Indian Energy Development: Poor Management by BIA Has Hindered Energy Development on Indian Lands
Published: 2015-06-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Indian energy resources hold significant potential for development, but remain largely undeveloped. Interior's BIA reviews and approves leases and other permits required for development. Other Interior components and federal agencies also have roles in this process.
The Energy Policy Act of 2005 provided the opportunity for interested tribes to pursue TERAs—agreements between a tribe and Interior that allow the tribe to enter into energy leases and agreements without review and approval by Interior. The act also authorizes Interior to provide grants to tribes to develop the capacity needed to enter into a TERA. However, no tribe has entered into a TERA.
GAO was asked to review Indian energy development. This report examines (1) factors that have hindered Indian energy development, (2) factors that have deterred tribes from pursuing TERAs, and (3) the effectiveness of Interior's efforts to build tribes' capacity to enter into TERAs. GAO analyzed federal data; reviewed federal, academic, and other literature; and interviewed tribal, federal and industry stakeholders.
section_title: What GAO Found
paragraphs: Bureau of Indian Affairs' (BIA) management shortcomings and other factors—such as a complex regulatory framework, tribes' limited capital and infrastructure, and varied tribal capacity—have hindered Indian energy development. Specifically, BIA does not have the data it needs to verify ownership of some Indian oil and gas resources, easily identify resources available for lease, or identify where leases are in effect, as called for in Secretarial Order 3215 and internal guidance. BIA also faces staff limitations and does not have a documented process or the data needed to track its review and response times, as called for in implementation guidance for Executive Order 13604, and therefore it cannot ensure transparency in its review of energy-related documents. These shortcomings can increase costs and project development times, resulting in missed development opportunities, lost revenue, and jeopardized viability of projects. Examples are as follows:
Missed development opportunities: According to a tribal official, BIA took 18 months to review a wind lease. According to the developer of the project, the review time caused the project to be delayed and resulted in the project losing an interconnection agreement with the local utility. Without this agreement, the project has not been able to move forward, resulting in a loss of revenue for the tribe.
Lost revenue: According to a tribal official, BIA's review of some of its energy-related documents took as long as 8 years. In the meantime, the tribe estimates it lost more than $95 million in revenues it could have earned from tribal permitting fees, oil and gas severance taxes, and royalties.
Jeopardized viability of projects: One lease for a proposed utility-scale wind project took BIA more than 3 years to review and approve. According to a tribal official, the long review time has contributed to uncertainty about the continued viability of the project because data used to support the economic feasibility and environmental impact of the project became too old to accurately reflect current conditions.
Several factors have deterred tribes from seeking tribal energy resource agreements (TERA). These factors include uncertainty about some TERA regulations, costs associated with assuming activities historically conducted by federal agencies, and a complex application process. For instance, one tribe asked the Department of the Interior (Interior) for additional guidance on the activities that would be considered inherently federal functions—a provision included in Interior's regulations implementing TERA. Interior officials told GAO that the agency has no plans to provide additional clarification.
Interior's Office of Indian Energy and Economic Development (IEED) provided grants to build tribal energy development capacity to 25 tribes from 2007 through 2013, but the effectiveness of the grants to move tribes closer to demonstrating that they have the capacity to enter into TERAs is unknown. The Standards for Internal Control in the Federal Government call for agencies to compare actual performance with planned or expected results and to monitor performance; however, IEED has not tracked how, if it all, the grants have eliminated capacity gaps.
section_title: What GAO Recommends
paragraphs: GAO recommends that Interior take steps to address data limitations, track its review process, provide clarifying guidance, and evaluate the effectiveness of grants. Interior generally agreed with most but not all of the recommendations because it is taking other actions to address some data limitations. GAO continues to believe that its recommendations are valid.

section_title: Letter
paragraphs: Indian energy resources hold significant potential for development, but  remain largely undeveloped. For instance, Indian tribes and tribal  members, collectively, are the third largest owner of domestic mineral  resources, including oil, gas, and coal. In addition, according to a 2013  Department of Energy (DOE) report, Indian lands in the contiguous 48  states have the technical potential to produce about 1.1 billion megawatt  hours (MWh) of electricity for wind energy—3.4 percent of total U.S.  technical potential.
Indian lands also have the potential to produce about  14 billion MWh of solar energy—5.1 percent of total U.S. generation  potential.
For some federally recognized Indian tribes and their members, development already provides economic benefits, including funding for  education, infrastructure, and other public services. For example, in 2012,  the President of the Jicarilla Apache Nation reported that approximately  90 percent of the tribe’s government operations were funded by oil and  gas development. In addition, the Campo Band of Mission Indians of the  Kumeyaay Nation leased lands in 2005 to a developer to construct a  utility-scale wind farm that consists of 25 2-megawatt (MW) wind  turbines. Tribal officials told us the wind farm provides revenue for tribal  government operations. 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.
Federally 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. As of January 14, 2015, the federal  government recognized 566 tribal entities. according to our analysis of SNL Financial data, from 2004 through 2013,  686 utility-scale wind projects added more than fifty-four thousand MWh  of generating capacity to the grid and 778 utility-scale solar projects  added more than seven thousand MWh of generating capacity to the grid.  Development of Indian energy resources could provide opportunities to  grow tribal economies and contribute to the nation’s energy production.
The federal government recognizes Indian tribes as distinct, independent  political communities that possess certain powers of sovereignty and self- government, including some power to manage the use of their territory  and resources and control economic activity within their jurisdiction. For  the past several decades, federal policy has supported greater tribal  autonomy and control by promoting and supporting opportunities for  increased tribal self-determination and self-governance. According to  literature, successful tribal economic development depends in part on  tribal control and decision-making authority over the programs and   By returning  activities that affect the tribe and its tribal members.decision-making authority to tribes, tribes are accountable to their own  people and can establish priorities that reflect those of the tribe over  federal agency priorities. Further, according to some literature, successful  tribal economic development involves the federal government making the  transition from decision maker to advisor, from controlling the process to  providing information and technical assistance to tribes.
However, according to literature, tribal control over the development and  use of Indian energy resources has been limited. Bureau of Indian Affairs (BIA), along with multiple other federal and tribal  agencies, govern the development of Indian energy resources, and BIA  often holds final decision-making authority. For example, BIA, with some  involvement from other federal agencies—such as the Bureau of Land  Management (BLM)—reviews and approves energy-related documents,  including surface and subsurface leases, drilling permits, right-of-way  (ROW) agreements,studies and surveys.
In general, Interior’s   cultural resource surveys, and environmental  In 2005, Congress passed the Indian Tribal Energy Development and  Self-Determination Act (ITEDSA) of 2005, part of the Energy Policy Act of  2005, to provide an option for federally recognized tribes to exercise  greater control of decision-making authority over their own energy  resources. 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 ROW agreements for energy  resource development on tribal lands without review and approval by the  Secretary. The act and Interior’s implementing regulations require that the  Secretary determine whether a tribe has the capacity to regulate the  development of its energy resources before approving a TERA. A TERA  may address development of all or a portion of a tribe’s energy resources  but does not authorize tribes to assume responsibility for lands and  resources owned by individual Indians—Interior is to maintain  responsibility for those lands and resources even if a TERA is approved.
See Judith V. Royster, Practical Sovereignty, Political Sovereignty, and the Indian Tribal  Energy Development and Self-Determination Act, 12 Lewis & Clark L. Rev.1065 (2008).
Nearly a decade after enactment of ITEDSA, no tribe has entered into a  TERA with Interior, but, according to Interior officials, six tribes requested  preapplication meetings to discuss establishing an agreement. ITEDSA  also authorizes Interior to provide grants to Indian tribes and, according to  Interior regulations, these tribal energy development capacity (TEDC)  grants are to be used to help tribes build capacity to perform the  administrative and technical functions included in a TERA. Interior’s  Office of Indian Energy and Economic Development (IEED) manages the  TEDC grant program.
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.  The federal trust responsibility is a fiduciary obligation on the part of the  United States to federally recognized Indian tribes and tribal members. According to Interior’s Secretarial Order 3335, among the guiding  principles of the trust relationship are supporting tribal sovereignty and  the right of Indian tribes to make important decisions about their own best  interests, protecting tribal resources, and practicing responsiveness and  timeliness.
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. ___, 131 S. Ct. 2313 (2011). tribes. Interior’s Office of Inspector General (IG) has also identified  weaknesses in BIA’s management and oversight of Indian energy  resources. For instance, in 2012, Interior’s IG 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. In addition, in 2014, Interior’s IG found that two of the  three BIA offices it reviewed had records management deficiencies,  including one office with incorrect property records, incomplete and  outdated ROW files, and incomplete well files.
You asked us to review the development of Indian energy resources. This  report examines (1) factors that have hindered Indian energy resource  development, (2) factors that have deterred tribes from seeking TERAs,  and (3) the effectiveness of TEDC grants to build tribes’ capacity to enter  into TERAs.
To examine the factors that have hindered Indian energy development  and deterred tribes from seeking TERAs, we reviewed and synthesized  literature that included more than 40 reports, conference proceedings,  hearings statements, and other publications from federal and tribal  governments; industry; academics; and nonprofit organizations. To  identify literature, we searched Web-based databases, including energy  industry specific databases, and other resources containing general  academic articles, law review articles, and government resources, such  as reports and hearing statements. In this report, 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.
To gain additional insights into the factors that hinder Indian energy  development and deter tribes from seeking TERAs, we interviewed a  nongeneralizable sample of stakeholders representing numerous  agencies and organizations, including officials from BIA, IEED, DOE, the  National Renewable Energy Laboratory, BLM, the U.S. Fish and Wildlife  Service (FWS), and the Environmental Protection Agency (EPA). Within  BIA, we interviewed officials from all 12 BIA regional offices and 9 BIA  agency offices. In addition, we interviewed officials representing 33 Indian  tribes, two Alaska Native Corporations, representatives from 13 energy  development companies or consulting firms, and representatives from five  nongovernmental organizations related to Indian energy development.  We selected federal offices based on their regulatory oversight  authorities, assistance of Indian energy development, and management  (trust) responsibilities of Indian lands and resources. We selected Indian  tribes to ensure a representation of tribes with various types of energy  development, including oil and gas and renewable energy development, a  range of experience with development, tribal size, and geographic  location.
We 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. In some cases, this  information came from publicly available documentation, such as  environmental impact statements. To assess the reliability of these data  and this information, we verified key dates with relevant and  knowledgeable officials associated with the project. We also obtained  information from BIA documents and officials to identify its process for  tracking its review of energy-related documents. We compared this  information with statutory and regulatory provisions, executive orders,  best practices for modernizing the federal permitting and review process  identified by an interagency committee, and the Standards for Internal  Control in the Federal Government.
To examine the effectiveness of TEDC grants in building the tribal  capacity needed to enter into a TERA, we obtained and reviewed  available information from IEED regarding the purpose and use of grants  awarded. To identify characteristics of effective tribal capacity building  activities, we reviewed literature from relevant federal agencies, nonprofit  organizations, and tribal research institutes with experience developing  capacity, including EPA’s Office of International and Tribal Affairs, the  Harvard Project on American Indian Economic Development, the Native  Nations Institute at the University of Arizona, and the First Nations  Development Institute. We compared the identified characteristics to  Interior’s TEDC grant program (see app.I for more information on our  scope and methodology).
We conducted this performance audit from March 2014 to June 2015 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.
subsections: section_title: Background
paragraphs: Domestic energy production, including Indian energy resources,  contributes to the U.S. economy and national security, providing energy  for transportation, manufacturing, and residential use. More than 90  percent of domestic energy consumption in 2013 came from fossil or  renewable sources. Fossil energy comes primarily from crude oil,  natural gas, and coal. Renewable energy comes from a variety of  sources, including wind, solar, hydroelectric power, geothermal, and  biomass. Electricity generation using renewable energy can range from  facility- and community-scale production—such as rooftop solar panels or  a wind turbine to power a community center—to utility-scale production of  hundreds of MWs of electricity.
Most of this energy was produced from non-Indian resources, but Indian  energy resources hold significant potential for future development. For  example, natural gas and crude oil are found in a variety of geological  formations, including shale. Some Indian tribes and their members own  resources located in known shale plays (see fig.1).
Development of Indian energy resources is a complex process that may  involve a range of stakeholders, including federal, tribal, and state  agencies. BIA, through its various regional and agency offices, Division of  Real Estate Services, Division of Land Titles and Records, and Division of  Natural Resources has primary authority for managing Indian energy  development (fig. 2 shows BIA regions and the number of associated  agency offices).
Other federal agencies and offices, including BLM, IEED, and FWS, may  also have a role in the development of Indian energy resources. For  instance, IEED’s Division of Energy and Mineral Development serves  tribes by assisting with the exploration, development, and management of  their energy resources—fossil fuels and renewable.
While the specific steps and order of events listed below vary based on  the type of resource being developed, location of development, and  ownership of the resource, energy development generally includes the  following activities:  Exploration. To develop energy resources, developers and operators  must locate a suitable resource. To identify potential oil and gas  resources, most operators use seismic methods of exploration. For  renewable projects, developers conduct a feasibility assessment to  determine the viability of the project, including an evaluation of the market  area to determine demand for power, availability of interconnection with  the grid, and financing opportunities. During the exploration phase, a  number of permits or authorizations may be required. For example,  permitting requirements can include seismic exploration permits,  permission to survey, ROW agreements, archeological and cultural  surveys, tribal access permits, and environmental assessments.
Preleasing. Operators must identify ownership of surface and/or  subsurface resources. BIA maintains surface and mineral ownership  records, and operators generally request a title status report from BIA’s  Land Titles and Records Office to verify ownership of land and resources.  A title status report is issued after BIA examines land titles and identifies  the legal description of a tract of Indian land; current ownership, including  any applicable conditions, exceptions, restrictions, or encumbrances on  record; and whether the land or resource is in trust, restricted, or fee  status. Trust and restricted resources are held for the beneficial interest  of the tribe or an individual Indian and cannot be transferred or leased  without approval of the Secretary of the Interior, who has generally  delegated this authority to BIA. Some tribal boundaries include a  patchwork of these ownership patterns, along with parcels of land and  resources owned by the federal government, states, and counties,  intermingled together—giving land ownership maps a “checkerboard”  appearance (see fig. 3).
Leasing. The operator or developer must acquire a lease for the use of  the surface and/or the right to drill for oil and gas resources. There are  several ways in which Indian oil and gas resources can be leased. For  example, oil and gas resources can be nominated for lease by operators,  the tribe, or an individual Indian owner. Then, BIA reviews nominated oil  and gas resources to determine ownership and in some cases, BLM may  assist with identifying ownership of proposed parcels. If the resources are  not already leased, BIA may advertise and conduct competitive lease  sales where operators can bid on nominated leases. BIA reviews the  bids, identifies the highest bidder, and notifies the operator whether its bid  was accepted. Tribes and individual Indians can, in some cases, lease  their own oil and gas resources. For energy development that requires  use of surface lands, leases for use of the lands are generally submitted  to BIA for review, after ownership has been determined.
Permitting and other government actions. Multiple permits and other  approvals can be required throughout the development process, and  types of permits vary by project. For example, BLM issues drilling permits  to operators developing Indian oil and gas resources—after receiving BIA  concurrence for approval of the permit. In addition, operators and  developers may have to obtain other types of permits from other federal  agencies. For example, an oil and gas operator may be required to obtain  a permit from EPA for air emissions, and a developer of a wind project  may be required to obtain a permit from FWS for unavoidable bird  deaths. Other approvals that may be needed for energy development include the granting of a ROW, which is generally obtained through BIA  approval.
Indian tribes may also have their own set of laws and regulations  governing energy development. For instance, tribes may require  operators to enter into tribal business license agreements and tribal  employment rights ordinance agreements.
State agencies have general authority to regulate natural resources within state  boundaries if the resources are located outside Indian country. States do not have  authority to regulate Indian resources located on Indian country unless Congress has  authorized this in a federal statute. One such statute is the Act of Aug. 4, 1947, 61 Stat.  731, sec. 11 (authorizing regulation of resources on “ll restricted lands of the Five  Civilized Tribes under Oklahoma oil and gas conservation laws” if approved by the  Secretary of Interior). Indian country is all land within the limits of any Indian reservation,  including rights-of-way; all dependent Indian communities within the borders of the United  States; and all Indian allotments the Indian titles to which have not been extinguished,  including rights-of-way. 18 U.S.C. § 1151. statute.defer to state well spacing, well completion, and production rules and  operators generally obtain a state drilling permit regardless of ownership.
In addition, according to Interior officials, BIA and BLM generally  Finally, for a utility-scale renewable energy project, a developer may also  need to execute transmission and power purchase agreements— agreements with a utility to connect the project to the grid and to  purchase the energy created by the project.
Environmental compliance and other requirements. Indian energy  development is generally subject to federal environmental and other laws  that apply to both federal and Indian resource development, but not to  private resource development. In particular, under the National  Environmental Policy Act (NEPA), federal agencies are required to  evaluate the likely environmental effects of certain major federal actions  by using an environmental assessment or, if the projects likely would  significantly affect the environment, a more detailed environmental impact  statement.and other documents needed to develop Indian energy resources. These  approvals are generally considered “major federal actions.” BIA, as the  responsible surface management agency for Indian lands, often takes the  lead in reviewing the NEPA analysis, though the analysis is reviewed by  multiple agencies, and the public is provided opportunities to provide  comment on the analysis. In addition, Indian energy development projects   Federal agencies review and approve the leases, permits,  are subject to National Historic Preservation Act requirements, and, under  some circumstances, require an Endangered Species Act (ESA)  consultation with FWS. Also, as noted above, operators may be required  to obtain a permit from EPA for air emissions. Under section 7 of the  ESA, federal agencies must ensure that any action they authorize, fund,  or carry out—including approval for Indian energy development  activities—is not likely to jeopardize the continued existence of a species  protected under the act.
Development. After leases, permits, and other authorizations are  obtained, the construction of the oil and gas well or renewable project can  begin.
section_title: Shortcomings in BIA’s Management and a Variety of Other Factors Have Hindered Indian Energy Development
paragraphs: A variety of factors, including shortcomings in BIA’s management of  Indian energy development, have hindered development of Indian energy  resources, according to some of the literature we reviewed and several  stakeholders we interviewed. In particular, BIA does not have  comprehensive data to identify ownership and resources available for  development, does not have a documented process or data to track and  monitor its review and response times, and some offices do not have the  skills or adequate staff resources to effectively review energy-related  documents. Additional factors, generally outside of BIA’s management  responsibilities, have also hindered Indian energy development, including  (1) a complex regulatory framework, (2) fractionated ownership interests,  (3) tribes’ limited access to capital and federal tax credits, (4) dual  taxation by states and tribes, (5) tribal capacity, and (6) infrastructure  limitations.
subsections: section_title: BIA Does Not Have Comprehensive Data Identifying Ownership and Use of Indian Resources
paragraphs: 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. 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. In addition, Interior’s Secretarial Order  3215 calls for BIA 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. Further,  according to Interior guidance, the determination of the legal boundaries  of Indian trust lands is essential to ensure that property and resources are  properly accounted for and protected.
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. For example, BIA  officials told us of an instance of Indian minerals under development  without an approved lease because BIA’s ownership data were outdated  and, therefore, not reliable to allow the agency to verify ownership.  Without an approved lease, BIA officials told us the operator could not  make royalty payments to the Indian beneficiary, and the royalty funds  were held in an escrow account for at least 8 months. BIA officials told us  that, as of April 2015, BLM started the survey, and the agency approved  the lease.
According to an Interior official, the absence of a cadastral survey is not  an isolated event. The official said he was aware of similar scenarios  throughout Montana, North Dakota, Oklahoma, and Wyoming; however,  the extent of this deficiency is unknown because neither BIA nor BLM  maintains an inventory of Indian cadastral survey needs, as called for by  Interior guidance issued annually since 2008. BLM historically maintained this information in its Cadastral Automated Request System  (CARS), but a BLM official told us the system has not been fully  maintained or consistently used since 2011. Without an inventory of  needs, BIA does not know the magnitude of the problem or how to  prioritize and target its limited resources.
In addition, 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 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. However, BIA’s database for  recording and maintaining historical and current data on ownership and  leasing of Indian land and mineral resources—the Trust Asset and  Accounting Management System (TAAMS)—does not include a GIS  mapping component.
According to a BIA agency 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. 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 record duplication  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. According to a  2012 report, an inventory of Indian resources can provide a road map for  expanding development opportunities.
According to Interior’s 2014-2015 performance plan, it was to incorporate  a GIS mapping component into TAAMS in fiscal year 2014. However, BIA  officials told us the agency faced competing priorities and has delayed the  incorporation of the GIS mapping component to fiscal year 2015. Without  easily accessible data, such as provided in GIS mapping technology, BIA  will continue to face challenges to properly manage Indian energy  resources and tribes could miss out on development opportunities.
section_title: BIA Does Not Have a Documented Process or Data to Track Its Review and Response Times
paragraphs: BIA review and approval is required throughout the development process,  including the approval of leases, ROW agreements, and appraisals;  however, BIA does not have a documented process or the data needed to  track its review and response times. In 2014, an interagency steering  committee that included Interior identified best practices to modernize  federal decision-making processes through improved efficiency and  transparency. 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 identified  that BIA’s review and approval process can be lengthy and increase  development costs and project development times, resulting in missed  development opportunities, lost revenue, and jeopardized viability of  projects. For example, in 2011, the President for the Rosebud Sioux  Tribe in South Dakota, reported that it took 18 months for BIA to review a  wind lease. According to the developer of the project, the review time  caused the project to be delayed and resulted in the project losing an  interconnection agreement with the local utility. Without this agreement,  the project has not been able to move forward, resulting in a loss of  revenue for the tribe.
In another example, in 2014, the Acting Chairman for the Southern Ute  Indian Tribe reported that BIA’s review of some of its energy-related  documents took as long as 8 years. Specifically, as of April 30, 2014, the  tribe had been waiting for at least 5 years for BIA to review 81 pipeline  ROW agreements—11 of the 81 ROW applications had been under  review for 8 years. According to the official, had these ROW applications  been approved in a timely manner, the tribe would have received revenue  through various sources, including tribal permitting fees, oil and gas  severance taxes, and royalties. The official noted that, during the period  of delay, prices for natural gas rose to an historic high but had since  declined. Therefore, the official reported that much of the estimated $95  million in lost revenue will never be recovered by the tribe.
In yet another example, BIA took more than 3 years to review and  approve a lease for a proposed wind project and, according to a tribal  official, the lease was only reviewed and approved after multiple calls and  letters from the tribe to BIA headquarters. Long review times can  contribute to uncertainty about the continued viability of the project  because data used to support the economic feasibility and environmental  impact of the project can become too old to accurately reflect current  conditions. The Commission on Indian Trust Administration and Reform  reported that undue delays in BIA’s review process can have a direct  negative impact on economic development and noted that willing  developers have walked away from a lease or other agreement because  the process takes too long.
BIA has taken some steps to improve its collection of data on review and  response times for some leases. Specifically, BIA determined that it did  not have a standard approach to track activities associated with the  review of leases, permits, and applications for the development of Indian  resources. Without this information, the agency could not monitor its  performance to meet regulatory processing times identified in its 2012  regulations or the status of applications. To address this concern, in  2014, the agency developed the Realty Tracking System. According to  BIA officials, this system provides the data needed to track reviews of  surface leases. However, the system does not track information for oil or  gas leases or other key review activities associated with energy  development, such as ROW agreements, and does not include  comprehensive data on existing surface leases under review.
According to BIA officials, the lengthy review times can be attributed, in  some instances, to incomplete lease or application packages submitted to  the agency. However, without key data to identify the time it has taken to  process energy-related documents and a documented process to track  review times, BIA cannot verify the extent to which incomplete lease or  application packages contribute to lengthy reviews. It also cannot ensure  that documents are moving forward in a timely manner or determine if its  efforts to improve the process are effective.
section_title: Some BIA Offices Do Not Have Staff with the Skills Needed to Effectively Manage Indian Energy Development
paragraphs: 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 example, Interior’s IG reported  in 2014 that a BIA agency office in Colorado does not have sufficient staff  qualified to effectively administer oil and gas operations. In 2013, the  Commission on Indian Trust Administration and Reform reported that  Interior does not have adequate resources to meet Indian leasing  demands for oil and gas development. Several stakeholders, including  Interior officials, also highlighted this concern and further identified  inadequate staff resources as a contributing factor in lengthy review times  and a hindrance to development of Indian energy resources. 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. Further, the Chairman of the Shoshone-Bannock  Tribes reported that one of the major impediments to the success of its  wind project is insufficient BIA staff resources to review and approve  environmental documents required under NEPA.
section_title: A Variety of Factors Generally Outside of BIA’s Control Have Hindered Indian Energy Development
paragraphs: A variety of factors generally outside of BIA’s control have also hindered  Indian energy development, according to some of the literature we  reviewed and stakeholders we interviewed, including (1) a complex  regulatory framework with multiple jurisdictions, (2) fractionated land and  mineral ownership interests, (3) tribes’ limited access to capital and  federal tax credits, (4) dual taxation by states and tribes, (5) tribal  capacity, and (6) infrastructure limitations.
subsections: section_title: Complex Regulatory Framework with Multiple Jurisdictions
paragraphs: 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, the development of Indian energy  resources can be governed by multiple federal, tribal, and, in certain  cases, state agencies and also can be affected by states’ regulation of oil  and gas resources on adjacent state or private lands.several stakeholders and some literature we reviewed, this framework  can involve significantly more steps than the development of private and  state resources, increase development costs, and add to the timeline for   According to  development.investment firm we interviewed, 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.
In 2013, the Coalition of Large Tribes passed a resolution calling for federal agencies to  adopt policies declaring that Indian lands are not public lands and should not be managed  according to public interest standards, but rather managed by Indian tribes for the benefit  of their members.
According to an Interior report to Congress, because Section 7 of the  ESA applies to the development of Indian resources, Indian energy  development often requires costly surveys and other forms of data  collection that are not always required for projects on private lands. In  addition, as part of the NEPA process, Indian energy development may  be open to a public comment period—allowing the public to present  concerns for consideration before BIA approves leases and permits.  Several stakeholders highlighted the additional costs required for NEPA  compliance, most often paid for by the developer or operator, and the  uncertainty associated with public opposition and comments received  during the NEPA process as factors that can cause a developer to avoid  Indian energy resources and choose to develop non-Indian resources that  do not require federal agency action. Interior officials told us that NEPA  compliance reviews significantly increase the cost of conducting  operations on Indian lands and, as a result, projects are moved to  adjoining state or private lands where NEPA compliance is not required.  A few stakeholders also expressed concern that BLM’s recent hydraulic  fracturing rule applies to Indian oil and gas development, adding more  federal regulation to development activities on Indian resources that are  not generally applicable to private or state resources.
Indian oil and gas development can also be subject to higher fees than  those for non-Indian resources. For example, development of Indian oil  and gas resources is subject to BLM’s $6,500 drilling permit fee. In comparison, development of private and state oil and gas resources may  be subject to state drilling permit fees, which vary by state; for example,  drilling permits in Montana cost $150 or less. Interior officials told us that  some Indian oil and gas resources are located in areas that offer marginal  economic returns, and development in those areas can be affected by  BLM’s permitting fee. In addition, in 2015, a research affiliate from the  Harvard Project on American Indian Economic Development noted that  the permitting costs to develop Indian energy resources are higher than  the development of resources elsewhere, thus creating an environment of  uncertainty and contributing to lackluster economic development.
section_title: Fractionated Land and Mineral Ownership Interests
paragraphs: Fractionated Ownership Interests  Fractionated ownership interests for Indian  resources are a result of the application of  state law by the General Allotment Act of  1887, subsequent federal laws, court  decisions, and administrative rulings. Allotted  tracts of land are passed down through  generations and, as generations pass,  ownership interests are fractionated among  heirs, but the land is not physically divided.  With each generation, ownership interests  exponentially grow.   To consolidate ownership of highly  fractionated trust lands, in 2012, Interior  created a land buy-back program for tribal  nations to implement the land consolidation  component of the Cobell v. Salazar  settlement. This settlement provides $1.9  billion to be used to purchase and consolidate  fractionated interests in trust or restricted  land. Consolidated parcels will be transferred  to tribal governments for uses benefiting the  tribes.
Some Indian resources have highly divided, or fractionated, ownership  interests that can result in more costly and longer development times  compared with non-Indian resources that are not fractionated. According  to Interior officials, fractionated ownership creates a problem for leasing  because federal statutes require written consent from at least a majority  of the “undivided interest” holders of an allotment before various activities  are authorized or permitted to occur on an allotment, such as surveying,  geophysical permits, ROW agreements, and mineral lease approval. In  most instances, the proponent of the activity, such as a developer, is  responsible for obtaining the required consents and providing proof of  consent to the federal agency. In the case of competitive bid sales, BIA  will ordinarily obtain the necessary consents; however, for negotiated  mineral leases, the would-be lessee is required to obtain the consents  needed. According to some literature we reviewed, these allotted  parcels of land have hundreds or even thousands of owners with interests  in a single parcel. According to some literature, fractionation raises the  cost of developing Indian energy resources, reduces the potential benefits  for each individual owner, and hinders development of some resources.
section_title: Access to Capital and Federal Tax Credits
paragraphs: Some tribes face difficulty accessing the capital needed to undertake  energy development projects, which can also hinder development of their  resources. For example, a 2013 article found that tribes have difficulty  establishing wind farms because they neither have access to the initial  capital needed to start the project nor the tax incentives to keep it going.  Specifically, because federally recognized Indian tribes are sovereign  legal entities and not subject to federal income tax, Indian tribes also  have limited opportunities to take advantage of federal tax credits to  develop their own resources, such as federal production tax credits. In  September 2014, we found that federal activities, such as tax credits for  renewable energy producers, were factors influencing a 30-fold increase  and a 19-fold increase in production of electricity from wind and solar  energy, respectively, from 2000 to 2013. According to some of the  literature we reviewed, without access to these tax credits, development  of Indian energy resources cannot easily compete with non-Indian  projects that receive tax credits.
However, Indian energy development projects may be able to benefit  from tax credits if the project is owned by a non-Indian entity. For  example, energy development projects in Indian country can be  structured so that non-Indian entities involved in the project benefit from  the tax credits and, in certain circumstances, tax credits, such as  investment credits for renewable energy assets, can be passed from the  tribe to a non-Indian project participant. However, according to a tribal  stakeholder we interviewed, this option limits the tribe’s ability to have an  ownership interest in projects developing its resources.
section_title: Dual Taxation
paragraphs: A severance tax on oil and gas production is a common mechanism  governments use to raise revenue, and both states (under certain  circumstances) and tribes can impose a severance tax. Dual taxation of  resources does not occur on private, state, and federally owned  resources and can make development less economically attractive and  discourage development of Indian resources, according to some of the  literature we reviewed. For example, in 2010, the National Congress of  American Indians included state taxation of Indian energy resources as  an identified threat to the viability of some projects.
Not all energy development activities in Indian country may be subject to  dual taxation, however. For example, states cannot tax Indian tribes or  certain tribally-owned corporations for their activities in Indian country.  However, a tribal stakeholder told us that most tribes do not have the  resources to start a production company to develop their resources, such  as oil and gas. As noted above, the lack of access to federal tax credits  can hinder a tribe’s ownership of renewable projects.
Tribal officials told us that both states and tribes may also impose taxes  on renewable energy equipment owned by nontribal entities, and Interior  officials identified dual taxation as a concern that can affect the  development of Indian energy resources. In the preamble to the 2012  final regulation governing the leasing of Indian lands for wind and solar  power development, among other activities, Interior noted that federal  laws and regulations governing surface leasing on Indian lands are  comprehensive and preclude state taxation of such leases and activities  occurring on leased Indian land. As noted above, a federal circuit court is  currently considering whether the federal regulatory scheme for surface  leases on Indian land, including leases for wind and solar development,  preempts state taxation of non-Indian lessees. In addition, federal courts  have found a state tax on non-Indian business extracting tribally owned  coal was preempted by federal law and infringed on the tribe’s rights of  self-government.
section_title: Tribal Governance and Capacity
paragraphs: According to some of the literature we reviewed and several stakeholders  we interviewed, perceived or real concerns about the political stability and  capacity of some tribal governments have hindered some tribes’ efforts to  pursue development of their resources. For example, a 2012 report found  that underdeveloped tribal legal infrastructure, outdated tribal governance  structures, and politicized business management are real or perceived  barriers to Indian economic development for some Indian tribes.  Specifically, many tribes do not have modern, comprehensive, and  culturally appropriate business and commercial laws or codes. An  underdeveloped legal infrastructure can create uncertainty and risk for  lenders and other business entities, which may deter lending or raise the  costs of doing business through increased interest rates and/or shorter  loan terms.
Officials from one tribe told us that it is difficult to build tribal capacity due  to understaffing or a lack of qualified staff with needed expertise. The  officials noted that several developers interested in developing its energy  resources have approached the tribe, but the tribe does not have the  legal or business expertise needed to ensure that negotiations with the  developers are in the best interest of the tribe.
section_title: Limited Access to Infrastructure
paragraphs: Some Indian energy resources are located in remote areas that are  distant from consumer markets, and the transmission lines to carry power  generated from renewable sources to market are not always readily  available. According to a 2014 report, many tribes lack the proximate  access to connect with the electrical grid.transmission lines, the profitability of a utility-scale renewable energy  project is diminished. In addition, some Indian oil and gas resources are  located in areas with limited access to transportation linkages to  processing facilities. In 2014, we found that infrastructure limitations can   Without access to  have economic implications, including lost revenue and hindered  development, for oil and gas development in some areas.
section_title: A Variety of Factors Have Deterred Tribes from Entering into TERAs
paragraphs: A variety of factors have deterred tribes from entering into TERAs,  including: (1) uncertainty about TERA regulations, (2) limited tribal  capacity and costs associated with assuming activities currently  conducted by federal agencies, and (3) a complex application process,  according to some of the literature we reviewed and stakeholders we  interviewed.
Uncertainty about TERA regulations. Two stakeholders told us that  certain provisions in the TERA regulations need additional clarification.  Specifically, TERA regulations authorize tribes to assume responsibility  for energy development activities that are not “inherently federal   According to officials from one tribe we interviewed, the tribe  functions.”has repeatedly asked Interior for additional guidance on the activities that  would be considered inherently federal functions under the regulations.  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  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. Additional guidance could include a  provision of 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. In addition, the tribal  officials told us that they have requested additional guidance to clarify  whether the requirement to develop a tribal environmental review process  that includes public input would open the tribe to additional liability from  nontribal members and could delay implementation of tribal resource  development decisions. Moreover, the tribal officials told us that it is  unclear whether a tribe that assumes certain responsibilities or activities  currently conducted by federal agencies can administer them using its  own protocols, or if the tribe must follow federal regulations to administer  these responsibilities and activities. Executive Order 13563 calls for  agencies to ensure that regulations promote predictability and reduce  uncertainty.and unknowns, BIA may not have fully ensured that the TERA regulations  are easy to understand, and tribal participation in a TERA may be  hindered.
Without additional clarification to address these concerns  Limited tribal capacity and associated costs. According to several  stakeholders we interviewed and some literature we reviewed, assuming  control of tasks currently conducted by federal agencies can require  significant tribal resources. 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 to cover expenses for  taking over activities currently conducted by federal agencies.
Complex application process. Several stakeholders we interviewed  stated that the process to seek a TERA is complex, confusing, and time- consuming (see app. II for details on the TERA application process). This  process involves multiple federal agencies, and, according to a few tribal  officials we interviewed, will require significant tribal resources to  complete the application process. According to Interior officials, the  agency is aware that tribes consider the process to obtain TERA approval  to be complex and that it has likely deterred tribes from seeking a TERA.
However, according to Interior officials, the process cannot be simplified  because all of the steps are needed to meet statutory requirements.  Interior officials told us the concern over the complexity and resources  needed for a tribe to apply for a TERA is compounded by the fact that no  tribe has yet entered into a TERA—leaving the outcome of the process  unknown.
section_title: IEED Has Provided TEDC Grants to 25 Tribes, but Their Effectiveness at Building Tribal Capacity Is Unknown
paragraphs: IEED allocated more than $2 million through 29 grants provided to 25  tribes from 2007 through 2013 under the TEDC program, but the  effectiveness of the program is unknown because Interior has not tracked  the benefit of the grants and does not have a documented process to  assess whether the grants have moved tribes closer to building the  capacity needed to pursue a TERA. According to Interior regulations,  these grants are to be used to help tribes build capacity to perform the  administrative and technical functions included in a TERA, and Interior  reported that one of its goals for fiscal year 2015 is to significantly  increase the ability of tribes to assess, plan, develop, and manage their  own conventional and renewable energy resources. In addition, the  solicitation for grant proposals in the Federal Register notes that a grant  recipient is to submit an interim report and a final report with a summary  of events, accomplishments, and deliverable products.has not used these reports to track how, if at all, funds were used to  eliminate identified capacity gaps. Interior was only able to identify five  final reports submitted for grants awarded between 2007 and 2012 and  could not locate or identify final reports for the remaining grants awarded  during this time period. Without a documented process to measure the  effectiveness of its TEDC program, IEED is limited in its ability to ensure  that the funds it provides are used to eliminate capacity gaps.
Tribal Energy Development Capacity  Grants  Tribal energy development capacity grants  range from approximately $20,000 to  $200,000 to fund activities such as  determining the current level of a tribe’s  technical, administrative, or management  capacity for energy development and  determining what process or procedure may  be used to eliminate potential capacity gaps in  energy resource development. For example,  according to the Office of Indian Energy and  Economic Development, a tribe received  $100,000 in 2008 to assess renewable energy  opportunities. In addition, another tribe  received $60,000 in 2013 to assess their  current energy development capacity.
In addition, the effectiveness of tribal capacity building efforts under the  TEDC program may be challenged by the design of the program itself.  For example, Congress appropriates funds annually to Interior that are  only available for 1 year for grants provided under the TEDC program.  According to literature from organizations with experience building  capacity, effective capacity building efforts should both provide for  sustained, consistent funding over time, since developing capacity can be  an ongoing effort that may take longer than 1 year to achieve, and  facilitate a tribe’s ability to develop a program that is responsive to each  tribe’s unique conditions and priorities. The current TEDC program  provides single-year grants for activities that can be completed within the  award year. According to a few stakeholders we interviewed, this can  hinder a tribe’s efforts to address capacity limitations that require longer- term efforts and strategies.
section_title: Conclusions
paragraphs: 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, a number of  factors have hindered development of these resources, including  shortcomings in BIA’s management of the resources and the  development process. In particular, without data to verify ownership and  use of resources—including current and accurate cadastral surveys,  which are generally completed by BLM—BIA 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. In  addition, lengthy review and response times at BIA have hindered  development and, without a documented process and data to track  agency review times, BIA cannot ensure that its review process is  transparent or that documents are moving forward in a timely manner. We  recognize the challenges that are associated with the administration and  management of Indian resources, and the shortcomings we identified in  BIA’s management of Indian energy development are not the only factors  hindering Indian energy development. However, unless BIA takes steps  to address the factors we identified, these factors may continue to  contribute to developers avoiding Indian energy resources in favor of  developing non-Indian resources. Further, these factors place the agency  at risk of not fulfilling its trust responsibility to Indian tribes and their  members.
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. The shortcomings in BIA’s management of Indian energy  development highlight the need for tribes to build the capacity to perform  the duties that would enable them to obtain greater tribal control and  decision-making authority over the development of their resources.  However, uncertainty associated with Interior’s TERA regulations has, in  part, deterred tribes from pursuing these opportunities. To enter into a  TERA, tribes must have the capacity to take over activities long held by  BIA, and IEED has provided some assistance building the capacity  needed to assume these responsibilities through the TEDC grant  program. However, without a documented process to evaluate the  effectiveness this program, IEED cannot determine whether the  assistance it provided has moved any tribes closer to eliminating capacity  gaps needed to pursue a TERA or whether there are features of the  TEDC grant program that may limit the effectiveness of the program.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of the Interior direct the Director of the  Bureau of Indian Affairs or the Director of the Office of the Indian Energy  and Economic Development, as appropriate, to take the following seven  actions:
To ensure it can verify ownership in a timely manner and identify  resources available for development, BIA should (1) take steps to  complete its GIS mapping module in TAAMS and (2) work with BLM  to identify cadastral survey needs.
To improve the efficiency and transparency of its review process, BIA  should (1) develop a documented process to track its review and  response times and (2) enhance data collection efforts to ensure it  has data needed to track its review and response times.
Provide additional energy development-specific guidance on  provisions of TERA regulations that tribes have identified to Interior as  unclear.
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 (1) develop a documented process for evaluating the  effectiveness of TEDC grants and (2) identify features of the TEDC  grant program that could limit the effectiveness of the program to help  tribes eliminate capacity gaps.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to Interior for review and comment.  In  its written comments, reproduced in appendix III, Interior agreed with our  recommendations related to TERA and the need for additional guidance.  Interior also agreed with our recommendations for a documented process  to evaluate the effectiveness of TEDC grants and to improve the agency’s  data collection efforts. However, Interior did not fully concur with our  recommendations related to the identification of Indian resources and the  need for a documented process to track and monitor BIA’s review  process. Specifically:  Interior did not concur with our recommendation to complete its GIS  mapping module in TAAMS and identify cadastral survey needs. In its  written comments, Interior stated that the agency is developing and  implementing other applications that will supplement TAAMS and  provide GIS mapping capabilities, although noting that one of these  applications, the National Indian Oil and Gas Evaluation Management  System (NIOGEMS), is not available nationally. During the course of  our review, the agency did not identify these applications as an  alternative to the planned mapping component in TAAMS or as a  mechanism for addressing cadastral survey needs. As such, we  cannot comment on these programs or whether these efforts, when  completed and fully implemented, will respond to the purpose and  intent of our recommendations. We continue to believe that Interior  needs to ensure it can verify ownership and use of resources in a  timely manner and identify resources available for development.
Interior did not fully concur with our recommended actions related to  the need for a documented process to track review and response  times. In its letter, Interior stated that it will use NIOGEMS to assist in  tracking review and response times. However, as Interior states in its  written comments, 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. We continue to believe that BIA needs a  documented process and increased data collection efforts in order to  improve its review and response times for energy related documents.
Interior also provided technical comments that we incorporated, as  appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Secretary of the Interior, and other  interested parties. In addition, the report will be available at no charge on  the GAO website at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or ruscof@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Key contributors to this report are listed in  appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine what factors have hindered Indian energy development and  factors that have deterred tribes from seeking Tribal Energy Resource  Agreements (TERA), we searched literature relevant to Indian energy  development, including fossil sources, such as oil and gas, as well as  renewable sources. We searched various Web-based databases, such as  Tulsa (Petroleum Abstracts), ProQuest Environmental Science  Professional, Ei EnCompassLIT, Inspec, and PolicyFile to identify existing  studies from articles, peer-reviewed and nonpeer-reviewed journals,  including law review journals, and government and academic  publications, including reports and hearing statements. We identified  articles from 2007 to 2014. We examined summary-level information  about the literature identified in our search and identified articles that we  believed to be germane to our report. We also asked external  stakeholders that we interviewed to recommend additional studies on the  topic. We reviewed and synthesized literature that included 41 reports,  conference proceedings, congressional testimony, and other publications  from federal and tribal governments, industry, academics, and nonprofit  organizations. It is possible that we may not have identified all of the  reports with findings relevant to our objective, and there may be other  factors that have hindered Indian energy development that we did not  present.
We identified relevant federal laws, executive orders, secretarial orders,  regulations, and Interior guidance to determine requirements and  responsibilities related to Indian energy development. We 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 Bureau of Indian Affairs (BIA) regional  and local officials, tribal officials, and industry representatives. We also  obtained information from BIA documents and officials to identify its  process for tracking its review of energy-related documents. We  compared this information with an executive order and best practices for  modernizing the federal permitting and review process identified by an  interagency committee, and the Standards for Internal Control in the  Federal Government.
To gain additional insights into the factors that have hindered Indian  energy development and deterred tribes from seeking TERAs, we  interviewed a sample of stakeholders representing numerous agencies  and organizations, including officials from BIA, the Office of Indian Energy  and Economic Development (IEED), the Department of Energy, the  National Renewable Energy Laboratory, the Bureau of Land Management  (BLM), the U.S. Fish and Wildlife Service, and the Environmental  Protection Agency (EPA). Within BIA, we interviewed officials from all 12  BIA regional offices and 9 BIA agency offices. In addition, we interviewed  officials representing 33 Indian tribes, two Alaskan Native Corporations,  representatives from 13 energy industry companies or related consulting  firms, and representatives from five nongovernmental organizations  related to Indian energy development. 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. To characterize stakeholders’ views throughout this report, we  define modifiers, such as “several” stakeholders to refer to  representatives from six or more entities; and “a few” stakeholders refers  to representatives from three to five entities. We selected federal offices  based on their regulatory oversight authorities, assistance of Indian  energy development, and management (trust) responsibilities of Indian  lands and resources. We selected Indian tribes to ensure a  representation of tribes with various types of energy development,  including oil and gas and renewable energy development, a range of  experience with development, tribal size, and geographic location. We  selected energy industry companies to ensure a representation of  companies with both fossil fuel and renewable energy development  experience. The findings from our interviews with select stakeholders are  not generalizable to those we did not speak to, but rather our findings  identify common factors, challenges, and concerns among these  stakeholders.
We also conducted site visits to California, Colorado, Montana, Nevada,  Oklahoma, and Texas to interview tribal and federal officials and industry  representatives, as well as to observe completed energy development  projects and those under construction. These sites were located based on  a number of factors, including proximity to tribal nations, presence of  energy development activities, the potential for energy development, and  proximity to federal agency field offices. Because we visited a  nongeneralizable sample of sites, findings from these visits cannot be  generalized.
To examine the effectiveness of TEDC grants in building the tribal  capacity needed to enter into a TERA, we obtained and reviewed all  available information from IEED regarding the purpose and use of grants  awarded. In addition, to identify characteristics of effective tribal capacity  building activities, we reviewed literature from a federal agency, nonprofit  organizations, and tribal research institutes with experience building  capacity. These included EPA’s Office of International and Tribal Affairs,  the Harvard Project on American Indian Economic Development, the  Native Nations Institute at the University of Arizona, and the First Nations  Development Institute. We compared the identified characteristics with  Interior’s TEDC grant program.
We conducted this performance audit from March 2014 to June 2015 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.
section_title: Appendix II: TERA Application Process
section_title: Appendix III: Comments from the Department of the Interior
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Christine Kehr (Assistant  Director), Cindy Gilbert, Alison O’Neill, Dan C. Royer, Monica Savoy, Jay  Spaan, Barbara Timmerman, and Amy Ward-Meier made key  contributions.