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Energy rights-of-way study criticized at Denver meeting
Wednesday, March 8, 2006

A federal study that will recommend how tribes should be compensated for use of their land came under fire at a meeting in Denver, Colorado, on Tuesday.

The Interior Department and the Energy Department have been charged by Congress to study energy rights-of-way on Indian lands. The mandate was included in the Energy Policy Act that was signed into law last August after years of considerable debate.

Retired Sen. Ben Nighthorse Campbell (R-Colorado) said the act was long overdue. He said it will help Americans gain independence from foreign sources of oil, encourage development of alternative sources of energy and create millions of jobs.

But he criticized Section 1813, the part of the bill that authorized the federal study. Instead of providing a solution to a major policy matter, he said it was driven by a single disagreement between an energy company that is locked in talks with the Navajo Nation over a 900-mile natural gas pipeline.

The dispute, he said, "could have and should have been worked out through arbitration without jeopardizing the rights of the other 557 tribes in this nation."

Campbell, who now works as a lobbyist for tribes, said the study will hurt Indian Country because it could force tribes to take a back-seat in negotiations over the use of their land. "They have every right to be involved in discussions and to expect fair compensation," he argued. "That's a fundamental tenet of the free enterprise system we all enjoy in this room."

David Lester, the director of Council of Energy Resource Tribes in Boulder, agreed with the assessment. He said the study will upset the gains tribes have made as they have become players in energy development.

"We didn't need an 1813 study for industry to talk to tribes. There are hundreds of companies doing business with hundreds of Indian tribes and the dialog is increasing," he said.

Like Campbell, he said the study focuses on a non-issue. "Collectively, the CERT member tribes have over 10,000 energy rights-of-way crossing their lands that they gave permission to," he said. "Where is the problem?"

But an industry representative argued in favor of the study. Meg Hunt, the director of government relations for the Edison Electric Institute, a national trade association, said energy companies are worried about the demands tribes are placing on them when rights-of-way agreements come up for renewal.

"Recent experience has caused considerable concern," she said. "First, the process for determining compensation is uncertain and unpredictable. Second, new fees are dramatically higher than comparable rates paid for the use of neighboring state and federal lands as well as private lands."

"Third, the fees are divorced from any objective measure that could provide a basis for negotiations," she continued. "Fourth, permit periods are being shortened, ranging from 10 to 20 years."

The meeting, which continues today, was called to focus on four subject areas. As dictated by Congress, the rights-of-way study will analyze historical rates of compensation, make recommendations for appropriate standards to determine fair and appropriate compensation, provide an assessment of tribal self-determination and sovereignty interests implicated by applications for energy rights-of-way and analyze relevant national energy transportation policies.

A significant point of contention is developing over the meaning of fair compensation and how that rate is determined. The energy industry has employed the term "across the fence" in hopes of setting compensation standards for Indian land that are comparable to rates for non-Indian land.

Tribal representatives argue that such a comparison is invalid because tribes have to worry about the additional costs of managing, regulating and providing services to their lands. A private landowner doesn't bear the same responsibility, and state and local governments can look to other revenue streams to fund those services.

"Unlike cities, states and federal government, tribal government do not have a broad or diverse tax base," said John Jurrius, a consultant who has worked with energy-developing tribes in Colorado and Utah. "They cannot use taxes to fund essential government services. Those costs and the costs of managing and supervising their land must be funded through revenues generated by their land base."

Whether tribes and individual Indians have received fair compensation for use of their lands has long been a concern in Indian Country. As part of the Cobell v. Norton lawsuit over individual Indian trust funds, a court official found that non-Indians received up to 20 times more for the use of their land than Navajo tribal members for the same kinds of leases.

"Non-Indians get all kinds more money than Indians. We know it, we see it in every community," Keith Harper, a Native American Rights Fund attorney handling the case, said last week. "It's happened for a century and it's got to stop."

Under Section 1813, the study will look at "tribal land," which is defined in the act as "any land or interests in land owned by any Indian tribe, title to which is held in trust by the United States, or is subject to a restriction against alienation under laws of the United States."

The term "tribal land" is different from "Indian land," which is defined in the law as all tribal lands and individual Indian lands. "Tribal land" does not include Alaska Native corporation land either.

Written comments on the rights-of-way study are being accepted by the Interior and Energy departments. A Federal Register notice published last month doesn't indicate a cut-off date for comments. But under the law, the study must be submitted to Congress by August 7.

Federal Register Notice:
Public Scoping Meeting on Congressionally Mandated Study of Energy Rights-of-Way on Tribal Lands (February 13, 2006)

Get the Bill:
Energy Policy Act of 2005 (H.R.6)

Relevant Links:
Council of Energy Resource Tribes - http://www.certredearth.com
Edison Electric Institute - http://www.eei.org
Department of Energy - http://www.energy.gov