ENERGY POLICY:

Tribal leaders urge reforms in Indian Country

Marcus Levings can see gas flares across the western horizon from his front porch on the Fort Berthold Reservation in North Dakota, where energy companies are drilling into the rich Bakken shale formation, one of the largest domestic oil and gas discoveries in the last 30 years.

But the night sky remains dark on the reservation, said Levings, who is chairman of the Three Affiliated Tribes -- the Mandan, Arikara and Hidatsa peoples.

A maze of bureaucratic delays and legal entanglements has kept the 11,000-member community from realizing much of its potential as an energy producer, Levings told the Senate Indian Affairs Committee yesterday. Consequently, an estimated 4 billion barrels of oil reserves remain out of reach.

"The light to the west stretches across the horizon," said Levings, who is also a board member of the Denver-based Council of Energy Resource Tribes. "My elders see this day in and day out, but they say 'Chairman, I signed my lease ... but I'm never going to see royalties, I'm going to die before I see royalties.' That's our frustration."

Levings and three others discussed ways the federal government could help tribes unlock their vast potential for conventional and renewable energy development.

The tribal leaders commented on a framework of proposals released last month by Chairman Byron Dorgan (D-N.D.) and Vice Chairman John Barrasso (R-Wyo.) aimed at addressing some of the biggest obstacles to energy development on tribal lands.

One of the chief recommendations in the concept paper was to streamline energy permitting for the nation's 562 federally recognized American Indian tribes.

"There is substantial energy available on Indian lands across this country, but too little of it is being developed because of cumbersome procedures and all kinds of roadblocks," Dorgan said. "We want to find a way to unlock that opportunity."

Dorgan and Barrasso plan to introduce legislation this year to address what tribal leaders have identified as the three biggest obstacles to development: antiquated laws and cumbersome regulations, lack of access to the transmission grid and a lack of available financing and incentives to spur project development.

Tribal communities face high levels of poverty and unemployment, with some 14 percent of American Indian households lacking access to electricity. But revenue from Indian oil, coal and gas as well as renewable wind, solar and geothermal reserves could be worth more than $1 trillion, according to the Interior Department, and could offer tribal communities major opportunities for economic growth, Levings said.

"American Indian energy resources, developed properly, can transform Indian economies and assist tribes in achieving real and lasting self determination," Levings said.

Energy resources could offer as much or more revenue than Indian gaming, according to Jim Grey, chairman of the Osage Nation in Oklahoma and the board president of the recently formed Indian Country Renewable Energy Consortium in Washington, D.C.

But difficult transmission access and unfavorable financing incentives create an uneven playing field for tribes looking to attract investments, he said.

"ICREC is not asking for special perks," Grey said. But lease review and approval processes for American Indian lands often take two to three years longer than similar processes on state, private or even federal lands, he said.

"In renewable development, as in so many things, time is indeed money, and to attract money, those who have built-in delays will be far less effective," Grey said.

To speed the development process, Grey said he favored the creation of "one-stop shops" that would allow tribes to expedite permit approvals they today must obtain from four different Interior agencies.

The committee concept paper recommended establishing three such centers in regional Interior offices that would ensure tribes, tribal members and the energy industry efficient processing of leases, permits and royalties. One recommendation supported by witnesses at the hearing was to bundle leases and right of ways on Indian lands.

Witnesses also recommended reformulating how tax incentives are awarded to renewable energy developers so that tax-exempt tribes are not penalized for taking ownership of wind or solar projects on reservations.

Such a proposal was not included in the committee concept paper but has been introduced in the House in bills such one (H.R. 2892) sponsored by Rep. Raúl Grijalva (D-Ariz.), which would allow tribes to transfer their share of a federal subsidy to taxable business partners, sweetening the pot for potential developers and tribes looking to own a stake in their energy resources (Land Letter, July 2).

"As tax-exempt entities, tribal governments have a very limited ability to employ current tax-based credits and other financial incentives for renewable energy development -- the primary drivers for renewable investment in the United States," Grey said.

Federal agencies lacking

Committee members and witnesses repeatedly criticized the lack of funding and personnel at Interior's Office of Indian Energy and Economic Development, created as part of the 2005 Energy Policy Act, and the Energy Department's Office of Indian Energy Policy and Programs.

OIEPP, authorized to spend $20 million annually to provide inter-agency coordination to facilitate tribal access to DOE programs, has not had any funds requested until this year, Grey said.

"The OIEPP director in the last administration directed only himself; he had no staff; he had few resources; he oversaw no programs," Grey said. "Needless to say, this must change."

The committee concept paper recommends changing EPAct to require DOE's implementation of a $2 billion Indian Energy Loan Guarantee Program.

Sen. Lisa Murkowski (R-Alaska) said the aid that has been made available to Interior's Office of Indian Energy and Economic Development has been "underwhelming, and sometimes nonexistent."