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75–746 PDF 2012

S. HRG. 112–628

ENERGY DEVELOPMENT IN INDIAN COUNTRY

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

FEBRUARY 16, 2012

Printed for the use of the Committee on Indian Affairs

(

(II)

COMMITTEE ON INDIAN AFFAIRS 

DANIEL K. AKAKA, Hawaii, Chairman 

JOHN BARRASSO, Wyoming, Vice Chairman 

DANIEL K. INOUYE, Hawaii 

KENT CONRAD, North Dakota 

TIM JOHNSON, South Dakota 

MARIA CANTWELL, Washington 

JON TESTER, Montana 

TOM UDALL, New Mexico 

AL FRANKEN, Minnesota 

JOHN MCCAIN, Arizona 

LISA MURKOWSKI, Alaska 

JOHN HOEVEN, North Dakota 

MIKE CRAPO, Idaho 

MIKE JOHANNS, Nebraska 

LORETTA A. TUELL, Majority Staff Director and Chief Counsel 

DAVID A. MULLON JR., Minority Staff Director and Chief Counsel 

(III)

C O N T E N T S 

Page 

Hearing held on February 16, 2012 ....................................................................... 1

Statement of Senator Akaka ................................................................................... 1 

Statement of Senator Barrasso ............................................................................... 5

Statement of Senator Franken ............................................................................... 4

Statement of Senator Johnson ................................................................................ 2 

Statement of Senator Tester ................................................................................... 2

Statement of Senator Udall .................................................................................... 3

WITNESSES

Anketell, Hon. Thomas ‘‘Stoney’’, Tribal Executive Board Member, Assiniboine 

and Sioux Tribes of the Fort Peck Reservation ................................................. 46

Prepared statement .......................................................................................... 48

Bordeaux, Hon. Rodney, President, Rosebud Sioux Tribe .................................... 33

Prepared statement .......................................................................................... 36

Gillette, Jodi, Deputy Assistant Secretary—Indian Affairs, U.S. Department 

of the Interior ....................................................................................................... 16

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

Jim, Hon. Rex Lee, Vice President, Navajo Nation .............................................. 60

Prepared statement .......................................................................................... 61

Kauhane, Michelle, Deputy Director, Department of Hawaiian Home Lands, 

State of Hawaii ..................................................................................................... 54

Prepared statement .......................................................................................... 55

LeBeau, Tracey A., Director, Office of Indian Energy Policy and Programs, 

U.S. Department of Energy ................................................................................. 6

Prepared statement .......................................................................................... 8

Pesata, Hon. Levi, President, Jicarilla Apache Nation ........................................ 40

Prepared statement .......................................................................................... 41

APPENDIX

Crow Tribe of Montana, prepared statement ........................................................ 77

Cuch, Hon. Irene C., Chairwoman, Ute Tribal Business Committee, Ute Indian Tribe of the Uintah and Ouray Reservation, prepared statement .......... 85

Hall, Hon. Tex G., Chairman, Mandan, Hidatsa and Arikara Nation of the 

Fort Berthold Reservation, prepared statement ................................................ 93

King, Hon. Randy, Chairman, Shinnecock Indian Nation, prepared statement 89

National Congress of American Indians (NCAI), prepared statement ................ 96

Tri-State Generation and Transmission Association, Inc., prepared statement 100

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ENERGY DEVELOPMENT IN INDIAN COUNTRY 

THURSDAY, FEBRUARY 16, 2012

U.S. SENATE, COMMITTEE ON INDIAN AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 2:15 p.m. in room 

628, Dirksen Senate Office Building, Hon. Daniel K. Akaka,

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. DANIEL K. AKAKA,

U.S. SENATOR FROM HAWAII 

The CHAIRMAN. I call this hearing of the Committee on Indian 

Affairs to order. 

Aloha, and thank you all for being with us today and taking the 

time to be with us today. Welcome to this oversight hearing entitled Energy Development In Indian Country. 

Native lands hold great potential for energy development. We all 

know that. Collectively, Tribal nations, Indian Tribes, Alaska Native, Native Hawaiians, are the third largest owners of mineral resources in the United States. Native lands are estimated to contain 

3 percent of the known oil and gas reserves, as much as 30 percent 

of the coal west of the Mississippi and up to a third or more the 

Nation’s uranium. 

Native lands are also geographically situated to become great 

producers of renewable energy resources, such as wind, solar and 

biomass. In Hawaii, we have been focusing on developing renewable energy resources to reduce our dependence on imported energy 

resources. I anticipate that the State of Hawaii Department of Hawaiian Home Lands will be sharing some of their innovative strategies to develop these resources on Hawaiian trust lands. Harnessing these vast energy resources means great economic development prospects for all, especially for Native communities. And the 

United States has a trust responsibility to ensure they can participate fully. 

Many Native communities are located away from major population centers where other forms of economic development are not 

feasible. Energy production provides jobs for Native and non-Natives alike. Developing energy resources at home also decreases our 

dependence on foreign energy sources. 

Like other areas of Indian policy, Congress has attempted to address energy development issues with limited success. Some barriers include administrative delays in permitting processes, State 

taxation of energy development on Tribal lands, and poor access to 

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the transmission infrastructure to bring energy resources to market. Helping Tribes and Native communities develop their energy 

resources means a better quality of life for Native peoples and others living in the surrounding areas. Especially for insulated communities, energy self-sufficiency is key. 

I look forward to hearing from our witnesses about their ideas, 

concerns and solutions to increase the ability of Native communities to participate in energy production to meet their needs. Vice 

Chair Barrasso, my good friend from Wyoming, is my partner on 

this Committee. I am happy that we are able to work together on 

the important work of this Committee. When he comes, I will call 

on him to give his opening remarks. I want you to know I am 

proud to co-sponsor his bill on energy. 

So let me then call on our members here for any opening remarks that you may have. Senator Johnson? 

STATEMENT OF HON. TIM JOHNSON,

U.S. SENATOR FROM SOUTH DAKOTA 

Senator JOHNSON. Thank you, Mr. Chairman, for holding this 

hearing. 

I would like to welcome several witnesses who have ties to my 

home State of South Dakota. Welcome to all of the Administration 

officials, each of which is from the Great Plains region. 

In addition, I would like to welcome President Rodney Bordeaux, 

from the Rosebud Sioux Tribe. 

As you know, Mr. Chairman, in South Dakota we have several 

large land-based Tribes where unemployment can be as high as 80 

percent. For the Tribes in my region, energy development is economic development. We must do all that we can to assist our 

Tribes to navigate the Federal Government to bring economic and 

energy development to our Indian communities. 

I look forward to the testimony today, and thank you again, Mr. 

Chairman, for holding this hearing. 

The CHAIRMAN. Thank you very much, Senator Johnson, and for 

your leadership here in the Senate. 

Senator Jon Tester? 

STATEMENT OF HON. JON TESTER,

U.S. SENATOR FROM MONTANA 

Senator TESTER. Thank you, Mr. Chairman. I thank you for holding this important hearing and I want to welcome our witnesses. 

A special welcome to Stoney Anketell, thank you very much for 

coming all the way from the Fort Peck Assiniboine and Sioux 

Tribes based in Poplar, Montana. It is a long trip, indeed, and I 

want to thank you for taking the time to travel out here. We look 

forward to your testimony on the second panel, and your experience, particularly as it applies to the Bakken formation, what you 

have seen so far and what you anticipate seeing into the future. I 

know there are other Montanans here today, and I appreciate those 

as well as everybody here to hear this testimony. This is a very, 

very important issue. 

This hearing is important because energy development in Indian 

Country has the potential to improve lives for everybody that lives 

in Indian Country and indeed, the entire United States. It has the 

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power to provide badly-needed economic development in many reservations that need economic development, and it will help America wean ourselves off of our dependence on energy from outside 

our borders. 

However, as with any powerful tool, it has the potential to be 

used for both good and bad purposes. I want to make sure that our 

Tribes have the opportunity to take advantage of the traditional 

forms of energy and the emerging renewable energy markets. I 

want to make sure the Tribes are not negatively impacted by those 

activities in terms of public safety or wear and tear on infrastructure, housing, cultural and environmental degradation, and the list 

goes on. 

By communicating with each other and by working together, we 

are going to be able to use this powerful tool of energy development 

to empower Indian Country to be strong, self-sufficient, while 

maintaining important individual cultural identities. Once again, I 

just want to thank you, Mr. Chairman, for holding this hearing. I 

look forward to the testimony of the people who are on the panels. 

The CHAIRMAN. Thank you very much, Senator Tester. 

Senator Tom Udall. 

STATEMENT OF HON. TOM UDALL,

U.S. SENATOR FROM NEW MEXICO 

Senator UDALL. Thank you. We really appreciate, Chairman 

Akaka and Vice Chairman Barrasso, your holding this very important oversight hearing. 

I would also like to recognize and give warm welcome to two individuals who will be joining us on the second panel: the Honorable 

Levi Pesata, President of the Jicarilla Apache Nation, and he is accompanied by several of his council members; and the Honorable 

Rex Lee Jim, Vice President of the Navajo Nation. Both of these 

men lead Tribes that have been very successful in a range of energy development activities. I urge our Administration witnesses to 

listen to their testimony and concerns closely and be as responsive 

as possible. 

I would also like to thank the Department of Energy for the Tribal energy grants announced today worth close to $1.3 million to 

jump start renewable energy projects on Tribal lands within New 

Mexico. The Navajo-Hopi Land Commission is receiving $347,000 

for feasibility studies for renewable energy on Navajo lands, where 

up to 4,000 megawatts of solar can be developed. Tahaduli Economic Development, Inc. is receiving $300,000 to conduct pre-construction activities for 30 megawatts of solar. Jemez and Zia Pueblos are also receiving funds for solar and biomass development and 

construction projects. 

Tribal lands have great energy potential, both renewable and 

traditional fossil fuel resources. The Department of Interior holds 

a very serious trust responsibility to Tribal nations in this regard. 

They are charged with protecting Tribal nations’ interests in their 

rightfully-owned resources. 

However, those protections should not be burden to responsible 

development. This hearing is urging the Department to make Tribal development more efficient in order to spur economic development. 

4

Tribal nations also know the importance of protecting the environment. New Mexico Tribes have felt a legacy of contamination 

from uranium mining and sacred sites are still at risk. I believe 

that Tribal nations can become leaders in responsible energy development. But the Federal Government must fulfill its trust responsibilities to allow this to happen. 

Thank you, Mr. Chairman. I notice this poster here that talks 

about did you know. Those four or five facts on there are so important to what the Tribes have to offer to the Nation and to themselves as to the potential for energy development. 

Thank you, Chairman Akaka. 

The CHAIRMAN. Thank you very much. 

Let me save Vice Chair Barrasso and call on Senator Al Franken 

for your opening remarks. 

Senator FRANKEN. Save the Vice Chair for last, good choice. 

STATEMENT OF HON. AL FRANKEN,

U.S. SENATOR FROM MINNESOTA 

Thank you, Mr. Chairman, for this important hearing. Energy 

development in Indian Country is a top priority for me. Our Country is in the midst of a major transition in the way we produce and 

the way we use energy. There is no doubt that clean energy development is a powerful tool to create jobs and foster economic development in communities all across the Country. And nowhere is 

that more urgent than in Indian Country, where unemployment 

rates can be 40, 50 percent or higher, and where vast energy resources are going untapped. 

Tribes in Minnesota fully understand this potential. The White 

Earth Band of Ojibwe in northern Minnesota erected a 750 kilowatt wind turbine. And they did actually get a feasibility grant 

today from the Energy Department on a combined heat and power 

facility that would run completely on biomass. So I want to thank 

the DOE for that. 

In northeastern Minnesota, the Fond du Lac Band of Ojibwe has 

built a biomass pilot project that uses waste woody mass from surrounding forests. It is a very wooded area of Minnesota. 

And just this January, I toured the Shakopee Sioux community 

and they have built a 12.5 megawatt, again, combined heat and 

power plant that runs on waste agricultural biomass from the local 

area. Electricity from the plant is sold on the open market and the 

excess heat is captured and used in a nearby malt manufacturing 

plant. 

There are more examples like this from Tribes in Minnesota. 

They are a testament to the fact that Tribes are engaged in energy 

development and looking for ways to scale up these projects. But 

most Indian energy development successes have been on a very 

small scale. Broader energy development on Tribal lands is still a 

missed opportunity, as that chart so well shows. 

As I have talked to Minnesota Tribes about energy development, 

I keep hearing the same issue over and over again: lack of access 

to financing, regulatory hurdles and administrative delays. I look 

forward to discussing these issues in more detail today and hearing 

from all the witnesses who I want to thank for your presence. I 

5

want to thank again the Chairman and the Vice Chairman for 

holding this important hearing. Thank you. 

The CHAIRMAN. Thank you very much, Senator Franken. 

And now I would like to call on my good friend from Wyoming, 

Vice Chair Barrasso, who is my partner. We have worked well together and I want you to know that he has taken a lead position 

on Indian energy development. I am proud to co-sponsor his bill 

and look forward to doing that. 

Senator Barrasso, will you please. 

STATEMENT OF HON. JOHN BARRASSO,

U.S. SENATOR FROM WYOMING 

Senator BARRASSO. Thank you very much, Mr. Chairman. Thank 

you for holding this important hearing on one of our Committee’s 

highest priorities. 

I want to thank you personally for the cooperation we have had 

and for your co-sponsorship of the bill that I have been working on. 

I know we have additional hearings scheduled for next month on 

the specifics of that bill. 

When I meet with the Tribal leaders in Wyoming, I am reminded 

of how important energy development is to our Indian communities. As Senator Franken just said, there continues to be hurdles, 

challenges, and delays. There have been successes, but they have 

been too small. We need to do more. 

Both on and off the reservation, energy development means jobs. 

Energy means royalty income for individual Tribal members and 

for Tribal governments. That is true not just in Wyoming but all 

over the Country. 

Energy development, of one sort or another, translates to jobs 

and income on many of our Country’s Indian reservations. This 

Committee can address key issues relating to energy that will improve Tribes’ abilities to develop their own energy resources. 

What we need to do is remove unnecessary regulatory barriers 

to energy development. That would actually help in a couple of important areas: it will bring jobs and economic prosperity to our 

Country’s Indian reservations and it will help our Country achieve 

energy independence. 

Not surprisingly, the Federal Government is often at cross purposes with itself, and we see this, certainly in this community and 

in this Committee. By over-regulating energy development in Indian Country, the Government inhibits the creation of desperately 

needed jobs, and it puts an unnecessary barrier in the pathway to 

energy security. NEPA can do that, as can some of the EPA’s rules 

and regulations. 

It is my hope, Mr. Chairman, that we can address these and 

other impediments to development on Indian lands. With that said, 

I want to thank our witnesses for being here today and thank you, 

Mr. Chairman, for your continued leadership. 

The CHAIRMAN. Thank you very much, Senator Barrasso. 

As Chairman, it is my goal to ensure that we hear from all who 

want to contribute to the discussion. So the hearing record is open 

for two weeks from today and I encourage anyone interested to 

submit their comments through written testimony. 

6

I want to remind the witnesses to please limit your oral testimony to five minutes today. 

Serving on our first panel is Ms. Tracey LeBeau, Director of the 

Office of Indian Energy Policy and Programs at the Department of 

Energy; and Ms. Jody Gillette, Deputy Assistant Secretary, Indian 

Affairs for Policy and Economic Development at the Department of 

Interior. Ms. Gillette is accompanied by Mr. Mike Black, Director 

of the Bureau of Indian Affairs at the Department of Interior. 

I want to welcome our panel here and look forward to your testimony. Ms. LeBeau, will you please proceed with your testimony? 

STATEMENT OF TRACEY A. LEBEAU, DIRECTOR, OFFICE OF

INDIAN ENERGY POLICY AND PROGRAMS, U.S.

DEPARTMENT OF ENERGY 

Ms. LEBEAU. Thank you very much. 

Good afternoon, Chairman Akaka, Vice Chairman Barrasso, 

members of the Committee. I thank you very much for the opportunity to appear before you today to discuss the Department of Energy’s energy programs and initiatives to support Indian energy development. 

My written submission, of course, goes into much more detail 

about the array of programs that DOE is leading to support Indian 

energy development. In the time I have today, I am going to update 

you on the status of this new office as well as focus more narrowly 

on the new and ongoing initiatives led by this new office. 

Since my appointment and taking office approximately one year 

ago, the Office of Indian Energy has been stood up and is now a 

formal program office within the Department, which now sits 

alongside our other sister offices, the Office of Energy Efficiency 

and Renewable Energy, the Office of Fossil Energy, Office of Nuclear Energy and the Office of Electricity Delivery and Energy Reliability, all of whom report to DOE’s Undersecretary. 

The U.S. Department of Energy’s Office of Indian Energy is 

statutorily charged to direct, foster, coordinate and implement energy planning, education, management, conservation and delivery 

of programs, to assist Tribes with energy development, capacity 

building, energy infrastructure, energy costs and electrification in 

Indian Country. 

Since joining DOE a little more than a year ago, I have been 

committed to undertaking the following strategic programmatic 

and administrative activities. First, reaching out into Indian Country to understand really what the high priority needs are for energy development and how this office can help address those needs, 

based on feedback from Indian Country directly and develop programs and policies to fill gaps in current departmental programs. 

Second, to work within the Department to leverage many of our 

resources, financial as well as technical, to promote Indian energy 

development throughout the Department and to institutionalize Indian energy development within the Department. 

Third is to develop programs to provide Tribal leader education, 

strategic targeted technical assistance for Tribes on energy project 

development, information on transmission and electrification, innovative project development and best practices for Tribes. 

7

And finally, to coordinate resources across the agencies to promote Indian energy development generally. 

In doing so, one of the things we wanted to point out and jut remind is that the Administration is committed to safely and responsibly harnessing America’s domestic energy resources to power our 

national economy. Our office’s charge is very broad in terms of the 

scope of energy development we are directed to facilitate for Tribes, 

ranging from conventional energy to cutting edge energy development. So our approach is an all-out, all of the above strategy, 

which does include clean energy resources such as wind and solar, 

but also traditional energy resources such as coal and natural gas, 

as well as improving infrastructure needed to deliver this energy. 

It is a fact that Tribes have shown a very high motivation to pursue expanded clean energy development. So our office initiatives 

that are taking root in Indian Country are a direct reflection of the 

innovation and the promise of the next generation of Tribal energy 

development. 

Our priority is in designing and implementing new programs in 

very close collaboration with Tribal leaders and Tribal experts that 

will accelerate energy development in Indian Country by providing 

reliable and accurate information, quality training and technical 

assistance. We are seeking to further empower Tribal leaders to 

make informed energy decisions and promote community economic 

development and job creation and advance Tribal clean energy ventures. 

Shortly after I was appointed, I asked the National Renewable 

Energy Lab to update all of our renewable energy estimates for Indian Country. Based on the 2011 data provided by DOE’s lab, 

NREL, using updated analysis and modeling tools, the estimated 

maximum renewable energy resource potential in Indian lands is 

in the millions of megawatts of nameplate capacity. 

Solar and wind are the primary energy resources that contribute 

to this potential. Although it would not be realistic to blanket Indian Country with solar panels or wind turbines, those numbers 

certainly illustrate the vast amount of resources potentially available. When combined, it is clear that further development of these 

resources in Indian Country provide an incredible opportunity not 

only to increase Tribal energy reliability and self-sufficiency but 

also provide an opportunity for Tribes to contribute to the Nation’s 

energy security goals. 

There are many critical factors to building sustainable economies 

around energy. Key amongst those factors are policy support, 

strong collaborative partnerships and understanding of issues affecting the hoped-for outcomes and of course, designing appropriate 

response. 

Some of the areas that we have been focusing most of our programmatic activities on is in technical assistance. We have initiated a strategic technical assistance program for Tribes, which we 

are in the process of making final selections for applications that 

have been received in the last two months. 

Interestingly enough, that was one of the primary areas, when 

we went out to Indian Country and spoke directly to Tribal leaders 

across the Country, the most requested thing from the Department 

8

of Energy was our technical assistance. And that is where we are 

focusing most of our activities and our funding on right now. 

I just want to finish up by also mentioning, and you all also acknowledged it today, that we have traditionally, our Office of Energy Efficiency and Renewable Energy’s Tribal Energy Program, 

since 2005, has been implementing the Office of Indian Energy’s 

Title V grant authority and has been providing funding related to 

renewable energy and energy efficiency. This program has been a 

really valuable investment in Indian Country and since 1994, DOE 

has funded a total of 210 Tribal energy projects and invested over 

$45 million in Indian Country. Today, we are proud to announce, 

as prat of the Obama Administration’s commitment to strengthening partnerships with Tribal nations and supporting Tribal energy development, Secretary Chu announced today that 19 clean 

energy projects will receive more than $6.5 million. These competitively-selected projects will allow Native American Tribes to advance clean energy within their communities by assessing local energy resources, developing renewable energy projects to their next 

level, and for installing clean energy technologies on Indian lands. 

These projects selected reflect a very innovative and exciting way 

to approach clean energy development and deployment and will 

help Tribal communities across the Country save money and create 

new jobs and business opportunities. 

I am going to conclude my remarks there and thank you again 

for asking me to be here today. I am available for questions. 

[The prepared statement of Ms. LeBeau follows:]

PREPARED STATEMENT OF TRACEY A. LEBEAU, DIRECTOR, OFFICE OF INDIAN ENERGY

POLICY AND PROGRAMS, U.S. DEPARTMENT OF ENERGY

Introduction 

Good afternoon, my name is Tracey A. LeBeau, Director of the Office of Indian 

Energy Policy and Programs at the U.S. Department of Energy (DOE) and a member of the Cheyenne River Sioux Tribe. Thank you Mr. Chairman for extending the 

invitation to testify before the Committee on energy development in Indian Country. 

I am honored to be here to testify before the Committee on behalf of Secretary Steven Chu. 

Background and Executive Summary of Accomplishments to Date 

The U.S. Department of Energy Office of Indian Energy is charged by Congress 

to direct, foster, coordinate, and implement energy planning, education, management, conservation, and delivery programs that assist Tribes with energy development, capacity building, energy infrastructure, energy costs, and electrification of 

Indian lands and homes. This Office has four statutory goals:

• Promote Indian tribal energy development, efficiency, and use;

• Reduce or stabilize energy costs;

• Enhance and strengthen Indian tribal energy and economic infrastructure relating to natural resource development and electrification; and

• Bring electrical power and service to Indian land and the homes of tribal members.

To accomplish these goals, Title V of the Energy Policy Act of 2005 (EPAct) conferred my Office the authority to provide grants, including formula grants or grants 

on a competitive basis to eligible tribal entities. Grants may be used for establishing 

programs to assist consenting Indian Tribes in meeting energy education, research 

and development, planning, and management needs, including:

• Energy generation, energy efficiency, and energy conservation programs;

• Studies and other activities supporting tribal acquisitions of energy supplies, 

services, and facilities, including the creation of tribal utilities to assist in promoting electrification of homes and businesses on Indian land;

9

• Planning, construction, development, operation, maintenance, and improvement 

of tribal electrical generation, transmission, and distribution facilities located on 

Indian land;

• Development, construction, and interconnection of electric power transmission 

facilities located on Indian land with other electric transmission facilities;

• Developing a program to support and implement research projects that provide 

Indian Tribes with opportunities to participate in carbon sequestration practices 

on Indian land; and

• Encouraging cooperative arrangements between Indian Tribes and utilities that 

provide service to Tribes.

Since joining DOE a little more than a year ago, I have been committed to accomplishing four strategic programmatic and administrative goals:

1. Fully implement Congressional stated goals for energy development in Indian 

Country, as found in Title V of the Energy Policy Act of 2005;

2. Reach out to Indian Country to understand what the high priority needs are 

for energy development and how this Office can help address those needs, 

and based on feedback from Indian Country, develop policies and programs 

to fill gaps in current Department programs;

3. Work within the Department to leverage the many resources—financial and 

technical—to promote Indian energy development throughout the Department and to institutionalize Indian energy development; and

4. Coordinate resources across agencies to promote Indian energy development.

In that same time period, the DOE Office of Indian Energy has:

• Conducted a major outreach initiative to Indian Country through eight roundtable discussions with tribal leaders around the country to discuss current 

needs and priorities related to Indian energy policy and programs;

• Established the Indian Country Energy and Infrastructure Working Group, an 

informal group of tribal leaders that provides input and recommendations to the 

DOE Office of Indian Energy on issues related to energy development and opportunities in Indian Country;

• Developed programs that provide tribal leader energy education, strategic and 

targeted technical assistance for Tribes on renewable energy project deployment, information on transmission and electrification, innovative project development, and best practices forums for tribal leaders; and

• Supported interagency coordination efforts to promote energy development in 

Indian Country.

More details about these efforts, as well as future plans are provided below. 

My testimony today will touch on some of our efforts to fulfill congressional and 

Administration goals. My written testimony goes into considerably more detail regarding these activities. 

Pursuing Sustainable Energy Development in Indian Country 

The Administration is committed to safely, responsibly harnessing America’s domestic energy resources to power our economy—from oil and gas to clean coal to 

nuclear energy to renewable energy and energy efficiency. Our Office’s charge is also 

broad in terms of the scope of energy development we are directed to facilitate in 

Indian Country—including renewable energy sources such as wind and solar and 

traditional energy sources such as coal and natural gas, as well as improving the 

infrastructure needed to deliver this energy. However, Tribes have shown a high 

motivation to pursue expanded clean energy development. It is our strong belief that 

the new DOE Office of Indian Energy initiatives that are taking root in Indian 

Country are a direct reflection of the innovation and the promise of the next generation of tribal energy development. Our priority is in designing and implementing 

new programs in close collaboration with tribal leaders and tribal experts that will 

accelerate energy development in Indian Country. By providing reliable and accurate information, quality training, and technical assistance, we seek to further empower tribal leaders to make informed energy decisions that promote community 

economic development and job creation, foster energy self-sufficiency and self-determination, and advance tribal clean energy visions. 

Shortly after being appointed, I asked the National Renewable Energy Lab to update all the renewable resource estimates in Indian Country. Based on 2011 data 

provided by DOE’s National Renewable Energy Laboratory using updated analysis 

and modeling tools, the estimated maximum renewable energy resource potential on 

10

Indian lands is millions of megawatts (MW) of nameplate capacity. Solar and wind 

are the primary energy resources that contribute to this potential. These estimates 

do not, however, take into account cost, transmission access, or other critical constraints on renewable energy deployment, and they assume that all land that is not 

protected, impervious to (or too small for) system installation, or clearly ill-suited 

for the technology is used for generation. Most of these resources will not be economical to access and there are competing land-use constraints. Although it would 

not be realistic to blanket Indian Country with solar panels or wind turbines, these 

numbers certainly illustrate the vast amount of resources potentially available. 

These resources are generally regional and geographic in nature: solar in the southwest, wind in the plains, biomass in the northwest and east, and geothermal in the 

West. 

When combined, it’s clear that further development of these energy resources in 

Indian Country provide an incredible opportunity to not only increase tribal energy 

reliability and selfsufficiency, but also provide an opportunity for Tribes to contribute to the nation’s energy security goals. 

Energy Economies in Indian Country that are Built to Last 

There are many critical factors to building sustainable economies around energy. 

Key among those factors are policy support, strong collaborative partnerships and 

understanding of issues affecting the hoped for outcomes, and of course designing 

appropriate responses to meeting the challenges identified. 

Policy Support 

President Obama and Secretary Chu have been extremely supportive of improving 

the economy of Tribal communities through enhanced energy development. 

At the 2011 White House Tribal Nations Conference, the President stated:

’’While our work together is far from over, today we can see what change looks 

like. It’s the Native American-owned small business that’s opening its doors, or 

a worker helping a school renovate. It’s new roads and houses. It’s wind turbines going up on tribal lands, and crime going down in tribal communities. 

That’s what change looks like.’’

At DOE’s Tribal Summit, held May 2011, the Secretary reaffirmed his commitment to Indian energy development. The summit provided a historic opportunity for 

the Department and tribal leaders to discuss a broad range of critical energy and 

environmental issues in Indian Country. Secretary Chu said, ‘‘By working together, 

we can promote economic development and help many more tribes and villages seize 

the clean energy opportunity.’’

In support of this commitment, Secretary Chu announced three key initiatives to 

support DOE’s goals of promoting Indian energy: (1) the creation of the previously 

mentioned Indian Country Energy and Infrastructure Working Group (ICEIWG); 

and (2) intent to issue policy guidance to the Department to implement the Title 

V provision on giving preference to tribal majority-owned businesses for DOE acquisition of electricity, energy products, and by-products. DOE also supports a number 

of programs that provide technical assistance to Indian tribes, including the Strategic Technical Assistance Response Team (START) initiative to help advance clean 

energy development in tribal communities, as described later in this testimony. 

The Indian Country Energy and Infrastructure Working Group was established 

in August 2011. The working group provides advice and recommendations to the Director of the DOE Office of Indian Energy Policy and Programs and to the Secretary 

of Energy on the strategic planning and implementation of the Department’s energy 

resource, energy technology, and energy infrastructure development programs. To 

provide the most relevant and up-to-date perspectives, the ICEIWG is comprised of 

five (5) elected tribal leaders from Tribes that are actively developing or have established energy projects, or can demonstrate business interest in energy development. 

This composition of tribal leaders enables ICEIWG to provide technical and experienced analysis and feedback to the Office of Indian Energy and DOE on complex 

energy development issues. 

We also have been working since May 2011 with several DOE offices, including 

the Office of Procurement, Federal Energy Management Program, Office of Policy, 

Office of Economic Impact and Diversity, Western Area Power Administration 

(WAPA), and the Bonneville Power Administration (BPA) to implement Secretary 

Chu’s directive to develop policy guidance to implement the Indian energy procurement preference provision. Section 503 in Title V of the Energy Policy Act of 2005 

(codified at 25 U.S.C. 3502(d)) grants DOE new authority to give preference to tribal 

majority-owned business organizations when purchasing electricity, energy products, 

and energy by-products. This procurement preference is intended to promote energy 

11

development in Indian Country by providing federal agencies the discretion to give 

tribal majority-owned business organizations preferred access to the Federal Government marketplace for electricity, energy, and energy by-products. 

Promoting tribal renewable energy development further enables economic development in Indian Country, and also helps meet the Administration goals on the acquisition and use of clean energy. 

Strong Partnerships and Common Challenges 

I began my appointment by meeting with tribal leaders in their communities to 

hear first-hand about the obstacles, issues, and opportunities for energy development in Indian Country. During the eight roundtable discussions with tribal leaders 

that I mentioned earlier, we learned about these as well as the needs, priorities, 

and possible solutions related to: conventional and renewable energy development; 

transmission and infrastructure; public-private partnerships; energy efficiency and 

management; education and workforce development; funding and tax incentives; and 

leveraging, coordinating, and optimizing federal resources and programs. The feedback from tribal leaders and organizations fed into Secretary Chu’s Tribal Summit 

in May 2011 and the program initiatives developed by the Office of Indian Energy 

to fulfill its statutory mandates and the Administration’s energy policy priorities. 

We also have taken time to evaluate the thrust of many of our programs to date, 

including the grants offered through the Office of Energy Efficiency and Renewable 

Energy’s Tribal Energy Program. Below are important lessons learned we would like 

to highlight:

1) There has been considerable focus on commercial-scale projects—both by 

DOE and in Indian Country. Commercial-scale projects are typically developed to sell the electricity generated into the marketplace. This focus is understandable, given the revenue potential of these large scale projects. In our 

view, however, there is a considerable opportunity in community-scale and 

facility-scale energy generation, as well as energy efficiency. Communityscale and facility-scale projects are developed to provide electricity to the 

local community (housing) or on-site (government buildings, community 

buildings). These types of projects allow tribes to marshal their resources to 

generate their own energy and electricity; reduce and/or stabilize their energy costs; create jobs in the construction, operation, and maintenance of 

these systems; promote energy reliability and self-sufficiency; and promote 

reservation economic development.

2) Key obstacles to commercial-scale energy development in Indian Country include:

a. Cost to build projects and the financing and funding options available for 

construction projects;

b. Access to transmission and the grid, and distribution of the electricity generated from projects; and

c. Securing buyers who are willing to purchase renewable energy at the cost 

to produce the energy.

3) The current commercial-scale energy development in Indian Country has 

been almost exclusively in the purview of third-party developers who lease 

land from Tribes to build renewable energy projects in Indian Country. 

There are three primary reasons for this: (1) the current projects under consideration cost hundreds of millions to build; (2) tax credit incentives (which 

reduce the net private-sector cost to build projects, and thus reduce the cost 

to produce electricity) promote third party development and ownership by 

taxable entities, and (3) extensive expertise—everything from siting, to 

transmission, to finding a buyer, to negotiating a power purchase agreement—is needed to build commercial-scale projects.

4) Tribes have become more interested in community-scale, facility-scale development for a number of reasons, including the success of the EECBG program, state and utility companies’ incentives that pay for on-site generation, 

and reducing or stabilizing costs.

5) The level of energy education and knowledge is still lacking. This is not necessarily based on capacity; even some Tribes that are very sophisticated in 

business practices and investments lack a fundamental understanding of how 

the renewable energy industry works. But, the impact can be most challenging for Tribes that lack financial, human, and technical resources to 

evaluate and develop energy projects on their lands.

6) We have focused some of our efforts on the unique energy situation for Alaska Native villages. Those challenges include remote locations, no grid connecVerDate 0ct 09 2002 12:55 Nov 28, 2012 Jkt 075746 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 S:\DOCS\75746.TXT JACK
12

tion (for most Alaska Native villages), and a harsh environment (weather 

and location). However, Alaska possesses a large amount of renewable resources, especially wind, tidal, hydro, and biomass. Unfortunately, because of 

the environment, much of these resources are ‘‘stranded,’’ meaning we cannot 

get them to market.

7) In many respects, there are several issues shared between Alaska Native villages and smaller tribes in the contiguous states, including: remote locations 

(cannot access transmission grids), small land bases (insufficient for commercial-scale and even sometimes community-scale development), small populations (they lack the human resource capacity for comprehensive energy development), and scarce financial resources.

8) Lastly, given this information, our primary short term goal has been to develop several programs to respond to the issues, obstacles, and opportunities 

in Indian Country so that we can see more implementation of successful, 

cost-effective projects.

Designing Programs to Meet the Challenges 

The topic of Indian energy development has been contemplated since the first oil 

wells were drilled on Indian lands in Oklahoma. Since that time there have been 

numerous attempts through laws and programs to add greater value to Indian 

economies through the use of energy resources. Today, the Department of Energy 

is arraying a number of resources and types of expertise to strengthen American 

Indian and Alaska Native economies through energy development. 

DOE Office of Indian Energy 

My Office has recently launched several programs and initiatives to promote energy development in Indian Country. 

START Program. The Strategic Technical Assistance Response Team (START) initiative is a DOE Office of Indian Energy project aimed at advancing next-generation 

energy development in Indian Country. The START initiative is focused on the 48 

contiguous states and Alaska. It is led by a technical assistance team comprised of 

experts from DOE and its National Renewable Energy Laboratory (NREL). For the 

48 contiguous states, early-stage project development technical assistance will be 

provided through the START program to selected projects. DOE and NREL experts 

will work directly with community-based teams and tribal legal/finance specialists 

to further develop market feasibility assessments; due diligence research, analysis, 

and documentation; and early pre-development work to prepare site control, verify 

resource, prequalify off-take agreements and strategy, and produce a permitting 

plan. 

In Alaska, we have teamed up with the Denali Commission to specifically assist 

in the development of tribal energy planning for Alaska Native entities. This includes a competitive technical assistance opportunity aimed at:

• Reducing the cost and price of energy for Alaska Native consumers and communities;

• Increasing local energy knowledge capacity, energy efficiency, and conservation 

through training and public education; and

• Increasing clean energy deployment and financing opportunities for communities and utilities.

We announced the START initiative in December 2011 at the White House Tribal 

Nations Conference, with an application deadline of January 15, 2012. We received 

24 applications for Alaska, and 22 applications for the lower 48 states. We currently 

are reviewing those applications. 

Tribal Leader Training. The Tribal Leader Energy Education Initiative is the 

DOE Office of Indian Energy’s training program and curriculum for tribal leaders 

on renewable energy project development and financing, including how to build a 

framework for tribal project development and ways to identify likely projects. We 

piloted initial curriculum at the National Congress of American Indians Annual 

Convention in November 2011, and we continue to provide training to Tribes online 

via webcasts and in person at tribal conferences. In addition to the training curriculum, we also initiated a series of Tribal Leader Forums to bring tribal leaders, 

federal agencies, and industry together to have in-depth discussions about particular 

aspects of energy development. We have already held two forums—one on solar energy development in the southwest and one on transmission and clean energy integration. We are planning several more, including a conventional energy forum and 

a forum on investment and project finance opportunities. 

13

Education and Capacity Building. In addition to the tribal leader training curriculum, we are expanding our curriculum to address the need for expanded understanding by tribal financial officers, attorneys, and executives on project development and project finance. This in-depth training is designed to build capacity for 

the tribal professionals who support tribal leaders in making the key decisions on 

energy development projects. 

We also have an effort underway to create a document library and to put more 

of our training and education programs online and make them available on demand. 

Transmission and Electrification. Understanding the transmission grid, interconnection issues, and issues related to distribution of electricity also are critical for 

successful development of energy projects, whether commercial or community scale. 

We are working with our partners in DOE to ensure tribal participation in the 

transmission planning efforts DOE funds and participates in. Our transmission 

technical assistance program is designed to assist Tribes with preparing for participation in transmission planning, which will help them identify opportunities for 

their own clean energy development. As I mentioned above, we have already hosted 

a forum on transmission and clean energy development. We had more than 30 

Tribes in attendance, with presentations from utilities, transmission planning authorities, WAPA, BPA, DOE, and other industry experts. We plan to continue to 

provide assistance to Tribes on transmission through a program that will focus on:

• Coordinating tribal input with national transmission planning initiatives;

• Collaborating with Office of Electricity Delivery and Energy Reliability (OE) 

and WAPA on a Pilot Tribal Transmission 101 Workshop;

• Collaborating with the Tribal Energy Program, OE, and WAPA through a 

webinar series on Transmission Basics Training for Tribal Decision Makers; and

• Working with OE and WAPA to map and create baseline studies of transmission in Indian Country, and we also will update information in a 2000 EIA 

report on electrification issues in Indian Country.

We also participate on the White House Rapid Response Team for Transmission 

(RRTT), an effort to improve the overall quality and timeliness of electric transmission infrastructure permitting, review, and consultation by the Federal Government on both federal and non-federal lands. 

Tribal Energy Program 

The DOE Office of Energy Efficiency and Renewable Energy’s Tribal Energy Program was established under the Energy Policy Act of 1992 to implement DOE’s responsibilities under that act. Since 2005, the program has been implementing the 

Office of Indian Energy’s EPAct Title V grant authority and has been providing 

funding related to renewable energy and energy efficiency. In addition to competitive grants, the Tribal Energy Program offers financial and technical assistance for 

renewable energy feasibility studies and the initial steps toward developing renewable energy and energy efficiency projects, including strategic planning, energy options analysis, human capacity building, and organizational development planning. 

Since 1994, DOE has funded a total of 210 tribal energy projects and invested 

over $45 million. These grants primarily have funded resource assessment, feasibility studies, and strategic energy planning. Recently, grants have been awarded 

for pre-development, deployment planning, and energy efficiency projects. In FY 

2011, the program awarded $5.6 million to 30 tribal energy assessments and initiatives to audit more than 200 tribal buildings and initiate strategies for the reduction 

of 30 percent in energy use in another 13 tribal buildings. These funds also will assist Tribes in training tribal members, assessing clean energy options, and building 

energy organizations. 

The program also offers free technical assistance to Tribes (up to 40 hours) which 

has focused much of its efforts on energy strategic planning, and also funds WAPA 

to conduct a limited number of pre-feasibility studies on transmission capacity. The 

Tribal Energy Program has conducted annual workshops on energy development 

and energy efficiency, as well as regional workshops. Finally, the program has an 

annual conference for tribal grantees to showcase and discuss their projects that 

have been funded by DOE. 

Indian Country is bustling with energy development activity. Much of this activity 

is in the early phases and stages of development where Tribes are trying to determine next steps, understand their resources, negotiate with developers, work within 

their communities to develop support for energy development, and educate themselves. Some Tribes have been very successful at developing strategic energy plans 

and have some well-formed plans for energy development. Many also have begun 

actual deployment. Examples of how DOE has helped some Tribes include:

14

• Strategic energy planning with the Mescalero Apache and Gila River Tribal 

communities provided by DOE’s Sandia National Laboratories.

• Forest County Potawatomi Tribe facility-scale development through the Community Renewable Energy Deployment grant funded by DOE through the 

American

Reinvestment and Recovery Act of 2009 (Recovery Act) and the Energy Efficiency 

and Conservation Block Grant (EECBG).

• Delaware Nation facility-scale development through EECBG and DOE state 

funds.

• Oneida Nation of Wisconsin Seven Generations waste-to-energy project—in 

Green Bay with DOE state energy funding (and Bureau of Indian Affairs loan 

guarantee).

Recovery Act Funding 

Through the Recovery Act, Congress appropriated billions of dollars for energy de- velopment and energy efficiency efforts. The largest effort was funding $3.4 billion 

dollars for the EECBG program. By statute, there is 2 percent set aside for Tribes 

within the EECBG formula grants. Under this set-aside DOE awarded $54 million 

in grants to more than 533 Tribes to create long-term energy plans, reduce energy 

use, and install clean energy projects within their communities. Original estimates 

from the Tribes indicate that under these 3-year projects, these funds will support 

more than 2,129 building retrofits, the installation of 1.4 MW of new wind and solar 

energy generation, and the development of more than 140 energy strategies. 

In addition, Tribes received Recovery Act funding through other programs. For ex- ample, the Forest County Potawatomi Tribe (mentioned earlier) received $2.5 million through the DOE Community Renewable Energy Deployment effort to help 

communities implement long-term renewable energy technologies, create jobs, and 

provide examples for replication by other local governments, campuses, and small 

utilities. The Forest County Potawatomi Tribe was the first community to complete 

their project—a rooftop solar photovoltaic installation on the Tribe’s administration 

building in Milwaukee. It now serves as a showcase not only for Indian Country, 

but for other communities across the nation. 

Two Tribes—Pyramid Lake Paiute Tribe in Nevada and Pueblo of Jemez in New Mexico—received $5 million in grants under DOE’s geothermal program. Both 

Tribes are using these funds to explore geothermal potential on their lands. Finally, the Navajo Tribal Utility Authority received a $6 million Smart Grid 

grant from OE to implement smart meters and upgraded grid technology. 

Other DOE Office Support 

As stated earlier, one of our primary goals is to leverage existing DOE resources 

to promote and implement energy development in Indian Country. To that end, we 

have started coordinating discussions with several DOE offices and entities. For example, we currently are working with the Office of Energy Efficiency and Renewable 

Energy to incorporate Tribes into the Solar America Communities and Wind 

Powering America programs. We hope this coordination enables us to leverage the 

considerable technical assistance mechanisms developed by these programs for government and community leaders. These programs also have created educational materials by working with and learning from government leaders on implementing renewable energy policies and programs at the community level. It is our goal to leverage those lessons and best practices in Indian Country, so that we do not have 

to recreate the wheel and can apply proven techniques and technical assistance. 

To further support Tribes in clean energy and infrastructure development, WAPA 

and BPA continue to provide technical assistance and make training opportunities 

available to the Tribes in their regions. In conjunction with the DOE Office of Indian Energy and the Tribal Energy Program, WAPA is conducting a series of 

webinars that promote tribal energy sufficiency and foster economic development 

and employment on tribal lands through the use of renewable energy and energy 

efficiency technologies. The webinars will:

• Discuss methods for Tribes to evaluate and develop their renewable energy resources;

• Help Tribes build the knowledge and skills essential for sustainable energy 

projects;

• Outline a process of strategic energy planning for Tribes interested in improving their energy sovereignty and local economy;

• Provide renewable energy and energy efficiency information for tribal decision 

makers; and

15

• Offer ways for Tribes and utilities to partner in renewable energy and energy 

efficiency development.

Through funding support from the Tribal Energy Program, WAPA also provides 

technical assistance to Tribes that request pre-feasibility studies on transmission capacity for potential commercial-scale development. WAPA also has worked with 

more than 100 tribal preference customers, receiving a total of 1.2 million MWh in 

generated electricity annually, ranging from 60 MWh to 182,000 MWh for different 

Tribes. WAPA has conducted two studies to specifically help Tribes overcome barriers to receiving federal allocation and integrate wind generation. 

BPA provides technical assistance to Tribes in the northwest. It has hosted Electric Utility System Operations training for regional Tribes that are developing tribal 

utility departments, marketing tribal energy resources, or developing tribal strategic 

energy plans. BPA also partners with Tribes to host a fall and spring tribal weatherization workshop to provide technical training assistance and networking opportunities for tribes who participate in the BPA low-income weatherization and energy 

efficiency program. Tribes who are served by public utility customers of BPA are 

eligible to participate. 

In June 2011, DOE announced a unique multi-year partnership between the 

American Indian Higher Education Consortium and the American Indian Science 

and Engineering Society (AISES) to bring science, technology, engineering, and 

mathematics (STEM) research and education funding to students at our nation’s 

tribal colleges and universities (TCUs) and mainstream institutions. This partnership will provide a record-high amount of funding from the DOE to Indian students 

and tribal college faculty. DOE and its national laboratories’ science resources will 

be integrated into the national American Indian STEM educational infrastructure, 

providing a significant contribution to the science education experience of American 

Indian students, particularly those pursuing careers in disciplines relevant to the 

DOE and its national laboratories. 

Through this 3-year program, American Indian students will be recruited to join 

student/faculty teams to participate in community energy projects on tribal lands, 

with the mentorship of DOE’s national laboratories. Courses and workshops will be 

offered through a new 2-week Energy Institute hosted by TCUs and the national 

laboratories, and a mentor pool of national laboratory personnel will be on hand to 

guide American Indian Research and Education Initiative (AIREI) faculty and student participants on education, research, and career topics. Each year for 3 years, 

AIREI will fund two student teams from TCUs and two student teams from mainstream institutions with active AISES chapters to work with DOE’s national laboratories on energy research projects. 

The National Nuclear Security Administration’s (NNSA) national laboratories 

have utilized their expertise to partner in scientific education initiatives and research projects in collaboration with tribal government partners. Just last week, 

Lawrence Livermore National Laboratory (LLNL) entered into a Memorandum of 

Understanding (MOU) with the Navajo Nation to provide technical assistance on 

the nation’s efforts to develop renewable energy resources, clean coal technology, 

and carbon sequestration. 

Setting Priorities in Fiscal Year 2013 Budget and Future Efforts 

The President’s budget reflects his commitment to making the tough choices to 

reduce the deficit while investing in priorities that make America stronger. It’s clear 

from the budget that America’s nuclear and energy security are major priorities for 

the President. Within our budget we made choices and found ways to get the best 

value for the taxpayer. President Obama’s budget for FY 2013 includes $2.5 million for the Office of In- dian Energy and $7 million for the Tribal Energy Program. For the Office of Indian 

Energy, which is funded at $2 million in FY 2012, this increased amount will allow 

us to maintain key initiatives while building on initiatives developed and executed 

in FY 2011 and FY 2012. For example, we will continue to support the Indian Country Energy and Infrastructure Working Group. We will continue the START program to provide strategic and in-depth technical assistance to more Tribes in the 

continental U.S. and in Alaska. The additional funding will also allow us to expand 

our energy education efforts, including enhanced curriculum and delivery mechanisms, such as online and on demand e-learning education. The funding also will 

support more local or regional workshops and forums for tribal leaders and provide 

additional technical assistance on tribal energy development projects. 

We also intend to build on the many relationships and coordination efforts we 

have initiated with other federal agencies that provide support for energy development. Those agencies include the Department of the Interior (DOI), Department of 

Agriculture, Denali Commission in Alaska, Environmental Protection Agency, and 

16

the Department of Commerce. We have been working closely with DOI and the Department of Agriculture to better coordinate our grant and technical assistance efforts. We are participating with DOI on an interagency working group tasked with 

working on rural energy issues in Alaska. DOI also has joined our Alaska START 

program as one way to work on these issues together with the Denali Commission. 

Conclusion 

Thank you for the opportunity to share the exciting things we are doing in collaboration and in partnership with Indian Country to promote energy development 

on Indian lands.

The CHAIRMAN. Thank you very much, Ms. LeBeau. 

I want to tell the panel that your full statements will be placed 

in the record. 

Ms. Gillette, will you please proceed with your testimony? 

STATEMENT OF JODI GILLETTE, DEPUTY ASSISTANT

SECRETARY—INDIAN AFFAIRS, U.S. DEPARTMENT OF THE 

INTERIOR; ACCOMPANIED BY MIKE S. BLACK, DIRECTOR, 

BUREAU OF INDIAN AFFAIRS 

Ms. GILLETTE. Good afternoon, Chairman Akaka, Vice Chairman 

Barrasso and members of the Committee. Thank you for the opportunity to provide the Department’s statement today on energy resource development in Indian Country. 

The Department of Interior believes that environmentally responsible development of Tribal energy resources is critical to the 

economic viability of many American Indian Tribes and to the sustainability of many Alaska Native villages. As this Committee is 

aware, the Department holds in trust 55 million surface acres and 

57 million acres of sub-surface mineral estates, and assists Tribes 

and Indian allottees in managing these lands and resources 

throughout Indian Country. 

Within Indian Affairs, the Office of Indian Energy and Economic 

Development, IEED, assists Tribes and allottees in the exploration 

and development of their energy and mineral resources while the 

Bureau of Indian Affairs, BIA, is responsible for approving industry 

leasing and development activities on Indian lands. 

In a recent report, the Department documented the critical role 

that energy and mineral development plays in Indian Country. For 

example, the BIE, Bureau of Indian Education, and IEED have an 

estimated economic impact of nearly $14.5 billion, 85 percent of 

which is derived from energy and mineral development on Tribal 

lands. And this economic impact creates an estimated 136,000 jobs 

with over 120 of those jobs directly associated with energy and 

mineral development on Tribal lands. 

Last year, the U.S. GAO stated that the uncertainly in accruing 

land in trust for Tribes as a result of the Carcieri decision is a barrier to economic development in Indian Country. Since energy and 

mineral development is focused on Tribal lands, it is important to 

restate the Department’s strong support for a Carcieri fix, and the 

Department continues to believe that legislation is the best mean 

to address the issues arising from the Carcieri decision. 

In addition, the President’s 2013 budget request includes language reaffirming the Secretary’s authority to take land into trust 

status for all federally-recognized Tribes. The Department is also 

cognizant that outdated regulations should work for Tribes and not 

17

serve as Federal road blocks. Thus, we have proposed new leasing 

regulations that streamline the process by which leases of Indian 

lands are approved, thereby promoting home ownership, economic 

development and renewable energy development on Tribal lands. 

These rules constitute the most significant and comprehensive 

reform to Indian land leasing rules in 50 years. We expect to publish final rules by June of this year. 

This reform underscores President Obama’s commitment to empower Indian nations and strengthens their economies by expanding opportunities for Indian landowners and Tribal governments. 

In the last 25 years, Congress has provided about $83 million in 

funding to the Department for projects to assess and help develop 

energy and mineral resources information on Indian trust lands. 

Our Office of Indian Energy and Economic Development is working with Tribes to provide them the technical assistance they need 

from feasibility studies to the development and job creation phase. 

Since 2008, IEED has assisted Indian mineral owners in the negotiation of 48 Indian Mineral Development Act leases. These leases 

have the potential to produce over $20 billion in revenue to the Indian mineral owner over the life of the leases through royalties and 

working interests. 

Energy production on Indian lands is not limited to production 

from oil, natural gas and coal. There is also significant potential for 

renewable resource development, and we are working with Tribes 

that are well-situated to participate in the Administration’s New 

Energy Frontier initiative. 

To this end, the Department is also improving its coordination 

among the bureaus, allowing the BIA to take advantage of best 

practices that have been successful in developing other renewable 

energy projects on Federal lands. As a result, the Department has 

included Indian Country projects on the Department’s renewable 

energy priority project list in 2012, including a 350 megawatt solar 

project on the Moapa Paiute Reservation in Nevada. These projects 

utilize structured, regular calls between the cooperating agencies to 

coordinate their various processes concurrently rather than sequentially. 

The steps taken to address the increase in oil and gas activities 

on the Fort Berthold Reservation are another example of the Department’s improved coordination. The IEED, BIA, BLM and other 

Department agencies have coordinated the oil and gas activity on 

the reservation. The overall goal is to expedite the processes within 

the Department and bridge lines of authority. 

The lessons learned from these coordinating activities will be applied in other areas as appropriate in both conventional and renewable energy development. 

This concludes my statement, and I am happy to answer any 

questions the Committee may have. 

[The prepared statement of Ms. Gillette follows:]

PREPARED STATEMENT OF JODI GILLETTE, DEPUTY ASSISTANT SECRETARY—INDIAN

AFFAIRS, U.S. DEPARTMENT OF THE INTERIOR

Good afternoon, Mr. Chairman and Members of the Committee. My name is Jodi 

Gillette, and I am the Deputy Assistant Secretary—Indian Affairs at the Department of the Interior (Department). I am accompanied by Karen Atkinson who is the 

Director of the Office of Indian Energy and Economic Development within Indian 

18

1See http://www.doi.gov/ppa/upload/DOI-Econ-Report-6-21-2011.pdf.

2See http://www.gpo.gov/fdsys/pkg/FR-2011-11-29/pdf/2011-29991.pdf.

Affairs. Thank you for the opportunity to present testimony today concerning economic development opportunities available for American Indian and Alaska Native 

communities through energy resource development. 

The Department believes that environmentally responsible development of tribal 

energy resources is critical to the economic viability of many American Indian 

Tribes and to the sustainability of many Alaska Native villages. Energy and mineral 

development represents a near-term solution for many Tribes to promote economic 

development, small business, capital investment, Indian-owned businesses, and job 

creation for their tribal members. 

Overview 

The Department holds in trust 55 million surface acres and 57 million acres of 

subsurface mineral estates and assists Tribes and Indian allottees in managing 

these lands and resources throughout Indian Country. In consultation with tribes, 

the Office of Indian Energy and Economic Development (IEED) under the Assistant 

Secretary—Indian Affairs have assisted Tribes and allottees in the exploration and 

development of 2.1 million acres of active and 15 million acres of potential energy 

and mineral resources. This activity includes collection of exploratory data and identification of energy resources, funding of and assisting in feasibility studies, market 

analyses and other resource development initiatives, as well as overseeing leases 

and agreements for oil, natural gas, coal and industrial mineral deposits located on 

Indian lands. 

Under the Assistant Secretary—Indian Affairs, the Bureau of Indian Affairs (BIA) 

is responsible for developing, implementing and reviewing bureau-wide policies, 

plans, processes, environmental impact studies, industry leasing and development 

activities, and other functions related to development and production of energy and 

mineral resources on Indian lands. The Assistant Secretary-Indian Affairs is also responsible for regulations related to Indian Country. 

On June 21, 2011 DOI published ‘‘The Department of the Interior’s Economic Contributions.’’ 1 This report documents the critical role that energy and mineral development plays in creating jobs and generating income throughout Indian Country. 

Highlights include:

• BIA, Bureau of Indian Education (BIE), and IEED have an estimated economic 

impact of $14.45 billion.

• 85 percent ($12.3 billion) of this impact is derived from energy and mineral development on tribal lands.

• The economic impact created by BIA, BIE and IEED create an estimated 

136,761 jobs.

• 88 percent (120,934) of these jobs are directly associated with energy and mineral development on tribal lands.

Surface Leasing Regulations 

The Department has proposed a new rule to remove federal roadblocks to economic development and to restore greater control to tribal governments in business 

and residential leasing, including wind and solar energy projects. The reform underscores President Obama’s commitment to empower Indian Nations and strengthens 

their economies by expanding opportunities for Indian landowners and tribal governments. The Department published proposed rules for Federal surface leasing covering Indian trust lands on November 29, 2011. 2 The public comment period for the 

rules ended on January 31, 2012. These rules constitute the most significant and 

comprehensive reform to Indian land leasing rules in 50 years. We included surface 

leasing provisions for wind and solar energy development in addition to other business and residential leasing and streamlined the process. 

Provisions for wind energy leasing include a new two-step process whereby developers first obtain BIA approval of a short term lease which covers installation of 

equipment to evaluate the resource. This is followed by a second step, a wind resources lease which allows installation of turbines. The environmental review conducted for the short-term lease, which would only evaluates the impacts of the 

equipment, may be rolled into the environmental review conducted for a lease for 

full development of the project. This two-step process allows for quicker review for 

an evaluation lease and provides a basis for further environmental review when the 

wind energy equipment is to be installed. 

The proposed rules also set out a nationwide process for approval of mortgages, 

amendments and assignments to ensure consistency across BIA regions and set 

19

deadlines for BIA review. Under the proposed rules, appraisals of tribal land are 

not required unless a tribe requests appraisal. The tribe negotiates rentals and authorizes rates and BIA defers to a tribe’s valuation for fair market value, thus reducing the time period for approval of business leases. 

We conducted tribal consultation meetings in Indian Country for the proposed 

rules, then incorporated comments and again conducted consultation for the proposed rules in Rapid City, South Dakota; Palm Springs, California; and Seattle, 

Washington. Following review of the comments and necessary revisions, we expect 

to publish final rules by June of this year. 

Carcieri 

The Department strongly supports Congress’ effort to address the United States 

Supreme Court decision in Carcieri v. Salazar, 129 S. Ct. 1058 (2009). In Carcieri, 

the Court’s majority held that section 5 of the Indian Reorganization Act permits 

the Secretary to acquire land in trust for federally recognized Tribes that were 

‘‘under federal jurisdiction’’ in 1934. The decision upset the settled expectations of 

both the Department and Indian Country, and led to confusion about the scope of 

the Secretary’s authority to acquire land in trust for federally recognized tribes—

including those tribes that were federally recognized or restored after the enactment 

of the Indian Reorganization Act. The ability to take land into trust is critical to 

creating an environment that is conducive to economic development and attracting 

investment in Indian communities. This includes energy planning and improving energy development capacity. Trust acquisitions allow tribes to grant certain rights of 

way and enter into leases that are necessary for tribes to negotiate the use and sale 

of their natural resources. In addition, acquisition of land into trust is essential to 

tribal self-determination. 

In April 2011, the United States Government Accountability Office (GAO) stated 

that the uncertainty in accruing land in trust for tribes, as a result of the Carcieri

decision, is a barrier to economic development in Indian Country. 

The Department continues to believe that legislation is the best means to address 

the issues arising from the Carcieri decision, and to reaffirm the Secretary’s authority to secure tribal homelands for federally recognized tribes under the Indian Reorganization Act. In addition, the President’s 2013 budget request includes language 

reaffirming the Secretary’s authority to take land into trust status for all federally 

recognized Indian tribes. 

Office of Indian Energy and Economic Development (IEED)—Energy and 

Mineral Development 

In the last 25 years, Congress has provided about $83 million in funding to the 

Department, for projects to assess and help develop energy and mineral resources 

information on Indian trust lands. 

IEED is working with tribes to provide them the technical assistance they need 

to proceed to the development and job-creation phase. IEED is further defining 

these resources by the use of detailed exploration, market studies, business plans, 

economic analysis, and lease negotiations that reflect the tribes’ economic, environmental and social needs. 

This proactive approach has helped tribes to proceed with development and realization of economic benefits from their energy and mineral resources. Today, our 

major objective is sustainable resource development focusing on Indian employment 

and income to the Indian mineral owner. This goes further than resource assessment which is the identification of the quantity and quality of mineral resources. 

This proactive focus on resource development has provided an informed decisionmaking process for their resources that provides a springboard to the development 

and realization of the potential economic benefits. 

We are providing tribes with access to state-of-the-art knowledge and geo-scientific-based analysis of their energy and mineral resources to allow them to perform the following critical functions:

• strategic planning; 

• formulation of economic and energy policies; 

• evaluation of federal lands; 

• development of sound environmental policies; and 

• negotiation of sound Indian Mineral Development Act (IMDA) agreements with 

energy and mineral industry developers.

IEED also has accumulated a significant repository of industry-confidential exploration data (e.g., seismic data, well data). We have been actively providing technical 

assistance to various tribes by purchasing, reprocessing and interpreting thousands 

of miles of 2D seismic data as well as hundreds of square miles of 3D data. These 

20

studies have identified numerous prospects, some of which are essentially ready to 

drill. Some of the prospects still require additional data collection and evaluation 

to more accurately identify exploratory and development targets. These evaluations 

yield prospects that enhance the marketability of Indian lands and results in better 

economic terms of an agreement. 

Oil and natural gas production in Indian Country has been significant and has 

even greater future potential. To date, more than 2 million acres of Indian lands 

have already been leased for oil and natural gas development. These lands account 

for about 10 percent of the oil and natural gas production from federally regulated 

onshore acreage. Based upon the latest data available from the Office of Natural 

Resources Revenue (ONRR), production of energy mineral resources generated about 

$550 million in royalty revenue paid to Indian individuals and tribes in 2011 and 

the royalty income trend line is rising. As demonstrated in the chart below, since 

2002, annual income from energy mineral production increased by more than 113 

percent and this trend is expected to continue for the foreseeable future.

The economic potential of future energy and mineral resources in Indian land has 

enormous possibilities. We estimate that an additional 15 million acres of undeveloped energy and mineral resources may exist on individual Indian and tribal lands, 

which if fully developed could result in billions of dollars in revenue for those tribes 

and individual Indian landowners over the period of production. 

As tribes and development companies create more sophisticated energy and mineral development agreements under the Indian Mineral Development Act (IMDA), 

comprehensive energy and mineral information is required to understand, evaluate 

and negotiate these agreements. By having a more thorough understanding of the 

geotechnical data and economic information, tribes can confidently enter into complex agreements knowing they have a sound economic and business arrangement. 

In addition, if a tribe wants to take advantage of the opportunity to develop Tribal 

Energy Resource Agreements with the Department, we must ensure that the tribe 

has identified resources and land title information, and the technical and administrative capability to develop those resources. 

For energy and mineral development in Indian Country, IEED provides advice 

and data concerning geotechnical, economic, and land-use issues to tribes and Indian landowners who are seeking to manage and develop their energy and mineral 

resources. IEED also provides assistance in negotiating beneficial working agreements with developers and guidance through the often complex and time-consuming 

regulatory approval process. 

Since 2008 IEED has assisted Indian mineral owners in the negotiation of 48 

IMDA leases for oil, gas, renewable energy, and aggregate totaling approximately 

2,750,000 acres and about $45 million in bonuses (upfront payments). These leases 

have the potential to produce over $20 billion in revenue to the Indian mineral 

owner over the life of the leases through royalties and working interests. 


216a2.eps
21

The following chart provides additional information about the significant economic 

impact that energy and mineral development can have on reservation economies.

IEED manages an annual grant program called the Energy and Mineral Development Program (EMDP) which provides grants to financially assist tribes and Indian 

allottees in evaluating their energy or mineral resource potential on their lands. 

EMDP projects may include such activities as:

• performing initial exploration activities and defining potential targets for development;

• performing market analyses to establish production/demand for a given commodity;

• providing outreach and education to tribes concerning energy or mineral development issues;

• performing economic evaluation and analyses of the resource; and

• promoting projects at industry conferences and to prospective partners.

With EMDP grants, tribes and Indian allottees have the ability to gain information and data they require to promote their lands, negotiate the best development 

agreement with partners or investors, and understand the economic impact to their 

lands. IEED solicits proposals from tribes, and through a competitive review system 

selects qualified projects for funding. In addition, IEED staff members provide technical assistance to tribal grantees, including geological, geophysical, and engineering 

reports, maps, and other data. They also interpret data and help negotiate development agreements. IEED staff also monitors those projects that receive grants to ensure that the best possible product is obtained for the funds allocated. 

For 2011, IEED received 61 proposals from tribes including renewable energy 

projects, primarily biomass and geothermal energy, oil, natural gas, coal, and minerals. The dollar amount of these requests totaled slightly over $15.9 million. IEED 

issued awards for 28 projects totaling $4,173,500. Of the awards, seventeen were for 

renewable projects totaling $2,863,650; five were for oil and gas projects totaling 

$390,000; three were for coal projects totaling $437,600; and three were for mineral 

projects totaling $482,250. Many other qualified tribal proposed EMDP projects 

could not be funded this year, and those projects will be considered for funding in 

the next fiscal year. 


216a1.eps
22

IEED also manages a Tribal Energy Development Capacity (TEDC) grant program under the Energy Policy Act, Pub. L. No. 109–58 (Aug. 8, 2005). The grants 

are designed for projects under which tribes build their human capacity to address 

issues concerning the development, management, environmental review, and monitoring of energy projects on Indian lands. In 2011, the TEDC grant solicitation received 23 applications from 20 tribes, with a total funding request of over $3.5 million. IEED awarded $300,000 to four tribes. 

Renewable Resource Development 

Although historically energy production on Indian lands meant production from 

oil, natural gas, and coal, there is also significant potential for renewable resource 

development. Many tribes are interested in developing their renewable energy resources; however, the amount of production from renewable resources has been limited by some external factors. Many tribal lands located contiguous with the lower 

48 States are well situated to take advantage of a range of renewable energy resources. However, just because an area has a significant solar, wind, biomass, or 

geothermal resource does not always mean that resource development—even with 

tax incentives or renewable energy portfolios—is economically viable. Other factors 

such as location of existing transmission lines and power generation stations, and 

distance to population centers affect the development prospects of these resources. 

Many Indian lands have biomass energy potential, from woody biomass from 

forestlands, and bio-diesel and ethanol production from agricultural and silviculture 

waste, to the growing and use of energy crops. We have identified 118 reservations 

with a high potential for biomass production. In addition, tribes in Nevada, California, Oregon, North Dakota, and South Dakota, and Pueblos in New Mexico also 

have potential to tap geothermal energy resources and most of the Indian lands in 

the Southwest and Western United States present opportunities for solar energy development. We are working with several tribes to identify available renewable energy resources. 

One renewable energy resource, municipal solid waste, is currently in development by the Oneida Tribe of Wisconsin. The Tribe is pursuing development of a 5 

MW waste to energy power plant and recycling center that will utilize municipal 

solid waste generated in Brown County, Wisconsin. The project, begun in fall 2010 

will create up to 30 new full-time jobs with additional training benefits. In FY 2010, 

the Division of Energy and Mineral Development funded this project for $333,500 

to finalize the engineering design and contracts with fuel sources. The Division of 

Capital Investment, within IEED, is providing technical assistance to the Tribe by 

assisting them in developing a loan proposal to seek financing for the project 

through our Loan Guaranty Program. 

IEED is addressing renewable energy potential in Indian Country as part of its 

mission to fulfill the Administration’s New Energy Frontier Initiative. It is working 

on more than 50 projects on approximately 35 reservations. IEED has identified 267 

reservations with renewable energy potential, but the resources on these reservations have not yet been adequately determined. In addition to providing an assessment of these resources, IEED works with Indian communities and tribes to bring 

these resources into production. 

While IEED offers technical assistance and funding during pre-development 

stages of renewable energy projects, the BIA is also involved with respect to lease 

approvals. The Office of the Assistant Secretary—Indian Affairs has created a small 

team of individuals with the goal of improving Indian Affairs’ ability to provide efficient review and approval of renewable energy projects. This team includes a staff 

point of contact from each of the twelve BIA regions, staff from IEED and the Office 

of the Secretary. If IEED becomes aware of a specific project, our coordination efforts will ensure that the BIA regional and agency offices are fully aware of project 

details in order to expedite any required BIA actions, including any NEPA analysis. 

Similarly, if the BIA is presented with a lease or other contract for approval, that 

will be related back to IEED for their assistance in any lease review or NEPA analysis. 

The Department is also improving its coordination among the bureaus, allowing 

the BIA to take advantage of best practices that have been successful in developing 

other renewable energy projects on federal lands. As a result, the Department has 

included Indian Country projects on the Department’s Renewable Energy Priority 

Project list in 2012. This includes a 350 MW solar project on the Moapa Paiute Reservation in Nevada, which is currently undergoing NEPA analysis with a final decision coming this spring. The BIA has been also able to take advantage of additional 

training opportunities by matching the appropriate BIA regional staff with training 

on the renewable resource they are most likely to encounter in their region. 

23

Additionally, in order to encourage careers in green and renewable energy for students at BIE high schools and colleges, IEED co-sponsors the Indian Education Renewable Energy Challenge with the BIE and Argonne National Laboratory. The 

2011 project challenge focused on the practical use of renewable energy resources 

and involved preparing bio-diesel fuel and establishing purity and performance 

characteristics. Southwestern Indian Polytechnic Institute college students and 

Oneida Nation High School students submitted the winning entries. Each team submitted a video of their projects along with samples of their bio-diesel fuels to Argonne National Laboratory. Representatives of the schools were invited to two days 

of meeting with Argonne scientists and an award ceremony. 

Alaska Energy 

Alaska Native villages have a unique energy situation. While rising energy costs 

present problems for those of us who live in the lower 48, the consequences for Alaska Native communities, which are mostly rural, are alarming. The energy crisis impacts rural Alaska on both the individual and community level: when communities 

spend more on fuel, they spend less on key services. Many residents of rural Alaska 

often have to make difficult decisions regarding heating their homes, putting fuel 

in their vehicles, and feeding their families. 

Diesel fuel driven generators provide a majority of electricity in rural Alaska, especially on the Aleutian Islands where power transmission lines are non-existent. 

Because nearly all rural native villages generate their electricity locally using diesel 

generators, it is a balancing act each year for these communities. Diesel in Alaska 

is expensive at any time, with reported prices of around $9 per gallon. 

IEED has been approached by numerous communities for support on geothermal 

projects. The State of Alaska has completed preliminary surface geology mapping 

at many of these communities and documented the geothermal resources that are 

present. We have supported the communities of Unalaska and Adak on the Aleutian 

Islands. Both communities are currently generating their electricity using diesel 

fuel. 

Unalaska has thermal resources that would be an ideal candidate for potential 

steam generation. This summer, the community is barging a drilling rig into the 

area to drill a municipal water supply well. This rig could be also be utilized to drill 

geothermal wells in the region. The mobilization costs for bringing in equipment are 

extremely high so it would be prudent to drill multiple holes while the rig is available. Unalaska currently is the home to an active fishing fleet and cannery. 

Our second project area is on Adak Island, which formerly housed a large Department of Defense facility. The island’s electrical generation facilities are powered by 

inefficient diesel powered generators to supply the electric needs of the 70 residents. 

There is a part-time cannery operation on the island supported by a small fishing 

fleet. In addition, the military left a 2.8 million gallon fuel supply tank that could 

potentially be used to fuel ships in the area and provide some job potential. The 

addition of geothermal generation would greatly reduce energy costs in the area. 

Numerous steam vents line the coast in the harbor near Adak. In addition, they 

have an extensive power line grid. At both of these communities, IEED proposes acquiring and processing seismic data in an effort to locate the ideal site for a rig to 

drill an exploration borehole to help identify the optimal site for a future power generation facility. 

We are also assessing potential wind projects that would enhance energy reliability for some villages. We are currently doing an assessment on the Pribilof Islands to determine the feasibility of developing a hybrid wind energy system. 

IEED is a co-chair with the Department of Energy’s Office of Indian Energy Policy 

Programs (IE) on the Alaska Native Village Sub-Group which is part of an interagency group established to implement the President’s Executive Order, Interagency 

Working Group on Coordination of Domestic Energy Development and Permitting 

in Alaska (July 12, 2011). The primary focus of the sub-group is to evaluate and 

determine appropriate federal efforts to support energy development in rural Alaska 

and Alaska Native Villages. IEED has done an inventory of assistance that our office has provided in Alaska and is in the process of reviewing these efforts to see 

if any projects would benefit from increased coordination or technical assistance 

from the Department or our federal partners. IEED has provided technical assistance to Alaska Natives by assessing potential energy projects which include wind, 

hydro-electric power, geothermal, tidal, and waste-to-energy. Through the Alaska 

Native Village Sub-Group, IEED will coordinate with the other sub-groups—hydroelectric power, biomass, and Federal facilities—to coordinate technical assistance to 

Native communities, thereby leveraging our resources and expertise to provide assistance to Alaska Native communities through this initiative. 

24

Fort Berthold 

In 2009, IEED implemented steps to address the increase in oil and gas activities 

on the Fort Berthold reservation. A ‘‘One-Stop-Shop’’ coordinating office was setup 

in New Town to oversee all oil and gas activity on the Reservation and coordinate 

the various procedures and processes that cross Bureau lines. The overall goals of 

IEED were to oversee and expedite the processes within the Department related to 

oil and gas development on Indian land and bridge management lines of authority 

to accomplish the office mission through the office of the Assistant Secretary—Indian Affairs. 

IEED’s Division of Energy and Mineral Development (DEMD) continued to support the concept with technical expertise on a part time basis. Geographic Information System (GIS) and data management support is also provided by DEMD through 

the implementation of the National Indian Oil and Gas Management System 

(NIOGEMS) at tribal offices, BIA Agency, the Bureau of Land Management Field 

Office, and the Office of Natural Resources Revenue (ONRR) to ensure proper communication and coordination occurs between the various Departmental Agencies, the 

Mandan, Hidatsa and Arikara Nation, and individual Indian Mineral Owners. In 

addition, DEMD has hired two environmental surface compliance specialists, one 

GIS specialist, and two administrative support positions to meet the increased oil 

and gas development activity occurring in 2011. These positions are temporarily 

funded by DEMD until the BIA Fort Berthold Agency can determine the need for 

full time hiring. 

On June 15, 2011, IEED hosted an Oil and Gas Lease Seminar at Fort Berthold 

attended by 47 Mandan, Hidatsa and Arikara Nation members and oil leaseholders. 

The seminar taught attendees how to protect their lease holdings and investments, 

giving them an understanding of fundamental mineral legal issues; relevant lease 

clauses; how to negotiate leases; joining, pooling, communalization, and unitization 

of leases; and, revenue and royalty distribution. IEED also sponsored an Entrepreneurial Training session at Fort Berthold conducted by Jeffrey Stamp, a professor 

at North Dakota University. This capacity-building session, which was attended by 

37 Mandan, Hidatsa and Arikara Nation members, focused on the core skills needed 

by entrepreneurs and helped attendees identify emerging economic opportunities, 

guiding them through the process of converting product or service ideas into a successful business. In September 2011, IEED awarded the Mandan, Hidatsa and 

Arikara Nation a $100,000 grant to study the economic opportunities resulting from 

the Bakken oil boom and to develop a reservation-wide, long-term economic development plan. 

DEMD’s continued support of oil and gas development occurring on the Fort 

Berthold Reservation is required over at least the next two years. The level of drilling activity continues to increase from 150 wells drilled through the end of 2010 to 

200 additional wells planned for 2011 and 2012. That represents a doubling of work 

load that is expected to continue through 2013, with development rate leveling off 

to 100 wells per year over the next 5 years. It is expected that 1000 wells will be 

drilled to initially develop the Bakken Formation and an additional 1000 wells to 

complete full development of the Bakken and Three Forks Formations over the next 

10 to 20 years. 

This concludes my prepared statement. I will be happy to answer any questions 

the Committee may have.

The CHAIRMAN. Thank you very much, Ms. Gillette. 

I know that some of my colleagues are limited in how long they 

will be able to stay for today’s hearing, so I am going to ask each 

of the witnesses just one question then defer to my colleagues to 

ask their questions. If time permits, we will have a second round. 

Otherwise, I will submit my questions in writing for the record. 

Ms. LeBeau, are there any specific regulations or laws that Congress should review that may allow for greater collaboration between your office and other Federal agencies to promote the development of vast energy resources in Indian Country? 

Ms. LEBEAU. Chairman, I am not currently aware of any that I 

can identify for you today. We will take a look at that and get back 

to you if we can identify some. But I would like to just point out 

that what is included in my written testimony, but what I would 

like to share with you now, since you bring it up, is we have manVerDate 0ct 09 2002 12:55 Nov 28, 2012 Jkt 075746 PO 00000 Frm 00028 Fmt 6633 Sfmt 6601 S:\DOCS\75746.TXT JACK
25

aged to form a close collaboration with the Department of Interior 

on several initiatives, also with the USDA. So we are talking pretty 

frequently now on how we can better align resources, our grant solicitations and the technical assistance that we all have in certain 

areas so we can collaborate better. 

For our strategic technical assistance initiative, our START program, we have partnered with the Denali Commission for a very 

specific and targeted Alaska START program. So there are ways 

that I think we have been reaching across to our Federal partners 

to better collaborate and coordinate our resources. 

The CHAIRMAN. Thank you very much, Ms. LeBeau. 

Ms. Gillette, you mentioned, and it really caught my attention, 

that the Carcieri decision is holding Tribes back from developing 

their economies, and that you are supporting the Carcieri fix. Can 

you please elaborate on that point and explain how important fixing the Carcieri decision is to Indian energy development? 

Ms. GILLETTE. As my longer testimony, my written testimony indicates, the ability to take land into trust is critical to creating an 

environment that is conducive to economic development and attracting investment in Indian Country. This includes energy planning and improving energy development capacity. Trust acquisitions allow the Tribes to grant certain rights of way and enter into 

leases that are necessary for Tribes to negotiate the use and sale 

of their natural resources. 

The CHAIRMAN. Thank you very much. 

Senator Barrasso, your questions. 

Senator BARRASSO. Thank you very much, Mr. Chairman. This is 

a fascinating conversation and discussion. 

Ms. LeBeau, in May of last year, your office hosted the Tribal 

Energy Summit and provided an opportunity for Tribal leaders to 

come together and discuss any barriers to energy development. 

What I would like to ask, in following up to the Chairman, is what 

were the main concerns that you heard at the Tribal Energy Summit, and what actions has your office taken to help follow up on 

some of those concerns that you heard? 

Ms. LEBEAU. Thank you. Prior to the Summit itself, we did initiate a round of roundtables across the Country, I think we held 

nine across the Country, speaking directly to Indian Country, trying to get to some of that information before we actually got to the 

Summit. So feeding all of that information into the Summit, and 

then we also had specific roundtables where we had all of our principals of all of our program offices there to speak directly with 

Tribal leaders. 

Some of the issues that came up were that, again, the most commonly requested thing from the Department of Energy was actually technical assistance. I think a lot of Tribes, especially in the 

areas of clean energy and renewable energy, where you have technologies that are either emerging or they are less familiar with, a 

lot of Tribes have asked us to kind of wade in and give them our 

expert opinions and help them sort through technology choice and 

through the very complex and difficult area of project finance for 

renewables, since it is so dependent on tax credits and other 

things. So that commonly came up. 

26

The other thing that came up was a very strong interest, and we 

knew this coming into the Summit, a very strong interest by Tribes 

for Federal departments to take advantage of the provision of the 

Energy Policy Act of 2005, which allows Federal agencies to provide a preference to power produced by Indian Tribes. We are in 

the process of leading, at the Department of Energy, leading an effort amongst all of our, many of our offices within the Department 

of Energy, of coming up with procurement guidance to actually implement that provision that no Federal agency has yet to implement. 

So those two were very significant 

Senator BARRASSO. Thank you very much. 

Ms. Gillette, first I want to thank you for how helpful you have 

been in the entire process and working on this area, such an important issue of energy development and economic development. Last 

year, the EPA enacted what was called the Federal Minor New 

Source Review Program in Indian Country. The rule requires that 

any new or modified synthetic minor source had to obtain an EPA 

permit prior to construction. And this pre-construction permit requirement amazingly became immediately effective. You had to 

have the permit, even though the process to get the permit didn’t 

exist yet. 

And I have been hearing more and more about it. I understand 

the process to get a permit still isn’t in place, even though you have 

to have the permit to start. It seems that the Tribes want to follow 

the rules, want to obey the law, but there is no real way that they 

can do so because of the EPA. 

Has your Department done an analysis of the impact this has 

had, this EPA rule, in Indian Country, and were the Tribes’ concerns justified? 

Ms. GILLETTE. I think that the Tribes’ concerns were justified, 

because there was not a lot of conversation about how it was going 

to be implemented. But since probably the summer time, and I 

guess between probably this fall and now the rule has been signed 

and the EPA has agreed to do a phased implementation. They are 

working closely with affected Tribes and have agreed to do consent 

agreements that would ensure that energy resource development 

isn’t interrupted. 

So at this point, especially this is affecting the Fort Berthold 

Reservation, and right now, out of ten companies there are eight 

companies that have consent agreements. They have agreed to 

make sure that there is a phased process, and they are working 

closely with both the Tribes and the industry to make sure it is not 

going to be a cost factor. 

Senator BARRASSO. It would have seemed to make more sense 

had the EPA come out with an application process, a way to fulfill 

the requirement, so that Tribes wanting to obey the law could have 

done it, could have done it right and then gotten back and started 

in time. 

Another issue that I hear about is processing and approving 

leases and agreements for energy development on Indian lands. We 

have heard many complaints from the Tribes that the delays in the 

approval process have been a significant impediment. I was going 

to ask about that, as well as the BLM charging such a high fee for 

27

an application to drill on Indian trust lands. I think $6,500 per permit, where a lot of fees at State levels are a lot less than that. 

Could you help us a little bit there on what you are seeing? 

Ms. GILLETTE. Sure. I am going to talk a little bit about the APD 

fees, and then I am going to turn it over to Mr. Black to answer 

the leasing question. 

We have engaged in discussions with BLM regarding the application of APD fees on Indian lands and options to address the fees. 

Congress established in appropriations the fees and the lands that 

they apply to. Legislation would be required to exempt Indian 

lands from the application of those fees. But we would be more 

than willing to work with the Committee and yourself and your office to look at ways to get to that end goal. 

Senator BARRASSO. And Mr. Black? 

Mr. BLACK. Thank you, Mr. Barrasso. 

Regarding the lease approvals and some of the processes we have 

to go to, and yes, you are right, we have heard complaints in the 

past over some of the delays. A lot of them, it can vary from place 

to place on what is exactly the issue there. It can deal a lot with 

the consent requirements that are often required under some of the 

leases, reaching the majority consent on a highly fractionated parcel of land and getting out and getting those consents. Getting 

through the environmental processes in some cases can add natural 

delays to the process. 

Some of them are built in by statute, regulation or law that 

cause us to have certain delays. But we have been working pretty 

hard over the last couple of years to look at our process overall, 

streamlining the process. We have the proposed Part 162 regulations that we have out for comment right now that we are looking 

to implement, which will go a long way, I think, toward streamlining some of the processes, and really take an outdated regulation 

and bring it into the modern day to deal with a lot of the situations 

we have, particularly with the renewable energy, wind and solar 

area that we are starting to experience now. 

Senator BARRASSO. Thank you, Mr. Black. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. Thank you very much, Senator 

Barrasso. 

Senator Johnson? 

Senator JOHNSON. Ms. LeBeau, our rural Native communities 

face an added burden of inadequate transmission grids. How is 

WAPA dealing with this continued growth and interest in renewable energy, especially in areas where gridlines do not have sufficient capacity? 

Ms. LEBEAU. That is a great question. I have been working pretty closely with Western Area Power Administration on exploring 

ways that they could outreach more to Indian Country in the area 

of transmission, particularly in regard to projects that are seeking 

transmission access and also transmission service across their 

lines. In some areas, we have actually, in the Desert Southwest, we 

have identified opportunities where Western Area Power is using 

their borrowing authority to do some expansions where there could 

be some opportunities for Tribal projects to get interconnected and 

get their energy to a marketplace. 

28

In the Great Plains, it is a little tougher. There are some identified projects I believe that have been prioritized and identified 

throughout the years that they are looking to do some expansions. 

But that is always contingent on their borrowing authority and 

their ability to do so through appropriations. So I know there is one 

case in particular where a Tribe has made their application, got in 

the transmission queue and has gotten all of their transmission 

agreements in place and executed. So we know that the process 

works. 

It could be quicker. So we are working on that. But we do have 

some success stories in the Great Plains on how this has occurred 

for some Tribes. 

Senator JOHNSON. Deputy Gillette, as you know, Tribes have 

been hindered by the bureaucratic process and red tape. I am glad 

to hear that the BIE will be improving wind energy leasing. With 

this new system, what is the estimated time that it will take for 

a Tribe to get through the approval process? 

Ms. GILLETTE. The provisions for wind energy leasing include a 

new two-step process, whereby the developers can first obtain approval of a short-term lease which covers installation of equipment 

to evaluate the resource. This is followed by a second step wind resource lease, which allows installation of turbines. 

The way that this works is we have designated time lines for 

each of those steps and the lease approval deadlines are something 

that hadn’t been there in the past. And we do have a lot more predictability and sort of understanding of how our internal processes 

will work in lease approvals. 

Senator JOHNSON. I yield back, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator Johnson. 

Senator Tom Udall? 

Senator UDALL. Senator Akaka, thank you very much, Mr. Chairman. 

Ms. Gillette, I would like to start by asking, because I think it 

lays out things well in terms of looking at this overall issue of energy development on Indian lands, what is the Federal trust responsibility as it relates to mineral and energy development for Indian Tribes? 

Mr. BLACK. Senator Udall, with regard to the Federal trust responsibility on, you are basically talking oil and gas and subsurface 

minerals, we are guided by statute and regulation, executive orders, laws that have come around through the years that govern 

our responsibility to manage and oversee the development of the 

mineral resources out on Indian lands. That is in partnership many 

times with our other Department partners, BLM and the Office of 

Natural Resource Revenues. 

Senator UDALL. And when it comes down to all these problems 

that have been described, all the Senators talking about issues of 

slow movement of leases and hurdles that they are talking about, 

is that a part of the trust responsibility and a part of getting 

through all of the statutes and laws that have been laid down? Is 

there a way to streamline that? 

Mr. BLACK. I think there are always different ways to streamline 

some of the processes, and we have done that in some ways. Some 

of the things that we don’t have total control over are some of the 

29

NEPA requirements and some of the environmental laws that we 

have to comply with. And there are certain time frames that are 

just naturally built into that process. 

Senator UDALL. Could you give me a couple of examples of where 

you have streamlined it? 

Mr. BLACK. Basically, we have worked with the oil and gas companies, and I am going to talk particularly to APD permits for that 

matter. That seems to be one of the biggest issues we ran into out 

in Indian Country in trying to expedite development of oil and gas. 

Senator UDALL. Tell us all what an APD permit is. 

Mr. BLACK. I apologize. 

Senator UDALL. No, I am just trying to get everybody on the 

same wavelength. 

Mr. BLACK. That is an Application for Permit to Drill. And that 

is a collaborative effort between, largely between ourselves and the 

Bureau of Land Management. Bureau of Land Management is actually the Department that would approve an APD permit out 

there, with our concurrence and activity and approval of the environmental documents. So we have worked with the oil and gas 

companies, I am looking to Fort Berthold, where we have had just 

a tremendous amount of activity over the last couple of years. And 

we have used, the oil company is working with them to identify 

certain processes where we could speed up working with them, 

having them conduct certain activities in the process that would 

help to speed up what we have to do on our review, standardizing 

some of the things that they would submit to our office. 

Senator UDALL. And you all realize, I am sure, that when a Tribe 

makes a decision to go forward, they are doing it because they 

want economic development, they want to have the jobs. I hope all 

these Federal agencies, whether it is the Bureau of Land Management, some within Interior, some outside, like the EPA, are all 

working together to try to achieve that objective. Because as you 

know, we have serious unemployment problems. You heard from 

Senator Johnson talking 80 percent, I think the Navajo Reservation, Mr. Vice President, you will tell them, but I think it is ranged 

in the 50 percent range. Some of our Pueblos in New Mexico are 

also that high. 

I hope, President Pesata, you will let everybody know about the 

unemployment on the Jicarilla Apache Reservation. 

Mr. BLACK. I was just going to say, speaking to what you are 

talking about there, we have also developed some processes, we are 

developing, improving the communications largely, between all the 

partners that are engaged in the oil and gas activity and monitoring and oversight. That means bringing BLM and ONRR and 

BIA and OST and all the different departments together to really 

identify the issues and ensure that we are working together. We 

are not badgering each other here in this activity, but we are working together to try and get the process taken care of. 

Senator UDALL. Great, thank you. And because Senator Tester 

was so generous, I am going to end a little bit early here. Thank 

you. 

The CHAIRMAN. Before I call on the next panel, did you have a 

comment to make, Ms. Gillette? 

30

Ms. GILLETTE. Yes. I just wanted to add that when it comes to 

conventional, that is why I have asked Mr. Black to accompany me 

during this session, but I am most familiar with renewable energy 

development, in that we are aware that we need to beef up our capacity in those areas. It is a very new part, within the Administration, it is a new part of what we do, and part of our trust responsibility. To that end, we have been working closely with the Department of Energy. Tracy and myself have regular conversations in 

looking at ways to get that kind of technical assistance and knowledge base to the folks within the BIA realty and environmental offices, so that those are better streamlined and better coordinated. 

The CHAIRMAN. Thank you very much, Senator Udall. 

Senator Tester? 

Senator TESTER. Thank you, Mr. Chairman. 

I don’t know whether to ask this question of you, Jodi, or you, 

Tracey. But are you familiar with a policy developed in the Energy 

Policy Act 2005, as it gives Tribes the opportunity to develop energy by developing Tribal energy resource agreements with the Department of Interior, called TERA? Okay. One of the things I have 

heard since I have been in the Senate is complaint, Chairman Dorgan had some members in leadership from the Tribes in North Dakota who talked about drilling wells and have energy develop all 

around the Reservation, but never ever getting in. I am concerned 

that that is happening, not just in North Dakota, but potentially 

a lot of other places, Montana included. 

One of the things that the TERA would allow, if they got into one 

of these agreements with the Department of Interior, it would 

allow them not needing approval from the Department of Interior. 

Correct me if I am wrong on that, that the Tribe would be able to 

address these business agreements on energy development without 

needing that approval from the Secretary. 

My understanding is not one Tribe has entered into a TERA. 

That sounds like a pretty good idea to me, self-determination and 

all that stuff. Can you give me any idea why not one Tribe has entered into it? This is seven years plus. 

Ms. GILLETTE. I think that you are right, this is a tool that 

Tribes can use to directly manage their energy resources and develop the renewable and non-renewable energy resources. But it 

also requires the Tribe to assume a greater level of regulatory authority and administrative responsibility. This may be one of the 

reasons that Tribes have not embraced the use of TERAs. We have 

had four Tribes informally discuss development of a TERA. Two of 

those received, through our regulatory process, formal meetings to 

consult on developing a TERA, and neither of those two Tribes 

have applied for one. 

So in the spirit of consultation, I think that would be an excellent question to ask the next panel, to fill out the gaps that I may 

be leaving here. 

Senator TESTER. We will do that. I appreciate the recommendation. 

Tracey, grant programs, you talked about education and technical assistance. You must be aware of a ton of grant programs out 

there for Indian Country, at least some, right? 

Ms. LEBEAU. Right. 

31

Senator TESTER. I guess the question I have is, it is my understanding these grants are very difficult to get. We are austere 

times and I don’t know if the grant programs have the kind of 

money they need for the demand that is out there. 

Is it time to have a setaside for Indian Country for some of these 

grants? That would be my first question. 

Ms. LEBEAU. I think one good example could be, through the Recovery Act, we had the Energy Efficiency Community Block Grant, 

with the $54 million setaside for Tribes. 

Senator TESTER. Right. 

Ms. LEBEAU. We are in the process of collecting information, just 

kind of doing a data call on the over 400 Tribes that we did fund 

through that setaside program to get a really good sense of how 

much capacity actually was built out there. 

Senator TESTER. Okay, good. 

Ms. LEBEAU. So I think as we collect and collate and analyze 

that data and kind of turn it around in the coming months, because 

some of those projects are in the process of winding down, I think 

that would be a great, that might be a good pilot or a good example 

to look at. 

Senator TESTER. One of my concerns is, and I think it is quite 

obvious, we can have grant programs, but if Tribes, because of 

whatever reasons, the entity that they are, or whatever reasons, 

aren’t eligible to get those grants, it really puts them behind the 

eight-ball when it comes to energy development. And I don’t know 

if this has to be an act of Congress or if you can do it administratively, but I think we should be looking at that. That is my own 

perspective, as we go forward. 

I want to follow up, because I only have about a minute left. Senator Johnson talked about lease approvals, and you talked about 

them a little bit, Jodi, and you said that there were deadlines for 

each step. If I am not on the same level that you two were on, correct me, but you said that there were deadlines for each step. Give 

me an idea what those deadlines are. What kinds of time frames 

are you talking about? 

Ms. GILLETTE. I can guess, but I would rather not do that. Do 

you know what they are? 

Mr. BLACK. Basically what she is talking about, this is under the 

Part 162 proposed regulations. 

Senator TESTER. Yes. 

Mr. BLACK. And we have implemented some processes that, upon 

receipt of the completed application and environmental documents, 

we, or the Bureau of Indian Affairs has 60 days to approve that 

lease. Otherwise, it moves forward. 

Ms. GILLETTE. I just want to add that it is 20 days for the 

WEELs, the Wind Energy Evaluation Leases. And I think it is 60 

days for the actual energy lease. 

Senator TESTER. Are you familiar with an act that I have cosponsored call the HEARTH Act, that would allow Tribes to make 

surface leasing decisions after the Secretary approves a leasing 

program? 

Ms. GILLETTE. Yes. 

Senator TESTER. Would you support it? 

Ms. GILLETTE. We do support it. 

32

Senator TESTER. You do support it. Good. That is very, very good. 

Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Franken. 

Senator FRANKEN. Thank you, Mr. Chairman. 

I wanted to follow up on the TERAs. Ms. Gillette answered, but 

Director LeBeau, do you have any ideas on why no Tribe has decided to use a TERA? 

Ms. LEBEAU. No, I don’t. 

Senator FRANKEN. All right, well, that is that. No more questions. 

[Laughter.] 

Senator FRANKEN. No, no, I will ask another one. 

Ms. LEBEAU. It would be hearsay, a lot of hearsay. 

Senator FRANKEN. Okay, well, maybe we will follow up with the 

next panel. 

Director LeBeau, at the Tribal Energy Summit your office held 

last May, Secretary Chu announced that he would be directing the 

Department of Energy to be purchasing renewable energy from 

Tribal lands when possible. Has the Department implemented this 

plan? That is my first question. 

Ms. LEBEAU. Thank you. We are in the process of coming up 

with the procurement guidance for that. So as with everything related to procurement for the Federal Government, it is not an easy 

question to answer. It was very helpful provision in the statute, but 

one provision that did not have a lot of definitions and guidance 

to it. So we have assembled counsel from across the Department 

and we have some draft guidance that we are circulating and hope 

to get out for formal consultation to Tribes very soon. 

Senator FRANKEN. What are the obstacles there? What is that 

like? Why does everything have to work that way? Why does everything have to be so slow? 

Ms. LEBEAU. One of the tough points for procurement officers 

has been that the Act allows for procurement of energy at prevailing market price, but did not define what prevailing market 

price was. So in some areas, in some markets where you have market that is freely traded, and/or you have energy that is primarily 

fossil, maybe coal or Federal hydro power, they were having to look 

at prevailing market prices, possibly what could we get, if I went 

out into the energy markets today and procured competitive energy, I might get it at 2 to 4 cents, when a solar project might be 

coming in for substantially more than that. 

So we are providing some guidance to those procurement officers 

on kind of how to better zone in on what a better comparable is. 

That was one very sticky issue. 

Senator FRANKEN. Okay, that just doesn’t seem that hard to 

solve. It really doesn’t. I mean, that seems like something, if you 

really wanted to solve that right away, you could solve that right 

away. 

Ms. LEBEAU. I think part of the challenge has been from the very 

high level to define those and other issues in the statute for those 

procurement officers, because they don’t necessarily have the discretion to make those kinds of calls at the field level. And a lot of 

the procurement that occurs at our facilities are at the field level. 

33

Senator FRANKEN. Okay, well, if they don’t have the authority to 

make that call, who does? You say at the field level? 

Ms. LEBEAU. So the guidance is coming from the headquarter 

level. So they will have kind of a, I guess a better checklist and 

guidelines. So when these projects, these proposals do come in, it 

is a more accurate comparable. 

Senator FRANKEN. Okay. It just doesn’t seem like there is a sense 

of real urgency there. Is that fair for me to interpret it that way, 

or am I not just understanding? 

Ms. LEBEAU. I think the other challenge has been, there wasn’t 

a lot of guidance and there is a lot of other Federal acquisition rule 

issues. We had to walk through all of those regulatory and statutory requirements for procurement and harmonize everything. And 

the other issue too has been, it is not a bad issue, it is just an 

issue, is working with our power marketing administrations to also 

get their input on how to deliver some of these energy, these possible energy generation products to our Federal facilities. Because 

a lot of times you don’t have Tribes that are really sitting on our 

Federal facilities themselves to directly transmit it onsite. They 

have to transmit it. 

Senator FRANKEN. Okay. This just seems to me, and maybe I am 

being really unfair here, that this is a good example of how things 

don’t get expedited that are good things in the Federal Government. And that I don’t think we would have won World War II if 

we had behaved this way. I think it is a good thing for the Energy 

Department to be making sure that we are purchasing energy from 

Indian Country and if last May, you are announcing that you are 

doing that, it should be happening by now. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator Franken. 

I want to thank the first panel very much for your responses. It 

certainly will be helpful to us and to the Tribes as we move along 

here. So I want to thank you for being here and I would like to invite the second panel to the witness table. 

Thank you very much. 

Serving on our second panel is the Honorable Rodney Bordeaux, 

President of the Rosebud Sioux Tribe, from Rosebud, South Dakota; the Honorable Levi Pesata, President of the Jicarilla Apache 

Nation, located in Dulce, New Mexico; the Honorable Thomas 

‘‘Stoney’’ Anketell, who is a Councilman of Fort Peck Assiniboine 

and Sioux Tribes in Poplar, Montana; Ms. Michelle Kauhane, Deputy to the Chairman of the Department of Hawaiian Home Lands 

in Kapolei, Hawaii; and Rex Lee Jim, Vice President of the Navajo 

Nation in Window Rock, Arizona. 

Welcome to all of you on this panel, and President Bordeaux, will 

you please proceed with your statement? 

STATEMENT OF HON. RODNEY BORDEAUX, PRESIDENT, 

ROSEBUD SIOUX TRIBE 

Mr. BORDEAUX. Good afternoon, Chairman Akaka, Senator Johnson, Senator Tester. 

On behalf of the Rosebud Sioux Tribe, I am very honored for this 

opportunity to testify on the energy development in Indian Country. 

34

Rosebud Sioux Tribe is located in south central South Dakota 

and comprises over 40,000 enrolled members, and encompasses 

over 900,000 acres. Recent U.S. Census data measures our area as 

the second poorest county in the Nation. 

However, what that economic data does not measure is our proud 

history, spirit, our resilience and tremendous potential. This is 

what I would like to talk about today. 

Since 1999, the Rosebud Sioux Tribe has been investigating and 

developing our wind resources here on Tribal lands. In March of 

2003, we commissioned the first ever commercial wind turbine on 

Tribal lands in the United States. The 750 kilowatt wind turbine, 

called the Akicita Cikala, which is the Little Soldier, is named after 

our late Tribal Chairman, Alex Lunderman. 

Today we have two major projects underway in wind develop- ment. In 2003, we were awarded a $441,000 grant from the Department of Energy to develop a 30 megawatt wind farm called the Owl 

Feather War Bonnet Wind Farm. One of the major issues that we 

had at the outset was the Bureau of Indian Affairs taking 18 

months to approve the lease. That is a major impediment for us. 

In 2008, we engaged Citizens Energy Corporation of Boston, 

Massachusetts, to develop a 190 megawatt wind farm in Mission, 

South Dakota. We are approximately 65 percent complete on the 

permitting. We did a preliminary system check on the WAPA 115 

kilovolt line that runs right to the project area and found out there 

is only 190 megawatt capacity on that line left. If we or anybody 

else in southern South Dakota wanted to build more wind farms 

in the area, we couldn’t unless WAPA upgrades their existing systems. 

In our land base, we have identified lands that can support up 

to 1,000 megawatts of wind development. But unless the grid is improved, there can be little or no pre-development work as the predevelopment is very costly. The pre-development cost for the 190 

megawatt wind farm was about $3 million, and of that, a DOE 

grant allowed us to get $1.5 million of that. 

As South Dakota is known for being the Sunshine State, we have 

huge, huge potential for solar development also. We feel that 

WAPA and DOE should look at its trust responsibility with the 

Tribes and develop policy to purchase power at market price for 

Tribal projects as a priority. The taking of our ancestral homelands 

on the Missouri River to provide energy to a growing Nation has 

never, we have never really been compensated for that. This would 

show the world a true act of trust responsibility from the Federal 

Government. 

From 2003, wholesale power costs from Basin Electric upon our 

local utilities had risen about 115 percent. And rate increases for 

the consumers since 2009 have risen by 47.5 percent. This, combined with the cutbacks in our Low Income Home Energy Assistance Program, has placed a tremendous strain on our people. I regret to say that we have people making decisions between having 

electricity or having something to eat. 

Our intent is to use revenue stream from these commercial 

projects to assist our people in purchasing residential renewable 

energy devices that would assist in lowering their energy bills and 

also build businesses and produce jobs around this sector. We also 

35

plan to develop a distributed generating system throughout the reservation, using community wind and hydro systems scattered 

throughout the reservation. 

In the northern part of our reservation, thanks to a BIA grant, 

we have drilled two deep 3,500 foot geothermal wells, artesian 

water. And we are going to use that to heat our White River 

Health Care, which is our nursing home and our day care center, 

located in White River, South Dakota. 

The sacred hoop of renewal exists, and we humans need to understand it and to embrace this philosophy. These are renewable 

energy resources that are given to us in every moment of every 

day, for our children’s sake to the future of all mankind. This is 

a teaching that needs to be brought forward for all of mankind. Renewable energy is the future of all people on this earth. The United 

States Government needs to embrace this future fully and support 

programs to promote this industry. 

In summary, the Rosebud Sioux Tribe makes the following recommendations. Number one, investments must be made to existing 

power lines so that we can use our great renewable energy resources. Number two, incentives must be made available to private 

energy buyers to purchase energy from Tribal energy sources. 

Number three, Federal buyers of energy, such as WAPA, should be 

made to source as much energy as possible from Tribal lands, provided the Tribe is willing to develop its energy resources. 

Number four, enact legislation to expedite lease review processes 

at the BIA as well as enact provisions for Tribes to review their 

own lease agreement in the true spirit of sovereignty. And lastly, 

extend the production tax credit for another five years. 

Again, I thank you for this opportunity, Mr. Chairman. 

[The prepared statement of Mr. Bordeaux follows:]

36

PREPARED STATEMENT OF HON. RODNEY BORDEAUX, PRESIDENT, ROSEBUD SIOUX

TRIBE


216b1.eps
37


216b2.eps

Bureau ojlndiallAffairsjinally slgr'M off on the Leaie Agreement in 

August 0/2008. The tribe bad signed off on the lease in December 0[2006. 

We lost valuable time and monies due to the failure of the BIA to expedite 

the lease. In the current economic enwronmen4 our developel', DJstriblltCd 

Generation Inc., oJLakew(J£l~ Colorado #ns'been struggling trying to 

S~CU"2 a PJ.nver p,trchaseAgreemeutwitlJ any large utility in tlie area. 

The main issue here is thai the project is Ioc(1iedfar from any major load 

or city and wheeling or tarifffecs impede the economics ifwe have to 

move the power for 'my loug distance. This farm will supply electricity for 

about 11,000 homes. Att/temoment, we do kavea draft PPA that is going 

through a due diligence review by a {argl! Investor. We al'e hopillg/lJr the 

best Another issue here is that as a tribe in South Dakota we have to follow 

the South Dakota tax rules and if the taxes are not conducive to wind 

development we probably won't get a project. These taxes hinder 

development and infringe upon tribal sovereignty. 

In 2IJ081 we engaged Citizens Wind o/Cititens Energy Corporation to 

deve/Qp (I. 190 Mw wind projectNorlA ofM'lSsion South Dakota. We are 

appr(Jx. 65% oomplete 011 thBpernlitting. We did apreiiminary syftem 

check on tlte WAPA 11$ kY line thot nuu right through the projett area 

alld/lJund out that there is on{v ahau! 190 Mwof capacity that C(l1Ijit on 

this line. We queued up on this line forpcsition 1 as a 90 Mw and position 

2 as a 100 Mw~ which in essence has :maximized the capacity on this line. If 

we or anybQtly e1. .. e in Southern SOllth D_akota wanted to build more wind 

farms in the (l,.etl~ we couldn't unless WAPA upgrades their existing 

system or a priWltejirm builds il new line through. This is O!€. biggest 

issue in the Nor(i'ern Plains, l(lck of capt/city on existing lines to Move 

power. 

The tribe's land base is includes lands 5 wunties. We have idef.tljled 

lands/ltal can support at least 1000 Mwts o/wind development, hut unless 

the grid is improved. there can be little 01 110 pre-development work 

stm1ea, as predevelopmentis very COYI)', Tlte CDstjOytJre pro..aBl-mopnumt 

oJ190 Mwwind fs estimIlted to be tlrDUJtif $3,000i)(}0.OO nndjQrluuately 

flJY Rosebud, we did apply Jor IlDOE grant 'whlch assisted RSTwitk 81.5 

million dollar grant in 2010 to help do tlds work. This elevated us- with 

Citizens wind as a partner in the development stage and a 33% share of the 

development fee that will be charged towards the new owner of the wind 

fmn, 
38


216b3.eps

We have yet tojind apurchaser Jor thepowel'!ro1fl this 190 Mw~ North 

Antelope Wi"d Farm. We have engaged the major wholesaler 0/ eltretricity 

in the area~ Basin ,Electric to see ifth~ have any interest in the project 

and they don~t as they have as much as 600Mw of renewable energy 

projeef$ in d,cir pipeline. We would fike to be able to sell to WAPA but 

within their policy guilklines tlley cannot lock ilJto any contnu:tBfor more 

than a period of 5 years, and inJleSimcllf strategiesfrom bankers require 

long term cOlltracts/or energy devdnpment to be at least1Z to 20 years Jor 

aPPA. 

We/eel that WAPA and DOE should look at its trust responsibility with 

the tribes ana develop policy tu purchase power at market pricefrom trilml 

projects as a priority. The taking ofaru:estral homelands Off the M'zswuri 

River to provide energy to agrmwlg nation has never really heen 

compensated/or and tltis would show the world a true (let of trust 

responsibility from the Federal Govermmmt towards trfbes (llong the river. 

From 200S, wholesale power costsjrottl Basin Electric upon our local 

"tilities have risen by 115% and rtdc. iucr(!(l.'f8!J,/or the consumer since 

2009 have riS(!1I. hy 47.5 %. This combined with the cutbacks on the LoJV 

Income Home Energy Assistance Program '.aveplaced a tremendous 

strain on our people. I regret to say tltafwc have people making deei<;;orf.<; 

betlVccII!J(Jvir'g electricity ami furvfng something to eut. As a Tnbe, we 

Wilnt to be self supporting and we are io"ldng towards renewable energy to 

help us help ourselves out ofthis predicament. Our illtmct. is ll1 use the 

re'l';lJ'J1m idnlantft'om these commercJal projects to assist OUI" P(IOpie. ill 

purchasing residential rem!'wable ellergy devices that would assist in 

loweriug their ellergy hills, (lnd tf) also build businesses {wd producejobs 

aroUild this sector. We also plan to dfJ)JCwp a disfrlbuted generation 

energy system Ihroughortt our reservation, using commultity wind and 

hydro-systems SCIlttered about the reservaJion. with tile tlunrght ttl 

eventually OJpn thG local utility. lit the Norlhern part of the reservation 

thnnks to if BrA grallt, we hare arl1(edtwo deep 3500' wells to access 

geothermal !teated artesian water for direct appticatiolt o/heating to the 

WhiteRiver Health Cam Callier (a nursing home) a1sdDrzy Care Center in 

White River, SlJ alld we also plan on looking at the possibr7ily o/making 

electricity witlt tltis resource. 
39


216b4.eps

Among 0111' poop/e, we believe that all things are alive or has the essence 

oia life energy. Theterm weusefor thir is "Wamakaskan". Life or energy 

from the winds that flow across (JUf lanth~ t(J the waieJ's that flew through 

our creeks and Weants., to the grasses and trees that grow on our land. .. to 

the four legged, winged ones~ even the Tid in tIre eartn. Be/ore the 

advent of oil UPOlJ.the earth, we Tturnal1~ lived off of the Gifts that 

Grandfather gave to the people. The gretdest gift that H-'aS' gn~lI to the 

Lakota OjiRiIJ W(l$ the buffalo and it was this renewable r&'ource. that/ed. 

clothed and sheltered our people/or eons1 until greed wok them awaYJ but 

greed callntn take away what the essence oflhe buffalo was. 

TheSacredHoop of Renewal e:.\."ists and we humans need to Ultdersumd it 

alld to embrace tllis philosophy. These (Ire the renewable energy "e&Qurces 

that are given tQ llS in every moment of evcryday,for our chj{dren~s sake 

and tlJejuture ofmankintL This is a t84Ching thatneeds to he hrought 

forward IOJ' all "fmanldml. Reuewa!Jleenergy is tlrefuture 'if all people 

011 this eart". The United States Govemment neerls to embrace this/uturl! 

fully and support programs thatpromote this industry. 

Beyond what was mentioned before, it is important to note and to encourage 

to Congress: that the Production Tax Credit should be exteucled for at least 

another 5 years, Without a doubt, this ta't credit is lite driver behind wind 

energy and other renewable energy development in the United States today. 

Finally, as we are talking about Energy Development. I must note our tribe's 

absolute opposition to the proposed route of the KeystoneXL project. The 

Keystone XL project is a product of deceit and greed and cannot be allowed 

to go forth. Water is life and is precious, more precious than oil. The United 

States has au obligation to its citizenship to protect the national resources 

from contamination of any sort and to place our drinking water injooparoy 

would be, in the opinion of the Rosebud Sioux Tribe. gross misconduct by 

the Congress of the United States. We are opposed to proposed legislation 

permitting the project,. and any aU efforts to route the pipeline on or near our 

homelands as defined by the 1851 and 1868 Ft. Laramie Treaties. 

In summa.ry. the Rosehud Sioux Tribe makes thefoHowing 

recommendatl'Olls. 
40

The CHAIRMAN. Thank you, Mr. Bordeaux. 

The Honorable President Levi Pesata, please proceed with your 

testimony. 

STATEMENT OF HON. LEVI PESATA, PRESIDENT, JICARILLA 

APACHE NATION 

Mr. PESATA. Good afternoon, Chairman Akaka, Senator Johnson, 

Senator Tester. 

My name is Levi Pesata, I am President of the Jicarilla Apache 

Nation. We have about a million acres of trust land in rural north 

central New Mexico within the San Juan Basin with approximately 

4,000 Tribal members, unemployment rate of about 35 percent and 

median income of about $35,000. 

We rely on our oil and gas resources to provide governmental 

services to our Tribal members and to those non-Tribal members 

living on the reservation. We have been involved in the oil and gas 

industry for about 60 years. Throughout this time, we have encouraged and fostered development of our reservation while protecting 

our sovereignty. 

In 1982, we won a major sovereignty ruling in the U.S. Supreme 

Court which recognized our inherent sovereignty to regulate and 

tax on our own reservation. However, another Supreme Court case 

permitted the State of New Mexico to also tax oil and gas production on our lands. This has led to dual taxation, which I will touch 

on a little bit later. 

Today I would like to focus on the oil and gas issues. First, on 

compliance and enforcement matters. With approximately 2,000 

miles of gas gathering pipeline and roads servicing this industry, 

we have major challenges in inspecting and monitoring the wells. 

We have issues in measurement and pipeline system and road 

maintenance. 

As stewards, we are paying close attention to BLM’s draft rules 

on hydraulic fracturing. Fracking requires a large amount of water 

usage and the recycling of chemically treated water. Full disclosure 

of the chemicals used in these amount are key issues in this process. 


216b5.eps
41

Moving on, we have an intergovernmental advisory committee to 

evaluate various energy proposals. From a business perspective, we 

aim to maximize current lease acreages, increase drilling and pay 

out on existing wells successfully. We want to drill deeper wells 

and develop horizontal drilling opportunities. We are also strengthening our oil and gas production company. We have our own company called Jicarilla Apache Energy Company, in which we are 

building new opportunities to develop jobs on the Reservation. 

Let me briefly make five other points. First, a truly coordinated 

BIA, BLM and ONRR system that works for the Tribe is critical 

to compliance enforcement and auditing and other collection issues 

that face Indian Tribes with oil and gas. This meets the Federal 

responsibilities owed to us as mineral owners. 

Second, based on our first-hand experience with bankruptcy 

issues, which we have had several of them this past year, this is 

new to Indian Country and Congress mus clarify that any assignment or assumption of Indian oil and gas leases be reviewed, renewed and approved both by the Tribal owner and the BIA. 

Third, on our split mineral estate issue, which is detailed more 

in the written testimony, Congress needs to make Interior obey the 

laws to fully review and approve leases and to secure Tribal consent, which is very important, and approval of all such leases. 

Fourth, Congress needs to address the dual taxation problem. It 

is unfair and it cripples Tribal economies. The creation of a Federal 

tax credit would help fix this problem. It would stimulate Tribal 

economies and boost domestic production and decreases and reliance on foreign fuels. Some time back, when Senator Domenici was 

still here, he did introduce such a bill, but it did not pass. 

Finally, my written statement addresses the weak electricity distribution system we have on our reservation. We are working toward establishing our own energy company to provide electric 

power to our communities, so that we can continue our development and increase opportunities on the reservation. 

That completes my statement, and I will be happy to answer any 

questions. 

[The prepared statement of Mr. Pesata follows:]

PREPARED STATEMENT OF HON. LEVI PESATA, PRESIDENT, JICARILLA APACHE NATION

I. Introduction 

On behalf of the Jicarilla Apache Nation (‘‘Nation’’), I am Levi Pesata and I serve 

as President of the Jicarilla Apache Nation. I would like to thank the Committee 

for convening this hearing to discuss Indian Energy Issues. The Nation is a Federally recognized Indian Tribe located in north-central New Mexico. Eighty-five percent of the Tribal population resides on the Jicarilla Apache Reservation (Reservation), mostly in the town of Dulce, which serves as our Tribal headquarters. We 

have a Tribal population of nearly four thousand members and our Reservation consists of approximately one million acres of trust land. We have been blessed with 

abundant Natural Resources such as oil and gas, timber, water, and fish and wildlife. Fortunately, our Reservation was not subjected to the disastrous Allotment Policy initiated in the 19th Century. As a result, we do not face the difficult checkerboard jurisdictional challenges encountered by those Tribes and individuals whose 

lands were broken apart (and in many instances lost) as part of that Federal Policy. 

Certainly, this consequence has benefitted our energy development initiatives over 

the years. Yet, given our extremely rural location, the considerable public health 

and welfare needs of our people, as well as the fact that we provide governmental 

services not only to our Tribal members but for those living near or travelling 

through our Reservation, the Nation has a heightened need to generate revenue to 

42

provide essential governmental services on our Reservation as well as to the surrounding rural region. Thus, we rely heavily on the development of our natural resources, primarily our oil and gas resources, to raise revenue to fund our government and provision of essential governmental services. Through these lens, I am 

pleased to be here today to discuss our Nation’s primary energy issues. 

II. Background 

As noted above, our Nation heavily depends on our oil and gas production as the 

primary means of generating governmental revenue. Our Reservation is located in 

the San Juan Basin, a well-known prolific source of oil and gas production for over 

70 years. Oil and gas development began on our Reservation in the 1950’s, under 

the leasing authority of the Secretary of the Interior pursuant to the Indian Minerals Leasing Act of 1938 (IMLA). Throughout those early years, the Secretary negotiated and entered into oil and gas IMLA leases on the Nation’s behalf, leaving us 

with a modest royalty interest in the development and production of our oil and gas 

reserves. In the 1970s and 1980s the Nation became more active in the development 

of our resources and won a significant legal ruling in the U.S. Supreme Court in 

1982. In that seminal case, Jicarilla Apache Tribe v. Merrion, the U.S. Supreme 

Court recognized our inherent right to regulate our lands and resources within our 

Reservation, and upheld our sovereign authority to impose our own severance tax 

on the production of our oil and gas resources. That same year, Congress passed 

the Indian Minerals Development Act (IMDA) which authorized Tribes to negotiate 

energy deals directly, though subject to Secretarial approval. The tremendous impact of the Merrion case coupled with the enactment of the IMDA provided our Nation and other Tribes powerful resources and tools to expand on our energy development initiatives. 

Today, we have approximately 377,000 acres of our Reservation under production, 

approximately one-third of our Reservation land base. According to our internal reports, our total hydrocarbon production consists of 302,000 Barrels of Oil and 32 

BCF of natural gas, which breaks down to approximately 80 percent in natural gas 

production and 20 percent in oil production. There are about 2,150 active wells on 

our lands and 700 wells that have been plugged/and abandoned. To support development and production, there are over 2,000 miles of gas gathering pipelines and 

roads on our Reservation. While a sizable portion of our Reservation is subject to 

oil and gas production activities, the Nation has been diligent in designating and 

protecting pristine areas, as well as sacred sites, and spiritual and culturally sensitive areas from disturbance. 

There are currently 26 current Record Title/Operators, 132 active IMLA leases, 

and 12 active IMDAs which accounts for approximately 550 companies with Operating Permits to conduct oil and gas business on our Reservation. Every non-Tribal 

employee working on our Reservation is required to register with and obtain a work 

permit every year from our Department of Labor (DOL). The Nation’s DOL issues 

over 15,000 work permits annually associated with oil and gas activities. Of the estimated 15,000, it is estimated that 2–3 percent constitutes Jicarilla Tribal Members. 

Presently, approximately 90 percent of the Nation’s government operations are 

funded with revenues stemming from production of our oil and gas resources. Thus, 

it is imperative to maximize oil and gas resource revenue by requiring compliance 

with Federal and Tribal laws and regulations as well as full and timely payment 

of royalties and taxes. At the same time, incentives such as Federal tax credit and 

other Federal resources (such as additional staffing and financing opportunities) are 

necessary to support the development of a robust energy industry on Indian lands. 

Certainly, maximizing our revenues and protecting our leases will allow the Nation 

to continue to provide essential governmental services to Tribal Members, and others working and residing on our Reservation. 

To that end, the Nation’s Oil & Gas Administration (OGA) is our regulatory compliance arm. OGA is lead by a Director who manages 16 employees organized in 7 

divisions. OGA also has a lead role in evaluating various proposals and energy deals 

submitted to the Nation. The OGA directly interacts and coordinates with the Bureau of Indian Affairs (BIA) and Bureau of Land Management (BLM) on regulatory 

matters. The Nation’s Revenue & Taxation Department (R&TD) oversees the collection of royalties and taxes on production of our oil and gas reserves. Through the 

R&TD, the Nation has developed an extensive auditing program which has operated 

for many years in collaboration with the Office of Natural Resources Revenue 

(ONRR) (formerly the Minerals Management Service). Together, the agencies of the 

Nation have provided the Nation powerful regulatory and auditing resources to 

achieve the goal of maximizing revenues while protecting our lands and valuable oil 

and gas reserves. 

43

In addition, the Nation established the Jicarilla Apache Energy Company known 

as JAECO as a Section 17 Federally chartered corporation which is wholly owned 

by the Nation. The Nation’s primary intent in establishing JAECO was to become 

the Nation’s oil and gas production ‘‘operating arm’’ that could evaluate and develop 

existing and new acreage for enhancement of production potential. Furthermore, the 

Nation also sought to provide opportunities for JAECO to evaluate existing lease 

acreages that come available for possible acquisition through a confirmed sale or 

bankruptcy proceedings. The overall intent has been a positive for the Nation, 

though JAECO’s progress has been somewhat stymied in this process due to lack 

of financing. In summary, there are meaningful and viable opportunities for the Nation through JAECO especially if there are significant financing opportunities to 

support its initiatives. 

Looking forward in expanding and enhancing our efforts to maximize revenues 

from production of our oil and gas resources, we intend to pursue the following initiatives:

• Continue to update, digitize and improve the Lease Record Management System 

so that we can more accurately and efficiently track and monitor all of the production on our Reservation;

• Update Environmental Review Documents such as Environmental Assessment 

and Environmental Impact Statements to address current and future potential 

impact from increased drilling and development;

• Maximize and expand development potential of current IMLA and IMDA lease 

acreages, increase drilling and payout on wells, pursue and achieve successful 

drilling in deeper depths, and develop successful horizontal drilling opportunities;

• Continue our collaborative efforts to provide a unilateral enforcement of lease 

activity by collaboration with Federal Regulatory Agencies such as BIA and 

BLM, as well as expedite/streamline the processing of IMDAs, assignments, 

plans of development, applications for permit to drill (APD), and right-of-way 

(ROW) agreements, for example; and

• Increase marketing of the Nation’s oil & gas resources.

III. Summary of Federally Related Energy Issues 

In addition, the Nation would like to bring a set of other issues to the Committee’s attention which relates to our Federal partners and agencies: 

A. Indian Oil and Gas Exploration and Production 

The Nation continues to experience challenges with oil and gas lease compliance 

primarily due to the large amount of acreage under lease and/or production, the 

number of wells in service, the extensive gas gathering systems operating throughout the Reservation, the large number of operators and related vendor service providers on the Reservation, to name a few. Under these circumstances, there is an 

acute need for additional BIA and BLM regulatory oversight including enhanced 

Federal coordination with the Nation and increased funding to fully support Tribal 

regulatory needs. 

As discussed above, oil and gas leasing activity on our Reservation is conducted 

in accordance with the IMLA or the IMDA. Through these laws, Congress created 

a statutory fiduciary relationship, whereby the government acts as a trustee for the 

Tribes in the context of mineral leasing of Tribal trust resources. Accordingly the 

three separate agencies within the Department of Interior (‘‘Department’’) have jurisdiction over Indian leasing: the BIA, the BLM, and the ONRR. The Nation exercises concurrent regulatory jurisdiction with these Federal agencies over oil and gas 

leasing activities, and the Nation imposes and collects Tribal severance taxes. 

Yet, though we have made tremendous progress through the years working with 

our Federal partners, the Nation believes there is room for improvement as far as 

coordination among the Nation and the Federal agencies in management and regulation. The Nation requests that Congress exercise oversight to consider a reform 

of current policies, procedures, practices and systems of the Department of the Interior, the BIA, the BLM, and the ONRR in order to ensure the proper and efficient 

discharge of the Secretary’s trust responsibilities regarding oil and gas leasing on 

our Reservation. 

B. Bankruptcy Declarations by Oil and Gas Lessees 

The Nation is concerned about the bankruptcy filings involving entities that hold 

or assert rights to IMLA leasing interests covering thousands of acres on our Reservation. In some cases, it is apparent that these bankruptcy filings apparently have 

been pursued as a means to circumvent Federal and Tribal laws. The Nation has 

44

already been involved in several bankruptcy proceedings to protect our interest in 

these IMLA leases. To address this alarming circumvention of Federal law and regulations, the Nation proposes that legislative or administrative fixes be put into 

place. Specifically, the law should be made clear that prior to any assignment or 

assumption of Tribal oil and gas leases, especially in the context of bankruptcy 

cases, both the Tribal mineral owner and the BIA must review and duly approve. 

A related issue is compliance by industry and enforcement by the BIA. It is important that Congress protect the integrity of IMLA leases by ensuring that Federal 

and Tribal oil and gas regulatory authority is not diminished through bankruptcy 

filings. 

C. Hydraulic Fracturing 

A burgeoning issue in natural gas production is the practice of hydraulic fracturing, also known as ‘‘fracking’’. We are also experiencing this development on our 

lands. BLM has provided the Nation its draft regulations on fracking, which would 

also apply on Tribal lands. The Nation has been involved in these discussions and 

is aware of both the concerns raised about environmental and water resource contamination and of overlapping and potentially burdensome Federal, Tribal, and 

state regulations. We continue to watch this closely and plan to file comments on 

BLM’s draft regulations. 

D. Split Mineral Estate Development 

An important aspect of Energy Development on our Reservation is to protect the 

integrity of the Nation’s sovereignty and control of its lands and the development 

of its resources. This aspect extends to the development of the split mineral interests on our Reservation. As noted above, our Reservation was not subject to the Allotment Policy and Law and therefore we retain 100 percent of the surface and mineral estate of our original Executive Order lands. However, the Nation subsequently 

purchased several large ranches adjacent to the Reservation and such lands and 

minerals were taken into trust and added to the Reservation. One particular ranch 

was taken into trust subject to a split mineral estate. 

As background, in 1985, the Nation purchased a 55,000 acre ranch contiguous to 

our northeastern boundary. At the same time, we purchased an approximate undivided 25 percent interest in and to all oil, gas, and other minerals owned by the 

seller, who held 75 percent of the mineral estate. A third party entity holds the 

other 25 percent of the mineral interests. In November 1987, the Nation conveyed 

the surface lands of this property to the United States, to be held in trust. In December 1987, the Nation conveyed its interest in the mineral estate to the United 

States. On or about March 10, 1988, pursuant to 25 U.S.C. § 465, the United States 

accepted these conveyances and approved the trust status of the surface lands and 

the Nation’s undivided interest in the subsurface mineral estate. On or about September 1, 1988, pursuant to 25 U.S.C. § 467, the United States added the surface 

lands and the Nation’s undivided interest in the subsurface mineral estate to the 

Reservation. See, Proclamation of Certain Lands as Part of the Jicarilla Apache Reservation, 53 Fed. Reg. 37355–02 (Sept. 26, 1988). 

In 2006, more than twenty years after the Nation purchased the ranch and eighteen years after the United States took into trust the surface lands and mineral interest the Nation purchased, the owner of the majority mineral interest entered into 

a lease with a third party for mineral development. The lease was not reviewed by 

the Nation or the BIA even though it purported to lease the Nation’s trust lands 

and its undivided trust mineral interest. 

Incidentally in July of 2006, the Solicitor’s Office of the Department of the Interior essentially determined that neither the Nation nor the United States could 

‘‘stop’’ development, which has led to a confusing opinion which created more questions than answers. In particular, the Solicitor’s opinion ignores Supreme Court decisions, which clearly hold that Indian trust land cannot be leased or otherwise encumbered without the approval of Congress. Congress has passed statutes which 

provide such approval subject to important protections, such as the IMLA and the 

Indian Reorganization Act. The fundamental reason for these laws is that the 

United States holds title to Indian trust land, and therefore, the United States must 

protect the beneficial interest of the Indian nation. The Nation requested the Solicitor to rescind or modify its legal opinion and further requested to meet directly 

with the Solicitor. Our requests were not granted, though the law is clear that both 

Federal approval and Tribal consent are required prior to any development or encumbrance of Tribal trust minerals. Congress should exercise its oversight authority 

over the Department of the Interior to ensure that these important and fundamental principles are fully adhered to, especially in our case where we have worked 

so hard to protect reservation lands. 

45

E. Dual Taxation of Oil and Gas Production in Indian Country. 

Following our victory in the Merrion case, the Supreme Court considered another 

case arising from our Reservation which involved an oil and gas company’s challenge to the imposition of the New Mexico Oil and Gas Severance Tax for activities 

on the Reservation arguing that those taxes were preempted by the State and Tribal 

regulatory schemes. In that case, States were granted permission to impose severance taxes on non-Indian activities involving the on-reservation production of Indian 

oil and gas reserves in the 1989 United States Supreme Court decision Cotton Petroleum v. New Mexico, 490 U.S. 163 (1989), which established a dual taxation burden 

on Tribal non-renewable trust resources. 

Three years later, Congress acknowledged the problem with this type of dual taxation. In the Energy Policy Act of 1992, Pub. L. 102–486, an Indian Energy Resources Commission (‘‘Commission’’) was established. Among several other objectives, the Commission was to (1) develop proposals to address the dual taxation of 

the extraction of mineral resources on Indian reservations; (2) develop proposals on 

incentives to foster the development of energy resources on Indian reservations; (3) 

identify barriers or obstacles to the development of energy resources on Indian reservations, (4) make recommendations designed to foster the development of energy 

resources on Indian reservations and promote economic development; and (5) develop proposals on taxation incentives to foster the development of energy resources 

on Indian reservations including, but not limited to, investment tax credits and enterprise zone credits. 

In June 2001, the Nation attempted to address the dual taxation issue working 

with our then senior Senator, Pete Dominici, who introduced S. 1106, a bill to provide a tax credit for the production of oil or gas from deposits held in trust for, or 

held with restrictions against alienation by, Indian Tribes and Indian individuals. 

A year later, the National Congress of American Indians passed Resolution #BIS–

02–060 to include S. 1106 in the National Energy Bill during conference between 

the United States House of Representatives and the United States Senate. However, 

the proposed bill was referred to the Committee on Finance, and was not passed 

into law. 

To date, the issues the Commission was to address have not been fully addressed 

by either the Commission or Congress. As Tribes increase their economic development efforts, issues with dual taxation also increase. Dual taxation is an impediment and deterrent to economic development on Indian trust and restricted land. 

Dual taxation of Tribal oil and gas reserves creates an adverse economic environment which impedes self-determination and strong economic development in Indian 

Country. The United States Congress has the power to address the dual taxation 

of Tribal non-renewable resources by providing a Federal tax credit for the production of Tribal resources, much like the one Senator Dominici introduced in the 107th 

Congress. 

It is important to note that the State of New Mexico enacted a state severance 

tax credit for producers who developed new wells after 1995. This is an important 

incentive to address the dual taxation issue. However, it is also important to note 

that many of the existing wells on the Nation’s lands were placed in service prior 

to 1995, and that many other States with oil and gas producing Tribal lands do 

have similar law in place. 

Thus, the enactment of a Federal tax credit for the production of oil and gas produced on Indian lands would be helpful in addressing this problem. The creation 

of such a tax credit would not only address the dual taxation of Tribal non-renewable resources, but would also help stimulate Tribal economies, and contribute to 

the United States energy policy of boosting domestic production to decrease reliance 

on foreign production. It is truly ironic that, as America seeks greater energy independence and undertakes hazardous energy sources such as nuclear energy and offshore drilling, Federal law burdens the development of safe Native American energy 

resources with dual taxation. This must end. 

We respectfully request an opportunity to work with you to craft a provision outlining Federal tax credit for the production of oil and gas produced in Indian Country. 

F. Electricity Transmission and Distribution Needs 

The final important energy issue the Nation would like to raise with the Committee is our ongoing efforts to address the weak electricity distribution system that 

serves our Reservation, which has long afflicted our people with rolling blackouts 

and has suffered from longstanding load capacity deficiencies. 

For decades the Nation has struggled with an unreliable source of electric energy. 

Sadly, the lack of reliable energy has had a direct impact on the quality of life of 

Tribal members and has slowed down and deterred the growth and business develVerDate 0ct 09 2002 12:55 Nov 28, 2012 Jkt 075746 PO 00000 Frm 00049 Fmt 6633 Sfmt 6621 S:\DOCS\75746.TXT JACK
46

opment opportunities. Years of negotiation with the local electric cooperative that 

serves the Nation via a 26 mile 24.9kv distribution line has not changed this unfortunate situation. After years of study, the Nation has elected to construct its own 

115kv transmission line, a line that will provide a reliable source of electric energy 

for years to come. Perhaps just as important, the line also has sufficient capacity 

to permit the Nation to facilitate the transmission of electric energy for other power 

providers across the state of New Mexico. 

Most recently, the Nation has undertaken and accomplished the following tasks, 

all with an eye towards electric energy independence:

• In January of 2011 the Nation contracted with Public Service Company of New 

Mexico (PNM) to complete a System Impact Study to evaluate the Nation’s proposed 115 kV transmission line;

• PNM completed the System Impact Study and issued its findings in June 2011. 

No adverse findings were noted;

• On September 9, 2011 the Nation passed a resolution authorizing and implementing the next phases of the Nation’s project, including continued discussions 

with PNM regarding siting and interconnection agreements and authorizing the 

appraisal of the local electric distribution system;

• On October 18, 2011, the Nation, by Ordinance, authorized the creation of the 

Jicarilla Apache Nation Power Authority;

• In October 2011, the site of the physical interconnection and location of the 

switch station of the proposed 115kV line with PNM’s 345 kV line was identified and blessed with Tribal leaders and local dignitaries;

• In November of 2011, the Nation put the local electrical cooperative on notice 

of its intent to acquire its electric distribution assets located on Tribal lands;

• In December of 2011, the Nation submitted its draft Cultural Resource Survey 

for a Proposed Power Line Easement on the Jicarilla Apache Reservation in Rio 

Arriba County, New Mexico to the BIA; and

• In January 2012, the Nation filed comments with the New Mexico Public Regulation Commission addressing the Commission’s concerns about FERC Order 

1000 and the planning of inter-regional transmission projects in the regional 

Southwest.

Going forward, the Nation continues to communicate with both PNM and the local 

co-op on a weekly basis in an effort to coordinate the construction and interconnection of its proposed 115kV transmission line and the acquisition of a distribution 

system by Spring 2014. As our project progresses, we will also continue communication with our New Mexico Congressional Delegation and this Committee regarding 

related Federal issues and support that needs to be addressed to bring this project 

to fruition. 

IV. Conclusion 

In closing, the Nation appreciates the opportunity to appear before this Committee and provide testimony on this extremely important subject. We look forward 

to working with the Committee to address these pressing Energy issues.

The CHAIRMAN. Thank you very much, Mr. Pesata. 

Councilman Anketell, will you please proceed with your statement? 

STATEMENT OF HON. THOMAS ‘‘STONEY’’ ANKETELL, TRIBAL 

EXECUTIVE BOARD MEMBER, ASSINIBOINE AND SIOUX 

TRIBES OF THE FORT PECK RESERVATION 

Mr. ANKETELL. Thank you, Mr. Chairman. 

My name is Thomas ‘‘Stoney’’ Anketell, and I serve as a member 

of the Tribal Executive Board of the Assiniboine and Sioux Tribes 

of the Fort Peck Reservation. In this capacity, I serve as Chairman 

of the oil and gas committee of the Tribal Executive Board. 

Tribal Chairman Floyd Azure and my fellow Tribal Executive 

Board members send their best wishes and thanks to Chairman 

Akaka and the Committee for holding this important oversight 

hearing on energy development in Indian Country. 

47

I also want to give special recognition to my Senator, Jon Tester. 

I have spent a great deal of my career focused on Tribal energy 

development, particularly oil and gas development. Prior to serving 

on the Tribal Executive Board, I worked for the Federal Government, BIA oil and gas leasing, as well as in the private sector. Having viewed energy development from three sides, I have a good 

sense of what is and what is not working in Indian Country. 

I want to share a little about Fort Peck. My reservation lies within the western part of the Williston Basin, which includes many 

oil-producing formations, including what is commonly known as the 

Bakken Formation and the Three Forks Formation. Since the 

1950s, a major part of the Tribe’s economy has been based on oil 

and gas development. 

Over the last two decades, oil and gas development on the Reservation has tapered off significantly. This is about to change. The 

development of horizontal drilling techniques allows for better access to known oil and gas reservoirs in the Bakken and Three 

Forks Formations on our reservation. These reserves were previously inaccessible using conventional drilling techniques. 

This represents a once in a lifetime opportunity for my Tribes: 

working in close collaboration with our Federal trustee to use our 

natural resources to create jobs and spur sustainable economic development to erase the high rates of unemployment and poverty on 

our reservation. Because despite our best efforts over the past decades to develop our natural resources the difficult of tapping these 

reserves, along with the challenges of dealing with multiple jurisdictions, have made it difficult for the Tribes to address the needs 

of our reservation. We can and must do better. But this will only 

happen if our Federal trustee works with us to avoid the mistakes 

of the past. 

We are particularly concerned about the long delays in processing mineral leases and other critical energy development documents, which often frustrates our energy development plans and 

serves only to push oil and gas and other types of energy and mineral development off the reservation. 

Time is money to energy producers. Federal inaction can often be 

as bad as wrong action, and we have fond instances where the BIA 

has simply failed to carry out its trust responsibility by waiting 

months and even years to act on mineral leases, appraisals, requests for drilling permits and other documents which require 

prompt action. 

Just as time is money to the energy producers, money is money 

to energy producers. If the cost of on-reservation energy production 

is much higher than the cost of off-reservation energy production, 

energy producers will naturally locate where it is less expensive to 

operate. Federal permit fees and other energy development costs 

should not be higher on Tribal lands than they are on State lands. 

To address our concerns, the Tribes ask that Congress work with 

Tribal leaders and the Administration to develop new legislation to, 

number one, establish review and approval times for Federal action 

on Indian Mineral Development Act agreements, leases, drilling 

permits and well-site permits. Number two, exempt Indian and 

Tribal trust lands from Bureau of Land Management drilling fees 

48

and reduce Federal fees for other energy Development permits to 

bring them more in line with similar fees on State fee lands. 

Number three, correct the double taxation of energy development 

on Tribal lands. And number four, provide special block grant 

funds to address the infrastructure needed for well-planned and coordinated energy development. Number five, ensure that bid deposits and other funds owed to Tribes and allottees are placed in interest-bearing trust accounts. And finally, number six, to better promote the development of wind and other renewable energy resources in Indian Country. 

Finally, Tribes are entrusted with protecting their homelands for 

the next seven generations. Thus, as we consider positive job creation and economic development opportunities, we have a corresponding duty to ensure that these projects are carefully planned 

and studied to ensure that they do not put our sacred sites at risk 

or otherwise imperil sacred trust we have to preserve our homelands for future generations. 

I thank the Committee for the opportunity to present this testimony. Thank you. 

[The prepared statement of Mr. Anketell follows:]

PREPARED STATEMENT OF HON. THOMAS ‘‘STONEY’’ ANKETELL, TRIBAL EXECUTIVE

BOARD MEMBER, ASSINIBOINE AND SIOUX TRIBES OF THE FORT PECK RESERVATION

I. Introduction 

My name is Thomas ‘‘Stoney’’ Anketell, and I serve as a member of the Tribal 

Executive Board of the Assiniboine and Sioux Tribes of the Fort Peck Reservation. 

Tribal Chairman Floyd Azure and my fellow Tribal Executive Board members send 

their best wishes and thanks to Chairman Akaka and the Committee for holding 

this important oversight hearing on energy development in Indian Country. I have 

spent a great deal of my career focused on tribal energy development, particularly 

oil and gas development, and am pleased to be here today to share my testimony. 

I hold a degree in petroleum land management from Rocky Mountain College in 

Billings, Montana. For fourteen years, I worked for the Department of the Interior 

in the Bureau of Indian Affairs (BIA) Realty and Mineral Development Divisions. 

Following my time at the BIA, I worked for several years in the private sector for 

Hunt Petroleum, ETO and Exxon Mobile. In this capacity, I assisted these companies in a cooperative effort with the Three Affiliated Tribes to bring major oil development to the Fort Berthold Reservation. Last but not least, I have served on the 

Fort Peck Tribal Executive Board for over 7 years and have experienced firsthand 

the challenges Tribal leaders face as we try to create jobs and increase sustained 

economic development on our Reservation. Having viewed energy development from 

the tribal, federal and private sector, I have a good sense of what is and is not working in Indian Country. 

II. The Opportunities and Challenges of Energy Development on the Fort 

Peck Reservation 

The Fort Peck Reservation consists of over two thousand square miles of land in 

northeastern Montana. The Assiniboine and Sioux Tribes and individual Indians 

own about 1 million acres of land. Over 6,700 Tribal members and non-member Indians live on the Reservation, along with over 3,200 non-Indians. We have been developing oil and gas reserves on our Reservation since the early 1950s. 

The Fort Peck Reservation lies within the western part of the Williston Basin, 

which includes many oil producing formations, including what is commonly known 

as the Bakken formation and the Three Forks formation (see attached chart). Since 

the 1950s, a major part of the Tribes’ economy has been based on oil and gas development. In the 1950s, the Tribes began to lease substantial amounts of tribal mineral lands to non-Indian companies for oil and gas development. In the oil boom of 

the 1970s and early 1980s, we asserted much greater control over this process, insisting on increased royalty rates for new tribal leases, entering into service contracts where the Tribes hired a private company to explore and develop tribal oil 

and gas for our own benefit. We also imposed a tribal severance tax on energy development. During the early 1980s, tribal revenues from oil and gas lease rents and 

49

royalties came to over $8 million in some years. Over the last two decades, oil and 

gas development on the Fort Peck Reservation has tapered off significantly. This is 

about to change. 

The development of horizontal drilling techniques allow for better access to known 

oil and gas reservoirs in the Bakken and Three Forks formations on our Reservation. These reserves were previously inaccessible due to the low porosity and low 

permeability of the Bakken and Three Forks rock formations containing the oil and 

gas, which made it difficult to extract the product using conventional vertical drilling techniques. The oil and gas is essentially trapped in the dense rock formation 

and cannot be extracted merely by drilling downward. Instead, the oil and gas must 

be released through horizontal drilling and a process called hydraulic fracture stimulation or more commonly ‘‘fracking.’’ An April 2008 USGS Report determined that 

horizontal drilling and fracturing techniques could provide access to 3 to 4.3 billion 

barrels of recoverable oil in the Bakken formation alone. In 2011, Continental Resources Inc., declared that the ‘‘Bakken play in the Williston Basin could become 

the world’s largest discovery in the last 30–40 years.’’ Continental estimates the 

Bakken and Three Forks collectively hold 24 billion barrels of potentially recoverable crude oil equivalent—20 billion in oil and 4 billion in natural gas. While much 

of the recent Bakken play has focused on reserves in North Dakota, it is now moving back to Montana and to the Fort Peck Reservation in particular. 

This represents a once in a lifetime opportunity for our Tribal government—working in close collaboration with our Federal trustee—to use the bounty of our natural 

resources to create jobs and spur sustainable economic development to erase the 

persistently high rates of unemployment and poverty on our Reservation. Despite 

our best efforts over the past decades to develop our natural resources in an economically and environmentally sustainable manner, the difficulty of tapping these 

reserves, along with the challenges of dealing with multiple jurisdictions, have made 

it difficult for our Tribal government to make a significant dent in the unemployment and poverty that still plague our Reservation. We can and must do better, but 

this will only happen if our Federal trustee works with us to avoid the mistakes 

of the past. 

Like most reservations in Montana, our Reservation was opened to homesteaders 

a century ago, with trust and fee lands interspersed in a ‘‘checkerboard’’ ownership 

pattern. Consequently, the development of lands and resources within our Reservation is subject to oversight from many federal, state and tribal agencies and laws. 

If done properly and with respect for tribal sovereignty, Federal Government oversight and regulation should not unduly impede energy development or infringe on 

the proper exercise of Tribal governmental authority on our Reservation. Unfortunately, our experience has taught us that federal involvement is not always helpful, 

particularly in the field of energy development. 

Federal and state agencies often do not coordinate well with one another or with 

Tribal agencies. This leads to long delays in the approval of required paperwork and 

in the implementation of tribally-beneficial energy development policies. While there 

are many excellent, highly motivated officials in the Department of the Interior 

(DOI) and the Department of Energy (DOE) working to provide useful technical assistance to Tribes, too often this technical expertise does not make it down to the 

BIA Regional Offices and Agencies on the reservations. BIA Regional and Agency 

staff often do not have adequate technical expertise in the complex field of energy 

development, and they do not always appreciate that ‘‘time is of the essence’’ when 

it comes to energy development. 

The Fort Peck Agency’s long delays in processing mineral leases and other critical 

energy development paperwork often frustrate our energy development plans and 

serve only to push oil, gas and other types of energy and mineral development off 

the Reservation. In fact, BIA approval of oil and gas leases can take so long that 

Indian probates have been known to open and close before any BIA action is ever 

taken. Time is money to energy producers. Federal inaction can often be as bad as 

wrong action, and we have found instances where the BIA has simply failed to 

carry-out its trust responsibility by waiting months and even years to act on mineral leases, appraisals, requests for drilling permits and other documents requiring 

prompt action. 

Just as time is money to energy producers, money is money to energy producers. 

If the costs of ‘‘on-reservation’’ energy production is much higher than the cost of 

‘‘off-reservation’’ energy production, energy producers will naturally locate where it 

is less expensive to operate. We have already seen this pattern in the Williston 

Basin and do not want to see it continue. Federal permit fees and other energy development costs should not be vastly higher on tribal lands than they are on state 

lands. By and large, the market should decide these costs and fees, not federal bureaucrats. 

50

The United States must do a better job of honoring its trust obligation to all Tribal nations in the field of natural resource development. As discussed in the recommendation section below, DOI and DOE policymakers should work together to 

place knowledgeable oil and gas development experts at every BIA Agency where 

Tribes are actively working to develop oil production in the Bakken and Three Forks 

formations. These locally-based experts could help the BIA Agency staff improve 

their turn-around time for required approval of a wide-range of energy-related documents. These experts should also be qualified to aid Tribal leaders and BIA officials 

in planning for (and identifying funding resources for) the critical transportation infrastructure needed to support energy development in a safe manner. We have witnessed the damage created on the Fort Berthold Reservation to the tribal road systems when oil production truck traffic increased rapidly with no corresponding increase in the transportation infrastructure needed to support it. Roads were destroyed and lives were lost in preventable traffic accidents. 

Congress and the Administration have important roles to play in helping all 

Tribes gain the benefits of sound and sustainable development of the Bakken and 

Three Forks formations. Congressional support for reservation-based transportation 

infrastructure, road maintenance and traffic safety program funding are critical to 

the safe and efficient development of the Bakken and Three Forks oil fields. Energy 

development activities also need to be coordinated with law enforcement officials, 

employee training center directors, environmental protection officials, school superintendent and housing programs directors so that the great crush of new people and 

economic activity on the Reservation does not overwhelm the Tribes’ limited governmental resources in these areas. Fort Peck Tribal members must also be adequately 

trained and equipped for jobs in the oil industry. 

Greater federal funding assistance and technical support for the tribal law enforcement, housing, environmental, career training and educational programs will 

help us ensure that the many positives that come from sound energy development 

are not overshadowed by the negative consequences of traffic congestion, traffic safety concerns and environmental damage. 

Our Tribal government is entrusted with protecting our homelands for the next 

seven generations. We have a duty to our ancestors to ensure that the land they 

fought to preserve for us is maintained in a culturally and environmentally sound 

manner to sustain our people for generations to come. Thus, as we consider the positive job creation and economic development potential of Bakken energy development 

or other major projects such as the Keystone XL Pipeline, we have a corresponding 

duty to ensure that these projects are carefully planned and studied to ensure that 

they do not put our sacred sites at risk or otherwise imperil the sacred trust we 

have to preserve our homelands for future generations. I discuss these recommendations below in more detail. 

III. Detailed Recommendations for Improving Reservation-Based Energy 

Develpment 

This hearing is timely and important. I believe the specific recommendations set 

out below will ensure that Tribal nations—indeed the entire Nation—will be in a 

better position to capitalize on the great economic and job creation opportunity presented by the Bakken and Three Forks oil plays. These recommendations will also 

help Tribal nations become engines of economic growth in the broader field of energy development—including renewable energy development—for the benefit of all. 

First and foremost, Congress should work with Tribal leaders and the Administration to develop new legislation to: (1) establish maximum review and approval times 

for federal action on Indian Mineral Development Act (IMDA) agreements, leases, 

drilling permits, well-site permits and other required paperwork; (2) exempt Indian 

and tribal trust lands from Bureau of Land Management (BLM) drilling fees and 

reduce fees for other energy development permits and paperwork to bring them 

more into line with similar fees on state fee lands; (3) correct the double taxation 

of energy development on tribal lands; (4) provide special block grant funds to address the transportation, housing, law enforcement, environmental and employment 

training needed for well-planned and coordinated energy development; (5) ensure 

that bid deposits and other funds owed to Tribes are placed in interest-bearing trust 

accounts; and (6) promote access to transmission lines to unlock the potential development of wind and other renewable energy resources in Indian Country. 

Second, given that the passage of new legislation will take time and is uncertain 

at best in an election year, this Committee and the senior DOI and DOE policymakers present at this hearing should engage the key federal agencies, including 

the BIA, to take immediate action now to implement the recommendations and correct the problems I have indentified in this testimony. These corrective actions are 

explained below. 

51

A. Improve Technical Capacity and Responsiveness at the Fort Peck Agency 

The Fort Peck Tribes are leading the effort to prove that the Bakken Reserve is 

not limited to North Dakota. In the last year, the Fort Peck Energy Company 

(FPEC), which is the Tribes’ energy development arm, has drilled two horizontal 

wells. We expect to fracture these wells in the next two weeks to determine their 

production capacity. This venture will provide much needed revenues for the Tribes 

and employment opportunities for our members, as well as support for America’s energy independence. However, in undertaking this initiative, the Tribes and FPEC 

have encountered some serious issues regarding the capacity and technical expertise 

of BIA officials to do the job that federal law requires the BIA alone to do. 

In addition to the length of time it takes for the BIA Agency to act on leases, permits and other paperwork, a great area of concern is the deficiencies within the 

BIA’s Realty Division. Specifically, there is not a certified realty appraiser at the 

Fort Peck Agency. Consequently, the BIA’s assessed values for rights-of-way and 

well-pad sites are sometimes 300 percent what they should be. For example, the 

FPEC paid $15,000 each for the two well-pad sites we expect to fracture soon. This 

price may be consistent with the amounts now paid in North Dakota, where major 

development activities are already ongoing, but it is inconsistent with normal appraising practices in a place where oil has not yet been located in paying quantities. 

FPEC paid this fee under protest because it did not have the luxury of time to dispute the BIA’s actions. Available drilling rigs are in high demand and difficult to 

get so FPEC had to secure the well-pad sites even though it strongly disagreed with 

the BIA Agency assessment. This is but one example of our Federal trustee charging 

a tribally-owned corporation an improper assessment due to a lack of oil development expertise and appraisal experience. 

We have encountered the same difficulty in securing rights-of-way (‘‘ROW’’) for oil 

exploration activities. We are aware of one company that has cancelled its plans to 

develop two wells on the Fort Peck Reservation because the BIA Agency staff insisted on a ROW fee in excess of $28,000, which is far more than would be paid 

off-reservation. While it is of course important that allottees and our Tribal trust 

lands receive fair compensation for ROW usage, it is equally important that appraisals are not so unfair or arbitrary that they discourage legitimate oil exploration activities. In my view, these fees were arbitrary and were based on the unreasonable 

judgment of BIA personnel who are not trained appraisers. This lack of technical 

expertise discourages energy development on the Fort Peck Reservation because potential developers fear they will be subjected to arbitrary fees and costs they do not 

encounter off the Reservation. 

Private business interests have often complained to the Tribal Executive Board 

that they do not like to deal with BIA Agency staff who too often seem uninterested 

in working with private companies in a fair, timely and efficient manner. I worked 

for the BIA for many years at the Fort Peck Agency, so please understand that I 

have no interest in being unnecessarily critical of the BIA Agency staff. The motives 

of these hard-working individuals may well be good, but more must be done to enhance the technical capacity and expertise of Fort Peck Agency staff in the areas 

of energy development, land use and ROW appraisals. 

Senior DOI and DOE officials should work together to place highly-motivated, 

well-trained technical staff at the Fort Peck Agency and all other BIA Agencies located on Indian reservations within the active Bakken and Three Forks formation 

oil plays. These teams would be similar to the ‘‘one-stop’’ technical assistance team 

established on the Fort Berthold Agency and should include not only trained oil and 

gas lease specialists, but also a ROW specialist, a trained appraiser, and a geologist 

with oil and gas development experience. More than any other single recommendation, I believe this action will help seize this once-in-a-lifetime economic development opportunity for the Fort Peck Tribes, for other Tribes in the region and for 

our Nation as a whole. 

To ensure rapid turnaround times for critical energy development permits and 

other required paperwork, I also propose the following mandatory timelines:

• IMDA agreements which now take over six months to process should be reviewed and approved within two, or at most three months.

• Oil and gas leases which currently take up to a year to process should be reviewed and approved within one month.

• Applications for a permit to drill (APDs) which currently take up to six months 

to process should also be reviewed and approved within one month.

• ROW documents that now take many months to process should also be approved within one month.

52

• Communitization agreements should be reviewed and approved within two 

months.

Along these same lines, I also recommend that additional federal resources and 

effort be provided to speed up the work on critically important cadastral surveys for 

the Fort Peck region. 

B. Reduce BLM Drilling Permit Fees and Other Unnecessarily High Federal Fees 

Another disincentive to drilling on Indian allottee and tribal trust lands is the $6,500 that the BLM charges for a permit application to drill on federal land, including Indian and tribal trust lands. In FY 2010, Congress increased this fee from 

$4,000 to $6,500. In theory, this fee is intended to cover the BLM’s cost of processing the drilling permit application. However, the fee is highly disproportionate 

to the $75 that the State of Montana charges to process the same kind of permit 

on State fee land. I see no good reason for the BLM fee to be so high on Indian 

and tribal trust lands and doubt Congress even considered the potential negative 

impact on oil and gas development in Indian Country when it made this change in 

the law. I ask Congress to correct this mistake and exempt Indian and tribal trust 

lands from the BLM fee so that the Fort Peck Reservation does not continue to be 

an island of poverty and missed opportunity in a sea of prosperous oil and gas development in our Region. 

C. Ensure That Lease Bid Deposits are Placed in Interest-Bearing Trust Accounts 

I also seek Congressional support for legislation—or at a minimum renewed pressure for administrative action—to ensure that bid deposits for oil and gas lease 

sales on Indian and tribal trust lands are once again held in interest-bearing accounts. Historically, bid deposits were held in interest-bearing trust accounts and, 

upon Secretarial approval of the lease or contract, both the principal and interest 

were paid to the Tribal and individual Indian landowners. However, DOI policy 

changed several years ago despite our strong protests. Now, DOI holds bid deposits 

and other advance payments made by successful bidders in noninterest-bearing federal accounts until the lease or contract is approved by the Secretary. 

As noted above, it can unfortunately take months and sometimes even years for 

a successful bidder to secure BIA approval of a mineral lease. Consequently, these 

bid deposits sit idle in federal accounts without earning interest for the beneficial 

land-owner, whether a Tribe or an Indian allottee. By the time the funds are finally 

paid to Tribes and individual Indian landowners, the value of the bid deposit has 

been eroded by inflation. 

In my view, DOI’s current practice is illegal and contrary to the federal trust responsibility. Our Tribal leadership has discussed this matter with senior BIA and 

DOI Office of Trust Fund Management officials, but they have responded by stating 

that they do not believe they have the statutory authority to place these funds at 

interest. At the same time, these officials agreed that bid deposit funds should start 

earning interest once the successful bidder is selected, and that Tribes and individual Indians should not bear the costs of the time that it takes for the BIA to 

review and approve leases. 

Although I believe DOI has sufficient legal authority and a clear trust obligation 

to place bid deposit funds at interest now, legislation mandating it would solve the 

problem once and for all and avoid future litigation over DOI’s improper handling 

of these funds. 

D. Eliminating the Problem of Dual Taxation 

The Fort Peck Tribes were one of the first Tribes in the country to institute a 

severance tax on oil and gas development on our Reservation. However, the 1989 

U.S. Supreme Court decision in Cotton Petroleum Corp. v. New Mexico, 490 U.S.163 

(1989) allows States to tax certain activities by non-Indian companies on Indian and 

tribal trust lands. When Cotton applies to allow States to impose taxes in addition 

to Tribal taxes, economic activity on tribal lands is discouraged. Tribal and State 

taxes are owed for energy development activities in Indian Country where only 

State taxes must be paid for energy development elsewhere. This double taxation 

creates a serious disincentive to energy and mineral development on Tribal lands 

and is inconsistent with well-established federal policies designed to promote Tribal 

economic development and self-sufficiency. 

Our Tribal government has long urged Congress to overturn the poorly decided 

Cotton decision and to bar State taxation of commercial activities on Indian and 

tribal trust lands, but Congress has repeatedly failed to act. Therefore, the only way 

we could avoid the disadvantage Cotton creates was either to forego our right to tax 

energy development on Reservation lands altogether or seek to enter into an innovative tax sharing agreement with State of Montana. 

53

As an example of our Tribes’ leadership in this area, I am pleased to report that 

the Fort Peck Tribes reached an historic tax-collection and tax-sharing agreement 

with the State of Montana on March 25, 2008. While we are pleased with this agreement and believe it presents a model for other Tribes to follow, we also continue 

to believe it is a poor substitute for congressional action. Simply put, the Cotton ruling was wrongly decided. I ask Congress once again to pass legislation returning 

full taxing authority to Tribal governments for commercial activities on Indian and 

tribal trust lands. 

E. Eliminating Barriers to Wind Energy and Other Renewable Energy Projects 

The Fort Peck Tribes believe further development of wind energy is an important 

part of America’s energy independence. Montana is one of the five windiest states 

in the union and the Fort Peck Reservation in northeast Montana presents one of 

the greatest opportunities for wind energy development in the entire State. With the 

support of DOE and other federal agencies, the Fort Peck Tribes spent many years 

researching and quantifying our wind energy resources, and we know that the potential energy that can be derived from wind power is considerable. With proper 

support from the Federal Government and better connections to transmission lines 

on the national energy grid, we could attract reputable business interests to partner 

with us to develop commercially viable and sustainable wind energy projects on the 

Fort Peck Reservation. 

Unfortunately, we and many others in Montana who wish to develop their wind 

energy resources are severely hampered by ever-changing national energy policies 

and by a lack of inexpensive and accessible transmission line capacity. Tribal wind 

energy projects cannot get off the ground if there is no commercially viable way to 

get our abundant wind power to energy consumers. Many of the transmission lines 

in Montana were built and are maintained by the Western States Power Authority 

(WAPA), a federal agency. In 2005 Congress directed the Secretaries of the Army 

and the Interior to conduct the Wind and Hydropower Feasibility Study (WHFS), 

which was completed in 2009, to determine the feasibility of blending wind generation with hydropower on the Missouri River, and to evaluate tribal wind generation. 

While the WHFS concluded that a 350MW Tribal Wind Demonstration Project was 

not feasible, it recommending studying facilities under 300MW and indicated that 

WAPA believed economic risk could be mitigated through the development of a 

50MW facility, if authorized and funded prior to 2015. Unfortunately, neither 

WAPA, nor Congress has undertaken the development of a Tribal Wind Demonstration Project. Congress should now take action to authorize and fund a Tribal Wind 

Demonstration Project, at Fort Peck, and others throughout Indian country, as its 

next step in obtaining American energy independence. 

F. Developing Environmentally and Culturally Sustainable Energy Projects 

Finally, related to our interest in wind energy development is our foundational 

belief that all economic development projects must be undertaken in ways that protect and enhance our Tribal homelands, sacred sites and cultural resources. We fully 

support job-creation initiatives and economic development opportunities that allow 

us to develop our natural resources and improve the quality of life for our Tribal 

members. However, all of our development efforts must be balanced with our sacred 

commitment to preserve our Tribal homelands and to protect the spiritual and cultural heritage which our ancestors suffered so much to preserve for future generations. The people residing on our Reservation need clean land, water, and air in 

order to live and work in a healthy environment. In addition, ranching and farming 

are vital industries on the Fort Peck Reservation so they too must be able to coexist 

and thrive alongside energy development. Otherwise, we have simply promoted one 

important Tribal industry at the expense of others, which would make no sense, economic or otherwise. 

As a Tribal government, we endeavor to support only those initiatives that are 

done in a manner that is backed by sound science and that minimizes potential adverse impacts to our Tribal lands and resources. We are uncertain whether the Keystone XL Pipeline falls in this category. While we realize there are many potential 

economic benefits to the Keystone project, we are deeply concerned that the proposed pipeline route currently runs under the Missouri River. The Missouri River 

is the source of our drinking water and provides countless benefits to our Tribal 

members and others residing on our Reservation. We are well aware of the recent 

oil spill in the Yellowstone River and the harm that spill caused to the surrounding 

area. 

Moreover, while I have suggested improved technical capacity and responsiveness 

within the Federal Government, as well as a reduction in certain fees that I believe 

should be decided by market conditions, I do not suggest the elimination of federal 

54

oversight over any projects that have an impact on Indian trust resources and sovereign Tribal governments. We ask the Committee and Congress to give careful consideration to the interests of those that may be adversely impacted by the Keystone 

project and to uphold the federal trust responsibility owed to Indians. 

I thank the Committee for the opportunity to present this testimony.

The CHAIRMAN. Thank you very much, Councilman, for your testimony. 

Ms. KAUHANE. will you please proceed with your testimony? 

STATEMENT OF MICHELLE KAUHANE, DEPUTY DIRECTOR, 

DEPARTMENT OF HAWAIIAN HOME LANDS, STATE OF HAWAII 

Ms. KAUHANE. Aloha, Chairman Akaka, members of the Senate 

Committee on Indian Affairs. 

The CHAIRMAN. Aloha. 

Ms. KAUHANE. My name is Michelle Kauhane, and I thank you 

for the invitation and opportunity to provide testimony on behalf 

of the State of Hawaii Department of Hawaiian Home Lands. Our 

State agency is responsible for the administration of the Federal 

land trust established by Congress through the Hawaiian Homes 

Commission Act of 1920, establishing approximately 203,000 acres 

of trust lands throughout Hawaii for the homesteading of Native 

Hawaiian people, similar to the trust lands established under the 

Indian Allotment Act for residential, farming and pastoral purposes. 

Today I will provide you with a brief overview of energy development in Hawaii, highlight two of the energy development projects 

currently happening on our trust lands and offer four recommendations to increase energy development on these lands. 

First, a brief overview of energy development in Hawaii. Hawaii 

is the only State within the United States that is 90 percent dependent on imported fossil fuels for its energy. Hawaii has untapped indigenous, renewable resources that can be utilized, including wind, solar, geothermal, wave energy, biomass, 

hydroelectricity and ocean thermal energy conversion. The lands in 

the Hawaiian Home Lands trust host many of the robust energy 

sources that can contribute to a clean energy future with a clear 

opportunity to be at the forefront of energy development in the 

State. 

As a Federal land trust administered by State government, we 

must work with Congress, with the Department of Energy and 

with the Department of Interior to advance energy development to 

benefit the Hawaiian Home Land trust, our State and the Nation. 

While we have only begun to understand the vast opportunities, I 

will highlight two examples of energy-related projects, one that is 

complete and one currently underway. 

First, the Kaupuni Residential Subdivision, completed last year. 

In January 2011, the Department of Hawaiian Home Lands hit a 

major milestone with the development of 19 homes in Kaupuni Village in Wai’anae on O’ahu. Kaupuni was the first LEED–Platinum 

single family affordable housing subdivision in the Country, achieving a net zero project with a holistic, sustainable community plan 

for families who reside within the community. 

Second, a commercial grade solar farm currently under development by Native Hawaiians residing on the island of Kauai in 

55

Anahola. DHHL is currently engaged in a very unique and exciting 

partnership being co-developed by a non-profit utility cooperative 

and the Homestead Community Non-Profit Development, made up 

of residents who reside in the community of Anahola. It represents 

the first time a solar farm is being pursued with Hawaiian homesteaders as a huge part of the development team. Prior to this, 

most of the lands are leased out and developed by third parties, 

whereas this project, our homesteaders are at the forefront. Aside from the $62 million 12 megawatt solar farm being the single largest solar farm being developed in the State, the benefit to 

the local homestead community has been cornerstone strategy that 

includes cultural and environmental protection, employment and 

small business opportunities, energy revenue sharing for the community-based project, and of course, the mentoring of Native Hawaiians on the development team. 

Beyond these projects, potential resources on Hawaiian home 

lands also include hydro, geothermal, wind and many others. What 

we know from just the initial energy-related projects pursued in 

the last three years is that the potential is real and achievable. 

The Department of Hawaiian Home Lands makes four recommendations to increase energy development on our trust lands. 

First, the implementation of SUTA to access capital and tax credits. Implementation of SUTA as eligible criteria in existing and key 

Federal programs will have a positive impact across the Nation. 

Number two, technical assistance to increase Native energy capacity and collaboration. Technical assistance and capacity building 

are vital tools to the development of energy resources in trust land 

areas. 

Third, energy transmission and infrastructure capital. We recommend Federal investments in smart grid technologies dedicated 

to trust land areas. And fourth, a streamlined and transparent 

land use policy. Successful energy development requires low-cost 

capital, excellent partners and clear land use policies that honors 

the trust status and original intent of our Hawaiian Homes Commission Act. 

Tribal and Hawaiian Home Lands holds some of our Nation’s 

most precious energy resources and remain some of the most underserved areas across the Nation. With specific attention to the 

development of Federal energy policy dedicated to trust land areas, 

the potential of Native lands in playing a significant role in our 

Nation’s energy future becomes possible. 

Chairman Akaka, I thank you for the opportunity to participate 

this afternoon. 

[The prepared statement of Ms. Kauhane follows:]

PREPARED STATEMENT OF MICHELLE KAUHANE, DEPUTY DIRECTOR, DEPARTMENT OF

HAWAIIAN HOME LANDS, STATE OF HAWAII

Aloha Chairman Akaka, Vice-Chairman Barasso and Members of the Senate Committee on Indian Affairs. 

My name is Michelle Kauhane, and I thank you for the invitation and opportunity 

to provide testimony on behalf of the State of Hawaii, Department of Hawaiian 

Home Lands (DHHL). Our state agency is responsible for the administration of the 

federal land trust established by Congress through the Hawaiian Homes Commission Act of 1920 (HHCA), establishing trust lands for homesteading by the native 

Hawaiian people similar to trust lands established under the Indian Allotment Act 

of 1906 for residential, farming and ranching of eligible American Indians. 

56

1 Hawaii Clean Energy Initiative Working Group Policy Recommendations for the 2010 Hawaii 

State Legislative Session, November 20, 2009, p. 1. 

Hawaiian Trust Lands Under the Hawaiian Homes Commission Act 

Since Hawaii’s overthrow as an independent nation and the subsequent annexation to the United States, one of the most significant federal policy achievements 

for native Hawaiians was the enactment of the HHCA. It began as a resolution in 

the territorial government in Hawaii, and advocated by the territory’s congressional 

representative, Prince Jonah Kuhio Kalanianaole. Similar to other land allotment 

acts of that era for Alaska Natives and American Indians, the HHCA established 

a land trust of approximately 200,000 acres of land located in every county in the 

state, to provide land for residential, agricultural and pastoral homesteading. In addition, the HHCA encourages economic development on trust lands through land licenses for commerce and public purpose development. 

The Act was incorporated into Public Law 86–3, the Hawaii Statehood Act in 

1959, as a condition of statehood, which required the new state government to administer the Hawaiian Home Land trust with federal oversight by the Department 

of Interior and Congress. DHHL and its administration of the land trust is governed 

by a 9-member Hawaiian Homes Commission appointed by the Governor of the 

state of Hawaii. Its Director, a member of the Governor’s cabinet, also serves as the 

Chairman of the Commission. In short, DHHL is a state agency managing a federally created land trust to reconnect native Hawaiians to their ancestral lands in Hawaii. 

Self-Determination of Native Hawaiians 

In Hawaii, we do not refer to our Native peoples as tribal members or Indians, 

although it is clear that Congress intended the inclusion of Native Hawaiians in the 

federal policies of self-determination. The most common terminology most understood in the islands to represent native Hawaiians eligible for the HHCA land trust, 

are ‘‘beneficiary’’ or ‘‘homesteader’’. Moreover, the lands in the Hawaiian Home 

Land trust are referred to as ‘‘homesteads’’ rather than reservations. For the purposes of our testimony, these terms will be used to describe native Hawaiians and 

land areas under the HHCA, which was enacted by Congress during a policy period 

of the Federal Government wherein land trusts and Native allotment programs 

were commonly established for Native peoples in Indian Country and Alaska. The 

HHCA was an extension of those policies, as well as the federal policies of self-determination that have been well documents over the last century. 

For the beneficiaries of the HHCA, self-determination and self-governance is expressed through the existence of beneficiary organizations governed by beneficiaries 

or homesteaders themselves. These organizations, called homestead associations, 

have existed for decades, and have representative leadership through democratically 

elected processes for each homestead land area on differing islands within the state. 

Just as tribes are powerful partners with the Federal Government, homestead associations are vital to our state’s success in implementing the tenets of the HHCA as 

Congress intended. 

Energy Development in Hawaii 

Hawaii is the only state in the United States that is 90 percent dependent on imported fossil fuels for its energy. 1 Not only is the state dependent on fossil fuels 

for transportation, but approximately 75 percent of Hawaii’s electricity is generated 

utilizing imported fossil fuels. The volatile price of oil, therefore, has a tremendous 

impact on Hawaii’s economy and its rippling effect is felt by every Hawaii resident 

and business. Families all across the state are paying a disproportionate share of 

household income on utilities. Businesses are inhibited by soaring energy costs, 

tamping down on growth and the availability of equity capital to expand. 

While it would be simplistic to view the State of Hawaii’s situation as isolated, 

our energy dependence on fossil fuels directly impacts national security given Hawaii’s strategic location in the Pacific Ocean. We serve as host to four major military 

installations for the United States Army, Air Force, Marines, and Navy as well as 

the headquarters for the United States Pacific Command (USPACOM), the combatant command focused on the Asia-Pacific region. Hawaii’s energy and food security 

is therefore a national priority that cannot continue to be ignored. 

State government, federal agencies and the energy industry are working together 

more than ever to bring an energy independent reality to Hawaii and its Pacific location. Hawaii has untapped indigenous, renewable resources that can be utilized, 

including wind, solar, geothermal, wave energy, biomass, hydroelectricity, and 

ocean-thermal energy conversion. In 2008, the State of Hawaii signed a Memorandum of Understanding (MOU) with the U.S. Department of Energy to address 

57

this situation, and set the goal of 40 percent generation from renewable energy 

sources and 30 percent increase in energy efficiency based on projected energy use 

levels in 2030. The Hawaii State Legislature has enacted a Renewable Portfolio 

Standard and an Energy Efficiency Portfolio Standard to reflect these goals, which 

are commonly referred to as a goal of 70 percent clean energy in 2030. 

While Hawaii has robust renewable resources, the lands upon which these types 

of projects can be developed are limited given zoning and urbanization constraints. 

The lands in the Hawaiian Homes land trust host many of the robust renewable 

resources that can contribute to Hawaii’s clean energy future with a clear opportunity to be at the forefront of energy development in the state. 

As a federal land trust administered by state government, we must work with the 

Congress, with the Department of Energy, with the Department of Interior, to advance robust energy development to benefit the Hawaiian Home Land Trust, our 

state and the nation. 

Examples of Energy Projects on Hawaiian Home Lands 

The Hawaiian Homes Commission established an adhoc Energy Committee to 

bring focus to energy development and to encourage maximum participation of 

DHHL and homesteaders. While we have only begun to understand the opportunities, following are just a few examples of energy related projects that have been 

completed, underway or in preliminary evaluation:

Kaupuni Residential Subdivision. In January 2011, DHHL hit a major milestone with the award of 19 LEED-Platinum homes at the Kaupuni Village in 

Wai‘anae, O‘ahu. Kaupuni was the first LEED-Platinum single-family affordable housing subdivision in the country, achieving a net-zero project for families 

living in the homes constructed. 

With private business constructing the project, DHHL planned the subdivision 

and qualified families to purchase the homes on residential land awards as defined under the HHCA. The Kaupuni project represents federal, state and local 

partnerships, as well as public and private industry partnerships to explore and 

implement a net-zero project approach. This pilot project will be a key informant to additional housing development projects across the state. 

Commercial Grade Solar Farms by Energy Developers. There are at least four 

solar farms being developed on Hawaiian Home Lands by a variety of local and 

national solar developers. DHHL designates land for development, and developers capitalize the project, work with utility entities to purchase power, and 

construct and operate the solar farms. An important aspect of solar projects on 

Hawaiian trust lands, has been the implementation of beneficiary consultation 

and the inclusion of a benefits agreement that encompasses homestead priorities into projects on the front end. 

Commercial Grade Solar Farm by Native Hawaiians. One of these projects is 

a one-of-akind partnership, being co-developed by a non-profit utility cooperative (the Kauai Island Utility Cooperative) and a homestead community development nonprofit representing four different Hawaiian homestead associations 

(Homestead Community Development Corporation). It represents the first time 

a solar farm is being pursued with Hawaiian homesteaders as part of the development team. 

The project will produce a 12MW solar farm, the single largest in the state of 

Hawaii, with estimated development costs of $62 million. The project is eligible 

under the federal 1603 Energy Tax Credit Incentives, combined with state of 

Hawaii incentives, to bring a total of $24 million to the project. The USDA 

Rural Utility Service is a key source of debt capital, with low interest rates, 

which combined with the federal and state incentives make the project possible 

and delivers cost savings to an entire county of rate payers. In addition, the economic impact and benefit to the local homestead community has been a cornerstone strategy that includes but is not limited to cultural and environmental 

protections, employment and small business opportunities, energy revenue sharing for community based projects in the region and the all-important mentoring 

of Native Hawaiians on the KIUC development team. 

Agriculture to Energy Projects. One of the exciting areas of energy development 

on Hawaiian Home Lands is in the cross utilization of homestead farming and 

ranching that connects food production to energy production. On Hawaii Island, 

homestead leaders are exploring the use of Hawaiian Home Lands to revitalize 

agriculture and ranching through the connectivity of producers to local markets, 

post harvest waste to energy development, and building pipelines of next generation farmers and ranchers. The project highlights include a Veteran to Farmer program to engage veterans in the agricultural industry, the development of 

post-harvest facilities to improve financial returns on farming, and generate 

58

methane energy produced by an anaerobic digester that utilizes green waste, 

creating low cost energy. The project is in very preliminary phases, but has attracted the attention of Department of Defense officials due to its energy generation aspect, as well as food security it can provide to military installations 

in the Pacific. 

Consumer and Business Solar Retrofits. One of the areas of energy development 

that DHHL has focused on with homestead communities and local Native Hawaiian community development nonprofits is the retrofit of households, public 

facilities and businesses located on Hawaiian Home Lands. The imperative is 

to retrofit existing structures to increase monthly family disposable income, create cost savings for business, and for Hawaiian Home Land areas to be at the 

forefront of energy transformation in our state. We believe that we must make 

bold moves to even the playing field with more affluent populations by creating 

opportunities for homestead areas to leave the electrical grid. Over a 2-year period, our partner, the Council for Native Hawaiian Advancement (CNHA), has 

installed 200 solar water and photo voltaic systems on households and business 

facilities, with additional capital leveraged through the U.S. Treasury CDFI 

program to deploy additional capital in our low to moderate income neighborhoods.

Beyond residential energy efficiency projects, agriculture to energy, and solar 

farms, potential resources on Hawaiian Home Lands also includes hydro, geothermal, wind and many others. What we know from just the initial energy related 

projects pursued in the last 3 years on Hawaiian trust lands, is that the potential 

is real, and achievable. We also know that energy development is economic development, creating real jobs inside our home land areas. 

Recommendations to Increase Energy Development on Trust Lands 

Hawaiian Home Lands, like Indian reservations and Alaska Native villages, are 

unique trust land areas that require federal land trust knowledge in any energy development partnership as well as excellent partnerships with federal agencies such 

as the Department of Energy, the Department of Interior and the Treasury Department at a minimum. We offer the following recommendations and input to the Committee to create a positive environment for energy development on trust lands:

1. Implement SUTA to Access Capital and Tax Credits. Congress codified the 

term, Substantially Underserved Trust Areas (SUTA) (9 USC 936(f)), in the 

2008 Farm Bill (P.L. 110–246). SUTA lands utilize the definition of trust lands 

that have been used since 1992 as part of the Native American Veteran Home 

Loan program. SUTA lands are trust lands defined to be any lands that: (1) is 

held in trust by the United States for Native Americans; (2) is subject to restrictions on alienation imposed by the United States on Indian lands (including native Hawaiian homelands); (3) is owned by a Regional Corporation or a Village 

Corporation, as such terms are defined in section 3(g) and 3(j) of the Alaska Native Claims Settlement Act, respectively (43 U.S.C. 1602 (g), (j)); or (4) is on any 

island in the Pacific Ocean if such land is, by cultural tradition, communallyowned land. 

The U.S. Department of Agriculture (USDA), through the Rural Utility Service 

(RUS) is authorized to provide grants and loans at rates as low as 2 percent 

to support the construction, acquisition or improvement of infrastructure on 

SUTA lands. This is a vitally important tool that recognizes that efforts to increase access to capital should include trust lands as a category in addition to 

low-income and rural communities.

One immediate action that can be taken which would yield significant positive 

impact not only on trust lands in Hawaii but throughout the nation would be 

to make SUTA lands automatically eligible for New Market Tax Credits 

(NMTC) administered by the U.S. Treasury Department. The NMTC program 

is one of the most successful federal programs in bringing private investment 

capital to underserved communities. Making SUTA lands automatically eligible 

for the NMTC program would have no cost to the U.S. government and would 

advance the incentives and awareness of economic development opportunities by 

capital markets. 

Implementation of SUTA as eligible criteria in existing and key federal programs will have a positive impact across the nation, since 35 states in the country have Tribes and/or congressionally established trust lands.

2. Technical Assistance to Increase Native Energy Capacity & Collaboration.

Technical assistance and capacity building are vital tools to the development of 

energy resources in trust land areas, and the economic self-determination of all 

Native peoples. Active participation by Homestead Associations, Indian Tribes 

59

and Tribal Corporations leads to project development efficiencies, best practices 

in operations and maintenance, and economic multipliers to invest in education, 

healthcare, job creation, etc in trust land communities. 

It is a positive cycle that serves trust land areas, surrounding communities, 

state economies and national priorities. We recommend strengthened and regional Technical Assistance funding awards to Tribes and Native Hawaiian Organizations to focus on energy development on trust lands in their respective 

states. 

We further recommend the coordination of federal agencies in bringing Native 

Hawaiian, Alaska Native and American Indian leaders together for consultation 

and training sessions, which provide outstanding opportunities to be exposed to 

best practices in other areas of the country, and solutions developed by others 

to address unique trust land challenges. One of the missed opportunities that 

can be avoided is the power of knowledge sharing among Native leaders that 

is made possible through opportunities to collaborate and learn together. This 

is particularly true for Native Hawaiians that are often separated from their 

counterparts in Indian Country.

3. Energy Transmission & Infrastructure Capital. Lack of infrastructure or upgrades to aging infrastructure and energy grids to develop trust land areas continues to be a primary challenge in transforming our energy dependency from 

fossil fuel based to renewable and clean energy. We recommend federal investments in smart grid technologies dedicated to trust land areas, as well as targeted investments in upgrading and expanding transmission improvements, including roads. 

We further recommend the coordination of federal agencies such as the Department of Interior, Energy, Transportation, HUD and USDA, to identify existing 

federal programs that support energy infrastructure development that are 

under-utilized by trust land communities. Again, the addition of the SUTA definition to the income and rural criteria used in most federal programs would ensure that trust land projects are included as priorities.

4. Streamlined and Transparent Land Use Policies. Successful energy development requires low cost capital, excellent partners and clear land use policies 

that honors the trust status and original intent of the HHCA. We recommend 

engagement by federal agencies, such as the Department of Interior, to share 

its best practices and pitfalls with DHHL learned over decades of Indian trust 

land management, including its Tribal Consultation methodologies and public 

comment processes through the federal register. Further, that the DoI, Office 

of Native Hawaiian Relations collaborate with the Bureau of Indian Affairs to 

publish energy project profiles of projects under development on Hawaiian home 

lands and Indian reservations as well as land use policies and procedures that 

work well, and that could be improved. 

Just as we are anxious to learn from American Indian and Alaska Native 

projects located around the country, we welcome the opportunity to share the 

innovations being developed on Hawaiian Home Lands in Hawaii to advance energy independence, economic development and the generation of clean and renewable energies.

Conclusion 

Chairman Akaka, Vice-Chairman Barrasso, Members of the Indian Affairs Committee, I thank you for the opportunity to participate this afternoon. The aboriginal, 

indigenous peoples of Hawaii are no different than those of other states in the country—adept, scientific, and practitioners of lifeways that utilize natural resources in 

a responsible, balanced, and common-sense manner, practices that have sustained 

our collective peoples for thousands of years. 

Tribal and Hawaiian Home Lands hold some of our nation’s most precious energy 

resources, and remain some of the most under-served areas. With specific attention 

to the development of federal energy policy dedicated to trust land areas, the potential of Native lands in playing a significant role in our nation’s energy future becomes possible. Access to capital, implementation of the SUTA definition in federal 

program eligibility, dedicated technical assistance resources and infrastructure investments, along with streamlined land use policies are areas that this committee 

can champion to create a new reality in energy development. 

We would welcome members of the Committee to visit our home lands along with 

constituents from Indian Country to engage in a dialogue of possibilities and opportunities. 

Thank you for the invitation to present testimony and to share the work of Native 

Hawaiians in energy development on the trust lands of the HHCA.

60

The CHAIRMAN. Thank you very much, Ms. Kauhane. 

Now I call on Vice President Rex Lee Jim for your testimony. 

Please proceed. 

STATEMENT OF HON. REX LEE JIM, VICE PRESIDENT, NAVAJO 

NATION 

Mr. JIM. Chairman Akaka, Ranking Member Barrasso and distinguished members of the Committee, thank you for the opportunity to testify before you today concerning energy development 

on Tribal lands. 

Our Nation needs to foster regional economic development to see 

us through these tough economic times. Unfortunately, unlike most 

States, the Navajo Nation and indeed, many other Tribal nations, 

face significant regulatory burdens placed on us by the Federal 

Government. I will focus my testimony on the regulatory hurdles 

preventing us from successfully developing a sustainable economy. 

Large energy projects provide the cornerstone of economic development. They infuse local economies with dollars earned from highpaying jobs and draw in businesses that serve these flourishing 

communities. In addition to jobs and business development, these 

projects provide the revenues the Navajo Nation uses to develop infrastructure and deliver social services. 

It is these revenues that will allow the Navajo Nation to stand 

on its own. However, the same government that forced us onto reservations now punishes us further because our lands are subject to 

Federal regulation that suppresses Tribal energy development. Perhaps the greatest hurdle to energy development in Indian Country 

is the applicability of the NEPA to Tribal lands and resources. Indian Tribes do not hold legal title to Tribal trust lands, which are 

titled to the Federal Government. 

BIA approval of Tribal leases and rights of way establishes a 

major Federal action triggering NEPA and the EIS/EA process. The 

Navajo Nation recognizes that Congress has taken action to relive 

the NEPA burden with Tribal energy resource agreements. However, even though the Navajo government has been developing the 

capacity to take advantage of the TERA, we still need assistance. 

We urge Congress to provide funding for Tribal capacity building. 

The Navajo Nation is also seeking an avenue for Tribal energy 

development free of the NEPA process by amending 25 U.S.C. Section 415(e) to authorize the nation to issue mineral leases without 

Federal approval. It would be helpful for future NEPA exceptions 

for Tribes to have more express language exempting Tribal actions 

from NEPA compliance. 

As a result of the treatment of Indian lands as Federal lands for 

purposes of NEPA compliance, the status of Tribal trust lands creates additional hurdles for development not present on Tribal fee 

lands. Tribal fee lands are still subject to State and local taxation 

and regulation. This circumvents Tribal jurisdiction over Tribal 

lands. 

Congress should consider developing a new land status for Tribal 

trust lands that is not Federal title and would allow Tribes to develop their own land tenure systems for economic development purposes. Such a change in status should ensure that Tribal lands remain free of State taxation and regulation. 

61

Additionally, certain parties believe that the Federal Government 

has the right to determine the value of Tribal lands and resources. 

Congress should clarify through legislation that the value of Tribal 

lands and resources shall be determined solely by the responsible 

Tribe. 

Finally, the Navajo Nation urges Congress to recognize the 

unique situation of Indian Tribes as similar to that of developing 

nations in the international community and prevent Federal agencies from imposing regulatory requirements on Tribes that are 

more stringent than required by Federal law. For example, the 

Desert Rock energy project would have been the cleanest coal-fired 

power plant in the U.S., but it was derailed by overzealous regulation by EPA and DOI, requiring the Navajo Nation to implement 

unproven and prohibitively expensive technologies. 

A further example of EPA’s over-regulation is the recent requirement under the Regional Haze Rule and MACT for SCRs. This 

technology is unreasonable and unnecessary, as far cheaper existing technologies are available that satisfy EPA’s objectives. 

Congress should consider legislation requiring the least costly 

regulatory requirements on Tribes, consistent with Federal law. 

The unreasonable requirements of Federal agencies costs Tribes essential jobs and revenues. The way to accomplish economic self-sufficiency is to minimize Federal involvement in Tribal energy development and maximize Tribal decision-making. 

Thank you. 

[The prepared statement of Mr. Jim follows:]

PREPARED STATEMENT OF HON. REX LEE JIM, VICE PRESIDENT, NAVAJO NATION

Chairman Akaka, Ranking Member Barrasso, and distinguished members of the 

Senate Committee on Indian Affairs. Thank you for the opportunity to testify before 

you today concerning energy development on tribal lands. The Navajo Nation and 

the United States are at a crossroads: high unemployment, deteriorating or non-existent infrastructure, a lack of capital investment, and a need for low cost power 

have come together as the nation faces some of the worst economic conditions since 

the Great Depression. Our nation needs to foster regional economic development to 

see us through these tough economic times. Unfortunately, unlike most of the states 

of our great union, the Navajo Nation faces significant regulatory burdens placed 

on us by the Federal Government that hinder development. In terms of energy development, the most onerous of these regulations come from the Environmental Protection Agency, but we are also burdened by the regulations from many federal 

agencies. My testimony this morning will address the conditions we face on the Navajo Nation, our plans for future energy development, and the regulatory hurdles preventing us from successfully developing a sustainable economy. 

The Navajo Nation has approximately 300,000 members, with nearly 200,000 

members living on more than 27,000 square miles of Navajo land. Fifty-five percent 

of our people are unemployed and nearly 50 percent live below the federal poverty 

line. Our annual per capita income is approximately $6,800, more than 40 percent 

of Navajo’s live without water services or electricity, and 90 percent lack natural 

gas. However, in the face of this poverty the Navajo Nation is rich in natural resources. We have abundant renewable energy resources such as solar and wind, substantial oil and natural gas reserves, and nearly 150 years of low cost coal. 

The Navajo Nation is seeking to leverage all of our available assets to spur economic development. Economic development requires the presence of land, water, 

power, and human capital. The Navajo Nation is blessed with land, water, and a 

young and dynamic workforce. The power component of this recipe for success has 

two pieces, the power needed to run businesses, and the tax and royalty revenues 

that can be realized from power generation. 

Studies have shown that a sustainable economy requires that dollars circulate a 

minimum of three times within a region. Currently, the majority of dollars earned 

by Navajos are spent in the towns and business that border the reservation because 

62

the Navajo Nation lacks basic businesses. Large energy projects provide the cornerstone of economic development by infusing local economies with dollars earned from 

high paying jobs, and drawing in the subsidiary businesses that serve these flourishing communities. In addition to jobs and business development, these projects 

and the communities that thrive around them raise the tax base and royalties from 

which the Navajo Nation can draw to develop infrastructure and provide social services. It is these revenues that will allow the Navajo Nation to be independent from 

the Federal Government and stand on its own. 

To that end, the Navajo Nation has a multi-pronged approach to develop these 

cornerstones of economic self-sufficiency. The Navajo Nation recently created an energy task force and has signed an MOU with the U.S. Department of Energy’s Lawrence Livermore Laboratory and is developing a comprehensive energy strategy that 

will take into account all of the Navajo Nation’s energy assets. 

On the renewable energy front the Nation is developing four projects that capitalize on our abundant wind and solar resources: (1) a 500 Mega Watt (MW) wind 

farm on the Boquillas Ranch in Seligman, AZ; (2) a 500 MW wind farm in the Grey 

Mountain chapter in Cameron, AZ; (3) a 200 MW wind farm in the Black Mesa 

chapter in Kayenta, AZ; and (4) a large scale solar project which we are currently 

reviewing solar intensity data to pick the best possible site. 

While we look forward to maximizing our available renewable resources, our most 

abundant, valuable, and stable resource is the vast coal deposits that lie within the 

Navajo Nation. Coal is, and for the foreseeable future will continue to be, the best 

source of low cost energy in the United States. We are continuing to explore alternatives to coal fired power plants such as the Desert Rock Energy Project that 

crumbled under the weight of EPA and DOI regulations and review. Projects such 

as Desert Rock would have been the cleanest pulverized coal-fired power plant in 

the country. This new cleaner technology would have set new standards of achievable control technologies across the spectrum, and brought in thousands of jobs and 

more than $1.5 billion in revenue to the Navajo Nation. With the tide clearly 

against pulverized coal fired power plants, we are also reviewing several coal-to-liquid plants that could convert coal to diesel or other needed industrial products. Unfortunately, the EPA’s hostile view towards any further coal development makes attracting much-needed capital patterns to these projects difficult. The Navajo Nation 

must find solutions to utilizing its vast coal resources. 

Native Nations have struggled to find avenues for economic development to provide for their people. For decades we have been trapped by government mandates 

to lead lives of poverty and government dependence. Now several tribes have realized that their resources can provide the avenue to economic self-sufficiency they 

have always longed for. However, now we find that the same government that 

forced us on to reservations now punishes us further by forcing stifling federal regulation because our lands, while held in trust for our benefit, are subject to federal 

oversight. As such, the Federal Government is the face of poverty on tribal lands, 

and no department is more responsible for this today than the EPA. 

Perhaps the greatest hurdle to energy development in Indian Country generally 

is the applicability of the National Environmental Policy Act (NEPA) to the use of 

tribal lands and resources. Indian tribes do not hold legal title to tribal trust lands, 

which are titled to the Federal Government. Accordingly, the Bureau of Indian Affairs (BIA), the federal land manager for tribal trust lands, generally approves tribal 

leases and rights-of-ways (ROWs) for tribal energy projects. In other words, BIA approval of tribal leases and ROWs constitutes a major federal action thereby triggering NEPA, and the concomitant EIS/EA (SPELL OUT) (absent a categorical exclusion). The Navajo Nation recognizes that Congress has taken action to relieve the 

NEPA burden for energy development in Indian Country pursuant to the 2005 Energy Policy Act, which provides for Tribal Energy Resource Agreements (TERAs). 

Under a TERA, a tribe is essentially pre-authorized by the Federal Government to 

make its own leasing and ROW decisions for energy projects, as long as they comply 

with an environmental review process. Unfortunately, even for the Navajo Nation, 

which has a sophisticated tribal government, including a Minerals Department, Fish 

and Wildlife Department, Historic Preservation Department and Tribal Historic 

Preservation Officer, and an Environmental Protection Agency, the Navajo Nation 

does not yet have the capacity to undertake a TERA. Consequently, we urge Congress to provide funding for tribal capacity building so that the purposes of the 2005 

Energy Policy Act in regard to tribal energy development can be realized. 

The Navajo Nation is also seeking an avenue for tribal energy development free 

of the NEPA process by seeking amendments to 25 U.S.C. § 415(e) to authorize the 

Navajo Nation to issue mineral leases without federal approval. By Navajo Nation 

Council Resolution CAU–35–11, attached hereto as Exhibit A, the Navajo Nation 

approved the above proposed amendments which have been introduced in the House 

63

of Representatives by Representative Young of Alaska in Section 11 of H.R. 3973. 

The Navajo Nation is simultaneously seeking approval of its General Leasing Regulations from the Secretary of the Interior pursuant to § 415(e), and would be able 

to immediately assume leasing authority over mineral leases if H.R. 3973 is passed 

by Congress. The Nation therefore asks for your support, and potentially one or 

more Committee members’ sponsorship of equivalent Senate legislation. As a final 

NEPA concern, it may be helpful for future NEPA exceptions for tribes, such as 

those described above, to have more express language exempting such tribal actions 

from NEPA compliance. 

As mentioned above, Indian lands are treated as federal lands for purposes of 

NEPA compliance. As a result of that federal ownership, the land status of tribal 

trust lands causes additional hurdles for economic development that are not 

present, for example, on tribally owned fee lands. In the case of tribally owned fee 

lands these are still subject to state and local taxation and regulation, which additionally circumvents what, should be inherent jurisdiction over tribal lands. In the 

long run, Congress should consider developing a new land status for tribal trust 

lands that is not federal title, and which would allow tribes to develop their own 

land tenure systems for economic development purposes. Any such change in land 

status should ensure that tribal lands remain free of state taxation and regulation. 

Of additional concern certain parties believe that the Federal Government has the 

right to determine the value of tribal lands and resources, including for leases and 

ROWs. Consistent with the sovereign status of Indian tribes and the federal policy 

for tribal self-determination, Congress should clarify through legislation that the 

value of tribal lands and resources should be determined solely by the responsible 

tribe. 

Another hurdle to energy development on the Navajo Nation is the imposition of 

dual taxation by states and tribes. The Navajo Nation is situated across three different states and faces the complexity of dealing with three distinct state tax regimes. In situations where state taxes are applicable on the Nation, the Navajo government is placed in a situation whereby if the tribe imposes its tax regime, it effectively discourages economic development, including energy development on the Nation, and if it does not impose taxes, it diminishes its capacity to generate needed 

government revenues and provide government services. Accordingly, and in recognition of the sovereignty of Indian tribes and the inherent right of tribes to tax, see, 

e.g., Kerr-Mcgee v. Navajo Tribe of Indians, 471 U.S. 195 (1985), the Nation urges 

the Congress to clarify the inapplicability of state tax regimes where they may adversely affect economic development on tribal lands. 

Finally, the Nation urges Congress to recognize the unique situation of Indian 

tribes as similar to that of developing Nations in the international community, and 

prevent federal agencies from imposing regulatory requirements on tribes and tribal 

resources that are more stringent than required by federal law. For example, the 

Nation’s Desert Rock Energy Project, which was slated to be the cleanest coal fired 

power plant in U.S. history, was essentially derailed by overzealous regulation by 

U.S. E.P.A. requiring the Navajo Nation to implement unproven and prohibitively 

expensive technologies. As a further example, U.S. E.P.A is requiring Selective 

Catalytic Reduction (SCR) technology for Best Available Retrofit Technology (BART) 

under the Regional Haze Rule (under the Clean Air Act) for San Juan Generating 

Station. U.S. E.P.A. has also proposed SCR technology in a draft rule for BART for 

Four Corners Power Plant, located on the Navajo Nation and utilizing Navajo coal, 

as well as in a Notice of Advanced Proposed Rulemaking for Navajo Generating Station, also located on the Navajo Nation and using predominately Navajo coal. U.S. 

E.P.A.’s requirement for SCRs is unreasonable and unnecessary to meet the requirements of the Regional Haze Rule, meant to be phased in over decades, as there is 

currently far cheaper existing technology which would meet the requirements of 

phase one of the Regional Haze Rule. Congress should consider legislation requiring 

U.S. E.P.A. and other federal regulatory agencies to implement the least costly regulatory requirements on tribes and tribal lands that are still consistent with federal 

law. The stringent requirements of federal agencies now affecting tribes costs tribes 

not only the ability to develop economically, but impacts existing royalties and lease 

rentals, and most importantly critical jobs and the government’s ability to provide 

services. 

There is only one way out of the trap of poverty and federal dependence, to allow 

and encourage Tribes to stand on their own and develop their own sustainable 

economies. In times of decreasing federal budgets this imperative is even more pronounced. The only way to accomplish this objective is to get the Federal Government 

out of the way and allow the Tribes to make their own decisions. The Navajo Nation 

is ready. Give us the opportunity. 

Attachments

64


216c1.eps

ro!:$OLtP.I!IOl'I OF 'l'HE 

NAVl\JQ lQ,'I;'rON COUNCTL 

2:200 NAvn.1O ~;eOJ! COtJNC:[li - !'i=t 't .. a.., 2011. 

""= 

-RBLA'H:NG l'O .m.B:!Ki'y~!.' f ~nw A1~1'S 'r(l 25 U.s.,". S 

us (F.) !!:O AtmroRnIE !l1ffill NAWv."JO NATroN -TO Z.!iStm Mni!lRAL LEAS:eS 

wn:l!Iotr.'t' E'EDERAL Al'PROVAL A't1D ~c J:NCR&lI.Sl1: waH DURA'l'ION Oli' 

At1'l!BOlUIU;:P BUS:rm:SS 1INP AGlUI!lT.noWURAL LI!ASES 

1. 'l:he- Na.".,.jo Natr,Qn l'Ifp:aby recommendS' amilndment.s to :23 

U.S.C. f:> 415ft) to au-::'h.o:r:i.ze the Uavajo Natie-:\ \:.<:> i:<>m .. mineraJ. 

lea~e:;, 'I<"ith~ut f.ederal appro¥<!l .. nd to 3.<1e.\:~<il th<'> dlirati<:lU of 

.a"rJ'l~:"~:ed i:ruSllne .. " and agricultural lozaae.s. l?rQ!>=~ sffia"'l<imO!!nts 

attacned ha~etc as EXhibit ~A.Y 

2. 'I'h", Navajo N .. t1or. Oil and Gas c.ol!Wany 

recolu~en(j-s the Simle amand.moll\;'l proposed here'-n. l'ts 

attached as Exhibit "8." 

BUpports l!Ind 

resolution i$ 

r Q~:rehy tmrt.il.'y that. th;;! fm:eg<:>ing itI'f!;!qlution w .. ,. duly 

eOr'.3ideroo by t~ t;avajo N:at.hm Cou.-,,::il at a dl.!>ly called l:!'2I?~i.ng 

.in Wind\1W P.f:.ck, "Na",aj.~ Nation t!'.r:i!Zor.aj at which a qu.:?r'..m< was 

p...~tml': al'lG ttiat the ~ was pasI>ed by a ·""te. ¢£ 15 .in favor a.."lU 

2 oppose4, this 19th day ~f, August.. 2011. 

A1ton'~ ghep~e~ 

C.tar~sg :Damon 
65


216c2.eps

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11!~';tation, pLlr""--,,,,1\ 

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t-<;. '2 ~.N C. 

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67

The CHAIRMAN. Thank you very much, Vice Chairman Jim. 

I am going to hold my questions for now and defer to Senator 

Tester for him to ask his questions. 

Senator TESTER. Thank you, Mr. Chairman. I certainly appreciate that. That helps me out a bunch. 

I will start with the Montanan in the crowd. Stoney, I appreciate 

your testimony and I also appreciate your level of expertise you 

bring to the panel. I didn’t know that you worked in the private 

sector, BIA and now a councilman. That is good. 

You said some things during your testimony that I would like to 

flesh out a little bit. Long delays in processing mineral leases, 

months, years. I did talk about TERA, I think Mr. Jim talked 

about TERA a little bit, too. Can you give me some ways we can 


216c4.eps
68

help streamline the processing of mineral leases? It shouldn’t take 

months and years. If it takes longer than it does on off-reservation 

land, that is certainly where the development is going to flow. 

I don’t even know how long it takes off reservation lands at this 

point in time. Could you give me some sort of idea what we could 

do and maybe what the differences are right now, if you can tell 

me that, how long it takes? And by the way, are those oil rigs you 

have on your tie? 

Mr. ANKETELL. Yes. 

Senator TESTER. Okay, I just wanted to point that out for the 

crowd. 

[Laughter.] 

Senator TESTER. Give me an idea of the difference between offReservation development and on-reservation development and 

maybe some things we could do. 

Mr. ANKETELL. Yes, Senator. The problem with the Bureau of Indian Affairs and the long time frames that it takes to get leases 

approved and other documents is that they are understaffed. The 

agencies are underfunded. And I just hate to be blunt here but, 

under-qualified people are put in very important positions. If an oil 

company was to embark on oil and gas development, they certainly 

wouldn’t put a farmer in charge of their oil and gas leasing department. 

Senator TESTER. Come on, really? 

[Laughter.] 

Senator TESTER. No, go ahead, you are right. You are absolutely 

correct. 

Mr. ANKETELL. We need technical experts in key positions. And 

the problem is that we may have an IHS employee transfer to the 

realty department. Then our CS person is now sitting as a superintendent. I believe that you should work your way up through realty, which is the branch of the Bureau of Indian Affairs that is 

in charge of oil and gas leasing. There should be years of experience behind people in key positions in oil and gas, and they are out 

there. 

On the fee land, you knock on the door of a farmer’s house and 

you can lease up to 5,000 acres in one day. With Tribal and allotted 

leases, Tribal can go pretty fast, as there is only one owner. But 

the allotted leases, you may have to hunt down literally hundreds 

of people, and small, minute percentages, and you have to get over 

50 percent to be able to get the lease approved and then be able 

to drill. 

So what happens when the BIA is inundated with leases and you 

don’t have the proper staff or the proper expertise in that office, 

what happens is that you may have somebody that signed an approved consent form, that person may pass away and it gets to be 

a probate. So the superintendent can still sign for a probate. But 

once the probate closes, now you have a whole bunch of new heirs 

that you have to go find. 

So if it takes a year or more, there may be two or three instances 

where a probate closes and a whole new set of heirs are now required to sign, so that the superintendent can approve those leases. 

So time is of the essence. I also want to stress that if my land, 

and I have signed a consent form, and it is submitted to the BIA 

69

for approval and they don’t get to it for a year or two or even three, 

which is the case at Fort Peck, that ties up my land for eight years, 

not five. The standard lease for a BIA lease is five years. But if it 

is sitting in the BIA waiting to be approved and it is down on the 

bottom of a pile of leases, then essentially the Federal Government 

is tying up my land for eight years, not five. That is grossly unfair, 

in my opinion. 

Senator TESTER. I appreciate the comments. Just to let you 

know, I am sure the BIA is watching this, so they probably agree 

with part of what you are saying. The fact is, I think your perspective on understaffed, underfunded, and potentially even underqualified are strong points. 

I want to talk about TERA a little bit, because Jodi Gillette said 

it would be a good idea, and I agree with her. This isn’t directed 

at anybody specifically, although Rex Lee Jim talked a little bit 

about TERA in his remarks. 

If you want to talk about it, you can; if none of you feel comfortable talking about it, that is fine, too. Can you tell me why it 

is not being used at this point in time? And it is not directed at 

anybody specifically, anybody who wants to talk to it can. With no 

Tribes in this Country utilizing TERA, there must be a reason for 

that. Go ahead, Rex Lee Jim. 

Mr. JIM. Thank you, Senator Tester. The Navajo Nation is very 

interested in pursuing a TERA as a way of removing the Federal 

Government from our development of Tribal energy resources. 

However, the TERA process requires the existence of significant capacity in terms of both institutional capacity and staffing. Even 

though the Navajo Nation has a sophisticated regulatory structure 

with institutions and tough environmental laws, we still need help 

in fully developing our capacity. 

So we urge Congress to provide grants to help in those areas. 

Senator TESTER. That would be good. We do need to have some 

collaboration to figure out how we can make it work. Because it 

was set up back in 2005, I believe is when it was done, and it is 

still non-functional. We need to work together to figure that out. 

I would be interested in doing that in a big, big way. 

I have a lot of other questions that may take up—one more. Levi, 

you talked about disclosure of the fracking fluid. I know, and I 

have heard both sides of this equation, I have heard that there are 

no contaminants in it, nothing to worry about and then I have 

heard folks say there are big things to worry about. 

I guess the question I have for you, if you made a request to the 

companies for disclosure and have they turned you down? 

Mr. PESATA. On the fracking issue, on Jicarilla, what our concern 

is basically is the chemical content that is used for fracking. We 

are concerned about water contamination. And like you say, there 

are two sides to the story. I think it is kind of a sensitive issue, 

because even the State of New Mexico, my home State, does not 

have a position on fracking. Although it is coming to the forefront 

more and more, I understand the BLM draft regulations that are 

coming out is asking for something like prior approval before using 

a fracking mechanism on any well, and also kind of a follow-up. 

I believe that it is still an issue, because whatever chemicals they 

are using are not disclosed. Regardless of which way this issue 

70

goes, I think it is important, because there are health issues on the 

reservation, for rural residents, they come down with cancers and 

different kinds of medical problems, which really does not correlate 

with the general environment and some of the health issues that 

are inherent in that environment. 

So it is an issue, I believe, that needs some disclosure. 

Senator TESTER. I would agree with that. I think that one of the 

things that bothers me about this, and make no mistake about it, 

and Stoney, you talked about it, I think without the fracking process we wouldn’t be able to access the Bakken. So it is important 

that we keep those options open. On the other side of the coin, if 

there is nothing in it that we need to be worried about, why hasn’t 

it been disclosed? That really is part of the equation. 

I know there are trade secrets involved and all that, but I have 

told folks in the industry that, quite honestly, the fracking process, 

there is information on both sides of the fracking fluid, there is information on both sides, and they need to get some good research 

out there so we can make good decisions. 

Thank you all for your testimony, I very much appreciate it. 

The CHAIRMAN. Thank you. Thank you very much, Senator Tester. 

I have a question for each of you. I want to deal with particular 

parts of energy. 

President Bordeaux, your Tribe is a producer of wind energy. 

What advice could you offer other Tribes hoping to develop their 

wind energy? 

Mr. BORDEAUX. Mainly getting an investor, getting a good company that you can trust, do a lot of due diligence on them. One of 

the major problems we have is the power purchase agreement and 

finding that investor and attracting the business. 

Another major factor that we are having is, as Mr. Jim mentioned too, is the State taxation of trust lands. That is a huge problem. We think it is illegal, they impose what they call a nameplate 

tax on our trust lands. And it is completely illegal, and it has happened on Navajo, it is going to happen everywhere. It is going to 

be an issue you have to face. 

But the problem that really started that was basically coming 

across Indian Country, because there is a lot of development of 

wind energy in South Dakota, the taxes are driving wind energy 

Development away in South Dakota. They are all over in Minnesota. So that is a major problem. So you are going to have to 

watch out for the State. 

And the Federal Government needs to assist us in that effort, 

and getting the resources. It is good that the DOE is helping out, 

the BIA is helping out. But the imposition of illegal taxes by the 

State, that is a major problem. And doing the studies, adequate 

studies that make sure that you have that, and the environmental. 

Even with the Bureau, they are talking about their leasing regulations and stuff, and I would like to agree with my colleague from 

Fort Peck, you get adequate personnel, trained personnel, knowledgeable personnel in the BIA leasing offices, they are not adequately funded. We need to fund the local BIA offices to a capacity 

where they can make these decisions and get qualified people in 

there. 

71

Most of the money that is taken away from the agency level either ends up in the area offices or here in Washington. And it 

needs to be down at the local level where all the action is, at the 

reservation level. 

The CHAIRMAN. Thank you for sharing. 

President Pesata, your Tribe is a leader in oil and gas production. What advice could you offer the Tribes who may wish to develop their resources? 

Mr. PESATA. Mr. Chairman, I think a lot of the recommendations 

that were given by the presenters here are very important. I think 

that consent must be very important. I think the cooperation of the 

agencies that I have mentioned, BIA, BLM, ONRR and so forth, 

must all work together to provide adequate information before any 

lease is signed. 

As we proceed through oil and gas development I believe that it 

has been mentioned here that some of the forms and documents 

used for oil and gas leasing are so outdated that they need to be 

revised. I think they need to mention some of the things that I 

have mentioned, like the bankruptcy issues on how to deal with 

that as you proceed through this. I think a lot of the oil and gas 

companies are using bankruptcy right now to circumvent some of 

the Federal laws that are available to protect Indian oil and gas 

and other energy leasing on our reservations. 

So what is said here I think is very pertinent to the hearing 

today, Mr. Chairman. 

The CHAIRMAN. Thank you. 

Councilman Anketell, what would being better enabled to develop wind energy mean to your people? You have mentioned to us 

many of the problems, the delays of leases and so forth, that you 

are experiencing at the present time. I thought I would ask you 

about something that enabled you to develop wind energy and what 

it means to your people. 

Mr. ANKETELL. Thank you for the opportunity, Mr. Chairman. 

On the Fort Peck Reservation, we developed a feasibility study 

in 1997 to determine the feasibility of wind energy on the Fort 

Peck Reservation. We got a quarter of a million dollar grant from 

the Department of Energy, hired Bechtel to do a total feasibility 

study on this. 

We do have Class 6 winds. What would the benefit be to us is, 

I have always envisioned, if we have enough transmission capacity 

to get it off the reservation, then we could sell the power to a utility and still have enough left over to provide free electricity to our 

Tribal membership. That still is a goal of mine. We need the transmission capacity to be upgraded along the high line. 

If we do, it would provide a tremendous benefit to our people, because of the extreme weather that we suffer. Our winters may get 

as low as 40 below zero Fahrenheit. It gets as high as 110 degrees 

in the summer. So we have huge swings in temperature. So we 

have a large need for the energy, either to heat our homes or to 

cool them in the summer. What an ideal thing we would have if 

we had a wind farm that would allow that as a benefit to our people. 

So I hope that answers your question. 

72

The CHAIRMAN. Yes. We want to share what you have learned 

that may help other Tribes, as they seek to use this type of energy. 

So thank you very much for that. 

Mr. ANKETELL. Thank you, sir. 

The CHAIRMAN. Ms. Kauhane, why is the substantially underserved trust area definition, better known as SUTA, maybe you 

could explain that also, why is that important to the development 

of energy in Hawaii? 

Ms. KAUHANE. Thank you, Senator. For Hawaii, the first community that comes to mind and why SUTA is important, Substantially 

Underserved Trust Areas, as defined in the Farm Bill of 2008, if 

some of our trust lands, if we implement the SUTA definition to 

automatically include any of the trust lands with that definition, 

it would bring in Federal programs, resources, attract new capital 

and credits to our trust lands. 

One example in particular, new market tax credits. In Kona, we 

have 10,000 acres that are prime for solar renewable energy PV 

farms. But because it is so close to the tourist destination, it 

doesn’t fit within the census track. Therefore, we can’t attract private capital through new market tax credits. 

But if we implemented the SUTA definition, all of our trust 

lands, whether they are close to the destination for the traveler or 

not, it would allow us to attract capital and tax credits, private 

capital in the form of tax credits on our trust properties. 

The CHAIRMAN. Thank you. Other Tribes can benefit by it, and 

the idea is to look for available money that can help you develop 

these energy systems. 

Ms. KAUHANE. Yes. 

The CHAIRMAN. So thank you very much for sharing that. 

Vice President Jim, your Tribal lands are geographically positioned to become a great producer of solar energy. Can you tell me 

what obstacles stand in your way in developing solar energy? 

Mr. JIM. Well, Chairman Akaka, it really comes down to land 

issues. We have huge land, but we have land regulations in place 

where one individual who has a permit to graze land can say no 

and stop the whole development. So we need to revisit those BIA 

regulations of how we deal with land and if we change that and 

allow for a different process, then we will be able to develop more. 

And as indicated, if somebody passes on, the next generation might 

say no to it. So we need to change those laws. 

And the other is capital capacity. Any time you need to start 

something, you do need money. So we do want to do business with 

private firms. We call that strategic partnering. When we want to 

do that, the whole idea of double taxation, it all comes into place. 

So businesses shy away from that. 

And not only that, but when businesses come in, and we spoke 

to this earlier as well, that is the land status, they know that it 

is not owned by the Navajo Nation. And if they invest so much into 

it, and for some reason, either the Tribe or someone defaults on it, 

on the loans or whatever is in place, they are not able to get to the 

land. So they shy away from that as well. And if they built something and they might end up losing it. 

So these are some of the critical issues that we need to address. 

73

The CHAIRMAN. Well, you can certainly help other Tribes think 

about the possible obstacles that you have experienced in trying to 

build solar energy. 

I have a question for all of you on the panel. Many of you alluded 

to the high unemployment rate in your communities. My question 

to you is, do you have any estimates as to how many jobs could be 

created, could be created with energy development? President Bordeaux? 

Mr. BORDEAUX. Mr. Chairman, just for our 30 megawatt wind 

farm, we probably had 100 jobs for construction initially for about 

six months, four to five permanent for the O&M. For the larger 190 

megawatt, we are talking about 200 jobs for 9 to 12 months, construction, and then 15 to 20 permanent jobs. Value-added jobs, 

hopefully the construction business startup. The Tribe does not 

have a concrete or construction company. That would need to be 

developed. We are in the infancy stages on that. 

What we are also looking at is to, with the revenue from the 

wind farm, is to develop more small businesses on the reservation 

and try to attract our dollars, and encouraging our people. Because 

80 cents out of the dollar leaves the reservation to surrounding 

communities. If we have more businesses on the reservation, we 

can spend that dollar locally and create more jobs. 

So primarily small business development and Tribal contracting 

business also. Thank you. 

The CHAIRMAN. Thank you. 

Mr. Pesata? 

Mr. PESATA. Mr. Chairman, we are primarily involved in oil and 

gas, that is probably about 90 percent of our revenue to operate our 

government. We have approximately 15,000 employees that are 

non-Tribal on the reservation from the oil and gas industry. And 

a very small percentage of that goes to Tribal member. 

The reason for that is it is very hard to get into the oil and gas 

industry, even though we have attempted to get programs, even 

from the high school level where we can have some training for 

young people on the reservation. It seems like we are not making 

a whole lot of headway. 

So right now, with our new agreements that we have with the 

oil and gas activity coming into the reservation, we are trying to 

make that a part of the agreement, so that we can put more jobs 

onto the reservation. I think that if we can get that, as we move 

along eventually, we can pick up, I think, maybe close to 1,000 jobs 

that we can add to our employment force. I think that is very important, we are trying to focus on that. 

Some of the other local activities, we have some small businesses 

and enterprises, like gaming operations on the Reservation. But 

that doesn’t employ a whole lot of people. So we still have a problem, we are still struggling to get more people to work. Thank you. 

The CHAIRMAN. Thank you very much, President Pesata. 

Councilman Anketell? 

Mr. ANKETELL. Mr. Chairman, I think that if we were to get our 

energy house in order, which my Tribe is making every effort to do 

so, we could eliminate the unemployment rate, the high, unusually 

high unemployment rate of our reservation. First of all, we, 

through strategic partnerships, have drilled the first two Bakken 

74

wells on our reservation. In fact, they are being fracked, one of 

them is being fracked as we are speaking today. It started Monday. 

It takes about a week to frack it. Then they are going to move to 

the second well and frack that. 

And this is all Tribal. This was a Tribal initiative, we went out 

and got the leases. We formed the partnerships and are a very active participant in developing our own oil and gas resources. It is 

called Fort Peck Energy Company. 

So I am really proud of that, that we took the initiative to drill 

two wells that were many millions of dollars each. 

I want to just briefly touch on a problem that exists in my area, 

my part of the world. And that is that there is so much new production coming online through the Bakken that oil pipelines are at 

full capacity. They are having to transfer the oil out of the region 

by rail cars or by any which way they can. They are paying huge 

fees to get it into pipeline; instead of being offered a premium they 

are paying a premium to get it to the nearest refinery. 

So with that extreme need, we are developing a refinery on Tribal land within our reservation, on an old refinery site, so we can 

clean it up. It is a brownfield by the EPA standard, it is a 

brownfield. And the only way really to economically clean it up is 

to refine the products that are floating on top of our groundwater. 

We will pump it out of the ground, refine it, sell it and use the revenues to further clean up this 110-acre piece of land that the old 

Kemco refinery sat on. 

So I think it is the first of its kind, where we are not taking new 

land, pristine land and turning it into a refinery. We are talking 

about brownfield land we are turning into a refinery. With that 

comes jobs, jobs and more jobs. Because oil exploration is not laborintensive, but the refining process is. And many, many jobs go 

along with it, like mechanics, truck drivers, et cetera. 

So I would ask for strong Federal support in our efforts to, when 

we endeavor to move forward on this refinery project, it is in the 

infancy stage. But the land has been purchased, we are moving forward. So that will take our 65 percent unemployment rate and 

take it down to practically nothing. 

I would urge this Committee to help us in our endeavor to get 

a refinery online. The first one in the United States since 1976, 

there has not been a new refinery built. Thank you, sir. 

The CHAIRMAN. Thank you for that report. 

Ms. KAUHANE.

Ms. KAUHANE. Thank you, Chairman. 

I can speak to the project that we are currently partnering with 

the homesteaders and the community utility co-op in Anahola. And 

that particular, it is a 12 megawatt farm. Total cost of that project 

is at $62 million, $24 million of that coming from 1603 credits 

through the DOE program under ARRA. It will create about 125 

jobs while the farm is being developed and put into operation. 

But I think more importantly for Anahola and that community, 

because the community is at the forefront of that project, not only 

will they have the short-term jobs through the process of development, but we have community benefit agreements in place, where 

the community then gets to do the maintenance of the grounds and 

75

have other longer-term jobs for the area after the project is done 

in the construction phase. 

I would also like to say for the record that what is very, very exciting in listening to all of the panelists and how powerfully important clean energy is to Tribal lands across our Nation is that it is 

really the true essence as Native people to be self-sufficient, that 

we have opportunities because of our land base and our land asset 

to take charge of our destiny and create jobs, both on and off homesteads. I think it is powerfully important, we thank you for this 

hearing as we take a look at all the needs around energy. Mahalo. 

The CHAIRMAN. Thank you, Michelle Kauhane. 

Vice President Jim? 

Mr. JIM. Thank you, Chairman Akaka. The Navajo Nation has 

more than 300,000 members, nearly 200,000 of them live on Navajo. And we have a 55 percent unemployment rate, with nearly 50 

percent living below the Federal poverty line. 

We also have about $2.5 billion coming through Navajo and 85 

percent of that goes off Navajo to border towns. Only 15 percent 

remains. We are working to reverse that, so that 85 percent remains and the 15 percent is going off to border towns. 

One way of doing that is to develop our own energy, because 

when we do that, we are also creating jobs on Navajo, so more and 

more people will stay on Navajo and spend more money there. We 

do not have an estimate, but we estimate that the Desert Rock 

project alone would have been over 1,000 permanent jobs, at the 

plant and in the mine, and 2,000 construction jobs. That was just 

one project. 

We also estimate that for every energy job created, three subsidiary jobs are created to support the energy jobs. So that is just 

one project that we have on Navajo. So if we had several projects 

similar to this going on, we would be creating quite a bit of jobs. 

Thank you. 

The CHAIRMAN. Thank you very much. 

It is good to hear of these possibilities. I want to wish all of you 

well in your pursuits and your endeavors in energy across the 

United States. 

I want to thank our witnesses for participating in today’s hearing. Enabling Native communities to develop their energy resources 

helps them develop their economies and provide for their people, as 

has been mentioned. It also creates jobs in rural communities 

throughout the United States for both Natives and non-Natives 

alike, while reducing dependency on foreign energy sources. 

I look forward to continuing to work together with my colleagues 

on these issues, so that we may implement policies that improve 

Native energy development. You have given us possible areas to 

work in here in the Congress. Because we want to continue to hear 

from you, please remember, the hearing record is open for written 

testimony for the next two weeks. You may send in your testimonies to us. 

This has been an interesting hearing, and it is good to hear of 

what you are doing out there. I hope that what we have heard in 

here will be the basis of developing greater programs throughout 

the Nation and energy for the indigenous people of our Country in 

Indian Country, Alaska and Hawaii. 

76

So mahalo nui loa, thank you very, very much. This hearing is 

adjourned. 

[Whereupon, at 4:25 p.m., the Committee was adjourned.] 

(77)

APPENDIX

PREPARED STATEMENT OF THE CROW TRIBE OF MONTANA

I. Introduction 

The Crow Nation welcomes this opportunity to share our views and concerns 

about energy development in Indian Country. The Crow Nation’s energy resources 

are abundant and the financial stability of our Tribe is wholly dependent upon 

them. The Crow Nation is uniquely positioned to contribute to the energy independence of our country. 

We applaud this Committee’s leadership in reviewing how Tribal energy development can be facilitated so as to fully contribute to national energy security. Over 

the years, Congress has attempted to make investing in tribal business attractive 

to private business, for example, in 1993 Congress provided tax incentives to help 

‘‘level the playing field’’ for tribal projects to compete with similar off-reservation 

projects. We see a necessary role for legislative intervention to ensure that Tribes 

can use our resources to the benefit of our people and all Americans by creating jobs 

directly and indirectly by providing raw materials and energy. The vast energy opportunities in Indian Country and the economic value of such resources not only to 

the Tribes that own them, but to the nation as a whole, must be freed from needless 

regulatory burdens. Eliminating obstacles to energy project development, along with 

providing incentives to create jobs in Indian Country to produce energy resources, 

will build additional national capacity to create even more jobs in the national economy. This is an opportunity that cannot be missed. 

In this testimony, we describe the extent of the Crow Nation’s coal, oil and natural gas, hydropower and wind energy resources and the existing and planned facilities and projects utilizing these resources. We also discuss the obstacles to increasing the development of these resources and the solutions we propose to reduce the 

obstacles. With an estimated 3 percent of the nation’s coal resources, as well as with 

preliminary estimates of significant oil, natural gas, and wind reserves, the Crow 

Nation is well positioned to provide the secure and dependable domestic energy resources that our national economy needs. And our energy resources will provide 

good jobs as we further develop them. 

II. Crow Energy Resources 

Land and Population 

The Crow Nation is a sovereign government located in southeastern Montana. The 

Crow Nation has three formal treaties with the Federal Government, concluding 

with the Fort Laramie Treaty of May 7, 1868. The Crow Reservation originally encompassed most of Wyoming (including the Powder River Basin) and southeastern 

Montana. Through a series of treaties, agreements and unilateral federal laws over 

a 70 year span, Crow territory was reduced by 92 percent to its current 2.2 million 

acre area. 

In addition to this substantial land loss, the remaining tribal land base within 

the exterior boundary of the Crow Reservation was carved up by the 1920 Crow Allotment Act. In 1919, prior to the Allotment Act, there were already 2,453 allotments, consisting of 482,584 acres. By 1935, there were 5,507 allotments, consisting 

of 2,054,055 acres (218,136 acres were alienated from tribal ownership by 1935). 

The Big Horn and Pryor Mountains were not allotted and still remain reserved for 

the Crow Nation and its citizens. 

According to more recent Bureau of Land Management Reports, the land statistics 

have shifted: 45 percent Crow allotments; 20 percent Crow Nation trust land; and 

35 percent non-Indian fee land. In sum, the pattern of surface ownership generally 

is ‘‘checkerboard’’ with interspersed Crow Nation trust and fee lands, Crow allotments (held in trust for individual Tribal member owners), and non-Indian fee 

lands. The statistics show limited success of the Crow Nation in reacquiring lost 

lands, but the reality is a much larger pattern of continued loss. 

78

Today, there are more than 13,000 enrolled citizens of the Crow Nation, with approximately 8,000 of those residing within the exterior boundaries of the Reservation. Additionally, a recent study indicates that the tribal population will exceed 

20,000 citizens by 2015, which will add further stress to our fragile developing economy, and sharply increase the level of basic human services needed by our population. Our goal is to invite more of our citizens to return home to live and resume 

tribal relations, but we must be able to offer tribal members solid opportunities to 

hold stable and meaningful employment, homes, and educational opportunities. Our 

current unemployment rate is 47 percent according to BIA statistics. The Crow Nation has always emphasized higher education and we currently have more than 400 

annual applications for higher education assistance. Because of federal funding limitations and internal budget constraints, however, we can only fund 90 students each 

year. 

In addition to providing financial support for education, we have a separately 

chartered tribal college (Little Bighorn College, ‘‘LBHC’’) that started operations in 

1981. LBHC has graduated over 300 students to date. LBHC graduates are employed on and around the Crow Reservation in a variety of positions including 

teachers’ aides, computer technicians, office managers and administrative assistants. At least sixty have completed bachelor’s degrees and are pursuing professions 

in education, social work, human services, science, nursing, technology, accounting 

and business. As we move forward in developing our energy resources, our own college can help to provide our citizens with training in new fields for expanded job 

opportunities, including vocational-technical courses to support energy development. 

Minerals, Past and Present 

The Crow Nation has an opportunity to develop tribal resources because the 1920 

Crow Allotment Act, as amended in 1968, reserved all minerals, oil and gas on any 

lands allotted under that Act for the benefit of the entire Tribe in perpetuity. Today, 

although some checkerboarding of mineral rights also exists on the Crow Reservation, subsurface mineral acres are owned primarily by the Crow Nation. For example, in the southeast corner of the Reservation, 1.3 billion tons of recoverable coal 

are wholly owned by the Nation. The larger portion of natural resources within the 

Reservation boundaries are recognized but remain largely untapped. 

The Crow Nation has developed a limited amount of its resources, typically with 

royalty (and some tax) revenue received as the lessor. Although the Crow Nation 

pursued some oil and gas development between the 1920s and 1950s, more recent 

natural gas development has been hampered by lack of pipeline infrastructure and 

the Federal Application for Permit to Drill (APD) fee. Most of our governmental revenue is derived from our 38-year relationship with Westmoreland Resources, Inc. 

Over that period, the Absaloka mine has produced about 150 million tons of coal 

and is the largest private employer within the Crow Reservation. 

The Crow Nation has very substantial undeveloped mineral resources. Our coal 

resources exceed 9 billion tons. We have been exploring our oil and gas reserves, 

and preliminary estimates indicate that they are significant. In addition, we have 

large deposits of industrial minerals, such as limestone and bentonite. Finally, preliminary data suggests that we have class 5/6 wind energy as well as other renewable resources. The Nation is currently in talks with various companies regarding 

the development of these untapped resources, but barriers have slowed or prohibited 

significant progress. 

III. Crow Energy Projects 

A. Absaloka Mine 

The Absaloka Mine, owned and operated by Westmoreland Resources Inc. (WRI), 

is a 15,000-acre single pit surface coal mine complex located near Hardin, Montana 

and the Crow Indian Reservation. WRI mines coal leased from the Crow Nation pursuant to two different coal leases. The mine shipped its first coal in 1974, and has 

been a steady and reliable source of coal to its customers, and revenue to the Crow 

Nation for a continuous 37 year period. The Absaloka Mine was expressly developed 

to supply Powder River Basin coal to a group of Midwestern utilities, including Xcel 

Energy’s Sherburne County Station near Minneapolis, Minnesota. The mine also enjoys a proximity advantage to these customers relative to its main competitors. Over 

the years, it has also sold coal to several other upper Midwest utilities as well. Coal 

is shipped via a 38-mile rail spur to the main line of the Burlington Northern Santa 

Fe Railroad near Hysham, Montana. WRI is currently evaluating a substantial investment in the construction of a westward bound railroad connection to facilitate 

coal transportation to explore west coast and export coal sales opportunities. 

The Absaloka Mine can produce up to approximately 7.5 million tons of coal annually, and has produced over 172.6 millions of tons over its life. WRI annually pays 

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substantial production taxes and coal royalties to the Crow Nation; $9.9 million of 

taxes and $9.1 million of royalties were paid in 2010. These royalties and taxes 

amounted to 25 percent of the gross revenue of the mine last year. These taxes and 

royalties are representative of the mine’s financial contribution over the past several 

years. The significant portion of the Crow Nation’s non-Federal revenues come from 

the Absaloka Mine. In 2010, these revenues accounted for nearly two-thirds of the 

Nation’s non-federal funds budget. WRI employs a variety of skilled, managerial, 

professional, and hourly employees, with an annual average salary of over $62,000 

and a total annual employment expense of approximately $16 million dollars. The 

Absaloka Mine is the largest private employer of Crow Tribal members on a reservation that struggles with an unemployment rate that exceeds 47 percent. More 

than 70 percent of the mine’s 163 member workforce consists of Crow Tribal members and affiliates. Without question, the Absaloka Mine is critical to the Crow Nation’s financial independence now, over the past 37 years, and well into the future. 

The Absaloka Mine continues to struggle financially with competition from the 

larger Powder River coal mines, and with the competitive advantage provided to 

Powder River coal through the impact of a price differential created by sulfur (SO2) 

emissions allowances under Title IV of the Clean Air Act. The competitiveness and 

the continued operation of the mine has been significantly facilitated by the tax benefits made possible by the Indian Coal Production Tax Credits (‘‘the ICPTC’’) included in the 2005 Energy Policy Act and beginning in 2006. The ICPTC neutralized 

the coal price differential related to the SO2 emission allowances. Without the 

ICPTC, the Absaloka Mine would have ceased to operate, thereby ending a substantial revenue source for the Crow Nation. The recent unplanned outage of the 

Sherburne County # 3 unit, which burns almost exclusively Crow coal, will put further pressure on the viability of the Absaloka Mine (and the Tribe’s finances), by 

cutting production in half for many months. In addition, 35 percent of the Mine’s 

workforce have been furloughed until the unit is repaired and brought back into 

service. Continuance of the ICPTC is critical to the future of the Absaloka Mine and 

the stability of revenue and jobs for the Crow Nation. 

The Crow Nation is proud of its 37-year partnership with Westmoreland on the 

Absaloka Mine. The Crow Nation seeks to ensure the continued economic viability 

of the Absaloka Mine, as the Tribal revenue and jobs that it provides are an overriding imperative for the Nation and its citizens. 

B. Many Stars CTL Project 

The Crow Nation has been working since 2008 to develop a very significant Coalto-Liquids (CTL) project within the Crow Indian Reservation called the Many Stars 

CTL Project. The Project will consist of a new surface coal mine and a proven direct 

coal liquefaction process plant that sequesters CO2, uses less water and is more efficient than conventional indirect coal liquefaction projects operating in the world 

today. This clean-coal technology based project offers the best opportunity for the 

Crow Nation to monetize our currently stranded, lower-quality coal assets and is a 

critical economic necessity for the Nation. The CTL project will also provide a critically needed key domestic energy source to the United States and help reduce America’s dependence on foreign oil. 

However, due to the recent economic downturn and investor concerns about future 

government policy towards CTL, greenhouse gases, and uncertain permitting requirements to allow carbon sequestration, this project has been struggling to move 

forward. Even with the currently robust commodity market for transportation fuels, 

project risk due to historical uncertainties with such commodity markets is still a 

deterrent to investors. The Tribe is currently seeking a new industry partner for the 

Many Stars project, and remains committed to developing an advanced coal conversion project for the long-term utilization of our coal with full carbon dioxide capture 

and sequestration. 

The Many Stars CTL Project will target conversion of up to 2 billion tons of Crow 

coal over the life of the project, initially producing 6–8,000 barrels of liquid products 

per day and ultimately expanding to produce up to 50,000 barrels or more of liquid 

products per day. The Crow coal would be converted to ultra-clean fuels, such as 

synthetic jet fuel and diesel fuel at an estimated yield of 1.5 to 2 barrels of liquid 

product per ton of coal. Thus, when considered in traditional oil and gas terms, this 

project has the opportunity to responsibly develop and monetize a world-class 3–4 

billion barrel oilfield. 

For the Crow people, the success of the Many Stars Project is absolutely critical 

to end decades of poverty and create the long term economic viability of the Crow 

Nation, and to provide for the long-term monetization of our vast coal resources. The 

first phase of the integrated surface mine and CTL plant could create up to 2,000 

jobs during an initial three year construction period with the expectation that a sigVerDate 0ct 09 2002 12:55 Nov 28, 2012 Jkt 075746 PO 00000 Frm 00083 Fmt 6601 Sfmt 6621 S:\DOCS\75746.TXT JACK
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nificant portion of these jobs would continue as the plant is expanded during the 

subsequent 10–15 years. The number of permanent operations jobs is expected to 

grow from 250 to 900 upon the commencement of initial operations of both the mine 

and plant. The jobs created by this project would include high level positions, such 

as engineers and managers, as well as skilled trades (mechanics, electricians, welders). In addition, income generated by the project could serve to support the Nation’s 

severely underfunded education and health care programs and support the development of key infrastructure on the Crow Reservation to improve the lives of its citizens. 

C. Other Crow Coal Development 

For many years, members of the Crow Nation have watched a nearly continuous 

stream of unit trains cross the Reservation every day on the BNSF Railway, carrying someone else’s coal to market. The Nation has active plans to develop several 

billion tons of ultra-low-sulfur coal located in the southeastern portion of the Reservation, for markets that the Absaloka Mine is not well-positioned to serve. These 

markets could include exports to Asia, which are currently constrained by port terminal capacity on the west coast, as well as difficulty in permitting new coal terminals generally. 

D. Oil and gas Development 

During 2005–2008, the Crow Nation leased substantial areas of the Reservation 

for oil and gas exploration and development, using Indian Mineral Development Act 

agreements. Unfortunately, the independent oil and gas companies who leased these 

lands did not discover any conventional oil plays like the Bakken formation in 

northeastern Montana and North Dakota. Instead, the conventional oil exploration 

work under these agreements resulted in dry holes. 

This leasing activity did prove the existence of substantial shallow natural gas reserves on the Crow Reservation. In August, 2009, Ursa Major (an independent oil 

& gas company from Oklahoma) began delivering the first Tribal natural gas into 

the interstate pipeline system from the northeastern portion of the Reservation. 

Further full-field development of Ursa Major’s gas field has been slowed by low natural gas prices, coupled with the $6,500 per well APD fee charged by the BLM. 

Following the crash in oil prices and the credit markets in late-2008, the industry’s interest in leasing Crow oil and gas lands evaporated, and most development 

plans were suspended. Recently, we have begun to see some renewed interest, as 

evidenced by drilling plans for this year on a heavy oil prospect in the Pryor area 

on the western portion of the Reservation, but the $6,500 APD fee currently in place 

reduces the interest of potential developers. 

The Nation will continue to pursue oil and gas development, knowing that there 

are substantial natural gas resources on the Reservation, trusting that the current 

heavy oil prospect will prove economic, and hoping that our luck will improve on 

locating other conventional oil resources. 

E. Wind Energy 

The Crow Reservation encompasses areas with a significant potential for wind energy development. The Crow Nation has, with the assistance of the Division of Energy and Mineral Development through Department of Interior, compiled wind data 

for the past several years, which indicates a steady and reliable Class 5/6 wind resource in several areas of the Reservation. The most significant resource areas are 

also located in direct proximity to existing transmission lines, and are relatively easily accessible using existing paved highways and secondary roads. The wind resource areas encompass lands held in a variety of ownership patterns, including 

tribal trust, individual tribal member allotments (many of which are highly 

fractionated), and non-Indian fee lands. 

F. Hydropower 

In 1958, the United States condemned over 5500 acres of Crow Reservation lands 

for building Yellowtail Dam. Yellowtail Dam became operational in 1966. The dam 

generates over a half billion kilowatt hours of power per year, even during drought 

conditions. To date, the power generation revenues have exceeded $600 million dollars. Although the Crow Nation did receive a few million dollars for the land taken 

to create Yellowtail Dam, the Crow Nation has never received any payment from 

the ongoing revenue from power generation. 

The recent Crow Water Rights Settlement Act of 2010 grants the Nation exclusive 

rights to develop and market hydropower from the Yellowtail Afterbay Dam (immediately downstream from the main Dam). Based on previous Bureau of Reclamation 

studies, the Yellowtail Afterbay should support the economic development of a 

small, low-head hydropower facility with an estimated capacity of 10–15 Megawatts. 

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The Nation is currently conducting a preliminary feasibility study to confirm that 

potential, and to evaluate transmission and marketing opportunities. Our study 

should be complete in a few months, and provide the necessary information to finance and construct the hydropower facility within the next two years. 

The Nation is considering using this hydropower production to supply the local 

rural cooperatives that provide electric power to the Reservation, to replace their 

current supplies of low-cost Federal hydropower which will no longer be available 

in a few years. It also appears that the Afterbay hydropower development could improve water quality in the blue-ribbon trout fishery on the Big Horn River. 

IV. Obstacles to Continued Development of Crow Energy 

A. Laws and BIA Procedures Impeding Energy Development 

Despite the fact that the Crow Nation has substantial resources, numerous practical problems arise from the previously described history. The Crow Nation and our 

energy development partners have experienced, and continue to experience, systematic problems in trying to create energy development and the new jobs that would 

be associated with that development. The Bureau of Indian Affairs (BIA) consistently creates barriers and delays to resource development. 

For example, for an oil and gas lease approved by the Nation in January of 2005, 

development did not begin until September of 2007 because of an extremely slow 

BIA approval process. Within the approval process of that lease, an inventory of 

Tribally-owed net mineral acres was reported as 94,000 acres. However, after the 

lessee expended large amounts of time and money reexamining mineral title information, an additional 50,000 net Tribal mineral acres was identified and confirmed. 

An error of this magnitude would be simply unacceptable in many contexts, but in 

our experience it is not surprising and is far from unique. 

BIA records for surface and mineral ownership are often erroneous, missing and 

out of date. These problems cause significant delay in preparation of environmental 

documents and overall land records necessary for business transactions. The BIA 

lacks the necessary staffing to provide accurate information on Reservation surface 

and mineral ownership, and to resolve additional questions that arise. It is extremely difficult to compete with off-reservation development because of these problems. Many companies view this, in addition to all other problems, as another prohibitive cost of doing business within the Crow Reservation. 

Recent BIA procedures have made it increasingly difficult to carry out exploration 

programs for energy and other minerals on the Reservation. For example, coal exploration involves drilling core holes with a truck-mounted drilling rig to verify the 

quantity and quality of coal, which take only a few days to drill, are accessed by 

existing undeveloped roads, and are fully reclaimed after completion. The BIA now 

requires full appraisals approved by the Office of the Special Trustee prior to obtaining consents from the allotted surface owners to drill the core holes and even to 

cross other allotments to reach the drill sites. These procedures, along with environmental assessments, result in long delays in exploration programs that could otherwise be completed in a matter of months. 

The obstacles posed by these procedures are even more prohibitive for other mineral exploration, such as bentonite, which require a large number of auger samples 

that have even less environmental impact and involve much smaller amounts of recoverable minerals. 

Finally, apart from the costs and delays caused by BIA staffing shortages and unnecessary procedures, laws that limit the duration of commercial leases on Tribal 

lands also impede development of large long-term projects such as the Many Stars 

CTL project. Many of these obstacles could be addressed by Congressional legislation such as the Indian Energy bill developed last year by the Senate Committee 

on Indian Affairs and introduced last session. 

B. Inability to Plan on Continued Availability of Federal Income Tax Incentives 

There are several current federal tax incentives for economic development in Indian Country, including an accelerated depreciation provision, an Indian wage tax 

credit, and the Indian Coal Production Tax Credit. However, the accelerated depreciation and wage tax credit both have substantial limitations that severely limit 

their usefulness for major Tribal energy development projects. 

More importantly, all of these tax incentives will expire again this year, and in 

the past they have been extended only one year at a time. For major Tribal energy 

projects, such as a coal mine or a CTL project with 6–10 year development lead 

times, the inability to rely on the continued availability of these incentives means 

that they cannot be factored into the economic evaluations that are necessary for 

investment decisions. 

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As further explained below, permanent extensions and appropriate modifications 

to these existing tax incentives would facilitate jobs and economic development, particularly energy development, on the Crow Reservation and for all of Indian Country. 

C. The BLM ‘‘APD Fee’’

Beginning with the FY 2008 Appropriations Act for the Department of Interior, 

Congress required the Bureau of Land Management (BLM) to charge a $4,000 fee 

to process every Application for Permit to Drill (APD) on the federal and Indian 

lands on which it supervises oil and gas development activity. The APD Fee has 

since been increased by subsequent appropriations legislation to $6,500 for each new 

well. The Crow Nation has continually protested the application of this fee to tribal 

lands, and has sought relief in numerous ways, but to date, no solution has been 

reached. 

This $6,500 fee compares to drilling permit fees of less than $100 off the Reservation in the State of Montana. Obviously, it is a disincentive to explore for oil and 

gas on Indian lands compared to off-reservation State and fee lands. As indicated 

above, it has been a major factor in the suspension of additional natural gas field 

exploration and development on the Crow Reservation by our partner, Ursa Major, 

who also holds leases outside the Reservation. The APD fee is a particular burden 

for the type of shallow (less than 1500’ deep), low-producing gas wells being drilled 

by Ursa Major. The cost of completing those types of wells is less than $150,000 

each, so the APD Fee represents a large portion of the capital investment necessary 

to bring additional wells into production. 

The APD Fee also discourages efficient development and slows exploration efforts. 

For exploratory ‘‘wildcat’’ drilling where success is not a sure thing, the developer 

can only afford to get permits for a couple of wells at a time, see if they hit gas, 

and if so, file APD’s for a couple more and repeat the cycle. Without the high APD 

Fee, the developer would be able to obtain many permits and immediately drill additional wells if the first ones are successful. Considering the lead time for issuance 

of the drilling permits (60–90 days), the APD Fee causes delays of up to a year developing a handful of new wildcat wells, in addition to adding tens of thousands dollars of non-productive costs that limit the Nation’s ability to charge taxes and royalties on the future production. 

V. Proposed Solutions 

A. Federal Tax Incentive Legislation 

1. Indian Coal Production Tax Credit 

The 2005 Energy Policy Act provided the Indian Coal Production Tax Credit beginning in tax year 2006, based upon the number of tons of Indian coal produced 

and sold to an unrelated party. ‘‘Indian coal’’ is coal produced from reserves owned 

by an Indian Tribe, or held in trust by the United States for the benefit of an Indian 

Tribe, as of June 14, 2005. The tax credit is calculated by totaling the number of 

tons of Indian coal produced and sold, then multiplying that number by $1.50 (for 

calendar years 2006 through 2010). For tax years between 2010 and December 31, 

2012, the total number is multiplied by $2.00. 

The origin of this production tax credit began with the goal of neutralizing the 

impact of price differentials created by sulfur (SO2) emissions allowances, thereby 

keeping Indian coal competitive in the regional market. Without the credit, the 

Crow’s Absaloka mine would have lost its supply contract and likely been closed in 

2005, which would have had a devastating impact on the Nation given that this 

mine provides a major portion of the Nation’s government’s operating budget. The 

tax credit has worked to keep the mine competitive and open. While the threat to 

the viability of Crow coal sales from emission allowance pricing has passed for the 

time being, other threats to coal sales continue. The loss of sales to the Sherburne 

County # 3 power plant, a major customer, presents a serious challenge in the short 

term. The ICPTC allows Crow coal to compete better in the regional market. Making this tax credit permanent provides the Nation with a basic level of security in 

the volatile energy markets, in addition to creating future opportunities for expanded sales and revenue back to the Nation. 

Now, in 2012, this tax credit remains critically important to the current operation 

of the existing Absaloka Mine and provides sufficient incentive to help us attract 

additional investment for future energy projects to diversify the Tribe’s income 

sources. In order to protect existing operations and encourage growth, the Indian 

Coal Production Tax Credit should be made permanent, should be allowed to be 

used against alternative minimum tax, the placed-in-service date should be extended for at least 10 years, and the requirement that the coal be sold to an unreVerDate 0ct 09 2002 12:55 Nov 28, 2012 Jkt 075746 PO 00000 Frm 00086 Fmt 6601 Sfmt 6621 S:\DOCS\75746.TXT JACK
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lated person should be deleted to allow and encourage facilities owned, in whole or 

in part, by Indian Nations to participate and benefit from the credit. 

2. Accelerated Depreciation Allowance 

Included in the Omnibus Budget Reconciliation Act of 1993, Pub. L. 103–66, 107 

Stat. 558–63, codified at 26 U.S.C. 168(j), 38(b), and 45(A), are two Indian reservation-based Federal tax incentives designed to increase investment and employment 

on Indian lands. The theory behind these incentives was that they would act in tandem to encourage private sector investment and economic activity on Indian lands 

across the United States. Neither incentive is available for gaming-related infrastructure or activities. The incentives—an accelerated depreciation allowance for 

‘‘qualified property’’ placed in service on an Indian reservation and an Indian employment credit to employers that hire ‘‘qualified employees’’—expired on December 

31, 2003, and have been included in the short-term ‘‘extenders packages’’ of expiring 

tax incentives since that time. 

Energy projects require significant equipment and physical infrastructure, and involve the hiring of large numbers of employees. Crow is not alone in our resource 

holdings; for several Indian nations, estimates of proven and undeveloped energy resources on Indian lands suggest that revenues to tribal owners would exceed tens 

of billions in current dollars. As the energy development market improves and the 

federal programs enacted in the 2005 pro-development energy law, the Indian Tribal Energy Development and Self-Determination Act (Pub. L. 109–58), energy-related 

activity on Indian lands will increase substantially in the years ahead. 

Unfortunately, one-year or two-year extensions of the accelerated-depreciation 

provision do not provide an incentive for investment of new capital in Indian country for significant energy projects. Development of major projects generally takes a 

decade or longer. Investors need certainty that the benefit will be available when 

the project initiates operations in order to factor that benefit into their projected 

economic models, as well as investment decisions. A permanent extension would address this problem, making the incentive attractive to investors in long-term energy 

projects on Indian lands. 

As currently written, the depreciation allowance could be interpreted to exclude 

certain types of energy-related infrastructure related to energy resource production, 

generation, transportation, transmission, distribution and even carbon sequestration 

activities. We recommend that language be inserted to statutorily clarify that this 

type of physical infrastructure expressly qualifies for the accelerated depreciation 

provision. In proposing this clarification, it is not our objective to eliminate non-energy activities that might benefit from the depreciation allowance. Indeed, if adopted, the language we propose would not discourage other forms of economic development in Indian country. 

By providing this clarifying language and this permanent extension, the accelerated depreciation provision will finally accomplish its purpose—enhancing the ability of Indian nations to attract energy industry partners to develop long-term 

projects utilizing the vast Indian resources available. 

3. Indian Employment Wage Credit 

The 1993 Act also included an ‘‘Indian employment wage credit’’ with a cap not 

to exceed 20 percent (20 percent) of the excess of qualified wages and health insurance costs that an employer pays or incurs. ‘‘Qualified employees’’ are defined as enrolled members of an Indian tribe or the spouse of an enrolled member of an Indian 

tribe, where substantially all of the services performed during the period of employment are performed within an Indian reservation, and the principal residence of 

such employee while performing such services is on or near the reservation in which 

the services are to be performed. See 26 U.S.C. 45(c)(1)(A)–(C). The employee will 

not be treated as a ‘‘qualified employee’’ if the total amount of annual employee compensation exceeds $35,000. 

As written, the wage tax credit is completely ineffective for high-paying energy 

industry jobs, and does not attract private-sector investment in energy projects 

within Indian country. The provision is too complicated and private entities conclude that the cost and effort of calculating the credit outweighs any benefit that 

it may provide. We therefore propose that the wage and health credit be revised 

along the lines of the much-heralded Work Opportunity Tax Credit, which is less 

complicated and more likely to be used by the business community. We propose retaining the prohibition contained in the existing wage and health credit against terminating and rehiring an employee and propose to alter the definition of the term 

‘‘Indian Reservation’’ to capture legitimate opportunities for employing tribal members who live on their reservations, even though the actual business activity may 

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be off-reservation. This amendment would allow the Indian Employment Wage 

Credit to more effectively fulfill the purpose for which it was originally enacted. 

B. Eliminate the BLM APD Fee on Indian Lands 

The current APD fee of $6500 is a hindrance to the Crow Nation’s goal of developing its oil and gas resource. The disparity between the cost for drilling on tribal 

lands under federal jurisdiction versus lands under state jurisdiction prevents any 

meaningful economic development of the reserves existing on the Crow Reservation. 

The Federal Government should not, through its’ trust responsibility, charge administrative fees that prohibit or render economically inefficient, the development of 

tribal trust assets. Indian lands should be exempted from BLM’s APD fee. 

C. Need for Government Support for the Many Stars CTL Project 

Several CTL projects have been announced in the U.S.; however, all of these 

projects are struggling due to the high financial commitment needed to plan and 

implement these projects in an uncertain economic and energy policy environment. 

Investors and banks are reticent to fund ‘‘first of a kind’’ projects, even though the 

technology has been proven commercially in other countries and in demonstration 

plants here in the United States. As a comparison, China is moving forward rapidly 

in the CTL sector, with 12 sites already producing at commercial demonstration 

scale of 4–8,000 barrels per day with four commercial projects nearing start of construction at capacities up to 80,000 barrels/day. 

Based on the foregoing, the following key actions are crucial for the viability of 

the Crow’s Many Stars CTL Project:

• Grant the Department of Defense and other federal agencies the ability to enter 

into long-term, guaranteed fixed-price contracts that will underpin the commercial framework needed for these types of long-term CTL projects;

• Extend the expiration date of the current 50-cents per gallon alternative fuel 

excise tax credit for a definitive time period rather than year-to-year extensions 

as has been done recently. Since it could take roughly 6–10 years for these 

types of projects to become fully planned, implemented, and operational, investors are concerned that the incentives will expire before the plant starts up. 

Consider providing the tax credit for a period of 10 years following start-up for 

those projects starting construction prior to 2015.

• Support a twenty percent (20 percent) investment tax credit for each CTL plant 

placed in service before the same future date, and/or allow 100 percent (100 percent) expensing of investments in the year of capital outlay for any CTL plant 

in operation by the same future date.

• Support DOE and DOD alternative fuel development programs as part of a comprehensive energy policy that supports the full spectrum of energy technologies 

and provides a level playing field for developing new innovation in clean coal 

technology to meet national environmental goals.

• Remove general uncertainty in energy policy that will provide investors confidence to support new innovation and major investment in the clean coal sector. We have been told repeatedly that policy uncertainty with respect to clean 

coal support equates to paralysis in trying to move the Many Stars CTL Project 

forward with new investors.

VI. Conclusion 

Given our vast mineral resources, the Crow Nation can, and should, be self-sufficient. We seek to develop our mineral resources in an economically sound, environmentally responsible and safe manner that is consistent with Crow culture and beliefs. The Crow people are tired of saying that we are resource rich and cash poor. 

We respectfully request your assistance in setting the foundation to make our vision a reality. We have been working to develop our energy resources and to remove 

obstacles to successful development. We hope to build a near-term future when our 

own resources, in our own hands, provide for the health, hopes and future of our 

people. 

It is critical that Congress act to protect Indian nations’ sovereignty over their 

natural resources and secure Indian nations as the primary governing entity over 

their own homelands. This will have numerous benefits for the local communities 

as well as the Federal Government. The Crow Nation has been an ally of the United 

States all through its history. 

Today, the Crow Nation desires to develop its vast natural resources not only for 

itself, but to once again help the United States with a new goal—achieving energy 

independence, securing a domestic supply of valuable energy, and reducing its dependence on foreign oil. Many members of the Crow Nation are veterans of the 

85

United States Armed Forces and we have a special understanding and respect for 

what it could mean to our sons and daughters in coming years if all of our energy 

needs were met here at home. 

It is time for the Crow Nation to begin realizing its true potential as a domestic 

energy producer. However, our vision can only become a reality with your assistance. We strongly feel that events in the Congress during 2012 will have a decisive 

impact on realizing our vision. 

PREPARED STATEMENT OF HON. IRENE C. CUCH, CHAIRWOMAN, UTE TRIBAL

BUSINESS COMMITTEE, UTE INDIAN TRIBE OF THE UINTAH AND OURAY RESERVATION

Chairman Akaka, Vice Chairman Barrasso, and Members of the Committee on Indian Affairs, my name is Irene Cuch. I am the Chairwoman of the Business Committee for the Ute Indian Tribe of the Uintah and Ouray Reservation. The Ute Indian Tribe consists of three Ute Bands: the Uintah, the Whiteriver and the 

Uncompahgre Bands. Our Reservation is located in northeastern Utah. Thank you 

for the opportunity to provide testimony on energy development in Indian Country. 

My testimony will focus on the barriers the Tribe faces in developing its energy resources and legislative solutions to those barriers. 

I. Energy Development of the Ute Indian Tribe 

Energy development has long been an important part of the Tribe’s Reservation 

economy. Production of oil and gas began on the Reservation in the 1940s. Over the 

past 70 years, production has been ongoing and went through a few periods of expansion. Today, the Tribe is a major oil and gas producer. The Tribe leases about 

400,000 acres for oil and gas development. We have about 7,000 wells that produce 

45,000 barrels of oil a day. We also produce about 900 million cubic feet of gas per 

day. And, we have plans for expansion. The Tribe is currently in process of opening 

up an additional 150,000 acres to mineral leases on the Reservation with an $80 

million investment dedicated to exploration. 

The Tribe relies on its oil and gas development as the primary source of funding 

for our tribal government and the services we provide. We use these revenues to 

govern and provide services on one of the largest reservations in the United States. 

Our Reservation covers more than 4.5 million acres and we have 3,175 members living on the Reservation. 

Our tribal government provides services to our members and manages the Reservation through 60 tribal departments and agencies including land, fish and wildlife management, housing, education, emergency medical services, public safety, and 

energy and minerals management. The Tribe is also a major employer and engine 

for economic growth in northeastern Utah. Tribal businesses include a bowling 

alley, a supermarket, gas stations, a feedlot, an information technology company, a 

manufacturing plant, Ute Oil Field Water Services LLC, and Ute Energy LLC. Our 

governmental programs and tribal enterprises employ 450 people, 75 percent of 

whom are tribal members. Each year the Tribe generates tens of millions of dollars 

in economic activity in northeastern Utah. 

The Tribe takes an active role in the development of its resources as a majority owner of Ute Energy which has an annual capital budget of $216 million. In addition to numerous oil and gas wells, Ute Energy teamed with the Anadarko Petroleum Corporation to establish and jointly own the Chipeta gas processing and delivery plant in the Uintah Basin. The Tribe recently approved plans for Ute Energy 

to become a publically traded company. This investment will allow us to expand our 

energy development and increase revenues. 

Despite our progress, the Tribe’s ability to fully benefit from its resources is limited by the federal agencies overseeing oil and gas development on the Reservation. 

As the oil and gas companies who operate on the Tribe’s Reservation often tell the 

Tribe, the federal oil and gas permitting process is the single biggest risk factor to 

operations on the Reservation. This process is primarily managed by the Department of the Interior (DOI). 

II. Administrative Efforts to Promote Indian Energy Development 

The Tribe is working directly with the Administration to improve oil and gas permitting on the Reservation and has also provided Congress with legislative solutions 

to the barriers we face. The Tribe takes this issue very seriously because the number of permits that the Federal Government is able to process and approve is directly related to the revenues the Tribe has available to serve its members. 

The Tribe is working with the Administration on its own and as a part of the Coalition of Large Tribes (COLT) to improve the oil and gas permitting process. Last 

November the Tribe hosted a tour of its oil and gas development on the Reservation 

86

for Del Laverdure the Principal Deputy Assistant Secretary for Indian Affairs, Juan 

Palma the State Director of the Bureau of Land Management (BLM), staff of the 

Utah Congressional Delegation, and other advisors and staff. 

The purpose of the tour was to provide the agency officials with a perspective on 

the scope of the Tribe’s energy development so that they could better understand 

the Tribe’s needs for an efficient oil and gas permitting process. We provided information about the permitting processes to the agency officials and we are working 

with them to streamline the process and improve their permitting capacity. 

As former Senator Dorgan highlighted, the Bureau of Indian Affairs (BIA) uses 

a 49 step process to approve a single oil and gas lease. Overall that process includes 

the following general steps:

• 5 Day Posting of Proposal; 

• Obtain Permission to Survey; 

• Field Staking; 

• Onsite Inspection; 

• Develop Site Specific Environmental Assessment (EA); 

• Application for Permit to Drill (APD) and Application for Right-of-Way (ROW); 

• Review and approve ROW and APD; and, 

• Construct ROW and Commence Drilling Operations.

In addition, the processing of an oil and gas permit must comply with a number 

of federal laws and regulations, including:

• Indian Leasing Laws and Regulations; 

• Indian Rights-of-Way Laws and Regulations; 

• the National Environmental Policy Act (NEPA); 

• the National Historic Preservation Act or Section 106 Process; 

• the Endangered Species Act; and, 

• potentially, the Clean Air Act.

The Tribe estimates that an oil and gas permit could be processed through these 

steps in about 90 days. Indeed, on the Fort Berthold Reservation in North Dakota 

where DOI utilizes a ‘‘virtual one-stop shop’’ to oversee and streamline permitting, 

we understand that oil and gas permits are processed in about 60 days. On our Reservation the actual time it takes a typical permit to process is about 480 days—more 

than one year. 

The Tribe is working with the Administration to find the resources, staff, and expertise needed to efficiently oversee oil and gas development on the Reservation. 

The first step is to get good information on the status of the permits. Unfortunately, 

the approval process is so complicated this information is difficult to obtain. 

In June 2011, DOI’s Office of Indian Energy and Economic Development found 

that there were 1200 backlogged permits. In January 2012, the BLM Field Office 

in Vernal, Utah reported that it had 245 permits pending in its system. Also in January, the Tribe’s Energy and Minerals Department reported that it had 10 permits 

pending. Specific information is needed for the permits pending with the BIA. The 

processing of permits needs better tracking. The number of permits pending in the 

system on any given day should not be greater than the number of permit applications submitted over a two month period, and no matter what the number is, permits should not be in the system for longer than 60 to 90 days. 

The second step is to find the staff and expertise for the BIA and BLM to efficiently process permits. As discussed in more detail below, the Tribe supports the 

‘‘one-stop shop’’ concept and believes that permitting on the Reservation would benefit from a ‘‘one-stop shop.’’ The Administration has suggested other options such 

as detailing employees to areas with high permitting needs or using permitting 

teams that would rotate among the local agencies to clear back logs. 

The Tribe’s ability to expand its oil and gas development is dependent upon a solution to the current permitting delays. For example, the Tribe understands that oil 

and gas companies operating on the Reservation are currently limiting operations 

based on the number of permits the agencies are able to process. In particular, companies are limiting the number of drilling rigs they are willing to operate on the 

Reservation. 

Drilling rigs are expensive operations that move from site to site to drill new 

wells. Oil and gas companies often contract for the use of drilling rigs. Any time 

a drilling rig is not actively drilling a new well it amounts to an unwanted expense. 

Consequently, oil and gas companies will only employ as many drilling rigs as permit processing will support. On our Reservation, the Tribe understands that some 

oil and gas companies who are currently using one drilling rig would increase their 

operations to three drilling rigs if permit processing could support this increase. 

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One example of this is the Anadarko Petroleum Corporation’s operations on the 

Reservation. Anadarko reported that it needed 23 well locations approved per month 

in 2011 and beyond, but in 2010, their permits were approved at a rate of 1.7 per 

month. Anadarko informed the Tribe that unpredictable approvals of permits forces 

the company to alter its operational plans at the last minute and often results in 

the company temporarily moving its operations off the Reservation to State and private lands. With consistent and reliable permit approvals, the Tribe is hopeful additional drilling rigs will move on to tribal lands and increase the revenues available 

for the tribal government, members, and investments. 

III. Legislative Efforts to Promote Indian Energy 

The Tribe is also working with Congress to improve the oil and gas permitting 

process. First and foremost, Congress needs to provide the BIA with sufficient budgets to support Indian energy development. The BIA needs to hire additional staff 

to process environmental reviews and needs to hire staff with energy expertise. In 

addition, Congress needs to pass laws that improve the permitting process and ensure that tribes have the authorities necessary to support Indian energy development. 

The Tribe has participated in the development of Indian energy legislation in the 

111th Congress and the current Congress. Last May, the Committee held a listening 

session on Senator Barrasso’s draft Indian energy bill. At that listening session and 

in response to the draft bill, the Committee asked tribes to submit legislative ideas 

that would facilitate Indian energy development. In response to your request, the 

Ute Tribe developed 32 legislative solutions to overcome barriers and improve the 

management of Indian energy resources. We submitted these proposals to you and 

your staff last July. Then, last October, Senator Barrasso introduced S. 1684, the 

Indian Tribal Energy Development and Self-Determination Act Amendments of 

2011, with Senators Akaka, McCain, and Hoeven as cosponsors. 

The Tribe supports S. 1684 and believes that it is a good start. We ask that you 

review the Tribe’s solutions and expand the bill to address more of the barriers that 

we face in managing our energy resources. I have attached the Tribe’s 32 legislative 

solutions to this testimony so that they will be part of the hearing record. 

In particular, the Tribe asks that the Committee support the creation of Indian 

Energy Development Offices to improve both traditional and renewable energy permitting. As former Senator Dorgan and many in Congress have noted, the oil and 

gas permitting process is a bureaucratic maze of federal agencies. Indian Energy 

Development Offices would bring all of the agencies into the same room and would 

streamline permit processing. These agencies could then work collaboratively to 

eliminate backlogs and delays in approving leases, rights-of-way, and applications 

for permits to drill. 

Former Senator Dorgan referred to these offices as one-stop shops. There are 3 

one-stop shops already in Indian Country. There is one at Navajo, in Oklahoma, and 

a virtual one-stop shop on the Fort Berthold Reservation in North Dakota. Former 

Senator Dorgan reported that the one-stop shop at Fort Berthold helped to increase 

oil and gas permit approvals by 4 times. 

On our Reservation, the Ute Indian Tribe needs 10 times as many oil and gas 

permits to be approved. Currently, about 48 Applications for Permits to Drill (APD) 

permits are approved each year on the Reservation. The Tribe and its business partners estimate that about 450 APDs will be needed each year as the Tribe expands 

its operations. The Tribe believes that a one-stop shop is the best way to get the 

BIA, the BLM, and other federal agencies working efficiently with the Tribe to manage the high level of permitting needed on the Reservation. 

Just as important, the BIA, BLM and other federal agencies that oversee the permitting process do so without the staffing and expertise needed to fully support Indian energy development. A one-stop shop would encourage the Department of the 

Interior to hire staff with Indian energy expertise. The BIA may be the most important federal agency responsible for supporting Indian energy development, yet there 

are only a handful of BIA employees with energy expertise. Congress needs to provide the authority and budgets so that the BIA can hire energy experts. 

The Tribe also believes that we need to remove as many disincentives to energy 

development on Indian reservations as we can. For example, the fees that the BLM 

charges for oil and gas activities on Indian lands are a disincentive to Indian energy 

development and encourage developers to move just over the Reservation boundary 

to private lands where there are no BLM fees. In the case of shallow wells, these 

fees may make development completely uneconomical. In addition, when the Tribe 

is developing its own resources, it is outrageous that the Tribe’s federal trustee 

would charge us for performing its trust responsibility. The BLM should be prohibited from charging fees for oil and gas activities on Indian lands. 

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We also need clarifications in the law to encourage energy development and other 

economic activities. Legislation should clarify that Indian tribes retain their inherent sovereign authority and jurisdiction over any rights-of-way they have granted. 

Over the last 30 years, jurisdiction over rights-of-way has been treated differently 

by various federal courts. Each time an issue arises, another federal court undertakes a new examination. This leads to uncertainty in the law and a lack of dependability about the rules that apply on a right-of-way. This hinders our ability to develop energy resources because all parties need certainty in the law. 

The law should also be clarified to ensure that tribes can raise needed tax revenues to support and oversee energy development. Currently, federal courts allow 

other governments to tax energy development on Indian lands. This limits and even 

prevents tribes from earning tax revenues from development on our lands. Without 

tax revenues, tribal infrastructure, law enforcement, and other services cannot keep 

up with the burdens imposed by energy development, and we remain dependent 

upon funding from the Federal Government. 

The Tribe is encouraged that amendments to the Tribal Energy Resources Agreement (TERA) program are being discussed by the Committee. The Tribe supports 

many of the changes to the TERA program that Senator Barrasso included in his 

Indian energy bill, S. 1684. These changes are intended to improve the TERA application process and make TERA’s more useful to tribes. In addition, the Tribe asks 

that changes include a limitation on the number of times DOI can force a tribe to 

revise a TERA application. DOI should be limited to requesting one-revision of a 

TERA application and if DOI requires any additional changes they should have to 

provide a reason why the change was not requested the first time. 

Finally, the Committee should not overlook the important role of the Department 

of Energy (DOE) could be playing in the management of Indian energy resources. 

In general, DOE ignores Indian tribes in its programs and in setting national energy policies. The relatively new Office of Indian Energy Policies and Programs is 

making progress, but tribes are left out of the vast majority of DOE programs. The 

Committee could hold an entire oversight hearing on the lost opportunities. Tribes 

need full access to existing DOE programs for energy loan guarantees, energy efficiency, weatherization assistance, and renewable energy research and development. 

At a minimum, DOE should be including tribes in federal energy efficiency and 

weatherization programs. The Federal Government provides about $100 million 

every year to fund these programs at the state level. This funding should go to those 

who need it most, but for decades these programs have ignored the needs of tribes. 

The Tribe asks that these programs be expanded to include set-asides for tribal governments. These programs would help tribes reduce energy costs and manage energy use in government buildings and reservation homes. 

IV. Fracing Rule 

The Tribe would also like the Committee to monitor BLM’s decision to develop 

regulations for hydraulic fracturing (fracing) activities on public lands. We are concerned with the process by which BLM is developing its regulations as well as the 

impact it will have on the oil and gas industry on the Reservation. 

First, BLM apparently considers Indian lands to be ‘‘public lands’’ and plans to 

apply its fracing regulations to Indian lands. Indian lands are not public lands. Indian lands are for the exclusive use and benefit on Indian tribes. The BLM’s oversight of activities on our lands is in fulfillment of the BLM’s trust responsibility to 

the Tribe. The BLM should not apply its public interest standards to our lands. The 

Tribe requests that the Committee and Congress pass legislation that would prevent 

Indian lands from being swept into laws and policies for public lands. 

Second, BLM is not fulfilling its obligation to consult with Tribes on its draft regulations. To date, BLM has hosted a handful of informational meetings throughout 

the West. The BLM has been describing these meetings as tribal consultation. An 

informational meeting describing to tribes what BLM plans to do is not tribal consultation. 

Effective tribal consultation is sitting down at the table with tribes to discuss the 

proposed regulations and its effects on tribes. This has not happened even though 

consultation is necessary for the BLM to understand how its proposed regulations 

may affect tribes differently than others. The Tribe requests that the Committee inquire with BLM regarding its plan for ensuring that tribal concerns are considered 

in the development of any regulations. 

For example, because of the Tribe’s reliance on oil and gas revenues to fund government activities, provide services to members, and invest in local businesses, any 

change in oil and gas regulations is of great significance to the tribal government 

and economy. If the BLM’s new fracing regulations create a disincentive for companies to develop energy on the Reservation, the Tribe would suffer a disproportionVerDate 0ct 09 2002 12:55 Nov 28, 2012 Jkt 075746 PO 00000 Frm 00092 Fmt 6601 Sfmt 6621 S:\DOCS\75746.TXT JACK
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ately greater impact than others. At a minimum, BLM should explain how it is 

going to mitigate for this disproportionate impact. 

Third, according to the draft regulations the BLM provided at a meeting in Salt 

Lake City, Utah, the BLM plans to look at three key issues pertaining to the fracing 

process: wellbore integrity, disclosure, and flowback water. We know of no incidents 

on tribal lands that would precipitate federal regulation of these issues. 

Fourth, the proposed rule would require prior approval from the BLM for all well 

stimulation activities. This additional time required for BLM staff to review a proposed fracing job only adds to delays oil and gas companies on the Reservation 

face—delays that have economic consequences. Requiring BLM approval for fracing 

jobs adds to the burden of an already short-staffed BLM Field Office. As stated 

above, there is currently a backlog of APDs and adding an additional burden on 

BLM staff will only worsen the problem. 

Oil and gas operators seeking permits to drill on Indian and public lands already 

undergo an extensive environmental review process before they can begin drilling 

activities. This process has become lengthy, time consuming and costly, so much so 

that there is a backlog of hundreds of permits to drill applications not having been 

acted upon by our local BLM Field Office. 

In addition, the Environmental Protection Agency (EPA) and other federal agencies are currently conducting scientific studies on fracing. BLM regulation is premature in advance of the EPA study, and BLM has offered no justification for proceeding with this new regulation without the benefit of these studies. Without clear 

demonstration of a problem with the fracing process, we feel the BLM regulation 

is putting the horse before the cart. 

V. Minor Source Rule 

While EPA’s Minor Source Rule, to date, has not had a significant impact on the 

oil and gas industry on our Reservation, we understand that it has impacted some 

of our sister tribes. We feel it is unfair that the EPA decided to move forward with 

the implementation of this rule. As a starting point, EPA did not engage in meaningful tribal consultation prior to finalizing the rule and subsequent publication in 

the Federal Register. Any agency action without meaningful consultation impacts us 

greatly. 

EPA issued its final rule for ‘‘Review of New Sources and Modifications in Indian 

County’’ in July 2010. To ensure that economic development was not adversely affected, EPA delayed implementation of much of the rule for three years while it 

hires the necessary staff and develops its permitting process. However, one part of 

the rule took effect almost immediately, the Synthetic Minor Source Rule (SMSR). 

Despite Congressional and tribal pleas to EPA to halt the implementation of the 

SMSR part of the rule, the EPA decided that it could not wait and implemented 

it. EPA implemented the rule despite not knowing what the SMSR permit should 

look like or exactly what it should contain. To date, EPA has yet to share with industry what a SMSR permit should look like and what is should contain. 

We ask that this Committee and Congress inquire with EPA as to why it decided 

to implement a rule it does not have the resources to implement. In addition, we 

ask this Committee and Congress to pass legislation that would make the SMSR 

part of the rule not operable until September 2013 in order for the EPA to develop 

its permitting process fully. 

VI. Conclusion 

I would like to thank Chairman Akaka, Vice Chairman Barrasso and members 

of the Committee for the opportunity to present this testimony on behalf of the 

Tribe. The Tribe stands ready to work with the Committee to find ways to eliminate 

barriers to Indian energy development. The current barriers have a direct effect on 

the Tribe’s revenues, our ability to invest in the future, and the services we are able 

to provide our members, our children and grandchildren. 

Towaok (Thank You) 

PREPARED STATEMENT OF HON. RANDY KING, CHAIRMAN, SHINNECOCK INDIAN

NATION

Good afternoon Chairman Akaka, Vice Chairman Barrasso, and Members of the 

Committee on Indian Affairs. My name is Randy King. I am the Chairman of the 

Shinnecock Nation Board of Trustees. Thank you for the opportunity to provide this 

testimony for the Committee’s Oversight Hearing on Energy Development in Indian 

Country. 

The Shinnecock Nation’s Reservation is located within the geographic boundaries 

of Suffolk County, New York—on Long Island. The Nation has maintained its existVerDate 0ct 09 2002 12:55 Nov 28, 2012 Jkt 075746 PO 00000 Frm 00093 Fmt 6601 Sfmt 6621 S:\DOCS\75746.TXT JACK
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ence on Long Island as a self-governing nation with a land base that it has exercised jurisdiction over since time immemorial. Despite this long history, the Nation 

was only recently acknowledged by the Federal Government. This circumstance has 

resulted in a situation where the Nation bore all the burdens and responsibilities 

of governing its land base without the support of federal resources that other tribes 

utilize. 

Federal acknowledgement opens up new opportunities for the Nation to provide 

for the critical needs of its communities, including implementation of energy development and efficiency measures. The Nation is facing impacts from climate change, 

growing energy costs, and the need to provide jobs for its members. In order to provide long-term economic opportunities for our members, protect our Reservation 

homelands, and address the imminent challenges of climate change, the Nation 

must plan for its energy future. We have already begun by working to partner with 

local organizations, including a potential project with Stony Brook University, to develop and implement renewable energy projects that will benefit both the Nation 

and the surrounding communities. 

Since the Nation gained federal recognition status, it has worked to build its sovereign capacity and self-governing infrastructure to better serve its tribal members. 

The Nation now has the ability to apply for federal grants to support and expand 

land use planning, environmental protection, health and safety, energy sovereignty, 

and economic self-sufficiency. Prior to now, the Nation has never been able to take 

advantage of federal assistance programs that many tribes utilize. The Nation plans 

to use this new opportunity to meet the needs of its members in the area of energy 

development by examining options for energy self-sufficiency, and economic development, including training and jobs for tribal members, as well as energy efficiency 

programs. 

According to the economic characteristics data set from 2005–2009, the U.S. Census Bureau reports that a significant portion of the tribal membership is unemployed, underemployed, or in need of employment. This percentage does not include 

tribal members who are living off the Reservation, and want to come home to raise 

their families within their traditional community. In 2003, more than 70 percent of 

Shinnecock citizens lived in Suffolk or Nassau County on Long Island or in one of 

the boroughs of New York City, all approximately within a two-hour drive of the 

Reservation. The Nation is faced with the challenge of developing and promoting energy projects that will provide benefits to all its members both on the Reservation 

and off. In order to meet this challenge the Nation must be able to create and implement sustainable energy projects that benefit the Reservation and surrounding area. 

Because the Nation’s Reservation is geographically limited and surrounded on 

three sides by water, we have an acute sense of the growing threat of climate 

change and the need to plan for our energy future. The Nation’s energy planning 

includes developing sustainable energy projects that will serve the immediate needs 

of the Nation, and longer term adaptive measures that will be needed in the face 

of climate change impacts over time. Energy independence will play a critical role 

in meeting these challenges. In order to be self-sufficient and sustainable as a Nation, the Shinnecock people will need to have sound reliable sources of energy. This 

includes not just generation resources, but also energy efficiency and weatherization 

measures that will help the Nation control energy costs for itself and its members. 

Environmentally sound energy development and the promotion of tribal energy 

sustainability would dramatically and positively impact the Shinnecock tribal economy by creating revenue through the sales of clean energy and, potentially, carbon 

credits, into the regional economy. Our effort to gain energy independence would 

promote the long-term security of our communities, provide a major regional economic boost, and provide a test-case in clean energy development that can assist the 

Department of the Interior (DOI), the Department of Energy (DOE), and other tribal 

communities seeking examples of successful tribal energy management and renewable energy development. 

The Nation intends to implement its energy planning through a potential partnership with Stony Brook University’s Southampton Campus to develop a hydrokinetic 

project. This project would allow a research facility to be put in place off the coast 

of the Nation’s Reservation. Tribal members and the University will be able to gain 

practical engineering experience and electric market experience in the development 

of the project. Hydrokinetic power offers a clean reliable domestic source of energy 

that could have far reaching benefits not only for Shinnecock, but for all coastal 

communities. 

The Nation supports the Committee’s interest in promoting Indian energy development, and generally support’s Senator Barrasso’s Indian energy bill, S. 1684. Promoting Indian energy and tribal management of energy resources is consistent with 

the Nation’s energy planning and goals described above. S. 1684 makes a handful 

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of important changes, but much more is needed. In addition to what is already in 

S. 1684, the Nation requests that the Committee include additional changes needed 

to overcome barriers to Indian energy development. 

As a newly acknowledged tribe, the Shinnecock Nation needs support for land into 

trust, tribal permitting processes, and restructuring of renewable tax credits. We 

ask the Committee to consider including provisions for incentives for development 

of offshore technologies, and an expedited fee to trust process for lands where energy projects are intended to be developed. 

The need for energy security and a sound domestic energy supply justifies an expedited fee to trust process for tribal energy projects. This does not negate or resolve 

the current issues many tribal nations face in the wake of the Carcieri decision. We 

believe resolving the Carcieri problem through adoption of a Carcieri fix will significantly assist tribal nations in moving forward with social welfare and economic development projects such as new more efficient housing, and renewable energy 

projects. 

Below, we provide some specific examples of how changes in law and additional 

tools for tribal governments would help us manage our energy resources and provide 

long-term economic resources for our communities. We ask that the Committee consider taking action on these ideas and include them in S. 1684 or any other Indian 

energy legislation being developed by the Committee. 

First, the Nation appreciates the work of Committee member Senator Murkowski 

to support hydrokinetic projects by sponsoring a bill, S. 630, which will improve marine and hydrokinetic renewable energy research and development. However, the 

bill should include Indian tribes and Alaska Natives as eligible entities for grant 

funds to implement hydrokinetic test facilities. Currently, the bill does not. 

The Nation requests that the Committee include the provisions of S. 630, and include tribes in those provisions, in any Indian energy legislation moving through the 

Committee. In the alternative, if the Senate plans to move S. 630 on its own or part 

of a larger national energy bill, the Nation asks that the Committee and Senator 

Murkowski ensure that Indian tribes and Alaska Natives are included in the list 

of eligible entities. The Nation is seeking an equal opportunity to apply for such 

funding and participate with other entities on Long Island as an equal partner for 

implementation of a hydrokinetic project. 

Second, the Nation also has an opportunity to purchase a number of tracts of land 

on eastern Long Island that could be utilized for the development of a solar power 

facility that would bring clean and reliable energy to Long Island. Currently, there 

are transmission constraints on Long Island that have impacted the ability for the 

eastern end of the Island to have reliable power. The Nation’s plan to acquire the 

lands and develop a solar facility on eastern Long Island would help meet New York 

State’s renewable portfolio standard and also provide local power without the constraints of wheeling power from other areas which would promote the reliability of 

electricity for the Nation and Long Island. 

In addition, this potential project is consistent with Governor Cuomo’s Energy 

Highway concept as it creates new clean sources of power to meet the needs of 

Downstate New York, while providing skilled jobs for tribal members and revenue 

for the Nation. This provides a win-win for both the Nation and the State of New 

York, allowing for a beneficial partnership that can be built on for future tribal energy projects in New York. However, in order to move forward with the proposed 

solar project, the Nation will need to acquire the land and have it placed into trust. 

The Nation recommends that the Committee develop legislation that would require 

DOI to expedite fee to trust applications for tribal energy projects. 

Third, the Committee should consider exempting energy projects in Indian country from some DOI approvals, or allowing tribes to take over certain approval processes. While the Tribal Energy Resource Agreement (TERA) program from the 2005 

Energy Policy Act already allows tribes to do much of this, the TERA program requires tribes to take over most or all of the permitting. Very few tribes have the 

resources to completely take over energy permitting. 

Instead, the Nation asks that the Committee recognize that every tribe is at a 

different place in its capacity to oversee energy projects and alternatives should be 

available for tribes to take over some DOI approvals, but not necessarily the entire 

energy permitting process. The Committee should consider exempting or allowing 

tribes to take over approval processes for appraisals, leases, rights-of-way, environmental reviews, and any other discrete parts of the energy development process. 

Having these options available will allow tribes to develop energy expertise and permitting capacity in manageable steps. 

Fourth, the Nation aspires to make President Barack Obama’s Executive Order 

on ‘‘Stewardship of the Ocean, Our Coasts and the Great Lakes’’ a reality and plans 

to examine its opportunities for development of ocean energy technology, which will 

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be a monumental step towards energy security and conservation for the entire 

Northeast Region. In order to be successful in this pursuit, the Nation will need to 

have the ability to permit such facilities, and have access to federal programs and 

funds that promote the development of offshore energy projects. 

On July 19, 2010, President Obama signed the Executive Order and established 

a National Ocean Policy to ensure the United States’ coasts, oceans and lakes are 

‘‘healthy and resilient, safe and productive . . . so as to promote the well-being, 

prosperity, and security of present and future generations.’’ Exec. Order No. 13547, 

§ 2. The Executive Order contemplates direct participation by tribal officials in the 

promotion of this policy, as well as tribal collaboration with state and Federal officials, with the goal of developing and implementing regional coastal and marine 

spatial planning that includes assessment and consideration of offshore renewable 

energy technologies. 

The Nation intends to participate in the process and pursue the potential for 

clean renewable ocean energy development; including both the aforementioned 

hydrokinetic project, as well as examining the potential for offshore wind projects. 

The Nation asks that the Committee help to make sure that tribes are included in 

programs and legislation supporting offshore energy projects. 

Fifth, the Nation looks to the Committee and Congress for support in the development and implementation of sound energy policies that will be able to promote environmentally friendly energy resources, and economic opportunities. An environmentally sound and predictable order for development on the reservation would 

allow the Nation to move forward with implementation of much needed energy 

projects, and, in turn, provides certainty for those considering investing in the Nation from an economic stand point, as well as for government agencies considering 

awards to the Nation for energy programs. 

The Nation has struggled for more than three decades for its rightful place as a 

federally recognized Indian tribe, and it now needs to focus on the long-term sustainable development of tribal resources. It is critical that Congress adopt policies 

that will allow for Indian tribes to meet our long-term goals by ensuring that federal 

programs designed to promote development of renewable power projects include Indian tribes as beneficiaries, and that policies supporting tribal permitting of such 

projects on tribal land be in place. 

The Nation is confident that tribal members and the surrounding communities 

will mutually benefit from environmental conservation, economic self-sufficiency and 

job creation that would come from a more streamlined tribal permitting process, expedited fee to trust applications for energy projects, and full access to grants, loan 

guarantees and tax credits used to advance energy technology and promote energy 

development. The Nation believes that the renewable energy mandatory purchase 

requirements of state and federal agencies are only going to increase. The Nation 

hopes to be a part of this growing market while at the same time promoting environmentally positive energy resources, as well as providing resources to assist coastal communities in climate change adaption measures. 

Sixth, as the Nation increases its energy activities, our tribal government will 

need to use the same tax revenues as other governments use to staff our energy 

programs, finance energy projects, and oversee tribal infrastructure. We need Congress to ensure that tribes can raise needed tax revenues. Without tax revenues we 

will not be able to develop the infrastructure necessary to manage and oversee our 

energy resources. 

Seventh, tribes also need to be able to take advantage of renewable energy tax 

credits. These tax credits have become essential to financing renewable energy 

projects and lowering the cost of the energy produced. Tribes need to be able to 

monetize these tax credits or share them with a private energy partner. Without 

the ability to utilize renewable energy tax credits tribes will be priced out of the 

market. 

Eighth, Congress should open up federal energy efficiency and weatherization programs to tribal participation. For decades the Federal Government has helped state 

governments manage their energy costs by providing around $50 million a year in 

energy efficiency funding. Tribal governments need the same support. 

Congress should also require DOE to send weatherization funding directly to tribal governments. Currently, DOE sends the money to state non-profits and tribes 

barely see a dime. Despite its trust responsibility, DOE does not even know how 

much funding tribes receive. This funding should go to those who need it most, but 

for decades DOE has ignored the needs of reservation homes. 

Finally, we support many of the other comments and suggestions made by tribes 

at this hearing. Like many tribes, the Nation is interested in exercising self-determination over its energy resources. To do this, we need Congress to reform laws 

that stand in our way, include tribes in all federal energy programs, and ensure 

93

that tribes can exercise the full range of governmental authorities needed to develop 

the physical and legal infrastructure to support energy development. 

I would like to thank Chairman Akaka, Vice Chairman Barrasso and Members 

of the Committee on Indian Affairs for the opportunity to present this testimony on 

behalf of the Nation. 

PREPARED STATEMENT OF HON. TEX G. HALL, CHAIRMAN, MANDAN, HIDATSA AND

ARIKARA NATION OF THE FORT BERTHOLD RESERVATION

Good afternoon Chairman Akaka, Vice Chairman Barrasso and Members of the 

Committee. My name is Chairman Hall. I am the Chairman of the Mandan, Hidatsa 

and Arikara Nation (MHA Nation). I am honored to present this testimony. 

The MHA Nation has long been working with both the Senate Committee on Indian Affairs and the House Subcommittee on Indian and Alaska Native Affairs to 

advance Indian energy legislation. In the 110th and 111th Congresses, the MHA 

Nation was fortunate to participate and present testimony at two Indian energy 

hearings held by former Senator Dorgan. In the current 112th Congress, the MHA 

Nation is again an active participant. 

In May of 2011, the Committee held a listening session on Senator Barrasso’s 

draft bill the ‘‘Indian Tribal Energy Development and Self-Determination Act 

Amendments of 2011.’’ At that listening session the Committee requested that tribes 

submit proposals to overcome barriers to Indian energy development. On July 18, 

2011, the MHA Nation submitted 31 proposals. I have attached those proposals to 

my written testimony for inclusion in the official hearing record. 

In addition, I testified in April of 2011 as a part of an Indian Energy Oversight 

Hearing before the House Committee on Natural Resources’ Subcommittee on Indian and Alaska Native Affairs. MHA Nation also testified before the Subcommittee 

on February 15, 2012, on Congressman Don Young’s ‘‘Native American Energy Act,’’ 

H.R. 3973. 

In my prior testimony before the Senate and the House, I have described how the 

Fort Berthold Reservation is located in the heart of the Bakken Formation which 

is the largest continuous oil accumulation in the lower 48 states. In 2008, the 

United States Geological Survey estimated that the Bakken Formation contains between 3 billion and 4.3 billion barrels of oil. Today, the Bakken Formation is the 

most active oil and gas play in the United States. 

MHA Nation is actively promoting the development of our energy resources. Our 

resources provide us with a substantial opportunity to ensure that our members 

have good jobs, can heat their homes and provide for their families. We are interested in developing our resources in a responsible manner that will maintain our 

homelands and provide long-term economic security for our Reservation communities. 

However, almost one year later, the MHA Nation continues to work on many of 

the same issues raised in our prior testimony, including: streamlining the oil and 

gas permitting process, insufficient federal staffing, and the Environmental Protection Agency’s recent decision to require air permits for oil and gas wells on our Reservation. We are beginning to wonder whether our testimony is doing any good. 

While there have been some improvements, each day brings a new challenge and 

the level of federal support is often in question. 

Of all of the challenges, the biggest issue we face is the inequitable division of 

tax revenues with the State of North Dakota. Under current law, states can tax energy companies on Reservation lands. Because of these state taxes, we cannot raise 

enough of our own tax revenue to provide the infrastructure needed to support and 

regulate the growing energy industry. We need Congress to affirm the exclusive authority of tribes raise tax revenues on the Reservation so that we can rely on the 

same revenues that state governments use to maintain infrastructure and support 

economic activity. 

Without the ability to raise sufficient tax revenues, the increasing oil and gas activity is taking a tremendous toll on the Reservation. For example, we need to maintain roads so that heavy equipment can reach drilling locations, but also so that our 

tribal members can safely get to school or work. I have attached to my testimony 

two pictures that show how the industry has devastated our roads. 

We also need to provide increased law enforcement to protect tribal members and 

the growing population of oil workers. And, we need to develop tribal codes and employ tribal staff to regulate activities on the Reservation. For example, we developed 

a code to prevent dumping of hazardous waste, but we also need to hire staff to enforce the code. 

94

Our tribal government works every day to provide the stable foundation needed 

to promote energy development on our Reservation. But, the laws and policies of the 

United States force us to do this with one hand tied behind our back. It is not a 

fair fight and our Reservation homelands are suffering the consequences. 

To avoid double state and tribal taxation on energy development that would have 

driven energy companies off the Reservation, we were forced into a lopsided tax 

agreement with the State. Three years later, the State is sitting on surpluses while 

we struggle to make ends meet. 

I am not talking about small state surpluses. Recent reports show that in the current fiscal year the State will have a $1 billion budget surplus and created a $1.2 

billon impact trust fund to put money into an investment account for infrastructure 

needs. The MHA Nation has current needs and our tax revenues should not be 

going into a North Dakota investment account. 

We actually agree with what Governor Dalrymple said earlier this year, ‘‘The 

number one priority is to keep up with infrastructure. growth cannot continue if we 

do not keep up with all of the impact that happens on communities out there.’’

Apparently, the Governor was not talking about tribal communities. In 2011, the 

State of North Dakota collected in excess of $60 million in tax revenue from oil and 

gas development on my Reservation, but State reports document that it expended 

less than $2 million toward the maintenance of on-Reservation roads and infrastructure and all of that was on the state and county roads. In 2012, projections are that 

the State will make nearly $100 million in tax revenues from oil and gas development on the Reservation. 

The need to raise tax revenues is directly related to MHA Nation’s ability to exercise self-determination in the development of our energy resources. We agree with 

self-determination policies and the need to eliminate bureaucracy, but, without the 

taxes revenues that other governments rely on, tribal governments will never have 

the staff and resources to effectively run permit programs. This is especially true 

in the complicated field of energy development. 

Without laws that support tribal taxing authority, MHA Nation will always be 

subject to bureaucratic delays by the Bureau of Indian Affairs (BIA) and the Bureau 

of Land Management (BLM). MHA Nation will also be dependent on federal budgets 

for Indian roads and law enforcement. To put an end to this problem, Congress 

should clearly affirm the exclusive authority of tribal governments to tax activities 

on Indian lands. Where the State provides services on the Reservation, the State 

can be fairly reimbursed out of tribal tax revenues. 

In addition to this important taxation issue, the MHA Nation needs many other 

changes to the law to support energy development on the Fort Berthold Reservation. 

Senator Barrasso has introduced a bill, S. 1684, the Indian Tribal Energy Development and Self-Determination Act Amendments of 2011, that addresses a few issues, 

but much more is needed. The MHA Nation asks that the Committee look to the 

past few years of Indian energy hearings, roundtables, and legislation for legislative 

text and ideas that tribes have long supported. 

Ideas that should be included in Indian energy legislation are:

• We need changes to the Department of the Interior appraisal process, including 

a deadline for making a decision on an appraisal, so that energy projects do not 

get held up by bureaucratic decisionmaking.

• Legislation should require the BIA and BLM to standardize lease numbers to 

improve permitting.

• Participants in the environmental review process for an energy project on Indian lands should be limited to the affected area.

• Legislation should eliminate fees that the BLM charges for the oversight and 

management of Indian trust oil and gas resources.

• Formal authority should be provided for Indian Energy Development Offices, or 

‘‘One-Stop Shops,’’ to co-locate all the federal agencies involved in permitting energy projects on Indian land which would streamline permitting, and force the 

BIA to hire staff with energy expertise.

• Legislation should clarify tribal jurisdiction over Reservation activities and any 

rights-of-way granted by an Indian tribe to eliminate uncertainty created by the 

Courts and encourage business development.

• We need changes in law that will allow Indian tribes to become full participants 

in the renewable energy industry by providing tribes will the ability to monetize 

tax credits, or the ability to share those tax credits with a private investor.

• Congress should also provide the Western Area Power Authority (WAPA) with 

the ability to treat tribal power as federal power so that tribal energy projects 

95

can utilize the existing WAPA transmission grid to get our energy to the cities 

that need it.

• Legislation should open up the approximately $50 million in federal energy efficiency programs to tribal participation so that tribes can get the same support 

that state governments get to manage their energy costs through energy efficiency measures.

• Legislation should also require the Department of Energy (DOE) to send weatherization funding directly to tribal governments and provide opportunities for 

weatherization training to increase the number of energy auditors in Indian 

country.

I want to thank Chairman Akaka, Vice Chairman Barrasso and the members of 

the Committee for the opportunity to highlight the most significant issues the MHA 

Nation faces as we promote and manage the development of our energy resources. 

We ask that you consider legislation to address many of the issues we have described.


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96

PREPARED STATEMENT OF THE NATIONAL CONGRESS OF AMERICAN INDIANS (NCAI) 

Introduction 

The National Congress of American Indians (NCAI) is the oldest and largest national organization of American Indian and Alaska Native tribal governments. Since 

1944, tribal governments have gathered as a representative congress through NCAI 

to deliberate issues of critical importance to tribal governments. NCAI is pleased to 

submit testimony for the Senate Committee on Indian Affairs to supplement the 

oversight hearing on ‘‘Energy Development in Indian Country.’’

NCAI thanks the Senate Committee on Indian Affairs (Senate Committee) for 

their sustained attention to the matter of tribal energy and their dedication to finding legislative solutions to make this important sector of tribal economies viable. 

NCAI also appreciates the long-standing commitment of the Senate Committee in 

working, in a bipartisan fashion, to address key challenges in Indian Country. 

An NCAI resolution regarding energy development is attached. PDX–11–072, describes the tribal energy issues most important to tribes and supports the Indian 

Tribal Energy Development and Self-Determination Act Amendments (S. 1684). In 

this testimony, NCAI would like to outline support for and views on S. 1684 as well 

as key provisions that NCAI would like to see added. 

1. Analysis of Current Law and Regulations 

The barriers to tribal energy development have been discussed at length during 

round tables and hearings conducted by the Department of Energy (DOE) and the 

Senate Committee on Indian Affairs. Examples of barriers include cumbersome bureaucratic processes, such as the requirement that tribes and tribal businesses obtain the approval of the Secretary of the Department of the Interior (DOI) for almost 

every step of energy development on tribal lands, including the approval of business 

agreements, leases, rights of way and appraisals. Other major barriers include 

tribes’ and tribal businesses’ lack of access to financing and transmission, and unfair treatment regarding Application for Permit to Drill (APD) fees as applied on 

tribal lands. 

2. Enacting S. 1684 Would Reduce or Eliminate a Variety of Barriers to 

Tribal Energy Development 

Title V of the Energy Policy Act of 2005, the ‘‘Indian Tribal Energy Development 

and Self-Determination Act of 2005,’’ (the ‘‘Energy Policy Act of 2005’’) provides for 


216c6.eps
97

tribal energy self determination through the creation of tribal energy resource 

agreements (TERAs). Tribes have not found TERAs in their current form to provide 

a suitable means of achieving energy self determination. Both the Senate Committee on Indian Affairs and the House Subcommittee on Indian and Alaska Native 

Affairs are currently considering legislation that NCAI believes would remedy the 

barriers to tribal energy development in the Act. 

A. Tribal Energy Resource Agreements (TERAs) 

Senate bill S. 1684, the Indian Tribal Energy Development and Self-Determination 

Act Amendments, seeks to amend the existing TERA process established by the Energy Policy Act of 2005. The fact that, to date, no Indian tribe has successfully navigated the burdensome TERA process, attests to its need for procedural revisions. S. 

1684 streamlines the criteria for approval by setting time limits for the approval 

process, as well as shifting the burden from the tribe to the federal agency to disapprove an application for a TERA, of course necessitating that the tribe meet several core criteria. After demonstrating sufficient capabilities, tribes would be able 

to proceed without the DOI Secretary’s review for leases, business agreements and 

rights of way. NCAI believes the amendments provided in S. 1684 would streamline 

the TERA process significantly and allow tribes to better use of legislation which 

Congress intended they make use of but which, to date, has not helped tribes develop critical energy resources. 

B. Tribal Energy Development Organizations (TEDOs) 

S. 1684 also provides for a new approach to tribal energy development with the 

introduction of Tribal Energy Development Organizations (TEDOS). Rather than 

form a TERA with Interior, a tribe will be able to form a Tribal Energy Development Organization that may include partnerships with other entities. TEDOs, wholly owned by the tribe, will be able to develop tribal energy resources with reduced 

DOI oversight. NCAI supports this provision as an option for tribes desiring to exercise their self-determination over energy development. 

C. Agency Collaboration (DOE and DOI) 

NCAI also supports the S. 1684 mandate for collaboration between the DOI Office 

of Indian Energy and Economic Development (OIEED) and the DOE Office of Indian 

Energy Policy and Programs (OIEPP) on matters involving tribal energy development. Tribes would greatly benefit from the combined process expertise of OIEED 

and the technical expertise of OIEPP. Recognizing the value of the technical expertise that DOE, through OIEPP, has to offer, NCAI strongly recommends mandating 

that DOE make its expertise available to tribes in the same manner S. 1684 mandates DOI provide technical assistance. OIEPP is making critical strides to leverage 

the immense expertise of DOE to address the challenges facing tribal energy development and NCAI believes it is imperative that this work continue regardless of any 

potential change in administration. 

NCAI also supports the provision of S. 1684 that expands the DOE loan guarantee 

program to include the Tribal Energy Development Organizations (TEDOs). This is 

an essential part of financing that needs to be available to tribal energy development entities. 

With enactment of S. 1684, tribes will be poised to move into the energy sector 

with greater sophistication and self-determination. This legislative action is crucial 

to increasing tribal ownership and control over their own natural resources, and 

helping ensure those resources help provide for the future of Indian Country. 

As mentioned earlier, the members of NCAI have passed a resolution to express 

support of S. 1684 (attached). This resolution also expresses the need for transmission access, the elimination of APD fees and the importance of making tax and 

finance options accessible to tribes. 

3. Additional Key Barriers to Energy Development Identified in the NCAI 

Resolution 

The NCAI resolution states opposition to any Application for Permit to Drill 

(APD) fees levied by the DOI Bureau of Land Management on tribal land because 

the APD fees create a significant disadvantage by burdening costs of exploration on 

tribal lands relative to the costs for exploration on neighboring lands. The NCAI resolution also recognizes the benefit of making tax incentives for renewable energy 

projects that are tradable and assignable for use by tribes and improving transmission access. 

Tribes are commonly interested in developing their renewable energy resources 

for the benefits of air and water quality. However, due to their tax-exempt status 

as sovereigns, use of federal tax incentives for renewable energy projects is becomes 

a complicated issue. NCAI would like to see the renewable energy tax credits made 

98

assignable and tradable to help tribal renewable energy projects gain traction with 

real world investment and finance entities. Similarly, NCAI would like to see Section 17 Corporations, which are federally-chartered corporations formed under Section 17 of the Indian Reorganization Act (IRA), become statutorily eligible for the 

1603 Treasury grants for renewable energy, regardless of appropriations levels for 

that program. 

Finally, for tribes to fully realize the scope and benefits of energy development 

on tribal lands, tribes need access to electric transmission. NCAI recommends an 

amendment to make the Energy Policy Act of 2005 binding so that power marketing 

administrators offer technical assistance to tribes seeking to use high voltage transmission lines. NCAI would also like to see federal power procurement leveraged for 

the benefit of tribal power producers. 

4. Indian Coal Production Tax Credit 

The Indian Coal Production Tax Credit (ICPTC) has helped tribal coal development remain competitive to ensure that much-needed revenue remains in place for 

tribal governments. Specifically, the Crow Nation relies on the ICPTC to stay in 

business due to the price differential imposed on coal with higher sulfur (SO2) emissions. This price differential was created by Title IV of the Clean Air Act and neutralized by the Indian Coal Production Tax Credit established in the 2005 Energy 

Policy Act. 

The 2005 Energy Policy Act included the Indian Coal Production Tax Credit, 

which began in tax year 2006 but unfortunately sunsets December 31, 2012. ‘‘Indian 

coal’’ is coal produced from reserves owned by an Indian Tribe, or held in trust by 

the United States for the benefit of an Indian tribe, as of June 14, 2005. The tax 

credit is calculated by totaling the number of tons of Indian coal produced and sold, 

then multiplying that number by a factor. The Energy Policy Act 2005 provides a 

factor of $1.50 per ton between 2006 and 2010 and $2.00 between 2010 and December 31, 2012. 

NCAI believes that the Indian Coal Production Tax Credit should be made permanent and allowed for use against the alternative minimum tax. Additionally, the requirement that the coal be sold to an unrelated person should be amended to allow 

and encourage facilities owned, in whole or in part, by Indian nations to participate 

and benefit from the credit. 

5. Carcieri Fix 

NCAI supports a legislative fix to the Supreme Court’s 2009 decision in Carcieri 

v. Salazar. The Carcieri decision erodes the trust responsibility of the Federal Government and harms future tribal energy development by creating uncertainty for investors and challenging the authority of the Department of the Interior to take land 

into trust for tribes. Tribal governments require trust land on which to develop their 

resources including energy. NCAI supports a legislative fix to the Carcieri decision 

that does not exclude Alaska Native tribes. 

6. Statutory Assertion of Tribal Taxation Authority 

Energy development provides critical revenue needed by tribes to provide governmental services to tribal members. Legislative action, affirming Indian tribes’ inherent taxing authority over tribal lands would enable revenue from energy development to be fully invested in quality-of-life improvements for tribal members rather 

than being diminished by state taxation. 

7. Small Scale Energy Implementation 

NCAI recommends the creation of legislation to support implementation of small 

scale renewable energy. This would be particularly helpful for Alaska Native villages that pay extremely high prices for heat and power. Small scale renewable energy can reduce and stabilize energy bills by using wind and solar resources. The 

DOE Tribal Energy Program has facilitated the planning and initial implementation 

of small projects all over Alaska and the United States and these projects help 

greatly with high utility costs, often in very innovative ways. 

Conclusion 

NCAI appreciates the Committee’s attention to S. 1684 and urges timely action 

so that a long awaited tribal energy bill can be passed during this session. NCAI 

supports S. 1684 but would also like to see the provisions described in this testimony included to make the next tribal energy legislation a comprehensive solution 

to the challenges facing tribal energy development. 

Attachment

99


216d1.eps

The National Congress of American Indians 

Resolution #PDX-ll-072 

TITLE: Supporting S. 1684, the Indian Tribal Energy Development and ScJfDetermination Aet Amendments 

WHEREAS, we, the members ofthe National Congress of American Indians 

oflhe United States, invoking the divine blessing of the Creator upon our efforts und 

purposes, in order to preserve for ourselves and our descendants the inherent sovereign 

rights of our Indian nations, rights secured under Indian treaties and agreements with 

the United States, and all other rights and benefits to which we are entitled under the 

luws und Constitution of the United States, to enlighten the public toward a better 

understanding of the Indian people, to preserve Indian cultural values, and otherwise 

promote the health, safety and welfare orthe Indian people, do hereby establish and 

submit the following resolution; and 

WHEREAS, the National Congress of American Indians (NCAl) was 

established in 1944 and is the oldest and largest national organization of American 

Indian and Alaska Native tribal governments; and 

WHEREAS, American Indian and Alaska Native tribes have significant 

renewable energy resource capacity in the form of wind, solw-, g~otho,;nnlll, lind 

biomass, as wcll as significant tradition energy resources, and seck to establislt 

sustainable economic development for tribal communities; and 

WHEREAS, the primary obstaclc to bath n:ncwablc and traditional energy 

resource development on triba] lands has been delays and bureaucracy at the 

Department afInlerior, particularly in its inability to conduct appraisals and approve 

leases in a timely manner; and 

WITEREAS, NCAT recogni;o:es that energy efficiency is a core component ofa 

sustainable energy program that can reduce both the amount and costs of energy 

oonsumption and raise the qUlllity of life in Indian communities, and the NCAI 

strongly supports direct federal funding for increased funding for tribal energy 

efficiency programs; and 

WHEREAS, after consultation with Indian tribes, Senator John Barrasso of 

Wyoming introduced S. 1684, titled above, whiclt has been co-sponsared by Senators 

Akaka, McCain, Thune and Hoeven, and which would provide Indian tribes with the 

opporlunity 10 remove some of the bureaucratic obstacle~ to energy leasing; and 

WHEREAS, S. 1684 also provides a fOffimla for direct federal funding of 

tribal weatherization programs, establishes a tribal priority for hydropower lensing, 

and includes Indian tribes in the Department ofintcriar's efforts on biomass; and 
100

PREPARED STATEMENT OF TRI-STATE GENERATION AND TRANSMISSION ASSOCIATION, 

INC. 

Tri-State Generation and Transmission Association respectfully submits the following testimony with supporting documents for inclusion in the record. 

The town of Dulce, New Mexico, located on the Jicarilla Apache Nation Reservation, is served by a 24.9 kV electric distribution line. As early as 2004, management 

from Northern Rio Arriba Electric Cooperative, Inc. (Nora) identified the need to increase capacity of the electric service to Dulce and worked with the Jicarilla Nation 

(Jicarilla) to secure the right-of-way to build a 115 kV transmission line from 

Chama, New Mexico to Dulce. Nora requested permission to build a 115 kV transmission line and planned to operate it at 69kV initially. In April 2008, The Jicarilla 

contacted Nora management to inform them that the Tribal Council had approved 

a resolution to allow construction of a 69 kV transmission line and substation. Nora 

management responded that the 69kV approval needed to be changed to 115 kV as 


216d2.eps
101

previously discussed to correspond with all planning and engineering work done. 

The Jicarilla representative went back to the Tribal Council several times to request 

the change. 

Finally, on November 7, 2009, Nora received a letter (Attachment 1) from the 

Jicarilla dated October 19, 2009 stating that The Jicarilla Legislative Council enacted resolution 2009–R- 359–06 on September 28, 2009 thereby confirming that the 

Nation had elected to construct the portion of the 115 kV transmission line on the 

Jicarilla Apache Nation Reservation from Dulce to the Reservation boundary in lieu 

of granting Nora an easement for Nora’s construction of a 115 kV line. The letter 

indicated that the Jicarilla would own those facilities constructed on their land and 

interconnect those facilities to the Nora system south of Chama. A copy of resolution 

2009–R–525–09 is included as Attachment 2. The letter referenced the wrong resolution. The resolution and letter indicated the nation was preparing a draft contract 

to provide for a long term lease of the constructed facilities to Nora and Tri-State 

for the purpose of delivering energy to the cooperative members on the reservation. 

Nora management agreed with the proposal and expected construction by the 

Jicarilla to begin immediately. 

By 2009, the existing distribution circuit had reached its capacity during peak 

loads so Nora, the Jicarilla, and Nora’s power supplier, Tri-State Generation and 

Transmission Association, Inc. (Tri-State) reached an agreement to install a temporary 2 MW generator for 24 months at a site selected by the Jicarilla in Dulce 

to serve the increasing load. That generator was energized for commercial service 

on February 3, 2010 and remains there today. The 24-month term was agreed to 

under a revocable permit from the Department of the Interior, Bureau of Indian Affairs as a stopgap measure while final negotiations were completed on the right-ofway for the 115 kV transmission line from Chama to Dulce. 

To date, the Jicarilla have not constructed the transmission line and have indicated verbally and through their attorney that they now intend to secure transmission service from Public Service Company of New Mexico with a new line from 

the south and to begin negotiation with Nora to discuss acquisition of existing electric distribution facilities. The Jicarilla’s attorney produced an unsigned tribal resolution at a meeting on September 9, 2011 stating so. With that discussion, Nora requested formal notice of the Jicarilla’s position and plans regarding the transmission line and Nora’s facilities located on the Reservation. To date, no formal notice has been provided. The twenty-four (24) month generator agreement expired 

and was extended even though its original purpose was frustrated (temporary service while the 115 kV Chama-Dulce line is constructed). Tri-State and Nora continue 

to serve the cooperative members in the area through the existing circuit and with 

the temporary generator. However the nature of that generator is temporary and 

it is imperative that the Jicarilla formally notify Nora of their intentions. Nora and 

Tri-State have stood ready to serve the needs of its cooperative members in the 

Dulce area but all efforts have been frustrated. 

Attachments

102


216e1.eps

P.O,J«,>;\; 107' 

OOVJW.1'<t.W\'T 

R<: Establi,bmg Corf"" AdlOOl3 That Al'e T" 11<> 'tl!k~11 Reprdlnt: n ..... !eplllODtgf ~ 

l"o"Pm"Sl'Y G .. ",r..t".- l:"ntj.<t ..-rull'ka.~ 1 ']'~lf Mao, SubmltloA """ FaclI/t!"" 

R..olutjonl'l",~'~!!! 

WImR'EAS, "'" Nruill<\tl'l Rill ATribo Eb;me C:w'lpm,tiVl:, lil~ {'"NORA'~ is"" elo:o:m" 

"""l'o:ml"" fu<Il di.lrib= cktlnt p~e> to p<>Mi0ll'l of 1l;. Jltlltllia Ap:!<;I .. 1hs=»lion CIne 

~11"" ... 'otbn''} a~~ NOM's !l<i,..o!y v@l~ P'''''tt' "''fIIili'''' ill 'lli-Sw.> Oonomtion a!ld 

Thm;mlaol"" "...",,;w.im), Inc., (''Tri..stot<o''l; And 

wtreREAS, fit a m<>cllng "" JI.lIl~ a~ Mol 9", 21J/.)~ ;,otwceu I1l!l l-ogj,llltlve C'"""",I, 

NORA'"haru1l, om! Ttl..:sl>lle's so:Ii{)r1>U\!!il&'<'!llMt{'~ M""""!D fuc !>i'I'kiJ'llll\'l ag.w! 

3!lfollows: 

.. Th.! a jHlrl1lbl" ~peoko.'" !l'"1et.l.tor sboulc! be ins\ulk!d ;md inle!CO<lMotod I<l 

.dd1=; the immcdiot<: lWld ,nd "",nobility ~ Olme Chm~a_bu"'" CIrouIl: ""d 

111'" ill Ootl ... 10 aili1ro.,; tI"",~ """. load..oo n>llablllty ",,~.e= OIl a looe-t=, 

~ it i. ~=!<Sao" IQo ""mil:"'" 8 !1SkV 'IrmmnIS!I!~n llne, .1t.;1Mlim"'''~ 'Blaled 

militl"", wlliotJ <lOll be 0(Q)0inJe:d oitlm by NORA ("App"","" Aj '" by tb~ 

NoI"", {"Appr<>l!ci: a."), a~ te= bOlh AW"~~l1 A "'Ill D oil!! QJI!Y lx< 

~p!i"hed ";Im the Nation's (lOtL'le:rt\ and ~lIPM"aJ, tbe!>latl«! will (WI"'" fm'" 'n- two apptm!Oltos !Il1<l1:b~ =II:r ;tII(> fue 1IO~...ary allf~ NORA 

~rnli'p,.Tri"S:ato: Ie ~""nhe >clctu"" of "'p~h 1-, (wl:lch <61ui<;;$ ~ litbi 

"r """I ~""Q .". B (which n>qui"", .. 1 ... " cl' u.. Notio" _. '"''''~<! 

-lm~",!,~,*""d 

TI .. t 'NOM m~l,,"dress iss""" ~ade<J.l!aCl' alld tho:< ~ ~amltf-ti.om: 

MQ.....,mi!1:j', on R=",afion 'NORA memm; sn<I 

"hat ., en nwm:rtrla~ time tIll: :N"~ltWlll ~p""lrm a Phaw 2 IllS!< V) Iin~ fiom 

Nu""i" D.un :u OI>lce if;! js fimlposedbyTtJ.State; en~ 

WHIUU;J',8, l1i ... <;!olre h",1OIto ~..u.:.n sl:IlpS in .mb (II mlllllU and im~_<1 u 

!<Il'l'~ ~tt<rwirbin the time _~ 1lI tho Choma MoeIi"J;, ""d Ttj,Sla!e and 

NORA ha~~ .greed 1<> ""ocutc 1hu ~ 11.",,,,,,",): Permit for Ute- imtolkilWIl nr .. L-emPQ~ 

S"" ..... '" and NORA "'(;O~~i>:"" 1IIt.1 d'te JnOI1I;totimn ~n ~~ z,rvioe hook-up. m .... ~ l;lled~ 

Ao' 

WKERl!.AS, Tri-Stat~ Md NORA. ~ lila!. a M~ of .t;zteom.nt me'f>O'l!,)ll>:i~g t,'1<: k\\~ wm. offue Ch= MO>tIiDg w no\ _or), 1bI: tho- ~torplOj~ tt' 

r~ """" llie LegJ.lattve eo"",;il .. ~eot< eitht: A:wroachA M A~{lach:3: AmI 

wm;:RJ'..AS, SlUIgron l'lJ"""c Coml"".\' ("Sf"""",,") boo ~""'nitted .. 1'1"'1"'<111 rt> 

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-!ltdbe NoIfun r~,. o."".<>f$!U5 mll~Wl, 

NOW, nU!:Rt:I<ORi" liE IT RESOLVED, !hat If:(! ~ of dlo Nnti~n 1~ 

,1I1lt0Ji~C<l'n' 
103


216e2.eps

1. Prllyjck: Tri .. ":tll.tc lind NORA..ruh 'Wri~ l1()ti«: that 1M NlUi(lli bas; (iJ 1lJlt~ furthc 

"51:If-lwih!"' plt.:matlw for 111.:: PM~ 1 'ttIIIlmIlsOOn Itn~, SLlbwtatllln and db;tn"bUIDm Line, and is 

raldy to wter IlJl. ~J. w.i1h N'ORA far the develapmmt of I!wt iilci.UIy ~d le~!le it to 

NOM. :v eanb!e NORA to 6;:liVl;t cledril:ily ttl lh<J Rett."VaIicu;md (Ii) is wllling w gnmi II 

shorNenn cKklmIlln (If lhe NORA FnulWise Agw"...mroJ W flIclli~ the Q¢-;etcpmcnt of tlle 

Phmc I II'llIllmlb!lioc Jtna. subje(.t 11:> Tl'i-state <md NORA ~<;Intlnutng to proceed with !be 

i!¢IWl .. I\Il pNject QrIthl~ bn~h:; and 

2. llx-.:c1M: ti-..:: !It1\l~hed Rt:m<:~bk Pmmit fut !'.!1lJ temJ»tl!!)' eenetattlr; and 

-3.....ln..woo:1m.1tiCJ.D......mtJb;;NatjgnT~ lef!!ll CllIIlWlI, HoI1aJ!£L& Knight U,P. m:gotiatefuc 

:mll tIIld conclllloM of ~ <;Ql'lStnlcrion eotrtral:t foi Plws~ I (w:ililie:s mIbj;d. tQ the ir,l1;!ll1ifkatkm 

of fundillg .$/'J1.l1'CCli and other clat.:Ji!~ to be 6ecirllXi by !he T.egi~lli1tive Co\1Qcil's review Il.lld 

approva.!; mrl 

4. 111 c<lrnmT!1l1ion Mill the Nllfum's 1~.coUnSe1. Hol!twd & Knight. T.T.p. uq;cl;afu'!be 

mm.~ !DId ccmlitilms of II ~ ~nt for tl1.e .l'hnst 1 fteultic;:! 'l\1tb NORA an" TTHllat\;. 

and Il-~uilltble ~1l'lt("lmm tllte{tSicn I;1.ftl'IC NORA F'nInQbl~ Agl.'an"..ent,. both agreem'O!'l1S !;\lbJ~ct 

lolh&Wative:Collncila~. ' 

IrE IT FrNAU.v RE,';;Ol..vi;D-. ihBt full' ~ l$ Jluth~ to =E:",rte ar>y 

u(X:I)mCTlt:; neceMM)' In <=lY nul (be dirn<:live.s; oflhi~ Rl)l\oIJ;1li(lll. 

Tb~ fctcgginf; R~1l11\tioll was t:fIII::Nd upon by ihe Legblative Cguucilllffue; Jjq..>fila 

l'1.paIlil~ NruiQfJ "n 1ho at:day pf Sgptqmb£r. ZOot IrJ note of i tor, !! q,WIISI,.e: Ill;lwlinlng, at 

a duly C$llr:d m~dlnlJ.JI1 which a qllDrum "fthe Lcaislaliv<' CmJooil Members ~ pres:tmt 

.... h 
104

Æ


216e3.eps

EXECUTIVE OF.PlCES I!O. Box ;(17 • Polo.", Nc"'" M«icD - ~1;1S{)3W • (505) 759-~z.!~ 

Jla.;lbA""", ___ ",I"" 

"",=,-11,""']'" 

Mt, Ben R. Uyba 

G<:noral Manager 

Northern Rio AnibaElcclIic Cooperative, wc. 

P.a. Bo~ 217 

Cluui>a. NewM,,,doo 87520 

R<r. 115 kV "Ph .... P' Tran=is,io1lLiIlc 

D"",Mc. Lcybaand Mt. And .... on: 

Ootober 19, 2D09 

Mr. Konneth Ande:rS{JJI 

BlWltivc Vioc President and GencmI Mllllagor 

Tri-8l11te Gon.",tion & Traromi .. lo~ Caape:rati'l'., h",. 

1100116" Street . 

WmmiDlI<:r, ColQrado 802:>4 

_ Pllr8Uonllo the discussiollS among 1he 1i<:a<illa A~ac1Je Nation ("Nati~n"), Tri-SIIl-(e 

Gen«ali01l & Transmi,:;;OJI Cooperative ("Tri_SIate'~.oo North"", Rio Am'ba Elec1rlc 

Cooperative ("NORA") (oolleotivcly th~ "Cooperatives'? at CbomR Oil J",", 8. 2009, the N.tiOll', 

L~gi'l.tive COUilcil <:l1~'*'<1- R_!uUon 2IlQ9·R-3.59-06 011 Seplcmber2S, 2009, thereby 

confirming thaI the Nation's ~II$ o1.e<:ted 10 con,Im'" the portion ofthc proposed Phase I 

lrnlIsmiSllion lim: on the Ji=11n Apocl:te Nati{]uReaervllliOll ("ReaervRtiuu'') from Dul,,~ Iii the 

Reservation boundory. A copy ~fthi~ Resolution is eru:la&.d r",your records. 

'rhi. "Pha,.lline will be a 115 kV lin. ruLed OQ the righl·or·way p!<lvio""ly id",,~litd and 

I.\lPftlved fOr a 59 KV Ilne 10 Marcll2jlO8, to COOIlCC!lllc cxislfng NORA transmission s)'StCm 

SQ1Itb ofCh;nna with ~ new substQtion on the ResmllMn ~l ~ sit~ zQ\\th ofDru~ with SI>\tOOle 

distnoutinn onnncctions from lhl' ,ub.tBtinn to Druce. The Nation', portioo afthe I""jcol will 

include the tnmsrnIss:ion 1"", on the }t""."".tiQU, th~ sohotatian, and di$lrib\Itionlin"" to nut ..... 

NORA and Tri_StEtte win beresponsib1cf{)f the off-Reservation portion ofth~ project os Wo'1! a. 

int=nn""riugth-..e !leW tnnsnrlssion faoiliti"" with th<lNORA ")'sI=.. 

The N.tioll is J?«'Poring -~ dIoft oorrlmct 10 provide fur l~ng-Icm>. lea.c {] f the 011-

R"""",,tiOlll'hase I facilitie.:; 10 the CooperetiVe:! £or the purpose of delivering energylo anResorvation membem 011 mUllJlIl1),-agreed lenns 3IId oorulitinni, and 10 provide fm "greed 

teohnic.! specifications, timing, siting arocl othernecesso:ry an--angep>enlS £or these facilities. We 

look forward 10 bringing Ibi. cor:rtrnct Iomutually-,lII:l,r"",ary ilOndusicn quiokly and 

prooeildins with the p.pjl>Cl. 

L"lhei~ ()f~~o;ling /he installlllion."d io~""eolion of ihepcr'.aNe gonotlllQr 

proj.~~ the JIc!ll:iUa~' Offirecllhl: llPl<:an c:fTnolian ~ ("Bl-\.") hal ~'aluated liI!d has indl"'*<l !1m ~pfmW'd the ReTIloabla l'cmrit a>a ~rning_ A r"ny Ell<I't>lIed m-.d BlA_ 

apPl"ved origlr.cl OOffille<pa!t nf Ille RtwOOllh1e Pomill will be forwurdd 1lIlller "op"mle oover to 

!he IoopocliV~ low.! oo\'llscl IQ, Tri·St.~ and NORA wifuin fh<' next foW da~. 1'1_ b:>ep 

SIle:r).., Awittl', Stephen M;:H\lgb, ond M~ Qlvaltangll advi.od .bout the schedul~fur 

cc!ll1)lcting the BUrV"Y of th~ g<m<o:e!Or ,ite thol: Is called furoy the Revocable Permit They will 

811Si,t you ill ccoidinatiIlR with the BIA Iffid iII obtainint any pem!its IIe=""'Yfor p"rf'"miIlg 

."rvO)' work on thQ geJl~r site wilhin tho Reservo,t;on. 

ill closing. on ~'uIlfQfthCLeglst"ti'l't Cowl0l11U1d lh~ NatiOll'1l Wi:<",,.thu!.ely on 

NORA fw .~kctri<>Ol.=1"", !his is "" op[><>Jlur'ity \O~.:os 1lt!o <>:itical ;".portanoo of 

hav\J<-l'\1>a grnetiltoriImtalloo I!!llnlerconn.....t at n.. earliI:st l"'ssible~, ""d ee/talnly 

by 0' befo,e D.oomber I, 2009. 1'M N.ii"MUIo1c:. tOildy (0 ;lSsMNORA .. ,ll: Trl,SllIll:oitl 

~evins this 'lital ~\'Il.