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76–531 PDF 2012

S. HRG. 112–636

S. 1684, THE INDIAN TRIBAL ENERGY

DEVELOPMENT AND SELF–DETERMINATION ACT

AMENDMENTS OF 2011

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

APRIL 19, 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 April 19, 2012 .............................................................................. 1

Statement of Senator Barrasso ............................................................................... 1 

Statement of Senator Conrad ................................................................................. 15

Statement of Senator Franken ............................................................................... 16

Statement of Senator Hoeven ................................................................................. 35

Statement of Senator Tester ................................................................................... 36

Statement of Senator Udall .................................................................................... 40

WITNESSES

Cuch, Hon. Irene C., Chairwoman, Ute Tribal Business Committee .................. 20

Prepared statement .......................................................................................... 22

Finley, Hon. Michael O., Chairman, Confederated Tribes of the Colville Reservation ................................................................................................................. 16

Prepared statement .......................................................................................... 18

Groen, Wilson, President/CEO, Navajo Nation Oil and Gas Company ............... 29

Prepared statement .......................................................................................... 30

Hall, Hon. Tex ‘‘Red Tipped Arrow’’, Chairman, Mandan, Hidatsa and Arikara 

Nation, Fort Berthold Reservation ..................................................................... 8

Prepared statement .......................................................................................... 9

Olguin, Hon. James M. ‘‘Mike’’, Vice Chairman, Southern Ute Indian Tribal 

Council .................................................................................................................. 3

Prepared statement .......................................................................................... 4

APPENDIX

Crow Nation, prepared statement .......................................................................... 47

Intertribal Timber Council, prepared statement .................................................. 58

King, Hon. Randy, Chairman, Shinnecock Indian Nation, prepared statement 51

Office of Hawaiian Affairs (OHA), prepared statement ....................................... 60

Porter, Robert Odawi, President, Seneca Nation of Indians, prepared statement ...................................................................................................................... 56

(1)

S. 1684, THE INDIAN TRIBAL ENERGY

DEVELOPMENT AND SELF–DETERMINATION 

ACT AMENDMENTS OF 2011 

THURSDAY, APRIL 19, 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. John Barrasso, Vice 

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. JOHN BARRASSO,

U.S. SENATOR FROM WYOMING 

Senator BARRASSO. Good afternoon. I am calling this hearing to 

order. 

First, I want to thank the Chairman, Senator Akaka, for scheduling this hearing today and allowing me to act as the Chairman. 

We will be considering my bill, the Indian Tribal Energy Development and Self-Determination Act Amendments of 2011. 

The Chairman has graciously agreed to co-sponsor the bill with 

me in the spirit of the Committee’s long tradition of bipartisanship. 

As I have stated in the past, when I meet with leaders of the Eastern Shoshone and the Northern Arapaho Tribes, I am reminded 

how important energy development is to Indian communities across 

the Country. On the Wind River Reservation, energy development 

means jobs. 

Energy development on the Wind River Reservation also means 

income for families. It means paying the heating bill. It means food 

on the tables. We know that many Indian communities have more 

than their fair share of challenges, unemployment, crime and drug 

abuse. Many of these problems are really aspects or features or 

something much larger: a pervasive lack of opportunity to earn a 

good living. 

Economic development and economic opportunities—those are 

the keys to a healthy, productive community. Energy development 

on Tribal lands is critical for employment and economic growth in 

Indian Country and for America’s energy security and our independence. 

For years, Indian Tribes have expressed concern about the numerous Federal laws and regulations governing the management of 

trust and energy resources. These rules often create significant 

delays and uncertainty in development proposals. 

2

For these reasons, I have introduced S. 1684, the Indian Tribal 

Energy Development and Self-Determination Act Amendments of 

2011. I would like to highlight some of the more important provisions. 

First, this legislation is intended to make the Tribal Energy Resource Agreement, or TERA, process, easier for Indian Tribes to follow. It will also make TERA more predictable. Since passage of the 

Indian Energy title of the Energy Policy Act of 2005, it appears 

that no Tribe has yet availed itself of the authorized TERA process. 

Under my legislation, a Tribal energy resource agreement would 

automatically go into effect after 270 days unless the Secretary determines that its terms do not meet the specific statutory requirements. 

Second, S. 1684 would allow Tribal entities to enter into certain 

energy development leases without approval by the Secretary. 

These entities could have non-Tribal investors, but the Tribe would 

have to be the majority equity owner and retain control at all 

times. 

Third, this Act provides the Indian Tribes with some funding to 

implement the TERA process without increasing the cost of the 

program. The amount would be equal to any savings that the 

United States realizes as a result of the Indian Tribe carrying out 

the TERA. 

There are other energy-related issues addressed in this bill apart 

from the Energy Policy Act of 2005. For example, Tribes also face 

barriers when seeking approval of hydroelectric projects. There is 

a provision in my bill that modifies the barrier in the Federal 

Power Act, making it difficult for Tribes to pursue hydroelectric 

projects. 

This bill would also authorize a biomass demonstration project 

for biomass energy production from Indian forest range lands and 

other Federal lands. We will hear more on that project from Michael Finley, from the Colville Tribes. 

For far too long, bureaucratic red tape has prevented the pursuit 

of Tribal economic development opportunities, especially energy development. This legislation will reverse that trend. 

Before I conclude, I want to again thank Chairman Akaka for his 

leadership on the issue. I would also like to thank the Chairman’s 

staff, who have been so very helpful as well. 

A final word: I am going to have to leave the hearing just before 

3 o’clock. Senator Hoeven from North Dakota will be chairing the 

hearing from that point on. 

With that, I would like to turn to the panel. We have a panel 

of five witnesses. I am going to introduce them, starting with the 

Honorable James ‘‘Mike’’ Olguin, the Vice Chairman of the Southern Ute Indian Tribe of Colorado. Next is the Honorable Tex Hall, 

Chairman of the Mandan, Hidatsa and Arikara Nation, from North 

Dakota. He will be followed by the Honorable Michael Finley, 

Chairman of the Confederated Tribes of the Colville Reservation in 

Washington State. Next is the Honorable Irene Cuch, Chairwoman 

of the Ute Indian Tribe of the Uintah and Ouray Reservation in 

Utah. And finally, we will hear from Mr. Wilson Groen, the President and CEO of the Navajo Nation Oil and Gas Company in Arizona. 

3

As you see, we do not have a witness from the Administration 

here today. I continue to work with the Administration to address 

questions they have and reiterate the importance of this legislation 

to Indian Country. So I am looking forward to the coming dialogue. 

With that, I would like to welcome our witnesses here today and 

look forward to their testimony, and we can begin. 

STATEMENT OF HON. JAMES M. ‘‘MIKE’’ OLGUIN, VICE 

CHAIRMAN, SOUTHERN UTE INDIAN TRIBAL COUNCIL 

Mr. OLGUIN. Good afternoon, Vice Chairman Barrasso. Also good 

afternoon, witnesses. 

My name is Mike Olguin, I am the Vice Chairman of the Southern Ute Indian Tribe. I am honored to appear before you today on 

behalf of my Tribe, my people and Tribal council to provide testimony on S. 1684, the Indian Tribal Energy and Self-Determination 

Act Amendments. 

We fully support S. 1684, especially its provisions regarding Tribal Energy Resource Agreements, or TERAs, which will be the focus 

of my comments today. 

S. 1684 continues this Committee’s commitment to support Tribal energy development. Over the years, you have worked on a number of legislative proposals to help us with our primary and ongoing concern, the delays and impediments to Tribal energy development caused by Federal bureaucracy. 

With the price of natural gas at a one-fifth of what it was only 

four years ago, you can easily understand the impact that multiyear delays and the approval of rights of way and other energy-related transactions have had and continue to have on our Tribal 

economies. Because we are the largest employer in our region, 

these impacts are felt in the non-Tribal community as well. Despite 

our mutual efforts to solve this ongoing problem, these bureaucratic delays and their financial impacts continue. In 2002, we 

began work with your staff on a possible solution. Back then, our 

legal counsel wrote to your legal counsel about a possible alternative approach that would allow Tribes to elect to escape the Federal bureaucracy for mineral development purposes, provided the 

Secretary has a reasonable indication that an electing Tribe will 

act prudently once cut free. 

This proposal ultimately came to fruition in the Indian Tribal 

Energy Development and Self-Determination Act of 2005. That law 

gave Tribes authority to manage some of their own energy development transactions without Federal oversight, provided the Secretary of the Interior was satisfied that the Tribe had the capacity 

to do so. 

As a precondition, the law required a Tribe and the Secretary of 

Interior to first establish a master agreement, or TERA. We continue to believe that this alternative approach is the right one. Unfortunately, no Tribe has yet entered a TERA to take advantage of 

the promise offered by the 2005 law. Each Tribe likely has its own 

reason for not pursuing a TERA, but we believe many concerns 

revolve around one, the lack of Federal funding for Tribes to assume additional duties under a TERA; two, the lack of clarity regarding what inherent trust functions would be retained by the 

Federal Government after entering a TERA; three, public input reVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 S:\DOCS\76531.TXT JACK
4

quirements for Tribal processes; and four, the extensive capacity 

demonstrations required before a TERA could be entered. 

S. 1684 would amend existing law regarding TERAs and while 

these amendments do not address all of the potential reasons for 

no TERAs, they expand the use of TERAs and their potential benefit for Indian Tribes. My written statement contains a detailed review of these complex provisions, but I would like to summarize a 

few of the most important changes S. 1684 would make. 

First, S. 1684 would expand the ability of Tribes to demonstrate 

sufficient capacity to enter a TERA by including successful performance of other Federal 638 contracts as a basis for such demonstration. This expansion provides a straightforward and reasonable capacity requirement, in addition to those already allowed by 

existing law. S. 1684’s amendments would provide a clear standard 

that we could easily meet. 

Second, S. 1684 would broaden the types of activities that could 

be included in a TERA. For example, the bill includes the addition 

of transactions related to renewable energy facilities and clarifies 

that TERAs may extend to pooling and communications agreements affecting Indian energy minerals. 

Third, the bill would allow for cost-sharing between the Secretary and a TERA Tribe, where the Tribe’s TERA activities have 

resulted in cost savings to the Secretary. Last, the bill shortens the 

time frame for secretarial review and approval of a TERA, and 

would require that if the Secretary does not act upon a proposed 

TERA in 270 days, the TERA becomes effective on the 271st day. 

Each of these amendments, as well as the other changes under 

S. 1684, would improve the chances that Southern Ute and other 

Tribes would enter TERAs. We continue to believe that the TERA 

alternative is the answer to the ongoing delays caused by inefficient and ineffective Federal processes. S. 1684 is another step toward making that alternative a reality, and we urge you to move 

forward. 

Thank you for this opportunity and we are available to answer 

any questions. 

[The prepared statement of Mr. Olguin follows:]

PREPARED STATEMENT OF HON. JAMES M. ‘‘MIKE’’ OLGUIN, VICE CHAIRMAN, 

SOUTHERN UTE INDIAN TRIBAL COUNCIL

I. Introduction 

Chairman Akaka, Vice Chairman Barrasso and distinguished members of the 

Committee, I am the Vice Chairman of the Southern Ute Indian Tribal Council, and 

it is my great honor to appear before you today on behalf of the Southern Ute Indian Tribe in support of S. 1684. Although this legislation was introduced approximately six months ago, we have been working closely with this Committee for more 

than three years in an effort to obtain legislation further empowering Indian Tribes 

to address energy needs and energy development opportunities. We were active participants in field hearings and legislative discussions that led former Chairman Dorgan to introduce S. 3752 in the summer of 2010. While that proposed legislation did 

not become law, it served as a key building block for S. 1684, which is before you 

today. Throughout the intervening years, Tribal leader after Tribal leader has come 

before you to express concerns about extreme needs in Indian Country, both for improved access to energy and for economic development for their constituents. Today 

we hope that members of the Committee will collectively determine that the needs 

of Indian Country merit passage of S. 1684. 

The first purpose of our testimony is to take a step back and re-visit the underlying reasons that led to introduction of both S. 3752 in the 111th Congress and 

5

S. 1684. Second, we believe it is important to review the factors leading to and the 

potential significance of Tribal Energy Resource Agreements (‘‘TERAs’’) as an optional vehicle of Tribal self-determination. Third, we hope to show why suggested 

changes to Title V of the Energy Policy Act of 2005 are improvements that deserve 

your positive action. 

For decades our leaders have had the privilege of working with this Committee 

and its staff. Even when differences on other political issues have divided Congress, 

this Committee has led the way in focusing on the needs of Indian Country and in 

attempting to craft solutions to those problems. We respectfully urge you to do so 

once again in passing S. 1684. 

II. S. 3752 (111th Congress, 2d Session) and S. 1684

Because the process leading to S. 1684 has spanned such a considerable time and 

has included the introduction of two separate legislative measures addressing several of the same concerns, we believe it is worthwhile to review those two measures. 

Investigative hearings before this Committee leading to introduction of S. 3752 

addressed a number of critical problems that continue to exist today in Indian Country. First, the unacceptable, bureaucratic delays in federal approval of Indian mineral leases and drilling permits related to Indian mineral lands captured the attention of former Chairman Dorgan, whose own Tribal constituents watched their nonIndian neighbors get rich from mineral resource development, as Indian lands remained unleased and undrilled month after month while awaiting federal approval 

and permitting. The punitive effect of those delays on the poorest individuals and 

communities in the Nation clearly impressed this Committee as unjustifiable. A 

number of the provisions of S. 3752 attempted to reduce such administrative burdens through such measures as: mandated interagency coordination of planning and 

decisionmaking; regulatory waiver provisions; relief from land transaction appraisal 

requirements; and the elimination of fees assessed by Bureau of Land Management 

for applications for permits to drill on Indian lands. 

Other testimony received by this Committee prior to the introduction of S. 3752 

reflected frustration regarding barriers to capital, expertise and facilities needed for 

Tribes to proceed with alternative or renewable energy development. Again, the 

Committee attempted to address these concerns through a number of provisions including authorization for greater governmental technical assistance, reclassification 

of certain Tribal agricultural management practices as sustainable management 

practices under federal laws, treating Indian Tribes like State and municipal governments for preferential consideration of permits and licenses under the Federal 

Power Act hydroelectric provisions; expansion of the Indian Energy Loan Guaranty 

Program; and authorization for a Tribal biomass demonstration project. 

In response to other evidence demonstrating inadequate access of many Indian 

communities to energy services and weatherization assistance, S. 3752 authorized 

the Secretary of Energy to establish at least 10 distributed energy demonstration 

projects to increase the availability of energy resources to Indian homes and community buildings. Special 638 contract funding provisions were put in place for energy 

efficiency activities associated with Tribal buildings and facilities. Section 305 of S. 

3752 reflected a major revision of the Nation’s weatherization program by authorizing direct grants to Indian Tribes for weatherization activities. 

S. 3752 also proposed significant revision of the Indian Land Consolidation Act 

to address practical problems in that act’s administration and substantial expansion 

of the durational provisions of the non-mineral, long-term business leasing provisions of 25 U.S.C. § 415(a). 

While this brief summary can by no means do justice to the myriad of matters 

addressed in the specific provisions of S. 3752, it is fair to state that it touched a 

wide array of Indian-related programs involving Indian energy issues. 

In contrast, the scope of S. 1684 is considerably more narrow than S. 3752. Nonetheless, S. 1684 does contain provisions that equate Tribes with States and municipalities for hydropower permits and licensing under the Federal Power Act [Sec. 

201]. It also makes provision for biomass Tribal demonstration projects [Sec. 202] 

and would provide considerably more modest, indirect access to weatherization program funding [Sec. 203] for Indian communities. It also encourages Tribal energy 

resource development planning in coordination with the Department of Energy [Sec. 

101]. It does not, however, address a number of matters contained in S. 3752, such 

as expansion of the Indian Energy Loan Guaranty Program, establishment of distributed energy demonstration projects, revision of the Indian Land Consolidation 

Act provisions, or expansion of the durational provisions of the non-mineral, longterm business leasing provisions of 25 U.S.C. § 415(a). 

The differences in the two legislative measures in some measure reflect the apparent fiscal reality that increased authorizations for Indian programs will likely be 

6

meaningless due to constrictions in appropriation funding. Perhaps the biggest single difference in the two legislative measures is the emphasis in S. 1684 on amending the TERA provisions initially established in the Title V of the Energy Policy Act 

of 2005. For reasons discussed in more detail below, those changes merit the Committee’s support. We urge those members of the Committee who sponsored S. 3752, 

which our Tribe fully supported, not to abandon S. 1684 because of its narrower 

scope. S. 1684 is badly needed in Indian Country. 

III. TERAs and the Balancing of Tribal Self-Determination and Secretarial 

Review 

On August 8, 2005, the Energy Policy Act of 2005 became law. Title V of this voluminous legislation, known as the ‘‘Indian Tribal Energy Development and Self-Determination Act of 2005,’’ amended Title XXVI of the Energy Policy Act of 1992. One 

of the key provisions of Title V was Section 2604 [25 U.S.C. § 3504], which created 

a mechanism pursuant to which electing Tribes might ultimately be allowed to 

grant energy-related leases, enter into energy-related business agreements, and 

issue rights-of-way for pipelines and electric transmission facilities without specific 

approval by the Secretary of the Interior, subject to certain durational limitations. 

As a pre-condition to such authorization, a Tribe and the Secretary of the Interior 

were first required to enter into a master agreement, or TERA, addressing the manner in which such a Tribe would process such energy-related agreements or instruments. 

Although the TERA concept did not become law until 2005, its genesis before this 

Committee occurred several years earlier, and our files show that our former Chairman Howard Richards, Sr. formally requested support for similar legislation in 

2003. Earlier correspondence confirms that we had the same concerns about federal 

trust administration then that we have now. A memo from our legal counsel to the 

Committee’s legal counsel dated June 30, 2002 states:

The problems with Secretarial approval of Tribal business activities include an 

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

structural alternative is needed. The alternative should be an optional mechanism that allows Tribes to elect to escape the bureaucracy for mineral development purposes, provided the Secretary has a reasonable indication that an 

electing Tribe will act prudently once cut free.

Much like the debates that surrounded passage of the Indian Mineral Development Act of 1982, the potential diminishment of the Secretary’s role contemplated 

under a TERA caused considerable discussion before this Committee. We participated in those debates. Ultimately, with the encouragement of the National Congress of American Indians and the Council of Energy Resource Tribes, compromise 

was reached among this Nation’s leaders on energy and Indian issues. Senator 

Bingaman and Senator Domenici and Senator Inouye and Senator Campbell 

reached agreements on a number of matters that paved the way for passage of this 

legislation in both houses of Congress. These legislative resolutions were reached 

only because of the overriding recognition that the system of Indian trust administration was broken and was condemning Indian people to an arbitrarily imposed future of impoverishment. 

Despite the potential promise extended by Section 2604, no Tribe has yet entered 

into a TERA. We have spent considerable time asking ourselves why. Clearly, the 

inadequacies of federal trust supervision persist and show no signs of marked improvement. Given the years that we have invested in pushing for the TERA alternative, it is worth identifying some of the reasons why no Tribe has entered into 

a TERA. The following is a list of some of the reasons we have considered:

1. The regulations implementing Section 2604 diminished the scope of authority 

to be obtained by a TERA Tribe by eliminating and reserving ‘‘inherent federal 

functions,’’ an undefined term that potentially rendered the act meaningless.

2. Unlike 93–638 contracting, Section 2604 provided no funding to Indian Tribes 

even though TERA contracting Tribes would be assuming duties and responsibilities of the United States.

3. One of the statutory conditions for a TERA, the establishment of Tribal environmental review processes requiring public comment, participation, and appellate rights with respect to specific Tribal energy projects, was an unacceptable 

opening of Tribal decisions to outside input and potential criticism.

4. Individual Tribes lacked the internal capacity to perform the oversight functions potentially contemplated in a TERA or standards for measuring Tribal capacity were vague or unclear.

7

5. The extensive process of applying for and obtaining a TERA was simply too 

consuming and distracting to merit disruption of ongoing Tribal governmental 

challenges.

Clearly, this list is not exhaustive. The tragic consequence of no TERAs and continued reliance upon federal supervision, however, has been the incredible lost opportunity to develop Indian energy resources during the period between 2005 and 

today. Those development opportunities were extended to non-Indian mineral owners throughout vast regions of the country, where no federal approval was required 

for leasing or development. If one considers that the price of natural gas in 2008 

exceeded $10 per mcf, and today is only one fifth of that price, those lost opportunities may not return for decades. We estimate that multi-year delays in approval of 

rights-of-way and drilling permits cost our Tribe more than $90 million, and those 

practices are ongoing. 

Our Tribe continues to believe that TERAs provide great potential as a vehicle 

for Tribal self-determination. We remain extremely frustrated with the federal administrative impediments to making simple decisions, such as granting rights-ofway across our lands. The federal system on our Reservation is getting worse, not 

better, and, increasingly, we are spending more time fighting with the BIA about 

nonsensical directives and conditions for obtaining federal approvals. This is true 

even though we are considered one of the most commercially advanced Tribes in the 

country, with operations in multiple states related to energy exploration and production, commercial real estate acquisition, real estate development, midstream gathering and treating, and private equity investment. 

While S. 1684’s provisions related to TERAs do not address all of the potential 

reasons listed above for no TERAs, they do eliminate some of those disincentives 

and also expand the use of TERAs for the benefit of Indian Tribes. 

IV. TERA Provisions of S. 1684

The major proposed revisions to current law affecting TERAs are found in Section 

103 of S. 1684. The proposed changes are technical in many cases and cannot be 

easily understood without a side-by-side comparison of the existing law. We fully 

support the changes, however, and hope that the Committee considers them favorably. Some key changes include the following:

First, Section 103 expands the scope of TERAs to include leases and business 

agreements related to facilities that produce electricity from renewable energy 

resources.

Second, clarifying amendments also confirm that TERAs may extend to pooling 

and communitization agreements affecting Indian energy minerals.

Third, Section 103 expands on existing law related to direct development of 

Tribal mineral resources when no third party is involved. Under existing law, 

because no federal approval for such activity is required, a Tribe may lawfully 

engage in such activity, but few Tribes have the capacity or internal expertise 

to do so directly. The expansion contemplated by Section 103 extends such an 

approval exemption to leases, business agreements and rights-of-way granted by 

a Tribe to a Tribal energy development organization in which the Tribe maintains a controlling interest. This provision expands the opportunity for access 

to capital for direct Tribal development without federal approval where the 

Tribe continues to control the activity.

Fourth, Section 103 would make a proposed TERA effective after 271 days following submittal unless disapproved by the Secretary and would shorten the 

time-period for review of TERA amendments.

Fifth, Section 103 provides for a favorable Tribal capacity determination based 

on a Tribe’s performance of 93–638 contracts or self governance compacts over 

a three year period without material audit exceptions.

Sixth, Section 103 allows for TERA funding transfers to be negotiated between 

the Secretary and the Tribe based on cost savings occasioned by the Secretary 

as a result of a TERA.

Seventh, Section 103 confirms that TERA provisions are not intended to waive 

Tribal sovereign immunity.

While Section 103 includes other clarifying provisions, these constitute the major 

changes to TERA requirements found in Section 2604 of existing law. The changes 

improve the scope and clarity of current statutory provisions. 

8

Conclusion 

Individually and on behalf of the Southern Ute Indian Tribe, I hope that these 

comments have been instructive as to why we strongly support S. 1684. We respectfully request that you move forward with this legislation on behalf of Indian Country.

Senator BARRASSO. Thank you very much. I have a couple of 

questions, but perhaps we will go through the rest of the testimony 

then I will come back. 

Mr. Hall, thank you for being here. 

STATEMENT OF HON. TEX ‘‘RED TIPPED ARROW’’ HALL,

CHAIRMAN, MANDAN, HIDATSA AND ARIKARA NATION, FORT 

BERTHOLD RESERVATION 

Mr. HALL. Thank you, Mr. Vice Chairman Barrasso. 

For the record, I am Tex ‘‘Red Tipped Arrow’’ Hall, the Tribal 

Chairman of the Mandan, Hidatsa and Arikara Nation of the Fort 

Berthold Reservation in North Dakota. 

I would like to just summarize my testimony verbally and give 

a little background about where we are with oil and gas development, and some recommendations on 1684, your bill, to improve 

the energy development and lessen the Federal obstacles that exist 

currently. 

The fracking and the horizontal drilling is very integral to Fort 

Berthold. In 2008, we had zero wells. We were just getting into the 

leasing. We had a huge backlog. We were the guinea pig of the 49 

steps of the Bureau of Indian Affairs, taking up to six months to 

a year to get a lease approved. So nobody has to tell us, no Federal 

agency has to sit here and tell us what it takes to go through those 

49 steps. 

I feel like a mouse or a rat in a maze, and when you hit one side 

you get kicked to the other side. You have to go 49 steps through 

those. 

Then now we have an air permit requirement from EPA. And 

this was, this occurred, this mandate occurred without consultation 

in August of 2011. So now our permits were treated like public 

lands. These lands are set aside by our 1851 treaty, Mr. Chairman 

Barrasso. That treaty means these lands are set aside for the Indians at Mandan, Hidatsa, Arikara. They are not set aside for EPA 

or BLM. 

So we don’t appreciate being categorized into public lands. So 

when you are categorized into public lands, then our permits get 

under the Federal Register, so somebody in New York, Pennsylvania, who knows, Puerto Rico, can comment on our wells on Fort 

Berthold Reservation for me as an allottee to see if maybe I 

shouldn’t get a well on my allottee farm or not. And now on top 

of that you have BLM trying to impose a fracking, another permit. 

So we are used to these bureaucratic delays. We feel this additional requirement, and this has already gone to OMB, we just testified in the House this morning, Mr. Chairman, and the rule has 

been without consultation, it has already gone to OMB. So something needs to happen. We are not going to sit down and take it. 

This would cost our reservation $132,010,000 a day, $2 million for 

each well at an 18 percent royalty payout. That is at a minimum, 

if you own the entire thing, it is a lot more money. 

9

So this is a serious issue that is not going away, because it has 

been sent to OMB. So we met with Senator Hoeven, Senator 

Conrad, Secretary Salazar and reiterated what kind of economic 

harm. We have 950 vendors that do subcontracting for the oil rigs, 

we have 22 active drilling rights. We have 450 rigs. We are 75 percent of the payout for all Indian Tribes in oil and gas right now 

at Fort Berthold, Mr. Chairman. 

So this has a huge, huge impact on us. I am sure, like everybody 

else sitting here, it has that kind of impact for them at home. 

But gain, for not having any kind of a consultation, and on top 

of that, that BLM official walked out on us after he gave his testimony this morning. I told Chairman Young he should be reprimanded. It is the first time I have seen BLM at the table, and 

they are talking about us and causing, we have almost 10,000 employees, 950 small businesses and $132 million of potential economic and job loss at Fort Berthold. So this is not good for us. 

And then in line with your bill, generally we endorse your bill. 

We would like your bill to go further and do more. 

I do have one thing I want to mention, our tax agreement, Mr. 

Chairman. It is a lopsided tax agreement and I wish that your bill 

would address Tribes having the authority to impose our own taxation. Cotton Petroleum, the State takes 65 percent, they will take 

$100 million from Fort Berthold Oil in 2012 and give us back $2 

million on State roads. I told Senator Akaka in the roads meeting 

earlier, I wouldn’t be back here if we can fix that one item of the 

tax bill. That is the single most issue facing Fort Berthold today, 

is having to share a lopsided tax agreement. 

And the last thing I will finish on is kind of crazy. But we have 

truck bombs. That is our latest law enforcement scare. You know 

what a truck bomb is, Mr. Chairman? Well, the truckers are now 

making between $100,000 and $135,000 at a minimum, a year. So 

the run 24/7, so they go to the bathroom in a Coke bottle and they 

throw the Coke bottle in a ditch. So when they come to clean the 

ditches and cut grass, those bottle explode. Nobody wants to clean 

the ditches in North Dakota any more. 

So that is what our law enforcement has to deal with, the latest, 

is truck bombs. 

It is a funny note to finish on, but again, generally we endorse 

and support 1684. We just would like it to go further. So I would 

be happy to answer any questions you may have later. 

[The prepared statement of Mr. Hall follows:]

PREPARED STATEMENT OF HON. TEX ‘‘RED TIPPED ARROW’’ HALL, CHAIRMAN, 

MANDAN, HIDATSA AND ARIKARA NATION, FORT BERTHOLD RESERVATION

Good afternoon Chairman Akaka, Vice Chairman Barrasso and Members of the 

Committee. My name is Tex Hall. I am the Chairman of the Mandan, Hidatsa and 

Arikara Nation (MHA Nation). I am honored to present this testimony. 

Introduction 

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 in 

an effort to advance Indian energy legislation that would help Tribes unlock the potential of their energy resources and provide additional tools for Tribes to manage 

their energy resources. 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. Senator Dorgan eventually introduced the ‘‘Indian EnVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 S:\DOCS\76531.TXT JACK
10

* The information referred to has been retained in the Committee files. 

ergy Parity Act of 2010’’ which included a number of proposals supported by the 

MHA Nation. 

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 Committee staff requested that Tribes submit proposals to overcome barriers to Indian energy development. On July 18, 2011, 

the MHA Nation submitted 31 legislative proposals to the Committee. I have attached these proposals to my testimony so that they will be a part of the Committee 

hearing record. * 

The MHA Nation also testified before the House Subcommittee in April of 2011 

as a part of an Indian Energy Oversight Hearing, in February 15, 2012, on Chairman Young’s ‘‘Native American Energy Act,’’ H.R. 3973, and again this morning on 

the Bureau of Land Management’s (BLM) proposed regulation of hydraulic fracturing activities. We also attended this Committee’s oversight hearing on ‘‘Energy 

Development in Indian Country’’ held in February 2012. 

The MHA Nation has a strong interest in these proceedings because our lands are 

currently in the middle of the most active oil and gas play in the United States. 

As you know, 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. 

In the last four years, energy development in and around the Reservation has exploded and we have struggled with the federal bureaucracy for every single oil and 

gas permit. We now have about 250 wells in production on the Reservation and the 

MHA Nation and Fort Berthold Allottees have earned about $182 million in oil and 

gas royalties. In addition, we have 905 vendors providing services directly to the oil 

and gas industry. Each of those vendors employs between 4 and 24 people. Based 

on an average employment of 12 jobs per company, that is in excess of 10,000 jobs. 

In 2012, we expect more wells to be drilled on the Reservation than were drilled 

in the first four years combined. In 2013, we expect another 300 wells to be drilled. 

This energy development will result in hundreds of millions in royalty payments 

and economic activity and provide the MHA Nation with a substantial opportunity 

to fund government operations, and ensure that our members can heat their homes 

and provide for their families. 

MHA Nation is actively promoting the development of our energy resources and 

seeking every opportunity to be an active developer of our resources, not just a passive lessor. However, the MHA Nation continues to work on many of the same barriers to Indian energy development that we started working on four years ago. The 

agencies and the issues change, but we are still trying overcome outdated laws and 

regulations, bureaucratic regulatory and permitting processes, and insufficient federal staffing or expertise to implement those processes. 

Of all of these 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. To avoid double state and Tribal taxation and 

promote energy development on the Reservation, the MHA Nation was forced into 

an unfair tax agreement with the State. About four years later, the State has a $1 billion budget surplus and created a $1.2 billon trust fund for infrastructure needs. The MHA Nation has roads that 

need fixing now. Our tax revenues should not go to a State investment account. 

State Governor Dalrymple said that infrastructure is his number one priority to promote growth and manage impacts on our communities. Apparently, this does not include Tribal communities. In 2011, the State collected more than $60 million in 

taxes from energy development on the Reservation, but spent less than $2 million 

for infrastructure on the Reservation. In 2012, projections are that the State will 

make nearly $100 million in tax revenues from oil and gas development on the Reservation. 

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. Under the tax agreement, the State has been receiving about 60 percent of the 

revenues and the MHA Nation is receiving about 40 percent. However, about 60 

percent of the total tax revenue collected under the agreement comes from lands 

held in trust for the MHA Nation and its members and only 40 from privately 

owned land fee lands within the Reservation. This is a windfall for the State! In 

addition, it is important to note that, 100 percent of the development covered by the 

tax agreement and the impacts are occurring on the Reservation. 

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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. The MHA Nation needs 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. 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. Below are two pictures of the tremendous toll energy development is taken on our Reservation roads.


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It is with this background that the MHA Nation assesses whether the ‘‘Indian 

Tribal Energy Development and Self-Determination Act Amendments of 2011’’ or S. 

1684 will advance the development of Indian energy resources. If Indian Tribes are 

going to unlock the potential of their energy resources, we need real changes in the 

law. Changes that affirm Tribal authority, provide Tribes access to funding and financing opportunities, and allow Tribes to participate in federal energy programs 

that have over looked Tribes for decades. 

MHA Nation Views on S. 1684, the Indian Tribal Energy Development and 

Self-Determination Act Amendments of 2011

In general, the MHA Nation supports S. 1684, the ‘‘Indian Tribal Energy Development and Self-Determination Act Amendments of 2011.’’ There are only a few problems with some of the provisions in S. 1684. The biggest problem is what is not in 

the bill. S. 1684 barely scratches the surface of outdated laws and regulations, bureaucratic regulatory and permitting processes and insufficient federal staffing or 

expertise to implement those processes. While we appreciate the effort made to improve these areas of law, much more needs to be done. 

In the last two Congresses, former Senator Dorgan spent three years holding 

hearings and consulting with Indian Tribes in the development of Indian energy legislation. Senator Dorgan’s bill was introduced in August 2010 as the ‘‘Indian Energy 

Parity Act of 2010.’’ This bill contained a variety of new tools, programs and authorities that were designed to help Tribes at any stage in the energy development 

process. In addition, Senator Dorgan developed a draft Indian Energy Tax Act to 

address issues in tax law that can make or break an Indian energy project. 

A few of former Senator Dorgan’s proposals found their way into S. 1684, but 

most are more limited versions. I ask that the Committee go back and reconsider 

these proposals for inclusion in S. 1684. I also ask that the Committee look across 

Capitol Hill to Congressman Don Young’s H.R. 3973, the ‘‘Native American Energy 

Act.’’ Combining all four of these bills, S. 1684, H.R. 3973, the ‘‘Indian Energy Parity Act of 2010,’’ and the draft ‘‘Indian Energy Tax Act,’’ would bring to the table 

much of what is needed to bring Indian energy law into modern times. 

S. 1684 would provide some of what is needed and the MHA Nation supports 

much of what is in the bill. S. 1684 is focused on making changes to the Tribal Energy Resource Agreement (TERA) program that was authorized by Title V of the Energy Policy Act of 2005. The primary benefit of a TERA is to enable a Tribe to enter 

into leases and rights-of-way without Secretarial approval. A TERA would allow a 


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Tribe to gain greater control over the multiple approvals needed for oil and gas development. 

The changes in S. 1684 are needed changes as I understand that no Tribe has 

utilized the TERA program since it was created. S. 1684 would make the TERA application process more certain, allow a new category of Tribes to exercise partial 

TERA authority, attempt to clarify the Federal Government’s trust responsibility in 

relation to a TERA, and provide a potential funding source for Tribes to run TERA 

programs. 

MHA Nation and the oil and gas development on our Reservation could benefit 

from these proposed changes to the TERA program. Oil and gas development is permitting intensive and we are constantly struggling with the Federal Government’s 

bureaucratic permitting processes. The proposed changes to the TERA program 

would make it possible for MHA Nation to take over the oil and gas permitting process from the Secretary, or to greatly streamline the permitting process by creating 

a Tribally owned energy company to develop our energy resources. The changes in 

S. 1684 might also provide some funding from the Department of the Interior (DOI) 

to help support the increased responsibilities we would be assuming. 

In addition to these changes, I ask that the Committee consider a few more 

changes to the TERA program. First, MHA Nation would be in a better position to 

take over the oil and gas permitting process from DOI and establish its own energy 

company if S. 1684 provided more reliable source of funding than annual funding 

agreements with DOI. To help make the changes proposed in S. 1684 a reality for 

the MHA Nation and other Tribes, S. 1684 should also affirm the exclusive authority of Indian Tribes to tax energy activities on our lands. As I mentioned above, 

Tribal governments need access to the same tax revenues that other governments 

rely on to support energy and economic development. If the state or local governments provide any services on the Reservation in support of this energy and economic development, then the law could provide for fair reimbursement by Tribes for 

state and local services. 

Second, to help make the TERA application process even more certain, S. 1684 

should include a one-revision limit on a TERA application. In response to an initial 

application, DOI should get one bite at the apple in requesting revisions. If DOI requires any additional changes beyond this first round, DOI should have to show 

cause for why such changes were not requested the first time, and Tribes should 

be able to appeal any DOI requests to revise the same application multiple times. 

Finally, the MHA Nation appreciates S. 1684’s new language that would help 

clarify the Secretary of the Interior’s trust responsibility in relation to leases and 

agreements made under a TERA. S. 1684 should also include an additional requirement for the Secretary to further consult with Tribes on the effect of a TERA on 

the Secretary’s trust responsibility. The Secretary should then be required to ensure 

that the results of this consultation are included in the regulations for implementing 

the TERA program. The trust responsibility is an expression of the government-togovernment treaty relationship between Indian Tribes and the Federal Government. 

When laws like the TERA program are enacted, we should all fully discuss and understand any consequences. 

S. 1684 includes a variety of other changes and initiatives that the MHA Nation 

also supports. In some cases, we ask that the Committee revise these proposals to 

make them more likely to benefit Indian energy development. First, the MHA Nation supports a legislative directive for the Secretary to include Tribes in well-spacing decisions. As a part of the Coalition of Large Tribes, the MHA Nation is seeking 

this same change administratively. 

Second, we support changes in S. 1684 that would make it more likely that the 

Department of Energy (DOE) would implement its long overdue Indian Energy Loan 

Guarantee Program. However, the language in S. 1684 falls short of requiring the 

Secretary of Energy to implement this program as was required for DOE’s Title 

XVII, Energy Innovations Loan Guarantee Program. DOE should be required to 

offer loan guarantees to Indian Tribes. Indian energy loan guarantees are likely to 

be more successful than the Title XVII program because of the vast unlocked potential of Indian energy resources. As an example, DOI is already running a successful 

Indian loan guarantee program but it lacks the budget to fund expensive energy 

projects. 

Finally, the MHA Nation supports changes in S. 1684 that would allow Tribes to 

apply for direct weatherization funding from DOE. However, S. 1684 only goes halfway to solving the problem. Allowing Tribes to simply apply for direct funding is 

an important change, but Indian Tribes need a weatherization program that is tailored to Indian Country. 

The MHA Nation included needed changes to DOE’s weatherization program in 

its legislative proposals. In addition to direct funding, DOE should reduce reporting 

14

requirements for Indian Tribes, use weatherization standards that reflect the status 

of housing in Indian Country, and provide training for energy auditors in Indian 

Country. The weatherization program is a low-income program and its funding 

should go to those that need it most—in Indian Country poverty rates are two and 

half times the national average. 

The decades old weatherization program and its management by DOE is an affront to the Federal Government’s trust responsibility and DOE’s own ‘‘American Indian Tribal Government Interactions and Policy.’’ Funding intended, in part, for the 

members of Indian Tribes should not be distributed through state governments who 

then distribute the funding through state non-profits. Regardless of whether this 

legislation is passed by Congress, DOE should immediately reform its weatherization program consistent with federal trust responsibilities. 

MHA Nation Proposals that Should be Included in any Indian Energy

Legislation 

The MHA Nation asks that the Committee review the legislative proposals submitted by the MHA Nation and other Indian energy legislation to increase the scope 

and benefits that S. 1684 would provide. If Indian Tribes are going to unlock the 

potential of their energy resources and provided needed domestic energy supplies, 

we need real changes in the law. Changes that affirm Tribal authority, provide 

Tribes access to funding and financing opportunities, and allow Tribes to participate 

in federal energy programs that have over looked Tribes for decades. Below we highlight some of the most important changes needed in law. 

First, similar to Congressman Don Young’s bill, H.R. 3973, the Committee should 

include authority for establishing Indian Energy Development Offices in areas of 

high energy demand. These ‘‘one-stop shops’’ would encourage the hiring of staff 

with energy expertise by the Bureau of Indian Affairs (BIA) and promote communication and efficiency among the DOI agencies that are involved in energy permitting on Indian lands. While MHA already has a virtual ‘‘one-stop shop,’’ this provision would make the office permanent in law. As former Senator Dorgan reported, 

the one-stop shop increased permitting on the Fort Berthold Reservation by four 

times. 

Second, the Committee should prohibit the Bureau of Land Management (BLM) 

from applying regulations developed for public lands to Indian lands. Indian lands 

are not public lands, yet the Bureau of Land Management has been incorrectly 

using its authority under the Federal Land Policy and Management Act of 1976 to 

regulate activities on Indian lands. In the most recent example, the BLM is developing regulations for hydraulic fracturing activities for public lands and intends to 

apply those regulations to Indian lands. The proposed regulations would eliminate 

much of the oil and gas development the MHA Nation has been working so hard 

to establish. Indian lands are for the use and benefit of Indian Tribes and the Committee should develop legislation that either precludes BLM from exercising authority on Indian lands, or require that BLM develop regulations consistent with its 

trust responsibility to Indian Tribes and not public interest standards. 

Third, the Committee should prohibit the Environmental Protection Agency (EPA) 

from implementing its new synthetic minor source rule for two years to ensure appropriate staffing is in place to administer any new permitting requirements. Energy development on the Fort Berthold Reservation is already limited by layers of 

bureaucratic federal oversight and federal agencies that are too short-staffed to 

manage existing requirements. EPA should be prohibited from implementing this 

new rule, or any new rule, until it can prove that it has the staff resources in place. 

Fourth, as described above, S. 1684 should affirm that Tribes have exclusive authority to raise taxes from activities on Indian lands. Because federal courts have 

allowed other governments to tax energy development on Indian lands, Tribes are 

unable to impose their own taxes or can only impose partial taxes. Without tax revenues, Tribal infrastructure, law enforcement, and social services cannot keep up 

with the burdens imposed by increased energy development. This authority is essential for Tribal governments to exercise self-determination over our energy resources. 

We cannot be asked to take over more responsibilities for the Federal Government 

without the ability to raise the revenues needed to support those responsibilities. 

Fifth, we also need to clarify Tribal jurisdiction over Reservation activities and 

any rights-of-way granted by an Indian Tribe. Courts have created uncertainty in 

the law and this uncertainty is yet another disincentive to the energy business. 

Sixth, the Committee should develop legislation to expand and clarify the ‘‘Buy 

Indian Act,’’ 25 U.S.C. § 47. As a part of its government-to-government and trust relationship to Indian Tribes, the Federal Government should be required to purchase 

Tribally produced or owned energy resources. As an example, the MHA Nation is 

15

developing an oil refinery that could supply federal agencies and the Defense Department with Tribally produced and owned domestic energy supplies. 

Seventh, S. 1684 should address delays in payments of oil and gas royalties due 

to approval of Communitization Agreements. Under current law, royalties are due 

within 30 days of the first month of production. However, without any authority, 

the BLM has allowed royalty payments to be delayed for months and years pending 

the approval of Communitization Agreements. This violation of the law cannot be 

allowed to continue. 

Where feasible, S. 1684 should require Communitization Agreements to be submitted at the time an Application for Permit to Drill is filed. This is possible where 

the oil and gas resource is well known. When this is not feasible, BLM should require that royalty payments from producing wells be paid within 30 days from the 

first month of production into an interest earning escrow account. 

Eighth, S. 1684 should eliminate BLM oil and gas fees on Indian lands. BLM fees 

for oil and gas activities on Indian lands create additional disincentives for development on Indian lands and in the case of shallow wells may make development uneconomical. In addition, where an Indian Tribe is seeking to develop its own resources, BLM should not charge Tribes to carry out its trust responsibilities to the 

Tribe. We included a legislative proposal that would prohibit BLM from charging 

fees for oil and gas activities on Indian trust and restricted fee lands, including fees 

for: (1) applications for permits to drill; (2) fees for oil and gas inspections; and, (3) 

fees for non-producing acreage. 

Ninth, S. 1684 should create a low sulfur diesel tax credit for Tribal refineries. 

This credit would be in addition to the existing credit for small business refiners. 

This legislation would retain the 1,500 employee cap and 5 cents per gallon credit, 

but remove the barrel and time limits, and provide that the credit may be sold for 

equity. 

Finally, in addition to the weatherization program discussed above, S. 1684 

should open the doors of DOE’s energy efficiency programs to Indian Tribes. Despite 

a longstanding state program, there are no ongoing programs to support Tribal energy efficiency efforts. DOE should allocate not less than 5 percent of existing state 

energy efficiency funding to establish a grant program for Indian Tribes interested 

in conducting energy efficiency activities for their lands and buildings. 

The MHA Nation has included in its legislative proposals a Tribal energy efficiency program that is modeled after the successful Energy Efficiency Block Grant 

(EEBG) program. Despite its success, the EEBG program was only funded one 

time—under the American Reinvestment and Recovery Act of 2009. To ensure an 

ongoing source of funding for Tribal energy efficiency efforts, Tribes should be provided a portion of the funding for state energy efficiency efforts. 

Conclusion 

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.

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

We are joined by two Senators, Senator Franken of Minnesota 

and Senator Conrad of North Dakota. Since we have just heard 

from a member from North Dakota, perhaps you might want to 

make some opening comments and then Senator Franken, if you 

wouldn’t mind, after Senator Conrad. Then we will go and pick up 

with Mr. Finely if you would like. 

STATEMENT OF HON. KENT CONRAD,

U.S. SENATOR FROM NORTH DAKOTA 

Senator CONRAD. I thank the Senator for his courtesy, and I 

thank the Senator from Minnesota for his courtesy as well. 

I just want to say very briefly how delighted we are to have 

Chairman Hall here, how delighted we are that his health is recovering after a very serious health scare. Chairman Hall is somebody 

who has provided leadership not only in North Dakota, but across 

the Country. We deeply appreciate the extraordinary leadership he 

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has provided. He has become somebody that is a trusted friend and 

somebody who has enormous credibility on the national stage as 

well as in the State of North Dakota. 

So welcome to Washington. I am so glad that you are here, so 

glad that you are feeling better. And so glad that you dodged a 

really tough bullet. 

Senator BARRASSO. Thank you, Senator. 

Senator Franken? 

STATEMENT OF HON. AL FRANKEN,

U.S. SENATOR FROM MINNESOTA 

Senator FRANKEN. I think this is a very, very important hearing. 

I thank the Vice Chairman for calling this and for writing an Indian energy bill. I think there may be some more things that we 

can do, but I commend the Chairman for that. 

And I just really believe that there is tremendous potential for 

economic development in Indian Country. I look forward to your 

testimony and look forward to asking some questions. Thank you. 

Senator BARRASSO. Thank you, Senator. 

Mr. Finley? 

STATEMENT OF HON. MICHAEL O. FINLEY, CHAIRMAN, 

CONFEDERATED TRIBES OF THE COLVILLE RESERVATION 

Mr. FINLEY. Good afternoon, Vice Chairman Barrasso. 

I want to thank the Committee for holding this hearing today, 

as well as being a part of this distinguished panel. I share the 

words that were shared earlier, that we are happy to have Mr. Hall 

among us today. We are happy to see that he is having a speedy 

recovery. He is truly a powerhouse in Indian Country and I am always happy to serve next to him. So thank you. 

Today my testimony will focus on Section 202 of Senate Bill 

1684, as introduced. Section 202 is of particular interest to the 

Colville Tribes because of our historic background and natural resources, particularly forest products and the logging industry. 

Starting back in 2008, with the downturn in the market, we felt 

a tremendous impact on Colville, because historically, our economy 

was driven by forest products. As a result, we were forced to shut 

down our two mills that our corporations operated underneath the 

Colville business council. 

As a result of that, the majority of our people went into unemployment and have been there since. Colville Tribes is the largest 

employer in North Central Washington State. But at the same 

time, we have some of the highest levels of unemployment on the 

reservation. We have a membership base of 9,400, of which about 

half live on or near the reservation. So our members rely heavily 

on the jobs that our Tribe creates for them. 

And because many of the people, many of our working class 

members, their number one trade is logging or forest products-derived employment, they rely on us to keep these jobs going. Because our land base consists of 660,000 acres of commercial timber 

property, being the stewards of the lands as we always have been, 

we take great pride in making sure that our forest’s health is up 

to par and that we manage it in a sustainable fashion. 

17

But with the downturn in the market, it has left us very little 

money to move forward with some of these efforts. And Section 202 

would allow for us to build a greater capacity for a project that we 

want to do, which is a woody biomass project, which this provision 

is meant to help promote. 

And in doing this, we originally were going to try to do this underneath the Tribal Forest Protection Act. But because of some of 

the limitations and because of some of it being unknown to many 

of the Forest Service entities throughout the United States, you see 

that there are very few Tribes that have actually taken advantage 

of it. So this would actually be an amendment to that. 

And we were hoping that we would get more longevity out of a 

potential contract that could come from it, whether or not the Secretary is granted that authority. This in itself would give us the 

ability to approach financial institutions who want to go into business with the Colville Tribes to fund such a grandiose project. We 

were looking at a project that would cost about $150 million. It 

would be a 40 megawatt woody biomass plant. 

But because of a ll the excess material that we have on Colville, 

in the past we have previously burned it because we had no other 

place to take it. If this project were to move forward, we would 

then have a place to take this excess material and actually create 

energy with it. 

For us, it is right in line with our traditional thinking. It is going 

green, it is a sustainable plan. But without the ability to go into 

a contract with the Federal Forest Service to the north of our reservation, we would have to downscale that project to a smaller 

plant. 

But looking outside of that, there are other reasons why we 

would want to do this. We have the forest health issues that, as 

I mentioned earlier, there is a fear of wildfire and some of the 

spruce bud epidemics moving south from the north of our reservation. We are starting to see a little bit of that right now within our 

forest. We have concern over that. 

With the recent settlements that have taken place, Colville included, we have a large sum of money to start to address some of 

our forest health concerns that have been epidemic over the years. 

We have a huge problem with an abundance of Douglas fir that 

currently exists within our forest. Historically and traditionally, it 

has always been primarily Ponderosa pine. 

So our intent with some of that money is to send our people out 

in the forest and to overturn that, and get some of that Douglas 

Fir, that smaller size Douglas Fir, out. But there always isn’t a 

market out there for it. So our intent is to get some of that to this 

plant, if and when it does move forward. 

But as I stated earlier, and I cannot stress enough that we need 

that excess material off the Forest Service lands, as well as to create more of a healthy forest there. We believe that with our integrated resources management plan, which we go by, it is a sustainable plan, that we can do that better than the Federal entity. Because let’s face it, a lot of times there isn’t enough money appropriated for them to even properly manage their forest to begin 

with. 

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And I have to agree with my counterpart, Tex Hall, that it troubles us to have people that aren’t even from our area commenting 

on these little projects that we are trying to do that are ultimately 

going to be to the benefit of not just the Colville Tribes, but to all 

the U.S. citizens that live in that area. Because those forests need 

to be managed in a sustainable fashion, and presently they are not. 

Our intent is to use that excess material for the benefit of everybody and to create more energy and to create jobs for our people 

who, daily I am getting emails and phone calls asking when they 

are going to be put back to work. As their leader, I need to ensure 

that they have something that they can rely on to feed their families. 

With that, you have my testimony and I stand for questions. 

Thank you. 

[The prepared statement of Mr. Finley follows:]

PREPARED STATEMENT OF HON. MICHAEL O. FINLEY, CHAIRMAN, CONFEDERATED

TRIBES OF THE COLVILLE RESERVATION

Good afternoon Chairman Akaka, Vice-Chairman Barrasso, and members of the 

Committee. On behalf of the Confederated Tribes of the Colville Reservation 

(‘‘Colville Tribes’’ or the ‘‘Tribes’’), I appreciate the opportunity to testify today on 

S. 1684, the ‘‘Indian Tribal Energy Development and Self-Determination Act 

Amendments of 2011.’’

The Colville Tribes strongly supports S. 1684, particularly Section 202, which 

would authorize the Tribal Biomass Demonstration Project (‘‘Demonstration 

Project’’). My testimony today will focus on the Demonstration Project and how it 

could potentially benefit the Colville Tribes and other Indian Tribes that are developing or that have an interest in biomass projects. 

Background on the Colville Tribes 

I would like to take this opportunity to provide some brief background on the 

Colville Tribes. Although now considered a single Indian Tribe, the Confederated 

Tribes of the Colville Reservation is, as the name states, a confederation of 12 aboriginal Tribes and bands from all across eastern Washington State. The Colville 

Reservation encompasses more than 1.4 million acres, of which approximately 66 

percent is forest land. The Colville Tribes has traditionally relied on its forest resources as a primary source of revenue for Tribal government programs. 

The Colville Tribes has more than 9,400 enrolled members, making it one of the 

largest Indian Tribes in the Pacific Northwest. About half of the Colville Tribes’ 

members live on or near the Colville Reservation. 

Utilizing grants and technical assistance from both the Department of the Interior 

and the Department of Energy, the Colville Tribes is developing a woody biomass 

facility on the Colville Reservation in Omak, Washington. Access to a reliable, longterm supply of woody biomass material is a key consideration in obtaining financing 

for the planned facility. This is one of the structural impediments that the Demonstration Project is intended to address. 

Overview of Section 202

Section 202 would add a new section to the Tribal Forest Protection Act of 2004 

that would require the Secretary of Agriculture (in the case of Forest Service land) 

and the Secretary of the Interior (in the case of Bureau of Land Management land) 

to enter into a collective total of at least four new contracts or agreements with 

Tribes to promote biomass, biofuel, heat, or electricity generation each year of the 

five-year authorization. 

Although Section 202 requires the Secretaries to enter into a minimum number 

of contracts, the Secretaries would be responsible for jointly developing the eligibility requirements. This would allow the Forest Service and the Bureau of Land 

Management to control the universe of potential applications. In evaluating applications, the respective Secretaries must consider a variety of factors, including whether a project would improve the forest health or watersheds on the Federal land and 

whether a project would enhance the economic development of the Indian Tribe and 

the surrounding community. 

19

Section 202 also allows for Tribal management land practices to apply to areas 

included in contracts or agreements entered into under demonstration projects. This 

would allow, for example, Indian Tribes to incorporate cultural resource or sacred 

site planning considerations into activities conducted on lands included in demonstration projects. 

Finally, Section 202 would authorize contracts or agreements entered into under 

the Act to have maximum terms of 20 years, with the ability to renew for additional 

10-year terms. The exact length of contract or agreement terms under a demonstration project would be subject to negotiation between Tribes and the federal agencies. 

The current limit for stewardship contracts under existing law is 10 years. 

Section 202 is not specific to any one Indian Tribe or region. If it is enacted into 

law, any Indian Tribe that meets the eligibility criteria may apply. 

The Tribal Biomass Demonstration Project Promotes Forest Health, Tribal 

Economies, and Renewable Energy 

Since passage of Title V of the Energy Policy Act of 2005, energy development on 

Indian lands has been a priority for many Indian Tribes, including the Colville 

Tribes. Renewable energy development such as biomass has been of particular interest to the Colville Tribes as it seeks new ways to promote on-reservation economic 

development and to diversify its economy. The Demonstration Project will eliminate 

barriers to these goals and promote the following—

Forest Health: As the Committee is aware, many federal lands that are adjacent 

to Tribal trust lands are in need of thinning and restoration activities to reduce the 

risk of catastrophic wildland fire and disease. Indian Tribes like the Colville Tribes 

are uniquely situated to carry out these activities because we have a vested interest 

in ensuring that neighboring federal lands do not pose fire or disease threats that 

will encroach on our Tribal trust lands. Protection of Tribal trust land was the primary consideration in the enactment of the Tribal Forest Protection Act of 2004. 

The Demonstration Project would ensure that forest health considerations are paramount in any stewardship contract or similar agreement that might be entered into 

under Section 202. 

The Colville Tribes recently approved a $193 million settlement with the United 

States government that will resolve the Tribes’ pending claims of mismanagement 

of its trust funds, natural resources and other non-monetary trust assets. The 

Colville Tribes is considering utilizing a portion of the settlement proceeds for 

thinning of our Tribal forests and restoration of the landscapes and watersheds on 

the Colville Reservation. 

Wood Products Industries and Local Economies: Stewardship contracts generally 

involve no payment by federal agencies. Rather, the contractor is ‘‘paid’’ by retaining 

and selling the woody materials they remove from federal lands in performing the 

contract. The use of stewardship contracting has risen dramatically by the Forest 

Service in recent years largely because these contracts do not require the expenditure of scarce agency resources. 

Viable wood products infrastructure is often needed to make stewardship contracts and other forest health activities on federal lands economically viable. Without a market demand for otherwise non-merchantable wood material, the costs of 

performing the forest health activities are prohibitively expensive. The housing market crash and increased global competition have resulted in the closure of many, if 

not most, saw mills in the western United States. The Colville Tribes was forced 

to close both its sawmill and its veneer plant due to market conditions in 2008 and 

2009. 

Section 202 supports new and existing wood products infrastructure by authorizing contracts for up to 30 years. Longer-term contracts will encourage private sector financing by increasing the likelihood that investors will recoup their initial capital costs through a reliable supply of biomass material for a longer period. The 

Colville Tribes understands that the Administration is interested in exploring 

longer-term stewardship contracts in a controlled manner that will allow for study 

and evaluation. Section 202 provides this type of mechanism. 

Tribal Management Practices Can Benefit Federal Lands: Many have praised 

Tribal land management practices as being far more efficient than those of their 

federal counterparts. In addition, Section 202(b) of the Federal Land Policy and 

Management Act of 1976 (FLPMA) requires the Secretary of Agriculture to coordinate land use plans for National Forest System lands with Tribal management activities. Section 202(c)(9) of the FLPMA further directs the Secretary of Agriculture 

to coordinate land use planning with Indian Tribes by, among other things, ensuring 

that consideration is given to those Tribal plans that are germane in the development of land use plans for public lands, assisting in resolving inconsistencies between Federal and Tribal plans and providing for meaningful involvement in the deVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00023 Fmt 6633 Sfmt 6621 S:\DOCS\76531.TXT JACK
20

velopment of land use programs, land use regulations, and land use decisions for 

public lands. 

Despite these statutory directives, federal agencies like the Forest Service have 

been slow to incorporate Tribal management principles to even those federal lands 

that are contiguous to Tribal trust lands. Many Indian Tribes, including the Colville 

Tribes, have adopted comprehensive integrated resource management plans 

(IRMPs) that govern management of Tribal natural resources. 

The Colville Tribes’ IRMP contains detailed prescriptions for ensuring that its forest management activities allow for sustainability of huckleberries and other foods 

and plants of cultural and spiritual significance to the Tribes and its members. 

These types of management practices can and should be carried out on federal lands 

that are adjacent to Tribal trust lands or to which Tribes have an historic or cultural interest. Section 202 encourages this by allowing Tribal management principles to be carried on federal lands that are included in contracts or agreements. 

Other Provisions of S. 1684

The Colville Tribes also supports the other provisions of S. 1684. The amendments 

in Section 103 relating to Tribal Energy Resource Agreements (TERAs) will streamline and provide certainty to the process for Indian Tribes to obtain TERAs. Overall, 

the Colville Tribes believes that S. 1684 will remove structural barriers to energy 

development on Tribal lands and we applaud Vice-Chairman Barrasso and Chairman Akaka for developing and introducing this important legislation. 

The Colville Tribe appreciates the Committee’s consideration of these important 

issues and looks forward to working with the Committee to ensure passage of S. 

1684. At this time I would be happy to answer any questions the members of the 

Committee may have.

Senator BARRASSO. Mr. Finley, thank you. Thank you for being 

here. 

Ms. Cuch? 

STATEMENT OF HON. IRENE C. CUCH, CHAIRWOMAN, UTE 

TRIBAL BUSINESS COMMITTEE 

Ms. CUCH. Good afternoon, Vice Chairman Barrasso and members of the Committee. 

My name is Irene Cuch. I am the Chairwoman of the Ute Indian 

Tribe. Thank you for the opportunity to testify today. 

Before I go any further, I would like to introduce some of my people who came with me. I would like to introduce Manuel Myore, 

who is the Director of our Energy and Minerals Department. He is 

sitting back there. Also Rose Taveapont, Oil and Gas Landman. 

And Rollie Wilson, our Tribal attorney. 

Senator BARRASSO. Thank you. Welcome to the Committee. 

Ms. CUCH. The Tribe is a major oil and gas producer. Production 

of oil and gas began on our reservation in the 1940s and has been 

ongoing for 70 years. We have 7,000 wells that produce about 

45,000 barrels of oil a day, and we produce about 900 million cubic 

feet of gas per day. This energy development is a primary source 

of funding for our Tribal Government and the services we provide 

to our members. 

The Tribe also invests in businesses and is an engine for economic growth. One of the Tribe’s businesses is Ute Energy and Oil 

and Gas Development Company. We recently approved plans for 

Ute Energy to become a publicly-traded company. With this investment, improvements to the oil and gas permitting process are vital 

to our long-term success. 

The best example of the need for improvements comes from the 

oil and gas companies themselves. They tell us that interior permitting process is the single biggest risk factor in their operations. 

We take this issue very seriously, because the number of permits 

21

that Interior is able to process is directly related to the funding the 

Tribe has to serve its members. 

As you may know, oil and gas development is dependent on drilling rigs. Drilling rigs are expensive equipment that move from site 

to site, creating wells. On our reservation, a rig can drill about 20 

wells a year. In the first year, the Tribe will earn about $16 million 

from those 20 wells. Over the life of those wells, we earn about $82 

million. Every time a drilling rig leaves the reservation because of 

permitting delays and does not come back, the Tribe loses $16 million in short-term and $82 million in the long term. 

The Tribe has made a lot of progress, but our ability to fully benefit from our resources is limited by the agencies overseeing energy 

development on the reservation. We cannot forget that every single 

well on our reservation began with a permit that had to make its 

way through a bureaucratic maze of 49 steps involving at least four 

understaffed Federal agencies. 

To promote Indian energy development and increase domestic 

production we need Congress to provide funding for BIA, BLM, and 

other agencies to hire more staff with energy expertise. The BIA 

has dozens of people who can approve a grazing lease. We need 

people who understand energy resources and keep up with the pace 

of energy development. 

In the rest of my testimony I will focus on specific sections of S. 

1684 and highlight some of the Tribe’s 32 proposals that should be 

included in the bill. The Tribe supports the bill and believes it is 

a good start. In particular, changes to the TERA program will benefit the Tribe. 

We strongly support providing Tribes with demonstrated experience. The authority to approve agreements with Tribal energy development organizations. This change would promote Tribal self-determination over our energy resources and allow us to avoid understaffed and bureaucratic agencies. We would be free to develop our 

own processes for approving agreement with Tribally-owned companies. 

We also strongly support requiring the Secretary to make funds 

available to Tribes who take over permitting. If Tribes are going 

to take over Federal responsibilities, then the government must 

provide adequate funding. In addition to any funding that may be 

available, Tribal self-determination would be better advanced if 

Congress affirmed Tribes’ exclusive authority to tax activities on 

Indian lands. Managing energy resources and providing infrastructure is an expensive undertaking for any government. A Tribe 

needs the same authority and revenue set as a government relies 

on to support energy development. 

We support the bill’s effort to include Tribes in well spacing decisions, implement DOE’s loan guarantee program, provide Tribes 

the same hydropower preference as any other government, and 

allow Tribes to seek weatherization funding directly. However, for 

many of these, the bill only goes halfway. We need real changes in 

the law. 

First, DOE must be required to provide energy loan guarantees 

the same as DOE’s Title 17 loan guarantee program. This is needed 

because financing energy projects is one of the most significant barriers Tribes face. 

22

Second, the bill’s limitations on Tribal hydropower preferences 

are not necessary. Existing laws already protect previously issued 

permits and encourage competition for licenses. 

Third, DOE weatherization program should be further modified 

so that it will work in Indian Country. We need Tribally-based 

standards and training for energy auditors. 

Finally, I ask that you review the Tribe’s 32 legislative proposals 

and expand the bill to address more of the barriers that Tribes face 

in developing and managing our energy resources. In particular, I 

ask that you support the creation of an Indian energy development 

office to improve energy permitting. Former Senator DOrgan called 

these one stop shops. There are three one stop shops already in Indian Country. Senator Dorgan reported that the one stop shop on 

Fort Berthold Reservation helped to increase oil and gas permit approvals by four times. 

On our reservation, we need ten times as many permits to be approved, currently about 48 permits are approved each year. We estimate that about 400 permits will be needed each year as we expand our investment. The Tribe believes that one stop shop is the 

best way to get the agencies to hire energy staff, and working together to manage the high level of permitting needed on our reservation. 

I would like to thank the Committee for the opportunity to 

present this testimony. The Tribe is ready to work to find ways to 

eliminate barriers to Indian energy development. The current barriers have direct effect on the Tribe’s revenues, our ability to invest 

in the future and the services we provide to our members, our children and grandchildren. 

Towaok, thank you. 

[The prepared statement of Ms. Cuch follows:]

PREPARED STATEMENT OF HON. IRENE C. CUCH, CHAIRWOMAN, UTE TRIBAL

BUSINESS COMMITTEE

Good afternoon 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 testify on S. 1684, the ‘‘Indian Tribal Energy Development and Self-Determination Act Amendments of 2011.’’

I. Introduction 

The Ute Indian Tribe is a major oil and gas producer in the United States. Production of oil and gas began on the Reservation in the 1940’s and has been ongoing 

for the past 70 years with significant periods of expansion. 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 the second 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 

23

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 LLC 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. As former Senator Dorgan highlighted, a single oil 

and gas permit must make its way through a bureaucratic 49 step maze to be approved. This process involves at least 4 routinely understaffed federal agencies. 

The Tribe estimates that an oil and gas permit could be processed through these 

steps in about 60 to 90 days. That is about how long it takes a permit to be approved on the Fort Berthold Reservation in North Dakota, where the Department 

of the Interior (DOI) utilizes a ‘‘virtual one-stop shop’’ to oversee and streamline permitting. On our Reservation, a typical permit can take about 480 days to be processed—more than one year. 

The Tribe takes delays in the permitting process seriously because the number 

of permits approved is directly related to the revenues the Tribe has available to 

fund our government and provide services to our members. 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. 

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, our members, and our investments. 

To improve the permitting process, the Tribe has been directly seeking legislative 

and administrative improvements to the permitting process for oil and gas development on Indian lands. 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. The Tribe hosted tours of oil and gas development on the Reservation 

for government officials, attended meetings with high ranking Bureau of Indian Affairs (BIA) and Bureau of Land Management (BLM) officials, and is planning energy 

summits and conferences to work collaboratively with other Tribes and industry 

partners in seeking improvements to the permitting process. 

The Tribe is also working directly with Congress to improve the permitting process. In the 111th Congress and the current Congress, the Tribe participated in the 

development of Indian energy legislation to help resolve these permitting issues. In 

the current Congress, the Tribe attended two listening sessions on a draft of S. 

1684. At these listening sessions, Committee staff asked Tribes to submit legislative 

ideas that would facilitate Indian energy development. In response, the Ute Indian 

Tribe developed 32 legislative proposals to overcome barriers and improve the management of Indian energy resources. These proposals were submitted to the Committee in July 2011. In February 2012, the Committee held an oversight hearing 

24

* The information referred to has been retained in the Committee files. 

on Indian energy development. The Tribe attended that hearing and submitted extensive testimony for the hearing record. 

Today, the Tribe is again providing testimony on needed legislative changes. My 

testimony will focus on the specific sections of S. 1684. I will also highlight some 

of the Tribe’s 32 legislative proposals that need to be included in S. 1684 to further 

improve the permitting process and provide additional tools for Indian Tribes to 

manage their energy resources. For your convenience, I have attached the Tribe’s 

32 legislative proposals to my testimony. * 

II. S. 1684, the Indian Tribal Energy Development and Self-Determination 

Act Amendments of 2011

The Tribe supports S. 1684 and believes that it is a good start. S. 1684 would 

amend existing laws to provide Tribes with improved opportunities to manage their 

own energy resources. However, S. 1684 only addresses a few areas of the law. On 

its own, the Tribe came up with 32 areas of law that need revision. Much more 

needs to be done to overcome barriers Tribes face in Indian energy development and 

to put Tribes on an equal playing field with state governments and other energy 

developers. Before discussing what else is needed, below I specifically discuss the 

substantive sections of S. 1684. 

A. Section 101. Indian Tribal Energy Resource Development 

The Tribe supports the amendments proposed in Section 101, but, in at least one 

case, more is necessary. First, this section would require the Secretary to consult 

an Indian Tribe when adopting or approving an oil and gas well-spacing program 

or plan on the Tribe’s lands. This proposal was among the 32 legislative proposals 

submitted by the Tribe. For too long the BLM, on behalf of the Secretary, has approved well-spacing plans on Indian lands without involving Tribes. Tribes should 

be involved in this decisionmaking process to ensure that Indian lands are being 

developed efficiently, that protected areas are avoided, and to ensure that Tribes 

have every opportunity to work closely with their industry partners. 

Over the past year, the Tribe has been working as a part of COLT to seek an 

administrative change from the BLM on the issue of well-spacing. BLM officials in 

attendance at these meetings have been supportive of including Tribes in well-spacing decisions, but the BLM has yet to issue any sort of policy directive to ensure 

that Tribes are included. By making this change legislatively, the Congress would 

advance an issue that the Tribe and COLT has been seeking for almost a year, and 

which appears to have the support of the Administration. 

Second, Section 101 also extends important planning authority to the Secretary 

of the Interior. When the Energy Policy Act of 2005 was passed, two Indian energy 

offices were created—one in the DOI and one in the Department of Energy (DOE). 

The DOE office was provided specific authority to assist Tribes in overall energy 

planning. The DOI office was not provided similar authority. 

Both offices need this specific planning authority. Federal energy policy has long 

overlooked or ignored Tribes. Today Tribes are catching up quickly and need the 

same or similar federal assistance that states rely on to manage their energy resources. In addition, Congress must support this statutory authority with needed 

appropriations to help Tribes overcome decades of neglect by federal energy policy 

makers. 

Third, Section 101 would require the Secretary of Energy to develop regulations 

for a long-overdue Indian energy loan guarantee program that was originally authorized in 2005 but never implemented. The Tribe believes that developing regulations would go a long way toward implementing the program and ensuring needed 

appropriations from Congress, but more is needed. 

The law also needed to be changed to actually require the Secretary of Energy 

to provide these loan guarantees. Current law only states that the Secretary ‘‘may’’ 

provide guarantees. Making the program mandatory would provide the Indian energy loan guarantee program with the same authority provided to the Title XVII 

loan guarantee program which was authorized at the same time for energy innovations. Under the Title XVII program, the law stated that the Secretary ‘‘shall’’ provide guarantees. 

We need similar energy innovations on Indian lands and we need similar laws to 

require that they be implemented. The Tribe specifically included this recommendation among its 32 legislation proposals because financing expensive energy projects 

is one of the most significant barriers to Indian energy development. Providing 

Tribes with the opportunity to secure government backed financing would promote 

Tribal self-determination in the development of energy resources because Tribes 

25

would have the opportunity to be the owners of their development companies rather 

than relying on others to develop Tribal resources. 

DOI currently manages a successful Indian loan guarantee program for Tribal 

businesses, but it lacks the budget for more expensive energy projects. Tribes need 

the level of funding proposed by the DOE loan guarantee program to cover the investment needed for energy projects. With this level of funding Tribes will be encouraged to be owners of their own energy projects and vast untapped Tribal energy 

resources can be developed for the long-term benefit of Tribal communities and the 

Nation’s domestic energy supplies. 

B. Section 102. Indian Tribal Energy Resource Regulation 

The amendments in this section would extend DOI funding opportunities for energy surveys and inventories to a new entity called a ‘‘Tribal energy development 

organization’’ that is defined elsewhere. The Tribe believes that it would be useful 

for Tribal energy development organizations to be able to receive funding through 

this program. However, it is more important and would advance Indian self-determination for Congress to provide sufficient appropriations to fund Indian energy 

surveys and inventories in the first instance. Funding is needed to ensure that 

Tribes can enter into energy development negotiations with sufficient information 

and thereby promote Indian energy development. 

C. Section 103. Tribal Energy Resource Agreements 

The Tribe supports the changes Section 103 would make to the existing Tribal Energy Resource Agreement (TERA) program. As you know, the TERA program generally provides a process for Indian Tribes to apply and potentially gain authority 

to approve leases, business agreements, and rights-of-way for energy development 

or transmission on their lands without Secretarial review. Many of the proposed 

changes in Section 103 would make the existing TERA application process more certain by providing timelines, requiring the Secretary to act on a TERA or it is 

deemed approved, and making more specific the reasons the Secretary may disapprove a TERA application. These are needed changes. I understand that since the 

program was created in 2005, no Tribe has applied for a TERA, in part, because 

of the lengthy and uncertain application process. 

Section 103 would also expand some TERA authority to a new category of Tribes. 

This new category would be Tribes who have carried out a contract or compact 

under the Indian Self-Determination and Education Assistance Act (ISDEAA) involving activities related to the management of Tribal land for not less than three 

years and without a material auditing exception. This new category of Tribes may 

exercise TERA authority when the other party to the lease is a ‘‘certified’’ Tribal 

energy development organization that is majority-owned and controlled by the 

Tribe, or the Tribe and one or more other Tribes. 

The Tribe strongly supports this change to the TERA program. This change would 

provide Tribes, with demonstrated experience, the authority to approve some of 

their own leases, business agreements, and rights-of-way without the delays inherent in Secretarial review and approval. The Tribe has long managed its own energy 

development, lands and natural and cultural resources. The Tribe’s experience in 

these areas should be recognized by the Federal Government without the Tribe 

being forced to take the additional, extensive, and uncertain step of completing a 

TERA application. 

This change also promotes Tribal self-determination and local control over the development of Tribal energy resources. Tribes would be encouraged to develop Tribally owned energy companies to develop their resources because Tribes could enter 

into leases and agreements with Tribally owned businesses without Secretarial oversight. This change allows Tribes to avoid understaffed and bureaucratic federal 

agencies and the permitting delays associated with those agencies. Instead, Tribes 

would be free to develop their own processes for more efficiently reviewing and approving leases and agreements with Tribally owned businesses. 

The Tribe also strongly supports changes proposed in Section 103 that would require the Secretary to make funds available to Tribes operating an approved TERA 

pursuant to annual funding agreements—similar to ISDEAA contracts. If the Tribes 

are going to take over these responsibilities for the Federal Government, then the 

Federal Government must provide adequate funding to Tribes. Although it is unclear how much funding would be available from the Secretary for , any new opportunity for funding energy activities is a significant change. 

In addition to any federal funding may become available, Tribal self-determination in the area of energy development would be better advanced if Congress affirmed Tribes’ exclusive authority to tax activities on Indian lands. Managing the 

permitting of energy resources, not to mention the infrastructure needs, is an expenVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00029 Fmt 6633 Sfmt 6621 S:\DOCS\76531.TXT JACK
26

sive undertaking for any government. Tribes need the same revenues that other 

governments rely on to oversee and provide the needed infrastructure for energy development. 

Finally, the Tribe supports changes in Section 103 that would help to clarify the 

Secretary’s trust responsibilities for leases and agreements negotiated pursuant to 

a TERA. The proposed changes use language that is similar to existing law for Indian Mineral Development Agreements 25 U.S.C. § § 2101–08 (1982) (IMDA). The 

IMDA’s explanation of the Secretary’s trust responsibilities has stood the test of 

time and is an appropriate model for the Secretary’s trust responsibilities pursuant 

to a TERA. 

D. Section 104. Conforming Amendments 

Section 104 expands the definition of ‘‘Tribal energy development organizations’’ 

to include a greater variety of Tribally owned business entities that can utilize the 

authorities provided to Tribal energy development organizations. The Tribe supports 

this change. The Tribe agrees that it is important and will advance Indian energy 

development to specifically recognize and extend authorities to Tribally owned business entities. In many cases, Tribally owned business entities, as opposed to just 

Tribal governments themselves, are needed for the practical and efficient development of resources. 

E. Section 201. Issuance of Preliminary Permits or Licenses 

The Tribe supports Section 201 which would provide Tribes with the same preference that states and municipalities have over private applicants for hydroelectric 

preliminary permits or licenses. It is appropriate to extend this preference to Indian 

Tribes because Tribal governments have many of the same public water development needs as state and municipal governments. 

However, subsection 201(b) ‘‘Applicability’’ is neither appropriate nor needed and 

should be deleted from S. 1684. This subsection would limit the Tribal preference 

and is intended to protect previously issued preliminary permits and original licenses that had been accepted for filing. Subsection 201(b) is not needed because 

the underlying law, 16 U.S.C. § 800(a), already provides protection for previously 

issues preliminary permits. Section 800(a) provides that governments may only receive this preference ‘‘where no preliminary permit has been issued.’’

Subsection 201(b) also not an appropriate protection for original licenses that have 

been accepted for filing. Congress already provided a process for ‘‘competing’’ license 

applications at 16 U.S.C. § 808 and subsection 201(b) should not attempt to override 

existing law. In Section 808, Congress encourages competition for licenses and provides standards to ensure the best development of public waterways. The proposed 

changes in subsection 201(b) would limit competition and result in water projects 

that are not the best available for Tribal and public waterways. 

F. Section 202. Tribal Biomass Demonstration Project 

The Tribe supports Section 202 and requests that these provisions be made permanent and available to many Tribes rather than just a limited demonstration 

project. Section 202 would require the Secretary of Agriculture or the Secretary of 

the Interior to enter into long-term contracts with Tribes to collect woody debris on 

federal lands for biomass energy production. Longer contract terms are needed to 

help finance and justify the investment in biomass energy generation facilities. The 

Tribe could utilize a longer-term contact to test development of biomass facilities 

and make use of National Forests that have been included within our Reservation. 

G. Section 203. Weatherization Program 

The Tribe supports the change proposed in Section 203, but thinks that it does 

not go far enough to make weatherization programs work in Indian Country. The 

Tribe requests that Section 203 be replaced with the weatherization proposal included among the Tribe’s 32 legislative proposals. The Tribe’s proposal includes a 

number of changes to the weatherization program so that it would work in Indian 

Country 

Section 203 would provide Tribes with the ability to apply for direct access to 

weatherization funding. This authority should have been provided long ago. Under 

current law, Indian Tribes are supposed to receive federal weatherization funding 

through state programs funded by DOE. However, very little funding reaches Indian 

Tribes, despite significant weatherization needs. 

If a Tribe wants to receive direct funding from DOE, it must prove to DOE that 

it is not receiving funding that is equal to what the state is providing its non-Indian 

population. This arrangement is a violation of the government-to-government relationship between Indian Tribes and the Federal Government, and the federal trust 

responsibility. DOE does not even track the weatherization needs of Indian Tribes 

27

or the funding distributed to Tribes. When former Senator Dorgan raised this issue 

with DOE in the 111th Congress, DOE reported that it had no idea how much 

weatherization funding was actually received by Indian Tribes. 

Over the years that the weatherization program has been in existence, Tribes 

have missed out on millions in funding. Each year the weatherization program is 

funded at around $50 million per year, and under the American Reinvestment and 

Recovery Act of 2009 $4 billion was provided for weatherization needs. This funding 

is intended for low-income households and should go to those who need it most. On 

Indian reservations poverty rates are 2 to 3 times higher than national averages. 

Section 203 should include additional changes to the weatherization program otherwise Indian Tribes will still not be able to utilize the funding. As written, Section 

203 requires Tribes to comply with the same standards as state governments who 

have been receiving weatherization assistance for decades. This puts the burden on 

Tribes to overcome decades of neglect by the Federal Government for energy use 

and management on Indian reservations. Without standards and training that are 

appropriate to Indian country, many Indian Tribes will still not be able to utilize 

this funding opportunity. Section 203 should include reporting standards that make 

sense in Indian country and provide for training of energy auditors to serve Indian 

reservations. 

III. Additional Changes Needed to Promote Indian Energy 

I ask that you review the Tribe’s legislative proposals and expand the bill to address more of the barriers that Tribes face in managing our energy resources. I have 

attached the Tribe’s 32 legislative proposals to my testimony for your convenience 

and 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. On the House side, Congressman Don Young has already included this proposal in H.R. 3973, his ‘‘Native American Energy Act.’’ 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 DOI 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. 

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 dependVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00031 Fmt 6633 Sfmt 6621 S:\DOCS\76531.TXT JACK
28

ability 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 also asks that Committee not overlook the important role 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 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 fully include 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. Regulatory Barriers to Indian Energy Development 

Finally, the Tribe asks that the Committee monitor agency actions to create additional barriers to Indian energy development. Two recent examples are the BLM’s 

decision to develop regulations for hydraulic fracturing activities on public lands, 

and the Environmental Protection Agency’s (EPA) implementation of its Minor 

Source Rule for air permits. The Committee may need to hold oversight hearings 

on these issues or develop legislative solutions depending upon how the agencies 

proceed in developing or implementing these rules. 

There are a variety of problems with the BLM’s proposed regulation of hydraulic 

fracturing. First, the BLM has never initiated a discussion with Indian Tribes about 

the need for the regulations, alternatives that could preserve Tribal authority for 

Tribes to regulate the issue ourselves, or even a government-to-government discussion of the substance of the proposed regulations. All of which fails to fulfill DOI’s 

four month old Policy on Consultation with Indian Tribes (December 2011) and Executive Order No. 13175 on Consultation and Coordination with Indian Tribal Governments. 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. 

Second, Indian lands are not public lands. Indian lands are for the exclusive use 

and benefit on Indian Tribes. Any BLM oversight of activities on our lands is in fulfillment of the BLM’s trust responsibility to the Tribe. The BLM should not apply 

public interest standards to Indian 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. 

Third, as written, the proposed rule would increase delays in obtaining oil and 

gas permits. The very delays the Tribe has been working so hard to overcome. The 

proposed rule would require separate approval of hydraulic fracturing plans. This 

will add time to the oil and gas permitting process, increase the costs of developing 

energy on Indian lands, and overburden already short-staffed BLM offices. Oil and 

gas operators seeking permits to develop oil and gas on Indian lands already undergo an extensive environmental review process before they can begin drilling activities. As written, BLM’s proposed regulations add additional unnecessary steps to 

the process. 

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. First, EPA also 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. 

Second, although EPA delayed implementation of part of the rule for three years 

while it hires the necessary staff and develops its permitting process, one significant 

part of the rule took effect almost immediately, the Synthetic Minor Source Rule 

(SMSR). 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 

29

with our industry partners what a SMSR permit should look like and what is should 

contain. EPA plans to phase the SMSR rule in over the next year. To prevent any 

impacts to energy development on Indian lands, we ask the Committee to develop 

legislation that would delay implementation of the SMSR part until September 2013 

in order for the EPA to develop its permitting process fully. 

V. 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)

Senator BARRASSO. Thank you very much. Thank you for bringing a number of members of your organizational staff, and thank 

you for the 32 recommendations. We will take them most seriously. 

Thank you. 

Mr. Groen? 

STATEMENT OF WILSON GROEN, PRESIDENT/CEO, NAVAJO 

NATION OIL AND GAS COMPANY 

Mr. GROEN. Thank you, Vice Chair, Senators. I appreciate the 

opportunity to testify before you. 

I am Wilson Groen, President and CEO of Navajo Nation Oil and 

Gas Company. Navajo Nation Oil and Gas Company, or NNOGC, 

as we refer to ourselves frequently, is a Section 17 federally-chartered corporation, wholly owned by the Navajo Nation. So all of our 

shareholders, our directors, are members of the Navajo Nation. 

Just in a quick summary, and right to the point, we do fully support the work that the Committee has been doing and the direction 

that this legislation is taking. We appreciate your efforts in that 

way. 

A brief background on the company, as I said, we are wholly 

owned by the Navajo Nation. We are a for-profit and fairly successful oil and gas company. We operate in the Four Corners area and 

we also have some activities off the Navajo Nation, currently up in 

Montana. Most of our production and exploration activities are in 

southeast Utah and northwest New Mexico. We have, there is 

major energy development in new projects. But as kind of a gist of 

where we are going, the company just last week either purchased 

or signed purchase sale agreements to add 41 percent additional 

reserves and production base to the company’s bottom line. That 

creates lots of new opportunities for the company, and it also creates a major revenue source for the Navajo Nation. 

We currently, before these acquisitions, have direct payments 

back to the Nation in royalties, taxes, bonuses, other activities, in 

excess of $14 million. This will probably exceed $20 million next 

year. And under the current budget, we will contribute approximately $35 million to the Navajo Nation economy. 

Why do I bring these subjects up? I think the key thing, and one 

of the major aspects of this bill and the 415(e) amendments that 

the House is working on is, how do we improve the working relationships and minimize some of the hurdles, so that we can work 

very efficiently, move our projects forward in an efficient manner. 

30

I think that is the gist of S. 1684 legislation, and again, I commend 

the Committee for moving this in this direction. 

A couple of other things, though. How are we going to administer 

this? Are there concerns with the Nation’s ability to oversee and 

regulate these? What are some of the other obstacles? The Navajo 

Nation has a very well-developed network of departments that 

focus on Navajo, it has Navajo EPA, Water, Water Resources, Minerals Department, Fish and Wildlife, Historic Preservation. All of 

these departments have been around 10 or more years and have 

guided both the Nation and been the basis for the formation of this 

company to better develop and reacquire the resources of the Nation. And again, our focus really is how can we even make it more 

efficient to continue to grow the company more effectively. 

But we can do it with these departments and so on, we do have 

very strict guidelines that we follow, along with a lot of the discussions recently on the fracturing and so on. We cement all of our 

wells from TD to surface to ensure that they are going to maximize 

the well integrity, to give the least potential of any failure of contamination of water and other resources. 

So I want to again thank the Committee for the support of this 

direction they are going. It will make the development of the resources on the Navajo Nation much more efficient and cost-effective 

and timely, because time does cost us money. 

And even we as a wholly-owned company do have to consider the 

timely use of our capital. If we can’t timely deploy it on the Nation, 

we deploy it elsewhere. Thank you. 

[The prepared statement of Mr. Groen follows:]

PREPARED STATEMENT OF WILSON GROEN, PRESIDENT/CEO, NAVAJO NATION OIL

AND GAS COMPANY

Introduction 

Good afternoon Chairman Akaka, Vice Chairman Barrasso, and members of this 

distinguished Committee. My name is Wilson Groen and I am the President and 

Chief Executive Officer of the Navajo Nation Oil and Gas Company (NNOGC), a 

company wholly-owned by the Navajo Nation (the Nation). NNOGC is active in oil 

and gas exploration and production on and off Navajo lands, owns and operates a 

crude oil pipeline, and is a retail and wholesale distributor of refined petroleum 

products. 

I want to thank you for the opportunity to discuss energy development on Indian 

lands. I also want to thank you for your leadership in identifying barriers to energy 

development on Indian lands, and for introducing legislation to address and remedy 

those barriers. 

History of the NNOGC 

In 1992, the Navajo Nation Energy Policy (Energy Policy) was issued by the Navajo Nation after much discussion and input from energy experts, environmentalists, 

economic development specialists, lawyers, and political leaders of the Nation. The 

Energy Policy observed that the Nation was resource rich, but that it was neither 

obtaining proper value for its minerals nor, more importantly, participating in the 

energy industry as a business owner. For example, the standard oil and gas leases 

issued by the Bureau of Indian Affairs (BIA) relegated the Nation to the role as passive lessor, and that needed to be changed. 

NNOGC was established in 1993 and is a direct outgrowth of the Energy Policy. 

The Nation’s objective was to launch a tribal corporation to engage in oil and gas 

production as an integrated, for-profit business entity to maximize the value of the 

Nation’s energy resources for the benefit of the Navajo people. 

NNOGC has acquired and now operates an 87-mile crude oil pipeline, acquired 

and is continuing to acquire significant oil and gas working interests in the Greater 

Aneth, Utah, oil fields, and expanded its retail and wholesale business. Just last 

31

week, NNOGC entered an option to purchase 10 percent of Resolute Energy Corporation’s interest in the Aneth Field, the largest oil producer in the State of Utah. 

While NNOGC is still in a robust growth mode, it has returned significant royalty 

payments, taxes, right-of-way payments, lease payments, scholarships and other 

contributions to the Nation and host communities. Much of the Nation’s resources 

used to provide employment and services to the Navajo people derives from 

NNOGC’s operations. 

NNOGC’S Oil and Gas Production 

Since 2005, oil and gas production on Navajo lands in southeastern Utah has increased and the Nation is consequently witnessing an increase in oil and gas royalty 

revenues. It is critical to the continued growth of the Nation’s economy to continue 

oil and gas resource development on Navajo lands. 

NNOGC, often with industry partners, is also leasing and developing tracts of 

land on and near the Navajo Reservation. NNOGC has obtained rights to 150,000 

acres of land within the Nation to develop coal bed methane, oil and conventional 

gas resources. NNOGC is also exploring the feasibility of developing helium reserves 

on the Navajo Reservation. NNOGC has recently partnered with another company 

to develop oil and gas reserves in Montana. 

As the Committee will surely appreciate, these activities contribute not only to 

the Nation’s self-sufficiency, but also to the energy security of the United States. 

NNOGC Comments on S. 1684

NNOGC supports the objectives of the bill, namely, to eliminate or reduce undue 

Federal interference in tribal energy resource development, strengthen tribal self 

determination, and boost energy resource production on Indian lands. In particular, 

we believe the following provisions contained in section 103 of the bill are key to 

achieving these objectives. 

Section 103 authorizes an Indian tribe to negotiate and enter energy-related business agreements, rights of way, and leases without the review or approval of the 

Secretary of the Interior (Secretary) if the lease or agreement was executed

(1) pursuant to a secretarially-approved ‘‘tribal energy resource agreement,’’ or

(2) by the Indian tribe and a tribal energy development organization, certified 

by the Secretary as majority-owned by the tribe; and

(3) has a term not more than 30 years, or if the lease is for the production of 

oil, gas or both, 10 years and as long thereafter as oil or gas is produced in paying quantities.

Section 103 would also expedite the review and approval of tribal energy resource 

agreements (TERAs) submitted to the Secretary by providing that a TERA is effective 271 days after receipt by the Secretary, unless the Secretary disapproves the 

agreement. With regard to revised TERAs, section 103 renders them effective 91 

days after receipt by the Secretary, unless the Secretary disapproves the agreement. 

Importantly, section 103 also amends existing law to provide that the Secretary 

may disapprove a TERA only if the Secretary determines

(1) the Indian tribe has failed to demonstrate sufficient capacity to regulate the 

development of one or more energy resources identified for development in the 

agreement;

(2) a provision of the tribal energy resource agreement would violate applicable 

Federal law, regulations, or a treaty applicable to the Indian tribe; or

(3) the tribal energy resource agreement fails to include all prescribed provisions.

This section also adds language providing that an Indian tribe shall be considered 

to have demonstrated capacity if the Secretary determines the tribe has for three 

years successfully carried out a contract or compact under the Indian Self-Determination and Education Assistance Act that is related to the management of tribal 

land, or the Secretary has failed to make a capacity determination within 120 days. 

Section 103 also carefully, and properly in our view, circumscribes who may be 

considered to be ‘‘an interested party’’ for purposes of challenges to tribal energy activities pursuant to a TERA. 

Section 103 also directs the Secretary to transfer any amounts the secretary 

would otherwise expend to operate any program, function, service or activity of the 

department as a result of the tribe carrying out those activities pursuant to a 

TERA, and directs the Secretary to make these amounts available through negotiated, annual funding agreements separate from the TERA. 

32

NNOGC also appreciates the changes proposed in section 104(a) altering the 

name of a ‘‘tribal energy resource development organization’’ to ‘‘tribal energy development organization,’’ and including in such organization ‘‘any enterprise, partnership, consortium, or other type of business organization that is engaged in the development of energy resources and is wholly owned by an Indian tribe (including an 

organization incorporated pursuant to section 17 of the Indian Reorganization Act 

of 1934) or section 3 of the Oklahoma Indian Welfare Act; or (B) any organization 

of two or more entities, at least one of which is an Indian tribe, that has the written 

consent of the governing bodies of all Indian tribes participating in the organization 

to apply for a grant, loan or other assistance, or to enter a lease or business agreement with, or acquire a right of way from, an Indian tribe.’’

Similarly, section 104(b) makes clarifying amendments by substituting the term 

‘‘tribal energy development organization’’ for the term ‘‘tribal energy resource development organization.’’ These proposed changes will add flexibility and creativity in 

how energy development projects are structured. NNOGC strongly supports these 

changes. 

Navajo Nation and NNOGC–Proposed Amendments to 25 U.S.C. § 415(e) 

NNOGC’s continued growth is critical to the continued growth of the Nation’s 

economy. While NNOGC sees the need for and supports the refinements to the 

TERA process contained in S. 1684, for the Navajo Nation, which is unique in many 

relevant respects, a more appropriate path is to amend 25 U.S.C. § 415(e) to authorize the Nation to engage in subsurface mineral leasing and development without the 

involvement of the Secretary. Should these amendments come to pass, they will facilitate the Nation’s economic growth and encourage self-determination by removing 

Federal delays and unnecessary obstacles from the process. 

Some background is in order. In 2000, the Navajo Nation requested Congress to 

amend the Long Term Leasing Act of 1955 (25 U.S.C. § 415) to authorize the Nation 

to develop and execute its own business, home-site, agricultural and other surface 

leases without the approval of the Secretary. The Nation made this request because 

member-owned businesses were not flourishing on tribal lands due to the overlay 

of tribal and Federal authority in granting business leases and other barriers such 

as bonding requirements, requirements for appraisals, and delays in lease processing and obtaining financing. 

The Congress responded by adopting 25 U.S.C. section 415(e)—the Navajo Nation 

Surface Leasing Act—which authorizes the Nation to execute its own leases without 

Federal approval, provided that the leases are issued pursuant to regulations approved by the Secretary and leases are limited to 25 years, subject to a right of renewal. 

The Nation’s leasing regulations were approved by the Secretary, and the Nation 

has been operating its own surface leasing regime without event for approximately 

seven years. All business site leases require surveys, geo-tech studies, archaeological 

clearances, and environmental assessment taking into account the impacts on the 

natural and human environment pursuant to the Nation’s business leasing and environmental laws. The various agencies and offices of the Nation, which are the 

most advanced in Indian Country, have more than ten years experience in performing these studies and assuring regulatory compliance. 

The Nation successfully manages the Navajo Nation Environmental Protection 

Agency, Department of Historic Preservation, Fish and Wildlife Department, the 

Minerals Department, and the Navajo Land Department. 

Amending 25 U.S.C. § 415(e) as the Nation and NNOGC are suggesting would 

continue to advance the Nation’s self-determination and self-sufficiency by amending the Nation’s leasing authority to permit business and agricultural and other surface leases for terms up to 99 years, and by further amending the statute to authorize the Nation to execute mineral leases, again, under the regulations approved by 

the Secretary, for a term of 25 years, and potential renewal for an additional term 

of 25 years —the customary term of minerals agreements approved by the Navajo 

Nation Council since approximately 1985. 

I note for the Committee’s consideration, these proposed amendments are currently contained in Chairman Don Young’s ‘‘Native American Energy Act’’ (H.R. 

3973), which is pending in the House Committee on Natural Resources. 

Conclusion 

In conclusion, I want to thank the bill’s sponsors—Vice Chairman Barrasso, 

Chairman Akaka, and Senator McCain—for their leadership in crafting and introducing S. 1684, and for your support for the amendments to 25 U.S.C. § 415(e) that 

the Nation and NNOGC are jointly proposing. 

33

It is our hope that the Committee will quickly and favorably report S. 1684, together with our proposed language, to the Senate Floor for its consideration. 

At this juncture, I would be happy to answer any questions you have.

Senator BARRASSO. Thank you, each and every one of you, for 

your testimony. 

I have a few questions for the record, but first I want to remind 

everyone that the hearing record will be open for two additional 

weeks, so that additional comments may be provided. So if you 

have additional comments, we would like to have them. 

Mr. Olguin, it has been over six years since Title 5 of the Energy 

Policy Act of 2005 was passed, yet no Tribes have applied for a 

TERA. In your view, what are the most significant obstacles that 

the Tribes face that discourage them from entering into such a 

process? 

Mr. OLGUIN. I believe, as I stated, we are looking at the cost. The 

Tribe is taking on the responsibility of the Federal Government, 

are there going to be funds available to provide that? I think that 

is a big issue. 

Also the Federal inherent trust responsibility along that line, too, 

are the Tribes going to have that ability to really manage their assets here? 

Senator BARRASSO. Mr. Hall, you see Senator Hoeven, your other 

Senator from North Dakota. You have people up here to sing your 

praises. You have a Republican and a Democrat, both sides of the 

aisle. You obviously have made a lot of friends from all of your 

leadership. 

I was very impressed with your testimony. We will make your 

entire written testimony part of the record. You talked about, since 

2008 there have been no new wells, how it’s hard to go through the 

49 steps, and you said you felt like either a mouse or a rat in a 

maze. And now the EPA has come forward and now you are being 

treated as if you are under EPA’s public lands area. You said we 

needed to go further with the bill. I didn’t know if there was anything additional that came to your mind that you would like to 

share with us in terms of significant obstacles that you are facing 

that discourage the Tribes from entering into a TERA. 

Mr. HALL. Mr. Chairman, it is a longstanding history where the 

Federal Government has done this for us. The BIA, the BLM, the 

EPA. And the Oil and Gas Leasing Act of 1938, Tribes weren’t at 

the table. That is when big brother was going to say, this is how 

it is going to be done. And so we weren’t at the table, so we kind 

of had to take it. Our grandfathers had to sit here and take it and 

do those things. 

But Tribes have actually bypassed the Federal Government. Our 

staff are more educated, we have more staff, we have an energy office, an environmental office. We have an oil and gas company. We 

have a water office, we have a health clinic, we have law enforcement, we have every agency that we provide these services, and 

have to supplement. Our Tribe supplements the Federal budget 

that we get through 638 contracts, $42 million a year. That is how 

understaffed and underfunded our Federal agencies are. 

So as this TERA is coming, as Vice Chairman Mike here had 

mentioned, the money, what additional costs? Is there going to be 

money? Are there going to be some resources that are going to add 

34

to this? So that way we can have this adding to what the Tribes’ 

capabilities already are. 

So the one stop shop that Irene was talking about is not funded. 

And Senator Dorgan did a great job advocating for it, but it is not 

funded, it is not permanent. It might be something that Tribes are 

scared of, is that a one time funding thing, or is it going to be a 

permanent funding base so you can count on it every single year? 

Because we are going to have 10 more years of drilling and about 

30 or 40 more years of production. 

So this economy is something that we want to continue to grow, 

and it is not going to go away. 

Then finally, the trust responsibility. What happens if there is an 

accident or if an allottee says, well, there has been a breach, there 

has been a breach of that trust responsibility on my land? Who is 

responsible, the Tribe? Or is it the Federal Government? So that 

is what I really want to be clear on. 

But as far as the TERA removing Federal obstacles, there is no 

question about it, we are tired of being under the thumb. 

Senator BARRASSO. Thank you very much. 

My time has expired. Senator Tester, did you want to make an 

opening statement? 

Senator TESTER. No, thank you, Mr. Chairman. 

Senator BARRASSO. Okay, then Senator Franken is next in line 

for questioning. I am going to have to excuse myself and Senator 

Hoeven will take the gavel. Thank you. 

Senator FRANKEN. Sure, great. Thank you, Mr. Vice Chairman. 

This is really to the entire panel. In the Midwest, we have a lot 

of wind. A number of Tribes in my home State of Minnesota have 

put up turbines, wind turbines to provide electricity to their communities. 

Southwest Tribes also have vast solar resources. But many 

Tribes still must rely on old, inefficient, dirty sources of energy, 

such as coal-fired power plants. And Tribes still struggle to provide 

reliable and affordable energy to their own members. 

Can any of you talk about the potential for distributed energy 

generation in Indian Country and what could the Federal Government do to help Tribes provide for their own energy needs? 

Mr. Finley? 

Mr. FINLEY. One of the problems we have in the northwest is 

that BPA is near full capacity on their grid. So a lot of Tribes want 

to develop energy development, they want to develop energy 

projects. But with the uncertainty of not being able to wheel your 

power and move it, what is the need to even try to move forward 

with the project, if you can’t move the power. Ultimately, many 

Tribes have some of the highest rates in electricity in their area, 

particularly us at Colville. Although we have the largest hydroelectric dam in North America, and the second largest, or one of 

the third or fourth largest on our reservation, we pay some of the 

highest electricity rates in the State. 

Senator FRANKEN. So the hydroelectric plant is on your reservation? 

Mr. FINLEY. Yes, they are federally-operated. But not one megawatt of power, not a single gallon of irrigation water has been 

35

made available to the Tribes. It all goes the opposite direction from 

the reservation. 

Senator FRANKEN. Anyone else have any thoughts on that? Because this is what I have heard, this is what I understand, is that 

there are Tribes that have all kinds of solar energy beating down 

on them and yet are paying for their electricity. Chairman Hall? 

Mr. HALL. Senator, in the Dakotas, we have WAPA, which has 

been an agency, Western Area Power Administration. It has not 

been willing to work or provide any space on the grid, as Chairman 

Finley was talking about. And they do have the lines, because we 

are by the river, and we have the dams, the Garrison Dam. We 

have seven dams from Fort Peck Dam down to Lake Oahe. But 

Tribes are not under that, and those, the Federal power should 

give Indian Tribes a little space on that grid. And we have some 

of the most, all the wind studies that have been done for almost 

all of us, 16 Dakota Tribes, have all shown that we have tremendous wind capacity in the Dakotas. 

But WAPA has just been hesitant to help provide any space on 

their grid, even though they have all the power lines running 

through our reservations. 

Senator FRANKEN. Thank you. 

Those are separate but related issues, which is, having the transmission in order to send out power that you are creating on your 

land, but also the idea of paying out, as Mr. Finley said, paying out 

for your own power, when you are making it, basically, on your 

land. 

Mr. Olguin, in your testimony you mentioned your involvement 

in the development of Chairman Dorgan’s Indian Energy Parity 

Act. I was also a co-sponsor of that legislation and believed it 

would have been a huge step forward for Tribal energy development, especially renewable energy development. S. 1684 is a much 

more narrowly-tailored bill, many provisions that were part of the 

Indian Energy Parity Act did not make it into S. 1684. 

Can you discuss any specific provisions from Senator Dorgan’s 

bill that you think would greatly improve the prospects for Tribal 

renewable energy development if it were included in the bill? 

Mr. OLGUIN. Along this line, we are still going to have to go back 

and look at that further. Right now, with 1684 we see that as the 

opportunity to streamline particularly the TERAs going forward. 

But as far as what you are asking, we will have to look at that further. 

Senator FRANKEN. Thank you. I see that my time has expired. 

STATEMENT OF HON. JOHN HOEVEN,

U.S. SENATOR FROM NORTH DAKOTA 

Senator HOEVEN. [Presiding.] At this point, we will go to Senator 

Tester, then I will conclude. And we can come back for another 

round, Senator Franken, if you have additional questions or would 

like additional time. Senator Tester?

36

STATEMENT OF HON. JON TESTER,

U.S. SENATOR FROM MONTANA 

Senator TESTER. Thank you, Mr. Chairman, and I want to thank 

everybody who testified today. 

Research development can do a lot of good things for Indian 

Country, and a lot of good things for this Country. Particularly, 

and I don’t know what it is on each one of your reservations, but 

in Montana, unemployment is damned high. There is opportunity 

to employ people, whether you are talking about conventional energy or renewable energy or utilizing your wood products, the list 

goes on and on and on. 

My question is, and anybody can answer this of it applies to 

them, if you have high unemployment, the work that you are doing 

or the Tribal colleges that you have, are you able to train the people that are your neighbors to be able to obtain the jobs when those 

jobs come available? 

Mr. FINLEY. Well, on the provision that I shared, that was a part 

of my testimony earlier, one of the things that we are seeing on the 

reservation is a lot of the younger generation are not taking an interest in forest products and some of the logging practices that we 

do on Colville. It is something that our older loggers have observed 

and shared with us as leaders, that some of the younger generation, they are not taking an interest in that. 

So if we are going to consider things outside of this endeavor 

that we have of building this woody biomass demonstration project, 

it is something that we are going to have to take into consideration. Obviously there is not a whole lot of training that goes into 

some of those jobs, but some of them are pretty technical. Some of 

them have a high risk as far as injury and there have been many 

deaths as a result of that. I think I have seen statistics in the past 

where it is one of the high risk jobs in the United States, being a 

logger. 

But having said that, I know that our older generation is prepared to move forward, and hopefully as the jobs are created with 

this legislation and with some of the projects that we want to move 

forward, that our younger generation will step up and that knowledge that has been developed over the course of several generations 

won’t be lost, and it will be shared. 

Senator TESTER. Do you have a Tribal college on your reservation? 

Mr. FINLEY. Yes, we do. It doesn’t focus on woody biomass or the 

forest products division. It is more so with core classes to help develop the classes they need to move on to a four-year institution. 

Senator TESTER. Do each one of you have a Tribal college on your 

reservation? You do, Tex? 

Mr. HALL. Yes. 

Senator TESTER. You do, Wilson? 

Mr. GROEN. Yes. 

Senator TESTER. I will kick it over to Tex, because I have a question for Wilson in a minute. Does your Tribal college train folks 

that you need to work in the fields? 

Mr. HALL. It does, Senator Tester. It is probably the bigger one 

is TERO, the TERO office. Every Tribe should have a Tribal employment rights office. These were designed about 35 years ago for 

37

employment and training of Indian Tribal members of that Tribe. 

So there is a TERO fee for every company, as I mentioned earlier, 

I don’t know if you were in chambers, we have 950 small businesses. About 200 of those are Native businesses. And some of 

them didn’t even know how to start a corporation, write a business 

plan or do a financial spreadsheet. But they all do now. They have 

been forced, it is sink or swim. 

Senator TESTER. Yes, and as energy development has already 

happened in your neck of the woods, and is probably going to be 

happing more so and more so in my neck of the woods, are you able 

to share your challenges with other Tribes around the Country? 

Mr. HALL. Absolutely. We have an expo at Fort Beck, Crow, 

Southern Ute, and everybody here is invited, May 8th and 9th. It 

is our annual MHA Oil and Gas Expo. We are going to do an actual 

tour of rigs to show production, drilling and hydrofracking, and 

then all the jobs, the TERO office, the Tribal college, all of this tour 

is going to be part of that regular conference agenda. 

Senator TESTER. Very good. I commend you in that. 

Wilson, curiosity always gets me. In your testimony you talked 

about developing a partnership with Montana companies. Can you 

give me any sort of idea who you are partnering with or is that a 

trade secret? 

Mr. GROEN. It is not a trade secret. We are involved with a small 

company out of Texas, actually, called Vecta, and we are in the 

Central Montana uplift area applying some new, latest technology, 

multi-component seismic, to help figure out where those fractures 

are and what direction we may want to drill the wells. 

Senator TESTER. So are you looking at oil, natural gas or something else? 

Mr. GROEN. Principally oil. 

Senator TESTER. Okay. 

Mr. GROEN. Along the line of your training and schools, the Navajo Nation does have a community college, Dine Community College. It is not focused really on oil and gas and that type of technology. 

However, in Farmington, New Mexico, there is a community college and it has one of the best reputations for training not only oil 

field services but gas plant and other types of training facilities for 

power plants, gas plants and other types of things. So they have 

a very good program. 

Additionally, our company itself, we commit approximately 1 percent, a little over 1 percent of our net income every year in support 

of scholarships for the Navajo Nation students. We want to build 

a well-trained, quality Navajo workforce to run this company well 

into the future. 

Senator TESTER. I appreciate that, I think that is smart. You 

need to be commended for that, allowing folks who need jobs to be 

able to have the mental infrastructure to be able to go get those 

jobs is critically important. 

I don’t know how aggressive you all are being, so I will just leave 

you with a comment. That is, there is incredible opportunity to put 

some folks to work here. Some of them are very skilled jobs, some 

of them are pretty regular kinds of jobs, too, that don’t require a 

big skill set. 

38

And I would just say that if it is firing up the Tribal colleges or 

partnering with community colleges or partnering with other reservations around the Country, I think it would be a missed opportunity. I just had the Blackfeet in my office earlier this week, and 

they are looking at some energy development. I said, boy, if you 

don’t aggressively get after it, you are missing a big opportunity to 

employ your own people. Because if you don’t do it, somebody from 

Texas will come up and do it for you. 

So with that, thank you very much for your testimony. 

Senator HOEVEN. Several questions. I want to start out with 

Chairman Hall. Chairman, it is good to see you. It looks like you 

are on the mend. Matter of fact, you look better even than the last 

time I saw you. 

Mr. HALL. I still have yet to get on a horse, though. 

Senator HOEVEN. Oh, well, you had better. I am counting on a 

ride together. 

Thanks to all of you for being here. We appreciate it very much. 

I am just going to follow up on something that you mentioned earlier, Chairman Hall, and that is in regard to the permitting for oil 

and gas development on the reservation. And the first would be, 

give me your sense of where you feel the Tribe is with EPA on the 

minor source rule. We have been talking to Region 8, we are determined to bring them out there. They have now committed to come 

back out. As you know, I feel there is real work to do here. 

Just give me an update as to where you think we are at this 

point and what your communication has been with the EPA on this 

synthetic minor source rule. 

Mr. HALL. The latest information, Senator Hoeven, we have is 

that they have only put out five permits for the Federal Register 

for public comment. So I stressed to, I think his name is Carl Bailey, who is the head of Air Quality at Denver, so we were on a conference call recently and I told Carl, I said, I don’t think that is 

enough. He begged to differ, he thought that was enough. 

So I said, so what happens after 30 days, Carl? If somebody from 

New York objects to an oil well on our family’s property on Fort 

Berthold in North Dakota, do they get another 30 days? He just 

kind of asked somebody next to him and they said, well, I think 

so. 

So there is really nothing cut and dried that says after 30 days. 

We went through this with the refinery, it took us eight years to 

get a permit for the refinery. So we just feel they don’t have 

enough permits in the queue in order to really, I think they are 

going to stymie development. And I don’t think you can develop an 

oil and gas field, a full field. The Mandaree Field, the Spotted Horn 

Field, I don’t think you can develop that field if you are going to 

do it just piecemeal, with five permits at a time. You are just going 

to develop that one well, and that is not a way to do oil and gas 

development. I don’t think EPA understands that, and I don’t think 

they care. 

Senator HOEVEN. That is exactly my sense as well. And exactly 

the sense that I am getting from the oil companies. They are getting frustrated as well. You have done a tremendous job of oil and 

gas development on the reservation. The companies want to continue to come there and do business. I think the Tribes do an inVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00042 Fmt 6633 Sfmt 6601 S:\DOCS\76531.TXT JACK
39

credible job. You talked about some of the things that you have put 

in place that were needed. And working with the State, it has been 

a very good working relationship. 

But we absolutely need to get EPA to work with the Tribe, listen 

to the Tribe and work with you on this minor source rule and the 

permitting process. We have talked to them and we just feel we 

have to get them up there to sit down with you on the reservation, 

have a meeting and go through this. 

Mr. HALL. Carl Bailey and the director, Jim Martin have never 

been to the —

Senator HOEVEN. And they need to come. Like I say, we have 

talked to them and we are going to get them up there. 

I think the best way, I have met with them in my office, I think 

the best thing is for them to come up and sit down with you on 

the reservation to see what you are doing and really get down to 

what needs to happen. A follow-on there is the one stop shop. You 

talked about it, Senator Dorgan was involved in getting it set up 

with you and others on the reservation. But where are we? My understanding is that there really, there is some concern on your part 

in terms of staffing and supporting that one stop shop to handle 

the volume that you have on the reservation. Is that the case, and 

what do you think needs to happen? 

Mr. HALL. The one stop shop is absent, even though it was in the 

green book, Senator Hoeven. The green book said it was a million 

dollars for oil and gas development on Fort Berthold. We don’t 

know where that million dollars is. So I have been working with 

the Administration trying to identify where that money went. 

Hopefully we will get an answer. 

But we just found out that Dickinson doesn’t have a BLM director now. So we just got through the communitization agreement 

backlog and the APD backlog. Well, now the CAs are backlogging 

again because there is no director. The one stop shop person would 

have been able to coordinate all of the agencies, including EPA, 

and schedule them for these visits on Fort Berthold. That way, 

these could have been foreseen. And actually, some of these functions could be 638, under Public Law 638 to the Tribe. The Tribe 

could be doing some of those functions at BLM. But it has never 

been shared with us. 

So again, that one stop shop director should be on Fort Berthold 

and helping to coordinate all that, sir. 

Senator HOEVEN. Did Secretary Salazar give you any indication 

when he was up several weeks ago as to what would happen with 

the one stop shop? 

Mr. HALL. He stressed it was a priority for him. And I think 

Mike Black was the, Larry Echo Hawk wasn’t there, so I think he 

is going, anyway. It is actually, he has six more days left. But actually, Mike Black is the head of the BIA and I believe Karen Atkinson or Del Lavadure, who is Acting Assistant Secretary of Indian 

Affairs after six days, will be the responsibility. 

But it is in the Office of Indian Energy Development at BIA and 

Karen Atkinson is over that. So she is coming out to our oil and 

gas expo on May 8th and 9th. So we are hopeful that Karen can 

meet with Del, meet with Mike and give us some direction on what 

40

happened to the money and see if we can get a plan to get this implemented. 

If they don’t want the Tribe to do it, do it yourself, BIA. We don’t 

care. But don’t just hang on to the million dollars. 

Senator HOEVEN. And maybe that is the next best step. If not, 

you and I should maybe develop a letter to Secretary Salazar, asking specifically what they are going to do. We can have that meeting first at your energy expo and see where that goes. But we definitely need to follow up. Because that was the commitment, was 

to provide that assistance. And clearly, you need it with, how many 

wells are you up to on the reservation now? 

Mr. HALL. Four hundred fifty, including fee. 

Senator HOEVEN. Four hundred and fifty wells. And I know you 

have applications for many, 200 more. So we are talking a lot of 

jobs and a lot of revenue for the Tribe. 

Mr. HALL. Are you coming to the expo? 

Senator HOEVEN. I sure hope to be able to come, absolutely. Did 

I get invited? 

Mr. HALL. Can you speak at our expo, Mr. Senator? 

[Laughter.] 

Senator HOEVEN. I would love to. 

Mr. HALL. Okay. Thank you. 

[Laughter.] 

Senator HOEVEN. Good to have you here. I am going to, at this 

point, go to, Senator Franken, did you have something or should 

we go to Senator Udall first? 

Senator FRANKEN. We should go to Senator Udall. 

Senator HOEVEN. Senator Udall. 

STATEMENT OF HON. TOM UDALL,

U.S. SENATOR FROM NEW MEXICO 

Senator UDALL. Thank you. 

Sorry for being a little late here. I had some other commitments, 

but I know that this has been very lively. Part of this question I 

am going to ask I think was asked by Senator Franken to Mike 

Olguin. But I would like the rest of the panel to address it. That 

question is, what additional provisions should the Committee add 

to the Barrasso-Akaka bill? Are there provisions from Senator Dorgan’s 2010 bill we should include, like access to tax credits, leasing 

reform or Tribal funding? 

Irene, do you want to start there? 

Ms. CUCH. Yes. I believe the Ute Tribe has submitted 32 proposals. And in there, that is our proposal to the present bill, the 

bill that Barrasso is sponsoring. That bill is asking for the Secretary to make funds available to take over the Tribes that want 

to take over permitting. I believe it is pretty much self-explanatory, 

that 34 proposals in there. That is what we would like to add to 

it. 

Senator UDALL. Thank you. 

Ms. CUCH. I believe, Senator, the Vice Chairman Barrasso did 

say he was going to look at the 32 proposals, which we just to here. 

Senator UDALL. Thank you. 

Mr. FINLEY. Our hope is that the bill moves forward. We realize 

that there may be things that get tied into other committees or 

41

may even stretch into other jurisdictions of other committees, and 

some may have concern over little minor things. For the most part, 

the pieces that don’t cost money, the pieces that make sense, that 

aren’t going to be a tremendous burden on the Federal Government, move forward. We just want movement. 

Senator UDALL. Do you have any specific recommendations of additional? 

Mr. FINLEY. Well, our provision that we are championing doesn’t 

cost the Federal Government any money. So I can’t speak to the 

rest of it. It is a great bill, it is going to do a lot of good things 

for Indian Country. But we spent a great deal of resources helping 

develop that provision. It appeared in the last Congress under Dorgan’s bill and it is here again. We were hoping there would have 

been movement then, there wasn’t. We just want there to be movement today. 

Senator UDALL. Tex, do you have anything to add there? 

Mr. HALL. Senator, it is in our written testimony but I can three 

just on the top of my head. One is that we need to clarify, under 

the TERA, under that section of the bill, the additional resources 

from Department of Energy need to be added, a budget needs to 

be added, because Tribes are taking on more responsibility. You 

are doing it instead of the Federal Government. Trust responsibility should be clarified. If there is a violation or dumping occurring, if Tribes don’t have an environmental code that prohibits that 

kind of activity. 

Second, I think that there needs to be something in the bill that 

clarifies Tribal lands or reservation, Indian lands are not public 

lands. BLM and EPA, you can’t treat us as public lands, because 

we are not. By treaty it is set aside and that treaty is supposed 

to be the supreme law of the land, according to our Constitution. 

Finally, I think Cotton Petroleum needs to be reviewed and overturned. 

Senator UDALL. Thank you, Tex. Wilson, do you have anything 

to add here? 

Mr. GROEN. I guess my key point would be, I like the provisions 

of S. 1684. There are some, the House Subcommittee on Alaskan 

and Indian Affairs has an amendment to 415(e) which I think there 

are some aspects of that that could be blended into this bill that 

would further enhance it. 

Senator UDALL. Wilson, it is good to see you here. I would like 

to give you an opportunity to expand on your testimony about the 

Nation’s proposal to do its own subsurface leasing. What are the 

benefits and how would the Nation protect its land and water resources? 

Mr. GROEN. Thank you. We have, the Navajo Nation has a very 

extensive department that focuses on the environment, fish and 

wildlife, historic preservation. I know I interacted, long before I 

worked for Navajo Oil and Gas back in the 1980s and early 1990s, 

I interacted with these departments and they had very detailed 

provisions, oversight and regulations that we had to follow as an 

operating company from the outside. The Nation has these capabilities. 

So I really feel that a lot of the oversight from the BIA and others on this is duplicative. They are basically kind of a rubber stamp 

42

of all of the work. When we bring a new operating agreement in 

front of the Nation to develop additional resources on the Nation, 

we are treated, for all practical purposes, just like an outside forprofit company. And it goes through all of the departments, it goes 

through various committees of the council, it goes back then in 

front of the full council for approval. Once that is signed, that is 

usually when we pay our bonus payment to the nation for a lease 

bonus. 

Having said that, we can’t start our activities then until this 

agreement has been approved by the Bureau of Indian Affairs. The 

most current one that, most current approved one was approved in 

October by the council and was approved by the Bureau of Indian 

Affairs in August, after much arm twisting and discussions. The 

previous one took over 400 days. This current one that took over 

nine months, we had paid out over $8 million in bonus fees to the 

Nation and over $12 million to the Nation in bonuses and rentals 

before we could drill our first well. These types of delays are just 

too onerous. Basically that’s the reason a lot of other companies 

won’t work on the Nation’s lands. There’s too many delays. 

Senator UDALL. Thank you, and thank all the witnesses for their 

testimony. Senator Hoeven, thank you for letting me go over a 

minute or so. 

Senator HOEVEN. Senator Udall, if you have anything else, go 

ahead and finish up, rather than another round, then we will go 

to Senator Franken. 

Senator UDALL. Sure. I have one more question. How is your proposal, the one we just talked about here on subsurface leasing, different than the proposal being made in the Barrasso-Akaka legislation? 

Mr. GROEN. I believe it gives a little more flexibility to the Nation and more independence to the Nation to move forward. I think 

there are some similarities, but it gives another alternative to 

TERA and to move it forward. That is my understanding. 

Senator UDALL. Great, thank you very much. Thanks, Senator 

Hoeven. 

Senator HOEVEN. Senator Franken? 

Senator FRANKEN. Thank you, Senator Hoeven. 

Just a couple of questions here. On weatherization, this bill 

would allow Tribes to get direct weatherization funding instead of 

funding through the State. Weatherization has a lot of positive impacts, it reduces energy costs, protects the environment and reduces demand on power generation. Can each of you, whoever 

wants to, talk about the importance of weatherization funding to 

your Tribes and do your Tribes have the systems in place in order 

to take advantage of this new stream of funding? 

Mr. OLGUIN. Yes, at Southern Ute, we do have our own housing 

department, and they are utilizing these types of funds to weatherize through replacement of windows, doors, on multiple homes. 

We are actually in phase four of that program. 

Senator FRANKEN. And it puts people to work doing that, too. 

Mr. OLGUIN. Yes. 

Senator FRANKEN. And it saves energy. Anybody else? 

Chairman Finley, you were talking about the use of woody biomass. Minnesota also has a lot of woody biomass and other bioVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00046 Fmt 6633 Sfmt 6601 S:\DOCS\76531.TXT JACK
43

mass. Does anyone here think that it would help, in Minnesota we 

have a renewable energy standard of 25 percent by 2025. We are 

actually ahead of the game on that. If we put in, we have a clean 

energy standard that Chairman Bingaman has authorized. Does 

anyone feel that a renewable energy standard within a clean energy standard or a national renewable energy standard would help 

Indian Country because utilities and others would be wanting to 

use the biomass and other renewables, solar and wind, that is 

available in Indian Country? 

Mr. FINLEY. I think it would be a tremendous help. Probably for 

the concern I raised earlier, the inability to wheel the power because of the various entities, the Federal entities, ours being BPA, 

that are near full capacity on their grid. If there was a need or a 

requirement for green energy from Indian Tribes, a hard percentage, that would put us in the driver’s seat, that would give us a 

stronger foothold to develop these projects. 

I think that would be more appealing to some of the outside entities that would like to partner with the Tribe, to come in on the 

reservation and do it. 

Senator FRANKEN. Give them an incentive to invest. 

Mr. FINLEY. Correct. 

Senator FRANKEN. To meet the renewable energy requirement 

that they have. 

Mr. FINLEY. Correct. 

Senator FRANKEN. I saw, Chairman Hall, you are nodding. I 

know you have a tremendous amount of oil and gas and that is a 

great thing. Senator Hoeven, I have asked him many times to discover oil in Minnesota and he has yet to do it. He seems to refuse. 

[Laughter.] 

Senator FRANKEN. But you do have wind. 

Mr. HALL. Oh, yes. 

Senator FRANKEN. Would a renewable energy standard be of help 

in that regard? 

Mr. HALL. No question about it. When I think of just oil and gas, 

getting back toy our point, Senator Franken, there are probably 30, 

40 of us, there are 565 Tribes, the super majority have renewable. 

They have wind, they have solar, they have wood, whatever else. 

They have the resources. A lot of them have the studies. So I certainly agree, that is an income that is sitting on the table not being 

utilized. 

Senator FRANKEN. Chairwoman Cuch? 

Ms. CUCH. I wanted to make a comment on the weatherization 

question you asked. 

The Department of Energy weatherization program, it goes to 

the States and they have been handling it for the last 30 years. It 

rarely comes to the Tribe. But it should be further modified so that 

it will work in Indian Country. We need Tribally-based standards 

and training for energy auditors. That is my comment. 

Senator FRANKEN. Thank you so much for that comment. 

Yes, Mr. Vice Chairman. 

Mr. OLGUIN. I would like to make a comment here just from the 

standpoint of Southern Ute, through its business opportunities—

not mentioning any names here—but we attempted to partner with 

another Tribe on a wind energy project. Along that line, when we 

44

look at the Federal rules and regulations, it is very difficult for certain Tribes to really enter into types of agreements, even with 

other Tribes. It diminishes opportunities. We are here, we are 

available and willing to assist other Tribes, but when we are hitting a roadblock, those opportunities unfortunately fall to the wayside. 

So I see opportunities increase for Indian Country as a whole, 

where other Tribes are ready and willing to help as well. 

Senator FRANKEN. Thank you, and thank you, Senator Hoeven. 

Senator HOEVEN. Thank you, Senator Franken. 

One follow-up question I have before we close, and I am going 

to start with Chairman Hall, and that is hydraulic fracturing. Just 

discuss your thoughts on hydraulic fracturing. I know you work 

very closely with the State, it seems to be going well. EPA is doing 

various studies. It recently came out, I think yesterday or the day 

before, with a 600-page report in regard to handling methane, if it 

is found in the hydraulic fracturing process. 

So just give me a status report, Chairman, where you are with 

the hydraulic fracturing on the reservation. 

Mr. HALL. When I look at the overall numbers, over 6,000 wells 

in North Dakota, over 450 wells on Fort Berthold, not one single 

incident of any contamination of any of the groundwater, we have 

deep, deep wells. We are 10,000 feet down vertically, up to a mile 

horizontally and longer, on a longer lateral. And the casing, the industry, I have been out to a rig, I have seen the hydrofracking. 

There are experts, there are expert companies that have like 

Schlumberger and Halliburton that have safety certificates hanging 

on their walls since the 1970s. The statistics are there. 

We have to have the hydrofracking in our Bakken formation in 

order to crack the shale. It is just an injection of a million gallons 

of water, sand and some chemicals. That is all it is. We think BLM 

stepped way out in front where their nose don’t belong. They are 

treating us as public lands. They got the rule with no consultation. 

So they are violating their own policy. We don’t think they have 

the authority, if you look at the Federal Land Policy Management 

Act of 1976 it does not give them the authority. 

I listened to that one guy, whatever his name was, Sipstack, at 

the House this morning, and he said he got it, he thought, from the 

1938 Act. We looked at the 1938 Oil and Gas Act, it isn’t there either. Actually BLM wasn’t even born in 1938. So I don’t know what 

he is talking about. And he admitted, after Chairman Young got 

out his, all the cities, because he was saying that he went to 

Bismark, well, Bismark wasn’t even on their list. But he was talking about Farmington, Tulsa, Billings, and I don’t know where else. 

But there was no Tribal input. He said, well, yes, toward the end 

of the meeting we did hand out the rule, toward the end of the 

meeting. There was not one committee member that said that was 

right, both Republican or Democrat. None of them said that was 

right. That wasn’t right to treat Indian lands as public lands. And 

for you to give a piece of paper at the end of the meeting and say, 

go ahead, by the way, read this, this is the new rule. 

The problem is at OMB. So I was on a conference call two days 

ago and they said they are embargoed to talk about it. They are 

45

just there to listen. I said, you aren’t any good to us, if you are just 

going to listen. 

So we asked Chairman Young to do something. So they are looking at legislation or appropriations or something. But we need all 

the help we can get, Senator Hoeven. Everyone here that testified 

this morning is on the same page, all the Tribes. 

Senator HOEVEN. Thank you, Chairman Hall. That is exactly 

where I was going next, is just to get comments from anyone else 

on the same issue, if you do have oil and gas on the reservation. 

Chairman Finley? 

Mr. FINLEY. The only well you will find on the Colville Reservation is a water well. So I will defer to my counterparts on this one. 

Senator HOEVEN. All right. 

Ms. CUCH. Yes, your question is on hydraulic fracturing. The Ute 

Tribe is concerned about this, because of the pollution or contamination it might create with our drinking water. And the other problem is, there was no adequate consultation, or I guess you could 

say no consultation done with my Tribe. The only thing is, the closest to consultation was a meeting they held in Salt Lake City. I believe that is what is on their schedule. 

But some of our Tribal, well, he is sitting here in the audience, 

Manuel Myore, who is the Director of our Energy and Mineral Resource Department. He went to that meeting. He said as far as he 

could see, there was no consultation, just only discussion at that 

meeting. 

Senator HOEVEN. Thank you. President Groen, your thoughts on 

the matter? 

Mr. GROEN. Very similar to what has already been spoken by 

Chairman Hall and Vice Chair Olguin. We have new play potential 

on the Nation. We have a new resource play that is being developed. These new rules could easily set this play back significantly. 

So we much appreciate the comments that were made and we 

strongly feel that there has to be real consultation with the Tribe. 

I cannot officially speak for the Nation itself, but I know they have 

very similar feelings and concerns. 

Senator HOEVEN. Thank you, I agree. I think it is very important 

that there be a consultation. 

Vice Chairman Olguin? 

Mr. OLGUIN. Yes, from Southern Ute’s standpoint, we have been 

in the gas and oil industry business there for several decades, probably as early as the early 1950s. We have over 3,000 wells on 

Southern Ute reservation and probably over 90 percent of those 

have been fracked. 

We are currently at the point where we are looking at the horizontal drilling. We have never had experience that we are aware 

of where we have had issue with the fracking. 

Senator HOEVEN. And this goes back how long, did you say? 

Mr. OLGUIN. Back to the 1950s. 

And along that line, there are many rules, regulations that the 

Tribe itself imposes. An example of that is cementing to the surface 

as far as the seal, versus requiring cement bond logs on every well. 

So definitely the concern with the fracking on the rule and regs, 

there are the costs again. And the rule imposes a definite threat 

to the economy in the southwest there, as well, as we are on the 

46

State line. A lot of the service providers do come from New Mexico. 

So we do serve the Four Corners region from an economic standpoint. 

Plus when we look at the opportunity, even with the 1684 TERA 

opportunity here again, get the Federal system out of the Tribal 

business opportunities and in essence, get them out of the way. 

Senator HOEVEN. I want to thank all of you for coming today and 

for your testimony. I think you really demonstrated not only a lot 

of knowledge but a lot of work on issues that are very important. 

I always go back to, job creation is job one. And this discussion has 

been about energy, but it really goes to job creation, which is so 

important to the future of your respective Tribes. 

So thank you for your good work. Thank you for being here. In 

closing, I want to remind everyone, the witnesses and any other interested parties, that the hearing record will be open for two additional weeks. So additional comments may be submitted. 

Again thanks to all of you for coming today. We truly appreciate 

it. And this hearing is adjourned. 

[Whereupon, at 3:44 p.m., the Committee was adjourned.] 

(47)

APPENDIX

PREPARED STATEMENT OF THE CROW NATION

I. Introduction 

The Crow Nation welcomes this opportunity to provide comments on S. 1684, the 

Indian Tribal Energy Development and Self-Determination Act Amendments of 

2011. The Crow Nation is a sovereign government located in southeastern Montana. 

The Crow Nation occupies a reservation of approximately 2.2 million acres, with 

abundant natural resources including coal, oil, natural gas, and bentonite. We also 

are also actively working to develop hydropower and wind power projects utilizing 

renewable energy resources. The Crow Nation is uniquely positioned to contribute 

to the energy independence of our country. 

We are encouraged to see the Committee working to address a number of the 

issues that impact energy development opportunities in Indian Country. Eliminating obstacles to energy project development and empowering tribes to regulate 

development on their own reservations, along with providing incentives to secure 

and expand Indian energy projects, will build additional capacity to create more jobs 

in the national economy. We must work together to address the barriers that currently limit project development in order to fully realize the potential for energy development that exists in Indian Country, and for the nation. 

We believe that S. 1684 makes significant strides encouraging energy project development in Indian Country. Based on our experiences working with industry partners in the coal, oil, and natural gas extraction industries, we will also suggest additional provisions that would further promote this objective, and that would expand 

the impact of S. 1684 in addressing longstanding disparities in energy project development. 

II. Comments on Existing Provisions in S. 1684

The current provisions of S. 1684 are all pointed in the right direction to eliminate obstacles to Tribal energy development and to facilitate efforts by Indian 

Tribes to control their own energy development. 

In particular, the amendments to the 2005 Act’s Tribal Energy Resource Agreement (TERA) statutes go a long ways toward making it possible for Tribes to take 

advantage of the authorization to approve their own energy development agreements and associated rights-of-way pursuant to an approved TERA. The time limits 

on approval by the Secretary of the Interior help assure that a TERA application 

will not languish for years due to staff shortages, or sheer inertia, within the Bureau of Indian Affairs. Providing Tribes with clear timeframes for TERA application 

processing should only serve to encourage tribal participation. 

The additional criterion for determining whether the tribe has sufficient capacity 

to regulate—based on its operation of programs under the Indian Self-Determination and Education Assistance Act for three consecutive years—should greatly facilitate what could otherwise be a complex and uncertain TERA approval process. The 

Crow Nation, and undoubtedly many other energy Tribes, have long histories of successful administration of P.L. 93–638 contracts and grants. We agree with the author and sponsors of S. 1684 that proficient consistent implementation of 638 contracts do, in fact, demonstrate a Tribe’s capacity to implement a TERA. There is 

no need to put tribes through the time and resources to demonstrate capacity, nor 

to spend limited federal resources evaluating tribal capacity needlessly. 

Further, the amendments providing for certification of ‘‘tribal energy development 

organizations’’ provide an important alternative route for tribes to approve their 

own energy development agreements, when the tribe maintains majority control of 

the organization. The Crow Tribe has formed such an organization, Apsaalooke Energy Company, LLC, under its own limited liability company act. Financial and 

other constraints have thus far severely limited our ability to maintain majority 

control of projects, when all the investment dollars are furnished by the outside developer. However, the potential advantages of operating a project through a tribal 

48

energy development organization, as afforded by the amendments in S. 1684, may 

also help facilitate that goal. 

The funding mechanism included in the S. 1684 amendments assures tribes that 

at least some of their efforts in regulating their own resources will be paid for by 

funds that would other be expended by federal agencies in carrying out their trust 

responsibilities. Whether this approach truly makes tribes whole will depend to a 

large extent on the scope and clarity of the Secretary’s regulations promulgated 

under the Act. In any event, additional funding is needed for tribes to create, expand or improve some tribal regulatory structures before undertaking new responsibilities under a TERA. 

Finally, we appreciate that S. 1684 includes clarifying provisions that expressly 

maintain the United States’ responsibility for losses not resulting from negotiated 

terms. Ultimately, Crow Nation’s ability to apply for a TERA or certification will 

depend on a consensus that the advantages are more than offset by any risks of future uncompensated losses that could threaten the tribes’ long-term financial viability. 

Apart from the TERA amendments, the other existing provisions of S. 1684 are 

also positive steps in eliminating barriers to Indian energy development and enhancing tribal self-determination. The amendments to the Federal Power Act would 

place tribes on an equal footing with states and municipalities in terms of preferences for FERC hydropower licenses. For the Crow Nation, the amendments supplement the exclusive rights to develop and market hydropower on the Yellowtail 

Afterbay Dam recognized in the 2010 Crow Tribe Water Rights Settlement Act (Pub. 

L. 11–291). The Nation is actively pursuing this hydropower development project to 

complement our portfolio of nonrenewable energy development projects. The amendments to provide weatherization assistance funding directly to tribes, rather than 

through the states, also recognizes the status of sovereign tribal governments. 

III. Recommendations for Additional Provisions 

A. BLM Oil and Gas Fees 

In order to address a long-standing concern of the Crow Nation, the Senate bill 

should include language prohibiting collection of any fee by the Secretary of Interior, 

through the Bureau of Land Management, for any application for a permit to drill 

oil and gas wells on Indian land. 

Beginning with the FY 2008 Appropriations Act for the Department of Interior, Congress required the Bureau of Land Management to charge a $4,000 fee to process every Application for Permit to Drill (APD) on the federal lands, which BLM 

has also applied to 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. This $6,500 fee compares to drilling permit fees of less than $100 off the Reservation in the State of Montana. Obviously, this creates a disincentive to explore for 

oil and gas on Indian lands compared to off-reservation State and fee lands. It has 

been a major factor in the suspension of additional natural gas field exploration and 

development on the Crow Reservation. The APD fee is a particular burden for the 

type of shallow (less than 1500’ deep), low-producing gas wells on the Crow Reservation. The cost of completing these types of wells—and the gas production volume—

is quite low, so the APD Fee substantially increases 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 speculative, 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 APDs for another couple of wells, 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 (more than 90 days), the APD fee causes delays of 

up to a year in developing a handful of new wildcat wells, in addition to adding tens 

of thousands of dollars of non-productive costs that limit the Crow Nation’s ability 

to charge taxes and collect royalties on future oil and natural gas production. 

Language eliminating the collection of APD fees on Indian lands will eliminate 

the disparity that currently exists between drilling on Crow lands and drilling on 

adjacent State fee lands. Such a provision will enable expanded and more efficient 

oil and gas development on the Crow Reservation, and conform to our longstanding 

belief that Indian lands should not be treated the same as federal ‘‘public lands.’’ 

This additional language would also be consistent with the amendment in Section 

101 of the Bill that requires the BLM to consult with tribes with respect to well 

spacing decisions. 

49

B. Leases of Restricted Lands 

The Crow Nation seeks authority to lease surface rights for not more than 99 

years by being added to the long list of tribes in 25 USC 415 (a). Having the authority to provide longer term surface leases will allow the Crow Nation to more effectively attract energy partners considering costly, long-term equipment installations, 

such coal-to-liquids plants or other clean coal conversion facilities. 

C. Certainty in 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 for energy in particular, the Indian Coal Production Tax Credit. 

Each of these tax incentives has substantial limitations restricting their usefulness for major Tribal energy development projects. More importantly, however, all 

of these tax incentives are set to expire at the end of 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 coal conversion 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. Permanent extensions and appropriate modifications to these existing tax incentives will facilitate job creation and economic development, particularly 

in energy development, on the Crow Reservation and for all of Indian Country. 

1. Indian Coal Production Tax Credit 

The Crow Nation has leased a portion of its coal reserves for 38 continuous years 

to Westmoreland Resources Inc (WRI). WRI owns and operates the Absaloka Mine, 

a 15,000-acre single pit surface coal mine complex on the northern border of the 

Crow Reservation. The Absaloka Mine was expressly developed to supply Powder 

River Basin coal to Midwestern utilities and has produced over 170 million tons of 

coal to date. WRI annually pays substantial production taxes and coal royalties to 

the Crow Nation: $9.9 million of taxes and $9.1 million in royalties were paid to 

the Crow Nation in 2010. A major portion of the Crow Nation’s non-federal budget, 

approximately two-thirds, comes from Absaloka Mine coal revenues. Additionally, 

WRI employs a 70 percent tribal workforce, with an average annual salary of over 

$62,000, and averages a total annual employment expense of approximately $16 million. The Absaloka Mine is the largest private employer of Crow Tribal members 

on the Crow Reservation, where the unemployment rate exceeds 47 percent. The importance of the Absaloka Mine to the economy of the Crow Reservation cannot be 

overstated. Without question, the Absaloka Mine is critical to the Crow Nation’s financial independence now, over the past 38 years, and well into the future. 

Several factors have contributed to the longevity of the Absaloka Mine and the 

partnership between the Crow Nation and WRI, but a critical element in keeping 

the Absaloka Mine in operation has been the Indian Coal Production Tax Credit 

(ICPTC). 

The 2005 Energy Policy Act authorized the ICPTC 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, from facilities placed in service before January 1, 2009. 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 was an effort to neutralize the impact of 

price differentials created by sulfur dioxide (SO2) emissions allowances, thereby 

keeping Indian coal competitive in the regional market. Without the credit, the 

Absaloka Mine would have lost some of its supply major coal supply contracts and 

would likely have closed in 2005, which would have had a devastating impact on 

the Nation. The ICPTC has worked to keep the Absaloka mine competitive and 

open, as it struggles to compete with much larger Powder River Basin coal mines 

producing federal coal. This tax credit remains critically important because, without 

it, the Absaloka Mine’s economic viability would be in serious jeopardy. Continuation of the ICPTC will also provide an important incentive to help us attract additional investment for future energy projects utilizing our vast coal resources, estimated at 9 billion tons. 

In order to protect existing operations and encourage growth, the ICPTC (a) 

should be made permanent, (b) should be allowed to be used against alternative 

minimum tax, (c) the ‘‘placed in service’’ date should be extended by at least 15 

years (from 2009), and (d) the requirement that the coal be sold to an unrelated perVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00053 Fmt 6601 Sfmt 6621 S:\DOCS\76531.TXT JACK
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son should be deleted to allow and encourage mine-mouth conversion projects and 

facilities owned, in whole or in part, by Indian Nations to participate and benefit 

from the credit. 

The continued operation of the mine has been significantly facilitated by the tax 

benefits made possible by the ICPTC. Without the ICPTC, the Absaloka Mine would 

likely have ceased to operate, thereby ending a major revenue and employment 

source for the Crow Nation. Continuance of the ICPTC is critical to the future of 

the Absaloka Mine and to attract new investment for developing other Crow coal 

resources. 

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 

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 holding vast 

untapped natural resources; 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. 

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 economic 

models and investment decisions. A permanent extension would address this problem, making the incentive attractive to investors for long-term energy projects on 

Indian lands. 

As currently written, the depreciation allowance could be interpreted to exclude 

certain types of 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 and, if adopted, the language we propose would still encourage other forms of economic development in Indian country. 

By providing 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 available Indian resources. 

3. Indian Employment Wage Credit 

The 1993 Act also included an ‘‘Indian employment wage credit’’ with a cap not 

to exceed twenty 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 does not attract private-sector investment in energy projects within Indian country. The provision is too complicated, the wage ceiling is too low for good energy sector jobs, 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 

51

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 be off-reservation. These 

amendments would allow the Indian Employment Wage Credit to more effectively 

fulfill the purpose for which it was originally enacted. 

4. Alternative Fuel Excise Tax Credit 

Several coal-to-liquids (CTL) projects have been announced in the United States. 

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. 

The Crow Nation’s Many Stars CTL Project has not been immune from these 

challenges. Although progress on Many Stars has been suspended while we seek a 

new industry sponsor for the project, the Crow Nation remains committed to development of a major clean coal conversion facility as the best way to monetize our 

very large coal resource base over the long term. Among other potential actions that 

the federal government could take to encourage the development of new technology 

in this area, the extension of the Alternative Fuel Excise Tax Credit is critical. 

The current Alternative Fuel Excise Tax Credit provides for a 50-cent per gallon 

credit. We would propose to extend the expiration of the 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 a CTL project to be fully planned, implemented, 

and operational, investors cannot count on incentives that will expire before the 

plant starts operation. An addition to S. 1684 should address this concern by providing the tax credit for a period of at least 10 years following start-up for those 

projects that utilize Indian coal as defined in the ICPTC provisions. 

IV. Conclusion 

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 aspires to develop its vast coal and other natural resources not 

only for itself, but to assist the United States realize the long-sought goals of achieving energy independence, securing a stable domestic supply of energy, and protecting national security. These goals are consistent with the provisions in S. 1684, 

and can be furthered by the additional provisions we suggest adding to the Bill. 

Thank you for the opportunity to provide these comments and to suggest additional measures to encourage energy development and self-determination in Indian 

Country. 

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 testify on 

S. 1684, the ‘‘Indian Tribal Energy Development and Self-Determination Act 

Amendments of 2011.’’ The Shinnecock Nation supports S. 1684, but asks that existing sections be strengthened and additional provisions be added to increase renewable energy and energy management opportunities for Indian tribes. 

I. Introduction 

The Shinnecock Nation’s Reservation is located within the geographic boundaries 

of Suffolk County, New York—on Long Island. The Nation has maintained its existence 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. 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. 

Our Nation is facing impacts from climate change, growing energy costs, and the 

need to provide jobs for tribal members. In order to provide long-term economic opportunities for our people, 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 exploration of a potential partnership with Stony Brook University, to develop and implement renewable energy projects that will benefit both the Nation and the surVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00055 Fmt 6601 Sfmt 6621 S:\DOCS\76531.TXT JACK
52

rounding communities. We also plan to utilize federal programs and grants to examine and support options for energy self-sufficiency, and economic development, including job training for tribal members, as well as energy efficiency programs. 

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 and limit carbon emissions 

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. 

As an example, he Nation is currently exploring options for a potential partnership with Stony Brook University’s Southampton Campus to develop clean renewable energy sources such as a hydrokinetic project. This potential project would 

allow a research facility to be put in place off the coast of the Nation’s Reservation. 

Tribal members and the University would 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 the Shinnecock Nation, but for all coastal communities. 

II. Specific Comments on S. 1684

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 some important changes to existing laws, but much more is needed. In addition to strengthening what is already in S. 1684, the Nation requests that the Committee include 

additional measures needed to promote renewable energy development and overcome barriers to Indian energy development. 

A. Indian Energy Loan Guarantees 

Section 101 of S. 1684 would require the Secretary of Energy to develop regulations for an Indian Energy Loan Guarantee Program that was originally authorized 

in 2005 but which was never implemented. We believe that requiring the Secretary 

to develop regulations would be helpful, but more is needed. The law also needs to 

be changed to require the Secretary of Energy to provide these loan guarantees so 

that Indian tribes can benefit from loan guarantees the same as other energy developers. Changing this law would help tribes overcome one of the major obstacles to 

Indian energy development—project financing. 

Under current law, the Secretary ‘‘may’’ provide loan guarantees to Indian tribes. 

This program needs to be made mandatory so that Indian tribes can received the 

same loan guarantees currently provided to other energy developers through the Energy Innovations Loan Guarantee Program. The Energy Innovations Loan Guarantee Program was authorized by Title XVII of the Energy Policy Act of 2005. The 

Secretary was required to implement the program under Title XVII and the law 

should be changed to require the Secretary to implement the program under Title 

V. 

Indian energy projects are innovative projects that are providing energy to generally underserved communities. These projects would bring economic and energy 

security to our communities while advancing national interests in increased domestic energy production. The Shinnecock Nation’s energy plans to develop 

hydrokinetic, distributed energy and community transmission projects deserve the 

same support as the support provided by the Title XVII program. 

Although the DOE stated that its Title XVII program is available to Indian tribes, 

the lack of tribal applicants and loan guarantees successfully awarded to tribes 

53

demonstrates that the Title XVII program is not a tribal program. The Title V Indian Energy Loan Guarantee program is needed to address issues specific to Indian 

Country. First, the loan guarantees need to be marketed to tribes. Second, tribal applications should not have to compete with national energy developers who have 

decades of experience in the energy industry. And, third, the loan guarantees should 

be provided to tribes on terms that will work in Indian Country. 

B. Tribal Energy Resource Agreements 

Section 103 of S. 1684 would make changes to the existing Tribal Energy Resource Agreement (TERA) to increase tribal interest in the program. In general, the 

TERA program provides a process for Indian tribes to apply and potentially gain 

authority to approve leases, business agreements, and rights-of-way for energy development or transmission on their lands without Secretarial review. The changes 

proposed in S. 1684 would make the application process more certain and provide 

an alternative route for a tribe to obtain limited TERA authority. 

While these are useful changes, the benefits of TERA authority seem limited to 

those tribes who are likely to be entering into many leases, business agreements 

and rights-of-way. It is not clear to us that tribes who may only enter into a handful 

of energy agreements would gain any benefit for the expense of going through the 

TERA application process. We propose additional changes that would benefit more 

tribes interested in energy development. 

As you know, TERA was enacted to promote tribal self-determination in the development and management of Indian energy resources. TERA does this by focusing 

on the lease and agreement approval process. This is only half of the problem. In 

addition to the authority to approve our own energy agreements, tribes need the exclusive authority to tax and exercise jurisdiction over energy projects. Without these 

two important elements of governmental authority, tribes are being asked to take 

over more governmental responsibilities with one hand tied behind our back. 

To really provide Indian energy self-determination and encourage Indian energy 

development we need Congress to affirm that Indian tribes have the same authorities that other governments use to support energy and economic development. First, 

we need to clarify that Indian tribes retain their inherent sovereign authority and 

jurisdiction over any energy 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. 

Second, the law should 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 even though these 

other governments may not provide services to the tribal community. 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. 

Third, even more streamlined opportunities should be available for tribes to gain 

control over energy permitting within their jurisdictions. For example, similar to the 

Clean Water Act and Clean Air Act treatment-as-a-state programs, and energy permitting program could be developed to allow either DOE or DOI to certify tribal energy programs that could then issue tribal approvals for projects within the jurisdiction of the tribe. Another option would be a list of projects or a checklist of project 

components where if a project description meets the majority of the provisions in 

the checklist the project would be considered ministerial or qualify for a categorical 

exemption from review under the National Environmental Policy Act. 

C. Hydroelectric Preliminary Permits and Licenses 

We support Section 201 of S. 1684 which would provide us with the same preference that states and municipalities have over private applicants for hydroelectric 

preliminary permits or licenses. As with taxing and jurisdictional authority described above, tribal governments should have the same preferences as state and 

municipal governments in the development of our water supplies. However, subsection 201(b) should be deleted from S. 1684. This subsection is intended to protect 

previously issued preliminary permits and original licenses that had been accepted 

for filing. This subsection unnecessarily limits the tribal preference and restricts 

competition. 

Subsection 201(b) is not needed because existing law, 16 U.S.C. § 800(a), already 

provides protection for previously issued preliminary permits. Section 800(a) proVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00057 Fmt 6601 Sfmt 6621 S:\DOCS\76531.TXT JACK
54

vides that governments only receive this preference ‘‘where no preliminary permit 

has been issued.’’ Consequently, there is no reason to include an extra limitation 

on tribal applications for preliminary permits. 

Subsection 201(b) also restricts competition for licenses contrary to prior Congressional intent. In Section 16 U.S.C. § 808, Congress recognizes and provides a process 

for competing license applications. Subsection 201(b) should not override this existing law and policy. In Section 808, Congress encourages competition for licenses and 

provides standards to ensure the best development of public waterways. The proposed changes in subsection 201(b) would limit competition and result in water 

projects that are not the best available for tribal and public waterways. 

D. Weatherization Program 

We support the changes proposed in Section 203 of S. 1684, but the changes do 

not go far enough to make weatherization programs work in Indian Country. Section 203 would provide tribes with the ability to apply for direct access to weatherization funding. This authority should have been provided long ago. Under current 

law, Indian tribes are supposed to receive federal weatherization funding through 

state programs funded by DOE. Not only is this a violation of the federal government’s government-to-government relationship with Indian tribes, but distribution 

through state programs also severely limits the amount of funding tribes receive. 

Instead, DOE should be required to establish a tribal set-aside and develop a 

weatherization program that will work in Indian Country. A tribal set-aside is needed to ensure that a portion of the approximately $50 million per year that is devoted 

to weatherization assistance gets to Indian tribes and their members. The weatherization program is intended for low-income households and should go to those who 

need it most. On Indian reservations poverty rates are 2 to 3 times higher than national averages. 

In addition, Section 203 should include changes that will allow tribes to put 

weatherization funding to work. Without standards and training that are appropriate to Indian country, many Indian tribes will still not be able to utilize weatherization funds. Training is needed for energy auditors in Indian Country and weatherization standards need to be adjusted to reflect the status of housing in much of 

Indian Country. For more than three decades, DOE has overlooked weatherization 

needs of Indian tribes and the program should be adjusted to reflect the unique 

challenges tribes face. 

III. Additional Measures Needed 

The Shinnecock Nation also asks that additional provisions be added to S. 1684 

to increase renewable energy and energy management opportunities for Indian 

tribes. 

A. Land Into Trust 

We believe the need for energy security and a sound domestic energy supply justifies a clean Carcieri fix as well as an expedited fee to trust process for tribal energy 

projects. As a newly acknowledged tribe, the Shinnecock Nation needs support for 

the land into trust process for many of our activities including energy development. 

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. 

For example, the Nation 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. 

This potential project is also 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 project will provide an opportunity for the Nation to work cooperative 

with the local governments for the benefit of both the Nation and the Long Island 

community generally. 

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 seek passage of a clean Carcieri fix and develop legislation that 

would require the DOI to expedite fee to trust applications for tribal energy projects. 

55

B. DOE Support for Hydrokinetic Projects 

Committee member Senator Murkowski has introduced an important 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 S. 1684. 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. 

C. Distributed Energy and Community Transmission 

The Nation asks that the Committee include provisions in S. 1684 that would support distributed energy and community transmission projects in Indian Country. In 

the Indian Energy Parity Act of 2010, former Senator Dorgan included a demonstration project that would provide just this kind of support. Senator Dorgan’s provision 

directed the Secretary of Energy to conduct no fewer than 10 distributed energy 

demonstration projects to increase the energy resources available to Indian and 

Alaska Native homes, communities, and government buildings. Priority is given to 

projects that reduce or stabilize energy costs among other things. 

Support for distributed energy and community transmission would help the Nation achieve energy independence and increase our energy security. While we have 

access to the traditional energy grid, supplies are geographically constrained. This 

is not unlike other tribes who are not connected to the traditional energy grid or 

have limited access. Currently, there are no existing federal programs that assist 

tribes in this situation. 

D. Tribal Authority Over Energy Approval Processes 

The Nation asks that Committee consider exempting energy projects in Indian 

country from some DOI approvals, or allowing tribes to take over certain approval 

processes. While the 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. 

E. Inclusion of Tribes in Offshore Energy Projects 

The Nation aspires to make President Barack Obama’s Executive Order No. 

13547, ‘‘Stewardship of the Ocean, Our Coasts and the Great Lakes’’ a reality. We 

plan to examine our opportunities for development of ocean energy technology, 

which will 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. 

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 asks that the Committee help to make sure that tribes are included 

in programs and legislation supporting offshore energy projects. 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. 

F. Renewable Energy Tax Credits 

The Nation and many other tribes need to be able to take advantage of renewable 

energy tax credits. These tax credits are essential to financing renewable energy 

projects and lowering the cost of the energy produced. Tribes need to be able to 

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monetize these tax credits or share them with a private energy partner. Without 

the ability to utilize renewable energy tax credits tribes will continue to be priced 

out of the renewable energy market. 

G. Energy Efficiency 

The Nation asks that the Committee include provisions in S. 1684 that would 

allow tribes to participate in energy efficiency programs. Despite a longstanding 

state program, there are no ongoing programs to support tribal energy efficiency efforts. DOE should allocate not less than 5 percent of existing state energy efficiency 

funding to establish a grant program for Indian tribes interested in conducting energy efficiency activities for their lands and buildings. 

S. 1684 could include a tribal energy efficiency program modeled after the successful Energy Efficiency Block Grant (EEBG) program. The EEBG program was very 

successful in providing funding to tribes to manage their energy resources, but it 

was only funded one time—under the American Reinvestment and Recovery Act of 

2009. To ensure an ongoing source of funding for tribal energy efficiency efforts, 

tribes should be provided a portion of the funding for state energy efficiency efforts. 

IV. Conclusion 

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 Shinnecock Nation. 

PREPARED STATEMENT OF ROBERT ODAWI PORTER, PRESIDENT, SENECA NATION OF

INDIANS

Dear Senator Akaka, Ranking Member Barrasso and Members of the Committee: 

On behalf of the Seneca Nation of Indians, thank you for the opportunity to add 

the voice of the Seneca Nation to the important topic of Indian Nation energy and 

economic development. The Seneca Nation has had the pleasure of addressing you 

and the Committee over the years and very much enjoys the strong working relationship with you and your staff. The Seneca Nation’s is a leader in the development 

of economic opportunities for its citizens and the surrounding region of Western 

New York and is eager to protect and develop its renewable resources as part of 

its economic diversification. 

The Seneca Nation submits this letter as comments for the record to the abovereferenced legislative hearing on S. 1684, specifically concerning the necessity for 

stronger Federal Power Act amendments that clarify Indian Nation Self-Determination. To increase its economic diversification, the Seneca Nation is a competitor in 

the hydropower re-licensing proceeding to operate the Seneca Pumped Storage 

Project at Kinzua Dam, which uses Seneca Nation lands and waters; and the Nation 

has filed a preliminary permit to add a conventional hydropower project at Kinzua 

Dam to increase hydroelectric capacity from the water resource; also, the Seneca 

Nation is a stakeholder in the incumbent’s attempt to continue its operation of the 

Seneca Pumped Storage Project. The Nation’s role as a stakeholder and competitor 

for hydropower has provided the Nation with valuable experience concerning the 

failures of the Federal Power Act to support Indian Nation Self-Determination. 

The ‘‘Seneca Pumped Storage Project’’ at Kinzua Dam requires the use of land 

and water that belongs to the Seneca Nation. However, the definition of ‘‘tribal 

lands embraced within Indian reservations’’ in the Federal Power Act has led to an 

inaccurate interpretation of ‘‘Indian reservations’’ by the Federal Energy Regulatory 

Commission. FERC has ordered that only lands held in trust status may be recognized as ‘‘tribal lands embraced within Indian reservations.’’ This is contrary to Indian Country Self-Determination and the body of federal Indian law defining ‘‘Indian Country.’’ As one of very few provisions in the Federal Power Act meant to protect Indian Country, it is important for Congress to clearly define the term ‘‘tribal 

lands embraced within Indian reservations’’ as it is understood in the body of federal Indian law. 

In addition, in re-licensing proceedings for projects that use Indian nation lands 

and waters, Indian nations receive no preference. The proposed Section 201 of S. 

1684 addresses Indian nation preference for original licensing and preliminary permits, and does not provide the same preference for re-licensing proceedings. The 

Seneca Nation and many other Indian Nations such as the Confederated Tribes of 

Warm Springs, the Crow Nation, and the Coeur d’Alene Tribe, have been historically burdened by private development of hydropower utilizing Indian lands and waters. For the Seneca Nation over the last 40 years, the Seneca Pumped Storage 

Project has eroded its lands, affected water quality and the ecosystem, disturbed 

cultural resources—and has done so without compensation or mitigation. The SenVerDate 0ct 09 2002 13:49 Dec 11, 2012 Jkt 076531 PO 00000 Frm 00060 Fmt 6601 Sfmt 6621 S:\DOCS\76531.TXT JACK
57

eca Nation should be provided a preference in re-licensing where the project uses 

Seneca lands and waters in order to support Seneca Self-Determination, to regain 

control and management of our treaty protected resources, and for Seneca Nation 

economic development that will benefit local and regional economy. 

When the Seneca Pumped Storage Project license was granted in 1965, the use 

of the Nation’s lands and waters were ignored, environmental concerns to Seneca 

resources were not considered, and annual charges for the use of our lands were 

not paid. Minor amendments to the Federal Power Act today could provide protection to Indian lands and waters and clarify the meaning and use of ‘‘tribal lands’’ 

in the Seneca Nation’s re-licensing efforts, as well as future development and participation in hydropower licensing by other Indian nations. 

To assist in your further review of the Federal Power Act, the Seneca Nation will 

be submitting proposed amendments to the Federal Power Act to your staff and 

counsel. These amendments highlight the need to ensure the goal of renewable energy development in Indian Country so that Indian Nation governments are no 

longer excluded in hydropower licensing, are allowed at least an equal playing field 

for Indian nations whose lands and waters are used for hydropower purposes so that 

they receive annual fees to which they are entitled, and to support Indian Nation 

development of hydropower as part of its economic and energy long term strategies. 

The National Congress of American Indians passed a Resolution, which called on 

Congress to explore the impact of dams in Indian Country, and to ‘‘amend the Federal Power Act to fully incorporate Indian Nations into the hydropower licensing 

and re-licensing processes wherever Indian Nation lands, former lands waters and 

on and off-reservation treaty rights are affected by dams and associated projects.’’ 

A copy of this Resolution, ABQ–10–035 passed in November 2010, is attached hereto. 

The strength of the Federal Power Act to Indian Country should be considered 

inS. 1684 as a potentially powerful way to protect (or usurp) Indian Nation sovereignty and energy development of our land and water resources, and can provide 

further opportunities (or hindrances) in the development of Indian Country renewable resources. The current re-licensing of the Seneca Pumped Storage Project allows the Nation to revisit the loss of land and use of our treaty protected lands and 

waters for hydropower purposes. The Seneca Nation’s entry into the re-licensing of 

the Seneca Pumped Storage Project and its preliminary permit for conventional hydropower at Kinzua Dam will further redefine, and hopefully strengthen, the Seneca 

Nation’s treaty relationship with the U.S. and its executive agencies, including the 

U.S. Army Corps of Engineers, the Department of the Interior, and the Forest Service. Most importantly the potential to obtain the license will grow the Seneca Nation’s economic independence and mutual goals for economic sustainability. 

The Seneca Nation would be grateful for the opportunity to discuss proposed 

amendments to the Federal Power Act to include in S. 1684 that will benefit Indian 

Country, at your convenience. The Nation looks eagerly toward the Committee’s 

progress on these issues. 

Attachment 

THE NATIONAL CONGRESS OF AMERICAN INDIANS—RESOLUTION #ABQ–10–035

TITLE: CALL ON CONGRESS AND OBAMA ADMINISTRATION TO REDRESS EFFECTS OF

FEDERAL DAMS AND WATER PROJECTS ON INDIAN LANDS AND WATERS AND

INCORPORATE SOVEREIGNTY AND SELF-DETERMINATION INTO FUTURE USE

WHEREAS, we, the members of the National Congress of American Indians of 

the United States, invoking the divine blessing of the Creator upon our efforts and 

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 laws and 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 of the Indian people, do 

hereby establish and submit the following resolution; and

WHEREAS, the National Congress of American Indians (NCAI) was established 

in 1944 and is the oldest and largest national organization of American Indian and 

Alaska Native tribal governments; and

WHEREAS, the Federal Government has a long history of building dams and related water projects that impact Indian Nation waterways and lands for various national flood control, navigation, water supply, pollution abatement, economic development and energy production efforts; and

58

WHEREAS, these dams and their associated projects have had dramatic and devastating effects on our Indian Nations, communities, lands, waterways, traditional 

ways, and resources and have resulted in legacies of removal, loss and trauma from 

which we have not recovered; and

WHEREAS, the continued operation of these dams and their associated projects 

creates disproportionate hardships for Indian Nations, including continued dislocation, loss of access to Indian Nation lands, poor water quality, increased trespassing 

and theft or damage to cultural resources, artificial sediment deposits that impact 

water infrastructure and contain unknown contaminants, harm to waterways and 

fisheries, loss of traditional medicines and plants, damage to riparian habitat and 

wildlife, and increased recreational traffic and impacts; and

WHEREAS, much of America benefits from the continued misuse of our Indian 

Nation lands and waters for flood control, water supply, pollution abatement, electricity and income generated therefrom, while our own communities enjoy few of 

these benefits, have had no control over the use of our lands and waters, and often 

have no voice in the process of determining continued use; and

WHEREAS, Indian Nation governments and communities have not been acknowledged as the owners and caretakers of their lands and waters, have not been 

fully compensated for their past losses nor ongoing impacts, nor fully consulted as 

impacted sovereigns on the current operations and effects of dams and their associated projects.

NOW THEREFORE BE IT RESOLVED, that NCAI calls on Congress to create 

a nine member Commission with a majority of tribal governmental representatives 

impacted by dams, to investigate and report on (1) the failure of Congress to fairly 

compensate Indian Nations for losses caused by dams and their associated projects, 

which Indian Nations have borne disproportionate burdens compared to the benefits 

received by the American people; (2) how Indian Nation sovereignty and self-determination can be supported so that Indian Nations maintain control of the use and 

enjoyment of their own lands and waters; and (3) how to compensate Indian Nations 

for past harms and future uses of Indian Nation lands and waters for dams and 

associated projects; and

BE IT FURTHER RESOLVED, that NCAI calls on Congress to respect Indian 

Nation sovereignty and self-determination and amend the Federal Power Act to 

fully incorporate Indian Nations into the hydropower licensing and re-licensing processes wherever Indian Nation lands, former lands waters and on and off-reservation 

treaty rights are affected by dams and associated projects; and

BE IT FURTHER RESOLVED, that NCAI calls on President Obama to issue 

an Executive Order calling on all federal entities, which have any role in administering dams, associated projects, or nearby lands (including but not limited to the 

Federal Energy Regulatory Commission, the U.S. Army Corps of Engineers, the U.S. 

Bureau of Reclamation, the Department of the Interior, the National Park Service, 

the U.S. Forest Service, the U.S. Fish and Wildlife Service, and the National Marine 

Fisheries Service) to acknowledge and support Indian Nation sovereignty and selfdetermination in the control and management over their own lands and waters, and 

to fully consult and cooperate with Indian Nation governments, whose lands, waters 

and resources are affected by dams and associated projects, and to read existing 

statutes and interpret existing authorities in favor of Indian Nation rights, sovereignty, and self-determination; and

BE IT FURTHER RESOLVED, that NCAI calls on President Obama to include 

in his Executive Order a requirement of a joint consultation on issues impacting affected tribes including the designation of a lead agency; and

BE IT FINALLY RESOLVED, that this resolution shall be the policy of NCAI 

until it is withdrawn or modified by subsequent resolution.

CERTIFICATION

The foregoing resolution was adopted by the General Assembly at the 2010 Annual Convention of the National Congress of American Indians, held at the Albuquerque Convention Center in Albuquerque, NM on November 14–19, 2010, with a 

quorum present. 

PREPARED STATEMENT OF THE INTERTRIBAL TIMBER COUNCIL

The Executive Board of the Intertribal Timber Council (ITC) supports S. 1684, the 

Indian Tribal Energy Development and Self-Determination Act Amendments of 

2011, and requests that this statement be included in the Committee’s April 19, 

2012 hearing record on the bill. 

59

The ITC is a thirty-six year old association of sixty Indian tribes and Alaska Native organizations that collectively manage more than 90 percent of the 18 million 

acres of forest land held in trust by the Bureau of Indian Affairs. The ITC is dedicated to pursuing the best management and protection of tribal forests and other 

natural resources. We actively participated in the development of the National Indian Forest Resources Management Act (PL 101–630, 1990) and the Tribal Forest 

Protection Act (PL 108–278, 2004). It is our pleasure to now support S. 1684. 

We wish to express our strong support for Section 202 which would establish Tribal Biomass Demonstration Projects. Such projects are sorely needed to improve forest health and reduce threats to lands held in trust for Indians. Tribal inquiries into 

biomass projects on federal public forests have often been thwarted by lack of federal direction, administrative timidity, and cripplingly slow decisionmaking. The 

demonstration projects will help overcome these obstacles by providing clear direction to the Forest Service and BLM and assuring that eligible projects are promptly 

selected and carried out. 

Tribal forest lands frequently adjoin or are in close proximity to federal public forest land, much of which is in need of forest health treatments that can be carried 

out by tribal forestry operations. Biomass projects could help reduce threats to nearby Indian trust forest resources from fire, disease and insect infestation. Protection 

of these trust lands and resources is the basic premise of the Tribal Forest Protection Act. In addition, improvement of forest health and ecological functions are vital 

to maintain watersheds and fish and wildlife habitat on lands that may be subject 

to federally-reserved tribal rights. 

Tribes are particularly well situated to undertake biomass projects. Some forested 

tribes have their own forest products processing facilities and many provide timber 

that supports other forest products milling facilities. Such infrastructure (roads, 

site, electricity, water, harvesting, transportation, and a trained work force) is essential for development of facilities that can use woody biomass for biofuels or renewable energy to contribute to national goals of energy independence and security. 

Tribes, as America’s first stewards, are committed to long-term, sustainable management of forests and other natural resources and have skilled and experienced 

professional staffs and field operations. The biomass demonstration project will help 

provide jobs, revenues, heat, fuel, or electricity for tribal and other rural communities. Some financial opportunities available to tribal governments, such as tax 

credits or bond financing, could also prove helpful in securing financing to develop 

and operate biomass facilities. 

The ITC appreciates the thought and effort in developing Section 202. Among particular elements we note in the bill are—

• A minimum of four projects a year for the Project’s five year authorization 

should provide an adequate opportunity for interested tribes to develop and submit applications to participate in the program. The eligibility criteria allow the 

Secretary, working with affected tribes and intertribal organizations, to flexibly 

tailor those requirements. The selection elements, drawn from the Tribal Forest 

Protection Act, include the Secretary’s according weight and deference, pursuant that Act’s Section 2(e)(2)(A), to the special and unique attributes of tribal 

governments, such as the government-to-government relationship between tribal governments and the U.S. and the sovereign authorities of tribal governments.

• The budget neutrality of the Project, including the specific limitations on direct 

service contracts and use of merchantable logs already identified for commercial 

sale to assure that neutrality.

• The prompt promulgation required for the Program.

• The authority for the Secretary to extend, as practicable, the tribe’s forest management plan or Integrated Resource Management Plan to the biomass project. 

Such plans are already required by statute to be sustainable, and must have 

been approved by the Secretary to be in effect, and their potential application 

to the biomass project would substantially facilitate the project’s implementation.

• The twenty-years-plus-ten year term for contracts (presuming that stewardship 

contracting authority will be extended) or agreements entered to carry out the 

Act. The potential to secure a thirty-year feedstock supply would provide sorelyneeded support for financing biomass plants.

Lastly, the ITC recommends that the term ‘‘biomass’’ be defined in S. 1684. ‘‘Biomass’’ has been defined and referenced extensively, but inconsistently, in various 

60

1 Bracmort, K. and R.W. Gorte. 2012. Biomass; Comparison of Definitions in Legislation 

Through the 111th Congress. Congressional Research Service Report R40529. March 7, 2012. 

legislation and administrative policies. 1 To eliminate ambiguity, we recommend 

that ‘‘biomass’’ be defined the in the same manner as ‘‘renewable biomass’’ in the 

2008 Farm Bill (PL 110–246). For Biomass projects to be successful, it is important 

for all potential feedstock to be available to provide diversity and stability of supply 

and to minimize the administrative costs of chain of custody requirements to qualify 

for classification as renewable fuels or renewable energy. 

We look forward to the Senate’s consideration of S. 1684 this year, and hope the 

bill will promptly move through Congress. 

PREPARED STATEMENT OF THE OFFICE OF HAWAIIAN AFFAIRS (OHA) 

Aloha e Committee Members. The Office of Hawaiian Affairs (OHA) thanks you 

for taking the time to conduct a legislative hearing on April 19, 2012 on S. 1684, 

the Indian Tribal Energy Development and Self-Determination Act Amendments of 

2011. OHA is a unique, quasi-independent state agency established by the Hawai’i 

State Constitution and state statutes to better the conditions of Native Hawaiians 

(Hawai’i’s indigenous people). Guided by nine trustees elected by the voters of Hawai’i, OHA advances the interests of Native Hawaiians and serves as a fiduciary 

for Native Hawaiian public trust funds and other resources. One of the ten strategic 

results identified in OHA’s strategic plan is to achieve pae ’a ̄ina sustainability—i.e., 

to increase the amount of Hawaiian land that is managed in a sustainable and balanced manner to create economic value and to preserve cultural and natural resources and historic properties. Accordingly, OHA offers the following testimony in 

support of the Indian Tribal Energy Development and Self-Determination Act 

Amendments of 2011. 

Native Hawaiians and Energy 

Limited resources required Native Hawaiians to develop careful land and resource 

management practices to support individuals and society, as well as to maximize 

available resources. With that in mind, OHA carefully monitors existing and proposed energy projects. 

As Hawai’i moves towards a renewable energy future, energy is playing an increasingly important role in sustaining a thriving, self-determining Native Hawaiian community. Namely, the pono (balanced and proper) use of wind, solar, geothermal, hydro, bio-fuel, and other renewable energy sources that are abundantly 

found in Hawai’i leads to increased employment, education, preservation of cultural 

and natural resources, and self-sufficiency, all of which are of critical importance to 

the self-determination of the Native Hawaiian community. 

The Indian Tribal Energy Development and Self-Determination Act Amendments of 2011

The Indian Tribal Energy Development and Self-Determination Act Amendments 

would provide Indian tribes with technical assistance in planning energy resource 

development programs; make intertribal organizations eligible for Department of 

Energy program grants; make tribal energy development organizations eligible for 

Department of Energy development loan guarantees; allow for leases and business 

agreements that pool, unitize, or communitize tribal energy resources with other energy resources; and require energy-related tribal leases, business agreements, and 

grants of a right-of-way that are made without secretarial approval to meet certain 

standards. 

OHA supports increased opportunities for Native communities to exercise their 

authority in the area of resource management and, specifically, in the area of energy 

resource development. Accordingly, OHA supports S. 1684, The Indian Tribal Energy Development and Self-Determination Act Amendments of 2011. Thank you for 

the opportunity to comment.

Æ