Randy Manion: Just give me a moment everyone. I'm going to start the recording. Now we're good to go. Good morning or good afternoon wherever you may be and welcome to the first webinar of the 2017 DOE Tribal Energy Webinar Series. Today's webinar is on Indian Energy: Looking Back and Moving Forward. I'm Randy Manion, today's webinar chair and manager of Western Area Power Administration's Renewable Resource Program.
Let's go over some event details. Today's webinar is being recorded and will be made available on DOE's Office of Indian Energy Policy and Programs website along with copies of today's PowerPoint presentation in about one week. Everyone will receive a post-webinar e-mail with a link to the page where the slides and recording will be located.
Because we are recording this webinar, all phones have been muted for this purpose. We'll answer all your questions at the end of the presentation. However, you can submit a written question at any time by clicking on the question button located in the webinar control box on your screen and typing your question. If you entered your audio PIN when you joined, at the end of the webinar, if we have time, I'll unmute your phone. If you raised your hand, you can ask our panel your question directly. We'll try to keep the webinar to no more than two hours.
We have several speakers on the webinar today. So, let's get started with opening remarks from Lizana Pierce. Lizana is a program manager in the Office of Indian Energy Policy and Programs, duty stationed in Golden, Colorado. Lizana is responsible for implementing national funding and financing programs and administrating the results in tribal energy project grants and agreements.
She has more than 20 years of clean energy technology, project development, and management experience assisting tribes and developing their energy resources and building their energy vision. She holds a Bachelor of Science degree in Mechanical Engineering from Colorado State University and pursued a Master's in Business Administration through the University of Northern Colorado. Lizana, it's a pleasure to have you give the opening remarks for today's webinar and kicking off the 2017 Webinar Series. The virtual floor is now yours.
Lizana Pierce: Thank you, Randy, and hello everyone. I join Randy in welcoming you to the first webinar of the 2017 series. The US Department of Energy Office of Indian Energy Policy and Programs, or for short Office of Indian Energy, and the Western Area Power Administration, or WAPA, are pleased to co-sponsor the fifth year of the Tribal Energy Webinar Series. The 2017 series theme is expanding tribal energy development through partnerships and is intended for tribal leaders, tribal staff, and anyone interested in working in Indian Country. In 2017, eleven webinars are planned and each is scheduled for two hours beginning at 11:00 Mountain on the last Wednesday of each month.
Specifically, the series is designed to support fiscally responsible energy business and economic development decision making and information sharing. In the second installment of the Quadrennial Energy Report, the QER, titled "Transforming the Nation's Electricity System", which was released just last month, January of 2017, the DOE recognized the strategic importance of tribal energy and the critical need to address electrification gaps on Indian lands and to support the deployment of energy solutions across Indian Country. I believe Doug MacCourt will speak more to that in his presentation.
American Indians and Alaska Natives have also recognized the potential economic and self-determination benefits of energy resource development and the end use strategies on their land, which consists of over 56 million acres or about 2.3 percent of all land in the United States. It's estimated to contain 17.1 million acres of existing and potential fossil energy and mineral resources.
Based on an analysis commissioned by the Office of Indian Energy, the DOE's National Renewable Energy Laboratory, or NREL, conducted a geospatial analysis of renewable energy technical potential on tribal lands and found that the technical potential is about six percent of the total national technical generation potential, which is disproportionately larger than the two percent of tribal lands indicating that there's an increase potential density for renewable energy development on tribal lands.
Because this analysis only addressed the gross technical resource potential, the Office of Indian Energy through NREL is refining this analysis to evaluate not only the resource potential but the economic and market potential giving a much more realistic picture of the energy development opportunities on tribal lands. This particular study is ongoing. However, we hope to have the results later this year. We'll bring those to you in one of the webinars planned for the fall. For those tribes with minimal land base or who have limited fossil, mineral, or renewable energy resources, you may wish to consider other strategic energy options which will be in a subsequent webinar, such as energy efficiency, design site management, or collaborate solar arrangements.
As this webinar series is focused on expanding partnerships for tribal energy development so will the National Tribal Energy Summit. We invite you to join us in Washington DC May 1st through the 3rd for the Tribal Energy Summit. This year, the summit is focused on tribal energy sovereignty and strengthening strategic partnerships and will support ongoing tribal and federal efforts to enhance energy security, increase resiliency, and cultivate a sustainable energy future. You'll hear more about the summit in subsequent presentations today as well.
The 2017 series kicks off with today's webinar entitled "Indian Energy: Looking Back and Moving Forward". You'll learn about the history of Indian energy in the United States, including key players and how energy development on tribal land has changed over time. You'll also hear about the mission of the Office of Indian Energy, including its past successes and future plans and how the office goal is to add value to the development and deployment of energy solutions, whatever those may be for the benefit of the American Indians and Alaska Natives.
Our hope is that this webinar and the 2017 Webinar Series will continue to provide you with important information for expanding tribal energy development through partnerships and, specifically, by providing tools and resources available to you to develop and implement your resources projects, and programs and to hear from other tribes and their experiences, and business strategies on how tribes can use this information to expand their energy options and develop sustainable local economies.
We hope you will join us for all 11 webinars scheduled this year. Again, welcome, and, Randy, now back to you.
Randy Manion: Thank you, Lizana. We have three additional speakers today. So, I'll briefly introduce them all right now. First is Christopher Clark Deschene. He is the director of the US Department of Energy Office of Indian Energy. Mr. Deschene has more than 20 years of management and policy experience along with extensive tribal relations and deep expertise in business and energy development, natural resources, environmental policies, federal Indian law, and government affairs. He plays a crucial role providing advice and support to the secretary, deputy secretary, under secretary for science and energy, and programs across the Department of Energy complex to help fulfill the department's mission of advancing the national, economic, and energy security of the United States to scientific and technological innovations.
Mr. Deschene is well regarded with tribal, state, and federal policy leaders and professionals, as well as industry and business leaders. Prior to DOE, he spent ten years as a partner with the Law Office of Schaff & Clark-Deschene, LLC. His experience extends to business and energy development on tribal, state, and federal land. He has extensive knowledge of power generation, transmission, distribution, renewable energy development, oil and gas development, utility formation, water and natural resources, energy environmental policy development, tribal and federal administrative and regulatory permitting, energy contracting and negotiations. His practice has taken him across the United States and throughout Indian Country.
Previously, Mr. Deschene served with the US Marine Corps as an infantry and reconnaissance officer and completed his service as a Major in the US Marine Corps Reserve. He has served with distinction and completed two tours in the Persian Gulf, first with the infantry and, second, with the reconnaissance unit. While on active duty, Mr. Deschene also served as military research engineer with Lawrence Livermore National Laboratory and received a Bachelor of Science in Mechanical Engineering from the United States Naval Academy in Annapolis, Maryland and a Master of Science in Engineering and Mechanical Engineering from Arizona State University in Tempe, Arizona. Concurrent with all this, he also earned a Juris Doctorate with a focus on federal Indian law and energy and natural resources law from Arizona State University. Mr. Deschene is licensed to practice law in Arizona and on the Navaho Nation.
Following Mr. Deschene is Doug MacCourt. Mr. MacCourt is a policy advisor to the director and staff of the Office of Indian Policy and Programs and works throughout DOE with other federal and state agencies on policy, legislative, and funding issues that are critical to the office's mission of developing and deploying energy and related economic development projects in Indian Country. He has more than 25 years of experience working with tribes, Alaska Native corporations, and tribal business enterprises on all aspects of energy development and natural resource matters.
Doug published the Renewable Energy Development in Indian Country: A Handbook for Tribes, as listed in Chambers USA: America's Leading Lawyers for Business and Best Lawyers in America for Native American natural resources law.
Prior to joining DOE, he served as a partner in the Portland, Oregon office of Atter Wynne where he led the land use and development practice in the firm's business group. Prior to that, Doug created and managed the City of Portland Brownfields Redevelopment Program where he successfully negotiated and implemented redevelopment of residential/commercial mixed use, industrial, and transportation projects throughout the metro area.
Concluding today will be Margie Schaff. Miss Schaff is an attorney who has practiced energy law for over 29 years. She is also a partner with Kanim Associates, LLC where she continues her other role as a consultant assisting tribes with tribal organization with energy related issues, including tribal utility formation, electric power generation projects, high voltage transmission issues, oil and gas exploration and development, right-of-ways, energy strategies, and legal codes.
Margie is currently completing the final steps for formation of two new tribal utilities that will be operational in October 2017. For fun, Margie is a novelist. Her latest book is a historical novel that takes place in Indian Country under the pen name of Margaret Martin and the book is called Seven Generations.
With that, Chris, just give me a moment to get your slide deck up and we'll get started. Okay, Chris, you're good to go.
Chris Deschene: Welcome, everybody. This is Chris Deschene. I'm the director for the Office of Indian Energy headquartered in Washington DC. I'm a member of the Navaho Nation and originally come from the Lake Powell region, Colorado River region of Northern Arizona. In Navaho, I would say [speaking Navaho]. Thank you for giving me the opportunity to share a few words.
Today I'm just going to give you a program overview with respect to the Office of Indian Energy, our program and our services, and a little bit about some of the activities that we're doing. What I'd like to start with is really the reality of the federally recognized tribes and the gaps that Indian Country as it relates to the rest of the United States.
It's no secret that tribal communities have staggering challenges, for example, housing, overcrowding, inadequate plumbing, and inadequate electric services. For the communities, poverty and unemployment are high and are generally higher than most of America. I had mentioned the lack of electricity. In our communities up in Alaska, notwithstanding climate change resiliency issues and the challenges surrounding that, they have also faced the issues surrounding the higher cost of energy, that being heating energy, energy use, and transportation.
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The Office of Indian Energy's commission is to maximize the development and deployment of energy solutions for the benefit of Alaska Natives and American Indians. Our vision here at the office is to be the premier federal office for providing those communities with the knowledge, skills, and resources needed to implement successful strategic energy solutions.
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Our law comes from the Energy Policy Act of 2005, which authorizes and directs DOE's Office of Indian Energy to do four things: promote Indian tribal energy development, efficiency, and use; reduce or stabilize energy costs; enhance and strengthen tribal energy and economic infrastructure relating to natural resource development and electrification; as well as bring power and service to tribal lands and the homes of tribal members.
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We have a number of goals but those goals are tucked under the larger goals for the under secretary for science and energy. That goal would be to develop and implement comprehensive strategy for the Science and Energy program of which this office is part of the overall under secretary that recognizes and differentiates the unique values and capabilities of each and creates new opportunities through their complementarity to develop and transition energy and technical solutions.
You can see again, here are our goals, one through four by law. We have identified a fifth goal under our strategic roadmap, which is to support and promote meaningful tribal participation in critical national and global tribal energy initiatives and cross-cuts, such as water-energy, grid modernization, and micro grids. This is important because, in essence, it modernizes the office. It allows it to work with administrative and agency initiatives and priorities.
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Here is the structure of the Office of Indian Energy. As you can see, this is a really simplified version of the office and the services and programs that we provide. Under the director, we have the deployment program which captures the education and capacity building arm as well as technical assistance and financial assistance. We also have a separate arm that talks through policy and innovation. Of course, we have a third arm which is the elements that are controlled by our chief operating officer.
The highlights include working with tribes, federal agencies, state governments, non-governmental organizations, and the private sector to develop solutions for the benefit of tribal communities. We provide a number of services, including education, technical and financial assistance, and policy support to tribal communities.
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Well over a year ago we began to work on a roadmap. This document here, you can find this online, is deemed the Strategic Roadmap 2025. It is built around our four statutory goals and the addition of the initiative support that we have. What it does is gives a framework in terms of overall goals, operational goals, and then strategic and tactical activities that look at, if you will, line by line activities that work to support the overall tribal Indian and energy development efforts throughout Indian Country. At a minimum, it provides a framework and hopefully gives some structure to the complex world of tribal energy development.
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Under the roadmap, we have a number of ideas supported by the roadmap. As I stated earlier, the roadmap is broken into three main areas, those being our deployment arm, our policy arm, and then strategic initiatives.
Under deployment, which I call our bread and butter, are our programs, like technical assistance, financial assistance, education capacity building. Recently, we put out a funding opportunity where we started an inter-tribal energy technical assistance providers network really to help leverage, optimize, and maximize our reach with providing not only education capacity measures but also looking at some of the TA support that we believe that the tribes should have.
Skipping over initiatives and going to policy, what we have there are a number of advanced Indian Energy efforts that look at, for example, tribal energy policy development. That's largely addressed by our working group. I'll have a slide separate for that. We also have commissioned a number of studies in applied research and analysis to really codify established at baseline to say what does tribal energy look like? What does energy look like in tribes? So, there'll be a number of efforts coming out with regard to those activities. Similarly, the third bullet talks about that.
The last bullet talks about an Arctic Integration Policy. Because of the complexity throughout Indian Country and the diversity and the uniqueness of Alaska, we had a number of activities, equities, stakeholders, and tribal communities working on a number of fronts on energy. We knew that a policy was required. That came out to be the Arctic Integration Policy to which we are now finally working through to get a final green light from the agency. Once that is out we'll be able to publish that.
Going to initiatives, the key to this are our relationships with our partners. Tribal private partnerships, energy and cross-cut demonstrations, and the whole clean energy economic ecosystem integration, as well as business development deployment innovation initiatives that really speak to what I call the fourth arm of energy development: the first being, of course, our stakeholder of the tribes; second being this office; third being the federal government as a whole; and then, fourth, the industry itself. And so, we have a number of initiatives that address that.
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Over the last two years, here's what we've done. If we're to look back and move forward, there are a number of things. This office has a long history of DOE support starting in the early 2000s. It was put into law in 2005. This office was stood up in 2011 with funding provided by 2014-2015. So, here we are in 2017 and this is what we've done in the last two years.
Under policy, we developed the roadmap. We also are the chairs of the Energy Subgroup Committee under the White House Council on Native American Affairs. We have developed from our working group policy priorities for tribal energy development.
Under deployment, we've solicited and awarded four funding opportunities. We've established the Inter-Tribal Technical Assistance Providers Network and we have developed the Arctic Integration Plan.
With regards to initiatives, we have organized and executed the National Tribal Energy Summit of 2015. We have a MOU with Interior to facilitate cross-agency collaboration and we have supported the White House Tribal Nations Conferences the years that I've been here and years before. Because tribal leaders have the vision to address standard workforce development, we began those discussions on a national scale.
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This slide shows the interagency coordination and cross-cut teams. So, if you will, DOE is in the center. We have fossil energy. We have the energy-water nexus. We have energy storage and grid modernization. All of those internal to DOE have separate elements, separate arms but projects that have a cross-cut or a nexus between different offices have begun to work together to address these main areas. The Office of Indian Energy is no different. There are a number of other cross-cut efforts but these are the main ones that Indian Energy focus on, again, fossil energy, water storage, and grid modernization.
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This slide talks about our FY 2017 budget requests. As you can see from '15, '16, and '17s progression, we are a humble office. We do a lot given the resources that we have. You can see that, in one sense, our technical assistance is requesting a doubling mainly because of the demand that has doubled since 2013.
Just to give you an idea of what that does, six million allows us to field support anywhere from 50-60 TA requests from tribes. That number is still about or less than ten percent of the total universe that is the tribal community. So, even though we are requesting a doubling of our TA support, it's still very small compared to the larger universe of tribal and Indian Energy TA requests.
It's the same thing with financial assistance. And, as you can see, the federal employees, we are working on a projection to grow our office as it relates to the demands of the services and the work that is being done given the budget history of this office.
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This slide quickly talks about DOE's investment with respect to tribal energy development. Since 2002, DOE has invested $66.5 million in 217 clean tribal energy projects valued at over $125-126 million. The DOE's investments were leveraged by the tribes of nearly $60 million in cost share and these have resulted in the results that are bulleted below: retrofits, energy audits, potential new renewable generation, assessments for more power in Alaska, as well as training to tribal participants. You can see by the picture there that the spreads around Indian Country is far-reaching and that this office, despite its small size, despite its resources, has been able, over the history, to reach across Indian Country.
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This is a quick slide that talks about some of the awards that were given with regards to deployment. From 2016, you can see that there is a dispersion of different tribes from different regions of the country. We won't stay here too long but you can see the awards are mixed depending on the technology, depending on the focus of the project, solar winds, and biomass. So, there are all types of projects that we look at. Of course, this office looks at all of the above strategy. We're working hard to maintain the growth and support for tribes as we continue in our work.
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Quickly, this is a slide that talks about an order for the Department of Energy. It talks about the Department's American Indian Tribal Government Interactions and Policy. What it does is communicates departmental, programmatic, and field responsibilities for interacting with American Indian governments and transmits DOE's policies, including its guiding principles, and transmits the framework for implementation of that policy. You can find this at the website listed there. But, in short, the next slide will talk about what they call policy priorities. I'll quickly just do a quick summary on that.
Policy principles are: 1) recognizing the federal trust responsibilities; 2) government to government relationships; 3) developing outreach mechanisms, consultation, tribal integration and decision making processes; 4) cultural resource protection and compliance; 5) coordinating departmental efforts on program resources, including technical assistance and financial assistance; 6) conducting periodic tribal leader summits; and 7) working with other federal and state agencies on related tribal matters. So, it really gives some good directions and principles regarding DOE's relationship to sovereign tribes.
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Here is a quick slide of some of the equities or entities that are at DOE. We'll just go from 12 and then go clock wise. We have the Office of Indian Energy. We have the working group with this office, which is the Indian Country Energy and Infrastructure Working Group. You just saw the DOE Order 144.1.
Out of that order there is a Tribal Energy Steering Committee that is an internal body. It is staffed by members from different offices within the agency that addresses any number of tribal and Indian affairs issues. It's very helpful because it's a communication network that allows synergies efficiencies and helps really share not only information but also efforts as we work on different tribal and Indian Energy issues that come to DOE.
The next one is the National Tribal Energy Conference. That is done periodically. We have one scheduled for the beginning of May this year. I'll have the slide on that here shortly. The next two talk about other under secretaries that have, for example, their own working groups. There's a Nuclear Tribal Energy Working Group and then the old guard of the State Tribal Government Working Group. There's a long history of working with DOE.
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This is another slide about the main working groups at DOE. You can see that there is some overlap. For example, all groups have met under the umbrella of the National Tribal Energy Summit or Conference, as it's called sometimes.
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This is a slide that shows the current membership of the Indian Country Energy and Infrastructure Working Group. You can tell there are 14 members that come from all parts of the country, including two members who are from Alaska. I'd like to think that we have membership from all corners of Indian Country. This is a rotating membership. As tribes leave, we fill them in with tribes that are interested but, generally, they help this office by providing information, policy development, and looking at some of the work that this office does to help improve our services and programs for the benefit of tribes throughout Indian Country.
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The next slide shows, again, ICEIWG. We have meetings throughout Indian Country. This is a picture of Chairman Fox who is seated – looking at it – it would be gentleman next to Doug MacCourt in the yellow and black. Of course, I'm sitting in the center. Chairman Fox and Mandan, Hidatsa, and Arikara Nation hosted an ICEIWG meeting. At this particular meeting, we unraveled the ICEIWG priorities of which, as you can see, one is to increase access to capital. Doug will talk a little bit more about this but there are four priorities. This goes a long way because it helps senior leadership here at DOE understand priorities that support our work from this office but also it gives it real world, real time input to the leadership as energy as well as providing information for not only the administration but the government as a whole.
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This is the National Tribal Energy Summit slide. It's a biannual summit that focuses on policy priorities important to tribes. It brings together a number of stakeholders from tribal, state, federal, private, and academia to look at energy development and security issues identified by the tribes. The ICEIWG plays a large part of this but so do the other working groups under DOE. As you can see from the pictures, there are a number of panels. There are a number of keynotes, as well as sessions that address a whole host of energy issues that tribes deal with. Our next summit is scheduled for May 1st through the 3rd here in Washington DC. You can go to our website to get more information about that.
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Here's a slide that talks about our effort to really respect our principle of working with other federal agencies and to address Indian Country's input to and recommendations to this agency to really find joint, collaborative, and cooperative frameworks to work together on complex energy issues. So, last summer, we, from this office, initiated the process to sign a MOU with Interior that was signed between the two agencies last summer. Now, we've begun to coordinate between Interior and Energy on different tribal projects, including things like looking at due diligence, looking at the scope of work, looking at leveraging, and optimizing our resources to really bring the full power of Energy and Interior to help tribal energy development.
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This is one of the last slides. This is really just a depiction of the White House Council on Native American Affairs. Under here we have Energy subgroups. You can see that by the seal Energy chair is the Energy subgroup for the White House Council. The other six committees talk to those specific issues. We address energy and look at the priorities around not only energy but tribal self-determination and governance. It's another avenue for tribes to input with regards to energy and other development issues related to not only energy but tribes and energy itself.
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That's the conclusion. I just want to say the work that we've done looking back and moving forward, all the work that has been done from this office was envisioned by tribal leaders in the late '90s. That began with a lot of tribal leaders working throughout the preceding generations. Because of natural resources, they're important. Tribal leaders said we need some kind of office at Energy to address this.
It reminds me of a quote that goes something like the significant problems we face cannot be solved by the same level of thinking that created them. That's good old Einstein. What that means to me is that tribal leaders saw that we had a number of significant problems in Indian Country. They knew the effort at that time needed to be improved. So, they changed the thinking of which resulted in things like this office. Hopefully, going forward with tribal input and support, a lot more will come to pass with regard to moving forward and helping fulfill that mission, which is for the benefit of tribal communities in Indian Country.
I'll leave it at that. I'll be on standby to answer questions. Lizana and Randy, thank you for giving me an opportunity just to share a few words. I appreciate your time and your attention. Thank you.
Randy Manion: Thank you, Mr. Deschene. Mr. MacCourt, stand by while I pull up your slide deck. Okay, Mr. MacCourt. It's all yours.
Doug MacCourt: Okay, great, there it is. Good afternoon. For those of you who are joining us from Alaska, good morning. My name is Doug MacCourt. I'm the senior policy advisor for the Office of Indian Energy. It's a real privilege to be a part of our first webinar of the 2017 series. Thank you, Randy and Lizana, for kicking us off. Chris, it's always an honor to follow you. I'm eager to hear Margie's presentation as well.
In thinking through what we wanted to try to do in kicking this year's webinar series off, we thought it would be helpful to take a quick look back to help inform us about where we think we're going and where we can go.
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So, in doing that, I'm going to take a fairly high altitude look at some of the historic patterns of energy development on Indian lands with tribes and how that has changed and where we're heading. I'm going to use some hydropower examples primarily from the Pacific Northwest and the West as one example of these trends so, basically, walking through the historical model, giving you a flavor of some of the legal issues that have been critical for driving this trend, and then we'll talk a little bit about how that's taken shape in the hydropower context.
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Before we dive in, I'll just reemphasize two points that Director Deschene made and that is, one, our Office of Indian Energy is, as Chris said, we take an all of the above approach or how I phrased it we operate on a fuel neutral basis. The best way to describe that is that unlike other offices here in the department we only support projects that are conceived, designed, and carried out by tribes. We don't do our own projects. We don't carry out federal transmission or energy projects on behalf of the department. We only support those projects that the tribes bring to us. We do that across all of the energy systems and resources on tribal lands, whether that's coal, oil, gas, many of the renewable energy resources.
If we look back in terms of energy projects and how those were conceived, constructed, and operated, historically, we note a few things. Typically, energy facilities, those are largely fossil fuel facilities going back into history, were owned and operated largely by non-tribal entities while there were some, depending upon where the facility was and what type the facility was, there was some level of tribal employment. But management by tribal leaders and tribal members was less common. The typical business model was a lease and royalty arrangement, depending, again, on the project. There were some exceptions to that model but they were very few and the strong emphasis of federal control over the development of tribal resources often in the opposition by tribes in terms of citing some of those facilities.
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The trend in what I describe shifting this historical paradigm has been toward tribal energy assessments driving the conception and the construction of tribal energy projects in the inclusion of energy in economic development planning by the tribe. The trend is also toward more and more diverse vehicles for investing in these projects both by the tribe and various business entities that the tribe can establish and by non-tribal sources of capital.
The trend is also towards a greater emphasis on tribal management and labor in construction and operation and of greater tribal control over the development of energy resources and less state control. We're seeing that play out in a variety of areas, in particular, the taxation area between state and federal and tribal taxation, as well as regulation.
As we walk through the rest of my presentation, I'll pick up on one other thing that Chris mentioned and that is that really we owe the strong and good environment that we have today for developing tribal energy projects to tribal leaders and tribal members making their voices heard and making their policy preferences heard through a variety of vehicles and mechanisms. I firmly believe there has never been a better time for development of energy as a vehicle on tribal lands to support economic development. There has never been a greater diversity of resources available with the possible exception of some of the stimulus bill resources that we don't have that we may see at some point in the future but it's just an absolutely fabulous environment.
From the legislative and policy point of view, in our next webinar on March 29th, we're going to take a deeper dive into some of the legislative and policy background of these issues in promoting tribal energy development and some of the current proposals, both at the federal and to some degree at the state level, and how those are seeking to support further autonomy and self-determination by tribes in the area of energy development.
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There are a number of reasons. I mentioned what I think is the most important and that is the tribal leaders have consistently and very successfully made their voices heard. There are other reasons and near the top of the list is that tribes have been some of the best stewards not only in this country but around the world of their rich and diverse natural resources on tribal lands. In the United States we've seen over the last century an evolution, after we got through some unfortunate periods in federal Indian policy, in the mid part of the last century we've been on a steady course towards greater self-determination. That's made its way into energy policy as well, both in terms of case law as well as legislation from Congress.
There is more tribal capacity for conducting business than there has been in the past. That is shown by the interest in outside investing in coming into Indian Country. There are more planning options for future economic development. Those are both governmental and non-governmental.
Another reason is simply that tribes have kept their eye on the ball with respect to energy and economic development being a foundation for sovereignty and self-determination. Lastly, there are a number of factors affecting this. There's been a general move and certainly a desire to move from a resource extraction type of economy and approach to energy development to more of protecting tribal assets and putting those to smart and efficient use.
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It's critical to note that on one of those points that I just mentioned, the legal issues, there have been some long-standing principles that have held the test of time in the rule of law as it applies to tribes and, again, principally federal Indian law. The two that I have used here are critical. One is that tribes are free to choose the form of governmental or non-governmental organizations through which they do business. There are a variety of vehicles such as the Section 17 Corporations.
Now we have new approaches under the HEARTH Act. We have a proposal to streamline and correct some of the deficiencies of the Tribal Energy Resource Agreements that came out in the 2005 Energy Bill. But the basic law of the land, and even though this is a 1973 Supreme Court opinion, it's based in law that goes back over a century that tribes don't have to use a particular form of corporation or a particular form of business. They can choose in which to do that and choose under what law they want to be regulated and whether that's, first and foremost, tribal law, federal law, if it applies, or state law.
Second, as a general rule, state civil laws do not apply to American Indians or their affairs within Indian Country either because the state laws are preempted specifically by federal law or those laws have been found to infringe on self-determination and tribal self-rule.
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When we look at the old model that I described at the beginning, the old historical paradigm, the shift away from that, and the successful projects and the negotiations, the deliberations and the decisions that led to those, the reality is that, keeping in mind the point from the last slide that tries to choose of form of business in which they want to interact and do an energy project, many of the business transactions and issues don't rise to a level requiring review and approval by the entire council, depending upon how they're set up, whether it's a smaller council or a general membership vote. In many instances, the non-tribal party may insist on tribal approval or at least clear lines of authority and support from the governing body of the tribe. Sometimes that can be a little counter-productive but it's always subject to negotiation and, again, a matter of, first and foremost, applicable tribal law.
Again, what we're seeing in the successful projects is that review and approval of contracts by tribal council usually is required. But in most cases the day to day decision making can be handled by a relevant tribal enterprise, a tribal corporation, one of the business structures the tribes have available to them to carry out the energy project.
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I've mentioned this several times. All lawyers know, that practice federal Indian law, first and foremost, you look toward the tribal law that governs the nature of the deal, the transaction, and the project. If you neglect to do that, it's at your own peril. The fact that if you're doing a negotiation with a non-tribal party and they claim that they relied detrimentally on a representation that tribal law didn't apply and they got it wrong, the contract won't be saved by that detrimental reliance.
So, again, first and foremost, it's very critical to look at tribal law. I should add that tribal law, tribal courts, the tribal judicial apparatus has also evolved significantly over the last 50 years in step with the developments at the federal level. Many tribes today enjoy a very healthy judicial system in which virtually all or many claims and disputes could be resolved that would arise in an energy project, in the development of an energy project.
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Again, for those of us that have worked most of their careers doing these projects, as Chris, Margie, and I have, we've seen a lot of progress in what used to be really difficult discussions and oftentimes deal breaking discussions right out of the gate, such as what form of dispute resolution is going to be chosen in the contract for the project? Whose law is going to govern? What forum are the parties going to choose to resolve disputes? Those are not the roadblocks they used to be but they do require an early analysis and a consensus among the parties to get it right.
Especially when we're talking about significant investment and very modest commercial or community scale or even smaller projects can get into fairly expensive both construction as well as the price of the materials as well as the labor, those contracts will often require a waiver of the defense of sovereign immunity. We've seen a lot of progress in how those can be crafted to carefully protect the fiscal resources of the tribe and not expose tribal leaders or tribal officials to liability and also provide for some level at least of exhaustion of revenues in tribal courts and decide on whether it makes sense to do arbitration versus seek a court resolution of a claim.
We've also seen a lot of evolution in the thinking in the legal community about how important or not things like indemnification, liability, limitations, and certain types of remedies on default are in these projects. To sum it up, the trend we've seen historically is that non-tribal parties are becoming more comfortable with the risks engaged in energy projects, whether they're on or off lands, and more comfortable and more knowledgeable about federal Indian law and how it applies to the deal. That often is the key factor in these projects going forward and the success of the negotiations.
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At this point, with that background, and, again, I'm bullish on tribal energy development because after spending 30 years working on tribal energy projects and a variety of projects in Indian Country, I have seen the climate improve for investment, for negotiations for actually building successful partnerships and relationships to get these projects done. I want to give you a glimpse into one very interesting trend that we're seeing in the area of hydropower. I've got a few slides here that describe some different types of settlements and approaches the tribes have taken largely to existing and oftentimes fairly old and depreciated hydropower assets that were built either by private entities or by the support of the government and often, as I mentioned, at the opposition of at least part of the tribe or not an entirely, what we would say would be, a government to government type of consensus around the citing and the construction of those projects.
Now, the one caveat I'll give you is this is a snapshot at the time the negotiations in these various examples were undertaken. Some of these terms have changed. Some of the timing behind them has changed. But the basic point of using these examples is tribes have corrected a lot of the historical problems with the citing of these facilities originally and have done so in a way that they have put themselves in a strong economic position as owners and operators of these facilities that generate significant amounts of revenue for their tribes and their tribal members.
The first one I have here is the Cushman settlement on the Skokomish River in Washington with the Skokomish Tribal Nation and a settlement with Tacoma Power. This particular deal included a one-time $12.6 million cash payment, a land transfer at the time worth $23 million, and a percentage of the electricity from this particular facility from one of the generation units on the project.
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The next example is from the Klamath River, those of you familiar with Northern California and Southern Oregon, a number of tribes in this case, including the Klamath, Yurok, and the Hoopa Valley Tribes, entered into negotiations with PacifiCorp and also some other parties, including the state and federal government, and reached a settlement with those parties that includes removal of a number of the dams at a significant expense. Again, comparing this example to the last one, clearly, here the tribes' objectives were different. They were after restoration of this fabulous natural resource. The way to get there was the actual removal of these facilities as opposed to the tribes that are deciding to negotiate for the acquisition of all or part of the facilities and the revenues that come from it.
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Another example is the Wells settlement on the Columbia River in Washington with Colville and Douglas County Public Utility District, a $13.5 million payment, 466 acres of land, and 4.5 percent of the output until 2018 and then 5.5 percent of the output thereafter. So, again, you see a trend in some of these negotiations after a part of the energy supply, after a part of the land upon which these facilities are based or have effected, and cash settlements.
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Again, on the Deschutes River, the Pelton/Round Butte complex with the Confederated Tribes of Warm Springs and their negotiations with PGE and I must say that Warm Springs really started this trend several decades ago in their original negotiations and acquisition of the first Reregulation Dam on the Deschutes River. We have the Confederated Tribes of Warm Springs to thank for really being the original leaders in this significant effort.
Among other things and other benefits, they obtained significant fish passage mitigation. Those of you who are familiar with this part of the world, this had endangered salmon and steelhead species in this river. That was a critical issue. They achieved ownership of some of the facilities flat out and co-ownership with others which were approved in 2005.
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The last example, many of the participants and listeners on this webinar may be familiar with or have heard something about, is the former Kerr dam on the Flathead River in Montana. This is an aerial shot of the dam at high water times.
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A few statistics about that particular facility and there's a long history of how the tribe positioned itself into reopening the license upon its 50 year anniversary and then exercising an option for purchase of the facility from its then owner. The facility is very significant. It's nearly 200 megawatts. I've got some statistics here on the output of the facility. Basically, a significant amount of the regions of that particular area power it can serve and the small communities surrounding that area. It also provides over a million acres feet of flood control storage capacity.
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I mentioned earlier in the presentation that we're going to be taking a deeper dive into policy legislation and some of the other legal issues effecting tribal energy development in our next webinar. That will include the current version of the Indian Tribal Energy Development and Self-Determination Act Amendments of 2017. For the folks that have followed this, this was former Senate 209 that Barrasso introduced the prior Congress. It largely deals with some proposed fixes on Tribal Energy Resource Agreements.
It has a number of other very interesting aspects to it that is separate from TERAs, including some funding authority for demonstration projects of a variety of types, a correction to the municipal authority under FERC's hydro licensing regulations to allow tribes to be treated the same as state and local governments for purposes of implementing the municipal preference under FERC's hydro licensing authority. This is an extremely valuable and very strong tool for tribes to have in their arsenal of tools for hydro licensing. It actually enables them, like municipalities can currently do, to step in and actually take over the ownership of a pending hydro license application and become the owner of that project through the licensing process.
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I brought my director's slide here but you've got my contact on this one, my e-mail, and cell number. I'm happy to take any questions offline or by e-mail. Again, I really appreciate the opportunity for allowing us to give you this snapshot of where we see, historically, the tribal energy projects have been and where they're going. It's just a very exciting time to be here at the Department of Energy helping tribes achieve the mission that Chris described. Thank you, Randy.
Randy Manion: Thank you, Doug. Miss Schaff, just give me a moment to pull your deck up. Okay, Miss Schaff, it's all yours.
Margie Schaff: Thank you everyone for having me here today. I really appreciate the opportunity to talk with you. The cover slide you see here has a picture of a well that's owned and operated by the Hickory Apache Energy Corporation. That is one of the wells that is currently on their reservation and currently was drilled and is owned and operated by the tribe through its Section 17 Corporation but we've come a long way.
I was asked to call about a historical overview of Indian Energy. A lot of that overview really has to do with the oil and gas and mineral development on Indian land because, for many years prior to the 1990s, that really was what Indian Energy was all about.
Go to the next slide please, Randy.
First, I'd like to provide some background to highlight the importance of Indian minerals. Indian tribes are collectively the third largest owners of mineral resources in the US. By minerals, for federal purposes, they are defined as oil, gas, uranium, coal, geothermal, or other energy and non-energy mineral resources. That includes things like copper, gypsum, sand, and gravel.
BIA administers about 4,800 hydrocarbon leases, 7 coal leases, and 56 leases of other minerals. In 2015, the Indian mineral production had a market value of about $3.6 billion. The Indian disbursements from that market value were about $600 million. This $600 million comes from rents and royalties. Royalties are basically a percentage of the income of an oil and gas production. I've seen royalties anywhere from about 6 percent in some of the old leases and up to 25 percent in some of the newer deals. Oftentimes, that 25 percent comes with some obligations on the tribe's behalf as well. As shown on this slide, Indian lands contain a significant amount of our nation's natural energy resources. The current production from Indian lands is really significant.
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A little bit about the legal background, the Supreme Court determined early on that Indian tribes are the beneficial owners of the natural resources located on and under their land, unless there was a specific reservation of a particular mineral resource in a treaty or other implementing document. Congress must permit any encumbrance of Indian land or any sale or removal of Indian lands from Indian ownership. So, all Indian Energy development has been done under a specific federal law. I'm going to go through and talk about all those different laws and how those laws have formed the way Indian Energy has been developed over the years.
Tribes are, of course, free to develop their own mineral resources with minimal federal oversight. However, most mineral development has historically been done through agreements with non-Indian parties due to the upfront capital requirements and the technological and resource specialization required to make projects successful. As we know, the energy business is very expensive. Drilling wells and doing all the work necessary in advance of drilling a well can be very, very expensive.
The development of resources is also very particular to the geology and engineering of each play. So, some tribes have developed in-house knowledge of those particular resources that they own and operate but others may rely on outside technical experts and other industry professionals who work in the area. The issues are also complicated by checkerboard reservations, which rely on agreements to consolidate reservoirs and different oil and gas plays.
The next slide here is basically a timeline of the federal laws that I was referring to. The first federal law that really allowed Indian Energy development was in 1891. That was a law of general application although there were many exceptions to it. It was written in a confusing way. Over the years there were five different amendments to that law which really only served to make it more confusing.
In 1938, the Indian Mineral Leasing Act was passed. This was really a way for non-Indians to gain control over reservation resources. It alienated those resources from Indian ownership and control because what the lease does, it's actually a real property instrument that removed the ownership of the resource from the tribe to the entity who acquired the lease. The law was not at all flexible. It was a very short form of a lease. The way that the law and the leases were provided was by an established procedure. Because it wasn't flexible, Congress changed things in 1982. It took a long time to get to 1982. There were many, many leases issued under the 1938 Leasing Act. Much of the prime oil and gas property in Indian Country is currently subject to those 1938 Act leases.
The Indian Mineral Development Act of 1982 gave tribes the ability to negotiate the terms and conditions of leases for the very first time. Then, the whole idea of energy resources started to change in the 1990s. Tribes had many conferences. There were inter-tribal organizations that were real active. As both Chris and Doug have said, tribal leadership got very involved in looking at energy resources. Congress also held hearings and as a result of this the Indian Energy Resources Act of 1992 was passed as Title 26 of the Energy Policy Act of 1992. That was replaced by the Indian Tribal Energy Development and Self-Determination Act of 2005 which expanded it and created additional opportunities.
The three laws I have here in bold all still continue in effect today. They each have a set of regulations that describe how to go about obtaining leases or agreements under these acts and different regulations that describe how things should be done under the 2005 Act. I'm going to go into a little bit more detail on each one of those three highlighted acts.
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The Indian Mineral Leasing Act of 1938 was essentially a way for coal and oil and gas companies to acquire Indian resources. The majority of current mineral production on Indian lands today is under these '38 Act leases. The goal of that act was uniformity.
The Indian Reorganization Act had just been passed and its goal was revitalization of tribal governments in promoting tribal economic development. This law called for a single set of leasing procedures requiring competitive bidding and a payment of a bonus. In some cases private negotiations were authorized.
This is very similar to the way other federal oil and gas leases or mineral leases are issued today. The government sets forth an area that will be subject to lease and offers, through the federal register, companies the opportunity to bid on those leases. Generally, the tribe would authorize a general lease sale but they could not authorize the sale of particular tracks so this often led to the oil and gas companies coming into possession at least of the mineral interests under some very important cultural sites and other sites that the tribes otherwise may not have wanted to be leased.
The other issue is that state taxation of Indian minerals continued until 1977 under the '38 Act leases. State taxation was specifically allowed under the 1891 Act and state taxes were deducted from tribal royalties so if you had a six percent state tax and a six percent royalty, basically, the state took all the value from the Indian lease.
Tribal consent and secretarial approval was required for all of these leases. One of the biggest problems though for tribes is that the 1938 Act leases had a term of a period not to exceed ten years and "as long thereafter as minerals are producing in paying quantities". This is known in the industry as land that is held by production.
So, sometimes today in Indian Country you will have a single well that holds an entire lease of land. It depends on how the regulations are in effect for a particular lease and the language of a particular lease. Sometimes it's more strict than that. You have to have more than one well but in some of these old leases they were written very broadly to benefit the oil and gas companies.
As I said, a standard form was used. It required rents and royalties but advanced rents could be deducted from royalties until 1996.
As you can see, there were a lot of ways that tribes did not receive the royalties that they were due under these leases. There was no tribal opportunity to participate in the mining or development or management of the activities. There was very limited ability to terminate or cancel the leases but tribes could sue and still can sue for damages for breach of contract under these leases. As we all know, this led to serious royalty mismanagement, inadequate accounting, and mineral theft which reduced already below market royalty payments. In most cases, royalty reporting was on an honor system for many years.
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Because the tribes were not allowed to alter the '38 Act lease form or the process by which these leases were given, to allow flexibility, Congress passed the Indian Mineral Development Act in 1982 and the agreements under that act are called IMDAs or Indian Mineral Development Agreements. The goal was to further the policy of self-determination and to maximize the financial return tribes can expect from their resources. This act authorized tribal negotiation of joint ventures and other mineral development agreements and for the sale and disposition of products through different types of agreements.
BIA is authored to provide advice and information regarding the negotiations and regarding the agreements but that is only to the extent that they have resources available. BIA does a good job of working with tribes as they are working through IMDAs but certainly the specialty required in the geological work means that you have to have local specialists and people that are experts in particular oil and gas fields, which BIA doesn't always have on their staff.
Tribes may now negotiate the ownership in the production so they may keep a percentage of their own ownership in the production. They can negotiate their royalty rates, rents and bonuses, environmental and cultural resources controls over their lands, employment and job training, reporting and accounting procedures, management of the development, and the operators. It's kind of amazing that these kinds of obvious management opportunities were not available to tribes until the 1980s.
Tribes may assume some risk in these IMDAs but they also have to take the obligation to provide payments for exploration, development, and production for a share of the profits and a share of the rewards. So, along with risk sometimes comes the obligation. But at least now tribes have the opportunity to take advantage of IMDAs and create different types of agreements that are more suited to the particular tribe and the particular reservation.
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By the 1990s, there was an expanding idea of what Indian Energy was by tribes. It wasn't just mineral resources anymore. Congress was holding hearings and Indian tribes had a lot of conferences, inter-tribal organizations, established a lot of policy meetings, and a lot of tribes were turning their attention to a much broader concept of what Indian Energy really was. So, the 1992 Energy Policy Act was eventually replaced with the Indian Tribal Energy Development and Self-Determination Act of 2005. The goal of this act was to promote tribal economic self-sufficiency through energy development and to further tribal control of energy development in Indian lands.
Here the definition of energy resources was expanded to include both renewable and non-renewable energy resources. The act, as you know, authorized grant programs and technical assistance through which the DOE office performs its activities. It also authorized the Tribal Energy Resource Agreements and they're also known as TERAs. These were agreements between a tribe and BIA that allowed the tribe to enter into energy agreements on its land without any federal approval. But the TERA, which is the umbrella agreement, was only approved after the tribe could show that it had capacity to regulate the energy development. This also included an environmental review process similar to NEPA.
I'm not aware of any tribe that has successfully negotiated a TERA with BIA which has gone through the process necessary to take on this obligation. As it was said by Doug in the previous presentation, there are some tweaks legislatively to amend the TERA obligations to see if that act can be made more suitable for tribes to actually use.
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This is a little bit about the environmental reviews that are required for energy agreements. This is a regulatory process for making and getting these agreements in place. So, in addition to the approval process and the regulations that were cited earlier in this presentation, the National Environmental Policy Act or NEPA requires that an Environment Impact Statement be prepared for all major federal actions significantly affecting the quality of the human environment.
So, for a 1938 act mineral lease, BIA must comply with NEPA and do an EIS or Environmental Impact Statement if the activity is going to be significant. For an IMDA, BIA has to determine that the agreement does not have an adverse impact sufficient to outweigh its expected benefit, which often requires at least an environmental assessment, which determines whether the impact will then be significant. TERAs must include an environmental review process mirroring NEPA. The approval of a TERA itself is subject to NEPA.
So, before any new agreement can be put in place with an Indian tribe, there are environmental reviews that must be made, as well as the procedures that allow for tribal consent of the agreement and all of its terms and conditions, and also BIA consent of the agreement and all of its terms and conditions. I can tell you from experience that those can be very long and complicated discussions because all of the terms and conditions of a particular oil and gas program are very particular to each site and the different wildlife, soils, and all the other environmental issues that arise with a particular development.
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One of the biggest issues for oil and gas tribes remains the management of hydrocarbon production. As I mentioned, there are many 1938 Act leases that are in place. Tribes have the right, in some senses, to regulate and to make sure that their royalties and rents are collected properly and also to make sure that they have taxes in place if that's something the tribe wants to do.
Federal laws and rules were virtually non-existent for management of federal hydrocarbon production prior to the 1980s, which led to massive oil and gas fraud and litigation, such as the Cobell class action suit. The law governing federal management of oil and gas leases is the Federal Oil and Gas Royalty Management Act of 1983 or FOGRMA and it covers: royalty collection, including information gathering and dissemination; management, which includes inspection and oversight of wells production and operations; and enforcement, including things like interest on late payments and civil and criminal penalties for failure to comply with the lease.
These leases can also be canceled by the BIA but typically they attempt for a long time to enforce leases rather than try to cancel them. In part, the reason for that is, oftentimes, if they simply cancel a lease then what it leaves is the tribe to deal with a lot of environmental problems in plugging and abandoning of wells and some other very expensive issues related to getting these lease areas cleaned up. Usually, if there is an enforcement problem, those kinds of issues can be significant.
FOGRMA is administered by the Office of Natural Resources Revenue, or ONRR, which previously was the Minerals Management Service and it was renamed the ONRR. Tribes, of course, are also encouraged to participate in the management of their own agreements by having staffed offices for taxation of the oil and gas production, and also accounting review, and for on the ground enforcement of drilling procedures, and environmental obligations, including the obligations under FOGRMA and including any obligations that the tribe might have under tribal law.
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Now, a little bit about the focus shift that took place in the 1990s. In Indian Energy, surrounding the Energy Policy Act of '92, there were many shifts in the focus. I've got a bunch of them here bulleted. The first is really from leasing out of resources to participation in resource decisions during the negotiation of agreements.
The next is from a passive receipt of payments, which is really how things were done in the olden days, I'd say, to active management of tribal resources, including those that are already leased. This includes the creation of tribal regulations, the passage of tribal taxes, and the hiring of staff to enforce the regulations and the taxes. There was a lot of improved accounting of royalties and taxes and improved tribal inspections and enforcement of lease provisions for on the ground activities.
The idea of tribal resources has also expanded significantly since 1992 to include electricity. Many of the reasons include the idea that renewable energy generation is being considered by most tribes. As Doug mentioned earlier in his presentation, a lot of the existing hydro dams also have their licenses come up for relicensing at FERC. The tribes who were impacted by those dams were given the opportunity to be part of those relicensing efforts. So, many existing hydro dams suddenly had the interest of the tribes who previously didn't have much to do with them. There were also many federal processes underway to look at various issues at the federal dams. Many of the tribes received power allocations from the Western Area Power Administration. Others made agreements with the Bonneville Power Administration.
The next issue is that tribes now see themselves as energy consumers and not just sources of natural resources. The issues that come with being an energy consumer include: the importance of energy efficiency and conservation; negotiating with your utility service providers; participating in utility government, especially when the utility is a cooperative or another entity that is owned and operated by its members who, oftentimes, the biggest member of utility cooperatives are often the tribe itself; and then, of course, energy use audits to make sure that energy bills are correctly accounting for the actual uses of the tribe.
In the 1990s, there was a new understanding of how tribal resources participate in the overall energy economy. These included considerations of right-of-ways and how rights-of-ways on tribal lands impacted the tribe and how renegotiation of right-of-ways that were expiring became important to tribes. It also included fish and wildlife impacts of energy production, such as from the federal dams, and then air quality issues from power plants that may not be on tribal lands but impacted tribal lands.
Tribes have had various levels of success in taking ownership of the development of their natural resources. Because many of the resources were already leased to third parties under the '38 Act leases, a lot of tribes were left with the situation of having to buy those leases back or to work with new areas of leases to create IMDAs where they could maintain some level of ownership. Just depending on the particular tribe, some were very successful in doing this and others have not really had that opportunity.
There have often been tribal energy offices created and regulatory programs have been created at the tribes so tribes have actually decided to regulate some of these issues through its powers of government. Tribes also understand the importance of audits of their land records and the improvement of the land management practices. Prior to the '90s, a lot of the tribal land records were very confused and not well kept. Since the 1990s, tribes have had a concerted effort to improving their knowledge of what their own lands have and have used a GIS and other kinds of technology to improve their understanding of their own land base.
Science, math, and other technology and legal education of tribal members is now emphasized to make sure that the tribes can participate in the energy economy that's all around them. There's even tribal participation in energy markets. Lastly, tribal utilities are being considered and formed in almost all regions of the country.
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We still have a lot of work to do. Tribal energy issues are highly localized. Each reservation is very different, as we all know, and each tribe is different, and each resource is different. Some of the major opportunities and issues that I've seen have included the improved tribal minerals management regulations and enforcement. It's still so important to manage the existing agreements, especially for oil and gas tribes.
We have the very serious issue of double state and tribal taxation of energy resources. This issue often makes development of tribal resources unattractive for oil and gas companies if they have to pay not just one tax but two on their production.
Tribal regulation and governance of utilities is an opportunity for many tribes. Tribal utility formation is being considered by many tribes and is feasible in many places. Tribes are also considering renewable energy solutions in generation and energy efficiency. Energy efficiency is one of the only things in energy that I call a no brainer. It's the one thing that always saves you money. It always only has positive environmental impacts. So, it's always good to be able to conserve when you can.
Education of tribal members in the energy industry is something that's still a major issue for many tribes. Many tribes in Alaska Natives still need tribal access to affordable energy sources to bring the tribes up to a common standard of living and for economic development. We know that poor tribal housing is a major issue in Indian Country.
One of the least of the problems is that it's a huge waste of energy to have poor housing. There are many flexible options to save energy dollars depending on your circumstances. For example, I've worked with tribes that have been able to renegotiate their natural gas delivery into a wholesale negotiation rather than a retail situation saving thousands of dollars a year.
There remains a need for reclamation and cleanup of past environmental damage due to energy development. At Navaho, there are many old uranium sites that need to be cleaned up as well as all across Indian Country. Some of the older oil and gas properties definitely have environmental cleanup issues.
Tribes are called on for coordination and participation with federal, state, local, and energy industry participants to avoid conflicts with regional energy projects. Tribes just have to be so aware of the energy projects going on in their area to make sure that they demand and are included in the decision making processes before the projects go forward because even if they are not right on the tribe's lands there could be impacts to tribal resources.
There's also an ongoing need for education of the energy industry on how they work with tribes. Because tribal law and tribal regulations are fairly complicated, to do business in Indian Country requires knowledge of working with tribes and how to get things done on a particular reservation.
Next slide please, Randy.
I just wanted to end with this slide, which was published by the BIA. It's the emerging oil and gas shale plays and shale basins in the US. It shows where the tribes are in relation to those basins. There are still many opportunities for new oil and gas and mineral development across the US. Of course, a lot of this is dependent upon the prices of oil and gas.
Since those prices fell in 2014, it's been much more difficult to bring new production online. But that doesn't mean that it won't happen if the opportunities are not there. So, there still is a lot of mineral opportunity out there for tribes that are interested. Of course, this is something that tribes can also decide that they don't want to have oil and gas or any other kind of development on their lands, if that's their choice.
I'll stop there. I do appreciate everyone's time. Thank you so much for your attention today. I'm available if anybody needs to ask a question. My e-mail is at the bottom of the page. Go ahead and send me an e-mail.
I'll stop there, Randy, and let you take over. Thank you.
Randy Manion: Thank you, Miss Schaff. We'll go into the Q&A portion of the webinar at this time. I'll leave the speakers' e-mail addresses up here momentarily. The first written question submitted today, are there any programs that support tribal energy projects that are Indian owned but off reservations?
Doug MacCourt: This is Doug. I guess what I would say is yes. I'm struggling to think of a specific program geared to off reservation activities but remember that tribes can pursue development on or off the reservation. In fact, if they have the resources available to them to do it, they are oftentimes the processes that we've discussed in this webinar. There can be some distinct advantages. For example, if you're not seeking to lease or otherwise contract for the use of trust lands or otherwise restricted lands, it may be a much less cumbersome process.
That being said, like our funding authority, it goes to tribes but it's not specifically restricted. So, again, it's restricted in the sense that the eligible applicants for our funding are federally recognized tribes, including Alaska Native Village, and regional corporations, and tribal energy resource development organizations that were created in the 2005 Energy Bill. There are often a lot of opportunities off reservation.
Randy Manion: The next question, does DOE view Alaska Native Village Corporation in the same light as Alaska tribes for eligibility for DOE tribal energy funding resources?
Lizana Pierce: This is Lizana. Each funding opportunity is specific but typically village corps and regional corps would be eligible in and of themselves to apply. Again, [Cross talking] each funding opportunity specifically for eligibility requirements.
Randy Manion: Doug, did you want to add anything?
Doug MacCourt: I just wanted to make sure people are clear on that. Alaska Native Village Corporations are included in our funding authority as are Alaska Native Regional Corporations.
Randy Manion: Is there guidance or resources available to help tribes identify and secure funding for new generations?
Doug MacCourt: The answer is yes. Do you want to address that, Lizana?
Lizana Pierce: Could you repeat that Randy?
Randy Manion: Is there guidance or resources available to help tribes identify and secure funding for new generations?
Lizana Pierce: There is technical assistance from the Office of Indian Energy that can assist in a variety of ways, one of them being looking at potential financing or funding options for new generation.
Doug MacCourt: When we issue a deployment funding announcement that can be used for new generation.
Randy Manion: This question is specifically for Doug. Is USBR the land owner on most of the hydro projects that you were discussing or is it all on tribal land?
Doug MacCourt: It varies significantly. The question was asking is the United States Bureau of Reclamation in the Department of Interior typically the land owner? They have a stake in many of the hydroelectric facilities that provide flood control but the land status is always very different. I'll go back to comments that I know Margie made and all of us alluded to and that is that each setting is different so you really have to analyze the specific ownership issues. Then, of course, in many states you have state ownership between the mean high water line, it's defined differently in different states, and the bed and the banks of most navigable waterways to which also federal authority applies. So, there's no one answer to that. It really takes just researching each specific facility.
Margie Schaff: I can also add though that I think all of the examples that Doug had were private relicensing of private dams. While the Bureau of Reclamation does have regulations and other things that impact those, those were all FERC relicensing efforts by private parties that operated those dams. Those dams were not all on Indian lands. Some were just dams that are upstream from Indian lands. As they eroded or otherwise made use of Indian lands, the tribes were authorized, under the FERC rules, to receive payments for the flooding and for different impacts of those dams.
Doug MacCourt: While we're on the subject, Bureau of Reclamations interest is, again, primarily flood control. It is true that you often, like in the case of Warm Springs, their reservation is on one side of the Deschutes River and you have both private and public ownership from the middle of the river onto the other side. So, it's always a different case in the case of each facility. Reclamation's primary role is not typically owning the facility but is in the regulation for flood control. They do own facilities too. Again, each one is different.
Randy Manion: Chris or Doug, can you provide any new updates from the transition to the new administration and how that impacts the Office of Indian Energy?
Chris Deschene: Doug, I'll let you go first.
Doug MacCourt: What we have seen is a very productive transition. We have had a number of very – initially, in transition team meetings and now that the transition, at least for the Department of Energy, those have evolved into positions that are now being held by some of the former transition team folks. So, what we're seeing is a good discussion about what the purpose and the mission of Indian Energy is for the folks that are new to the department. We're seeing a high level of interest in engagement.
We just got a request this week to brief the Senate Indian Affairs Committee on how things are going with Indian Energy. I'll also add that the Office of Indian Energy even came up in the confirmation hearings. It was actually the third question asked by Senator Murkowski in the beginning of the hearing at Senate Energy and Natural Resources. So, what we're seeing is a very productive dialog, people very interested in learning about what our mission is and what we do for the folks that are new to Indian Energy.
Chris Deschene: This is Chris. Simply, transition is occurring and the department did not have a secretary as of yet. We're awaiting confirmation still. So, as with other presidential transitions, we have briefed the teams that have arrived. We have prepped them with the program overview that I presented earlier. And we are on standby as far as answering questions related to the overall mission of not only the agency but Indian Energy.
It's been good to know that throughout Indian Country, as Doug referred to, that the story and the work that we have done over the last two years has gone out in a way that has, in essence, resonated back with not only the members of Congress but also folks in the new administration. So, there's a respect for what we do that folks recognize. There is few and far between folks who do what we do. There are constituency stakeholders out there that they were not necessarily aware of. And so, there's a lot of good potential for Indian Energy and that we know that, in this office, we have positioned Indian Energy to be in a good place regardless of the final outcomes of a new administration.
Randy Manion: Thank you, Chris and Doug. Next question, could you talk a little about smaller renewable energy systems, for example, solar PV and wind? What role do you see for them regarding electrification of homes and especially in off grid situations on tribal lands?
Doug MacCourt: This is Doug. I'll provide an initial observation on that. Lizana, you might want to talk a little bit about what we're seeing both on the technical assistance side and some of our past grant history. First, the issue of electrification is a critical one. It got researched and discussed in the Quadrennial Energy Review that Lizana described in her opening remarks.
One of the several baseline research studies that we are working on in conjunction with the DOE National Laboratories is to refine with better precision just how many homes are un-electrified and poorly electrified in Indian Country. There are a number of suggestions and opportunities in that Quadrennial Energy Review on how to tackle that problem.
Now, solar and distributed generation and other types of distribution, it doesn't have to even be renewable, both of fossil and renewable energy at a distributed scale, are going to be critical components to addressing the electrification issue in Indian Country for a number of reasons. But one basic fact, that is the cost of extending electrical infrastructure in remote parts of the country, in particular, in the West where you have more sparsely populated communities, just is prohibitive. So, we're going to see distributed generation of all types play a more important role in that.
Lizana Pierce: This is Lizana. Also, with the price of certain technologies becoming more competitive with other options, especially in distributed or remote applications, there is great interest, and has been for many years, in solar and wind depending on one's location. Obviously, the Navaho Tribal Utility Authority has been doing the combination solar/wind for some of their remote homes on the reservation for many years. We are seeing, through our funding opportunity announcement, huge interests by tribes in solar energy, both on the community scale as well as on the residential or even for low income tribal homes as well.
For remote opportunities, you have to look at all of your options. Renewables may provide a portion of that for remote homes along with other more conventional energy sources or batteries or such. So, we're seeing an increased interest in solar. Renewables will likely play a part for remote applications.
Doug MacCourt: I'll add one other thing to build on Lizana's comments and that is that we announced last year, actually at the Senate Energy and Natural Resources field here in Bethel, Alaska, one of the research reports that we had at the National Renewable Energy Laboratory do looking at solar potential in Alaska. If you're not familiar with really how most electricity is generated in Alaska, well over 75 percent is diesel generation. That's pretty much the exclusive form of electricity in off grid remote villages.
So, you're seeing a really good and well researched opportunity both on the affordability side in terms of bringing down high diesel fuel costs, which is one of our offices statutory mandates in combining better, more efficient diesel systems with other types of generation resources. Those are, by nature, from these off grid communities distributed resources. We have that research report along with others available through our website. I think the title is "Solar Prospecting in Alaska". We're seeing a good confluence between the fossil fuel generation that exists now and how to improve that by bringing in other types of resources to complement it and bring those costs down.
Randy Manion: Thank you, Doug and Lizana. There's a question on energy starvation. If that person could raise their hand, I'm going to unmute you so you can ask that question directly to the panel. There are a few more written questions but we're going to go to the raised hand. So, if you have a question you want to ask our panel, raise your hand. It's already past the end time but we're just going to go to a few raised hands and then we'll conclude the webinar.
I'm going to need your help, Sean, because I don't have access to all the attendees so if you could go to the attendee box and look for Benson Lee and unmute him so he can ask his question.
Sean: Yep. He's now unmuted.
Benson Lee: This is Benson Lee. The term energy starvation, the technology exists. We've been talking about it. Why hasn't entrepreneurs or businesses seen this is an opportunity and why haven't they done anything? Or, if some of these have been done, how successful were they and why didn't they work?
Doug MacCourt: This is Doug. I'll offer an initial observation. Benson, hello, and for the rest of the callers, Benson and I have had a few conversations around a particular technology issue that Benson and his company work on. It's a real issue. One of the best analyses of that issue, at least from the department here, is in the Quadrennial Energy Review. It's in chapter seven. The background research that went into that, that's a summary really.
The background documents that we looked at address some of the nature of those problems. There are a variety of reasons that issue exists. One is simply that the cost of building out infrastructure is not seen by a lot of utilities as something they can recover through their rate base. So, it's caused at least not a growth into those areas through new infrastructure but there are a variety of reasons. I'll leave it to others if they have other observations.
Benson Lee: Doug, as you and I have spoken, one of the opportunities that distributed generation presents is to look at it as part of a larger economic development approach. In other words, using a systems approach where multiple requirements can be met, not just from the individual families but you can put in schools, hospitals, government organizations and sharing the cost of the basic distributed network. It simply is a matter of perspective and raising the bar, if you will, so that the goal is not just making affordable energy available but actually looking at how it can be a true infrastructure.
The problem, of course, that some technologists see is that the solar and wind plus batteries is not the same as a primary power network, which is available 100 percent of the time and can be shared by multiple users simultaneously. I guess I'm just raising, has there been any innovation along these lines that the rest of us, who are Johnny come latelies, can learn from and avoid making the same errors over again?
Doug MacCourt: Again, from the activities that the Office of Energy has engaged in, we have some great ideas in the area that you're describing. It's not just a technology issue but it's an issue of looking at the market differently and looking at the investment opportunity with different objectives in mind. It's a different discussion but when I was using the hydropower acquisitions and showing what the different objectives for some of those tribes are, it just makes the point that it's not simply a technology question. It's a matter of being smarter about looking at the market.
One of the ways we're exploring that now is last fall we conducted a series of what we call business roundtable sessions, including finance, fossil energy, renewable energy, and a session specifically focused on our laboratory's efforts in Indian Country and one just on Alaska. There were a number of interesting recommendations that were made to try to get at the point you're making, which is we need to be smarter about how we look at the markets in terms of solving the affordability and the energy gap issue. So, we're in the process of finalizing that draft report. We do plan to make that public here in the next month or two. Stay tuned for that. We'll put that on our website and make sure folks get access to it.
Randy Manion: Thank you, Benson. Doug, I'll also add that Benson and others may want to look at Blue Lake Rancheria and their efforts to establish a very comprehensive micro grid system with energy storage and 24/7 generation sources. We are seeing other tribes submit TA requests to study micro grid opportunities for existing and new community developments that they'd like to put in on their land. So, that is an increasingly hot topic.
Doug MacCourt: Randy, thank you for mentioning that. Jana Ganion, who is the energy director with Blue Lake Rancheria in Northern California, is a member of our Indian Country Energy and Infrastructure Working Group, one of several tribal working groups that the department facilitates. That one is specifically to look at policy priorities from Indian Country and tackle these kinds of questions. Jana actually participated in several of the roundtable sessions and brought those issues to bear. There is some fascinating work going on in Alaska amongst the tribal communities and the different infrastructure that exists up there in terms of the regional corporations, the village corporations, and the tribes so more to come on that subject.
Margie Schaff: I'll also add there have been a lot of feasibility studies for tribal utilities and a lot of tribal utilities that have formed that have looked into the issues of how to serve smaller communities like Indian tribes in different Indian communities. So, there are a couple of really good reports the DOE has sponsored on tribal utilities that might be a good summary for you to review.
Randy, I think you know which reports I'm talking about. There's probably a way you can reference them on your website.
Randy Manion: They are posted on the Office of Indian Energy website. Is that correct, Lizana?
Lizana Pierce: Yes. I'm trying to remember the title. If you search under authority, I think it should pop right up. It's under the Energy Resource Library. I think if you look under authority that particular report should come up.
Randy Manion: Great, thanks. Howe Clap, you have your hand raised. Sean, can you unmute Howe and he can ask his question to the panel?
Sean: I'm unable to because he hasn't entered his PIN number.
Randy Manion: Okay, great, thanks. Let's see if there are any other raised hands. Steve Herrera.
Sean: The same situation.
Randy Manion: Okay. Let me see if there are any other raised hands. There are no other raised hands. We're getting close to ending so let me see if there are any other written questions and then we'll conclude.
Sean: Randy, there was one that came in specific to the technical assistance that I think might be good. It's asking through the program if we provide any assistance in securing PTAs or off take agreements with the governments, if that's something within the technical assistance program?
Randy Manion: Thank you, Sean.
Lizana Pierce: We do offer technical assistance and support for assisting tribes, put together RFPs, reviewing responses to RFPs, and, in some situations, helping advise the tribes. We can't necessarily guarantee our purchase agreements with the government but we can probably assist to some extent. If that's of interest, you can submit a TA request online and we can evaluate it, have a conversation, and see what we could assist with.
Doug MacCourt: I was just going to add it's not just with government off takers. If somebody has an interest in negotiating a power purchase _____ with a utility or an industry, there's a variety of folks out there who want power and agreements take a different form depending upon whether you're negotiating with a regulated utility or some other type of entity. Our technical assistance could cover any of those based on the comments that Lizana just made.
Randy Manion: With that, we're going to conclude. We have the upcoming webinars for 2017 shown here. They're also on the Office of Indian Energy website. Chris, Doug, Margie, Lizana, do you have any final comments for the audience before we sign off?
Chris Deschene: This is Chris. I just want to thank everybody for attending this webinar. We look forward to meeting you if our paths cross down the road. Thank you.
Randy Manion: Great. Thank you everyone for participating today. Goodbye.
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