the environmental studies and evaluations necessary 

for issuance of APDs on reservation lands and the services provided by the BLM 

relative to APDs are minimal. 

From my understanding, S. 209 would also make much needed changes to the requirements for entering into tribal energy resource agreements, or ‘‘TERAs,’’ under 

Title V of the 2005 Energy Policy Act, P.L. 109–58. Although TERAs, once executed 

between tribes and the Federal Government, were intended to be a vehicle to improve energy development in Indian Country by removing requirements for further 

Federal approvals, to my knowledge, not a single tribe has entered into a TERA because the requirements are so onerous. S. 209 would streamline those requirements 

and would also create a new option for tribes to issue, without Federal approval, 

leases and rights-of-ways on tribal lands to a certified Tribal Energy Development 

Organization, or ‘‘TEDO,’’ an entity that would be majority owned by the tribal 

landowner. Thus, an energy and business arm of the tribe, like NNOGC, could be 

certified as a TEDO and no longer have to get BIA approval for energy development 

on behalf of its tribal owner. TEDOs and TERAs, under the proposed amendments 

to P.L. 109–58, are excellent vehicles for tribal self-determination in energy development, and I urge that reconciled legislation adopting this language in S. 209 be 

passed by the House of Representatives. 

Concerning other regulations not addressed by H.R. 538 and S. 209, NNOGC has 

concerns about the proposed BLM regulations to reduce waste of natural gas from 

23 

venting, flaring and leaks during oil and natural gas production activities and establishing when produced gas lost through venting, flaring or leaks is subject to royalties. The regulations, which are quite strict, are proposed to be codified at 43 Parts 

3178 and 3179. The proposed regulations address an activity already regulated by 

states and other departments of the Federal Government. There are very few oil 

and gas pipelines on the Navajo Nation and thus venting and flaring under reasonable regulations is necessary if the industry is to be viable. For that reason alone, 

these regulations should not apply in Indian Country without the consent of the affected Indian tribe. Moreover, the regulations may be beyond BLM’s delegated 

authority from Congress. In recently striking down hydraulic fracturing regulations 

promulgated by the BLM, the U.S. District Court for the District of Wyoming ruled 

that Congress has not delegated any authority to regulate environmental impacts 

from oil and gas activities to the Department of the Interior. See State of Wyoming 

et al. v. Department of the Interior et al.,—F.Supp.3d—, 2016 WL 3509415 (D. Wyo. 

June 21, 2016). That case is on appeal to the Tenth Circuit Court of Appeals, which 

will hopefully agree with the District Court’s well-reasoned opinion. 

Thank you for the opportunity to provide this testimony, and for your interest and 

assistance in improving tribal prosperity and self-determination in Indian Country 

and on the Navajo Nation, through energy development. 

The CHAIRMAN. Thank you. Thank you again so very much. 

Mr. Henson, you are, I believe, our economist on the panel, which 

means you have a right to be boring if you want. 

[Laughter.] 

Mr. HENSON. I will try not to be. 

The CHAIRMAN. OK. I recognize you for 5 minutes. 

STATEMENT OF ERIC HENSON, SENIOR VICE PRESIDENT, 

COMPASS LEXECON, RESEARCH AFFILIATE, HARVARD 

PROJECT ON AMERICAN INDIAN ECONOMIC DEVELOPMENT, 

TUCSON, ARIZONA 

Mr. HENSON. My name is Eric Henson. I am a citizen of the 

Chickasaw Nation, located in Oklahoma. As you heard, I have a 

couple of jobs. I work at a place called Compass Lexecon in Boston, 

and I do economics consulting full time. I am also a Research 

Affiliate at the Harvard Project on American Indian Economic 

Development. A very short synopsis of the research that Harvard 

has done over the past 32 or so years is something you have already heard mentioned today—tribal governments do better when 

they have control over their own resources. This squares very nicely with the evolution that we have seen in a lot of government 

elections. 

The incentives for risk and reward line up better when those who 

make the decisions potentially benefit the most from those decisions, and also potentially suffer the consequences of bad decisions. 

Having a Federal authority from thousands of miles away decide 

which leases should be approved and what appraisals should come 

in at, just does not square with the kind of risk and reward tradeoff we tend to see that really helps economies in any setting, not 

just Indian Country. 

One of the things everyone here knows is how important energy 

development is to a number of tribal lands, particularly out West 

and in Alaska. Mr. Glenn and I share the distinction of growing up 

in some of the world’s greatest oil producing regions. I went to high 

school in a tiny little town in west Texas, and so I personally observed the benefits that can come with sensible oil and gas development. Of course, those same kinds of regulatory frameworks that 

24 

allow that to happen and increase the right incentives for that to 

happen apply to all sorts of Indian resources, including solar, biomass, and lumber. This is not confined only to hard minerals and 

nonrenewables. 

As you have heard a couple of people talk about, the statistics 

for tribes are still pretty terrible in terms of the socioeconomic. 

There is this kind of, I think, knee-jerk reaction to the notion that, 

well, tribes have gaming now, so Indian tribes are not poor anymore. That is really not the case. We have a great diversity of 

tribes with incredibly divergent outcomes in terms of different enterprises. And gaming, because we have a few examples of large 

revenues coming into certain tribes, has tended to unfairly dominate the conversation. It kind of puts energy development in a bin 

that does not get the attention it deserves. 

I really support the notion that you are trying to get some public 

attention for tribes that do not necessarily have gaming revenues 

driving their economies, kick-starting some development that really 

does make a big difference to a lot of people on the reservation and 

in places like Alaska, not only those that have the resources in the 

south. 

A few things about the bill itself, H.R. 538. It appears to me to 

be on this trajectory now, the TERA and the HEARTH Act and the 

ITEDSA exclusive component, components of the HEARTH Act, or 

HEARTH-like components to them. I suppose that is a question 

that we can get into in the Q&A a little bit about its somewhat limited scope, Navajo-only and certain limitations that I would like to 

know more about in terms of why that cannot be expanded more 

broadly across Indian Country. 

It has some explicit attempt to get the appraisal process moving 

more quickly, and I think that is a really great idea, and there are 

a number of other ideas we can probably pursue to bolster the appraisal process getting done more quickly. I have done some work 

for a number of tribes, including places like the Crow Reservation. 

Folks up there have these tremendous delays. I hear from people 

on the ground about how some of the delay problems arise from 

lack of funding at the BIA, lack of personnel in terms of skill and 

expertise, and background and workload. So, there are ways we 

can address this with maybe the carrot and the stick in the funding 

mechanisms, an explicit time limit, maybe some funding that goes 

directly to tribes for appraisals, just take those off the backlog that 

the BIA has, some process by which we can approach it from a 

multi-part solution rather than just only sticking with time limits 

for the BIA to approve. 

One of the things I think we ought to keep in mind as we address the delay in things like appraisals is how incredibly important the BIA still is to energy development on tribal lands. In my 

work with tribes, one thing that you cannot do if you work 20 years 

in Indian Country is not recognize the great diversity that is out 

there. So, I hear from tribes like the Southern Ute about the delays 

that are still tremendously problematic, and I also hear from other 

tribes in certain situations, ‘‘Hey, you know, we have a well-funded, 

well-staffed area office, and we have this kind of ability to utilize 

some expertise that is already there. It is working for us as is.’’ 

25 

1 Compass Lexecon is an international economics consulting firm and is part of FTI 

Consulting. 2 Referred to herein as ‘‘HPAIED’’ or ‘‘Harvard Project.’’ The Harvard Project is based at 

Harvard’s John F. Kennedy School of Government in Cambridge, MA. We partner with the 

Native Nations Institute, which is located at the University of Arizona in Tucson, AZ. The 

Native Nations Institute provides executive education and leadership programs, uniquely 

tailored to senior executives and managers within Native communities. 3See, e.g., The Harvard Project on American Indian Economic Development, The State of the 

Native Nations: Conditions Under U.S. Policies of Self-Determination, New York: Oxford 

University Press, 2008. 4 I appear today not as a representative of Compass Lexecon or Harvard University. Furthermore, I have no financial interest in pending legislation that might impact my opinions in any 

way. 5 A copy of my curriculum vitae was submitted for the Committee record. 

In any proposed solution, I would urge everyone on the committee, while drafting legislation, keep in mind the incredible diversity and leave it in the tribal purview about how much of this 

might come under tribal activities versus how much might stay 

with the BIA, because the experiences out there on the ground are 

very different. 

I have heard quite a bit over the last few weeks, as I have 

thought about this legislation, about other approaches that sometimes work, potentially funding appraisal teams inside tribes, or 

this notion of a one-stop shop where located close to Indian 

Country you can have the expertise instead of relying on the area 

offices, and different ways that tribes might be able to take on 

some of the backlog of the appraisals themselves and then run the 

approvals by the BIA without it flowing the other direction with 

this many-months delay we seem to be having. 

That is, I think, my 5 minutes. I will stop there and look forward 

to the Q&A. 

[The prepared statement of Mr. Henson follows:] 

PREPARED STATEMENT OF ERIC CONRAD HENSON, SENIOR VICE PRESIDENT, COMPASS

LEXECON AND RESEARCH AFFILIATE, THE HARVARD PROJECT ON AMERICAN INDIAN

ECONOMIC DEVELOPMENT

I would like to take a moment to thank you for the opportunity to speak to you 

today in beautiful Santa Fe. My name is Eric Henson, and I am a Senior Vice 

President at Compass Lexecon, which is an economics consulting firm with offices 

located around the world.1 I primarily work out of the Compass Lexecon offices in 

Boston, Massachusetts and Tucson, Arizona. In my economics consulting, I have 

worked on numerous projects involving oil and gas development, coal production, 

electric utilities, and the energy marketplace more broadly. A number of my consulting engagements have involved working with Native American tribes such as 

the Navajo Nation and the Crow Nation, both of which have substantial energy resources of the types at issue here. I also serve as a Research Affiliate with the 

Harvard Project on American Indian Economic Development,2 and in that position 

I am engaged in an ongoing effort to understand what makes tribal economies work 

best.3 I am a citizen of the Chickasaw Nation, and I grew up in one of the country’s 

great oil producing regions, the Permian Basin of West Texas.4

I have a Master’s Degree in Public Policy from the John F. Kennedy School of 

Government at Harvard University, an MA in Economics from Southern Methodist 

University, and a BBA in Business Economics from the University of Texas at San 

Antonio. I attended Harvard as the Kennedy School’s Christian Johnson Native 

American Fellow. I have been engaged in Indian affairs since graduate school; my 

Master’s thesis at Harvard examined the importance of a uniform commercial code 

for economic development on the Crow Reservation.5 I’ve had the great privilege of 

visiting many of the tribal lands we will be discussing today. 

THE HARVARD PROJECT ON AMERICAN INDIAN ECONOMIC DEVELOPMENT

Since its inception in 1987, the Harvard Project has collaborated with Native 

Nations to understand how and why tribal economies, social institutions, and political systems either succeed or fail. At the Harvard Project, my colleagues and I 

26 

6See the Harvard Project website at http://www.hpaied.org/. 

7For more examples, see ‘‘Honoring Nations: Directory of Honored Programs 1998–2010,’’ 

Honoring Nations Program, The Harvard Project on American Indian Economic Development, 

at pages 9 and 11, at http://hpaied.org/sites/default/files/documents/finalhndirectory.pdf. 

undertake research and teaching specifically tailored to meet the needs of tribal 

communities and tribal leadership. 

One of the major questions the Harvard Project has been grappling with is: How 

is it that, despite widely cited poverty and social distress, which is prevalent across 

numerous American Indian reservations, more and more tribes have been able to 

cast off the bonds of external economic dependence? We have seen an increasing 

number of tribes taking part in what we have often referred to as an ‘‘Indian 

Renaissance,’’ where dynamic self-sustaining economies are created by tribal actions. These economies are built upon, and supported by, vibrant political and social 

institutions. The success stories are wide-ranging, from the property development 

and management of the Tulalip Tribes in Washington State, to sustained energybased projects at Southern Ute, to the diverse array of professional and construction 

services offered by Ho Chunk, Inc. in Nebraska. Many tribes have begun actively 

challenging century-long economic paradigms and demonstrating effective selfdetermination and governance. It is curious that, contemporaneously, a number of 

other tribes experience continued economic hardship, high unemployment, rampant 

social and physical health challenges, and the like. What might be the causes of the 

striking economic and social divergences within Indian Country? 

In the first years of HPAIED, the founding researchers recognized that what was 

needed in Indian Country was not additional unsolicited interference from outsiders, 

but culturally specific educational programs and research, developed for tribes, and 

undertaken hand-in-hand with tribal governments. The results of these studies are 

channeled back to those who must deal with the daily challenges of improving the 

economies and social conditions in Native communities (i.e., Indian people working 

in Indian Country). 

In accordance with the above-mentioned approach, graduate students at the 

Kennedy School of Government and at the Native Nations Institute (working in 

close coordination with tribes) have completed several hundred projects and field research reports, many of which were on matters specifically requested by the tribes. 

These field projects have ranged from welfare reform at the Navajo Nation to bison 

ranching at Cheyenne River, and from judicial reform at Hualapai to ski resort 

management for the White Mountain Apache. As part of our organization’s mission, 

many of these reports are available on our website from which all tribes can learn.6

Another important facet of the Harvard Project’s work is our Honoring Nations 

program. Honoring Nations is a competitive awards program that identifies, celebrates, and shares outstanding success stories in tribal governance. We honor tribes 

that exemplify successful tribal governance, and to date the Harvard Project has 

recognized tribal governmental programs ranging from the Eastern Band of 

Cherokee for their Tribal Sanitation Program (in 1999), to the Effective Law 

Enforcement Program of the Gila River Police Department (in 2003), to the Seniors 

Skilled Nursing Facility at the Tohono O’odham Hospice (in 2008), to the Tribal 

Fisheries Department at Nez Perce (in 2015). Since 1999, we have honored about 

130 tribal governmental initiatives.7 HPAIED remains committed to empowering 

Native Nations through identifying the common characteristics of tribes that are 

successfully charting a course toward a socially, culturally, politically, and economically healthy future. 

RESEARCH FINDINGS

Prior to the 1980s, there was a notable lack of research pertaining to economic 

development in Indian Country. The small amount that was available contained at 

least two consistent themes: First, the over-riding focus of thinking and policymaking was on what the Federal Government could do to create jobs, raise income, 

and increase household wealth. This helped contribute to the unbalanced relationship between the Bureau of Indian Affairs (‘‘BIA’’), other Federal programs, and the 

tribes, which often became dependent on Federal funding and expertise. 

Second, the Federal policies and programs that did exist within Indian Country 

constituted what we refer to as a ‘‘Planner’s Approach’’ to economic and community 

development. The Planner’s Approach was simplistic in treating economic development as a fundamental question of resources and expertise, as opposed to one of 

incentives and institutions. Viewing the world through the lens of the Planner’s 

Approach, academics, government officials, and tribal leaders interpreted the underdevelopment seen on reservations as stemming from a lack of access to financial 

27 

8 ‘‘Rent seeking’’ is a term from economics and occurs when an organization or individual(s) 

seeks to obtain economic gain from others without reciprocating in the form of further wealth 

creation. 9 Consider the natural experiment of the German economies after World War II. The parts 

of former Germany subjected to market forces (i.e., West Germany) became a powerhouse of 

development in post-war Europe. The parts of the former Germany subjected to centralized 

planning (i.e., East Germany) stagnated and the citizenry had to be forcefully restrained from 

leaving for better opportunities elsewhere. For a discussion in the context of Indian Country, 

see, the Statement of Joseph P. Kalt, Establishing a Tribal Development Corporation, Before the 

U.S. Senate Committee on Indian Affairs, September 20, 2004 (hereinafter, ‘‘2004 Kalt 

Testimony’’), noting that ‘‘Economic development is an organic process. In an environment in 

which opportunities are subject to the vicissitudes of competition and continually changing marketplace conditions, economic development occurs as the sum of small, adaptive decisions of 

myriad individuals who by luck or preparation are in the right place at the right time to take 

advantage of unplanned prospects. Economic development is much more analogous to tenacious 

plants looking for places to pop up and take root, than to an engineered system.’’ 10For more information on the Nation Building approach, see: The Harvard Project on 

American Indian Economic Development, The State of the Native Nations: Conditions Under 

U.S. Policies of Self-Determination, New York: Oxford University Press, 2008, starting at page 

26. 11Miriam Jorgensen, Bringing the Background Forward: Evidence from Indian Country on the 

Social and Cultural Determinants of Economic Development, Doctoral Dissertation, May 2000, 

at page 129. 

capital, technical skills, and managerial expertise. The Planner’s Approach typically 

provided grants and loans in a well-intended effort to stimulate economic development. However, this heavy-handed approach was driven by Federal budget allocations and has had a strong adverse impact on many Native communities. This 

approach created a world in which grant writers were always in short supply and 

tribal politics revolved around which elected officials could most effectively capture 

(or perhaps extract), funds from the Federal Government. Under the Planner’s 

Approach, what was originally intended to be a solution to underdevelopment instead seems to have perpetuated it, degrading the core tenets of economic development into a series of rent-seeking behaviors.8

A fundamental flaw of the Planner’s Approach was the erroneous assumption that 

a nation’s economic development is a mechanical process that can be achieved by 

way of the imposition of a predetermined blueprint. While it is advisable and even 

advantageous to plan ahead, it is an exercise of hubris to think that one can ‘‘plan’’ 

an economy, in the sense of expecting tribal councils, national legislatures, or 

Federal planners to correctly select a portfolio of businesses, projects, and activities 

that will not only survive, but will meet the needs of tribal citizens, and will thrive 

over time.9

The discussion above raises one obvious question: If one cannot ‘‘plan’’ an economy 

to arrive at productive and sustainable development, what is the alternative? While 

there is no predetermined blueprint for success, there are some general tenets for 

effective, long-term economic development, and these tenets are now being demonstrated by a large number of tribes in Indian Country. We have found that these 

tenets of sustainable development are applicable to developing nations the world 

over, and are being acted upon by many successful tribes in Indian Country. A discussion of these tenets is found below, and in contrast to the Planner’s Approach, 

we refer to tribes that are building their communities under these principles as governments engaged in a ‘‘Nation Building’’ process.10

Institutions Matter: The nature of a society’s institutions, whether social, cultural, and/or governmental, determines the incentives around productive or unproductive activity. Within the scope of our research, the Harvard Project and the 

Native Nations Institute have consistently found that a tribe’s economic development is anemic, or worse, unless the tribe’s institutions personify at least three 

characteristics. The key attributes are: 

• A Rule of Law. A respect for tribal law and the establishment of legitimate 

means for dispute resolution. 

• Separation of Politics from Day-to-Day Administration and Business Affairs. 

Enterprises and economic transactions are free from societal politics and 

power struggles. 

• Efficient Bureaucracy. Clarity of procedures, good recordkeeping, efficient 

administration processes, reliable computer networks, and the like. 

Culture Matters: Given the importance of institutions within a society, the social 

norms and world view of the citizens that interact with those institutions also matter.11 This lesson, observed repeatedly in our research with Native Nations, is an 

28 

12 2004 Kalt Testimony at pages 13–14. 13 2004 Kalt Testimony at page 14. 14Stephen Cornell and Joseph P. Kalt, ‘‘Reloading the Dice: Improving the Chances for 

Economic Development on American Indian Reservations,’’ Joint Occasional Papers on Native 

Affairs, No. 2003–02, 2003. 

important tenet regarding economic development. The importance of local conditions 

and political willpower in building and promoting effective institutions as part of 

economic development cannot be ignored. However, our research in Indian Country 

indicates that, for governing institutions to provide the foundation upon which sustained economic development can take place, there first must be a cultural match.12

One can think of cultural match as the consonance between the structure of a society’s formal institutions of governance (and its economic development initiatives) 

and its underlying norms of political power and authority (i.e., culture).13 In order 

to function effectively, a society’s institutions and corresponding economic development must be consistent with underlying cultural, political, and organizational 

norms. Simply put, they must be seen as legitimate in the eyes of the society’s 

citizenry. 

Sovereignty Matters: Self-determination is a key issue within Indian Country 

and its importance to economic development cannot be overlooked. There are four 

inseparable issues connecting sovereignty and self-determination to economic and 

community development within Indian Country. They are: 

• Design issues. Without self-determination, it is impractical (and perhaps 

impossible) to change institutions so that they more closely match those of 

Native Nations and their unique economic needs. 

• Ownership issues. Absent a strong sense of ownership, it is unquestionably 

difficult to get a local community involved and interested in the payoff from 

tribal economic investments. 

• Accountability issues. Linked closely with the concept of ownership, those 

making the investments and program decisions need to be held accountable 

for how all Federal (and tribal) resources are used. 

• Leadership development issues. There are an increasing number of astute, 

capable, highly experienced leaders emerging within Indian Country. This is 

demonstrated by tribes (and tribal leadership) taking charge of issues irrespective of historical (or concurrently existing) Federal support. 

After years of research, it has become clear that tribes must have autonomy in 

order to foster institutions that are a cultural match for their societies. Successful 

tribal governments all exhibit effective institutions paired with a cultural match. 

We have come to believe that this is why policies of sovereignty and selfdetermination have been the only strategy that has shown any prospect of breaking 

the patterns of poverty and dependence that became so familiar on reservations 

from the late 1800s until at least the 1990s. It is only logical that it requires selfrule for a culture to put in place institutions that are a cultural match. Thus, we 

can restate the uniform qualities that have marked successful economic development in Indian Country as aggressive assertions of sovereignty, resulting in selfgoverned institutions that are characterized by a cultural match. It has repeatedly 

been shown that, when a tribe takes control of its institutions and runs them in 

congruence with its own cultural norms, the result is a set of economic, social, and 

political systems that work for its citizens.14 Continued dependence on the Federal 

Government for grants and guidance removes accountability for tribal leadership 

and undermines the processes necessary for stable and lasting economic development. The negative results of such dependence should not be surprising. 

ENERGY DEVELOPMENT ON NATIVE AMERICAN LANDS

The importance of furthering Native American economic development and reducing Federal dependence can be highlighted by looking the socioeconomic conditions 

of Native American tribes. Consider a few basic statistics, illustrated in Figures 1 

and 2. As shown in Figure 1, the annual per-capita income of American Indians living on the reservations has been consistently lower than (and often less than half 

that of) the U.S. average. In the period between 2006 and 2010, American Indians 

living on reservations had an average per-capita income of $12,459, compared to the 

national average of $26,893. Family poverty levels reflect this same shortfall: 

despite a decrease from 1990 to 2010, the family poverty rate for Native Americans 

in the 2006–2010 time period was 33.5 percent for the Navajo Nation and 

31.7 percent for reservations other than Navajo, approximately three times the U.S. 

29 

15The U.S. Census, American Community Survey (‘‘ACS’’) 5-year data are presented for 

Figures 3 and 5, because the U.S. Census typically provides the most complete and reliable data 

available. 16Shawn Regan and Terry L. Anderson, ‘‘Unlocking the Wealth of Indian Nations: Overcoming Obstacles to Tribal Energy Development,’’ Property and Environment Research Center, 

February 2014 (hereinafter referred to as ‘‘PERC Report’’) at page 4. 17PERC Report at page 4. 18 E. Doris, A. Lopez and D. Beckley, ‘‘Geospatial Analysis of Renewable Energy Technical 

Potential on Tribal Lands,’’ U.S. Department of Energy, February 2013, at pages 1–2. 19Maura Grogan, Rebecca Morse and April Youpee-Roll, ‘‘Native American Lands and Natural 

Resource Development,’’ Revenue Watch Institute, 2011, at pages 6–7. 

average for that same time period (see Figure 2). Figure 3 further highlights income 

disparities for Native Americans, with particular focus on the Crow and Navajo 

Nations. As the figure shows, approximately 40 percent of Crow and Navajo people 

were living in poverty in 2014, relative to the 15 percent nationally.15 A potential 

contributing factor to this income disparity in 2014 could be that employment rates 

for many tribes, including some of the energy-producing tribes, lag behind the 

national average (see Figure 4). Lagging socioeconomic indicators such as these persist across energy-producing tribes; consider, for example, the Blackfeet, Sioux and 

Tohono O’odham tribes, which, like the Navajo and Crow Nations, are all endowed 

with substantial natural resources. Unemployment rates for these tribes are consistently much higher than the national average across the United States (unemployment data from 2007 to 2014 are shown by Figure 5). In 2012, the unemployment 

rate gap was the highest shown (at 14.2 percent); in 2008 the divergence in unemployment rates was ‘‘merely’’ 7.6 percent. 

It is striking that these socioeconomic conditions were (and are) present on these 

reservations, despite the tribes’ abundance of valuable and accessible natural resources. The wealth of available resources available to select tribes is detailed in 

Figure 6. Data for all tribes indicate that Indian lands hold almost 30 percent of 

the nation’s coal reserves west of the Mississippi, 50 percent of potential uranium 

reserves, and 20 percent of known oil and natural gas reserves.16 These resources 

are estimated to be worth approximately $1.5 trillion.17 Figure 7 further illustrates 

how important tribal energy resources are. As this figure shows, potential production of important commodities such as coal, uranium, and oil and natural gas is substantial. The largest producing states do in fact generate more of each of these 

energy sources than the potential from tribal lands, but the potential from tribal 

lands eclipses the second largest producing states (that is, tribal production of coal 

could be greater than that of West Virginia, tribal production of uranium could be 

greater than that of Texas, and tribal production of oil and gas could be greater 

than that of North Dakota). 

In addition to coal, uranium, oil, and gas, tribal lands also hold large potential 

renewable energy resources. Wind, solar, geothermal and hydroelectric energy are 

all accessible in many tribal areas, but relatively few examples exist to demonstrate 

successful development of renewable energy supplies. For example, the U.S. Department of Energy notes that ‘‘Overall, the analysis shows that the technical potential 

on tribal lands is about 6 percent of the total national technical generation potential. This is disproportionately larger than the 2 percent tribal lands in the United 

States, indicating an increased potential density for renewable energy development 

on tribal lands.’’ 18 The potential that tribal energy development represents is largely untapped; the Department of the Interior indicates that only 2.1 million acres of 

Indian lands are being developed for their energy resources, while an additional 15 

million acres with energy potential remain undeveloped. In other words, 88 percent 

of Indian surface lands have resources that could provide tremendous economic and 

social benefits to a number of tribes, but have yet to be developed. 

Our meeting today has been arranged so that we can discuss the potential for enhancing energy development on American Indian lands by reducing Federal regulations that impede the process. By any measure, the potential resource base found 

on tribal lands is substantial. These largely untapped assets offer significant and 

unique prospects for individual citizens as well as entire tribal communities; 

successful energy development represents important revenue streams and higher 

socioeconomic standards for a number of tribes. If tribes choose to pursue energy 

development, they can see benefits from well-managed development such as wellpaying jobs, substantial royalty and tax revenues to the tribes, and greater access 

to critical healthcare and social services, among several others. If these resources 

remain effectively inaccessible to tribes, then what is already a set of complex and 

difficult socioeconomic challenges that face the most economically disadvantaged 

people in the country could easily degrade further.19

30 

20Stephen Cornell and Joseph P. Kalt, ‘‘Two Approaches to Economic Development on 

American Indian Reservations: One Works, the Other Doesn’t,’’ Joint Occasional Papers on 

Native Affairs No. 2005–02, 2006, at pages 14–15. 21 Indian Energy Development: Poor Management by BIA Has Hindered Energy Development 

on Indian Lands, U.S. Government Accountability Office, June 15, 2015 (‘‘GAO Report’’), at 

pages 32–33. 22 HEARTH does not cover subsurface leasing or the ability to grant rights-of-way (Code of 

Federal Regulations, Title 25—Indians, at § 162.006(b)(1)). 23Monte Mills, ‘‘New Approaches to Energy Development in Indian Country,’’ The Federal 

Lawyer, April 2016 (‘‘Mills Report’’) at page 53. Under HEARTH, the Pueblo of Sandia was the 

second tribe (after the Federated Indians of Graton Rancheria) to be approved for tribal regulations on their land (U.S. Department of the Interior, ‘‘Secretary Salazar Signs Historic Agreement in New Mexico to Help Spur Economic Development in Indian Country,’’ March 14, 2013). 

The Governor of the Pueblo, Victor Montoya, said at the time he expected HEARTH to aid with 

elimination of red tape and quicker negotiations with companies looking to lease land. With the 

help of HEARTH, the Pueblo has been working to develop its airport and improve its retail 

center (Albuquerque Journal, ‘‘A ‘historic day’ at pueblo,’’ March 15, 2013). 24GAO Report at page 2. 25GAO Report at page 3. 

The bill we are discussing today, H.R. 538, looks to streamline energy development on tribal lands by decreasing Federal oversight and regulation. Lessening the 

need for this regulation and oversight moves toward tribal autonomy and selfgovernance, and as the research noted above indicates, successful tribal development will depend on enhanced tribal decision-making authority over governmental 

and economic policies that affect tribal lands and resources.20 Promoting opportunities for tribal self-determination and governance is something the Federal Government has tried to do over the last several decades, but has largely fallen short of 

in regard to energy development. 

Congressional efforts to facilitate energy development on tribal lands include the 

Indian Tribal Energy Development and Self-Determination Act (‘‘ITEDSA’’) of 2005 

(which is part of the Energy Policy Act of 2005). This legislation was an attempt 

to give tribes the option to exercise greater authority over their own energy resources. Under the ITEDSA, something known as the Tribal Energy Resource 

Agreement (‘‘TERA’’) allows a tribe, at its own discretion, to enter into leases, business agreements and right-of-way agreements for energy development on their lands 

without review or approval from the Secretary of the Interior. However, as is well 

known, not a single tribe has entered into a TERA agreement, about a decade after 

passage of the Act. This lack of adoption of TERAs is due to factors such as uncertainty about some of the TERA regulations and a complicated, confusing, and timeconsuming application process.21

In contrast to the unutilized TERA, the more recent Helping Expedite and 

Advance Responsible Tribal Homeownership Act of 2012 (‘‘HEARTH’’) provides a 

model which should help tribes accelerate the leasing of tribal surface lands.22 My 

understanding is that HEARTH has as its foundation ideas that were articulated 

in earlier limited legislation authorizing tribes such as the Navajo Nation to independently lease surface lands without Secretarial approval for each individual lease; 

HEARTH extended these rights to all tribes.23 In the context of energy, HEARTH 

allows for projects that lease only surface land and does not extend tribal leasing 

authority over subsurface extraction or exploration. Energy projects on surface land 

are often renewable energy projects, such as utility-scale solar or wind farms. While 

it is promising that under HEARTH tribes can implement their own regulations 

governing the leasing of Indian lands (including for renewable energy development), 

such projects have not yet taken off on tribal lands. As of March 2015 only one utility-scale wind facility was in operation on tribal land, with one more such facility 

and one utility-scale solar facility under construction at that time.24 This is in stark 

contrast with the significant developments in utility-scale wind and solar capacity 

in the United States. Data indicate that in the decade between 2004 and 2013, 686 

utility-scale wind projects and 778 utility-scale solar projects were constructed 

nationally.25 This difference between renewable capacity added nationally and on 

tribal lands illustrates the need to create further provisions for tribes to develop 

their energy resources. 

H.R. 538 takes the HEARTH provision of tribal surface land leasing one step further, specifically in the context of energy development and the Navajo Nation. 

Section 8 of the proposed bill contains a provision to allow the Navajo Nation to 

lease tribal land for the exploration, development, or extraction of mineral resources 

without Federal approval. This would allow for the Navajo Nation to engage in 

energy development beyond projects limited to the surface (i.e., such as utility-scale 

solar and wind facilities). It is possible that the Navajo Nation will benefit from 

such a provision as it is a tribe with substantial natural resources, and a capable 

31 

26PERC Report at pages 17–18. 27Mills Report at page 57. National Congress of American Indians, ‘‘Policy Update, 2016 MidYear Conference,’’ 2016, at pages 13–14. 28 Clair Johnson, ‘‘Crow Tribe signs lease with oil exploration firm,’’ Billings Gazette, May 16, 

2005, at http://billingsgazette.com/news/state-and-regional/montana/crow-tribe-signs-lease-withoil-exploration-firm/article85763605-8812-5993-a56d-8717f7c71bff.html. See also, ‘‘Crow Tribe 

Signs oil and gas development deal,’’ May 17, 2005, at http://www.indianz.com/News/2005/ 

008205.asp. 29Tribal Development of Energy Resources and the Creation of Energy Jobs on Indian Lands, 

Before the House Committee on Natural Resources, Subcommittee on Indian and Alaska Native 

Affairs, 112th Cong. (2011), Statement of Scott Russell, Secretary of the Crow Nation, at page 

13. Delayed approval of oil and gas leases can have a particularly detrimental impact on the 

potential revenues earned from energy development projects in a world of falling oil and gas 

prices. In cases where oil and gas prices have fallen significantly in the long waiting period between application submission and BIA approval, tribes have seen development opportunities 

abandoned. Development efforts not completed have effectively forced certain tribes to forego the 

potentially significant revenues that would have started flowing at higher price levels. 30See, e.g., On Improving Tribal-Corporate Relation in the Mining Sector: A White Paper on 

Strategies for Both Sides of the Table, HPAIED, April 2014, at http://hpaied.org/sites/default/ 

files/documents/miningrelations.pdf, at page 91. 31 Joseph P. Kalt, ‘‘The Mining of Crow Nation Coal: Economic Impact on Crow Reservation, 

Big Horn County and Montana,’’ February 4, 2014, at page 2. 

governmental bureaucracy. However, Section 8 appears to be narrow in scope; it 

does not extend the subsurface leasing rights to tribes more broadly and somewhat 

constrains the Navajo Nation’s ability to fully exploit energy projects as the Nation 

sees fit. Allowing tribes to develop and control their own resources has, in certain 

instances, been tremendously successful. Consider the example of the Red Willow 

Production Company, which is owned and operated by the Southern Ute Tribe in 

Colorado. Red Willow, which engages in oil extraction in a number of geographic 

areas and produces throughout the Western United States and offshore in the Gulf 

of Mexico, is but one of five energy companies operated by the Southern Ute Tribe. 

The success of the tribe’s energy endeavors has allowed it to create a growth fund 

worth billions of dollars, and to provide sizable dividends to the tribe’s citizens over 

a number of years.26 Extending this section of H.R. 538 to tribes beyond the Navajo 

Nation, in a way that maintains the trust responsibility held by the United States 

toward tribes, could promote significant economic and energy development on tribal 

lands. 

In addition to the provision for Navajo subsurface leasing without Federal approval, H.R. 538 sets out to reduce the time required for the approval process and 

lessen the potential for legal challenges (for example, imposing binding time limits 

on the appraisal and approval processes could significantly speed up the time taken 

to greenlight a project and prevent bureaucratic delays). Tribal energy development 

projects that have been stymied in the past have caused significant economic 

damages to tribes, and have led to skepticism in pursuing tribal projects among 

nontribal industry participants in the energy market. Streamlining the Federal appraisal process could make it easier for tribes to undertake energy development in 

pursuit of tribally-driven economic development and determination.27 Similarly, language limiting legal fees that might be recovered by those bringing legal challenges 

to energy project could help insulate tribal energy development projects from costly 

delays, but may also have unintended consequences through chilling judicial access 

for parties that have legitimate standing to challenge certain developments. 

While tribes such as the Southern Ute are benefiting from energy development, 

research has noted that some tribes that engage in the natural resource industries 

are often overly and unjustly burdened by the current system. Cumbersome regulations and/or past mismanagement by the Federal Government deter some tribes 

from proceeding with energy development. Complying with unwieldy Federal regulations and application processes can be incredibly time-intensive and complex, and 

mismanagement and delays of energy projects cost tribes a significant amount of 

revenues. Consider one example of bureaucratic impediments that have stymied 

energy development for tribes such as the Crow Nation. In January 2005, the Crow 

Tribal Council approved an oil and gas lease on tribal lands,28 but development of 

the resource was blocked until September 2007 due to the excessively slow review 

and approval process in place at the BIA.29 Additionally, the Crow Nation reports 

that BIA’s records for surface and mineral ownership are repeatedly missing or outof-date.30 Persisting issues and inefficiencies, layers of regulatory oversight, lack of 

access to markets, higher-than-elsewhere permitting costs, and persistent infrastructure challenges create an environment of uncertainty and contribute to lackluster economic development.31

32 

32 I note that the positive BIA feedback I have recently heard involves energy leases on tribal 

lands that are not reservation lands. 33 U.S. Department of the Interior, ‘‘Tribal Grant Program to Assess, Evaluate and Promote 

Development of Tribal Energy and Mineral Resources.’’ 34Office of Natural Resources Revenue, Department of the Interior, ‘‘Federal Indian Minerals 

Office,’’ March 31, 2016 at http://www.onrr.gov/IndianServices/fimo.htm. 35 Another ‘‘one-stop shop’’ is the still-nascent Indian Energy Service Center in Denver, CO. 

The Service Center will include personnel from several relevant segments of the Department 

of the Interior, and is expected to provide expertise, policy guidance, standardized procedures, 

and technical assistance as needed by tribes (see, e.g., Written Testimony of Lawrence Roberts, 

U.S. Government Accountability Office Report, ‘‘Indian Energy Development—Poor Management 

by BIA has Hindered Energy Development on Indian Lands,’’ Before the U.S. Senate Committee 

on Indian Affairs, October 21, 2015). While the ‘‘one-stop shops’’ noted here might be beneficial, 

there are also potential drawbacks to consider. If not executed properly, these offices may exacerbate existing bottlenecks to energy development by simply consolidating them into one location, such as Denver. Offices of this type may also draw experienced technical advisers away 

from field offices where those personnel might have made a greater impact working more 

directly with the tribes located nearer the area offices. 

Due to these bureaucratic inefficiencies and challenges, the BIA is not always able 

to aid tribal energy development to the best of its capabilities. The BIA is extremely 

important for the administration and management of tribal land held in trust by 

the Federal Government, and its smooth and timely functioning is essential for tribal energy development. An understaffed and overburdened BIA impedes tribes from 

capitalizing on their own resources. In recent discussions I have had with those 

working on the ground in energy development for tribes, I have heard differing 

views on the BIA’s role. For example, I have found several instances where a lack 

of funding, staffing, and expertise at the BIA acts as a roadblock to the timely 

energy development that tribes seek; I have also found that there are instances 

where tribes look to the BIA for its built-in expertise and assistance in leasing oil 

and gas properties, and report that the area BIA office works quickly and efficiently.32 As tribal experiences with the BIA are not positive across the board, it 

is important to reduce inefficiencies and streamline the BIA’s approval and appraisal process. This can be accomplished by using Federal appropriations to provide 

the BIA with more of the funding it needs to increase its staff and expertise and 

by providing incentives for quick and timely action by existing BIA offices. 

Other options to alleviate the congestion at the BIA include the possibility of 

administering block grants and/or setting up additional offices that serve as ‘‘onestop shops’’ for tribes for appraisals, regulation enforcement, and administration of 

lands held in trust by the Federal Government. In recent discussions I have had 

with tribes engaged in energy development, the idea of block grants, or funding directly to certain tribes to carry out functions typically performed by the BIA, was 

largely well-received as a potential way to improve efficiency in tribal leasing for 

energy development. These types of grants could provide a given tribe with a fixed 

amount of funding for the tribe to hire third-party appraisers, to hire experts to assist in negotiating agreements with outside investors and developers, and to review 

royalty rate provisions and distribute royalty payments.33 Consider the bottleneck 

that the appraisal process has often become. By giving tribes funding to cover what 

it costs to do the appraisals itself, in some circumstances the BIA could alleviate 

the backlog in reviewing lease applications, and reduce the financial burden of increasing its own staffing to handle a larger number of applications (and overcome 

existing backlogs where such backlogs exist). Additionally, more ‘‘one-stop shop’’ offices like the Federal Indian Minerals Leasing Office (‘‘FIMO’’) situated at the Four 

Corners Region serving the Navajo, Hopi, Ute and Zuni Tribes should be set up. 

This office is the first of its kind, and both its proximity to tribes and its understanding of conditions on the ground uniquely position it to help streamline and accelerate projects on tribal lands.34 Directing funding to the establishment of such 

offices could be beneficial to energy development for tribes by further alleviating 

congestion at the BIA and providing tribes with more accessible expertise.35

Energy development is an important goal for tribes, and granting them the ability 

to capitalize on their own resources without Federal impediments will go a long way 

toward improving socioeconomic conditions for a number of tribes. This is evidenced 

by the significant gains in wealth for those tribes who have been able to develop 

and operate their own energy projects and by the significant losses for those tribes 

whose efforts have been stymied by failures in the current Federal system for oversight of these important energy developments. Streamlining energy development 

and minimizing Federal oversight that is inefficient will empower tribes to control 

their own lands in a more efficient and beneficial manner. At the same time, it is 

important to proceed with any new legislation in a way that maintains the trust 

responsibility held by the U.S. Government toward the tribes. The goal is not to 

33 

upend the balance of responsibility but to create a business optimal environment for 

the tribes and help them benefit from the resources on their lands. There are several ways to work toward this, such as extending the subsurface leasing provisions 

included in H.R. 538 to tribes beyond the Navajo Nation, by providing the BIA with 

more funding to increase its staff and reduce the backlog of lease applications, by 

providing block grants to tribes for third-party appraisers, and by establishing more 

‘‘one-stop shop’’ offices such as the FIMO. 

The efforts I have described here can help promote the development of Native 

American energy resources, resulting in benefits to Native Nations and individual 

tribal citizens, through both enhanced economic development opportunities and 

more efficient exploitation of the energy resources we are all collectively fortunate 

to have within the boundaries of the United States. Clearly, this is an issue that 

is worthy of serious consideration by the U.S. Congress, and I thank you for 

allowing me to take part in this important discussion. 

The CHAIRMAN. Thank you. 

I appreciate all five of you for coming and sharing these concepts 

with us, both written as well as oral recommendations. 

Now, under Rule 3(e), we have the opportunity for asking questions, a 5-minute limit for each of the questions, but once again we 

can be pretty flexible with that situation here. 

I am going to ask Mr. Westerman if he would like to start the 

questioning process. 

Mr. WESTERMAN. Thank you, Mr. Chairman. I would also like to 

thank the witnesses for their time today and for their enlightening 

testimony. I mentioned I was a freshman, so a lot of this is a learning experience to me, and it is beneficial to be here and to hear 

what is happening out in the real world. 

Mr. Ferguson, you discussed woody biomass projects and how 

they are needed not only for economic development but also to keep 

forests healthy, and you also talked about how tribes are better at 

managing timberland than the Federal Government. I had a classmate in forestry school who was the president of the Intertribal 

Timber Council, and he has testified before this committee before. 

I would say that the data that I have seen from him, as well as 

other data, strongly supports what you said about tribes being better timberland managers. 

In my home state of Arkansas, we have a lot of forests there, and 

in my district it is about 86 percent forested. We have a problem 

in Arkansas, the fact that we are growing so many trees. If you 

take everything that is harvested, everything that dies or is destroyed by fire, and then look at what grows every year, there is 

about 15 to 16 million tons more of timber in my state right now 

than there was at this time last year. To put that in perspective, 

every minute our forests grow a new truckload of logs. So, there 

is a huge abundance of wood in my state, and I know that is true 

in many other places because we are seeing a lot of forest fires. 

I think it is very safe to say that we are at a point right now 

where the forests need industry much more than the industry 

needs forests, because there is so much timber out there. When we 

talk about the benefits of a healthy forest, to keep those forests 

working and productive and to reduce insects, disease, infestation, 

and ultimately forest fires, we need a home for that biomass when 

we take it off of there. 

Do you believe that forests are less healthy, and the environment 

is in turn less healthy and robust under the current administraVerDate Mar 15 2010 09:04 Jan 25, 2017 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6602 J:\114TH CONGRESS\FULL COMMITTEE\10-04-16 FIELD\22190.TXT DARLEN
34 

tion’s forest management policies than it would be under a tribal 

management policy? 

Mr. FERGUSON. I do. I am going to lean on Cody for more of the 

technical answers on that. But from what I have seen growing up 

in the forestry industry and working as a forestry tech for our 

tribe, I have to agree with everything you said. It is apparent on 

our border with the Federal lands in the Northwest, the Colville 

and the Okanogan National Forests, that the overstocking and—I 

don’t want to call it mismanagement—but the under-managing has 

created very bad health issues and fire hazards. If you were to 

come to our reservation, we could show you that. 

Just north of our border, just as we have stated, the health of 

that forest is in decline. Ours is growing well. 

Mr. DESAUTEL. A lot of the problems we face with Federal land 

managers is they seem to think that there is one treatment to fix 

forest management. Everybody who manages forests understands 

that that is not a static forest. There is always change. So, a forest 

management activity needs to continue over time. One forest 

health treatment does not fix that problem forever. In the tribe’s 

management we look at 15-year re-entry cycles to make sure that 

we continually manage those acres. We are managing different 

acres on every entry. We have good diversity to supply all the ecological needs we have for water quality, fish habitat, wildlife habitat, cultural plants, those types of things, along with healthy 

forests that are resilient to fires. 

What we saw last year, we burned in 2015 upwards of 250,000 

acres on a 1.4 million-acre reservation, which is huge. But we also 

saw a lot of beneficial fire because of the management that we 

have done. We had good early species composition, trees that are 

very resilient to fire. We had stands that had very low stocking. We 

had opportunities to go in there to catch those fires, but we had 

a lack of fire-fighting suppression—— 

Mr. WESTERMAN. So, you were using good forest management to 

keep your forest healthy. But for your neighbor, a Federal forest 

that may not be managed as well, the insects, the disease, the 

fires, it does not recognize your boundaries. 

You mentioned a great point about how forests are dynamic and 

constantly changing and need management. 

Mr. Chairman, are we going to do a second round of questions, 

or should I finish up? 

The CHAIRMAN. No, we will do more. 

Mr. WESTERMAN. OK. I will come back again. 

The CHAIRMAN. Why don’t you both take a seat in front of the 

microphones? Thank you for sacrificing your chair. 

Let me go to each of you, if I could. One of the things that we 

are talking about in our committee is the concept of consultation, 

which is in law but sometimes not necessarily used. Can I ask you 

your experience dealing with both BIA and BLM, the Department 

of the Interior, on how consultation is working? Is it being done? 

Is it effective? Could it be improved? Very quickly, and then I will 

go through some specifics. 

So, Mr. Olguin, with the Southern Utes, has the Federal 

Government been effective in their consultation? Could it be 

improved? 

35 

Mr. OLGUIN. From my perspective, and I think speaking on behalf of the Southern Ute Tribe, there is always going to be room 

for improvement. Nothing is perfect. When we look at consultation, 

there are so many things that come into play, whether that is the 

NACRA, the NEETHA, the air quality, the clean water. There are 

so many environmental components that it really begs the question 

of are we doing enough to ensure tribes are consulted on matters 

that are significant and important, especially when it comes to 

areas of territory and historical use as far as sites and area. 

The Southern Ute, as an example, covering the western third of 

the state of Colorado, that is a lot of country to cover from the 

standpoint of consultation, with a lot of sites that are significant 

to us as mountain people. But at the end of the day, some agencies 

do better than others. When it comes to the point of the tribes 

themselves, they also have to play a very significant role in this 

consultation. Receiving a notice or receiving a letter just does not 

meet the letter of consultation as far as the process. It is a dualpronged approach where tribes have to be at the table as well to 

ensure they provide adequate and significant consultation back to 

the agencies. 

The CHAIRMAN. Mr. Glenn, you have a different kind of situation 

up in Alaska than they have on the reservations. Just respond to 

that same thing about does consultation work. 

Mr. GLENN. Once again you have saved me many words in my 

own answer. Consultation exists on the North Slope with the 

Federal Government, in my case most directly with the Bureau of 

Land Management and the Bureau of Ocean Energy Management. 

It does happen, and it does include Alaska’s Native Village 

Corporations, and even some of the municipalities. 

Where I find a weakness in the consultation is in several ways. 

At the same time that consultation is invoked, the agency seems 

to be apologizing for the fact that they are not doing a very good 

job at it. ‘‘Give us some time, we are practicing, this is all kind of 

new to us.’’ It seems that their approach to consultation is, ‘‘This 

is what we are going to do, and we are here to tell you we are 

going to do it,’’ rather than meeting with us upstream of the crystallization of their idea, whatever it is, and having us be informed 

as to how they got to that idea, having us affect it one way or another with our local knowledge, local expertise, and then being a 

true consultation. 

So again, the letter that says we are making a meeting and this 

is a consultation where we have no effect on what they were going 

to do anyway, that sounds paternalistic and very ineffective. 

The CHAIRMAN. We have to do something a little bit differently 

here. 

Mr. Denetsosie, let me ask you a specific one. There is going to 

be a bending and flaring rule coming out here. Has the Navajo 

Nation been consulted by BLM on anything with that potential 

rule going forward? 

Mr. DENETSOSIE. I have seen the tribal leader letters, and I know 

that the Navajo Nation had a committee member that attended 

those meetings. We did that. 

The CHAIRMAN. I understand there are going to be consultation 

sessions with Interior, Justice, and Army that they have scheduled 

36 

in the next few months. Do you know if this is going to be a topic 

of that conversation? 

Mr. DENETSOSIE. No, I don’t. 

The CHAIRMAN. I only have 45 seconds. Mr. Westerman, let me 

go back to you for questions. I have a few more for some of the 

other witnesses, as well. 

Mr. WESTERMAN. Thank you, Mr. Chairman. 

I want to go back to the woody biomass for a moment. We talked 

about how important keeping our forests healthy is and the science 

behind it. It is good for the environment, it is good for the economy, 

better air, better water, better wildlife habitat, to get more recreational opportunities. There is not a downside to having healthy 

forests, and that includes on the environmental side. 

So, with that in mind, do you believe that the Federal Government is allocating enough resources to research and demonstration 

projects, like you mentioned, for woody biomass compared to other 

renewable fuels? 

Mr. DESAUTEL. I think there is adequate research, but the 

research tends to point at the same thing. The woody biomass utilization is often a cost. It is not necessarily something that is 

economically viable by itself. If you mix it with other forest management activities, I think that is where you have an opportunity. 

You can use some of the revenue generated from commercial timber harvests to cover some of the costs of non-commercial harvests. 

A lot of the national forests that we see up in Washington, at 

least, seem to trend toward non-commercial treatments, I think, 

just because they are less controversial. They think they can get 

those through the NEPA process because people understand them 

for fuel treatments, but a lot of times those treatments are noncommercial. They remove a small amount of biomass, and they are 

not necessarily effective for very long from what we see from fuel 

treatments in—— 

Mr. WESTERMAN. One of the drivers in that is the fact that the 

energy market is not very well developed around woody biomass. 

I went to the National Foundation around the research labs trying 

to see if they were doing any research on how to better capture and 

extract the energy that is in the woody biomass, and there was one 

project they took me to see at the Lawrence Livermore Lab in 

Berkeley where they are actually breaking the biomass down into 

simple sugars that can be digested into a whole spectrum of chemicals and fuels, which has great core economic backbone to it. It 

would make it cost effective to go out and harvest woody biomass 

if you had a developed market like that. 

But it appears to me that we are not out getting enough resources to develop those markets. We are relying on old combustion 

technology to burn this and make steam and electricity. So, I think 

we need to push for more research and more demonstration 

projects. 

Also, this Administration—and this baffles me because we know 

the environmental benefits of having healthy forests—they are very 

lethargic in recognizing the scientific natural process of photosynthesis and recognizing woody biomass is a carbon-neutral material, 

like most other developed countries have done. 

37 

Do you think this is in any way hindering the development of 

woody biomass as a fuel? 

Mr. DESAUTEL. Yes, I would agree with that. We have looked at 

what the traditional methods are economically, but there would be 

other markets, and the investment costs of this is I think the biggest driver. We have looked at a biomass facility because we harvest a lot of wood annually, about 77 million board feet a year, 

which produces a lot of ton wood and residues, but it is about $100 

million per facility, up to $120 million per facility, and we don’t 

know how many megawatts it will produce. But again, that is a 

huge investment, and you need long-term guarantees on supply to 

make that kind of investment. I think that is why this 20-year 

commitment for a stewardship contract is a huge part of what 

would ultimately bring in an outside investor to build that type of 

facility. 

Mr. WESTERMAN. That is right. We have seen a lot of wood facilities close down, particularly in the West. If you try to get investors 

to come in and utilize this biomass, they are just not going to invest that kind of money if there is not some assurance that they 

can have a forest for their facility or the life cycle of the facility. 

That is definitely another issue I think we need to work on 

federally, on Federal forests, to make sure that we have a large 

landscape-wide stewardship contract. 

Mr. Chairman, I will yield back, and I promise to have a 

question about something other than woody biomass next time. 

The CHAIRMAN. That is OK. You can keep doing the forestry side. 

That is your forte. 

I am going to go back to consultation because that is something 

on which I am still unsure. Let me ask Mr. Olguin and Mr. Glenn 

again, you both talked about H.R. 538. The White House issued a 

statement of administration policy opposing that bill, in part because it removes oversight for appraisal of Indian lands or trust 

assets. 

You described how the Interior Department appraisal process 

has been problematic, at best. I guess the question I have is, before 

that administrative policy was actually set—Mr. Glenn, let me ask 

you—did anyone in the Administration talk to you before they 

came up with that policy? The same thing for Mr. Olguin. Did anyone talk to someone in your tribe before they actually came up with 

their policy statement? 

Mr. GLENN. No. 

The CHAIRMAN. OK. That is easy enough. 

Mr. OLGUIN. I don’t recall off the top of my head. I don’t think 

so. Of course, for us, we do our own appraisals. 

The CHAIRMAN. That becomes troubling as well. 

Let me go to the Navajo Oil and Gas Company. APD stands for 

what again, Mr. Denetsosie? 

Mr. DENETSOSIE. Application for Permit to Drill. 

The CHAIRMAN. As you were talking about that, I cannot look at 

this in any other way than actually something more than just a tax 

on the resources of the Navajo land. Am I looking at this unfairly? 

It is not really a user fee. It is actually a tax just to generate 

money for the Federal Government? 

38 

Mr. DENETSOSIE. Well, I know that BLM does very minimal work 

on the Application for Permit to Drill on Navajo, and the project 

preview office does all the studies for that. 

The CHAIRMAN. So, your nation is actually doing the effort there? 

Mr. DENETSOSIE. Right, all of it. 

The CHAIRMAN. And they get the money. 

Mr. DENETSOSIE. So, I see it as a tax, too. 

The CHAIRMAN. Mr. Henson, let me ask you a question once 

again. You talked about how different areas are treated differently. 

I think one of the issues, when you were talking about how it is 

about 45 days for permitting that you all can do versus what the 

state can do, the 4 to 6 years the BIA is coming up with the permitting, and it is common in some areas, it is not common in other 

areas. Some areas are faster than others. Is this simply based on 

the incompetence of the Federal Government, that when you are so 

far away from the area that you simply had too much land to manage and it is not going to be done efficiently or effectively? Or is 

this a by-product of staffing decisions? Is the delay because of staffing, or is it both of them? 

Mr. HENSON. I think it is probably several things. One is just 

kind of aligning the incentives track. If you work in private industry and you have a deadline, you work very hard to meet it. If you 

have little incentive and little potential upside from getting 

through a large backlog in a quick and rapid manner, then you just 

do not have any incentive to do so. 

So, I think some of it is incentives, the dislocation of potential 

upside from development happening from those who have the decisionmaking authority. I have heard quite a lot just in the last few 

months from different tribes out West about how hard it is to attract the right kind of staff, which in a low price environment for 

oil and gas it might be the best time in which you could potentially 

hire people. Denver, Houston, New Orleans—there are plenty of 

folks walking around looking for jobs these days that have the 

right kind of expertise. But the Federal H.R. apparatus is not necessarily set up to identify those folks, convince them to move to 

somewhere like Durango, Colorado, take up a new job working for 

the Feds, even though their skills would be the right set of skills. 

You have kind of a mismatch in H.R. policies, a mismatch in the 

skills available, and funding issues. The BIA is under-funded in 

plenty of different ways. The allocation of the risk and reward, I 

think, is the critical thing from the economics perspective, because 

you do not have an incentive to work really hard to get that backlog solved when you work for the Federal Government far, far 

away. 

The CHAIRMAN. Mr. Olguin, you were talking to me about staffing situations you have there. As long as BIA has to provide that, 

there is a problem. But I am assuming the tribe could actually do 

that work. You are already there. You are effective. You could handle that one. 

Mr. OLGUIN. Yes. In fact, we do a majority of the work for the 

Bureau of Indian Affairs as staff, and it is really that concept of 

what do we have to do to help you help us. That is a model we 

have been using for quite a few years. Along that line, what it really entails is because the agency has struggled with finding 

39 

competent people, qualified people, people who understand the responsibilities when it comes to realty work, because there is no 

training program out there in tribal energy development when it 

comes to paperwork, we are seeing some very good opportunity 

with the San Juan College School of Energy where they are developing this curriculum right now. It is a long time coming, but when 

the tribe has to step in and do the work—and in our case it is very 

fortunate that we have hired good people, competent people, and 

pay them well, because an issue that does come into play is that 

the Federal system is underpaid. 

When you look at competition, they are looking for competitive 

jobs in the Durango area. Of course, the cost of living is very high 

there. When the Bureau does advertise positions, people do show 

interest. When they get to the point of actually accepting the job, 

all of a sudden they find out the cost of living is too high, they 

cannot afford to move there, so they decline the position. It is a recurring cycle. 

We have also experienced situations where not every region handles realty functions the same. Each region is different. What people learn through on-the-job training is different. Some folks do get 

transferred or get assigned to different regions. They bring that 

skill set with them, but it may not fit with the region where they 

end up working. So, the conflicts do create themselves in that 

respect as well. 

The CHAIRMAN. Thank you. 

Let me change the rules here. I have two more questions. Let me 

just throw them out, and then you can finish off the questioning. 

Mr. WESTERMAN. All right. 

The CHAIRMAN. For as long as you need to. 

Look, I appreciate what you are doing. Obviously, consultation 

was one of the issues that I would like to see done differently. 

Obviously, the process that we go through I would like to see done 

smoothly, faster, differently. You are talking here about how a 

devolution of these decisions probably is the only way you can do 

it, because Indian Country is not monolithic. There are differences 

in every one of those. 

I have two other specific issues to go into, if I could. 

Mr. Glenn, there are Members of the House, even some members 

of our committee, who have co-sponsored efforts to try to make the 

Slope, the coastal areas and ANWR a wilderness area or a national 

monument. They don’t ever talk to you guys about that? And does 

your area support any of that kind of approach? 

Mr. GLENN. In general, we oppose setting aside huge swaths of 

land for any reason because even with the best of intentions, it 

ends up unfairly limiting our people, the residents, for any purpose 

into the future in some unanticipated way. We set aside a huge 

corner of our ocean for a bird called the spectacled eider who hardly nests there in comparison to where it nests elsewhere. So, we 

cannot develop any of our land that directly abuts that coastline. 

We cannot access the coastline by any kind of marine transportation because we are in critical habitat, nesting birds. 

Wilderness issues are difficult for us. They present subsistence 

access problems in the name of protecting the environment. Our 

own people cannot hunt on top of the tundra for caribou in 

40 

summertime. We have become more like wards of an agency rather 

than citizens of our own land. So, we generally oppose wilderness 

and national monuments, and we oppose the unnecessarily excessive critical habitat designations. We are the ones who depend on 

the animals more than anyone else, and we know what would or 

would not jeopardize their condition. In the name of protecting 

them, the critical habitat designations do not improve their living 

environment one iota, and yet they reduce our ability to access our 

own land. 

So, the short answer, again, is no. 

The CHAIRMAN. One of my passions back in Congress is the concept of federalism. I do think that is the solution to our country’s 

problems. But it also applies here with Indian Country as well, 

even though the concepts are not necessarily always talked about 

in the same sentence. But the idea of federalism, it is not liberal, 

it is not conservative policy. It is not either small government or 

big government. It is simply giving people the choices of having 

what they want in their particular area without impacting someone 

else. 

So, if there is a state that wants a robust government, fine, let 

them do it, just so it does not impact my state. We get to make 

decisions for ourselves. It seems like we are saying basically the 

same thing with a lot of these areas in Indian Country. If we can 

actually allow you to make those decisions for yourselves according 

to your circumstances, those will be better decisions, those will be 

wiser decisions, those will be more effective decisions simply because people want it. 

Sometimes when we talk about federalism, people’s eyes glaze 

over. They don’t really understand the term. It is that essay they 

did not write when they were a junior in high school. But what it 

actually means to me is, as I told a group of 20-something bloggers 

once, I said federalism is like an app for government, and all of a 

sudden they got excited and their fingers started dancing on the 

computer. I still don’t know what I told them. 

But it seems that the more you can actually give those decisions, 

devolve that decision down, especially when we have reservations, 

Indian Country, that already is a sovereign, the more we can do 

that, the better off we would be, and we simply are not moving in 

that direction. 

I just want to ask one other question, Mr. Ferguson. You talked 

about forest lands that are under-managed, which I think is probably a good term to use in Washington State. It impacts Idaho, 

Montana, wherever the Forest Service is dominant. As I am looking 

at that, there are two factors that I look at with the Forest Service 

which makes it difficult for them to manage their land. 

The first one deals with the cost of fighting wildfires, which is 

ever-growing. The second biggest cost the Forest Service has is the 

litigation. I guess one of the questions I have is why is that litigation issue not as big in Indian Country as it is on Federal forest 

land, and is there not something we could do to try to mitigate that 

litigation? 

I think in every bill we have had, we have tried to deal with the 

concepts of litigation. If we cannot bring the litigation threat into 

41 

check, I don’t know how we can ever provide enough money for 

actually not under-managing the forest lands. 

Do you want to address that, and do you feel comfortable doing 

that? 

Mr. FERGUSON. I think I would feel more comfortable with Cody. 

He has dealt with more of this than I have. Just to let the 

committee know, I was last minute asked to come. 

The CHAIRMAN. We appreciate you coming regardless of when 

you were asked. 

Mr. DESAUTEL. Mr. Chairman, the biggest difference in NEPA for 

us, and I think what helps us get through the process faster, is our 

scope of public is limited to the tribal membership. While we hear 

a lot of the same concerns we hear from other special interest 

groups, those groups are just smaller. The BIA requires if you are 

going to appeal a project, that you have to put up a cash bond and 

you have to show a vested interest in the project, which I think is 

very critical. A lot of times what you see in Federal projects is some 

college student from New Hampshire opposes the project just because they are environmentally friendly and don’t understand what 

the benefits of the project are. So, I think that is the biggest difference between them, is the scope of who the public is and the requirements of what you have to do if you want to oppose a project. 

The CHAIRMAN. Thank you for adding that, which I think is good 

because, Mr. Westerman, that was part of your bill, wasn’t it? 

Mr. WESTERMAN. It was. 

The CHAIRMAN. OK. I will let you have the last round of 

questions. 

Mr. WESTERMAN. Thank you again, Mr. Chairman. 

We addressed issues earlier where the Federal Government or 

this Administration has greatly under-performed. Where I am 

from, we say actions speak louder than words. The words I hear 

from this Administration is it is all about protecting the environment. We have to keep this for future generations. But the actions 

on the ground are not part of protecting the environment or helping out future generations, or helping current generations get out 

of poverty. 

Mr. Chairman, I think this goes along with what we were just 

talking about. You referenced the Administration’s opposition to 

H.R. 538 earlier. I would just like to quote what the Administration said, why they oppose H.R. 538. They said, ‘‘It would undermine the public participation and transparency of review of projects 

on Indian lands under the National Environmental Policy Act, set 

unrealistic deadlines, remove oversight for appraisals of Indian 

lands for trust assets, prohibit awards under the Equal Access to 

Justice Act, or payment of fees or expenses to a plaintiff from the 

judgment fund and energy-related actions.’’ 

When they say it would prohibit awards under the Equal Access 

to Justice Act, I am not sure if everybody understands what that 

means, that the Federal Government will pay you to sue the 

Federal Government. The Administration, I think it is more about 

protecting special interests than protecting the environment and 

preserving it for future generations. 

So, as we transition from their under-performance more to their 

over-reach, we see that a lot of these regulations, particularly with 

42 

the tribes, are duplicative. There are already regulations and rules 

in place to address the issues that the Federal Government is 

coming in and trying to put layers on top of layers. 

I just want to open it up to the panel to maybe talk about some 

of the specific duplicative regulations and how they directly impact 

what you are trying to do on the tribal lands from a cost standpoint 

and a development standpoint. Does anybody want to jump on that 

first? 

Mr. GLENN. I have a couple of examples. Thank you. 

I think that no one has done more in recent times to elevate the 

visibility of tribes than this Administration at the very top. But at 

the same time, at the administrative levels, we have encountered 

so many instances where issues of duplicative safeguarding or duplicative actions in the name of safeguarding start to take multiple 

bites at the apple, overly excessive, to the detriment, like you said, 

of the people who are living there and not really helping the stated 

goal of safeguarding the environment for future generations. So, 

there is a disconnect there. 

One example is mitigation, wetlands mitigation or mitigation in 

general, which says if you disturb an acre of environment over here 

with a project, you should preserve an acre of environment over 

there, somewhere else, some similar landscape classification 

system. Sometimes they use a multiplier; if you disturb 1 acre, you 

have to save 3, or 5, or 10 acres, depending on the classification 

of the landscape, which sounds like a pretty good system if you 

somehow have an ability to weigh in on what should be the 

exchange rate. 

But my problem with the overall concept of mitigation is you 

have multiple agencies looking for mitigation for the same project. 

So, you will have Wetlands mitigation, Corps mitigation, NEPA 

mitigation, Fish and Wildlife Service mitigation, overall BLM mitigation. Now each one of their agencies are taking their pound of 

flesh from the same project, and the project can only tolerate so 

much. It has its own checks and balances. One of them includes 

whether or not it is financially viable. If you start to overly burden 

a project with mitigation, even with the best of intentions, then 

away goes the project, and now you have people who are hurting 

for more industry. They are in more poverty. They are in need of 

more Federal programs. So, on a big, global scale, good intentions 

end up with bad results, and mitigation is just one example. 

Mr. WESTERMAN. I would like to say, in the forestry sector, we 

are loving the trees to death and not doing what we need to help 

them. 

Mr. HENSON. I have one thing on what the layers of overlap are 

and what the impacts are. I think you were trying to address this 

here, but it kind of gets lost a little bit in the shuffle, and that is 

how incredibly important energy projects are for certain tribes. 

I think for the Crow, two-thirds of the tribal budget is not directly from Federal dollars. It comes from the single production line 

they have in the mine. We heard some factoids about how, for the 

Jicarilla Apache, 90 percent of their tribal budget is oil and gas 

production. Today, we heard for the Southern Ute, 30 percent of 

the tribal budget is on-reservation oil production and gas production. For the Navajo, 90 percent of the workforce is Native. 

43 

One thing that happens when you stymie the next development 

is you prevent the hiring of that next 90 percent of Native workers. 

In lots of places where the unemployment rate is really high, sometimes the best jobs available in terms of skill set, pay, employment 

security, really do depend on these types of projects. So, to the extent you can help bring tribes into their next energy development 

project, you are really talking about real people, real jobs, living 

wages, important impacts on the individual tribal citizens that I 

think kind of gets overlooked a bit. 

And the second layer of that is one of the great things about a 

lot of the revenues that these things generate, because they tend 

to go into the tribal general funds, is they allow things like we 

heard mentioned by Mr. Glenn, diversification into a wide array of 

industries, sectors, and diversification of energy development. Not 

all your development is in Alaska and small towns. You are able 

to really diversify your portfolio of investments and secure longterm revenues, long-term job security, and long-term educational 

opportunities for a wide range of people. A lot of that does not depend on the next mine shaft at Navajo, but on your ability to use 

those revenues very broadly. 

So, I encourage you to keep that in mind as you continue to work 

on these kinds of bills. 

Mr. WESTERMAN. I appreciate that insight, Mr. Henson. You hit 

directly on the point that what seems like a good idea from a building in Washington, DC, has real impact out on the ground across 

the country and affects real people’s lives. The duplicativeness of 

mitigation and all the other ways that projects get loaded up with 

regulations ultimately kill these projects. Without them, we are not 

going to see economic development the way we would like to. 

Mr. GLENN. May I expand on Mr. Henson’s point with an example, a real-world example from the North? Which is that he is correct that there are a lot of unseen ripple effects of the presence or 

absence of industry in the region. In our case, the industry is the 

oil and gas industry. Yet, if you look at the largest employers of 

people in our region, it is the home rule government, the North 

Slope Borough, and the North Slope Borough School District. Yet, 

100 percent, or 99.9 percent, of the tax base for the operational and 

capital budgets of those governments is the presence of industry in 

the region. So, even our schools are being built because of the presence of industry in our region, and our safe water, our electricity, 

our runways, our roads, and our health clinics are funded because 

we have a tax base which in our case is the oil and gas industry. 

It is doubly so for our region, for the Native corporations and for 

the local government. Thank you. 

Mr. WESTERMAN. Cody? 

Mr. DESAUTEL. If I could just add a little bit, I don’t think it is 

just the regulations that are the issue, but sometimes we get policy. For example, the Secretary will order 3336 about sage grouse. 

We have seen a lot of issues that will affect Indian Country, especially as we move toward—well, hopefully we don’t move toward it, 

but as we move toward this risk-based management funding allocation. That is a Secretarial Order from the Secretary of the Interior 

that will have detrimental impacts to all tribes in the West, 

44 

because it will shuffle funding and resources to those areas that 

are critical sage grouse habitat. 

I understand that is more an oil and gas issue, but we should 

deal with oil and gas issues if that is the case and not try to hide 

that behind sage grouse habitat. 

Mr. WESTERMAN. I would argue that that is regulation because 

that is not a bill that we debated, or that I, or Rob, or anybody in 

the U.S. Senate voted on. That is an unelected bureaucrat writing 

policy, which is what a regulation is. 

With that, I will yield back, Mr. Chairman. 

The CHAIRMAN. I had never heard of sage grouse before in my 

life. Thank you for saying that, especially because I think there 

will be some announcements either today or tomorrow to deal with 

that specific issue, so I thank you. 

I thank everyone for being here. You were right in saying for me 

this is a significant issue because I come from one of the two states 

that allows no gaming, whatsoever. For my Native Americans within the state of Utah, this is an essential issue if there is going to 

be economic development on their reservation land. 

I want to thank the New Mexico legislature for working with us 

and allowing us to use their facilities. 

I want to thank the law enforcement here for your calm professionalism and the kindness with which you handled these things. 

Somebody went to a lot of effort to make signs, and I didn’t even 

get a chance to see them. 

[Laughter.] 

The CHAIRMAN. Maybe when you show me back the video, 

because I think one mentioned me. Can I actually get that later on 

to put in the office? Never mind. Forget it. 

[Laughter.] 

The CHAIRMAN. To the five gentlemen, or six, who came and testified today, thank you so much for traveling here to do that. I 

would let you know that members of the committee may have other 

questions. That means Westerman and I. You may be bored tonight 

and come up with something else. I don’t really think you are going 

to be worried about that, but our Committee Rules do say that if 

we do have questions, we may send those to you, and we would 

appreciate a timely response to them. 

The committee hearing under Rule 4(h), the record for the committee will be open for 10 business days for those responses, if 

there are any, and for anything else you would like to add to the 

record at the same time. 

And I appreciate the audience being here, as well as the staff for 

setting this up and doing everything so professionally. I thank you 

for your presence. 

I think this has been a very good hearing, at least for me. I have 

some new insights and some things I really want to move forward 

on as we go into the future. 

If there is no other business, the committee will stand adjourned. 

Thank you. 

[Whereupon, at 11:30 a.m., the committee was adjourned.] 

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