Red tape chokes off drilling on Native American reservations

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By Valerie Volcovici

<span class="articleLocation”>When the U.S. oil boom hit North Dakota a decade
ago, wells sprang up quickly on the edges of the Fort Berthold
Indian Reservation, an expanse of prairie and rolling hills
three times larger than Los Angeles.

Tribe members here, facing a 40 percent unemployment rate
and sending their children to 1950s-era school buildings, were
eager to tap some of state’s most promising reserves. But layers
of federal regulation – applying only to tribal lands – slowed
them down for years, frightened away investors and cost them
millions of dollars.

“The reservation looked like the hole of a donut,” said
Marcus Levings, who was chairman of Mandan, Hidatsa and Arikara
(MHA) Nation’s reservation at the time. “Everything around us
was moving, and there was nothing in the middle.”

Fort Berthold has since caught up to become one of the
state’s most productive regions. But the initial delays
undermined the MHA Nation’s sense of sovereignty and cost it
badly needed revenue – an experience echoed in widespread
complaints from other tribes and from energy firms, including
some owned by Native Americans.

Now, with U.S. President Donald Trump in office and oil
prices rising, their frustration is fueling a renewed
push to streamline approvals for drilling and mining on Indian
reservations.

Clearing regulatory hurdles for a single project on tribal
lands can take as many as 50 steps, compared to a half dozen for
oil wells on private property. The process can take three times
as long to complete, according to tribal leaders, lawyers
specializing in Native American issues, oil company executives
and federal regulators.

Officials at the agency overseeing that process – the U.S.
Bureau of Indian Affairs (BIA), a division of the Department of
Interior – did not respond to repeated requests for comment. A
spokesperson for Trump, who campaigned on a promise to slash
energy regulation, declined a request for comment.

The stakes are high. Native American reservations cover just
2 percent of the nation’s surface, but by some estimates contain as much as a fifth of all U.S. oil and gas reserves,
along with vast coal stockpiles.

Some tribes, for environmental or cultural reasons, have
shunned the idea of developing these reserves, but many others
want to tap the vast wealth beneath their homelands.

A coalition of Native Americans appointed by Trump’s team to
guide his Indian policy is researching proposals to make energy
development easier on tribal lands – including the controversial
idea of transferring them to private ownership.

That coalition met privately in Washington last month with
tribal representatives and Trump’s team, and the group listed
deregulation of energy development on reservations as a high
priority, according to a person who attended the meeting.

Representatives of the coalition did not respond to requests
for comment.

Congress, now firmly in Republican control after November’s
election, also appears poised to act. The Indian affairs
committees in the House and Senate are planning to re-introduce
legislation this year that would streamline Bureau of Indian
Affairs approval processes for tribal energy resource
agreements, said Senator John Hoeven, a Republican from North
Dakota and the new chair of the Senate Indian affairs committee.

U.S. Representative Raul Grijalva, a Democrat from Arizona,
has opposed previous efforts to relax energy regulations on
tribal lands, including a 2015 proposal he argues would have
undermined public input before project approvals. That could
weaken the legal arguments of residents impacted by
environmental damage, he said in an interview.

“The regulations are there for the public, including tribal
members, to know what the intended and unintended consequences
of that project are going to be,” he said.

WAIT, WAIT, WAIT

The United States holds title to about 56 million acres of
tribal lands, a vestige of the treaties made between 1778 and
1871 to end wars between indigenous Indians and European
settlers. The tribes have rights to the land – and the resources
under the surface – but they do not own it.

On Fort Berthold and other reservations, energy development
requires a uniquely large number of easements and environmental
permits, all of which must be approved by multiple federal
agencies in a process overseen by the Bureau of Indian Affairs.

Former North Dakota Democratic Senator Byron Dorgan – who
was in office when the shale boom hit his state – said he
understood that regulations can preserve Native American culture
by keeping tribal lands environmentally sound and off the real
estate market. But he also said he recognized them as a
bottleneck.

“It shouldn’t be a reason for holding up development,”
Dorgan told Reuters in an interview. “If ever there was a place
in North Dakota that needed this development most, it is on
reservations.”

A 2015 report by the nonpartisan Government Accountability
Office found that the problems went beyond the processes in law
and regulations. Poor management by the Bureau of Indians
Affairs has hindered energy development and resulted in lost
revenue for tribes, the office concluded.

One tribe, according to the report, saw permit reviews
stretching to as long as eight years and missed out on than $95
million in revenues it could have earned from royalties, oil and
gas severance taxes and tribal permitting fees. The report also
found that BIA offices were understaffed and had failed to keep
adequate records.

Dave Williams, CEO of MHA Nation-chartered energy company
Missouri River Resources, said his firm has learned how to work
around the regulatory process, but called it frustrating. He
said he knows most of the employees at the BIA’s regional office
on the reservation in New Town, and tries to prod them to get
things done “with a friendly touch.”

“It is discouraging because everything gets bureaucratized –
just wait, wait, wait – especially if you’re an oil guy, and
most of your life you are on time and get things done,” he said.

Deregulation could also benefit private oil drillers
including Devon Energy Corp, Occidental Petroleum
, BP and others that have sought to develop leases
on reservations through deals with tribal governments. Those
companies did not respond to requests for comment.

TRIBAL OPPOSITION, SOLIDARITY

A substantial segment of the Native American community
continues to oppose energy development on tribal land or would
like to see it limited. The Northern Cheyenne in Montana, for
example, live atop rich coal reserves but have shunned mining it
because they fear it will bring pollution and undermine their
way of life.

The Standing Rock Sioux Tribe in North Dakota has galvanized
the U.S. environmental movement with its ongoing protests
against a pipeline constructed near its reservation. But many
tribes that supported the Standing Rock protests were motivated
by protecting a tribe’s right to govern itself rather than by
opposition to fossil fuel development.

Among the tribes backing the protests were the Southern Ute
Tribe in Colorado, the Ute Tribe of Utah, the Montana Crow and
the Navajo Nation across the Southwest, all of which are
pursuing energy development on their own lands.

Tribes are also seeking to curtail what they call unjust
taxation of energy projects on tribal lands by states in which
their reservations are located..

For many tribal leaders, the desire for more control over
drilling projects is as much about self-determination as money.

“We’ve always wanted jurisdiction over our people and our
land to the fullest extent possible,” said Jackson Brossy,
executive director of the Navajo Nation’s Washington office.

Back in Fort Berthold, MHA Nation Councilman Fred Fox said
he felt it was time for Washington to hand more responsibility
for tribal lands back to the tribes. They should not be managed
as U.S.-owned “public lands,” he said, but rather as sovereign
Native American nations.

“We have ancestors that owned these lands,” he said, looking
out over a snow-covered settlement in the White Shield section
of the reservation. “Let us collect our own taxes. Let us create
economic viability for our people. Let us create the regulatory
system.”



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