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99–901 PDF 2016

S. HRG. 114–240 

THE GAO REPORT ON INDIAN ENERGY 

DEVELOPMENT: POOR MANAGEMENT BY BIA 

HAS HINDERED DEVELOPMENT ON INDIAN 

LANDS 

HEARING 

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

OCTOBER 21, 2015 

Printed for the use of the Committee on Indian Affairs 

( 

(II) 

COMMITTEE ON INDIAN AFFAIRS 

JOHN BARRASSO, Wyoming, Chairman 

JON TESTER, Montana, Vice Chairman 

JOHN MCCAIN, Arizona 

LISA MURKOWSKI, Alaska 

JOHN HOEVEN, North Dakota 

JAMES LANKFORD, Oklahoma 

STEVE DAINES, Montana 

MIKE CRAPO, Idaho 

JERRY MORAN, Kansas 

MARIA CANTWELL, Washington 

TOM UDALL, New Mexico 

AL FRANKEN, Minnesota 

BRIAN SCHATZ, Hawaii 

HEIDI HEITKAMP, North Dakota 

T. MICHAEL ANDREWS, Majority Staff Director and Chief Counsel 

ANTHONY WALTERS, Minority Staff Director and Chief Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on October 21, 2015 .......................................................................... 1 

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

Statement of Senator Daines .................................................................................. 5 

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

Statement of Senator Heitkamp ............................................................................. 53 

Statement of Senator Hoeven ................................................................................. 4 

Statement of Senator Lankford .............................................................................. 55 

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

WITNESSES

Cuch, Cameron J., Vice President of Government Affairs, Crescent Point 

Energy U.S. Corporation ..................................................................................... 32 

Prepared statement .......................................................................................... 34 

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

Tribe ...................................................................................................................... 18 

Prepared statement .......................................................................................... 20 

Roberts, Lawrence S., Principal Deputy Assistant Secretary, Indian Affairs, 

U.S. Department of the Interior ......................................................................... 6 

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

Rusco, Frank, Director, Natural Resources and Environment, U.S. Government Accountability Office .................................................................................. 12 

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

Stafne, Hon. Grant, Councilman, Fort Peck Assiniboine and Sioux Tribes ....... 26 

Prepared statement .......................................................................................... 27 

APPENDIX

Chapoose, Shaun, Chairman, Ute Indian Tribe of the Uintah and Ouray 

Reservation Business Committee, prepared statement .................................... 71 

Fox, Hon. Mark, Chairman, Mandan Hidatsa and Arikara Nation, Fort 

Berthold Reservation, prepared statement ........................................................ 63 

Response to written questions submitted by Hon. Steve Daines to Lawrence 

S. Roberts .............................................................................................................. 76 

(1) 

THE GAO REPORT ON INDIAN ENERGY 

DEVELOPMENT: POOR MANAGEMENT BY 

BIA HAS HINDERED DEVELOPMENT ON 

INDIAN LANDS 

WEDNESDAY, OCTOBER 21, 2015 

U.S. SENATE, 

COMMITTEE ON INDIAN AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:30 p.m. in room 

628, Dirksen Senate Office Building, Hon. John Barrasso, 

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM WYOMING 

The CHAIRMAN. I will ask the witnesses to please head to the 

table in order to testify and we will move along with the hearing. 

As the witnesses are taking their seats, I am going to call to 

order this hearing. We will examine today the Government Accountability Office June of 2015 report on Indian Energy Development. I requested this report on January 4th, 2014, for several reasons. Energy development holds much promise for Indian communities. According to the Department of the Interior, in 2014, revenues for tribal energy development exceeded $1.1 billion dollars. 

That figure should be much higher. 

Over the years, this Committee has received concerns from Indian tribes and energy developers regarding the complexity of Federal regulation and decision-making relating to Indian lands. These 

issues either drive up costs and drive away developers or delay the 

payment of royalties to Indian land owners. In fact, the Government Accountability Office report noted that one private energy developer reported that an oil and gas well developing Indian resource generally costs almost 65 percent more for regulatory compliance than a similar well for private resources. 

In another instance highlighted in the report, an eight-year delay 

by the Bureau of Indian Affairs in reviewing tribal documents 

caused the tribe an estimate $95 million in lost permitting fees, 

severance tax and royalty revenues. To improve energy development on Indian lands, we needed to get to the bottom of this complexity and the delays. 

This report confirms several issues this Committee has been 

working to address in a bipartisan way. On January 21st, 2015, the 

Vice Chairman, Senator Tester, and I introduced S. 209, the Indian 

2 

Tribal Energy Development and Self-Determination Act Amendments of 2015. This bill would reduce much of the bureaucracy and 

delays associated with the Secretarial review of leases, business 

agreements and rights-of-way for Indian energy development. 

The Committee unanimously passed this bill and it is being 

hotlined for Senate consideration. Congress needs to pass this bill 

this year so the tribes may begin energy development without 

these continued delays. 

Other management and interagency challenges were highlighted 

in the report. I look forward to hearing from the Department of Interior on the progress made in addressing these issues. 

I just want to remind the Department of the Interior that when 

we send out invitations to testify, they are non-transferable. There 

is an expectation that when we confirm appointees to these bureaus that these appointees will be responsive to the Committee 

and come back to testify upon request. 

Mr. Roberts, I know you are the messenger for the Interior Department today. Please pass on my remarks to the Secretary. 

The GAO report noted the overlap of agency responsibilities in 

Indian energy development. It stands to reason that officials with 

overlapping responsibility would be responsive to this Committee. 

With that, I would like to welcome the witnesses and I look forward to the testimony. 

Senator Tester, any opening statement? 

STATEMENT OF HON. JON TESTER, 

U.S. SENATOR FROM MONTANA 

Senator TESTER. Yes, thank you, Mr. Chairman, and thank you 

for holding this hearing on energy development in Indian Country 

today. We have had similar hearings in the past to discuss Indian 

energy bills, the delays in energy development on tribal lands. This 

hearing is in that same vein. I think it is warranted, as we discussed. The GAO’s recent report detailing concerns with Indian energy development. 

Quite frankly, it is the same conversation we have had on these 

issues for quite a while. I remember when Senator Dorgan was sitting in your chair, and it was earlier on in his chairmanship. We 

had a visit about dysfunction in energy development in Indian 

Country. The Department of Interior has not been good at enabling 

tribal energy development. And the GAO report echoes what tribes 

have been saying for years. 

There are staffing issues. The BIA doesn’t have enough staff to 

process all the leases. The staff it does have isn’t always qualified 

to work specifically on oil and gas or renewable energy project 

leases. Staffing issues probably start with funding. You can’t always hire the right staff if the agencies don’t have the funding that 

they need to hire those staff. 

But it is also a process issue. Tribes and the GAO report talk 

about delays due to the lack of proper information systems and 

multiple agencies being involved. I just don’t understand why this 

is this difficult. We have trust responsibilities to help tribes develop their resources. I would think that responsibility would mean 

tribes should be getting in on the ground floor any time there is 

a boom in the industry or new markets open up. 

3 

But that doesn’t happen. Tribes are always several steps behind 

and we need to get this done in a more prompt way. 

I remember Senator Dorgan, when the Bakken was first being 

developed, talking about oil wells everywhere except in Indian 

Country. That is unacceptable. I think the primary solution is to 

get as much of the decision-making as possible in the hands of 

tribes. They know their resources and their communities’ priorities. 

Self-governance has proven to be an effective policy for the last 40 

years. 

That is why I co-sponsored the Indian Energy bill with the 

Chairman to help fix the Tribal Energy Resource Agreement process. TERAs would give tribes the authority to develop their own energy resources without further involvement from the DOI. 

But since the passage of the 2005 Tribal Energy Bill that created 

TERAs, no tribe has entered into one. There are a number of reasons for that. I think it is a good idea to fix the TERA process, but 

I am more than happy to go straight to the HEARTH Act-like 

model for tribal energy if that is what we need to do. That model 

has worked for surface leasing, and I think tribes would make it 

work for minerals. 

I would like to hear what the witnesses today think about that. 

I am fine with doing both, fixing the TERA process and utilizing 

the HEARTH Act model as an alternative. If we can only pass a 

tribal energy bill once in 10 or 15 years, I want to do as much as 

we can to improve energy development in Indian Country. 

I also want to commend the Administration for its proposal to coordinate energy development by placing all the agencies under one 

roof. If you are going to have multiple agencies involved, the least 

you can do is put them in a room together to make sure they are 

talking to one another. But if we don’t have the right people involved, the right process in place and the right funding behind the 

idea, it simply is not going to be efficient. 

That is why I am glad we are having this hearing today. We 

need to get out of this rut so the tribes can develop their resources. 

I think everyone wants that to happen. So I hope we hear some 

new ideas, some good ideas today about how to address these 

issues. 

Finally, I want to thank Grant Stafne for coming all the way out 

from Fort Peck Indian Reservation. Energy development in the 

past has been a big driver of Fort Peck’s economy, and it can be 

again in the future. You have been serving your community on the 

council for a number of years now. I want to commend you for that. 

I look forward to getting your input today. I am glad you came. I 

want to make sure the Committee and the Congress are giving the 

tribes and the BIA the tools they need for success. 

I appreciate everyone who is going to speak today. I look forward 

to the question rounds. Once again, the 2,000-mile hike you made, 

Grant, we appreciate it. 

The CHAIRMAN. Thank you very much, Senator Tester. Since you 

mentioned Senator Dorgan, we have two Senators from North Dakota on the Committee right now. You will remember that map of 

the State of North Dakota that he brought to this Committee. It 

showed all of the oil and gas activity and the energy activity. There 

was a big area that was completely blocked off, and we wondered 

4 

how it was that the resources had followed such a perfect line as 

not being there. 

In fact, the resources were there but just were being blocked. So 

I appreciate the continued efforts in a bipartisan way with the two 

Senators from North Dakota here who are clearly aware of the situation. 

Any other members have opening statement they would like to 

make? Senator Franken. 

STATEMENT OF HON. AL FRANKEN, 

U.S. SENATOR FROM MINNESOTA 

Senator FRANKEN. Actually, Mr. Chairman, I don’t have one prepared, but we have had these hearings, very dramatic hearings, on 

things like suicide, child suicide. And there is a vicious circle in 

terms of housing and economic development and addictions and domestic violence. When you are housed with another family, exponentially being exposed to that. 

One thing that I think we all agree on is there is nothing like 

economic development. When we heard from Pine Ridge, from Red 

Lake, the conclusion they came to is that we have to do everything 

we can to create economic development. This testimony says that 

there is energy there, both in renewable and in non-renewables. I 

want energy projects in Indian Country to create jobs, create economic activity so that we can do something to break this cycle. 

Anything we can do. I don’t care, you know me, I am Mr. Global 

Warming is a Real Problem. But if they find a coal mine on a reservation, let’s use it. 

So I want to do everything I can—— 

The CHAIRMAN. Save that videotape. 

[Laughter.] 

Senator FRANKEN. Oh well. I wanted to jolly up the Chairman. 

The CHAIRMAN. Oh, well, we are inviting you to sit on this side 

of the dais. Come on over. 

[Laughter.] 

Senator FRANKEN. There is also sun, there is also wind. To me, 

there is nothing more important than finding a way to get jobs in 

Indian Country. This is definitely a way that we can do it. That 

is my opening statement. 

The CHAIRMAN. Senator Hoeven? 

STATEMENT OF HON. JOHN HOEVEN, 

U.S. SENATOR FROM NORTH DAKOTA 

Senator HOEVEN. Mr. Chairman, just picking up on comments 

made by both yourself and the ranking member, in 2008 I was Governor in North Dakota and signed an agreement with the Three Affiliated Tribes. At that time, there was one well on the Three Affiliated Tribes’ reservation. 

Essentially what that agreement did is it brought parity between 

the regulation on and off the reservation, so that the regulations 

off-reservation in North Dakota and on the reservation in North 

Dakota were the same. Since then, they have drilled hundreds of 

wells. I think now if the Three Affiliated Tribes were an independent State, they would be the ninth largest oil-producing State 

in the Nation. 

5 

So if we find a way to make it easier to do business, companies 

respond. Investments are made, jobs are created, Senator Franken. 

So that is what this hearing today is about. 

It is not just the investment to produce more energy. That investment also produces better environmental stewardship, because 

we get the investment in the new technologies and the gathering 

systems and the pipelines we need in order to move gas to market 

rather than throwing it off, which I look very much forward to talking about. 

I thank both of you for calling this hearing today. 

The CHAIRMAN. Thank you, Senator Hoeven. Senator Daines? 

STATEMENT OF HON. STEVE DAINES, 

U.S. SENATOR FROM MONTANA 

Senator DAINES. Thanks, Mr. Chairman. I want to thank you as 

well as Ranking Member Tester for this hearing today. 

As I travel across Indian Country in Montana, I hear about the 

challenges associated with energy development. Senator Franken, 

I look forward to touring with you the coal operations at the Crow 

Reservation in Montana. We have more recoverable coal than any 

State in the Union. 

Senator FRANKEN. Let me be clear. I am sorry to interrupt you. 

But that coal in Indian Country would replace coal being mined 

elsewhere in Wyoming. 

[Laughter.] 

Senator DAINES. There are always conditions. 

But to that point, the unemployment rate today on the Crow Reservation is north of 40 percent. Without those coal-mining jobs, the 

unemployment rate is over 80 percent. This is a key to future prosperity, certainly in these energy jobs. 

I too want to welcome Councilman Stafne. Thanks for making 

the long trek from Montana, from the Fort Peck Reservation. As 

you are going to hear in his written testimony, it is rich in oil and 

gas reserves coming from that Bakken Formation that the Governor, now Senator from North Dakota was talking about, the 

Bakken Three Forks Formation. It also has significant wind potential as well. 

As the GAO report and the witnesses are going to tell us today, 

energy development in Indian lands is laden with red tape. It is expensive. It is detracting investors. It ignores the most important responsibility of the Federal Government to uphold its trust responsibility with Indian nations. Frankly, I think it is a disgrace that the 

Federal Government has not done more to ensure that our Indian 

nations can foster their own tribal sovereignty doing the best they 

can to create a better livelihood for their members. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator Daines. 

I want to welcome the witnesses again, and remind you that your 

complete statements will be part of the record and ask you to keep 

your statements to five minutes or less. 

Today we are going to hear from Mr. Larry Roberts, who is Principal Deputy Assistant Secretary of Indian Affairs at the Department of the Interior; Mr. Frank Rusco, Director, Natural Resources 

and Environment, U.S. Government Accountability Office; the HonVerDate Mar 15 2010 13:07 Apr 26, 2016 Jkt 099901 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 S:\DOCS\99901.TXT JACK
6 

orable James ‘‘Mike’’ Olguin, who is the Tribal Council Member 

from the Southern Ute Indian Tribe in Colorado; Mr. Grant Stafne, 

who has been welcomed by your two Senators from Montana; and 

Mr. Cameron Cuch, who is the Vice President of Government Affairs, Crescent Point Energy, U.S. Corporation, from Denver. 

Mr. Roberts? 

STATEMENT OF LAWRENCE S. ROBERTS, PRINCIPAL DEPUTY 

ASSISTANT SECRETARY, INDIAN AFFAIRS, U.S. DEPARTMENT 

OF THE INTERIOR 

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

Tester, members of the Committee. 

My name is Lawrence Roberts. I am the Principal Deputy Assistant Secretary for Indian Affairs at the Department of Interior. I am 

a member of the Oneida Nation of Wisconsin. I thank you for the 

opportunity to testify today. 

I have with me today BIA Director Mike Black, Acting Director 

of Indian Energy and Economic Development Office; Jack Stevens 

and our Division Chief, Steve Many Deeds, and staff from his office. 

As many of you have noted in your statements, energy is critically important to tribes. Commercial and community scale tribal 

energy development is a priority for this Administration because it 

provides significant economic and social benefits to tribes and individual Indians. 

Working closely with tribes, we have seen revenues from tribal 

energy development grow from just under $400 million in 2009 to 

over $1.9 billion in 2014. While most of the increase in the revenue 

has been in the area of conventional energy, several tribes are now 

well situated to develop substantial renewable energy resources, including solar and wind energy. 

The Bureau of Indian Affairs and the Indian Energy and Economic Development Office work closely with the tribes testifying 

today. The Southern Ute is a well-recognized leader in the field, 

and their testimony speaks to the importance of retaining committed and engaged local staff, such as agency superintendent Priscilla Bancroft. 

At Fort Peck, we recently provided a substantial grant to investigate potential petroleum reserves that exist on the reservation 

and make recommendations as to where new opportunities are located. We have also installed our NIOGEMS system at the tribal 

energy office and at the BIA agency office. Our work with the Ute 

Tribe has included providing staff to work on site to expedite well 

permitting, onsite inspections and environmental review, as well as 

installing the NIOGEMS system at the tribal energy office. 

Our work across Indian Country touches on all aspects of energy 

development. At this moment, we are either funding or providing 

technical assistance to energy and mineral projects in over 70 different tribal communities. For example, we have funded business 

planning for the Salish and Kootenai Tribes on their hydroelectric 

project. 

More recently, we have seen growing interest in smaller renewable energy projects, ranging from 250 kilowatts to 3 megawatts. 

7 

The projects are distinguished from those utility-scale projects 

where power is sold and used off-reservation. 

These smaller projects have lower capital expense, they allow for 

100 percent tribal ownership, benefits accrue locally and provide an 

alternative to high local energy rates. For example, we have assisted the Blue Lake Rancheria in developing a small scale biomass 

combined heat and power facility that will generate modest income 

and jobs. 

Senator Tester spoke about the success under the HEARTH Act. 

Congress’s enactment of that HEARTH Act in 2012 has been extremely successful. Over 20 tribes have utilized the HEARTH Act 

for many business, solar and wind energy developments. The 

HEARTH Act is an example of how Congress and the Administration can work together to foster tribal self-governance and self-determination in energy development. 

The GAO report makes a number of recommendations that we 

agree with and that we are working to implement. For example, we 

agree that GIS mapping and a tracking system is exceedingly important. The Department’s NIOGEMS system is a tool that can 

provide this mapping and tracking service for oil and gas development. We are working to improve it to include other forms of energy development. 

NIOGEMS is available to our other Federal agencies. It is available to tribes and it is available to our local staff on the ground. 

It is used at a number of locations, including Wind River, Navajo, 

Jicarilla Apache and others. In addition, we are actively working 

with BLM to identify the needs for cadastral surveys. Further, we 

agree with GAO’s recommendation to develop TERA guidance and 

to evaluate the effectiveness of our capacity grants. 

As the GAO report underscores, the Department and Congress 

working together can do much to promote tribal energy development. For example, Assistant Secretary Washburn testified last 

Congress on what is now Chairman Barrasso’s bill, S. 209. There 

is a lot the Department likes about that Act, and there is a need 

to improve the 2005 Act. 

Finally, the GAO report underscores the lengthy review times 

and the need to improve efficiency and transparency. We have 

sought to address this problem by proposing in the 2016 budget to 

establish an Indian Energy Service Center located in Denver, Colorado. That would include personnel from the various Interior agencies that must coordinate energy development in Indian Country, 

including BIA, IEED, the Office of Natural Resource Revenue, 

BLM, and the Office of Special Trustee. 

Thank you for providing this opportunity to testify today. The 

Department will continue to work with tribes to promote energy 

development and will continue to work closely with this Committee 

as well as our Federal and State partners to address energy development issues and solutions. I am happy to answer any questions 

the Committee may have. 

[The prepared statement of Mr. Roberts follows:] 

8 

PREPARED STATEMENT OF LAWRENCE S. ROBERTS, PRINCIPAL DEPUTY ASSISTANT

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

Chairman Barrasso, Vice-Chairman Tester, and Members of the Committee, my 

name is Lawrence Roberts and I am the Principal Deputy Assistant Secretary of Indian Affairs at the Department of the Interior (Department). Thank you for this opportunity to testify on the June 2015, GAO Report ‘‘Indian Energy Development, 

Poor Management by BIA Has Hindered Energy Development on Indian Lands.’’ 

Energy is critically important to tribes. Commercial and community scale tribal 

energy development is a priority for this Administration because it provides significant economic and social benefits to tribes, and individual Indians. The Administration has worked very hard to help tribes assess, develop and market conventional 

energy resources, while also assisting supporting tribes as they explore development 

of renewable energy resources, such as wind and solar energy. Working closely with 

tribes, we have seen revenues from tribal energy development grow from just under 

$400 million when President Obama took office in 2009 to over $1.1 billion in 2014. 

While most of the increase in revenue has been in the area of conventional energy, 

several tribes are also now well-situated to develop substantial renewable energy resources, including solar and wind energy. We will continue to support tribes in both 

areas, conventional and renewable, to ensure that tribes play a crucial role in America’s energy future. 

Yet, as the GAO report shows, the Department and Congress, working together, 

can do much more to promote tribal energy development. As discussed in more detail below, the Department largely agrees with GAO’s recommendations and, despite 

fiscal challenges, we are working to implement widespread improvements. We have 

been working hard to address each of the subjects raised by the GAO report and 

have substantial progress to report. For example, the GAO report underscores the 

lengthy review times and the need to improve efficiency and transparency. We have 

sought to address this problem by breaking down the silos that create obstacles to 

close coordination in the federal bureaucracy. As detailed in the President’s 2016 

Budget, the Department proposes to establish an Indian Energy Service Center 

(Service Center) centrally located in Denver, Colorado, to address this need. The 

Service Center will include personnel from the various Interior Agencies that must 

coordinate energy development in Indian Country including the Bureau of Indian 

Affairs (BIA), the Office of Indian Energy and Economic Development (IEED), the 

Office of Natural Resource Revenue (ONRR), the Office of the Special Trustee for 

American Indians (OST), and the Bureau of Land Management (BLM). The Service 

Center would provide expertise, policy guidance, standardized procedures, and technical assistance across a broad spectrum of services. The idea has been well-received 

by energy-producing tribes because it would provide a centralized, one-stop shop for 

energy services. 

The GAO Report provides seven (7) recommendation areas. My testimony today 

will summarize how we are working to implement solutions in those areas and conclude with further detail about the Indian Energy Service Center 

Recommendation 1: To ensure it can verify ownership in a timely manner 

and identify resources available for development, BIA should take steps to 

complete its GIS mapping module in TAAMS. 

The GAO report recommended that the Geographic Information System (GIS) 

mapping module be added to the Trust Asset and Accounting Management System 

(TAAMS). TAAMS represents a significant, long-term investment in the Department’s efforts to meet its trust responsibility. As we explained in our discussions 

with GAO, TAAMS was not designed as a geospatial mapping system, but simply 

to reflect legal descriptions as they appear on documents recorded as required by 

federal law. 

We agree, however, that GIS mapping of Indian lands is exceedingly important. 

As we discussed with GAO, the Department has developed the National Indian Oil 

and Gas Evaluation Management System (NIOGEMS), which is a map-oriented GIS 

computer application, for managing reservation lease, well, and production data for 

oil and gas and other energy/mineral resources. NIOGEMS assists energy producing 

Indian tribes by allowing tribal, BIA and other Interior resource managers to gain 

ready access to financial, realty, geo-technical information and complex resource 

data aggregated from other data systems/sources, for tracking and making decisions 

on leasing, developing, and managing energy/mineral resources. 

NIOGEMS incorporates aggregated data and presents information in concise userfriendly data view and map-based forms, and allows generation of reports, sharable 

maps, and data extractions for use in other analytical software. While no system 

is perfect, NIOGEMS has helped us improve our performance of our responsibilities 

to Tribes and individual trust owners. As the DOI’s Inspector General’s Report No.: 

9 

CR–EV–BIA–0001–2011 stated in its list of promising technologies and practices for 

oil and gas in Indian country: 

‘‘[T]he National Indian Oil and Gas Evaluation Management System 

(NIOGEMS)... represents a significant improvement over the current Trust 

Asset and Accounting Management System database for managing oil and gas 

activities, including leasing and production data, by incorporating geospatial information as well as a digital mapping capability. The Wind River Agency in 

Wyoming reported a tenfold improvement in productivity for certain realty activities after implementing NIOGEMS.’’ 

NIOGEMS can provide regularly updated mapped ownership tracts, energy 

Leases, as well as BLM agreements data for Tribes, BIA agencies, and supporting 

federal agencies for a large set of reservations. Staff also develops and gathers an 

array of Indian energy resource data, for regional areas and in detail on a reservation project area basis. For the reservations supported in NIOGEMS, this data is 

combined in the NIOGEMS database to meet the need for comprehensive data to 

identify ownership and resources available for energy development, particularly oil 

and gas. Though it began with oil and gas related information, NIOGEMS is expanding to include additional energy/mineral resource data and supporting 

functionality. We will begin visiting reservation sites to train staff on how to log 

onto NIOGEMS from the Albuquerque server. 

We are also taking steps to develop a land boundary and ownership repository 

that will be incorporated into TAAMS for all tribal lands. Our goal is that legal land 

descriptions entered in TAAMS from these conveyance documents will be regularly 

extracted and aligned with BLM survey data to produce GIS products that illustrate 

current Indian land ownership. In sum, we are continuing to invest heavily in 

TAAMS and related systems that have improved our ability to meet our various responsibilities. We are committed to avoiding past mistakes and having the technical 

resources that we need to manage vast tribal resources successfully. 

Recommendation 2: To ensure it can verify ownership in a timely manner 

and identify resources available for development, BIA should work with 

BLM to identify cadastral survey needs. 

In more than a century since the establishment of Indian reservations, the federal 

government has not yet fully surveyed all Indian reservation lands. For example, 

in the nearly 150 years since establishment of the Navajo Reservation, portions of 

that reservation have never been fully surveyed. A survey is an important step in 

developing a full inventory of trust resources. The GAO report recommended that 

the BIA and BLM work together to identify cadastral survey needs. As in years 

past, the BIA and the BLM, in a coordinated and focused effort, have prepared a 

Reimbursable Service Agreement (RSA) between the two agencies to identify and 

deliver survey-related products and services needed to identify and address the realty and boundary issues, in terms of asset/resource protection, of American Indian 

and Alaska Native Trust beneficiaries. Moreover, in February of 2015, the President 

asked Congress for $2.791 million for Fiscal Year (FY) 2016 to fund this effort. Absent a budget, it is unclear when the fuding will be available. However, the Department agrees that this is an urgent need in the BIA, particularly where reservations 

and trust lands lay along a river or where the river created the border. Such landmarks tend to move creating uncertainty as to ownership. During FY 2015, the BIA 

and BLM held quarterly meetings to discuss the cadastral survey needs, along with 

specific requests and the development of a mechanism to collect survey requests 

from the field. The BLM continues to provide boundary solutions by utilizing innovations in survey technology. Planning meetings between the BIA and the BLM will 

continue in FY 2016. A methodology to collect survey needs has been established 

and further refinement of the data collection will be completed by the end of FY 

2016. 

Recommendation 3: To improve the efficiency and transparency of its review process, BIA should develop a documented process to track its review 

and response times. 

The GAO report recommended the BIA should develop a process to track BIA review and response times. As the recommendation applies to oil and gas leasing, the 

BIA will make a concerted effort to implement a tracking and monitoring effort in 

compliance with regulatory requirements to demonstrate timely reviews and approvals within the system of record, TAAMS. This will assist the BIA’s field offices with 

maintaining a single current and accurate system. The goal is to have tracking 

mechanisms in TAAMS by the end of FY 2017. Additionally, IEED uses a formal 

Internal Control Review process for ensuring timely review of Indian Minerals Development Act of 1982 (IMDA) agreements for oil, gas, and other minerals. Under 

10 

these procedures, IEED must identify all major risks that would prevent the review 

of agreements from meeting a deadline, and then to establish procedures (controls) 

to eliminate identified risks. The IEED’s time line for reviewing agreements and 

providing technical comments (including economic analysis of negotiated agreement 

terms) is 30 days. 

Recommendation 4: To improve the efficiency and transparency of its review process, BIA should enhance data collection efforts to ensure it has 

data needed to track its review and response times. 

The GAO report recommended that the BIA enhance data collection for its tracking of BIA review and response times. We are working hard and investing heavily 

to improve tracking. In addition to the TAAMS enhancements, NIOGEMS currently 

tracks permits, rights of way, and environmental studies associated with energy development. The next version of NIOGEMS, scheduled for implementation in the 

next few months, will provide the user with the ability to develop ad hoc tracking. 

Recommendation 5: Provide additional energy development-specific guidance on provisions of TERA regulations that tribes have identified to Interior as unclear. 

The Department agrees with the report’s recommendation that it provide additional energy development-specific guidance on provisions of TERA regulations that 

tribes have identified to the Department as unclear. IEED and our Office of the Solicitor believe that this clarity can be best achieved by amending the IMDA to insert 

tribal self-determination language similar to that found in the Helping Expedite and 

Advance Responsible Tribal Homeownership (HEARTH) Act of 2012. The HEARTH 

Act permits tribes to lease surface trust lands for renewable energy purposes absent 

approval by the Department, by implementing their own leasing regulations. The 

Department respectfully asks Congress to make this possible in the conventional energy arena by amending the law to match the HEARTH Act provisions. We would 

be happy to work with your staff on such an amendment. 

The GAO report highlights the need to track the benefits of its Tribal Energy Development Capacity (TEDC) grant program and to determine whether these grants 

have enabled tribes to develop the administrative and technical capacity to enter 

into Tribal Energy Resource Agreements (TERAs). To address the deficiencies identified in the GAO report, the Department modified this grant program to complement the HEARTH Act. In recognition of the growing need for tribal regulatory 

infrastructure since passage of the HEARTH Act, the Department reformed the program to encourage tribes to establish the legal infrastructure to regulate energy-related activities, including the adoption of commercial codes, establishment of electrical utility authorities, and enactment of energy-related regulations. For example, 

of the ten TEDC grants that the Department disbursed at the close of FY 2015, half 

were awarded to equip Tribes to establish tribal utility authorities, a substantial 

step in assuming sovereign control of electrical resources. 

Recommendation 6: To ensure the TEDC grant program is effective in 

moving tribes closer to developing the capacity needed to pursue TERAs, 

IEED should take steps to develop a documented process for evaluating the 

effectiveness of TEDC grants. 

The Department will establish an evaluation process involving program staff and 

other stakeholders to gauge the extent to which TEDC grants have increased tribal 

capacity to enter into a TERA. We will seek feedback from tribal leaders, project 

managers, consultants and others on features of the program that are problematic. 

We will work with them to find ways to cure the deficiencies that they have identified. We will also reevaluate TEDC’s efficacy at the close of each fiscal year. Staff 

will monitor the progress of each grant and furnish technical assistance to each 

grantee, identifying and addressing any problems while grant projects are still in 

process. Moreover, the Department will administer an anonymous, follow-up online 

survey with tribal stakeholders on the effectiveness of each grant, which will include 

questions related to progress in developing capacity, challenges or concerns, and 

suggestions for improvement. The information gathered from this survey will assist 

staff to guide further improvements in the TEDC grants. 

Recommendation 7: To ensure the TEDC grant program is effective in 

moving tribes closer to developing the capacity needed to pursue TERAs, 

IEED should take steps to identify features of the TEDC grant program 

that could limit the effectiveness of the program to help tribes eliminate 

capacity gaps. 

In response to the GAO report’s Recommendation 7, the IEED staff will establish 

two methods to help identify features of the TEDC program that could limit the effectiveness of the program in addressing capacity gaps. The first method will be to 

11 

seek TEDC feedback by reaching out directly to stakeholders such as tribal council 

members, tribal leadership, consultants and others. The IEED will compile and 

evaluate responses to establish effective solutions to the deficiencies recognized 

through the TEDC stakeholder outreach. The second method would be an internal 

reevaluation of effectiveness of the TEDC program at the end of each closing fiscal 

year. The IEED staff will be responsible for project monitoring and for providing 

technical assistance to the TEDC grant recipients. Staff and recipients will possess 

firsthand knowledge of the deficiencies limiting the grants’ effectiveness after the 

first year of project monitoring. The IEED staff will then evaluate these findings 

to create solutions and make adjustments to the program. 

Sixty (60) days after the 2015 TEDC solicitation closure or at the end of FY 2015, 

IEED staff plans to begin initial outreach for evaluating the effectiveness of TEDC 

grants, and for identifying the features of the TEDC grant program that could limit 

the effectiveness of the program to help tribes eliminate capacity gaps. At the end 

of FY 2016, IEED staff will follow up with a second outreach and re-evaluate the 

effectiveness of TEDC grants. 

Moving Forward: Indian Energy Service Center 

As noted above, the Department will be implementing the Indian Energy Service 

Center, if funded, in FY 2016. As identified in the 2015 GAO report, the increased 

demands of oil and gas development have challenged the existing staff and management structure in providing timely efficient services. To address this demand, an 

interagency team from the BIA, IEED. ONRR, BLM, and OST have collaborated on 

solutions. The role of the Indian Energy Service Center would be to maintain a responsive, administrative and technical capacity, that when needed, can bolster local 

or regional staff faced with surging workload thus avoiding or eliminating backlogs. 

The proposal reflects the spirit of the White House Council on Native American 

Affairs, which seeks to break down barriers between federal agency ‘‘silos’’ and also 

builds on recent innovations such as the IEED’s detailing of critical personnel to 

Fort Berthold, the rapid contracting of services by the Federal Indian Minerals Office at Navajo, and the BLM’s ‘‘Tiger Team’’ formed to address backlog Applications 

for Permit to Drill at Fort Berthold. By adopting some of these short-term innovations, improving protocols, and building up a technical specialist corps that can collaborate across agency lines, we can efficiently institutionalize these types of rapid 

response efforts to ensure sustainable, scalable and timely, delivery of service, both 

to Indian country and the nation. 

The Indian Energy Service Center would improve performance of federal trust responsibilities in energy development. As proposed, it would provide technical and 

administrative functions that require minimal field presence. By fulfilling a support 

role for field offices through regional/state level offices, the field personnel would be 

able to focus on the local issues and challenges that accompany rapid expansion, 

making the Department and its many components more responsive to urgent needs 

in energy development. 

The Indian Energy Service Center would support numerous units, including the 

BIA regional offices; the BLM field and state offices; the OST fiduciary trust officers 

and regional trust administrators; and ONRR. The Indian Energy Service center 

would expedite the leasing, permitting, developing, and reporting for oil and gas development on Indian trust lands. Fundamental to this effort is responsiveness to Indian mineral owners (tribal or individual) and coordination between Federal agencies. In support of this mission, the Indian Energy Service Center would serve as 

a processing center for certain nationwide trust functions where this service is more 

efficiently provided by an off-site work team in support of agencies and field, regional, or state offices. The Indian Energy Service Center would also dispatch expertise to the impacted agency or field office to evaluate the situation and make a determination how best to address the workload, particularly when the pending workload directly affects income being generated for beneficiaries. 

Conclusion 

Thank you for providing this opportunity to showcase the myriad efforts being 

made at the Department to improve energy development on Indian lands. The Department will continue to work with Tribes to promote energy development and will 

continue to work closely with this Committee as well as our federal and state partners to address energy development issues and solutions. 

Thank you also for focusing attention on this important topic. I am available to 

answer any questions the Committee may have. 

The CHAIRMAN. Thank you, Mr. Roberts. Now we turn to Mr. 

Frank Rusco. 

12 

STATEMENT OF FRANK RUSCO, DIRECTOR, NATURAL 

RESOURCES AND ENVIRONMENT, U.S. GOVERNMENT 

ACCOUNTABILITY OFFICE 

Mr. RUSCO. Thank you. Chairman Barrasso, Vice Chairman Tester and members of the Committee, I am happy to be here today 

to discuss the results of our report on Indian energy development. 

As you know, there is great potential for the development of energy resources on tribal and Indian lands, including 

hydroelectricity, oil and gas, and wind and solar. When we look at 

a map of energy development, you will see development happening 

all around and up to tribal and Indian lands. But with only a few 

exceptions, such energy development stops right at the borders. 

In our recent report to this Committee, we found numerous challenges facing tribes and individual Indians that own energy resources and want to develop them. Key among these challenges are 

that the Bureau of Indian Affairs has failed to perform its duties 

in an efficient and thorough way to review and approve energy development, to identify Indian land owners and to hire and retain 

key skilled staff who have the expertise to evaluate energy-related 

documents. 

The consequence of BIA’s mismanagement is that numerous energy development projects languish for months or even years without proper review, without appropriate communication between the 

agency and the applicants and without even explanation for such 

delays. To be fair, in doing our work, we found many dedicated BIA 

staff and managers who were trying their best to adapt to the 

changing energy landscape. However, they have not received the 

support they need from BIA headquarters or the Department of the 

Interior to build the capacity needed to perform these required 

tasks. 

Meanwhile, the Country has seen an explosion of energy development over the last five to ten years on private, State and Federal 

lands. For example, State renewable energy portfolio standards for 

electric utilities have sparked a boom in wind and solar development. Many tribal lands have great potential for developing wind 

and solar projects, but the lack of a functional approval and permitting process at BIA has contributed to what amounts to a staggering loss of opportunity for tribes and Indian land owners. 

Once State renewable energy portfolio standards are met, the opportunity will be gone. So the clock is ticking for BIA to fix its 

management problems. 

Similarly, oil and gas resources exist on many tribal and Indian 

lands, but the recent resurgence of such development in the United 

States has largely passed these lands by. When an oil and gas company can deal with private, State or Federal land and resource 

owners, they are able to make development plans in which the 

steps needed for approval are known and the time frames are reasonable or at least predictable. Sadly, this is not the case when 

dealing with BIA. In fact, BIA does not track its review and response times, so the agency itself cannot predict how long these 

processes take. 

In our recent report, we found that a number of challenges have 

hindered the ability and willingness of tribes to seek Tribal Energy 

Resource Agreements, or TERAs, which Congress created to allow 

13 

1GAO, Indian Energy Development: Poor Management by BIA Has Hindered Energy Development on Indian Lands, GAO–15–502 (Washington, D.C.: June 8, 2015). 2The federal trust responsibility is a fiduciary obligation on the part of the United States to 

federally recognized Indian tribes and tribal members. The Supreme Court has recognized a 

general trust relationship with Indian tribes since 1831. See Cherokee Nation v. Georgia, 30 U.S. 

(5 Pet.) 1 (1831). The trust responsibility originates from the unique, historical relationship between the United States and Indian tribes and consists of the ‘‘highest moral and legal obligations’’ that the federal government must meet to ensure the protection of tribal and individual 

Indian lands, assets and resources, but is legally enforceable only to the extent it is specifically 

defined by federal laws. See Seminole Nation v. United States, 316 U.S. 286, 296–297 (1942), 

and United States v. Jicarilla Apache Nation, 564 U.S. ll, 131 S. Ct. 2313 (2011). Letter 

tribes to take charge of more of the elements of energy development on their lands. These challenges include uncertainty about 

TERA regulations, unreimbursed costs of assuming activities that 

have been historically conducted by Federal agencies, and the complex application process. 

For example, TERA has not defined inherently Federal functions, 

a provision in the TERA regulations. As a result tribes interested 

in seeking TERA approval do not have clear guidance on which 

functions they would take over from Federal agencies and which 

would remain inherently Federal. 

Congress has also directed in TERA to help tribes develop the capacity needed to pursue TERAs. They found that TERAs’ approach 

to tribal capacity-building was not well developed and lacked documented processes for evaluating the effectiveness of such capacity 

building. 

We are currently doing additional work for this Committee, looking at BIA’s human capital challenges and evaluating what BIA is 

doing to resolve these issues. 

I will be happy to answer any questions you may have. Thank 

you. 

[The prepared statement of Mr. Rusco follows:] 

PREPARED STATEMENT OF FRANK RUSCO, DIRECTOR, NATURAL RESOURCES AND

ENVIRONMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

Chairman Barrasso, Vice-Chairman Tester, and Members of the Committee: 

I am pleased to be here today to discuss our recent report on the development 

of Indian energy resources. 1 As you know, Indian energy resources hold significant 

potential for development and, for some Indian tribes and their members, energy 

development already provides economic benefits, including funding for education, infrastructure, and other public services. According to Department of the Interior (Interior) data, in fiscal year 2014, development of Indian energy resources provided 

over $1 billion in revenue to tribes and individual Indian resource owners. However, 

even with considerable energy resources, according to a 2014 Interior document, Indian energy resources are underdeveloped relative to surrounding non-Indian resources. 

Development of Indian energy resources is a complex process that may involve a 

range of stakeholders, including federal, tribal, and state agencies. Interior’s Bureau 

of Indian Affairs (BIA), through its various regional, agency, and other offices, has 

primary authority for managing Indian energy development and, in many cases, 

holds final decisionmaking authority. Federal management and oversight of Indian 

energy development is to be conducted consistent with the federal government’s fiduciary trust responsibility to federally recognized Indian tribes and individual Indians. 2 However, in recent decades, Indian tribes and individual Indians have asserted that Interior has failed to fulfill its trust responsibility, mainly with regard 

to the management and accounting of tribal and individual trust funds and trust 

assets. For example, Interior recently settled numerous ‘‘breach of trust’’ lawsuits, 

14 

3 Cobell v. Salazar was a class action lawsuit initially filed in 1996 by Elouise Cobell, a member of the Blackfeet Tribe, and others against the federal government concerning Interior’s management of individual Indian trust fund accounts. Those accounts contain funds from leases of 

Indian land, some of which involve energy development. The settlement in Cobell required congressional authorization, which was provided in the Claims Resolution Act of 2010, Pub. L. No. 

111–291, § 101, 124 Stat. 3064, 3066 (2010). 4Federally recognized tribes have a government-to-government relationship with the United 

States and are eligible to receive certain protections, services, and benefits by virtue of their 

unique status as Indian tribes. 5GAO–15–502. 

6Within BIA, we interviewed officials from all 12 BIA regional offices and 9 BIA agency offices. 

including Cobell v. Salazar, one of the largest class action suits filed against the 

United States. 3

Federal policy has supported greater tribal autonomy and control by promoting 

and supporting opportunities for increased tribal self-determination and self-governance, including promoting tribal oversight and management of energy resource development on tribal lands. For example, in 2005, Congress passed the Indian Tribal 

Energy Development and Self-Determination Act (ITEDSA), part of the Energy Policy Act of 2005, to provide an option for federally recognized tribes to exercise greater control of decisionmaking over their own energy resources. 4 The ITEDSA provides for interested tribes to pursue a Tribal Energy Resource Agreement (TERA)— 

an agreement between a tribe and the Secretary of the Interior that allows the 

tribe, at its discretion, to enter into leases, business agreements, and right-of-way 

(ROW) agreements for energy resource development on tribal lands without review 

and approval by the Secretary. However, no tribe has entered into a TERA with Interior, and shortcomings in BIA’s management that we identified in our June 2015 

report highlight the need for tribes to build the capacity to perform the duties that 

would enable them to obtain greater tribal control and decisionmaking authority 

over the development of their resources. 5

In this context, my testimony today discusses the findings from our June 2015 report on Indian energy development. Accordingly, this testimony addresses the factors that have (1) hindered Indian energy resource development and (2) deterred 

tribes from seeking TERAs. In addition, I will highlight several key actions that we 

recommended in our report that Interior can take to help overcome challenges associated with the administration and management of Indian energy resources. 

To conduct the work for our June 2015 report, we reviewed and synthesized literature including more than 40 reports, conference proceedings, hearings statements, and other publications from federal and tribal governments; industry; academics; and nonprofit organizations. We also obtained available data on key dates 

associated with the review and approval of energy-related documents for planned or 

completed utility-scale renewable projects from several BIA regional and local officials, tribal officials, and industry representatives. Further, we interviewed a nongeneralizable sample of stakeholders representing 33 Indian tribes, energy development companies, and numerous federal agencies and organizations, including officials from BIA, Office of Indian Energy and Economic Development, Department of 

Energy, National Renewable Energy Laboratory, and the Bureau of Land Management (BLM). 6 We did not evaluate tribal activities or actions to govern the development of their resources or assess any potential barriers to energy development such 

actions or activities may pose. Our June 2015 report includes a detailed explanation 

of the scope and methodology used to conduct our work. 

We conducted the work on which this testimony is based in accordance with generally accepted government auditing standards. Those standards require that we 

plan and perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 

Shortcomings in BIA’s Management and a Variety of Other Factors Have 

Hindered Indian Energy Development 

Factors, such as shortcomings in BIA’s management and additional factors generally outside of BIA’s management responsibilities—such as a complex regulatory 

framework, tribes’ limited capital and infrastructure, and varied tribal capacity— 

have hindered Indian energy development. Specifically, according to some of the literature we reviewed and several stakeholders we interviewed, BIA’s management 

has three key shortcomings. 

First, BIA does not have the data it needs to verify ownership of some oil and 

gas resources, easily identify resources available for lease, or easily identify where 

15 

7GAO–15–502. 

8 Board of Governors of the Federal Reserve System, Growing Economies in Indian Country: 

Taking Stock of Progress and Partnerships, A Summary of Challenges, Recommendations, and 

Promising Efforts (April 2012). This report was the result of a series of workshops that included 

nine federal agencies, four Federal Reserve Bank partners, and representatives from 63 Indian 

tribes. The effort was focused on economic development in Indian Country. 9 According to Interior’s 2014–2015 performance plan, it was to incorporate a GIS mapping 

component into its Trust Asset and Accounting Management System in fiscal year 2014. 10 In 2014, an interagency Steering Committee developed in response to Executive Order 

13604 identified best practices to modernize federal decision-making processes. The committee 

found that federal agencies reviewing permits and other applications should collect consistent 

Continued 

leases are in effect, inconsistent with Interior’s Secretarial Order 3215, which calls 

for the agency to maintain a system of records that identifies the location and value 

of Indian resources and allows for resource owners to obtain information regarding 

their assets in a timely manner. The ability to account for Indian resources would 

assist BIA in fulfilling its federal trust responsibility, and determining ownership 

is a necessary step for BIA to approve leases and other energy-related documents. 

However, in some cases, BIA cannot verify ownership because federal cadastral surveys—the means by which land is defined, divided, traced, and recorded—cannot be 

found or are outdated. It is additionally a concern that BIA does not know the magnitude of its cadastral survey needs or what resources would be needed to address 

them. 

We recommended in our June 2015 report that the Secretary of the Interior direct 

the Director of the BIA to take steps to work with BLM to identify cadastral survey 

needs. 7 In its written comments on our report, Interior did not concur with our recommendation. However, in an August 2015 letter to GAO after the report was 

issued, Interior stated that it agrees this is an urgent need and reported it has 

taken steps to enter into an agreement with BLM to identify survey-related products and services needed to identify and address realty and boundary issues. In addition, the agency stated in its letter that it will finalize a data collection methodology to assess cadastral survey needs by October 2016. 

In addition, BIA does not have an inventory of Indian resources in a format that 

is readily available, such as a geographic information system (GIS). Interior guidance identifies that efficient management of oil and gas resources relies, in part, on 

GIS mapping technology because it allows managers to easily identify resources 

available for lease and where leases are in effect. According to a BIA official, without a GIS component, identifying transactions such as leases and ROW agreements 

for Indian land and resources requires a search of paper records stored in multiple 

locations, which can take significant time and staff resources. For example, in response to a request from a tribal member with ownership interests in a parcel of 

land, BIA responded that locating the information on existing leases and ROW 

agreements would require that the tribal member pay $1,422 to cover approximately 

48 hours of staff research time and associated costs. In addition, officials from a few 

Indian tribes told us that they cannot pursue development opportunities because 

BIA cannot provide the tribe with data on the location of their oil and gas resources—as called for in Interior’s Secretarial Order 3215. Further, in 2012, a report 

from the Board of Governors of the Federal Reserve System found that an inventory 

of Indian resources could provide a road map for expanding development opportunities. 8 Without data to verify ownership and use of resources in a timely manner, 

the agency cannot ensure that Indian resources are properly accounted for or that 

Indian tribes and their members are able to take full advantage of development opportunities. 

To improve BIA’s efforts to verify ownership in a timely manner and identify resources available for development, we recommended in our June 2015 report that 

Interior direct BIA to take steps to complete GIS mapping capabilities. 9 In its written comments in response to our report, Interior stated that the agency is developing and implementing applications that will supplement the data it has and provide GIS mapping capabilities, although it noted that one of these applications, the 

National Indian Oil and Gas Evaluation Management System (NIOGEMS), is not 

available nationally. Interior stated in its August 2015 letter to GAO that a national 

dataset composed of all Indian land tracts and boundaries with visualization 

functionality is expected to be completed within 4 years, depending on budget and 

resource availability. 

Second, BIA’s review and approval is required throughout the development process, including the approval of leases, ROW agreements, and appraisals, but BIA 

does not have a documented process or the data needed to track its review and response times. 10 In 2014, an interagency steering committee that included Interior 

16 

data, including the date the application was received, the date the application was considered 

complete by the agency, the issuance date, and the start and end dates for any ‘‘pauses’’ in the 

review process. 11This government-wide initiative was developed in response to Executive Order 13604 and 

was led by an interagency Steering Committee, which is composed of Deputy Secretaries or their 

equivalent from 12 federal agencies, including the Department of the Interior. In 2014, the 

Steering Committee released an implementation plan for the Presidential Memorandum on 

Modernizing Infrastructure Permitting. Executive Order 13604 calls for agencies to improve federal permitting and review processes. 

identified best practices to modernize federal decisionmaking processes through improved efficiency and transparency. 11 The committee determined that federal agencies reviewing permits and other applications should collect consistent data, including the date the application was received, the date the application was considered 

complete by the agency, the issuance date, and the start and end dates for any 

‘‘pauses’’ in the review process. The committee concluded that these dates could provide agencies with greater transparency into the process, assist agency efforts to 

identify process trends and drivers that influence the review process, and inform 

agency discussions on ways to improve the process. 

However, BIA does not collect the data the interagency steering committee identified as needed to ensure transparency and, therefore, it cannot provide reasonable 

assurance that its process is efficient. A few stakeholders we interviewed and some 

literature we reviewed stated that BIA’s review and approval process can be 

lengthy. For example, stakeholders provided examples of lease and ROW applications that were under review for multiple years. Specifically, in 2014, the Acting 

Chairman for the Southern Ute Indian Tribe testified before this committee that 

BIA’s review of some of its energy-related documents took as long as 8 years. In the 

meantime, the tribe estimates it lost more than $95 million in revenues it could 

have earned from tribal permitting fees, oil and gas severance taxes, and royalties. 

According to a few stakeholders and some literature we reviewed, the lengthy review process can increase development costs and project times and, in some cases, 

result in missed development opportunities and lost revenue. Without a documented 

process or the data needed to track its review and response times, BIA cannot ensure transparency into the process and that documents are moving forward in a 

timely manner, or determine the effectiveness of efforts to improve the process. 

To address this shortcoming, we recommended in our June 2015 report that Interior direct BIA to develop a documented process to track its review and response 

times and enhance data collection efforts to ensure that the agency has the data 

needed to track its review and response times. In its written comments, Interior did 

not fully concur with this recommendation. Specifically, Interior stated that it will 

use NIOGEMS to assist in tracking review and response times. However, this application does not track all realty transactions or processes and has not been deployed 

nationally. Therefore, while NIOGEMS may provide some assistance to the agency, 

it alone cannot ensure that BIA’s process to review energy-related documents is 

transparent or that documents are moving forward in a timely manner. In its August 2015 letter to GAO, Interior stated it will try to implement a tracking and 

monitoring effort by the end of fiscal year 2017 for oil and gas leases on Indian 

lands. The agency did not indicate if it intends to improve the transparency of its 

review and approval process for other energy-related documents, such as ROW 

agreements and surface leases—some of which were under review for multiple 

years. 

Third, some BIA regional and agency offices do not have staff with the skills needed to effectively evaluate energy-related documents or adequate staff resources, according to a few stakeholders we interviewed and some of the literature we reviewed. For instance, Interior officials told us that the number of BIA personnel 

trained in oil and gas development is not sufficient to meet the demands of increased development. In another example, a BIA official from an agency office told 

us that leases and other permits cannot be reviewed in a timely manner because 

the office does not have enough staff to conduct the reviews. We are conducting ongoing work for this committee that will include information on key skills and staff 

resources at BIA involved with the development of energy resources on Indian 

lands. 

According to stakeholders we interviewed and literature we reviewed, additional 

factors, generally outside of BIA’s management responsibilities, have also hindered 

Indian energy development, including 

• a complex regulatory framework consisting of multiple jurisdictions that can involve significantly more steps than the development of private and state resources, increase development costs, and add to the timeline for development; 

17 

12GAO–15–502. 

• fractionated, or highly divided, land and mineral ownership interests; 

• tribes’ limited access to initial capital to start projects and limited opportunities 

to take advantage of federal tax credits; 

• dual taxation of resources by states and tribes that does not occur on private, 

state, or federally owned resources; 

• perceived or real concerns about the political stability and capacity of some tribal governments; and 

• limited access to infrastructure, such as transmission lines needed to carry 

power generated from renewable sources to market and transportation linkages 

to transport oil and gas resources to processing facilities. 

A Variety of Factors Have Deterred Tribes from Entering into TERAs 

A variety of factors have deterred tribes from pursuing TERAs. Uncertainty associated with Interior’s TERA regulations is one factor. For example, TERA regulations authorize tribes to assume responsibility for energy development activities 

that are not ‘‘inherently federal functions,’’ but Interior officials told us that the 

agency has not determined what activities would be considered inherently federal 

because doing so could have far-reaching implications throughout the federal government. According to officials from one tribe we interviewed, the tribe has repeatedly asked Interior for additional guidance on the activities that would be considered inherently federal functions under the regulations. According to the tribal officials, without additional guidance on inherently federal functions, tribes considering 

a TERA do not know what activities the tribe would be assuming or what efforts 

may be necessary to build the capacity needed to assume those activities. 

We recommended in our June 2015 report that Interior provide additional energy 

development-specific guidance on provisions of TERA regulations that tribes have 

identified as unclear. 12 Additional guidance could include examples of activities that 

are not inherently federal in the energy development context, which could assist 

tribes in identifying capacity building efforts that may be needed. Interior agreed 

with the recommendation and stated it is considering further guidance but did not 

provide additional details regarding issuance of the guidance. 

In addition, the costs associated with assuming activities currently conducted by 

federal agencies and a complex application process were identified by literature we 

reviewed and stakeholders we interviewed as other factors that have deterred any 

tribe from entering into a TERA with Interior. Specifically, through a TERA, a tribe 

assuming control for energy development activities that are currently conducted by 

federal agencies does not receive federal funding for taking over the activities from 

the federal government. Several tribal officials we interviewed told us that the tribe 

does not have the resources to assume additional responsibility and liability from 

the federal government without some associated support from the federal government. 

In conclusion, our review identified a number of areas in which BIA could improve 

its management of Indian energy resources and enhance opportunities for greater 

tribal control and decisionmaking authority over the development of their energy resources. Interior stated it intends to take some steps to implement our recommendations, but we believe Interior needs to take additional actions to address data limitations and track its review process. We look forward to continuing to work with this 

committee in overseeing BIA and other federal programs to ensure that they are operating in the most effective and efficient manner. 

Chairman Barrasso, Ranking Member Tester, and Members of the Committee, 

this concludes my prepared statement. I would be pleased to answer any questions 

that you may have at this time. 

The CHAIRMAN. Thank you so much for your insightful and helpful testimony. It is a staggering loss of opportunity, to take your 

words. 

Next we will hear from the Honorable James ‘‘Mike’’ Olguin, who 

is a Tribal Council Member from the Southern Ute Indian Tribe. 

Welcome back to the Committee. 

18 

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

COUNCIL MEMBER, SOUTHERN UTE INDIAN TRIBE 

Mr. OLGUIN. It is a pleasure. Good afternoon, Chairman 

Barrasso, Vice Chairman Tester and Committee members. 

Thank you for the opportunity to provide a statement on behalf 

of the Southern Ute Indian Tribe regarding BIA supervision of Indian energy development. And thank you for commissioning this 

important report. 

My name is Mike Olguin. I am an elected member of the Southern Ute Indian Tribal Council, which is the governing body of the 

Southern Ute Indian Tribe. 

The Tribe was very happy to cooperate with GAO staff and a few 

of the report’s key points here bear repeating. According to the report, BIA’s mismanagement of oil and gas resources led to an industry preference to acquire oil and gas leases on non-Indian lands 

over Indian lands. 

The Tribe is not surprised by this conclusion, since development 

on the reservation involves three Federal agencies and compliance 

with a multitude of Federal statutes that do not apply on adjacent 

fee land. The BLM’s new hydraulic fracturing rule would dramatically compound this problem if it ultimately goes into effect. 

In addition, permitting costs are much higher on tribal lands 

than on fee lands. While the GAO report noted that the BLM’s 

drilling permit fee is $6,500, as of today that fee is actually $9,500. 

A permit from the State of Colorado to drill in adjacent fee land 

is free. This disparity creates a problem that is made worse on reservations like our Tribe’s, where tribal land and non-Indian fee 

land are arranged like a checkerboard and oil and gas operators 

can develop non-Indian fee land for less time and money, all while 

depleting Indian minerals. 

There is no improvement in sight. Entering into a Tribal Energy 

Resource Agreement, or TERA, could help address delays caused by 

Federal oversight. Despite the Tribe’s repeated request for clarification on what constitutes a Federal inherent function, the Tribe 

learned that the Interior officials told GAO that the agency has no 

plans to provide additional clarification. 

If BIA can’t help itself, it should readily accept assistance from 

tribes when offered. The GAO report makes perfectly clear that the 

BIA does not have the resources to meet the Tribe’s needs. The 

Tribe has the resources and has made countless offers to assist the 

BIA, but the BIA has repeatedly resisted these offers for reasons 

that are not particularly compelling. 

For example, the Tribe tried to assist with its Trust Asset Accounting Management System, TAMS, only to be told that it was 

not permissible for the tribe to assist unless it has a P.L. 638 contract in place. The Tribe tried to assist with organizing the records 

at the Southern Ute Agency but the Bureau said tribal employees 

did not have the expertise necessary to assist, and that the employees needed to have background checks. Those checks took months 

to complete and required a 160-mile round trip drive to be 

fingerprinted and have a photograph taken for facial recognition, 

and an hour-long interview with an OPM contract investigator. 

Time and time again, the Bureau held up its trust responsibility 

to the Tribe as a reason it could not allow the Tribe to assist. 

19 

Shouldn’t the trust responsibility analysis start with common 

sense? Who is the Bureau afraid to sue if the Bureau didn’t require 

these background checks? The Bureau’s circular reasoning, we can’t 

allow the Tribe to assist in cleaning up tribal records, or they 

might not sue us for not requiring them to have the required background checks, was illogical, patronizing and contrary to the Tribe’s 

best interests, as articulated by the Tribe. 

Trust responsibilities of the BIA to the Tribe must be modified 

so that the agency can provide support for the Tribe’s decisions. 

Many months after the Office of Trust Records’ assessment report, 

after the arrival of a new, helpful agency superintendent, the Bureau has entered into a P.L. 638 contract with the Tribe to scan 

and organize the agency’s files before they are sent to the archives. 

The scanning project utilizes less than $100,000 from the Department of Interior and more than $1 million of tribal money and the 

dedication of tribal staff. 

The Southern Ute Agency’s belated cooperation on this project is 

a radical change from past practice. The Bureau’s past attempts to 

protect the Tribe from itself are patronizing, at best, and a breach 

of trust, at worst. What is more is that they don’t make sense. 

In this instance, upholding a trust responsibly did not require 

the Bureau to find millions of dollars and staff to meet the Tribe’s 

needs. All it required was facilitating the Tribe’s efforts by removing the meaningless requirements like facial recognition scans, so 

that the Tribe could take care of the problem itself. 

The Tribe is well-equipped to define and articulate its best interests. Yet the ethic of the Bureau is to second guess and overrule 

it. It does not make sense, particularly given the Bureau itself cannot meet the Tribe’s needs. The Bureau must be more flexible. 

Lastly, Southern Ute recognizes the Bureau cannot be all things 

to all tribes, and each tribe is different. But that trust responsibility means different things to different tribes. Each agency must 

try to understand the needs of the tribes that it serves, and the Bureau should not try to rely on a one size fits all approach. For example, the inflexibility of TAMS has been cited numerous times as 

an excuse for delays. On the other hand, because the BIA lacks the 

technology required to manage the Tribe’s resources adequately, 

the Tribe’s department of energy has scanned its entire set of files 

and developed its own data base in-house, complete with a GIS 

module that TAMS lacks. It is the juxtaposition, like these, the disparity between the Tribe’s technological acumen as compared to the 

Bureau’s technical paralysis, that make the inherent Federal function requirement all the more patronizing and meaningless. 

With that, the shortcomings of the BIA are not fresh revelations. 

As you know, last week the House did pass the Native Energy Act, 

which would tackle many of these problems identified in the GAO 

report. The Tribe supports that bill and supports Chairman 

Barrasso’s Indian Tribal Energy Development and Self-Determination Act Amendments. 

With that, we are ready to answer any questions. Thank you. 

[The prepared statement of Mr. Olguin follows:] 

20 

PREPARED STATEMENT OF HON. JAMES ‘‘MIKE’’ OLGUIN, TRIBAL COUNCIL MEMBER, SOUTHERN UTE INDIAN TRIBE

Good afternoon Chairman Barrasso, Vice Chairman Tester, and Committee members. Thank you for the opportunity to provide a statement on behalf of the Southern Ute Indian Tribe regarding BIA’s supervision of Indian Energy Development, 

and thank you for commissioning this important GAO report. 

My name is Mike Olguin. I am an elected member of the Southern Ute Indian 

Tribal Council, which is the governing body of the Southern Ute Indian Tribe. The 

Tribe occupies the Southern Ute Indian Reservation (Reservation) in southwest Colorado. The Reservation comprises approximately 700,000 total acres and its boundaries include approximately 311,000 surface and mineral acres of land held in trust 

by the federal government for the benefit of the Tribe. As a result of the complex 

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

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

United States. 

The Tribe had spent a great deal of time with staff from the Government Accountability Office who prepared this report. Tribal officials and staff met with GAO auditors and provided information regarding the Tribe’s experience with the Bureau of 

Indian Affairs. The Tribe was pleased with the final product and would like to take 

this opportunity to focus on some of the key points and share with you stories of 

the Southern Ute Indian Tribe’s experience. 

Indian Energy—Conventional and Renewable—has Enormous Potential for 

Indian Tribes and their Members in Terms of Jobs and Household 

Incomes 

The Southern Ute Indian Tribe is a great example of the positive impacts of Indian energy development. Less than fifty years ago the Tribal Council had to end 

the practice of distributing per capita payments to tribal members because the Tribe 

could not afford them. Today the Tribe provides health insurance for its tribal members, promises all members a college education, and has a campus dotted with stateof-the art buildings. This success was not an accident. Without a prolonged effort 

to take control of its natural resources in the face of numerous obstacles, including 

BIA mismanagement, the Southern Ute Indian Tribe would not be the economic 

powerhouse that it is today. In 1974 the Tribal Council placed a moratorium on oil 

and gas development on the Reservation until the Tribe could gain better understanding and control over the process. That moratorium remained in place for 10 

years while the Tribe compiled information and evaluated the quality and extent of 

its mineral resources. As part of that process, in 1980, the Tribe created its Department of Energy. Because the Tribe’s leaders believed that the Tribe could do a better job of monitoring its own resources than federal agencies did, shortly after passage of the Federal Oil and Gas Royalty Management Act of 1982, the Tribe entered 

into a cooperative agreement with the Minerals Management Service permitting the 

Tribe to conduct its own royalty accounting and auditing. These acts of energy development self-determination are key to the Tribe’s economic success. 

The Tribe is a leader in Indian Country with a demonstrated and sterling record 

of business and administrative acumen. The Tribe is the only tribe in the nation 

with a AAA+ credit rating, which was earned through years of successful and prudent business transactions. Though the Tribe has a diversified economic development strategy, energy development remains the key component of the Tribe’s strategy. Approximately thirty percent of the Tribe’s income comes from energy development on the Reservation. Accordingly, barriers to energy development—including 

BIA’s poor management—have a direct bearing on the Tribe’s economic success. 

That in turn has a direct bearing on the health and welfare of the Tribe’s 1,500 

members. 

The Federal Role in Indian Energy Development has Enormous Impact— 

Largely Negative—on Revenue for the Southern Ute Indian Tribe from 

Reservation Energy Development 

The Tribe has achieved its stature at times with the assistance of, but often in 

spite of, the BIA’s role in Indian energy development. According to the GAO Report, 

in 2012, the Department of the Interior’s Inspector General found that weaknesses 

in BIA’s management of oil and gas resources contributed to a general preference 

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

This conclusion comes as no surprise to the Tribe, who is all too aware of this reality. The Tribe’s wholly owned oil and gas company has had to weigh the uncertainties associated with BIA administrative delays and the quality of BIA and BLM 

management decisions when considering whether to invest in energy development 

on Tribe’s own lands or off the Reservation. The Tribe is hopeful that the GAO’s 

21 

conclusion in this regard brings additional attention to this problem. The GAO 

noted that ‘‘According to Interior officials, while the potential for oil and gas development can be identical regardless of the type of land ownership—such as state, private, or Indian—the added complexity of the federal process stops many developers 

from pursuing Indian oil and gas resources for development.’’ In addition to a cumbersome process than involves not one but three federal agencies (BIA, BLM and 

ONRR), development of minerals on Indian lands also requires compliance with 

NEPA and the National Historic Preservation Act, which can add significant delay. 

Based on an interview with a private investment firm, GAO learned that an oil or 

gas well that develops Indian resources generally costs almost 65 percent more for 

regulatory compliance than a similar well developing private resources. The BLM’s 

new hydraulic fracturing rule, currently stayed by the U.S. District Court in Wyoming, would dramatically compound this problem if it ultimately goes into effect. 

These regulatory compliance costs are magnified when oil is trading around $50 

a barrel, as it is now. The State of Colorado, which issues drilling permits on fee 

lands, typically issues a permit in approximately 45 days. If the permit is not issued 

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

BLM issues the permits to drill, which typically take four to six months. There are 

no regulatory commitments to a processing timeframe; operators must just wait. In 

addition, permitting costs are much higher on tribal lands than on fee lands. While 

the GAO Report noted that the BLM’s drilling permit fee is $6500.00, as of today 

that fee is actually $9500.00, and none of that money goes to the Tribe. In comparison, a state drilling permit in Colorado is free. These disparities create a problem 

that is exacerbated on reservations like the Southern Ute Indian Reservation, where 

tribal land and non-Indian fee land are arranged like a checkerboard, and oil or gas 

operators can develop on non-Indian fee land for less time and money, all-the-while 

depleting Indian minerals. 

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

federal law and regulations still require the BIA to review and approve even the 

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

the Reservation. The Tribe must generally wait upon approval from the Agency, 

which will invariably delay a proposed tribal project. These delays are exacerbated 

by the fact that the Agency approval often constitutes a federal action, which triggers environmental and other review requirements, even for simple and straightforward realty transactions. In essence, the Tribe’s own lands are treated as public 

lands, and, if federal approval is involved, no action—not even some initiated by the 

Tribe itself—can occur until the federal government has analyzed the potential impacts. 

In order to eliminate these delays and in recognition of the Tribe’s ability to protect its own interests and assets without assistance from the BIA, the statutory and 

regulatory requirements for BIA approval of tribal transactions must be modified so 

that BIA review and approval of realty-related tribal projects is not required. Entering into a Tribal Energy Resource Agreement (TERA) would-at least in theory-address this problem, but despite the Tribe’s repeated requests for clarification of the 

TERA process, and in particular, for clarification on what constitutes an ‘‘inherent 

federal function’’ for which the Tribe would not be allowed to assume authority 

under the Department’s regulations, the Department of the Interior has refused to 

provide guidance. The Tribe now learns in the GAO Report that ‘‘Interior officials 

told GAO that the agency has no plans to provide additional clarification.’’ The Tribe 

notes that this is a problem Interior created for itself, as the term ‘‘inherent federal 

functions’’ is only contained within Interior’s regulations, and is found nowhere in 

the Indian Tribal Energy Development and Self-Determination Act, the statute 

through which Congress created TERAs. 

Tribes like Southern Ute that Actually Practice Self-Determination Still 

Need the BIA to be Effective, Efficient, and Responsive to the Tribe’s 

Needs When it Comes to Federal Functions 

The BIA, particularly at the local Southern Ute Agency office, has been underfunded and understaffed for decades. As a result, the review and approval process 

often causes substantial delays that damage the Tribe and its interests. At one point 

in time several years ago, the Tribe estimated that delays associated with the review and approval of pipeline projects had cost the Tribe over $90M in lost revenue. 

To make up for the BIA’s shortcomings and ensure that tribal business can continue, the Tribe has committed tribal staff and resources to ensuring that the work 

needed to be done by the BIA to approve transactions can be completed in a timely 

manner. 

22 

1This appears to be a systemic issue. The Tribe’s few positive experiences with the BIA in 

the past decade are limited to positive interactions with motivated, committed, engaged individual Agency employees, such as the Tribe’s new Agency Superintendent, Priscilla Bancroft. 2The Tribe has repeatedly told the Bureau that it will not enter into a 638 contract for realty 

functions unless and until the Bureau organizes its records. The lack of a 638 contract is nevertheless heralded as the reason the Tribe cannot assist with TAAMS encoding. 

Unfortunately, none of the GAO Report’s Recommendations for Executive Action 

address the problem of underqualified and untrained staff. The Department of the 

Interior’s comments stated that the development of an Indian Energy Service Center 

will solve this problem, but this solution still will not solve the problem at a local 

level. In addition, before an Indian Energy Service Center is implemented, there 

should be a review of existing organizations (e.g., various offices and services provided by the OST) that were created to assist in the wake of the Cobell lawsuit. 

The high cost of living in the Durango area is often cited as the reason that the 

Bureau cannot attract candidates to staff the Southern Ute Agency, yet the Bureau 

does not advertise locally and in forums where local people look for jobs in the area. 

If flight risk and high cost of living make it difficult to attract staff who will stay 

here, why would the Bureau not look to candidates who already live in and are committed to this Region, and then provide training? 

If BIA Cannot Help Itself, it Should Readily Accept Assistance from Tribes 

when Offered 

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

Ute Indian Tribe has implored the BIA to accept the Tribe’s countless offers to assist. BIA has repeatedly resisted those offers for reasons that are not particularly 

compelling. The GAO’s report makes perfectly clear that the BIA does not have the 

data, resources, technological capabilities, or staffing to meet the needs of tribes. 

The Bureau also has no apparent incentive to meet tribal needs. 1 The Tribe has 

data, resources, staffing, technological capabilities, and the incentive to improve the 

situation. To help with the backlog in processing transactions, the Tribe has attempted to assist with Trust Asset Accounting Management System (TAAMS) encoding, only to be told that it was not permissible for the Tribe to assist unless it 

has a 638 contract. 2 This fact was only communicated after the Bureau led the 

Tribe on for several years, requiring technology expenditures and requiring and conducting extensive background checks for tribal employees who would be assisting. 

When the Agency’s records were discovered to be in utter disarray, and after an 

OTRA audit resulted in findings of records in jeopardy, the Tribe tried to assist the 

Bureau with cleanup and organization. However, the Tribe was told that tribal employees assisting with the Tribe’s records needed to have extensive background 

checks, and that the tribal employees did not have the knowledge and expertise necessary to assist. The Tribe had several of its employees go through the background 

check process, which involved a long application, a 160 mile round trip drive to be 

finger-printed and have a photograph taken for facial recognition, and an hour-long 

interview with an OPM contract investigator. This process took many months. The 

Tribe even hired local museum archivists to conduct a training on archival techniques for Agency and tribal staff so that the Bureau would allow tribal staff to 

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

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

it could not allow the Tribe to assist. This circular reasoning (if we let the Tribe, 

without proper background checks and training, assist us in organizing and 

inventorying the irreplaceable historic records that we have haphazardly thrown in 

open cardboard boxes on the floor below shelves of industrial size bottles of toilet 

bowl cleaner, they might sue us for not upholding our trust responsibility to protect 

their records from tribal staff who do not have the requisite background checks and 

training) was illogical, maddening, patronizing, and contrary to the Tribe’s best interests, as articulated by the Tribe. 

The Trust Responsibilities of the BIA to the Tribe must be Modified so that 

the Agency Can Provide Support for and Enforcement of the Tribe’s 

Decisions Rather than Delay the Implementation of those Decisions 

Many months after the OTRA report, after the arrival of a new, helpful Agency 

Superintendent, the Bureau has entered into a PL 93–638 contract which allows the 

Tribe to, largely with the Tribe’s own funding, scan and organize the Agency’s files 

before they are sent to the American Indian Records Repository. The records will 

be prepared and scanned using 300 dpi scanners. The electronic files will be sent 

off site, where they will be organized in accordance with the Bureau’s filing protocol, 

the 16 BIAM, which has been only loosely followed at the Southern Ute Agency in 

23 

past decades. The electronic files will then be indexed into the Tribe’s proprietary 

Geographic Information System (GIS). This scanning project, which utilizes less 

than $100,000 from the Department of the Interior and more than $1M of tribal 

money and the dedication of tribal staff, is well worth the money to the Tribe. The 

Southern Ute Agency’s belated cooperation on this project brings a sigh of relief and 

a radical change from past practice. The Bureau’s past attempts to protect the Tribe 

from itself are patronizing at best, and a breach of trust, at worst. The Tribe is wellequipped to define and articulate its best interests, yet the ethic of the Bureau is 

to second-guess and overrule it. This does not make sense, particularly given that 

the Bureau itself cannot meet the Tribe’s needs. The Bureau must be more flexible. 

The BIA Cannot Be All Things to All Tribes, but in Consultation with 

Tribes, it Should Identify Those Things It Will Do and then Endeavor 

to do them Extremely Well 

Southern Ute recognizes that the Bureau cannot be all things to all tribes, and 

that each tribe is different. Too, the trust responsibility means different things to 

different tribes. This underscores the need for each Agency to endeavor to truly understand the needs of the tribes that it serves, and to work toward responding to 

those needs. This will mean that the Bureau will not be able to rely on a one-sizefits-all approach. The Bureau is not particularly well equipped for flexibility, unfortunately. For example, the Southern Ute Indian Tribe, as well as operators on the 

Reservation, prefer to handle an operator’s rights-of-way all at once. This utterly rational approach allows the Tribe to more easily monitor the end date and renegotiate renewals when an operator’s hundreds of rights-of-way are handled together. 

However, when the Southern Ute Indian Tribe presented one of these ‘‘global rightsof-way’’ packages to the Southern Ute Agency for approval, it took the Agency approximately four years to approve them. The Tribe later learned that the biggest 

hurdle to prompt approval was that there was no effective way to enter the rightsof-way into TAAMS. The unwieldiness of TAAMS has been cited numerous times 

as an excuse for delays in energy transaction processing and as an excuse for why 

the Bureau cannot assist the Tribe. If this system is so fundamental to the Bureau’s 

ability to function, why did the Bureau select and contract for a system that is so 

poorly designed and so inadequate? 

The GAO Report identified problems with TAAMS. As the Report noted, ‘‘BIA 

does not have geographic information system (GIS) mapping data identifying resource ownership and use of resources, such as existing leases. Interior guidance 

identifies that efficient management of oil and gas resource relies, in part, on GIS 

mapping technology because it allows managers to easily identify resources available for lease and where leases are in effect. However, BIA’s database for recording 

and maintaining historical and current data on ownership and leasing of Indian 

land and mineral resources (TAAMS), does not include a GIS mapping component.’’ 

The Report noted that ‘‘according to a BIA official, without a GIS component, the 

process to identify transactions such as leases and ROW agreements for Indian land 

and resources can take significant time and staff resources to search paper records 

stored in multiple locations.’’ 

To improve access to critical mineral resource information, the Tribe’s Department of Energy has scanned its entire set of files and developed an associated GIS 

system that allows each document to be linked to a location on a map. Together the 

store of digital documents and the GIS make up the Department of Energy’s Land 

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

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

complete with the GIS module that TAAMS lacks. It is juxtapositions like these— 

the disparity between the Tribe’s technological acumen as compared to the Bureau’s 

technological paralysis—that make the ‘‘inherent federal function’’ requirement all 

the more patronizing and meaningless. 

The shortcomings of the BIA are not fresh revelations and, as you know, last 

week the House passed the ‘‘Native Energy Act’’ (H.R. 538), which would tackle 

many of the problems identified in the GAO report. The Tribe supports that bill as 

it supports Chairman Barrasso’s ‘‘Indian Tribal Energy Development and Self-Determination Act Amendments’’ (S. 209). With a short calendar remaining in 2015, 

we hope the Senate takes up S. 209 in the days ahead. 

Thank you for the opportunity to appear before you today. I would be happy to 

answer any questions the Committee may have. 

Attachment 

24 

SUPPLEMENTAL STATEMENT OF JAMES M. ‘‘MIKE’’ OLGUIN

Chairman Barrasso, Vice Chairman Tester, and Committee members, on behalf 

of the Southern Ute Indian Tribe, I would again like to thank you for allowing us 

to participate in this Oversight Hearing. The Committee’s review of the GAO Report 

on BIA’s management of energy development on Indian lands signaled bi-partisan 

recognition that the current system of managing energy development in Indian 

country is simply unacceptable. During the hearing on October 21st, members of the 

Committee asked questions and received testimony on several matters that are deserving of additional comment. Specifically, the items we wish to address are: (1) 

shortcomings in the BIA’s land records system; (2) the dilemma of withholding ‘‘inherent federal functions’’ from tribal administration; and (3) the role of the BIA in 

advocating tribal best interests to sister agencies. We respectfully request that you 

consider our Tribe’s supplemental comments on these subjects. 

1. The Records System for Indian Land Title Is Grossly Inadequate 

The GAO Report found that the BIA ‘‘does not have the data it needs to verify 

ownership of some oil and gas resources, easily identify resources available for lease, 

or easily identify where leases are in effect.’’ GAO Report at 18. Quite separate from 

the slow conversion of the BIA’s automated land records system, the Trust Asset 

and Accounting Management System (TAAMS), to facilitate GIS mapping, the underlying deficiency in verifiable land and mineral ownership records is a 

foundational concern with enormous ramifications. Based on the experience of 

Southern Ute, we understand that the BIA has never successfully completed the importation of historic, hard-copy title records into the TAAMS system. Further, because successful encoding of historic or current transactional documents into 

TAAMS is an administrative condition to such documents actually being recorded 

in the BIA’s Land Title and Records Offices (LTROs) (the official regional locations 

for maintaining land title records), whether a critical document actually exists in 

the official LTRO records depends—not on its timely delivery for recording—but 

rather on whether the BIA personnel have had the time and training to convert the 

written document into TAAMS data. At Southern Ute, backlogs in TAAMS encoding 

have correspondingly diminished the reliability of LTRO as the definitive source for 

ascertaining Indian land title. We sincerely hope that our concern regarding this 

matter derives from circumstances that are localized and anomalous, but we respectfully urge the Committee to delve deeper into this issue. It is the fundamental, 

bedrock trust function of the BIA to maintain accurate records of Indian land ownership. 

2. The Secretary’s Unwillingness to Permit Tribes to Assume ‘‘Inherently 

Federal Functions’’ Stymies Congress’ Intent Under Either TERAs or 

HEARTH Act Approaches 

Commencing several years before passage of the Energy Policy Act of 2005, the 

Southern Ute Indian Tribe was one of several tribes advocating the creation of a 

statutory vehicle by which an electing tribe, with demonstrated capacity, could obtain Secretarial approval to bypass the Secretarial approval requirements for energy 

leases, rights-of-way and other business agreements. The reasons for seeking this 

optional statutory mechanism reflected the reality that the capacity and sophistication of some tribes and the complexity of their transactions (such as monetization 

of Section 29 non-conventional fuel tax credits) had simply outstripped the expertise 

of BIA. As debate began, however, multiple issues were identified by various tribes 

and non-tribal groups, including: applicability of NEPA, development of tribal environmental review procedures, public comment opportunity, waivers of trust responsibility, retrocession of TERAs, and tribal capacity determinations. The resulting 

TERA statute embodied in the Indian Tribal Energy Development and Self Determination Act (25 U.S.C. § 3504) is a complicated and daunting vehicle for achieving 

what was intended to be a simple objective. 

While the TERA statute addresses many matters, Congress recognized that the 

Secretary would need to supplement those provisions with implementing regulations 

and directed that the Secretary promulgate the regulations within one year of passage of the statute. 25 U.S.C. § 3504 (e)(8). Recognizing that such deadlines are 

sometimes missed (it took 11 years for the Secretary to promulgate regulations 

supplementing the Indian Mineral Development Act of 1982, only ten and a half 

years overdue), the Southern Ute Indian Tribe offered the services of its staff and 

attorneys to take a preliminary stab at creating a conceptual draft. The BIA not 

only accepted the Tribe’s offer, but also assigned officials from the Office of Indian 

Energy and Economic Development and the Solicitors’ Office to participate in the 

preliminary process. 

25 

The immediate question confronted by the drafting participants was whether the 

permissible scope of a TERA might include the regulatory and administrative functions typically performed by the BIA or BLM in implementing a Secretarially approved energy lease, right-of-way or business agreement. For example, if a tribally 

approved oil and gas lease under a TERA still required BLM approval of an Application for Permit to Drill, could the Secretary authorize a TERA tribe to review and 

approve the APD? With support from the highest levels of the BIA, the participants 

were encouraged to maximize the potential scope of the TERA, consistent with the 

statutory language and Congress’ intent. 

Upon completion of the initial drafting, the participants delivered the conceptual 

document to the BIA, which gave the BIA a head start in preparing draft regulations later circulated for public comment in conformity with the Administrative Procedures Act. To the consternation of tribal participants, the draft published regulations and the final TERA regulations carved an undefined exception from the potential scope of a TERA by withholding ‘‘inherently Federal functions’’ from the ancillary administrative activities that could be undertaken by a TERA tribe in overseeing activities on a non-federally approved lease, right-of-way or business agreement. 25 C.F.R. § 224.53(e)(2). Despite repeated efforts to obtain an explanation 

from the BIA about what ‘‘inherently Federal functions’’ means in the context of the 

potential scope of a TERA, the Tribe has been stonewalled. The GAO was also unsuccessful in obtaining clarification on this point because ‘‘the agency has not determined what activities would be considered inherently federal... and doing so 

could have far-reaching implications throughout the federal government.’’ GAO Report at 32. Indeed, when questioned at the Oversight Hearing about the BIA’s unwillingness to clarify this non-statutory exception to the scope of a TERA, the Secretary’s representative, Principal Deputy Assistant Secretary, Indian Affairs Lawrence S. Roberts, provided little assurance that an interested tribe will ever have 

advanced knowledge about the potential scope of a TERA. 

Significantly, as Deputy Assistant Secretary Roberts reminded the Committee, Assistant Secretary Washburn has previously advocated extension of the HEARTH Act 

(25 U.S.C. § 415(h)) to energy related leases, rights-of-way, and business agreements, as a preferable alternative to clarifying the TERA statute or regulation. The 

HEARTH Act is clearly a simpler mechanism for removing Secretarial approval requirements than the TERA statute. However, in attempting to address post-approval administrative powers, the TERA regulations are much more ambitious than 

the HEARTH Act for a reason; the administrative functions and approvals related 

to energy project operations interplay directly with the performance of energy lease 

obligations and those administrative activities are also points of delay in energy resource development in Indian country. If the HEARTH Act is extended to energy 

development, we believe that Indian country and Congress will demand a clearer 

understanding of what ‘‘inherently Federal functions’’ are and why they may not be 

assumed by capable tribes. 

3. As Evidenced in the BLM’s Rulemaking for Hydraulic Fracturing, It Is 

not Apparent That BIA Has Been an Effective Advocate for Tribal Best 

Interests in Sister Agency Rulemaking 

Because of the importance of oil and gas development to our Tribe, we participated in every stage of consultation offered by the BLM regarding its proposed hydraulic fracturing regulation beginning in January of 2012. Frankly, BLM was not 

forthright about the advanced status of its rulemaking activities when it began 

those discussions with tribes, and it never seriously entertained repeated tribal recommendations that its rule separately address Indian lands from public lands or 

that tribes be afforded an opportunity to opt-out of its rule. As recently found by 

United States District Court Judge Skavdahl, ‘‘The BLM had already drafted a proposed rule by the time the agency initiated consultation with Indian tribes in January of 2012.’’ Order on Motions For Preliminary Injunction at 39, Doc. 119, Sept. 

30, 2015, Wyoming v. United States Department of the Interior, Case No. 2:15–CV– 

043–SWS (D. Wyoming). Additionally, in granting a preliminary injunction suspending the rule, Judge Skavdahl determined that ‘‘the BLM summarily dismissed 

legitimate tribal concerns, simply citing its consistency in applying uniform regulations governing mineral resource development of Indian and federal lands and disavowing any authority to delegate regulatory responsibilities to tribes.’’ Id. 

Although not discussed in the Wyoming case, the Southern Ute Indian Tribe and 

other energy producing tribes had also made repeated requests to the BIA to intervene with BLM on behalf of tribes. At a hastily assembled meeting with BIA officials who were attending the annual NCAI meeting in Nevada in June of 2013, a 

room full of tribal representatives brought the pending BLM rule to the attention 

of BIA officials, who seemed unfamiliar with the fact that the rule was pending. 

26 

Tribal concerns at that time were evidenced by the adoption of NCAI Resolution No. 

REN–13–077, which called for separation between regulation of Indian lands and 

public lands and greater deference to tribal sovereignty. At various subsequent occasions in 2013 and 2014, tribal representatives traveled to Denver and Washington, 

D.C. to communicate their concerns, not just to BLM, but to urge BIA to speak on 

their behalf in this matter. To the very end, BLM refused to consider treating Indian lands and public lands differently or allowing electing tribes to opt out of the 

rule. To be sure, the final BLM rule did set up a waiver mechanism permitting the 

applicable State BLM Director to permit a tribe or state to substitute its own rules 

for BLM’s, but only upon a finding that such a rule meets the federal objectives of 

the BLM rule. The BLM Director’s determination is entirely discretionary and not 

subject to administrative challenge under the currently enjoined BLM rule. 

It is possible that the referenced waiver provision is due in part to BIA involvement; however, we were never advised of that involvement. We were disappointed 

by the lack of visible support of the BIA for our position. We also believe that, because of its unique expertise and responsibilities, it should be active in assisting 

tribes when the actions of sister agencies implicate legitimate tribal interests. 

Conclusion 

We respectfully thank you for the opportunity to address these matters and look 

forward to working with you in the future with regard to Indian energy issues. 

The CHAIRMAN. Thank you very much, Mr. Olguin. 

Mr. Stafne? 

STATEMENT OF HON. GRANT STAFNE, COUNCILMAN, FORT 

PECK ASSINIBOINE AND SIOUX TRIBES 

Mr. STAFNE. Good afternoon, Chairman Barrasso, Vice Chairman 

Tester and members of the Committee. 

My name is Grant Stafne. I serve as a member of the Tribal Executive Board of the Assiniboine and Sioux Tribes of the Fort Peck 

Reservation. 

On behalf of Chairman A.T. Stafne, I thank the Committee for 

holding this important hearing. It highlights the GAO findings concerning Indian energy development, namely, that poor management by BIA has hindered energy development on Indian lands. 

The Fort Peck Reservation lies within the western part of the 

Williston Basin, which include the oil-producing formation commonly known as the Bakken and Three Forks Formation. Estimates are that Bakken and Three Forks collectively hold 24 billion 

barrels of potentially recoverable crude oil, 20 billion barrels in oil 

and 40 billion barrels in natural gas. I am here today to provide 

specific recommendations that I hope the Committee will help implement, because as for the Fort Peck Reservation, the GAO findings are all true. 

At Fort Peck, we have experienced long delays by the Fort Peck 

agency in processing mineral leases, appraisals and requests for 

drilling permits, raising Federal permit and rights-of-way fees and 

other energy development costs well above off-reservation fee lands, 

sometimes setting rates three times the going rate in our area. And 

poor allocation of agency personnel who can expedite permits, 

rights-of-way and other Federal requirements. 

We have considerable experience in oil and gas development, dating to the 1950s. It is simply unacceptable to my tribe that agency 

shortcomings have resulted in missed development opportunities 

for tribes, lost revenues and jeopardization of otherwise viable energy projects. The United States must do a better job of honoring 

its trust obligations to all tribal nations in the field of natural reVerDate Mar 15 2010 13:07 Apr 26, 2016 Jkt 099901 PO 00000 Frm 00030 Fmt 6633 Sfmt 6601 S:\DOCS\99901.TXT JACK
27 

source development. The Departments of Interior and Energy 

should work together more closely. 

We make the following six recommendations. One, improve the 

BIA’s administration of energy development. This starts with having qualified and trained personnel in realty appraisals and permitting being detailed to the relevant BIA agency and regional offices. Energy developers will not pursue otherwise viable tribal energy leases if they fear they will be subject to delays and arbitrary 

fees and costs that they do not encounter off-reservation. Two, reduce oil and gas fees. BLM currently charges $6,500 for 

a permit application to drill on Indian and tribal trust lands. The 

State of Montana charges $75 to process the same kind of permit 

on State fee land. Had Congress known this, we doubt it would 

have set so high a fee as to discourage energy development on tribal trust lands. 

Three, ensure that the lease bid deposits are placed in interestbearing accounts. This was done historically and should be reinstituted. 

Four, eliminate dual taxation. As the GAO report found, dual 

taxation hinders oil and gas development on Indian lands as a result of the wrongly-decided Supreme Court decision in Cotton Petroleum that allows States to tax certain activities by non-Indian 

companies on Indian and tribal trust lands. This discourages economic activities on tribal lands. Cotton was wrongly decided. We 

ask Congress once again to pass legislation returning full taxing 

authority to tribal governments. 

Five, eliminate barriers to wind energy and other renewable energy projects. Our reservation provides a great opportunity for 

wind development, but ever-changing national energy polices and 

the lack of inexpensive and accessible transmission line capacity 

hinders wind energy development at Fort Peck. 

Six, develop environmentally and culturally sustainable energy 

projects. We fully support job creation initiative and economic development opportunities when such activities are balanced with 

longstanding ranching and farming activities and a sacred commitment to preserve our tribal homelands. 

In conclusion, we do not suggest the elimination of Federal oversight over tribal energy projects. We ask, however, that the Federal 

Government do its job more efficiently and with greater consultation with tribal governments. 

[Phrase in Native tongue.] 

[The prepared statement of Mr. Stafne follows:] 

PREPARED STATEMENT OF HON. GRANT STAFNE, COUNCILMAN, FORT PECK

ASSINIBOINE AND SIOUX TRIBES

I. Introduction 

My name is Grant Stafne, and I am a member of the Tribal Executive Board of 

the Assiniboine and Sioux Tribes of the Fort Peck Reservation. Tribal Chairman AT 

Stafne and my fellow Tribal Executive Board members send their best wishes and 

thanks to Chairman Barrasso, Vice Chairman Tester, and the Committee for holding this important oversight hearing on the GAO’s report on the effects of BIA’s 

management on development on Indian Lands, GAO–15–502, Indian Energy Development: Poor Management by BIA has Hindered Energy Development on Indian 

Lands (‘‘Report’’). 

The Fort Peck Reservation consists of over two thousand square miles of land in 

northeastern Montana. The Assiniboine and Sioux Tribes and individual Indians 

28 

own about one million acres of land. Over 6,700 Tribal members and non-member 

Indians live on the Reservation, along with over 3,200 non-Indians. We have been 

developing oil and gas reserves on our Reservation since the early 1950s. 

II. The Opportunities and Challenges of Energy Development on the Fort 

Peck Reservation 

The Fort Peck Reservation lies within the western part of the Williston Basin, 

which includes many oil producing formations, including what is commonly known 

as the Bakken formation and the Three Forks formation. Since the 1950s, a major 

part of the Tribes’ economy has been based on oil and gas development. In the 

1950s, the Tribes began to lease substantial amounts of Tribal mineral lands to nonIndian companies for oil and gas development. In the oil boom of the 1970s and 

early 1980s, we asserted much greater control over this process, insisting on increased royalty rates for new Tribal leases, and entering into service contracts 

where the Tribes hired a private company to explore and develop Tribal oil and gas 

for our own benefit. We also imposed a Tribal severance tax on energy development. 

During the early 1980s, Tribal revenues from oil and gas lease rents and royalties 

came to over $8 million in some years. Over the last two decades, oil and gas development on the Fort Peck Reservation has tapered off significantly. 

However, the development of horizontal drilling techniques allows for better access to known oil and gas reservoirs in the Bakken and Three Forks formations on 

our Reservation. These reserves were previously inaccessible due to the low porosity 

and low permeability of the Bakken and Three Forks rock formations containing the 

oil and gas, which made it difficult to extract the product using conventional vertical 

drilling techniques. The oil and gas is essentially trapped in the dense rock formation and cannot be extracted merely by drilling downward. Instead, the oil and gas 

must be released through horizontal drilling and a process called hydraulic fracture 

stimulation or more commonly ‘‘fracking.’’ An April 2008 U.S. Geological Survey Report determined that horizontal drilling and fracturing techniques could provide access to 3 to 4.3 billion barrels of recoverable oil in the Bakken formation alone. In 

2011, Continental Resources Inc., a petroleum liquids producer in the U.S., declared 

that the ‘‘Bakken play in the Williston Basin could become the world’s largest discovery in the last 30–40 years.’’ Continental estimates the Bakken and Three Forks 

collectively hold 24 billion barrels of potentially recoverable crude oil equivalent: 20 

billion in oil and 4 billion in natural gas. While much of the recent Bakken play 

has focused on reserves in North Dakota, it is now moving back to Montana and 

to the Fort Peck Reservation in particular. 

Even though the recent drop in the price of oil presents an additional obstacle to 

development of our oil and gas resources, the Fort Peck Tribes sees this technological advance as an opportunity for our Tribal government—working in close collaboration with our Federal trustee—to use the bounty of our natural resources to 

create jobs and spur sustainable economic development to erase the persistently 

high rates of unemployment and poverty on our Reservation. Despite our best efforts over the past decades to develop our natural resources in an economically and 

environmentally sustainable manner, the difficulty of tapping these reserves, along 

with the challenges of dealing with multiple jurisdictions, have made it difficult for 

our Tribal government to make a significant dent in the unemployment and poverty 

that still plague our Reservation. We can and must do better, but this will only happen if our Federal trustee works with us to avoid the mistakes of the past. Unfortunately many of the factors identified in the recent GAO report on Indian Energy 

Development have had direct impacts on the pace of development of the oil and gas 

resources on our Reservation. 

For example, the Report identifies the nature of ‘‘checkerboard’’ and fractionated 

land interests as a serious problem. See, e.g., Report at 28. Like most reservations 

in Montana, our Reservation was opened to homesteaders a century ago, with trust 

and fee lands interspersed in a ‘‘checkerboard’’ ownership pattern. Consequently, 

the development of lands and resources within our Reservation is subject to oversight from many federal, state and tribal agencies and laws. If done properly and 

with respect for tribal sovereignty, federal government oversight and regulation 

should not unduly impede energy development or infringe on the proper exercise of 

Tribal governmental authority on our Reservation. Unfortunately, our experience 

has taught us that federal involvement is not always helpful, particularly in the 

field of energy development. 

Federal and state agencies often do not coordinate well with one another or with 

tribal agencies. And as the Report identifies, this leads to long delays in the approval of required paperwork and in the implementation of tribally-beneficial energy 

development policies. While there are many excellent, highly-motivated officials in 

the Department of the Interior (DOI) and the Department of Energy (DOE) working 

29 

to provide useful technical assistance to tribes, too often this technical expertise 

does not make it down to the BIA Regional Offices and Agencies on the reservations. BIA Regional and Agency staff often do not have adequate technical expertise 

in the complex field of energy development, and they do not always appreciate that 

‘‘time is of the essence’’ when it comes to energy development. Our experience lines 

up with the Report’s findings on the need for more—and better trained and 

resourced—staff to work on Indian energy issues. 

The Fort Peck Agency’s long delays in processing mineral leases and other critical 

energy development paperwork often frustrate our energy development plans and 

serve only to push oil, gas, and other types of energy and mineral development off 

the Reservation. In fact, BIA approval of oil and gas leases can take so long that 

Indian probate cases have been known to open and close before any BIA action is 

ever taken. Time is money to energy producers. Federal inaction can often be as bad 

as wrong action, and we have found instances where the BIA has simply failed to 

carry out its trust responsibility by waiting months, even years, to act on mineral 

leases, appraisals, requests for drilling permits, and other documents requiring 

prompt action. 

Just as time is money to energy producers, money is money to energy producers. 

If the costs of ‘‘on-reservation’’ energy production is much higher than the cost of 

‘‘off-reservation’’ energy production, energy producers will naturally locate where it 

is less expensive to operate. We have already seen this pattern in the Williston 

Basin and do not want to see it continue. Federal permit fees and other energy development costs should not be vastly higher on tribal lands than they are on state 

lands. By and large, the market should decide these costs and fees, not federal bureaucrats. 

The United States must do a better job of honoring its trust obligation to all tribal 

nations in the field of natural resource development. As discussed in the recommendation section below, DOI and DOE policymakers should work together to 

place knowledgeable oil and gas development experts at every BIA Agency where 

tribes are actively working to develop oil production in the Bakken and Three Forks 

formations. These locally-based experts could help the BIA Agency staff improve 

their turn-around time for required approval of a wide-range of energy-related documents. These experts should also be qualified to aid tribal leaders and BIA officials 

in planning for (and identifying funding resources for) the critical transportation infrastructure needed to support energy development in a safe manner. We have witnessed the damage created on the Fort Berthold Reservation to the Tribal road systems when oil production truck traffic increased rapidly with no corresponding increase in the transportation infrastructure needed to support it. Roads were destroyed and lives were lost in preventable traffic accidents. 

Congress and the Administration have important roles to play in helping all tribes 

gain the benefits of sound and sustainable development of the Bakken and Three 

Forks formations. Congressional support for reservation-based transportation infrastructure, road maintenance and traffic safety program funding are critical to the 

safe and efficient development of the Bakken and Three Forks oil fields. Energy development activities also need to be coordinated with law enforcement officials, employee training center directors, environmental protection officials, school superintendent, and housing program directors so that the great crush of new people and 

economic activity on the Reservation does not overwhelm the Tribes’ limited governmental resources in these areas. Fort Peck Tribal members must also be adequately 

trained and equipped for jobs in the oil and gas industry. 

Greater federal funding assistance and technical support for the Tribal law enforcement, housing, environmental, career training, and educational programs will 

help us ensure that the many positives that come from sound energy development 

are not overshadowed by the negative consequences of traffic congestion, traffic safety concerns, and environmental damage. 

Our Tribal government is entrusted with protecting our homelands for the next 

seven generations. We have a duty to our ancestors to ensure that the land they 

fought to preserve for us is maintained in a culturally and environmentally sound 

manner to sustain our people for generations to come. Thus, as we consider the positive job creation and economic development potential of Bakken energy development 

or other major projects such as the Keystone XL Pipeline, we have a corresponding 

duty to ensure that these projects are carefully planned and studied to ensure that 

they do not put our sacred sites at risk or otherwise imperil the sacred trust we 

have to preserve our homelands for future generations. 

30 

III. Recommendations for Improving Reservation-Based Energy 

Development 

This hearing is timely and important. The Tribes believe the specific recommendations set out below will help ensure that tribal nations—indeed the entire Nation— 

will be in a better position to capitalize on the great economic and job creation opportunity presented by the Bakken and Three Forks oil plays. These recommendations will also help tribal nations become engines of economic growth in the broader 

field of energy development—including renewable energy development—for the benefit of all. 

A. Improve BIA’s Administration of Energy Development 

The GAO Report identified the BIA’s review and response times and the cost of 

permitting as hindering energy development. Report at 21, 27. We agree. However, 

in addition to the length of time it takes for the BIA Agency to act on leases, permits and other paperwork, a great area of concern is the deficiencies within the 

BIA’s Realty Division. Specifically, there is not a certified realty appraiser at the 

Fort Peck Agency. Consequently, the BIA’s assessed values for rights-of-way and 

well-pad sites are sometimes 300 percent what they should be. For example, the 

Fort Peck Energy Company (FPEC), which the Tribes’ former energy development 

arm, paid $15,000 each for two well-pad sites. This price may be consistent with 

the amounts now paid in North Dakota, where major development activities are already ongoing, but it is inconsistent with normal appraising practices in a place 

where oil has not yet been located in paying quantities. FPEC paid this fee under 

protest because it did not have the luxury of time to dispute the BIA’s actions. 

Available drilling rigs are in high demand and difficult to get so FPEC had to secure 

the well-pad sites even though it strongly disagreed with the BIA Agency assessment. This is but one example of our Federal trustee charging a tribally-owned corporation an improper assessment due to a lack of oil development expertise and appraisal experience. 

We have encountered the same difficulty in securing rights-of-way (ROW) for oil 

exploration activities. We are aware of one company that has cancelled its plans to 

develop two wells on the Fort Peck Reservation because the BIA Agency staff insisted on a ROW fee in excess of $28,000, which is far more than would be paid 

off-reservation. While it is of course important that allottees and our Tribal trust 

lands receive fair compensation for ROW usage, it is equally important that appraisals are not so unfair or arbitrary that they discourage legitimate oil exploration activities. In the Tribes’ view, these fees were arbitrary and were based on the unreasonable judgment of BIA personnel who are not trained appraisers. This lack of 

technical expertise discourages energy development on the Fort Peck Reservation 

because potential developers fear they will be subjected to arbitrary fees and costs 

they do not encounter off the Reservation. 

Private business interests have often complained to our Tribal Executive Board 

that they do not like to deal with BIA Agency staff that too often seems uninterested in working with private companies in a fair, timely, and efficient manner. 

More must be done to enhance the technical capacity and expertise of Fort Peck 

Agency staff in the areas of energy development, land use, and ROW appraisals. 

Senior DOI and DOE officials should work together to place highly-motivated, 

well-trained technical staff at the Fort Peck Agency and all other BIA Agencies located on Indian reservations within the active Bakken and Three Forks formation 

oil plays. These teams would be similar to the ‘‘one-stop’’ technical assistance team 

established on the Fort Berthold Agency and should include not only trained oil and 

gas lease specialists, but also a ROW specialist, a trained appraiser, and a geologist 

with oil and gas development experience. More than any other single recommendation, we believe this action will help seize this once-in-a-lifetime economic development opportunity for the Fort Peck Tribes, for other Tribes in the region, and for 

our Nation as a whole. 

B. Reduce Oil and Gas Fees 

Although this hearing is concentrated on BIA, it is important to note that another 

disincentive to drilling on Indian allottee and tribal trust lands is the $6,500 that 

the BLM charges for a permit application to drill on federal land, including Indian 

and tribal trust lands. In FY 2010, Congress increased this fee from $4,000 to 

$6,500. In theory, this fee is intended to cover the BLM’s cost of processing the drilling permit application. However, the fee is highly disproportionate to the $75 that 

the State of Montana charges to process the same kind of permit on State fee land, 

which is analogous to the differential fee problem identified in the report. See Report at 27. We see no good reason for the BLM fee to be so high on Indian and tribal 

trust lands and doubt Congress even considered the potential negative impact on 

31 

oil and gas development in Indian Country when it made this change in the law. 

Economic development in Indian country should not be used to off-set the federal 

deficit. 

C. Ensure that Lease Bid Deposits are Placed in Interest-bearing Trust Accounts 

The Tribes also seek congressional support for legislation—or at a minimum renewed pressure for administrative action—to ensure that bid deposits for oil and gas 

lease sales on Indian and tribal trust lands are once again held in interest-bearing 

accounts. Historically, bid deposits were held in interest-bearing trust accounts and, 

upon Secretarial approval of the lease or contract, both the principal and interest 

were paid to the tribal and individual Indian landowners. However, DOI policy 

changed several years ago despite our strong protests. Now, the DOI holds bid deposits and other advance payments made by successful bidders in non-interest-bearing federal accounts until the lease or contract is approved by the Secretary. 

As noted above, it can unfortunately take months and sometimes even years for 

a successful bidder to secure BIA approval of a mineral lease. Consequently, these 

bid deposits sit idle in federal accounts without earning interest for the beneficial 

land-owner, whether a tribe or an Indian allottee. By the time the funds are finally 

paid to tribes and individual Indian landowners, the value of the bid deposit has 

been eroded by inflation. 

In the Tribes’ view, the DOI’s current practice is illegal and contrary to the federal trust responsibility. Our Tribal leadership has discussed this matter with senior BIA and DOI Office of Trust Fund Management officials, but they have responded by stating that they do not believe they have the statutory authority to 

place these funds at interest. At the same time, these officials agreed that bid deposit funds should start earning interest once the successful bidder is selected, and 

that tribes and individual Indians should not bear the costs of the time that it takes 

for the BIA to review and approve leases. 

Although the Tribes believe DOI has sufficient legal authority and a clear trust 

obligation to place bid deposit funds at interest now, legislation mandating it would 

solve the problem once and for all and avoid future litigation over DOI’s improper 

handling of these funds. 

D. Eliminate Dual Taxation 

As the Report identifies, the problem of dual taxation is a serious hindrance to 

oil and gas development on Indian lands. Report at 29–30. The Fort Peck Tribes 

were one of the first Tribes in the country to institute a severance tax on oil and 

gas development on our Reservation. However, the 1989 U.S. Supreme Court decision in Cotton Petroleum Corp. v. New Mexico, 490 U.S.163 (1989), allows States to 

tax certain activities by non-Indian companies on Indian and tribal trust lands. 

When Cotton applies to allow States to impose taxes in addition to tribal taxes, economic activity on tribal lands is discouraged. Tribal and State taxes are owed for 

energy development activities in Indian Country where only State taxes must be 

paid for energy development elsewhere. This double taxation creates a serious disincentive to energy and mineral development on Tribal lands and is inconsistent 

with well-established federal policies designed to promote Tribal economic development and self-sufficiency. 

Our Tribal government has long urged Congress to overturn the poorly decided 

Cotton decision and to bar State taxation of commercial activities on Indian and 

tribal trust lands, but Congress has repeatedly failed to act. Therefore, the only way 

we could avoid the disadvantage Cotton creates was either to forego our right to tax 

energy development on Reservation lands altogether or seek to enter into an innovative tax sharing agreement with State of Montana. 

As an example of our Tribes’ leadership in this area, we reached an historic taxcollection and tax-sharing agreement with the State of Montana on March 25, 2008. 

While we are pleased with this agreement and believe it presents a model for other 

tribes to follow, we also continue to believe it is a poor substitute for congressional 

action. Simply put, the Cotton ruling was wrongly decided. We ask Congress once 

again to pass legislation returning full taxing authority to tribal governments for 

commercial activities on Indian and tribal trust lands. 

E. Eliminate Barriers to Wind Energy and Other Renewable Energy Projects 

The Fort Peck Tribes believe further development of wind energy is an important 

part of America’s energy independence. Montana is one of the five windiest states 

in the union and the Fort Peck Reservation in northeast Montana presents one of 

the greatest opportunities for wind energy development in the entire State. With the 

support of the DOE and other federal agencies, the Fort Peck Tribes spent many 

years researching and quantifying our wind energy resources, and we know that the 

potential energy that can be derived from wind power is considerable. With proper 

32 

support from the Federal government and better connections to transmission lines 

on the national energy grid, we could attract reputable business interests to partner 

with us to develop commercially viable and sustainable wind energy projects on the 

Fort Peck Reservation. 

Unfortunately, we and many others in Montana who wish to develop our wind energy resources are severely hampered by ever-changing national energy policies and 

by a lack of inexpensive and accessible transmission line capacity. Tribal wind energy projects cannot get off the ground if there is no commercially viable way to get 

our abundant wind power to energy consumers. Many of the transmission lines in 

Montana were built and are maintained by the Western States Power Authority 

(WAPA), a federal agency. In 2005, Congress directed the Secretaries of the Army 

and the Interior to conduct the Wind and Hydropower Feasibility Study (WHFS), 

which was completed in 2009, to determine the feasibility of blending wind generation with hydropower on the Missouri River, and to evaluate tribal wind generation. 

While the WHFS concluded that a 350MW Tribal Wind Demonstration Project was 

not feasible, it recommended studying facilities under 300MW and indicated that 

WAPA believed economic risk could be mitigated through the development of a 

50MW facility, if authorized and funded prior to 2015. Unfortunately, neither WAPA 

nor Congress has undertaken the development of a Tribal Wind Demonstration 

Project. Congress should now take action to authorize and fund a Tribal Wind Demonstration Project at Fort Peck and throughout Indian country generally, as its next 

step in obtaining American energy independence. 

F. Develop Environmentally and Culturally Sustainable Energy Projects 

Finally, related to our interest in wind energy development is our foundational 

belief that all economic development projects must be undertaken in ways that protect and enhance our Tribal homelands, sacred sites, and cultural resources. We 

fully support job-creation initiatives and economic development opportunities that 

allow us to develop our natural resources and improve the quality of life for our 

Tribal members. However, all of our development efforts must be balanced with our 

sacred commitment to preserve our Tribal homelands and to protect the spiritual 

and cultural heritage which our ancestors suffered so much to preserve for future 

generations. The people residing on our Reservation need clean land, water, and air 

in order to live and work in a healthy environment. In addition, ranching and farming are vital industries on the Fort Peck Reservation, so they too must be able to 

coexist and thrive alongside energy development. Otherwise, we have simply promoted one important Tribal industry at the expense of others, which would make 

no sense, economic or otherwise. 

As a Tribal government, we endeavor to support only those initiatives that are 

done in a manner that is backed by sound science and that minimizes potential adverse impacts to our Tribal lands and resources. Moreover, while we have suggested 

improved technical capacity and responsiveness within the federal government, as 

well as a reduction in certain fees that we believe should be decided by market conditions, we do not suggest the elimination of federal oversight over any projects that 

have an impact on Indian trust resources and sovereign tribal governments. We ask 

that the Committee continue to provide oversight regarding Federal agencies’ administration of programs that impact energy development on Indian reservations to 

help ensure that Tribes and our Federal trustees can work together to further Tribal priorities and both improve and protect our communities. 

We thank the Committee for allowing us to submit testimony on this critical issue 

and look forward to working with Congress and the Administration to make real 

progress toward energy independence in Indian Country. 

The CHAIRMAN. Thank you so much for your testimony. 

Now if I could call on Mr. Cuch. Thank you. 

STATEMENT OF CAMERON J. CUCH, VICE PRESIDENT OF 

GOVERNMENT AFFAIRS, CRESCENT POINT ENERGY U.S. 

CORPORATION 

Mr. CUCH. Good afternoon, Chairman Barrasso, Vice Chairman 

Tester, and members of the Committee on Indian Affairs. 

My name is Cameron Cuch, and I am Vice President of Government Affairs at Crescent Point Energy, U.S. Corporation. I am also 

a member of the Uinta Indian Tribe at Uinta and Ouray Indian 

Reservation, Utah. Thank you for the opportunity to testify on our 

33 

company’s experiences developing new tribal oil and gas resources 

in the Uinta Basin of eastern Utah. 

We have made a significant investment in Ute tribal oil and gas 

properties. However, the regulatory uncertainty with the inability 

to predict project permitting times and a shifting landscape of regulatory requirements is frustrating Crescent Point’s ability to cost 

effectively develop tribal oil and gas resources. From our perspective, the incentive for oil and gas operators to make long-term investments on tribal lands would be greatly improved if operators 

were able to work directly with individual tribes in the permitting 

and development of these projects, rather than having to work 

through the BIA as an intermediary. 

Crescent Point is one of Canada’s largest oil producers. As of 

2012, it has been one of the largest producers in Utah. In 2012, 

Crescent Point saw a tremendous opportunity to partner with the 

Ute Tribe by acquiring Ute Energy Upstream Holdings, an oil and 

gas company majority owned by the Ute Tribe and a private equity 

partner in Houston, Texas. Our corporate development strategy is 

focused on long-term growth and cost-effective full field development. One of the primary components of achieving cost effective development is regulatory certainty and the ability to predicted permitting times and requirements. Crescent Point paid $861 million to acquire Ute Energy. One of 

the primary targets of Crescent Point’s acquisition was the right to 

develop in and around the Randlett area, an area that was covered 

by an exploration development agreement between Ute Energy and 

the Ute Tribe. To date, Crescent Point has made a total investment 

of $1.6 billion in the Uinta Basin. We currently operate 349 wells 

in the Basin, 64 of which are tribal. We have long-term plans to 

develop roughly 1,000 additional Ute tribal wells. 

The delays and uncertainties we have experienced in obtaining 

drilling permits and other authorizations is jeopardizing our future 

development plans. During 2015, it has taken an average of 405 

days for Crescent Point to receive a drilling permit from BLM and 

BIA for tribal wells. In contrast, it has taken the State of Utah 

only 73 days on average to issue Crescent Point drilling permits for 

private and State-managed lands. 

The permitting delays have resulted in lost revenue to the Tribe 

and jeopardized economic viability of certain projects. Given the 

precipitous drop in crude oil prices between 2014 and 2015, many 

of the wells we would have drilled in 2014, had we been able to 

obtain permits, are uneconomic in today’s price environment and 

we have elected to defer drilling these locations. 

We estimate that the lost revenue to the tribe for these wells is 

approximately $2.3 million in royalty and $800,000 in severance 

tax per well even in today’s low oil prices. We have also run into 

Federal resistance to the Tribe’s plans to develop oil and gas resources located along the Duchesne River and its tributaries, which 

bisect the Randlett EDA area. Under pressure from EPA and Fish 

and Wildlife Service and over the Tribe’s objection, BIA has indicated that it will not allow development within the flood plain, 

which makes up roughly 30 percent of the Randlett EDA area. 

Under a full development scenario, we estimate that the Ute 

Tribe will lose $571 million in royalties and $148 million in severVerDate Mar 15 2010 13:07 Apr 26, 2016 Jkt 099901 PO 00000 Frm 00037 Fmt 6633 Sfmt 6601 S:\DOCS\99901.TXT JACK
34 

ance taxes if the BIA ultimately disallows flood plain development. 

In sum, we believe that many of the permitting delays and additional burdens to development are a result of poor coordination 

among BIA and the other Federal agencies. We also believe that 

the BIA is overly deferential to these other agencies to the detriment of tribal interests. 

For operators, there would be a substantial benefit to being able 

to work directly with tribes without numerous Federal intermediaries. We suggest that tribes be authorized to lead energy 

project permitting with BIA playing a technical support function, 

but without having to go through the onerous process of entering 

into a TERA. We have observed that this sort of arrangement is 

already happening informally and a formal adoption of this practice 

would allow for tribes to ensure environmentally responsible oil 

and gas development in a manner consistent with tribal objectives. 

From an operator’s perspective, consolidation of decision-making 

authority within individually affected tribes will increase efficiencies and regulatory certainty, increasing our incentives to invest in tribal projects. 

In closing, I would like to thank Chairman Barrasso and Vice 

Chairman Tester and the members of the Committee for the opportunity to present these issues on behalf of Crescent Point Energy. 

I am happy to respond to any questions or provide further information. Thank you. 

[The prepared statement of Mr. Cuch follows:] 

PREPARED STATEMENT OF CAMERON J. CUCH, VICE PRESIDENT OF GOVERNMENT

AFFAIRS, CRESCENT POINT ENERGY U.S. CORPORATION

Good afternoon Chairman Barrasso, Vice-Chairman Tester and Members of the 

Committee on Indian Affairs. My name is Cameron Cuch and I am Vice President 

of Governmental Affairs at Crescent Point Energy U.S. Corporation (‘‘Crescent 

Point’’). 

I. Executive Summary 

Crescent Point has made a significant investment in exploring for and developing 

oil and gas resources owned by the Ute Tribe of the Uintah and Ouray Reservation 

in Eastern Utah. However, the regulatory uncertainty associated with an inability 

to predict project permitting times and a shifting landscape of regulatory requirements is frustrating Crescent Point’s ability to cost-effectively develop Tribal oil and 

gas resources. From our perspective, the incentives for oil and gas operators to make 

long term investments in the development of Tribal oil and gas resources would be 

significantly improved if operators were able to work directly with individual Tribes 

in the permitting and development of these projects, rather than having to work 

through BIA as a federal intermediary. 

We believe that Tribes are in the best position to manage and make decisions 

about development of their resources and that BIA should be a strong advocate for 

Tribal self-governance. However, we have often seen BIA defer to other federal 

agencies’ views on resource development issues that, at times, have been contrary 

to Tribal goals, management plans and regulations. We believe that Tribes should 

be empowered to take over management of certain aspects of energy development 

that will allow the Tribe to achieve its own internally-determined goals and objectives while still providing for robust environmental review and protections. 

II. Development Opportunities—Corporate Approach 

Crescent Point is one of Canada’s largest light to medium oil producers. We are 

publicly traded (New York and Toronto Stock Exchanges) and are headquartered in 

Calgary, Alberta with a U.S. headquarters in Denver, Colorado. We entered the U.S. 

in 2011 with a significant acquisition in North Dakota and followed in 2012 with 

a large acquisition in the Uinta Basin of Eastern Utah, which included contractual 

interests in a number of properties on the Uintah and Ouray Reservation. Our primary operations are currently located in Saskatchewan, Alberta, North Dakota and 

35 

Utah. Our average production in 2015 has been 165,500 barrels per day, with approximately 20,000 coming from the United States, 15,000 of which are produced 

in the Uinta Basin. 

Crescent Point has a three-part business strategy that we have implemented for 

the purpose of ensuring consistent returns to our shareholders: (1) acquisition of 

high-quality, large resource-in-place pools with the potential for upside in production, reserves, technology and value; (2) management of risk by maintaining a conservative balance sheet with significant underutilized lines of credit and a 3.5 year 

hedging program; and (3) development of our large, low risk drilling inventory to 

maintain production, reserves and dividends. A primary component of Crescent 

Point operations is our commitment to environmental responsibility and conducting 

our business in a manner that minimizes our impact on the air, land and water surrounding our operations. 

We generally fund our acquisitions internally and strive to maximize shareholder 

return with long-term growth, dividend income and cost-effective field development. 

One of the primary components of achieving cost-effective development is regulatory 

certainty and the ability to predict permitting times and requirements. 

a) Considerations for Corporate Investment—Partnership with the Ute Tribe 

In 2012, Crescent Point acquired Ute Energy Upstream Holdings, LLC (‘‘Ute Energy’’), majority-owned by the Ute Tribe of the Uintah and Ouray Reservation (‘‘Ute 

Tribe’’) and a private equity partner based in Houston, Texas. Ute Energy was 

formed in 2005 in order to provide a vehicle to efficiently develop Tribal oil and gas 

resources to generate revenue for the Tribe. Exhibit 1 shows an overview of the 

Uintah and Ouray Reservation. In 2010, Ute Energy and the Tribe entered into the 

Randlett Exploration and Development Agreement (EDA), which gave Ute Energy 

the right to explore for and develop Tribal oil and gas resources within a geographically defined area around the small town of Randlett, Utah. The Tribe executed the 

EDA under the authority granted by the Indian Mineral Development Act of 1982, 

25 U.S.C. § § 2101–2108, which specifically authorizes Tribes to enter into agreements with private industry to develop their natural resources for the purpose of 

achieving economic independence. As required by the Indian Mineral Development 

Act, the EDA was approved by BIA. The EDA area can be seen on Exhibit 2. Exhibit 

3 shows Indian Country and the external boundaries of the Uintah and Ouray Reservation. 

When Crescent Point acquired Ute Energy, one of the primary assets of interest 

was the Randlett area and the exploration and production opportunities created 

under the EDA. We believed that the BIA-approved EDA would enable us to explore 

and develop the Randlett area in a phased and predictable manner under which we 

would operate existing wells while at the same time exploring the area in anticipation of full-field development. Crescent Point has had a number of positive experiences working with First Nations in Canada, and believed the opportunity to partner with the Ute Tribe would be a substantial benefit to Crescent Point. Because 

of these considerations, Crescent Point paid a total of $861 million to acquire Ute 

Energy. Crescent Point also operates one township in the Rocky Point Exploration 

and Development Agreement area, which lies directly west of the Randlett EDA 

area. 

To date, Crescent Point has made a total investment of $1.658 billion in the Uinta 

Basin, including a $689 million investment in development capital. We currently operate 349 wells in the Uinta Basin, 64 of which are Tribal wells, and the remainder 

of which are located on private and federal lands. We have also paid over $5 million 

to Tribal companies for support services, including water hauling, road and well pad 

construction and roustabout services. In addition, we employ a number of Tribal 

members and roughly 30 percent of our Uinta Basin field staff are American Indians, Alaska Natives and Hawaiian Islanders. 

We currently have applications pending for 203 drilling permits in the Uinta 

Basin, 95 of which are Tribal. Additionally, BIA is finalizing a Programmatic Environmental Assessment that will enable the drilling of up to 300 additional Tribal 

wells and we recently initiated an Environmental Impact Statement for all of our 

Uinta Basin assets, which will analyze the impacts of developing 725 Tribal wells. 

Crescent Point has made a significant investment to develop oil from Ute Tribal 

lands and is committed to being a responsible and cost-effective partner with the 

Tribe. However, the delay and uncertainties that we have experienced in obtaining 

permitting approvals and authorizations from the BIA has had a substantial negative impact on our ability to develop Tribal oil and gas resources and, thereby, generate income for the Tribe. 

36 

III. Permit Challenges, Economic Impacts and Project Viability 

As Crescent Point began to undertake exploration and development within the 

Randlett EDA area, we encountered a number of challenges to obtaining permits, 

largely related a lack of inter- and intra- agency coordination, duplicative review 

processes, and long review periods. This is particularly true in the context of drilling 

permits, which requires that BIA manage and coordinate consultations between several federal agencies. 

a) The Permitting Process 

Under federal statutes and regulations, and unless a Tribal Energy Resource Development Agreement (TERA) has been entered into pursuant to the Energy Policy 

Act of 2005, in order to permit a well on Tribal lands, an operator must receive a 

federal drilling permit. To initiate the process, the operator must request drilling 

permit approval from BIA. Because this constitutes ‘‘federal action,’’ BIA must comply with NEPA, even in cases where BIA has already approved of the development 

in general by, among other things, authorizing an EDA. BIA will then require that 

an appropriate NEPA analysis be performed, usually an Environmental Assessment, 

the costs of which are paid by the operator. During the NEPA process, a number 

of other federal agencies may become involved in review of the document. For operations on the Uintah and Ouray Reservation, the United States Fish and Wildlife 

Service will consult on the document under Endangered Species Act Section 7 authority and the Environmental Protection Agency will often consult on air and water 

quality issues. 

Once the Environmental Assessment is completed, a process that, in the best of 

situations, takes roughly 8 months, BIA will issue a decision record. Once BIA 

issues the decision record, permitting is handed over to BLM because federal regulations require that BLM perform all downhole analyses and is the agency that ultimately issues the drilling permit. BLM must then provide a NEPA concurrence and 

process the permit application. Thus, in order to receive a drilling permit, at least 

two federal agencies, and often four or more, will have had the opportunity to weigh 

in on the proposal. 

Because of the numerous agencies involved, the wait times associated with obtaining permits is often substantial and in almost all instances impossible to predict. 

Further, because of the multiple opportunities for inter-agency comments, BIA often 

receives comments from these other agencies proposing numerous project modifications and mitigation measures that were not contained in the initial proposed action. All of this adds substantial time and cost to the permitting process. 

b) Permit Approval Timing 

During 2015, it has taken an average of 405 days for Crescent Point to receive 

a drilling permit from BLM and BIA for Tribal wells. This is down slightly from 

2014, when it took an average of 427 days. In contrast, the State of Utah averaged 

73 days to issue Crescent Point a drilling permit to drill on private or State-managed lands during the same time period. In 2014, it took an average of 121 days 

for the State of Utah to issue a drilling permit. See Exhibit 4. 

c) BIA Concurrence to BLM Issuance 

Even after BIA has approved the NEPA documentation required to authorize a 

drilling permit, BLM concurrence times take an average of 135 days, and have 

taken as long as 203 days. Exhibit 5 shows the additive delays associated BLM concurrence times. 

By comparison, Crescent Point estimates that it takes a total of 4–6 months to 

receive all authorizations necessary, including performing environmental analyses, 

to develop oil and gas projects with First Nations. Similarly, we estimate that it 

takes, on average, one day for the provincial government to approve drilling permits 

that have been authorized by First Nations. These projects require concurrence and 

approval from just one Canadian governmental agency. 

d) NEPA-Timing Delays Lead to Either Delayed or Lost Revenue to the Tribe 

The considerable amount of time it takes BIA and BLM to complete NEPA analyses and issue permits has resulted in, at best, delay of projects and income to the 

Tribe and, at worst, project scale-back and cancellation. Given the precipitous drop 

in crude prices between 2014–2015, many of the wells that we would have drilled 

in 2014 had we been able to obtain permits are uneconomic in today’s price environment. 

For example, we submitted an application for a permit to drill the Ute Tribal 9– 

30–3–2E well on May 22, 2013. BIA issued a decision record on the NEPA Environmental Assessment on February 21, 2014. Building in a generous amount of time 

for approval, Crescent Point estimated that we would receive the permit in April 

37 

1 516 DM 10 § 10.5(G): 2The Ute Tribe can obtain access to the national funds, but must apply to the federal government in order to receive them. 

of 2014 and would drill and complete the well during May and June, with first production coming on line in July. However, we did not receive an approved permit 

until September 12, 2014, which would have put us on track to receive first production from the well in January 2015. Unfortunately, between June and October of 

2014, oil prices plunged, taking our rate of return on the well from 37 percent with 

a payout in just 2.2 years to 13.7 percent with a payout in 5.9 years. With the precipitous drop in oil prices, Crescent Point elected to postpone drilling the 9–30–3- 

2E, something that we would have done had we received the permit as anticipated 

in April 2014. See Exhibit 6. 

Crescent Point also experienced considerable delay and extra costs associated with 

obtaining permits to conduct a seismic data acquisition in the Randlett EDA area. 

In June of 2013, Crescent Point submitted an application to conduct the seismic operation, completion of which would be of substantial benefit to the Tribe because it 

would allow Crescent Point to drill more profitable wells and because Crescent Point 

agreed to share the data directly with the Tribe. Department of Interior policies provide for a NEPA categorical exclusion for seismic operations, 1 under which NEPA 

review is not required unless ‘‘extraordinary circumstances’’ are identified by the 

lead agency. 

Although BIA initially indicated that the project would be permitted under a categorical exclusion, after four months of inaction and under significant pressure from 

the U.S. Fish and Wildlife Service and the Bureau of Reclamation (who had surface 

management authority over a very small portion of the project area), BIA informed 

Crescent Point that it would be required to complete an Environmental Assessment 

based on the potential impacts the data acquisition could have on plant and animal 

species. One of the primary issues the Fish and Wildlife Service was concerned with 

was potential impacts to the Uinta Basin Hookless Cactus, a small cactus listed 

under the Endangered Species Act, but with prolific populations in the Uinta Basin. 

Although the Ute Tribe has adopted a regulation concerning the cactus, which requires setbacks from cactus populations and the payment of funds directly to a Tribal cactus mitigation fund administered by the Tribe, the Fish and Wildlife Service 

pushed for adoption of the federal guidelines concerning cactus setbacks and insisted that payments be made to the nationally-administered conservation fund. 2

Ultimately, after significant push-back from Crescent Point, it was agreed that mitigation funds would be split between the Tribe and the federal conservation fund. 

Crescent Point had initially planned to conduct the seismic acquisition during the 

fall and winter of 2013–2014; however, the Environmental Assessment was not completed until the summer of 2014 and we did not receive permits until the end of 

September 2014. Although the Environmental Assessment ultimately concluded that 

the data acquisition would not have a significant impact on the human environment 

and Crescent Point won an award for its environmental stewardship on the project 

from the State of Utah, a permitting process that should have taken several months 

under a categorical exclusion took over 15 months to complete, delaying our seismic 

acquisition by one year. Had we been able to conduct the seismic acquisition as 

planned, we would have had usable data during the 2014 drilling season, which 

would have enabled us to drill more accurate and profitable wells with a smaller 

surface impact. 

e) Regulatory Uncertainty Jeopardizes the Viability of Projects 

The Randlett EDA area is bisected by the Duchesne River and several tributaries. 

Although BIA approved the EDA, which provides for development of all areas within 

the EDA boundaries, BIA has become increasingly less willing to allow surface disturbance within the 100-year floodplain. As demonstrated on Exhibit 2, roughly 30 

percent of the Randlett EDA area is within the 100-year floodplain and 7,404.7 

acres of floodplain within the EDA area are located on Ute Tribal and allotted 

lands. 

We note that it is common to develop oil and gas resources within 100-year 

floodplains and there are no federal regulations addressing floodplain development. 

In cases where floodplain development occurs, Crescent Point has implemented a robust system of protocols to protect against damages in the case of a flood event. 

Nonetheless, during the development of the Randlett Programmatic Environmental 

Assessment, which analyzes the impacts of drilling up to 300 Tribal wells, in response to comments BIA received from the Environmental Protection Agency and 

the Fish and Wildlife Service, BIA developed a so-called ‘‘Resource Protection Alternative’’ under which no wells could be developed within the floodplain. This is in 

38 

spite of the fact that the Ute Tribe has adopted a regulation governing oil and gas 

development within floodplains that expressly authorizes such development and has 

publicly supported development of all locations in the Randlett EDA area. Under the 

Resource Protection Alternative, 29 wells were removed from analysis because of 

their proximity to the floodplain. The removal of these 29 wells will result in a loss 

of $66.5 million in royalties to the Tribe and $23 million in Tribal severance tax. 

We anticipate that the Resource Protection Alternative will be the selected alternative when the decision record is issued later this year. 

If Crescent Point continues to full field development of the Randlett area and BIA 

does not approve development of resources within the floodplain, we estimate that 

the Tribe will lose $571.14 million in royalties and $148.38 million in lost severance 

taxes. 

f. Shifting Federal Regulation and Executive Action 

In addition to the regulatory uncertainty created by unpredictable project permitting timelines, the relentless pace of executive branch rulemaking affecting Tribal 

lands has substantially impacted our ability to develop economic Tribal wells. These 

changes have included new Secretarial Onshore Orders 3, 4, and 5, new Secretarial 

Orders regarding Tribal consultation at FWS, the BLM’s hydraulic fracturing rule, 

and the Environmental Protection Agency’s rule defining waters within Clean Water 

Act jurisdiction. 

V. Nature of the Mineral Estate 

As shown on Exhibit 7, much of the land within the Randlett area, as with the 

rest of the Uintah and Ouray Reservation, is made up of a checkerboard of parcel 

ownership, with parcels owned by the Tribe, private owners, the federal government, the State of Utah and individual Tribal allottees. In addition, there is a substantial amount of split estate, particularly areas with Tribal surface overlying federal minerals. 

Presently, there is very little development of Ute Tribal oil and gas resources. 

There is, however, currently substantial development of federal oil and gas resources underlying Tribal surface. In these cases, the Tribe bears the burdens associated with oil and gas development, but does not share in the benefits. In contrast, 

the development proposed by Crescent Point will directly benefit the Tribe by developing Tribal minerals from Tribal surface. We believe that the BIA does not appropriately consider the financial benefits that development of oil and gas resources 

will provide for the Ute Tribe when reviewing permit applications and NEPA documents, and instead focusses only on potential negative environmental consequences. 

BIA should distinguish between projects involving development of Tribal minerals, 

from which the Tribe will benefit greatly, and projects on Tribal surface that develop federal minerals, from which the Tribe will experience the negative consequences associated with oil and gas development without any of the benefits. 

Because of the large amount of time and lack of certainty associated with obtaining permits to drill Ute Tribal wells, in certain instances Crescent Point has been 

forced to drill wells on private lands within the Randlett area rather than on nearby 

Tribal parcels. In a large number of cases, this is simply a function of our inability 

to obtain permits to drill Tribal wells within a reasonable timeframe and our need 

to develop wells for the benefit of our shareholders and keep a drilling rig in operation. If there were assurances in place that we could obtain drilling permits within 

specified timeframes, our incentive to drill wells on Tribal rather than private parcels would increase substantially. 

Finally, and while this is not the primary factor for Crescent Point, we note that 

it is substantially less expensive to obtain permits to drill wells on private minerals 

than Tribal minerals. We estimate that the average hard costs of permitting a well 

on Tribal surface to Tribal minerals are approximately $41,000. In contrast, the average hard costs of permitting a well on private surface to private minerals are 

$20,500. The primary differentials are the federal permit fee and the costs of performing the NEPA analysis. The breakdown of these costs is shown on Exhibit 8. 

VI. Agency Failures and Proposed Solutions 

Many of the permitting delays Crescent Point has experienced relate to strained 

BIA budgets and agency inability to appropriately staff projects and commit the resources necessary to ensure that economic development projects can be approved 

within reasonable timeframes. We believe that much of the delay associated with 

permitting is a result of poor coordination among the BIA and the other federal 

agencies with which it must consult on project approvals. We are further concerned 

that because of limited budgets, BIA is unable to appropriately staff offices with 

enough personnel knowledgeable about energy development. Because of this, we beVerDate Mar 15 2010 13:07 Apr 26, 2016 Jkt 099901 PO 00000 Frm 00042 Fmt 6633 Sfmt 6621 S:\DOCS\99901.TXT JACK
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lieve that overworked BIA personnel are often overly deferential to other, more powerful and better funded agencies, sometimes to the detriment of Tribal interests. 

On several permitting projects we have observed that, in spite of decades of federal agency guidance outlining agencies’ obligations to consult with Tribes, there is 

a fundamental failure on the part of other federal agencies to engage in meaningful 

consultation with Tribes. BIA should be the agency tasked with ensuring that consultation is occurring and that Tribal sovereignty is being respected. And, we note 

that several agencies within the Department of the Interior have recently faced significant criticism for their failure to take their consultation obligations seriously 

and, indeed, a federal court recently enjoined BLM’s hydraulic fracturing rule in 

part because of a failure to substantively engage in Tribal consultation. Nonetheless, we have observed BIA receive and concede to pressure from other federal agencies on several occasions, the result of which has been increased permitting times 

and costly project modifications that have neither been requested nor approved of 

by the Tribe. We believe this is related to understaffing at BIA agency offices and 

a lack of direction from BIA leadership empowering BIA personnel to stand up to 

these other federal agencies and decline proposed project modification when they do 

not correlate to Tribally-set policies and regulations. 

a) Tribal Lands treated as Public Lands 

We have observed a failure on the part of many of the federal agencies with which 

BIA must interact on permitting approvals to understand the distinction between 

Tribal lands and federal public lands. We have routinely observed these agencies attempt to inappropriately impose federal land use restrictions and policies on Tribal 

lands. For example, although U.S. Fish and Wildlife Service regulations and policies 

are clear that Tribal lands are not federal public lands and that Tribes should not 

be forced to bear a disproportionate burden for species conservation, the Fish and 

Wildlife Service regularly proposes permit restrictions for Tribal projects that are 

identical to the restrictions proposed for projects on federal lands. Rather than 

refuse to adopt these proposals, BIA often agrees and includes them as additional 

permitting requirements or conditions of approval. 

This occurred recently on an Environmental Assessment prepared by BIA for 11 

wells in the Randlett area. Following consultation with the Fish and Wildlife Service, BIA attached a number of conditions of approval to the permits requiring onerous setbacks and mitigation requirements applicable to operations in the vicinity of 

Uinta Basin Hookless Cactus populations and in areas that could serve as potential 

Yellow-billed cuckoo habitat. These additional requirements, which are neither mandated by federal law or regulation, were facially inconsistent with Tribal regulations 

and substantially increased the costs of the project. In addition, BIA has recently 

sought public comment on several Environmental Assessments analyzing development of purely Tribal resources. Federal regulations do not require public comment 

on Environmental Assessments, and BIA generally has a policy not to solicit input 

from the public at large on Tribal projects. This policy makes sense from a Tribal 

sovereignty perspective, as members of the public who are not Tribal members 

should have not say over Tribal development projects. However, in response to comments BIA received from the Environmental Protection Agency, BIA has decided to 

seek public comment on the last 3 Environmental Assessments it has prepared. 

b) Proposed Solutions 

We believe that Tribes are in a much better position to perform environmental 

analyses, require project modifications and craft best management practices and resource conservation plans than the BIA and that, in many cases, Tribes are already 

performing many of these functions informally. 

While the GAO report pointed out that some BIA offices do not have staff with 

the skills needed to effectively manage Indian mineral development, many Tribes 

have staffs that possess these qualifications. The Ute Tribe has numerous highly 

trained employees who can perform many of these tasks in a manner that is consistent with Tribal management policies and goals. For example, the Tribe’s Fish 

and Wildlife Department has 5 biologists on staff, compared to BIA’s Uintah and 

Ouray Agency, which employs none. We believe that the Tribe’s Fish and Wildlife 

Department can perform many of the plant and wildlife consultations the U.S. Fish 

and Wildlife Service currently performs in a more efficient manner. Similarly, the 

Ute Tribe’s Energy and Minerals Department had a budget of $2.3 million in 2014 

and has 25 employees working on energy development reviews, royalty issues, land 

work and regulatory compliance. Further, as pointed out by the GAO report, BIA 

lacks GIS systems and other data identifying ownership of resources and resource 

uses and authorizations. However, the Ute Tribe has this information as well as a 

GIS database system for the vast majority of Reservation lands. 

40 

We believe that the resources the Ute Tribe already possesses should be put to 

greater use by allowing the Tribe increased authority over energy-related decisionmaking. In particular, we think that a mechanism should be developed that would 

allow for the following: 

• Automatic deference to Tribal resource management and conservation plans. At 

present, Tribal resource management and conservation plans are considered, if 

at all, only during the NEPA process and we have found that BIA is often unaware of the existence of Tribal resource management and conservation plans 

that directly address matters under review. 

• Replace Endangered Species Act Section 7 consultation, which requires BIA to 

consult with the Fish and Wildlife Service any time a proposed action might affect a listed or candidate species or its habitat, with Tribal consultation and 

issuance of a Tribal resource permit. 

• Tribal facilitation of right-of-way preparation. Presently, all right-of-way applications must go through BIA, which does not have the personnel or data necessary to efficiently process such applications. In contrast, the Ute Tribe has 

adequate personnel and data systems in place to process these applications 

within a much shorter timeframe. 

VII. TERAS 

a) Operators Working Directly with Tribes Can Provide Greater Regulatory Certainty 

As an operator, Crescent Point questions whether TERAs, as provided for under 

the Energy Policy Act of 2005, can realistically improve the efficiencies associated 

with development of Tribal oil and gas resources. From our perspective, we believe 

that TERAs are overly complex and that time has shown that they are not a useful 

tool to improve BIA efficiencies related to energy development. Nonetheless, for operators, there is a substantial benefit to being able to work directly with Tribes 

without numerous federal agency intermediaries. We would very much like to see 

a mechanism in place that would allow for direct Tribal approval and decisionmaking authority on Tribal oil and gas projects. We believe that the regulatory certainty this would provide would create a substantial incentive to invest in oil and 

gas development on Tribal lands. 

We suggest that the Committee consider development of a program under which 

individual Tribes can assume responsibility for certain aspects of energy development without needing to enter into a TERA. As previously suggested, we think that, 

for example, the Ute Tribe is in a very good position to assume responsibility for 

management of plant and wildlife considerations associated with energy development. Under this approach, individual Tribes could decide which aspects of energy 

development they would like to assume, without having to take on the onerous task 

of entering into a TERA. We also suggest that the Committee also consider a mechanism under which Tribes could enter into TERAs for specific geographic locations, 

such as locations where they own both the surface and the mineral estate. This 

would allow Tribes to concentrate resources on areas in which they receive the benefit of oil and gas development and not on areas where there interest is limited to 

the surface. 

We also believe that determinations about whether a Tribe has the capacity to 

regulate all or certain aspects of energy development should be made at the individual BIA agency office, rather than at the Region or the Office of Indian Energy 

and Economic Development. BIA agency offices regularly work with Tribes and 

know whether individual Tribes are ready to take over management of energy development. 

b) Coordination Between Tribes and Operators Can More Effectively and Efficiently 

Develop Appropriate Mitigation Measures to Address Tribal Resource Concerns 

In addition to the efficiencies and regulatory certainty that would accompany a 

direct working relationship between operators and Tribes, we also believe that there 

would be a substantial benefit to consolidating project decisionmaking authority 

within the individually affected Tribe. Not only would this significantly decrease the 

overlap and inefficiencies associated with the need to obtain BIA approval for permits, but we believe that Tribes are often in a better position than the federal government to make decisions about management of their resources. From an operator’s perspective, this will increase the incentive to invest in Tribal projects by allowing us to work collaboratively with our Tribal partners to tailor project components to meet Tribal objectives and to react quickly to changing circumstances without a federal intermediary. 

In closing, I would like to thank Chairman Barrasso and Vice Chairman Tester 

and the Members of the Committee for the opportunity to present these issues on 

41 

behalf of Crescent Point. I firmly believe that there are numerous opportunities for 

Tribes and private industry to work together to develop Tribal energy resources in 

an environmentally responsible manner and according to Tribally-set objectives and 

policies. All operators and Tribes need from the federal government to accomplish 

this goal is less federal oversight of Tribal decisionmaking and more opportunities 

for direct management by Tribes. 

Attachments 


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The CHAIRMAN. Thank you so much to each of you for your testimony. We will start with some questions. I believe Senator Hoeven 

is first. 

Senator HOEVEN. Thank you, Mr. Chairman. Thanks to both you 

and the Ranking Member for holding this important hearing today. 

Mr. Roberts, how are you responding to the GAO findings on the 

backlog on right-of-way approvals in Indian Country? 

Mr. ROBERTS. Some of the things that we are doing on right-ofway approvals is we put out a proposed rule on rights-of-way to 

streamline that process. That rule is well on its way to being finalized. The comment period is closed. 


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We are hoping that that rule, which has had a lot of tribal engagement and a lot of public comment, that that rule will streamline the process. A couple of years ago now, 2012, we updated our 

leasing regulations. Those leasing regulations are very deferential 

to tribal decision-making in terms of those agreements and those 

sorts of things. 

Our proposed rule for the right-of-way regulations sort of took 

the same path, I will say. Like I said, we are hoping to finalize 

those right-of-way regulations in the near future. We think that 

will be a big improvement. 

Senator HOEVEN. When do you anticipate finalizing it, and do 

you anticipate it having significant impact in reducing the backlogs? 

Mr. ROBERTS. We hope to finalize it as soon as we can. 

Senator HOEVEN. Which would be when? 

Mr. ROBERTS. I don’t know, Senator. 

Senator HOEVEN. A year? Two years? 

Mr. ROBERTS. Before this Administration ends, hopefully. 

Senator HOEVEN. So less than a year? 

Mr. ROBERTS. Less than a year. Well, more than a year, but yes. 

Senator HOEVEN. Okay. So within the next year, and you think 

it will have a significant impact? 

Mr. ROBERTS. I do. I think it will be very helpful. 

Senator HOEVEN. The Chairman of this Committee has authored 

and submitted the Indian Trial Energy Development and Self-Determination Act to streamline the application process for right-ofway approvals. I am pleased to co-sponsor it, as are other members 

of this Committee, in a bipartisan fashion. Are you supportive of 

that legislation? Are you willing to help get it passed and enacted 

into law? 

Mr. ROBERTS. Kevin Washburn, the Assistant Secretary, testified 

on, I think, identical legislation last Congress. He identified a number of areas where the Administration is supportive and some 

areas where we had concerns. We suggested, for example, that the 

legislation, rather than having a capacity determination, that we 

try to streamline that legislation to be similar to what is done in 

the HEARTH Act. 

Senator HOEVEN. I am not sure what that means. My concern is 

that this process is not moving forward. I listened to both the 

Chairman and the Ranking Member talk about how former members of this Committee expressed concern about the very same 

problem that we are expressing concern about today. 

So how are we going to get beyond talking about this problem 

and maybe doing something a year from now to actually getting 

something accomplished today? 

Mr. ROBERTS. Senator, we do hope to finalize those regulations 

as soon as we can on rights-of-way in terms of the Chairman’s bill. 

We have testified on that in the last Congress. We are supportive 

of a number of provisions in that bill. If it is enacted into law, we 

will certainly implement it. 

Senator HOEVEN. Are you willing to work with the States to 

avoid some of the duplication, for example, in the hydraulic fracturing rule that Interior has brought forward, and give the tribes 

more discretion in the right-of-way process? 

49 

Mr. ROBERTS. In terms of hydraulic fracking, as I am sure everyone is aware, that is subject to litigation at this point in time. I 

will note that the final rule on hydraulic fracking provided an opportunity for BLM to issue modifications to the rule if a tribe or 

a State would come to BLM to talk about those modifications. So 

I know that the rule is in litigation right now. It is not being implemented. That is about all I can say on that. 

Senator HOEVEN. But you would support that flexibility for 

States and tribes? 

Mr. ROBERTS. The flexibility was in the final rule. 

Senator HOEVEN. Right. And you would support acting on that 

and empowering tribes to use that flexibility and giving them more 

discretion? 

Mr. ROBERTS. Sure. 

Senator HOEVEN. Mr. Rusco, what is your recommendation to 

move this along? How do we get this going faster? 

Mr. RUSCO. Well, we don’t want to comment on ongoing legislation. 

Senator HOEVEN. Well, I don’t mean just the legislation. I mean 

action, reducing the backlog and getting activity expedited. 

Mr. RUSCO. I think that some things that have worked, we have 

encountered similar problems with BLM and their management of 

oil and gas on Federal lands, not as extreme as what we found 

here. But some of the things that worked were pulling qualified 

staff with the right skills from other locations and bringing them 

to places where there were hotspots. They did that in North Dakota, they brought people in to reduce a backlog. It was very effective in doing so. 

We are going to have to do something like that, because there 

are many offices that just plain don’t have the right staff to do the 

job. 

Senator HOEVEN. Thank you. 

The CHAIRMAN. Senator Tester? 

Senator TESTER. Thanks, Mr. Chairman. First things first, Mike, 

great haircut. I am just telling you. 

[Laughter.] 

Senator TESTER. The Department has been, we have been doing 

energy development for 100 years or longer in tribal. It is true that 

this Administration has tripled the number of leases in Indian 

Country. But we are still not where we need to be. 

I had mentioned in my opening statement that the TERA agreements, no tribe has taken advantage of them. Mr. Olguin said that 

they had asked for clarification and the BIA and Larry, tell me, 

they didn’t want to give any? The statement by Mike - 

Mr. ROBERTS. Senator, I understand his statement that, the 

statement that he made was whether the Department would provide guidance on what is an inherent Federal function. The GAO 

raised that issue and I think we are committed to providing guidance on what is not an inherent Federal function, to provide more 

clarity. 

So for example, when we are contracting with tribes under 638 

contracts, for example, if there is a Federal approval that is needed 

at the end, a number of tribes are successfully implementing the 

50 

Federal program up to the point of approval. So we will provide 

guidance on what is not an inherent Federal function. 

Senator TESTER. So what is the problem? I mean, I am not talking about the TERAs. I do want to get out there, because I think 

the tribes are asking for something, you just can’t say no. So that 

is good. But what is the real problem here? Is it that the BLM has 

their fingers in the cookie jar on this stuff and that the BIA has 

to do their thing and the permitting costs more money than it does 

on fee land? This can be fixed. You have to tell us how to fix it. 

So tell us how to fix it. 

Mr. ROBERTS. There are a lot of challenges that GAO raised, both 

within our lane and outside of our lane, quite frankly. I think every 

member of this panel touched upon the fact that we are dealing 

with a complicated land ownership situation, fractionation, allotment. The allotment policy passed in the 1880s. It leads to a lot 

of our difficulties here today. 

If we can make some headway, and we are making headway on 

a lot of different fronts, in restoring tribal homelands, consolidating 

lands, those sorts of things will help in the big picture. In the small 

picture, in terms of oil and gas development and energy development, we need to and we are more closely collaborating within the 

Federal family. 

But I think one answer, Senator, very clearly is what Kevin 

Washburn testified to in the last Congress, which was a HEARTH 

Act approach for oil and gas development. The HEARTH Act is 

working in Indian Country. Like I said, we have over 20 tribes that 

have taken advantage of the HEARTH Act. 

So when a tribe that has taken advantage of the HEARTH Act 

for let’s say, surface leasing of lands for wind or solar development, 

those approvals no longer need to come back to the Department of 

Interior. The tribes can approve those projects. 

So some of the things that the GAO report highlighted—— 

Senator TESTER. Will be done with the HEARTH Act, if we get 

that model passed or you get that model through rule. 

So okay, Mr. Rusco spoke of pulling qualified staff within the 

BLM and the high growth areas. Do you have that capability? 

Mr. ROBERTS. No, we have a very hard time. 

Senator TESTER. Why do you not have that? 

Mr. ROBERTS. Because we can’t compete with the private sector. 

Senator TESTER. You mean you can’t hire people because your 

wage is not high enough? 

Mr. ROBERTS. That is right. 

Senator TESTER. Okay. So is that an Office of Personnel Management problem or is that a budgetary problem? 

Mr. ROBERTS. It may be a budgetary problem, it may be a statutory problem. That is not to say that we don’t have great staff. 

Senator TESTER. I am not saying that. What I am asking is that 

if you don’t have enough great staff. 

Mr. ROBERTS. Right. 

Senator TESTER. And that is what I heard you say. 

Mr. ROBERTS. Yes. 

Senator TESTER. When you put your budget forth to us, did it include enough dollars for hiring the folks you needed? 

51 

Mr. ROBERTS. It included increases for realty services, it included 

increases for an oil and gas - 

Senator TESTER. What impact did sequestration have on that 

budget? 

Mr. ROBERTS. Significant. It was across the board. Operating 

under a continuing resolution, we are stuck now until December 

11th. We have a very limited budget. We have memorandums of 

agreement and are ready to go on the oil and gas service center 

once we get a budget. 

Senator TESTER. I have to do this, if you will just give me this 

flexibility, because Grant is here, and there was just one question 

I wanted to ask. You had six recommendations. I appreciate that, 

by the way. I like solutions. Thank you for that, Grant. 

Can you tell me how much earnings Fort Peck has lost because 

the deposits are not held in interest-bearing accounts? 

Mr. STAFNE. Substantial. As a former Federal employee, we used 

to have special deposit accounts. Oil and gas companies would 

come onto our reservation and bid on hundreds, thousands of 

tracts. When they bid on those tracts, they were required to bring 

a portion of the money and we would put that in special deposit 

accounts until the leases were approved. That sometimes took six, 

seven, eight months. 

By the time they were distributed or disbursed to the rightful 

land owners, it was pretty good revenue for the land owners. Senator, I cannot give you a figure, but just from what I said, you can 

imagine what that impact would be. 

Senator TESTER. Excuse me, Mr. Chairman, who did that? Why 

isn’t this still being done this way? 

Mr. ROBERTS. I can get you an answer to that. I don’t know the 

answer to it. 

Senator TESTER. Okay, thank you. 

The CHAIRMAN. Thank you, Senator Tester. Senator Daines? 

Senator DAINES. Thanks, Mr. Chairman. I want to explore the 

challenges regarding responsible energy development in Indian 

Country and talk about possible solutions. I know, Councilman 

Stafne, you have some ideas there as well. Senator Barrasso, I 

think, has a good bill to strengthen the tribes’ abilities to control 

their own destinies and have more authority in developing their 

own energy. 

I remind members of this Committee the House recently passed 

H.R. 538, the Native American Energy Act, with a very strong bipartisan vote of 254 to 173, which includes some good provisions 

to streamline permitting processes and make some worthwhile improvements in the BIA such as appraisals and ensuring the seven 

regional offices are going off the same playbook, some standardization. 

The GAO report mentions one challenge to Indian energy development, and that is a lack of access to energy tax credits in Indian 

Country. Senator Tester and I have introduced a bill to make permanent the Indian Coal Production Tax Credit to incentivize on Indian reservations for energy development where it is already too 

costly and where it is needed most. 

Questions I have, I will start with Mr. Cuch and Mr. Olguin. You 

both mentioned frustration with meaningful consultation with the 

52 

BIA and other Federal agencies regarding energy projects. In particular, you mentioned the hydraulic fracturing rule. We know in 

Montana, and especially in Councilman Stafne’s neck of the woods, 

how important that technology, hydraulic fracturing, has been in 

unlocking prosperity for rural communities. 

My question is, could you expand on the challenges associated 

with the hydraulic fracturing rule? Let me start with Mr. Cuch. 

Mr. CUCH. The new proposed rule we find to be duplicative of 

what States already provide. It means added time and cost to our 

operations to be able to follow those new regs, wherever they may 

end up being. So that would be my comment related to that. 

Senator DAINES. Mr. Olguin? 

Mr. OLGUIN. For us, the challenge is as far as consultation. It did 

occur from the very beginning, when we didn’t feel we had fruitful 

consultation on what the BLM rule was going to be comprised of, 

let alone what it was going to become. We ended up at the point 

where we drafted our own regulation, passed it through tribal resolution and we are at the point now where we have filed suit 

against BLM for their regulation being imposed on tribal lands. So 

we are in litigation now. 

There is a stay from the judge and with that, we are working on 

settlement. 

Senator DAINES. So why don’t you think you receive meaningful 

consultation? My experience has been, meaningful consultation by 

the bureaucracy tends to be, well, we received a letter, we had a 

meeting, we had a cup of coffee, we came to a conference room. But 

it seems like you are not being listened to in terms of the substance 

of your proposals and argument. 

Mr. OLGUIN. That is true. When we look at the initial, it was a 

PowerPoint presentation of here is what hydraulic fracturing is. 

Well, we know what hydraulic fracturing is, we have been doing it 

for 50 years. So it wasn’t necessarily that we needed an education 

component. We need to understand, what is the rule, what was the 

rule intended to do, and let’s have this meaningful conversation 

face to face, discuss the issues, argue back and forth, if that is 

what it takes, but come to an understanding that we are talking 

the same thing. 

Senator DAINES. So do you believe that these agencies understand what meaningful consultation really is? 

Mr. OLGUIN. Yes, I think they do today. 

Senator DAINES. Why aren’t you being heard? 

Mr. OLGUIN. Well, today we are because of the lawsuit. 

Senator DAINES. But that seems to be a failure in their process 

that we should be trying to avoid the course and have the meaningful consultation up front. 

Mr. OLGUIN. I am not sure. I have my own speculation but I really don’t know. 

Senator DAINES. Mr. Roberts, did the BIA work with BLM on the 

implications of the hydraulic fracturing rule in Indian Country? 

Mr. ROBERTS. The implications? 

Senator DAINES. Right. There is a disconnect here, there are implications, there are consequences. 

Mr. ROBERTS. It is BLM’s rule, I know that it is in litigation. 

There is not a whole lot, unfortunately, I can say about that. As 

53 

the Honorable Mr. Olguin said, we are in settlement discussions 

with the tribe on their lawsuit. 

Senator DAINES. The BIA, do you work with these other agencies 

like the BLM to ensure that the tribal trust responsibility is upheld 

appropriately? I don’t think it has been upheld appropriately. 

Mr. ROBERTS. Sure. We do work with the other Federal agencies. 

That is one of the things that we are trying to incorporate in the 

service center. So the service center, if we get funding from Congress to move forward with that, it will be BLM, it will be ONR, 

it will be BIA. We will all be co-located, so that we are all working 

together. 

Senator DAINES. That is an activity. I am looking for results. It 

looks like what has happened here has been a failure in that process, where the tribe is saying they don’t believe they really experienced meaningful consultation. 

Mr. ROBERTS. There is really not a lot at this point, again, because it is in litigation, Senator, I can’t really comment on the adequacy of consultation in that process. 

Senator DAINES. Thank you. 

The CHAIRMAN. Thank you, Senator Daines. Senator Heitkamp? 

STATEMENT OF HON. HEIDI HEITKAMP, 

U.S. SENATOR FROM NORTH DAKOTA 

Senator HEITKAMP. Thank you, Mr. Chairman. 

Mr. Roberts, would you agree with the statement that the lands 

that are managed by the Bureau of Indian Affairs and by BLM for 

the tribes and for individual members of the tribes are not public 

lands? 

Mr. ROBERTS. They are different than our normal public lands. 

Senator HEITKAMP. Yes or no. They are not public lands. 

Mr. ROBERTS. We hold them in trust for the tribes. 

Senator HEITKAMP. That is right. And I think that is the crux of 

the problem here. These are not public lands. 

But yet they get treated all the time as if they are, as if they 

are minerals that are owned by the people of the United States, as 

opposed to minerals that are owned by sovereign nations and by 

the people of sovereign nations. Until we really start appreciating 

that there is a differentiation here, I think we will always be at 

this table arguing this point over and over and over again. 

You can say, well, this was set up, because there is this trust obligation. But the facts that were revealed in the Cobell litigation 

tell us that fiduciary obligation and that trust obligation hasn’t 

been well managed, it continues to not be well managed by the Department of Interior. 

Mr. ROBERTS. Senator, I can assure you that we take our trust 

responsibilities very seriously. It was this Administration that settled the Cobell litigation. It is this Administration that has settled 

over 80 trust settlements with tribes. 

Senator HEITKAMP. I understand that. I am trying to make a 

point which is historic. It is not just about this Administration. We 

constantly try and deal with the facts that are in front of us instead of looking at this in an historic context, which is that these 

are minerals that belong to a different sovereign nation. Just as 

you shouldn’t require an EIS for the State to drill on, lease its own 

54 

minerals, I don’t know why we are in this situation, delaying permits and delaying leases and delaying the things that need to be 

done, when you have elected tribal governments that have that responsibility. 

I think that is an historic anomaly. But that is why we are here. 

We are here because of the structure that we have set up here in 

Congress that manages minerals that are owned by people other 

than the people of the United States. Obviously, citizens of the 

United States, but not in the context of traditional BLM minerals. 

I want to get to the employment issue that Senator Tester raised. 

I have done a lot of work on this with OPM. We have been able 

to get various accommodations from OPM through the Department 

of Defense. We are working now with USDA. Department of Interior has been really slow to work with us to try and make sure that 

OPM is doing what they can to deal with high cost of living and 

low participation rates in the Federal workforce. We can’t get this 

work done until we staff to get this work done. 

So I want a commitment from you, Mr. Roberts, that you will 

take back to Department of Interior my frustration that we continue to work on this but we haven’t gotten very far in terms of 

making sure that we get salary adjustments that will add to the 

workforce. 

Mr. ROBERTS. Absolutely, Senator. 

Senator HEITKAMP. Just a final point, I don’t have a lot of time 

left. Mandan, Hidatsa and Arikara Nation has counted 100 steps 

and up to seven agencies who provide a permit for drilling on tribal 

land. Let me repeat that. A hundred steps and up to seven agencies. I am glad that you are talking about centralizing this. It is 

what some of the tribes have done. I think the tribe’s proposal, the 

Mandan, Hidatsa and Arikara proposal is to provide a director to 

oversee permitting requirements for all the agencies involved. 

Would creating this office under your plan resolve staffing issues, 

and having one point of accountability for the tribes to actually, instead of trying to deal with Fish and Wildlife, trying to deal with 

BLM, trying to deal with a myriad of Federal agencies, shouldn’t 

there just be one person accountable in all of this? 

Mr. ROBERTS. That is the design of the service center. You are 

right, Senator, we heard that from tribes and we have consulted 

with tribes. It was their idea for the service center. So we are trying to implement that. 

Senator HEITKAMP. This is incredibly frustrating, because the 

time when we could have been producing oil at $100 a barrel, that 

opportunity, as we look at oil prices now at $45. If you are looking 

at, from the standpoint of a production company or a drilling company, and you have all the headaches of trying to work through 

100 different steps and seven agencies, you are not going to drill 

in Indian Country. 

I would like at some point somebody to really examine this issue 

of going back and just thinking about this differently. It is not public land. It is land that is owned by sovereign nations. It is land 

that is owned by members of sovereign nations. A lot of the system 

was set up to be paternal and kind of dictate. There is nothing that 

would recommend in the past, and I am not saying it is this Administration, but when you go past, that would recommend that we 

55 

have really fulfilled our fiduciary obligation or our trust obligation 

to either individual members of the tribe or the tribe themselves. 

So there is no doubt there is a legitimacy to the frustration that 

we see today and we continue to see. So this needs to be resolved 

maybe in a broader context. 

The CHAIRMAN. Thank you, Senator Heitkamp. Senator 

Lankford? 

STATEMENT OF HON. JAMES LANKFORD, 

U.S. SENATOR FROM OKLAHOMA 

Senator LANKFORD. Thank you all for your testimony. And on 

what Senator Heitkamp was just saying, I couldn’t agree more. We 

have to be able to streamline this process. There should be ongoing 

conversation, rather than hearing it again and again and again and 

saying, there is a problem. There has to be some conversation to 

say, how do we actually resolve this, so it is not an ongoing conversation. 

Let me ask a follow-up as well, to what Senator Daines was talking about also. Mr. Roberts, before the BLM released their frack 

rule, did the BLM consult with BIA and say, we are about to do 

this rule, what would be the consequences in Indian Country if this 

rule is released? Did that conversation occur? 

Mr. ROBERTS. My understanding is that BIA participated in some 

of the consultations, if not all of them. I don’t have the details for 

you, Senator, today. But I think there was coordination between 

BIA and BLM. 

Senator LANKFORD. Was there a conversation between BIA and 

back to BLM during that consultation to say, here is what the financial consequences will be to tribes if this rule is imposed? 

Mr. ROBERTS. I don’t know. 

Senator LANKFORD. Was there an estimate of the financial consequences on tribes and the effect on jobs if that rule is imposed? 

Was there any study that was done or any conversation or BIA advising BLM, if you do this, this is the consequences on tribes? 

Mr. ROBERTS. I don’t know, Senator. 

Senator LANKFORD. How can we find out? Obviously there is this 

trust responsibility to make sure that we are managing that. When 

that rule is being discussed behind closed doors, we trust BIA to 

actually speak out on behalf and say, if BLM does this and imposes 

this on tribes, here is the effect of it. That is important to know 

how that is being fulfilled. 

Mr. ROBERTS. I would be happy to follow up with you, Senator. 

Senator LANKFORD. Please do. We would love to have some notes 

on that, just the back and forth on that. For instance, when EPA 

and Corps of Engineers are discussing the Waters of the U.S. Rule, 

there was swapping back and forth between the attorneys. We have 

those documents, how they swapped back and forth and were having those internal conversations. We would like to know how BIA 

was advising that back to BLM. 

Let me ask this as well, dealing with Osage and the Osage Nation area and Osage County in Oklahoma. It is a unique energy 

issue, because of the mineral rights in that area. I would be confident that you are aware of some of the issues there. BIA earlier 

this year released new regulations for conducting operations in 

56 

Osage County. During that time period of releasing those new regulations, royalties had dropped in half during that time period. It 

has been a very significant change on that. 

Can you give me an update on the status of the suit and newly 

released regulations that may be pending for Osage? 

Mr. ROBERTS. I just know that it is still in litigation. There has 

been a stay. Mike Black, the Director of BIA, has been thoroughly 

involved with this. He has been working with Kevin and I on this. 

I know we are in close coordination with your staff as well, Senator. 

Senator LANKFORD. Do you know if BIA will put out new regulations for the Osage mineral stay, if that is in the conversation? 

Mr. ROBERTS. I don’t know. 

Senator LANKFORD. Can you help me understand something that 

has happened recently in the Osage area? My understanding is 

BIA has decided that all permit applications, activity reports, historical information about production activity, individual wells, has 

now been taken into BIA and is considered to be private information that is inaccessible. If someone wants to get a history of a well, 

now rather than that being available, they have to get a FOIA request to get background information on a well. 

Do you know if that is true? 

Mr. ROBERTS. I think it is true. I think the staff at Osage are, 

obviously they have to comply with Federal law. My understanding 

is that there were some instances where perhaps information as 

not, was being provided without a FOIA request. But we do need 

our staff to provide the information in accordance with law. That 

is what I understand our staff is doing now, Senator. 

Senator LANKFORD. So let me help with the hurdle here again. 

Not only is it more expensive to then do production in Indian Country, not only does the permitting take five times longer, but now 

if you are interested in buying that well, you can’t just go get the 

information. One county over, you could actually go online and get 

that information if it is anywhere else in the State, and be able to 

find it, if you want to get it and deal with production. Now you also 

have to jump through a FOIA request hurdle on this as well. 

Mr. ROBERTS. My understanding is that we are working with 

staff to make as much of the publicly-available information available to the public without a FOIA request. 

Senator LANKFORD. I am just trying to figure out why suddenly 

you have to go through a FOIA request hurdle. Why was that even 

a consideration for publicly-available information, what has been 

historically publicly-available, now a new hurdle has been added to 

a million other hurdles that are there? 

Mr. ROBERTS. My understanding, Senator, is that some of the information that was being released may have contained Privacy Act 

information. So we obviously don’t want that to occur. We are looking at that information now. We will try to put out as much publicly-available information as possible. I know Director Black and 

his staff have been at Osage both last week and this week. 

Senator LANKFORD. Has any of that information been lost? Do 

you know if all that information has been retained? Is there any 

missing information on any of the wells? 

57 

Mr. ROBERTS. I am not aware of any missing information, Senator. 

Senator LANKFORD. Obviously there are multiple issues as we 

deal with Osage. It is a unique issue but it is characteristic of what 

is happening in a lot of the energy development along this. The 

greater number of hurdles that are placed there, the incentive is 

go somewhere else. That directly affects what is happening in 

Osage County. That directly affects the tribe. That directly affects 

everything in Indian Country across my State and other States as 

well. 

The more hurdles, the more expensive this is, the longer the 

process, the more people say, I will go next door. Which has a direct effect, in this case, just on headright owners there, where it 

has been cut in half just this year. So there are significant effects 

that are happening. We are trying to figure out, how do we help 

the tribe and how do we provide some sort of level stability, and 

where are we going to be able to get efficiency in the process and 

who is an advocate for the tribes to be able to say to other agencies, 

if you do that, here is how it hurts. Let’s find a way to be able to 

except out the tribes so this doesn’t make a hard process even 

harder. 

I yield back. 

The CHAIRMAN. Thank you, Senator Lankford. Senator Franken? 

Senator FRANKEN. Let’s make a hard process easier. It should be 

easier to do energy projects on Indian land than anywhere else. Because we have a trust responsibility. 

Mr. Roberts, do you disagree with anything in the GAO report? 

Mr. ROBERTS. Senator, as I testified, we are implementing almost 

all the recommendations. The one thing that I would say, an area 

of disagreement with the GAO report is more a small picture than 

big picture. The GAO report basically says we should have GIS 

mapping capability that is provided to tribes. And that it should be 

in a certain system of records. 

What we have responded to GAO is that we have that system. 

It is called the NIOGEMS system. It is freely available to tribes. 

In fact, we are utilizing it at a number of reservations today. I am 

more than happy to have our staff, who are familiar with that, 

work with your staff to show you. Because it is state of the art. 

You can go on, for example, Fort Berthold—— 

Senator FRANKEN. Okay, I got that. But I am struck with the 

staggering loss of opportunity, as well as the Chairman was. And 

you sense the frustration here. We here on Indian Affairs, we are 

the ones who hear this testimony. We are the ones who hear the 

testimony about youth suicide. We are the ones who hear about the 

inability to get housing. We are the ones who hear that we can’t 

get law enforcement because we don’t have housing, that families 

have to double up because there isn’t housing. 

We are so frustrated. Then it is hard to argue for funding which 

you need when you are having reports like Mr. Rusco’s that say the 

BIA is not operating efficiently. That is another catch-22. Why 

should we fund the Bureau of Indian Affairs? The Bureau of Indian 

Affairs isn’t doing its job if it is dysfunctional. 

We all want to see this happen yesterday. I want your pledge 

that you will get this done in terms of making this process more 

58 

efficient, so that we can help you. Secretary Moniz was testifying 

about the budget a while ago in the Energy Committee. By the 

time it got to me, I think I had all the time I needed so I just said, 

is there anything you want to say? He said, yes, we put $11 million 

loan guarantee for Indian energy. This is something that Congress 

authorized a loan guarantee program in the Department of Energy, 

dedicated to tribal energy development, in 2005. It has never been 

funded. 

The President included $11 million for the program in his budget 

request this year. My staff has talked to the Chairman’s staff about 

this. He expressed concern that it was just renewables that would 

be in this. Again, I said ‘‘a coal mine,’’ as painful as that is for me 

to say, a coal mine, oil, gas. I would love my colleagues to urge the 

appropriators to appropriate that. They have already resolved, 

without it, they finished their package. But I want an amendment 

to get this $11 million, which can leverage $90 million, $100 million in projects in Indian Country. 

But I want to be able to say, going forward, that we will be able 

to do these projects. I think a loan guarantee will help get these 

projects done. Do you agree on that? 

Mr. ROBERTS. Yes, sure. Absolutely. 

Senator FRANKEN. Okay. Mr. Rusco, can I ask you what the barriers would be to, say, doing a solar project in Arizona for a tribe? 

Just give us a typical, let’s say a tribe wants to start a solar 

project. There is plenty of sun. I am sorry to go over my time here. 

I have been in Arizona in the summer. It is just sun. Let’s say 

a tribe wanted to do that. What barriers would you see? Can you 

paint a picture for us? 

Mr. RUSCO. I think Senator Heitkamp said it much better than 

I could. You have to deal with multiple agencies, and you will have 

to do that on their time and go through their processes. There is 

nobody to turn to to guide you through that process. 

There is a good example in the Federal Government of a permitting process that actually works where there is a one-stop shop, 

and it is not a small group in one State, it is the Federal Energy 

Regulatory Commission for permitting pipelines. You go across 

multiple Federal and private jurisdictions, you have to go to all the 

resource agencies and you have to get all kinds of permits and 

studies and all that sort of thing. 

But FERC coordinates with all the agencies and makes sure that 

they are understanding the process and they are guiding the applicant through the process from step one all the way to the end. That 

kind of a model can work. I am not making a recommendation. I 

don’t know how to fix it. 

Senator FRANKEN. Would you write that piece of legislation for 

me and have it on my desk tomorrow? Or on the Chairman’s? 

[Laughter.] 

Mr. RUSCO. Absolutely. 

The CHAIRMAN. Al Franken for pipelines. 

Senator FRANKEN. Well, I am for pipelines. We have pipelines, 

and they need to be approved, so that we don’t have what happened in Enbridge, in Michigan. You need pipelines, especially because we have a lot of Bakken oil coming through Minnesota by 

rail and taking space that could deliver farm produce or product. 

59 

Don’t get me wrong, I am for pipelines. I just want to see it easier to do this. It should be easier in Indian Country than anywhere 

else. That should be our goal. Thank you. 

The CHAIRMAN. Thank you so much, Senator Franken. 

Mr. Roberts, I want to go back to something you said. Why is the 

DOI opposed to Southern Utes doing their own fracking rule? 

Doesn’t the DOI support sovereignty of the tribes? 

Mr. ROBERTS. This matter is in litigation, Chairman. I will say 

that the fracking rule provided a process, a variance process, a 

process where the tribes could work through BLM or States, for 

that matter, and utilize tribal regulations for fracking. 

The CHAIRMAN. Mr. Rusco, your report on Indian energy development identified poor management by the BIA as an impediment to 

Indian energy development. A number of us picked up on your 

staggering loss of opportunity comment. Your written testimony 

noted one tribe estimated that approximately $95 million in potential revenues from royalties, permitting fees, severance taxes was 

lost due to agency delays. 

Can you elaborate a little bit on the extent of the effects on tribes 

and tribal members as a result of this agency’s management shortcomings? 

Mr. RUSCO. Unfortunately, the record-keeping and the information systems can’t give you a comprehensive picture. But I can give 

you some examples. We talked to a tribe trying to develop a wind 

project, wind energy project. And for years they had gone through 

trying to get approval through BIA for the basic permits. They had 

a purchase power agreement, they had a utility willing to pay them 

for the power. 

It took so long to do that that after several years, in the middle 

of this process, the tribe went ahead and went through the process 

of getting, of implementing the HEARTH Act in order to bypass 

that. That was faster than actually getting through the other process. 

But they didn’t actually still get the project built. Because by the 

time all the delays took place, the purchase power agreement expired. So now they are looking for a new buyer. I don’t think you 

can estimate the value that these kinds of delays cost, because if 

you miss the train, it is not coming back through sometimes. You 

have a case where you are buying power from a bunch of places, 

and when they are bought up, you are not on the list any more. 

Oil and gas is not that different. If an area is being developed 

and they are building infrastructure and if all that gets done and 

the service companies move out and the pipelines that are going to 

be there are there, and now you want to develop a new area, you 

have to ramp it all up again. This is what the delays cost. 

The CHAIRMAN. And $100 oil versus $50 oil in terms of the potential. 

Mr. RUSCO. Exactly. 

The CHAIRMAN. Secretary Roberts, the GAO report highlighted 

that the BIA faces limitations in staff expertise needed to administer energy development functions. We have heard testimony indicating that the number of agency personnel trained in oil and gas 

development work isn’t sufficient to meet the demands of the increased energy development on Indian lands. 

60 

What is the BIA doing now to ensure proper staff expertise is 

available to assist the tribes and their energy partners in developing resources? 

Mr. ROBERTS. We are utilizing every incentive that is available 

to us for hiring. As I said, we are competing with private companies and corporations. We are also losing great folk from the Bureau to tribal leadership positions and other positions. 

So we are working actively to fill those. But it is a matter of competing with industry. 

The CHAIRMAN. I think members of the Committee find it troubling from the GAO report that the Bureau of Indian Affairs 

doesn’t have the data needed to verify ownership of oil and gas resources, that data isn’t readily available to identify resources available for lease or identify where the leases are in effect. The report 

noted that in some cases, agency personnel would have to search 

paper records stored in multiple locations to find the data. The Department’s response letter to the GAO from August of this past 

year noted that a national data set of all Indian land tracts with 

visualization functionality is expected to be completed, they say, 

within four years. 

What is the BIA going to do in the interim when tribes and tribal 

members need the data to develop their energy resources? 

Mr. ROBERTS. We are working as hard as possible, Senator. It is 

a matter of limited resources. I know that on a number of reservations where there are significant oil and gas resources, we do have 

those, we do have that technology, and tribes are using the 

NIOGEMS system to track not only - we can go to a parcel of land, 

we can say, okay, here is when the application came in, here is 

when it was issued, here is when the APD was issued, here is 

where they are in the NEPA process. We can do some of those 

things. We can’t do it nationwide, that is right. 

But with our resources that we have, we are trying to move as 

quickly as possible. 

The CHAIRMAN. Mr. Olguin, your written testimony highlighted 

several frustrating instances that your tribe experienced in trying 

to develop its resources. The tribe found that the BIA records were 

in disarray, staff were untrained, staff were underqualified. Likewise the existing system for tracking rights-of-way was unwieldy. 

The tribal energy resource agreement would authorize the tribe to 

develop its energy resources, which may include tracking the 

rights-of-way and leases. 

Could you just explain how would your tribe benefit if you had 

a tribal energy resource agreement in place? 

Mr. OLGUIN. What it would do, it definitely would give us the 

ability to approve a lot of things on our own, particularly these 

leases and rights-of-way and put control in the tribe’s hands. Along 

that line, I believe that with a lot of those factors that come into 

play with the deficiencies, it gives the tribes the capability and capacity to really manage its own affairs on its own terms. We still 

have to realize, we are still going to be stuck with what is inherent 

Federal functions. That is still going to be a key component, even 

if the TERA issue came forth. 

61 

We haven’t applied, we are thinking about applying. We are 

thinking about pushing that envelope to either get an approval or 

a denial to test the system to see if it is going to work. 

The CHAIRMAN. Mr. Cuch, you have a map of Utah next to you. 

Your written testimony noted that it takes approximately 405 days 

for your company to receive a drilling permit from the Bureau of 

Land Management and the BIA for tribal wells, correct? 

Mr. CUCH. Correct. 

The CHAIRMAN. Meanwhile, it takes 73 days, or it takes over a 

year to get it from BLM and the BIA, only 73 days, a little over 

two months, to receive a permit from the State of Utah for a well 

in non-tribal areas. So there is an 11-month difference there in the 

permitting time. It is almost a year difference. 

What additional risks or costs are incurred by the tribe and your 

company because of delays associated with the development of tribal wells? 

Mr. CUCH. Certainly time is an issue. One of the things we have 

witnessed is that the BIA, they handle the rights-of-way and the 

NEPA. So the NEPA process is really what takes probably the 

longest amount of time. There are a lot of consultations that take 

place with outside Federal agencies that often add to additional 

mitigation requirements and things like that, that they require. 

That has been a challenge. 

We found that the BIA often sort of defers to these outside agencies, rather than saying, this is the proposed action, the tribe is 

good with it, we would like to move forward. We think that the BIA 

could be a stronger advocate for tribes. 

Another thing I will share with you is that, and I can’t speak for 

the Ute Tribe, I am a tribal member, I am here on behalf of industry, but what we have witnessed is that the tribe has a much bigger budget than BIA. They have the staff on hand, at their Energy 

and Minerals Department. They have a very sophisticated government. They have a fish and wildlife department of their own. They 

have several biologists on staff. They have a natural resources department. We think they are fully capable of handling those environmental projects, which would do away with that Federal action 

piece. 

So already, the tribe has taken over the right-of-way piece. If you 

look at Exhibit 4, you will see that we have actually had some decreases in time. It is not here, it is in your packet. That is largely 

because the tribe has taken over the right-of-way function and the 

BIA at the agency are supportive of working with the tribe to handle that aspect. 

Then of course, the other additional delay is kind of to my right, 

where you see an additional amount of time, 176 to 203 days, from 

when the BLM receives the right-of-way and NEPA concurrences 

for them to do their part for the down-hole analysis. We need to 

see better coordination, we think, between the agencies, to ensure 

that tribal projects are getting prioritized and are getting support 

from the various agencies who share the trust responsibility that 

BIA has. 

The CHAIRMAN. Your companies make significant investments, $1.5 billion in the Uinta Basin, including 64 Ute tribal wells, your 

company has applications pending I think for about 95 more wells 

62 

for the Ute Tribe, and an environmental process underway for over 

1,000 more tribal wells in the Basin. The testimony stated that 

under Federal law unless a tribe has a tribal energy resource 

agreement pursuant to Title V of the Energy Policy Act of 2005, an 

operator will have to obtain a Federal drilling permit. But because 

of the delay and the uncertainties in obtaining permitting approvals, authorization from the BIA, that there is a substantial negative impact on your ability to develop tribal oil and gas resources 

and generate income for the tribe. 

So how would the tribe and your company benefit if the tribe had 

this tribal energy resource agreement that we are talking about 

today? 

Mr. CUCH. Well, certainly it is up to the tribe to decide if that 

is the route it wants to go. But I think they are fully capable of 

taking over and being in a position to enter into a TERA where 

they would take a greater role in the permitting process. In our 

testimony, we have shared several examples of how the current 

process has led to delays and has impacted revenues to the tribe. 

I think it is important to understand that tribes are governments 

without a tax base, so they largely require this revenue to support 

core government services to the members. 

Again, one of the biggest challenges we are seeing is that there 

are a lot of outside Federal intermediaries that as well as administrative rulemakings, that are sort of adding to the difficulty to develop tribal resources. I think as Senator Heitkamp mentioned, 

tribal lands are not public lands. I think the Bureau could do a lot 

to try and work to educate those other agencies so they understand 

that and also be willing to take a stronger stance with those agencies to move tribal projects forward. 

The CHAIRMAN. I want to thank each and every one of you for 

being here. Obviously this is an area where there is a lot of interest. You had 13 different United States Senators here today to hear 

what you had to say. Some had to come and go, some may actually 

want to have questions in writing that they will submit to you. 

The hearing record will remain open for two weeks for additional 

testimony and some follow-up. I want to thank each of you for 

being here today as witnesses. The hearing is adjourned. 

[Whereupon, at 4:05 p.m., the hearing was adjourned.] 

(63) 

A P P E N D I X 

PREPARED STATEMENT OF HON. MARK FOX, CHAIRMAN, MANDAN HIDATSA AND

ARIKARA NATION, FORT BERTHOLD RESERVATION

I. Introduction 

Chairman Barrasso, Vice-Chairman Tester and Members of the Committee, thank 

you for the opportunity to testify on the Government Accountability Office’s (GAO) 

report entitled ‘‘Indian Energy Development: Poor Management Has Hindered Energy Development on Indian Lands.’’ My name is Mark Fox. I am the Chairman of 

the Mandan Hidatsa and Arikara Nation (MHA Nation) of the Fort Berthold Reservation. 

The MHA Nation appreciates the Chairman’s oversight and investigation into the 

barriers we face every day as we work to develop our energy resources, mitigate the 

impacts of energy development, protect our homelands and provide for our members. 

The GAO report requested by the Chairman is an important piece in the Committee’s 8 years of investigations into the barriers to Indian energy development. With 

the GAO report and volumes of testimony from tribes, tribal organizations and our 

industry partners, it is time to take action to resolve these issues. The MHA Nation 

agrees with and supports the comments of many of the Senators who attended the 

hearing that Congress and the Bureau of Indian Affairs (BIA) should take action 

on these issues immediately. 

Passage of Chairman Barrasso’s bill, S. 209, the Indian Tribal Energy Development and Self-Determination Act Amendments of 2015, would be an important step 

forward. In addition, now that Congress has passed a budget, the MHA Nation asks 

for the Committee’s support of the Administration’s $4.5 million budget proposal for 

an Indian Energy Service Center in Denver, Colorado. The proposed Service Center 

would go a long way to resolving many of the issues identified in the GAO report. 

The MHA Nation knows the issues highlighted in the GAO report first hand. The 

MHA Nation and our Fort Berthold Reservation are in the heart of the Bakken Formation—still one of the most active oil and gas plays in the United States. Our Reservation, located in west-central North Dakota, is the equivalent of about the 7th 

highest producing oil and gas state in the Country. In less than 7 years, North Dakota, including our Reservation, became the second highest producing state in the 

Country. Only Texas produces more. Currently, there are 8 drilling rigs, more than 

30,000 semi-trucks, and more than 1,300 oil and gas wells producing about 200,000 

barrels of oil per day on our Reservation. The MHA Nation struggles daily with 

BIA, BLM and other Federal agencies for every single permit needed to get oil and 

gas wells into production and to keep them operating. 

II. GAO Report 

The GAO report confirms years of testimony by Indian tribes and our energy partners before this Committee and the House Natural Resources Subcommittee on Indian Insular and Alaska Native Affairs. The MHA Nation and other tribes have long 

expressed frustration about the Federal government’s overly complex energy permitting process, a lack of BIA staff and expertise to approve energy permits, and a lack 

of financing for energy projects on Indian lands. GAO’s June 2015 report confirms 

our frustrations. 

The GAO report found that the following factors have hindered Indian energy development: (1) shortcomings in BIA management of Indian energy development including a lack of comprehensive data, a lack of staff and a lack of energy expertise; 

(2) an overly complex regulatory framework; (3) fractionated ownership interests; (4) 

a lack of capital and tax credits; (5) dual taxation of Indian energy resources by 

state governments; (6) lack of tribal capacity to oversee energy development; and, 

(7) limited tribal or reservation infrastructure. GOV’T ACCOUNTABILITY OFFICE, 

INDIAN ENERGY DEVELOPMENT—POOR MANAGEMENT BY BIA HAS HINDERED ENERGY DEVELOPMENT ON INDIAN LANDS 18 (June 2015). The Tribe 

asks that the Committee consider and approve legislation that would address these 

issues. 

64 

The two most important actions the Committee could take to address the issues 

identified by GAO would be to prevent state dual taxation of Indian energy resources and enact our proposal for an Indian Energy Regulatory Office. Preventing 

state dual taxation would ensure that Tribes receive the full benefit of their Indian 

energy resources, including maximum needed tax revenue to mitigate energy impacts, support tribal self-determination and tribal infrastructure. Enacting our proposal for an Indian Energy Regulatory Office would streamline permitting and increase Indian energy staffing and expertise. Our testimony focuses on these two solutions to the issues raised by the GAO report. 

III. Providing Tribes with the Full Value of Energy Resources 

The GAO report found that state dual taxation hindered Indian energy development. GAO concluded that ‘‘dual taxation of Indian energy resources by state governments’’ was one of the reasons why ‘‘Indian energy resources are underdeveloped 

relative to surrounding non-Indian resources.’’ Id. at 29 to 30. State dual taxation 

takes the revenues that tribes need to exercise self-determination over their energy 

resources and provide tribal infrastructure to support energy development. Tribes 

cannot take over significant roles in energy permitting without the tax revenues 

that every other government relies on to staff government offices and support infrastructure. 

Enacting the Indian Mineral Leasing Act of 1938, the Indian Mineral Development Act of 1982 and the Indian Tribal Energy Development and Self-Determination Act of 2005, Congress intended for Indian tribes to receive the full value of 

their energy resources. Congress intended for development of these tribal trust resources to provide tribes with financial resources, fund tribal government activities, 

promote economic development and provide on-reservation jobs. Congress did not intend that State governments would directly benefit from the development of tribal 

trust resources or receive a windfall by taxing development of those resources. 

Yet, that is exactly what is happening. States are collecting taxes from the development of Indian trust resources while providing little to no on-reservation benefits. 

In 1989, the Supreme Court questioned whether Congress intended for tribes to receive the full benefit of their resources. Finding the Congress did not speak clearly 

on this issue, the Supreme Court allowed state dual taxation of Indian energy resources. Notably, the affected Tribe was not even a party to the case. Congress 

should resolve this issue by passing legislation that affirms that Indian mineral development laws are intended to ensure that tribes receive the full benefit their resources, and this includes the full benefit of the tax revenue derived from energy 

production. 

Currently, state dual taxation forces tribes into tax agreements with states to 

share taxes from energy development on reservation lands. Without these tax agreements, state taxation doubles the tax rate for development of Indian energy resources and stifles development. Only by agreeing to give up half or more of their 

tax revenues can tribes ensure that energy development on reservation lands is 

competitive with surrounding lands. 

At the same time, tribal governments must pay for the heavy burdens that energy 

development puts on tribal government in all areas, including destruction of roads, 

increased crime, hazardous spills, and an overall burden on government infrastructure. Because Tribes are not able to maximize available tax revenue to mitigate 

these impacts, they must in many cases use royalty revenue. This is unjust. Tribes 

should not have to give up tax revenue because of dual state and local taxation 

when they are faced with the brunt of the burden that comes with energy development. 

The case of the MHA Nation demonstrates the impact of dual state taxation. Job 

and development killing dual state taxation forced us into an unfair tax agreement 

with the State of North Dakota whose coffers are so full they have a $3.6 billion 

surplus and created investment accounts that exceed a billion dollars whose funds 

cannot be spent until 2017. In addition: 

• From 2008 to the present, the State is approaching $1 billion in tax revenues 

from energy production on tribal trust land. 

• During this time period, the State took the majority of the tax revenues from 

energy production on the Reservation—over 51 percent of all of the tax revenues. 

• Over the next five years, the State will get about $1 billion more in taxes from 

tribal resources. 

• The State does not report how these funds benefit the Reservation. 

65 

• We do know that in 2011 the State collected about $82 million in taxes from 

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

roads on the Reservation and zero on tribal and BIA roads. 

• In addition, we do not collect a dime in taxes from pipelines that cross the Reservation because pipeline operators pay taxes to the counties, even though we 

bear the expense of cleaning up spills and regulating activity. 

To make matters worse, in the Spring of 2015, the North Dakota State legislature 

unilaterally voted to reduce tax rates which also lowers the revenues the MHA Nation will receive. We estimate that over the next 20 years we will lose $700 million 

under the new lower tax. We are not running budget surpluses like the State. The 

MHA Nation needs tax revenue to provide the infrastructure needed to support the 

energy industry. 

To provide the tribes with the resources we need to exercise self-determination 

over our energy resources, the Committee should consider and approve legislation 

affirming that Indian mineral leasing status are intended to provide tribes with the 

full benefit of their energy resources. The following amendments should be added 

to S. 209, the Indian Tribal Energy Development and Self-Determination Act 

Amendments of 2015, as it is considered on the Senate floor: 

Sec. XX. Amendments to Indian Mineral Leasing. 

(a) Act of March 3, 1909.-The twelfth undesignated paragraph under the heading 

‘‘COMMISSIONER’’ of title I of the Act of March 3, 1909 (25 U.S.C. 396), is amended— 

(1) by striking ‘‘That all lands’’ and inserting the following: 

‘‘(a) Leases.-All land’’; and 

(2) by adding at the end the following: 

‘‘(b) Leases approved under this Act shall provide Indian tribes and Indian mineral owners with the maximum governmental and economic benefits associated 

with mineral leasing and development, including all revenue derived therefrom, 

to encourage tribal self-determination and economic development on Indian 

lands. 

‘‘(c) Within one hundred and eighty days of the date of enactment of this Act, 

the Secretary of the Interior shall promulgate rules and regulations to facilitate 

implementation of this Act.’’ 

(b) The first section of the Act of May 11, 1938 (25 U.S.C. 396a), is amended— 

(1) by striking ‘‘That hereafter unallotted lands within’’ and inserting the following: 

‘‘(a) Leases.-Effective beginning on May 11, 1938, the unallotted land within’’; 

and 

(2) by adding at the end the following: 

‘‘(b) Leases approved under this Act shall provide Indian tribes and Indian mineral owners with the maximum governmental and economic benefits associated 

with mineral leasing and development, including all revenue derived therefrom, 

to encourage tribal self-determination and economic development on Indian 

lands. 

‘‘(c) Within one hundred and eighty days of the date of enactment of this Act, 

the Secretary of the Interior shall promulgate rules and regulations to facilitate 

implementation of this Act.’’ 

(c) The third section of Indian Mineral Development Act of 1982 (25 U.S.C. 2102), 

is amended— 

(1) by adding at the end the following: 

‘‘(c) Agreements approved under this Act shall provide Indian tribes and Indian 

mineral owners with the maximum governmental and economic benefits associated with mineral leasing and development, including all revenue derived therefrom, to encourage tribal selfdetermination and economic development on Indian lands. 

‘(d) Within one hundred and eighty days of the date of enactment of this Act, 

the Secretary of the Interior shall revise and promulgate rules and regulations 

to facilitate implementation of this Act. 

(d) Section 2604 (h) of the Energy Policy Act of 1992 (25 U.S.C. 3503 (h)) is 

amended— 

(1) by adding at the end the following: 

66 

‘‘(c) Agreements approved under this Act shall provide Indian tribes and Indian 

mineral owners with the maximum governmental and economic benefits associated with mineral leasing and development, including all revenue derived therefrom, to encourage tribal selfdetermination and economic development on Indian lands. 

‘‘(d) Within one hundred and eighty days of the date of enactment of this Act, 

the Secretary of the Interior shall revise and promulgate rules and regulations 

to facilitate implementation of this Act. 

IV. Indian Energy Regulatory Office 

Almost as important as the problem of dual taxation is a continued lack of Federal staff, expertise and coordination in the processing of Indian energy permits. 

The MHA Nation supports BIA’s efforts to create an Indian Energy Service Center 

to coordinate and support Indian energy permitting, however, much more is needed. 

In addition to the BIA’s effort, the MHA Nation asks that the Committee support 

and pass legislation to create an Indian Energy Regulatory Office. 

The MHA Nation’s proposal for an Indian Energy Regulatory Office was developed 

in coordination with the Coalition of Large Tribes and supported by the National 

Congress of American Indians. This proposal and resolutions support it are attached 

to my testimony. Legislation creating an Indian Energy Regulatory Office would 

provide BIA the authority it needs to ensure that its Service Center is a success. 

Our proposal would: 

• require all of the agencies involved in Indian energy permitting to co-locate staff 

in a single office; 

• provide a Director with the authority to reach across Federal agencies to get 

permits approved; 

• direct the office to be guided by basic Indian trust principles that have been 

lost in the current unorganized Federal system for overseeing energy development on Indian lands and prevent application of public land standards to Indian lands; and, 

• provide resources within Interior and BIA for the efficient processing of Indian 

energy permits and approvals. 

Our proposal would solve most if not all of the BIA management problems identified by GAO. By centralizing BIA support for Indian energy development, BIA could 

generate comprehensive data for the ownership and use of resources, develop a centralized tracking system, and provide a home within BIA for Indian energy staff and 

expertise. 

Congress provided similar authority for federal public lands 10 years ago in Section 365 of the Energy Policy Act of 2005. Section 365 established a number of Permit Processing Improvement Offices in regions with high oil and gas permitting activity on federal public lands. These pilot offices were then made permanent by S. 

2440 in the 113th Congress. The same support should be provided for Indian lands. 

Particularly given that the benefits of energy development far exceed the benefits 

on Federal lands. Energy development on Indian lands provides jobs, economic development, revenues for tribal governments, and, if managed properly, long-term investment reservation infrastructure. 

V. Conclusion 

The GAO report concluded that, ‘‘The development of Indian energy resources has 

the potential to provide significant benefits to Indian tribes, tribal members, and the 

Nation through both tribal economic development opportunities and by contributing 

to the Nation’s energy production.’’ However, GAO found that a number of factors, 

including poor management by BIA, limits the ability of Tribes to developer their 

resources. GAO recommended that, ‘‘Federal policy calls for providing enhanced selfdetermination and economic development opportunities for Indian tribes by promoting tribal oversight and management of energy resource development on tribal 

lands.’’ 

In addition to GAO’s findings and 8 years of testimony from Indian tribes, the 

Committee should follow the calls for action from the many Committee members 

who attended the hearing and spoke passionately about the need for changes in the 

management of Indian energy development. Legislative changes are needed to provide the staff, expertise and resources to for the Federal government to effectively 

oversee and manage Indian energy resources. Change is also needed to ensure that 

tribes receive the full benefit from developing their resources and have the tax revenues needed take over portions of the permitting process and exercise self-determination in the development of our resources. 

67 

Thank you for the opportunity to provide this testimony. 

Attachments 

COALITION OF LARGE TRIBES—RESOLUTION # 1–5–21–14 

Title: A New Interior Office to Promote Indian Energy, Sovereignty, SelfDetermination and American Energy Independence 

WHEREAS, the Coalition of Large Tribes (COLT) was formally established in 

April 2011, and is comprised of tribes with a large land base, including the Mandan, 

Hidatsa and Arikara Nation (MHA Nation), the Oglala Sioux Tribe, the Crow Tribe, 

the Navajo Nation, the Sisseton Wahpeton Sioux Tribe, the Blackfeet Tribe of Montana, the Rosebud Sioux Tribe, the Ute Indian Tribe, the Shoshone-Bannock Tribes, 

the Colville Confederated Tribes, Spokane Tribe, and the Cheyenne River Sioux 

Tribe. COLT is chaired by Chairman Tex Hall of the MHA Nation; and 

WHEREAS, COLT was organized to provide a unified advocacy base for tribes 

that govern large trust land bases and that strive to ensure the most beneficial use 

of those lands for the tribes and individual Indian landowners; and 

WHEREAS, several COLT members are currently located in the Bureau of Indian 

Affairs’ (BIA) Phoenix, Rocky Mountain, Great Plains, and Albuquerque Regions 

and are energy producing tribes or are among those tribes with potential for energy 

production that rely or might rely in the future on conventional or renewable energy 

resource development to support infrastructure, economic development, jobs, government revenues and income; and 

WHEREAS, at the COLT DC Impact Meetings held in Washington, D.C. from 

March 5 to 6, 2014, with a quorum present, COLT adopted Resolution #3–3–6–14 

entitled ‘‘Request that the Department of the Interior Create a New Office for Energy Producing Tribes;’’ and 

WHEREAS, the United States Congress is currently considering and the Department of the Interior (DOI) and the Bureau of Indian Affairs (BIA) are currently developing a proposal for a new Indian energy office; and 

WHEREAS, it is in the best interest of COLT to provide the Congress, DOI and 

BIA with additional information and detail about the proposed office to ensure that 

the office will effectively serve Indian tribes; and 

WHEREAS, COLT proposes to amend Section 2602(a) of the Energy Policy Act 

of 1992 (25 U.S.C. 3502(a)) to create a new Indian Energy Regulatory Office (Office) 

that would be centrally located in Denver, Colorado and utilize and refocus the existing staff, resources and office space of the Office of Indian Energy and Economic 

Development’s (OIEED) Division of Energy and Mineral Development; and 

WHEREAS, establishing the Office in Denver, Colorado provides adequate housing and ease of recruiting new employees to a major metropolitan area, and proximity to other federal agencies involved in the energy permitting process; and 

WHEREAS, the Office would be established within the Secretary’s Office, similar 

to the Indian Water Rights Office, to ensure that the Director of the Office has authority over the various agencies involved; and 

WHEREAS, the Office would serve as a new BIA Regional Office that energy producing Indian tribes may voluntarily select to replace an Indian tribe’s existing BIA 

Regional Office for review and approval of all energy related projects and would not 

result in duplicative review and approval of energy projects; and 

WHEREAS, the Office would not replace current BIA Regional Offices nor the 

Farmington Federal Indian Minerals Office authorities and responsibilities except 

for those energy producing Indian tribes that elect to utilize the Office; and 

WHEREAS, the Office would provide energy resource assessments and feasibility 

studies, technical assistance and training in energy development proposal review, 

increase federal permitting capacity and permit streamlining, provide support for 

permitting conducted by federal Agency and Field Offices, improve coordination 

within Interior agencies and with other Departments, provide technical assistance 

and training in the oversight and management of energy and financial resources, 

and ensure that Indian lands are not managed according to Federal public land 

management standards; and 

WHEREAS, Indian tribes seeking greater DOI support in the areas of energy development, oversight, management, proposal review and energy related financial 

management could elect to be served by this Office or could elect to contract the 

functions of this Office in a manner consistent with P.L. 93–638; and 

WHEREAS, existing BIA Regional Offices would continue to provide Indian tribes 

that have elected to utilize the new Office with support and oversight for all nonenergy related issues; and 

68 

WHEREAS, to coordinate and streamline permitting, the Office would also include staff from other DOI agencies and offices involved in energy permitting on Indian lands, including: the Bureau of Indian Affairs, the Bureau of Land Management, the Office of Valuation Services, the Office of Natural Resources Revenue, the 

Fish and Wildlife Service, the Office of Special Trustee, the Office of the Solicitor, 

mining engineering and minerals realty specialists from the Office of Surface Mining, and any other DOI offices involved in energy permitting on Indian lands; and 

WHEREAS, the establishment of the Office would utilize existing funding and resources from the OIEED’s Division of Energy and Mineral Development and from 

each of the agencies and offices listed above, and allow for supplemental funding 

from industry partners in addition to new federal appropriations; and 

WHEREAS, within one year or less, the Office would enter into agreements with 

other Federal agencies to coordinate and streamline permitting, including: the Environmental Protection Agency, the United States Department of Agriculture, and the 

Army Corps of Engineers; and 

WHEREAS, on May 21, 2014, the Senate Committee on Indian Affairs approved 

with amendments S. 2132, a bill to amend the Indian Tribal Energy Development 

and Self-Determination Act of 2005 and for other purposes, however, the bill, as 

amended, would only study energy permitting delays for a year, meanwhile, Congressional action is immediately needed to reform and restructure federal oversight 

and permitting of Indian energy development. 

NOW, THEREFORE, BE IT RESOLVED, COLT calls upon Congress to pass 

legislation and that DOI take administrative action pursuant to a Secretarial Order 

to establish and implement an Indian Energy Regulatory Office as described in this 

resolution and the attached legislative proposal; and 

BE IT FURTHER RESOLVED, COLT calls upon Senator Tester, the Chairman 

of the Senate Committee on Indian Affairs, and other members of the Committee 

and the Senate to work with COLT and amend S. 2132 before it comes to the Senate 

floor to include the attached legislative proposal; and 

BE IT FINALLY RESOLVED, this resolution shall be the policy of COLT until 

it is withdrawn or modified by subsequent resolution. 

CERTIFICATION 

This resolution was enacted at a duly called meeting of the Coalition of Large 

Tribes held in Washington, D.C. on May 21, 2014, at which a quorum was present, 

with 4 members voting in favor, 0 members opposed, 0 members abstaining. 

PROPOSED LEGISLATIVE LANGUAGE FOR INDIAN ENERGY REGULATORY OFFICE

Section 2602(a) of the Energy Policy Act of 1992 (25 U.S.C. 3502(a)) is amended— 

(1) by redesignating paragraph (3) as paragraph (4); 

(2) by inserting after paragraph (2) the following: 

‘‘(3) INDIAN ENERGY REGULATORY OFFICE.— 

‘‘(A) ESTABLISHMENT.—To assist the Secretary in carrying out the Program, 

the Secretary shall establish an ‘Indian Energy Regulatory Office’ within the 

Secretary’s Office to be located in Denver, Colorado. The Office shall utilize the 

existing resources of the Department’s Office of Indian Energy and Economic 

Development Division of Indian Energy and Mineral Development. 

‘‘(B) DIRECTOR.—The Office shall be led by a Director who shall be compensated at a rate equal to that of level IV of the Executive Schedule under 

section 5315 of title 5, United States Code and who shall report directly to the 

Deputy Secretary. 

‘‘(C) FUNCTIONS.—The Office shall serve as a new Bureau of Indian Affairs 

(BIA) Regional Office that energy producing Indian tribes may voluntarily select 

to replace an Indian tribe’s existing BIA Regional Office for the following functions: 

(i) notwithstanding any other law, oversee, coordinate, process and approve 

all Federal leases, easements, right-of-ways, permits, policies, environmental reviews, and any other authorities related to energy development on Indian lands. 

(ii) support BIA Agency Office and tribal review and evaluation of energy proposals, permits, mineral leases and rights-of-way, and Indian Mineral Development Agreements for final approval, conducting environmental reviews, and 

conducting surface monitoring; 

(iii) review and prepare Applications for Permits to Drill, Communitization 

Agreements and well spacing proposals for approval, provide production monitoring, inspection and enforcement, and oversee drainage issues; 

69 

(iv) provide energy related technical assistance and financial management 

training to BIA Agency Offices and tribal; 

(v) develop best practices in the area of Indian energy development, including, 

standardizing energy development processes, procedures, and forms among BIA 

Regions and Agency Offices; 

(vi) minimize delays and obstacles to Indian energy development and, 

(vii) provide technical assistance to Indian tribes in the areas of energy related engineering, environmental analysis, management and oversight of energy 

development, assessment of energy development resources, proposals and financing, development of conventional and renewable energy resources. 

‘‘(D) RELATIONSHIP TO BUREAU OF INDIAN AFFAIRS REGIONAL AND 

AGENCY OFFICES.— 

(i) The Office shall have the authority to review and approve all energy related matters for those tribes that elect to utilize the Office, without subsequent 

or duplicative review and approval by other BIA Regional Offices or other Interior agencies. Existing BIA Regional Offices shall continue to oversee, support 

and provide approvals for all other non-energy related matters for those tribes 

that elect to utilize the Office. 

(ii) BIA Agency offices and Bureau of Land Management (BLM) State and 

Field offices shall continue to provide regional and local services related to Indian energy development including, local realty functions, on-site evaluations 

and inspections, direct services as requested by Indian tribes and individual Indian and any other local functions to related to energy development on Indian 

lands. 

(iii) The Office shall provide technical assistance and support to the BIA and 

BLM in all areas related to energy development on Indian lands. 

‘‘(E) DESIGNATION OF INTERIOR STAFF.—The Secretary shall designate 

and transfer to the Office existing staff and resources of the Division of Energy 

and Mineral Development, the Bureau of Indian Affairs, the Bureau of Land 

Management, the Office of Valuation Services, the Office of Natural Resources 

Revenue, the Fish and Wildlife Service, the Office of Special Trustee, the Office 

of the Solicitor, mining engineering and minerals realty specialists from the Office of Surface Mining, and any other Interior agency or office involved in energy development on Indian lands to provide for the review, processing and approval of: 

(i) permits and regulatory matters under the Indian Mineral Leasing Act of 

1938 (25 U.S.C. § § 396a et seq.), the Indian Mineral Development Act of 1982 

(25 U.S.C. § § 2101 et seq.), the Indian Tribal Energy Development and Self-Determination Act, included as Title V of the Energy Policy Act of 2005 (25 U.S.C. 

§ § 3501 et seq.), the Surface Mining Control and Reclamation Act of 1977 (30 

U.S.C. § § 1201) and its provisions on Tribal Primacy; the Indian Right-Of-Way 

Act of 1948 (25 U.S.C. § 323 to 328) and its implementing regulations at 25 

C.F.R. Part 169, leasing provisions of 25 U.S.C. 415, and surface leasing regulations at 25 C.F.R. Part 162; 

(ii) the consultations and preparation of biological opinions under section 7 of 

the Endangered Species Act of 1973 (16 U.S.C. § 1536) (ESA); 

(iii) the preparation of analyses under the National Environmental Policy Act 

of 1969 (42 U.S.C. § § 4321 et seq.) (NEPA); and, 

(iv) providing technical assistance and training in various forms of energy development on Indian lands. 

(F) MANAGEMENT OF INDIAN LANDS.—The Director shall ensure that all 

environmental reviews and permitting decisions comply with the United States’ 

unique legal relationship with Indian tribal governments as set forth in the 

Constitution of the United States, treaties, statutes, Executive Orders, and 

court decisions, and are exercised in a manner that promotes tribal authority 

over Indian lands consistent with the federal policy of Indian Self-Determination. The Director shall also ensure that Indian lands shall not be considered 

to be Federal public lands, part of the public domain or managed according to 

federal public land laws and policies. 

‘‘(G) INDIAN SELF–DETERMINATION.—Programs and services operated by 

this Office shall be provided pursuant to contracts and grants awarded under 

the Indian Self Determination and Education Assistance Act of 1975 (25 U.S.C. 

§ 450f). 

70 

(H) TRANSFER OF FUNDS.—To establish the Office and advance these efforts, 

the Secretary shall authorize, for a period of not to exceed two years, the expenditure or transfer of such funds as are necessary from the annual budgets 

of: 

(i) the Bureau of Indian Affairs; 

(ii) the United States Fish and Wildlife Service; 

(iii) the Bureau Land Management; 

(iv) the Office of Surface Mining; 

(v) the Office of Natural Resources Revenue; and, 

(vi) the Office of Mineral Valuation. 

‘‘(I) BASE BUDGET.—Following the two year periods described in (G) above, 

the combined total of the funds transferred pursuant to those provisions shall 

serve the base budget for the Office. 

‘‘(J) APPROPRIATIONS OFFSET.—All fees generated from Applications for 

Permits to Drill, inspection, nonproducing acreage, or any other fees related to 

energy development on Indian Lands shall, commencing on the date the Office 

is opened, be transferred to the budget of the Office and may be utilized to advance or fulfill any of its stated duties and purposes. 

‘‘(K) REPORT.—The Office shall keep detailed records documenting its activities 

and submit an annual report to Congress detailing, among others: 

(i) the number and type of federal approvals granted; 

(ii) the time it has taken to process each type of application; 

(iii) the need for additional similar offices to be located in other regions; and, 

(iv) proposed changes in existing law to facilitate the development of energy resources on Indian lands, improve oversight of energy development on Indian 

lands. 

‘‘(L) COORDINATION WITH ADDITIONAL FEDERAL AGENCIES.—Within 

one year of establishing the Office, the Secretary shall enter into a memorandum of understanding for the purposes coordinating and streamlining energy related permits with— 

(i) the Administrator of the Environmental Protection Agency; 

(ii) the Assistant Secretary of the Army (Civil Works); and, 

(iii) the Secretary of Agriculture. 

THE NATIONAL CONGRESS OF AMERICAN INDIANS—RESOLUTION #ANC–14–011 

TITLE: Supporting and Providing Additional Detail for New Bureau of Indian Affairs Regional Office to Serve Energy Producing Tribes 

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, several Tribes located in the Phoenix Region, the Rocky Mountain 

Region, the Great Plains Region and the Southwest Region, as well as the Alaska 

Native communities, and are energy producing tribes or among those tribes with potential for energy production that rely or might rely in the future on mineral revenue income for infrastructure, economic development, jobs and income from the development of their mineral resources; and 

WHEREAS, at the 2013 Annual Session of NCAI held at Cox Business Center 

from October 13 to 18, 2013 in Tulsa, Oklahoma with a quorum present, the General Assembly adopted Resolution #TUL–13–012 entitled ‘‘Requesting the Bureau of 

Indian Affairs Create a New Regional Office for Energy Producing Tribes;’’ and 

WHEREAS, the United States Congress is currently considering and the Department of the Interior (DOI) and the Bureau of Indian Affairs (BIA) are currently developing a proposal for a new Indian energy office; and 

71 

WHEREAS, it is in the best interest of NCAI to provide the Congress, DOI and 

BIA with additional information and detail about the proposed office to ensure that 

the office will effectively serve Indian tribes; and 

WHEREAS, NCAI proposes to amend Section 2602(a) of the Energy Policy Act 

of 1992 (25 U.S.C. 3502(a)) to create a new Indian Energy Regulatory Office (Office) 

that would be centrally located in Denver, Colorado and utilize and refocus the existing resources and office space of the Office of Indian Energy and Economic Development’s (OIEED) Division of Indian Energy and Mineral Development; and 

WHEREAS, establishing the Office in Denver, Colorado provides adequate housing and ease of recruiting new employees to a major metropolitan area, and proximity to other federal agencies involved in the energy permitting process; and 

WHEREAS, the Office would be established within the Secretary’s Office, similar 

to the Indian Water Rights Office, to ensure that the Director of the Office has authority over the various agencies involved; and 

WHEREAS, the Office would replace current BIA Regional Office authorities and 

responsibilities for energy producing Indian tribes, and would not result in duplicative review and approval of energy projects; and 

WHEREAS, the Office would provide energy resource assessments and feasibility 

studies, technical assistance and training in energy development proposal review, 

increase BIA permitting capacity and permit streamlining, support for permitting 

expertise within BIA Agency Offices, improved coordination with other agencies, 

technical assistance and training in the oversight and management of energy and 

financial resources, and ensure that Indian lands are not managed according to Federal public land management standards; and 

WHEREAS, Indian tribes seeking greater BIA support in the areas of energy development, oversight, management, proposal review and financial assistance could 

elect to be served by this Office; and 

WHEREAS, existing BIA Regional Offices would continue to provide Indian tribes 

utilizing the new Office with support and oversight for all non-energy related issues; 

and 

WHEREAS, to coordinate and streamline permitting, the Office would also include staff from other DOI agencies and offices involved in energy permitting on Indian lands, including: the Bureau of Land Management, the Office of Mineral Evaluation, the Office of Natural Resources Revenue, the Fish and Wildlife Service, the 

Office of Special Trustee, the Office of the Solicitor; and 

WHEREAS, the establishment of the Office would not increase the deficit because 

it would utilize existing Federal resources in Denver, Colorado and existing funding 

from each of the agencies and offices listed above; and 

WHEREAS, the Office would enter into agreements with other Federal agencies 

to coordinate and streamline permitting, including: the Environmental Protection 

Agency, the United States Department of Agriculture, and the Army Corps of Engineers. 

NOW THEREFORE BE IT RESOLVED, that NCAI requests that Congress 

pass legislation requiring the Secretary of the Interior to establish and implement 

an Indian Energy Regulatory Office as described in this resolution and as reflected 

in the attached legislative proposal; and 

BE IT FURTHER 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 2014 MidYear Session of the National Congress of American Indians, held at the Dena’ina 

Civic & Convention Center, June 8–11, 2014 in Anchorage, Alaska, with a quorum 

present. 

PREPARED STATEMENT OF SHAUN CHAPOOSE, CHAIRMAN, UTE INDIAN TRIBE OF THE

UINTAH AND OURAY RESERVATION BUSINESS COMMITTEE

Introduction 

Chairman Barrasso, Vice-Chairman Tester and Members of the Committee, thank 

you for the opportunity to testify on the Government Accountability Office’s (GAO) 

report entitled ‘‘Indian Energy Development: Poor Management Has Hindered Energy Development on Indian Lands.’’ My name is Shaun Chapoose. I am the Chairman 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. 

72 

The Tribe appreciates the Chairman’s request for GAO’s investigation into issues 

that hinder Indian energy development. GAO’s report provides an important perspective on an issue that the Committee has been studying since 2008. The GAO 

report cites a number of issues that the Committee and Congress could solve 

through legislation and increased budgets that reflect the value of Indian energy resources. The Tribe agrees with and supports the comments of many of the Senators 

who attended the hearing that Congress and the Bureau of Indian Affairs (BIA) 

should take action on these issues immediately. 

In fact, proposals that would address some of the issues cited in GAO’s report are 

already before Congress. Senator Barrasso’s bill, S. 209, the Indian Tribal Energy 

Development and Self-Determination Act Amendments of 2015, would streamline 

the process for a tribe to obtain a Tribal Energy Resource Agreement (TERA) to 

achieve greater tribal control over energy resources, would provide needed financing 

opportunities for Indian energy projects, and would create opportunities for tribal 

hydroelectric, biomass and weatherization projects. In addition, the President’s FY 

2016 Budget includes a request for $4.5 million dollars to establish an Indian Energy Service Center in Denver, Colorado that would streamline and support permitting work in local BIA offices. The Tribe supports these proposals and asks Congress 

to take action to pass these proposals. 

In addition to the proposals currently before Congress, much more is needed to 

address the fundamental problems revealed in the GAO report. The GAO report 

found that the following factors have hindered Indian energy development: 

• shortcomings in BIA management of Indian energy development including a 

lack of comprehensive data, a lack of staff and a lack of energy expertise; 

• an overly complex regulatory framework; 

• fractionated ownership interests; 

• a lack of capital and tax credits; 

• dual taxation of Indian energy resources by state governments; 

• lack of tribal capacity to oversee energy development; and, 

• limited tribal or reservation infrastructure. 

GOV’T ACCOUNTABILITY OFFICE, INDIAN ENERGY DEVELOPMENT— 

POOR MANAGEMENT BY BIA HAS HINDERED ENERGY DEVELOPMENT ON 

INDIAN LANDS 18 (June 2015). The Tribe asks that the Committee follow up on 

GAO’s report and this oversight hearing by considering and reporting to the Senate 

floor additional legislation to address all of these issues. 

The Ute Indian Tribe itself has provided the Committee and members of Congress 

more than 32 legislative proposals, many with no cost to the government, that 

would address the full range of issues raised in GAO’s report. The GAO report highlights what we have long known, ‘‘Indian energy resources are underdeveloped relative to surrounding non-Indian resources.’’ It is also important to note, that the report does not just focus on BIA. GAO also cited to the Bureau of Land Management 

(BLM), the Fish and Wildlife Service (FWS), the Environmental Protection Agency 

(EPA), the National Environmental Policy Act (NEPA), and the Endangered Species 

Act (ESA) as a part of the ‘‘complex regulatory framework’’ that limits Indian energy 

development. Id. at 15–18. 

It has been almost 8 years since former Senator Dorgan called for reform of the 

bureaucratic permit approval process for Indian energy. He reported that a single 

oil and gas well must navigate a 49-step process involving at least 4 understaffed 

federal agencies. Since Senator Dorgan highlighted these issues there have been numerous Congressional hearings, testimony and roundtables. There is an extensive 

Congressional record and, as seen at this oversight hearing, there is also much 

agreement about the need for change. 

Ute Indian Tribe’s Experience with Energy Development 

The Ute Tribe is a major oil and gas producer and knows these issues all too well. 

Production of oil and gas began on our Reservation in the 1940s 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 in process of opening 

up an additional 150,000 acres to mineral leases on our 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 reservation in the United States. 

Our Reservation covers more than 4.5 million acres and we have about 3,000 memVerDate Mar 15 2010 13:07 Apr 26, 2016 Jkt 099901 PO 00000 Frm 00076 Fmt 6601 Sfmt 6621 S:\DOCS\99901.TXT JACK
73 

bers living on the Reservation. The Tribe is also a major employer and engine for 

economic growth in northeastern Utah. 

Tribal businesses include a bowling alley, supermarket, gas stations, feedlot, an 

information technology company, manufacturing plant, and Ute Oil Field Water 

Services, 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, however, 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. For 

example, we need 10 times as many permits to be approved. Currently, about 48 

Applications for Permits to Drill (APD) are approved each year for oil and gas operations on the Reservation. We estimate that 450 APDs will be needed each year as 

we expand operations. 

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. In order for the Tribe to continue to grow and expand our economy all of the issues raised by the GAO report need to be addressed. 

We request that the Committee take action beyond the issues addressed in S. 209. 

We need legislation that will address all of the agencies involved in the energy permitting process on Indian lands and will open up energy programs at the Department of the Energy to Indian tribes. 

Addressing BIA’s Management of Indian Energy Development 

The most promising solution to many of the issues raised by GAO would be to 

establish and fund an Indian Energy Regulatory Office that would overcome management issues, develop comprehensive data, and provide a home within the Administration for Indian energy staff and expertise. This Office would address the current lack of focus by providing a single office responsible for Indian energy permitting. The Tribe asks that the Committee approve legislation to create an Indian Energy Regulatory Office that would co-locate staff from all the agencies involved in 

one office to coordinate and streamline Indian energy permitting, and to provide the 

staff, expertise and resources needed for energy permitting. This Office could follow 

the FERC permitting model cited by GAO at the hearing. 

The Ute Indian Tribe, the Coalition of Large Tribes (COLT), and the National 

Congress of American Indians (NCAI) all support establishing this new Indian Energy Regulatory Office within the Department of the Interior. The Office would be 

located in Denver, Colorado and utilize many existing resources to provide staff and 

expertise that would support energy permitting at the local level. The Office would 

provide the focus, expertise and resources needed so that Indian tribes can effectively participate in this important part of the economy and contribute to the Nation’s domestic energy supply. 

The Ute Indian Tribe and other tribes are also working with the BIA on its proposed Indian Energy Service Center. The Service Center is similar to our proposal, 

however, the Service Center proposal does not provide a Director who has all the 

authority necessary to issue permits and approve energy development on Indian 

lands—everything from permitting oil and gas wells, to environmental review of renewable energy and transmission projects. Instead, the Service Center relies on 

Memorandums of Agreement between the agencies. While we support the BIA’s efforts, legislation is needed to provide the Director of this Office the authority to 

reach across agencies to get things done. 

We also need legislation to ensure that either the Service Center or the Office we 

propose fulfills basic Indian trust principles that have been lost in the current unorganized Federal system for overseeing energy development on Indian lands. In particular, our legislative proposal directs that Indian lands are not public lands. Both 

Congress and Interior have been clear on this point in the past, however, over time, 

Federal agencies have attempted to apply public land management standards to Indian lands. 

Current examples of treating Indian lands like public lands include the application of the National Environmental Policy Act (NEPA) to Indian lands, BLM’s attempt to regulate hydraulic fracturing on Indian lands, and FWS’s implementation 

of the ESA on tribal lands without considering tribal interests and the Federal government’s trust responsibility. Legislation is needed to affirm the trust status of Indian lands, ensure Indian lands are managed according to Federal trust management standards as opposed to public land management standards, and finally provide the resources needed at Interior and BIA for the efficient processing of Indian 

energy permits and approvals. 

74 

The Office we are proposing is long overdue. Congress provided similar authority 

for federal public lands 10 years ago in Section 365 of the Energy Policy Act of 2005. 

Section 365 established a number of Permit Processing Improvement Offices in regions with high oil and gas permitting activity on federal public lands. These pilot 

offices were then made permanent by S. 2440 in the 113th Congress. 

The same support should be provided for Indian lands. Particularly given that the 

benefits of energy development far exceed the benefits on Federal lands. Energy development on Indian lands provides jobs, economic development, revenues for tribal 

governments, and, if managed properly, long-term investment reservation infrastructure. Attached to my testimony are NCAI and COLT resolutions in support of 

this Office as well as proposed legislative text.(See attachments printed Mark Fox’s 

prepared statement) 

Addressing Other Factors Hindering Indian Energy Development 

A number of other legislative reforms are needed to address the full range of 

issues raised in the GAO Report. Many of these are already before the Committee. 

In prior Congresses and in response to requests by former Senator Akaka, Senator 

Barrasso and, on the House side, Congressman Young, the Tribe developed 32 legislative proposals to improve Indian energy permitting, coordination and financing. 

These proposals were highlighted in hearings before the Senate Committee on Indian Affairs and the House Subcommittee on Indian, Insular and Alaska Native Affairs. To follow up on the GAO report and to finally make a difference in Indian 

energy development, the Tribe asks that the Committee consider and pass a variety 

of other legislative reforms. 

Below we highlight legislative reforms that would address gaps in the current system, clarify the authority of tribal governments to oversee energy activities on tribal 

lands and increase the resources available to tribes to address all aspects of energy 

development on tribal lands. The Tribe has already submitted legislative text to the 

Committee for these reforms. These reforms include: 

• ensuring that Communitization Agreements do not delay royalty payments; 

• including tribes in well spacing decisions on Indian lands; 

• ensuring that EPA’s new regulation of minor sources in Indian Country will not 

impede energy development; 

• setting aside a portion of existing energy efficiency funding for Indian tribes; 

• setting aside a portion of existing weatherization funding for Indian tribes; 

• streamlining environmental reviews on Indian lands by providing tribes with 

‘‘treatment as a sovereign’’ status under the National Environmental Policy Act 

(NEPA); 

• clarifying that Indian lands are not public lands and therefore are not subject 

to NEPA; 

• preventing BLM’s hydraulic fracturing regulations, designed for public lands, 

from applying to Indian lands; and, 

• supporting the capture and beneficial use of Indian energy in remote locations 

through distributed generation and community transmission on Indian lands. 

Through these legislative reforms, the Committee could address more of the issues 

raised in the GAO report and further unlock the potential of Indian energy development. 

Delayed Royalties Due to Communitization Agreements. The Secretary of 

the Interior has delegated the approval of oil and gas Communization Agreements 

to BLM. Instead of creating new unneeded regulatory responsibilities, like its hydraulic fracturing rule, BLM should fulfill its current obligations to timely review 

and approve Communitization Agreements. The Committee should require 

Communitization Agreements to be submitted at the time an Application for Permit 

to Drill is filed. This is possible when 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. 

Under current law, royalties are due within 30 days of the first month of production. However, without any authority, 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. The Tribe asks that the 

Committee consider and approve legislation to address BLM’s delays in payments 

of oil and gas royalties due to approval of Communitization Agreements. 

Inclusion of Tribes in Well Spacing Decisions. Instead of treating Indian 

lands like public lands, BLM should commit staff resources to actually regulating 

75 

well spacing on Indian lands and involving Indian tribes in oil and gas well spacing 

decisions. Currently, BLM defers the ability to determine well spacing on Indian 

lands to state well spacing forums and practices. Although BLM ultimately approves 

the oil and gas well spacing that was originally proposed in state forums, BLM 

should defer to and directly consult with Indian tribes in spacing determinations on 

Indian lands. BLM’s current practice ignores its Federal authority, its trust responsibility to Indian tribes, and takes away any benefits that a tribe could have received by determining its own well spacing on its reservation lands. 

The Tribe asks that the Committee consider and approve legislation that would 

direct BLM to enter into oil and gas well spacing agreements with Indian tribes. 

These agreements would provide tribes every opportunity to participate in and ultimately determine spacing units on its reservation. The opportunity to participate in 

well spacing decisions and ultimately determine well spacing on Indian lands would 

involve tribes in an important aspect of regulating oil and gas development. 

Minor Source Regulation in Indian Country. Require EPA to delay implementation of its new synthetic minor source rule for two years to ensure appropriate 

staffing is in place to administer any new permitting requirements. 

Energy Efficiency Reforms. Despite a longstanding state energy efficiency program, there is no ongoing program to support tribal energy efficiency efforts. Tribal 

governments have the same energy efficiency needs as state governments. The Tribe 

asks the Committee to direct the Department of Energy to 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. 

A tribal energy efficiency program could be 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. 

This program could lower tribal governmental energy costs and ultimately lower the 

Federal funding used by tribes to administer Federal programs at the local level. 

Weatherization Reforms. The Tribe asks that the Department of Energy’s 

weatherization program be reformed consistent with the Federal Government’s trust 

responsibility and to recognize the weatherization needs of Indian tribes. Under current law, the Department of Energy requires Indian tribes to obtain Federal funding 

through state governmental and non-profit entities administering weatherization 

programs. Tribes can only receive direct funding from the Department of Energy if 

a tribe can prove that it is not receiving funding that is equal to what the state 

is providing its non-Indian population. Currently, out of 566 federally recognized 

tribes, only two tribes and one tribal organization receive direct weatherization 

funding from Department of Energy. As a result, tribes are effectively excluded from 

the Federal Government’s weatherization program. 

Weatherization funding does not benefit tribal homes for a number of other reasons. In particular, Indian tribes lack energy auditors to assess the weatherization 

needs of Indian homes. The Department of Energy’s weatherization program must 

be reformed to provide direct funding to tribal governments, provide training for energy auditors in Indian Country and to reflect the unique weatherization needs of 

tribal homes. These reforms are needed to get weatherization funding to those who 

need it most. While the Tribe appreciates the weatherization changes included in 

Senator Barrasso’s bill, S. 209, much more is needed. 

Environmental Review of Energy Project on Indian Lands. As the GAO report concludes, the environmental review of energy projects on Indian land is more 

extensive than on comparable private lands. This extensive review acts as a disincentive to development on Indian lands particularly given the understaffed Federal agencies overseeing Indian energy development. Similar to the Clean Water 

Act, Clean Air Act and others, the Committee could amend the National Environmental Policy Act (NEPA) to include treatment as a sovereign (TAS) provisions. The 

new provision would allow a tribe to submit an application to the Council on Environmental Quality and once approved, federal authority for completing environmental reviews would be delegated to tribal governments. 

Clarify that Indian Lands are not Public Lands Subject to NEPA. The 10th 

Circuit Court of Appeals, in Davis v. Morton, 469 F.2d 593 (1972), equated Indian 

trust land to public lands and thus treats leases on Indian trust land as a major 

federal action subject to NEPA. The Court stated that exempting Indian lands from 

NEPA ‘‘would preclude all federal lands from NEPA jurisdiction, something clearly 

not intended by Congress in passing the Act.’’ Davis supports a sweeping interpretation of NEPA’s application in Indian country and questions the fundamental differences between Indian lands and public lands. The Tribe asks that he Committee 

clarify that Indian lands are not ‘‘public lands’’ held in trust for the people of the 

76 

United States. Indian lands are held in trust or restricted status for the use and 

benefit of the Indian tribes and its members. All other ‘‘federal lands’’ would still 

be subject to NEPA. 

BLM Hydraulic Fracturing Regulations. BLM’s hydraulic fracturing regulations are based on public policy standards set out in the Federal Land Policy and 

Management Act standards. Not trust standards used to manage Indian lands. The 

Committee should approve legislation prevents BLM from regulating hydraulic fracturing on Indian Lands. For example, the Committee could including language that 

‘‘prohibits any Department of the Interior rule regarding hydraulic fracturing, used 

in oil and gas development or production, from having any effect on land held in 

trust or restricted status for Indians, except with the express consent of its Indian 

beneficiaries.’’ 

Distributed Generation and Community Transmission. The Tribe also asks 

that the Committee support new and emerging ways for tribes to beneficially use 

our energy resources and provide energy security for our communities. We need a 

new approach to capture and not waste valuable resources that are too far from existing transmission networks. The Tribe asks that the Committee direct the Department 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 should be given to projects 

that utilize local resources, and reduce or stabilize energy costs. 

Conclusion 

The GAO report highlights the need for accountability and reform in Indian energy permitting. The GAO report concluded that, ‘‘The development of Indian energy 

resources has the potential to provide significant benefits to Indian tribes, tribal 

members, and the Nation through both tribal economic development opportunities 

and by contributing to the Nation’s energy production.’’ Id. at 35. However, GAO 

found that a number of factors, including poor management by BIA, limits the ability of Tribes to developer their resources. Id. GAO recommended that, ‘‘Federal policy calls for providing enhanced self-determination and economic development opportunities for Indian tribes by promoting tribal oversight and management of energy 

resource development on tribal lands.’’ Id. at 36. 

The Tribe asks that the Committee take action to improve the agencies and laws 

that we must work with to develop our energy resources. There was agreement at 

the hearing that action is needed now. Thank you for the opportunity to provide this 

testimony. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. STEVE DAINES TO

LAWRENCE S. ROBERTS

Mr. Roberts, as I expressed at the hearing, the tribal trust relationship must be 

upheld appropriately and meaningful consultation with tribes must take place between the Bureau of Indian Affairs and tribes regarding energy projects and also 

as federal agencies issue regulations that affect them. The Hydraulic Fracturing 

rule, which we discussed, is a perfect example. You responded describing the Indian 

Energy Service Center as an aid to the current inadequacy in tribal consultation. 

Question. Among the vast hurdles to energy development in Indian Country, I 

have heard from some tribes that BIA personnel is a particular stumbling block to 

getting approval for energy projects. Whether it’s an expertise or a bandwidth issue, 

staffing challenges are a consistent theme. Regardless, most tribes seem to prefer 

to have BIA personnel focused on energy development on the ground in regional and 

field offices. Especially because this Center would require appropriations from Congress and would be located in Denver, CO, far away from Montana Indian Country, 

can you explain what specific results would be achieved in Montana Indian Country? Have you established goals for the energy project review process, such as improving timelines for review, measuring cost and staff hours saved, and determining 

how tribal consultation would be improved amongst other federal agencies? 

Answer. The mission of the Indian Energy Service Center (IESC) is to provide a 

wide suite of support services to the Bureau of Indian Affairs (BIA) Agencies and 

Regional Offices; Bureau of Land Management (BLM) Field Offices and State Offices; Office of the Special Trustee for American Indians (OST) Fiduciary Trust Officers and Regional Trust Administrators; and the Office of Natural Resources Revenue (ONRR) for purposes of expediting the leasing, permitting, developing, and reporting for oil and gas development on Indian trust lands. Fundamental to this effort is responsiveness to trust mineral estate owners (tribal and allotted) and coordination between Federal agencies. In support of this mission the IESC would: 

77 

• Serve as a processing center for expediting nationwide trust functions where 

this service is more efficiently provided by an offsite work team in support of 

agencies and field, regional and state offices. 

• Provide direct support, technical advice and contractual services to: 

—Help formulate and develop consistent policy, rules, regulations, and business 

processes; 

—Identify and assist with implementation of best practices for deployment 

throughout the appropriate bureau or office; 

—Develop statements (scope of work) and funding for contracts to provide direct 

services in support of energy development. 

—Address impediments restricting the timely development of energy resources. 

• Consult, coordinate, and collaborate to promote resource sharing between Interior Bureaus, tribes and Indian land owners in the resolution of issues that impede energy development. 

• Serve as a center point for collaboration with other Federal bureaus for expediting energy development. 

• Support tribal consultation on energy development for BIA, BLM, ONRR, and 

OST. 

• Provide a program assessment and evaluation of existing program operations. 

• Conduct training of Interior employees that have a role in energy programs. 

As capacity is built, the IESC will perform work for which it has developed expertise in support of the Department’s energy and mineral development responsibilities. The IESC work will be prioritized with input from the affected bureau or agencies and adjusted as IESC builds capacity. 

The IESC has requested each of the BIA Regional Offices to identify their needs 

to help expedite energy development and leasing activities. The BIA Rocky Mountain regional office specifically requested training, records management, data entry 

and examination, field work for abandoned well reclamation, and responding to Indian mineral owner inquiries. IESC support in these areas will allow for the BIA 

Region and agencies to focus on the day to day energy development activity on reservations. In addition, there were perceived benefits to co-locating the IESC with 

the existing Office of Indian Energy and Economic Development’s Division of Energy 

and Minerals Development, which has been taking the lead for Indian Affairs in the 

past several years to fill the gap for Indian energy. 

Æ