Tribes Mine New Opportunities in Energy Projects

In North Dakota, a $100-million oil refinery is planned on the Three Affiliated Tribes reservation. In Washington state, the Tulalip Tribes are looking at building a plant that would produce electricity from cattle waste. And in Colorado, the Southern Ute tribe will pay each tribal elder $55,000 this year, largely from the money it makes from gas drilling.

From the Northern Plains to the Pacific, tribes are increasingly getting into the energy business. Many are seeking revenue sources beyond gambling.

And now Congress is poised to include in its energy bill a provision that would relax regulatory requirements governing energy production on Indian land, from oil and gas exploration to construction of power plants and transmission lines.

The bill would also provide tribes with government assistance, including up to $2 billion in federal loan guarantees, for energy projects on Indian land. And it would give tribes a freer hand to strike deals with energy companies, such as oil and mining interests.

Although negotiations over the energy bill have hit a number of roadblocks, Republican leaders in both the House and the Senate pressed the conferees Wednesday to finish the job by the end of the week.

The Indian energy provision has received scant attention. But the Bush administration and its congressional allies see it as an important step toward addressing two national problems: U.S. dependence on foreign oil and stubborn tribal poverty. Something is wrong, they feel, when high-voltage transmission lines cross reservations that have homes without electricity.

“Native American resources in the West are one of the great untapped resources that we have in this country,” said Sam Maynes, an attorney in Durango, Colo., for the Southern Ute tribe, which operates about 400 gas wells and has energy investments in Canada and the Gulf of Mexico.

A recent letter sent to tribes by the Bureau of Indian Affairs said the agency had made it a top priority to assist tribes in developing energy projects: “Our objectives include increasing energy and mineral resource exploration on Indian lands and ... in bringing tribes and private sector developers together.”

While about 2 million acres of tribal land have some kind of energy exploration, another 15 million acres of potential energy resources remain untapped.

According to one government estimate, Indian land has more than 10% of the nation’s onshore natural gas reserves. About a third of the coal in the West lies on tribal land, offering opportunities for methane gas produced from coal beds, officials say. And tribal land holds great potential for wind-power projects, government and industry officials say.

“We own the ridges where the wind is,” said A. David Lester, executive director of the Denver-based Council of Energy Resource Tribes, which helps tribes manage energy resources.

Sen. Ben Nighthorse Campbell (R-Colo.), the Senate’s only Native American, said the Indian energy measure would help tribes become more economically self-sufficient.

In addition, Campbell said the measure would promote self-determination -- also a U.S. goal in Iraq. “If it is good enough for Iraqis, shouldn’t it be good enough for Americans?” he asked during a Senate debate.

But the bill has also generated controversy, some from unlikely places.

Los Angeles County officials have expressed concern that the legislation could allow tribes to build power plants on Indian lands “without the safeguards provided by federal environmental laws,” said Roger Berliner, a Washington energy attorney who represents the county.

Environmental groups argue that the measure would lead to less rigorous environmental reviews of energy projects and make it harder for the public to demand changes to lessen environmental damage.

“The environmental community is not opposing the right of the tribes to make decisions about energy development on their land,” said Sharon Buccino, a senior attorney in the Natural Resources Defense Council’s lands program. “But we do believe that how those decisions are made is very important and that it needs to include a meaningful voice for those affected by the decisions, both on and off the reservation.”

The measure would eliminate the need for the Interior Department to sign off on each energy project. But proponents say that tribes would still need to address the environmental effects of projects.

Lester, complaining about the “hassle factor” involved in securing approval for energy projects on tribal land, said the legislation would make a big difference “because it will put the authority and the decision-making where it really belongs: in the tribes’ hands.”

He bristled at suggestions from environmentalists that tribes would be less vigilant about protecting the environment.

Environmentalists, Lester said, believe that “because Indians are poor and desperate for money that we will cut corners on the environment to get money.... To the contrary, there’s ample evidence where tribes who are very poor have declined all kinds of development because of the impact on their culture and the environment. If we were going to sell out, we would have sold out a long time ago.”

Tom Shipps, an attorney for the Southern Utes, said the current process could be “an incredible disincentive” for an energy company to work with an Indian tribe.

The current requirement for tribes to seek Interior Department approval for every lease and business agreement is, according to Campbell, so costly and burdensome that outside parties, who otherwise would like to become partners with tribes to develop their energy resources, are reluctant to become entangled in the red tape.

“We’re a business-minded tribe,” said Howard Richards, chairman of the Southern Utes. “We don’t have the time to sit back and wait for the Bureau of Indian Affairs” to approve every project, he said. “Every minute that goes by is money lost.”