Tribal Energy Development - Learning The Rules For Producing The Power

(Solar Panels for Tribal Housing, Romona Band of Cahuilla Indians, Anza, California)

When it comes to developing energy resources, many Tribes appear to be in the right place at the right time in 2009. Native communities blessed with wind, water, solar, or geologic resources are likely to see broad demand for their development, as the United States pushes for increased domestic energy production in general and of alternative/renewable sources in particular. The Department of Energy is actively seeking Tribal participation in energy development, the federal economic stimulus packages currently being debated in Congress contain funding and tax credits for energy projects on reservations, and private entities are realizing and pursuing the untapped energy sources present in many Native lands.

While the potential benefit to Tribes and the rest of the country from this energy drive appears vast, realizing that potential requires navigating various federal laws and regulations. Recent federal legislation such as the Indian Tribal Energy Development and Self-Determination Act, 25 U.S.C. §§ 3501–3506 (ITEDSA) sets forth rights and procedures for Tribes to pursue development of energy resources on their lands. Through ITEDSA, Tribes can negotiate energy resource agreements (“TERAs”) with the Department of the Interior, which provide authorization for Tribes to pursue energy development and transmission activities of all kinds. The newness of ITEDSA – the final regulations for which came into effect in 2008 – presents both a challenge and an opportunity for Tribes. Tribes that have a firm grasp of both the nature of their natural resources and the rules for negotiating TERAs can put themselves in the forefront of new energy production, thereby producing a vital resource for their members and new revenue from power sales to outside entities.

Understanding the federal laws and procedures for energy development is critical for Tribes not just to speed up the development process, but also to protect their legal and resource rights. Professor Judith Royster’s recent article regarding Tribal sovereignty and implementation of ITEDSA highlights previous instances when Tribes lost hundreds of millions of dollars in potential energy revenues, primarily due to having less information than their non-Tribal lessees regarding the true nature and extent of the Tribe’s natural resources. While the provisions of ITEDSA are designed to help prevent these egregious scenarios and create a “level playing field” for all parties, it is crucial for Tribes to be knowledgeable of their rights and opportunities -- and to be proactive in exercising them.
 

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