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Desert Rock project: Trouble and toil for a model in the making

Analysis

WASHINGTON - A twice-told article of faith coming out of a conference on tribal energy development July 17 and 18 was that foreign companies sometimes prove to be easier partners than domestic ones. The example given whenever it came up was that the foreign companies are accustomed to dealing with foreign nationals and their governments, and so they accept the sovereignty of tribes in a way American companies may not.

Poor Dirk Straussfeld. The executive vice president of Sithe Global Power appeared to have encountered a sovereign power he still had trouble accepting. Not a tribe's - he repeated several times that the Navajo Nation has been helpful and cooperative - but rather the sovereign power of the federal energy and Indian bureaucracy to delay, stymy and undermine productive effort. Sithe is developing energy-related projects in Uganda, Canada, Pennsylvania and the western United States. But in describing the development of Desert Rock with the Navajo Nation and Dine' Power Authority, Straussfeld implied that he's never seen anything like the federal bureaucracy in Indian country.

On July 17, Chris Clark-Deschene of Schaff & Clark Deschene in Boulder, Colo., displayed a slide cluttered with rectangular boxes, oval balloons and mathematically impossible arrow lines and curlicues crisscrossing between and roundabout them. He called it a chart of the ''spaghetti relationship'' between tribal energy development projects and the federal bureaucracy.

On July 18, toward the end of an exceptionally full agenda, Straussfeld referred back to one of the conference's more enduring graphics. ''I just want to make everybody aware, this was a simplification.''

He drew more laughter when describing, in his heavy but readily comprehensible German accent, an environmental permitting process that is fundamentally unbusinesslike. ''So we talk about millions of dollars for permitting, an unpredictable timeline, and unpredictable number of cooperating agencies. When you would join some of the conference calls I'm on, you don't believe how many agencies are on these calls. And the lead agency that operates on pre-Internet technology. It's still unbelievable that you can't send an e-mail to BIA.''

Many other examples proved his point, namely that it takes patience and a good sense of humor to develop energy projects on tribal lands. But in the last analysis, Straussfeld knows full well that energy development projects aren't supposed to be dead simple, and Sithe hasn't spent over $10 million for laughs. To the contrary, several speakers at different points during the conference referred to Desert Rock as one of the most important energy development projects now under way. It is a coal-fired, dry-cooled plant on Navajo land in New Mexico, coming in at a price tag of $3 billion, with an additional $400 million for transmission lines. In a measure against global warming, it will produce coal to the lowest CO2 emission standards ever proposed in the United States, according to Straussfeld and Navajo president Joe Shirley Jr. Every gas emission will be mitigated, and net emissions will be in the negative, Straussfeld added.

Once up and running, Desert Rock is supposed to operate for approximately 50 years, at considerable profit to the tribe, Sithe and a syndicate of some 100 banks and investors. A 476-mile transmission line, permitted by the tribe, will deliver power to Phoenix at first; and future stations along the line may extend Navajo-produced power into Nevada and the Las Vegas market, just as much a mecca for electrical power producers as it is for gamblers.

Most importantly perhaps, Desert Rock aims to pilot the large-scale sequestration of CO2 in subterranean seams, where it will not release into the atmosphere as a contribution to global warming. The demonstration project would be transportable to other coal-fired generation plants.

All of which helps to explain Straussfeld's discomposure over government-mandated delays. Paul Moorehead, now a lawyer and lobbyist with Drinker Biddle & Reath in Washington, brought the Indian title - Title V - of the Energy Policy Act of 2005 up to the legal standard as chief of staff for then-senator Ben Nighthorse Campbell, now retired. On July 6, the Department of the Interior issued a notice of grants availability for tribes that want to improve their technical and regulatory capacity in advance of submitting a Tribal Energy Resource Agreement to Interior for approval (the only federal approval they would need for proposed energy development projects). Final rules and regulations for TERAs, which essentially implement the Energy Policy Act's Indian title, are due out in early August. In theory at least, they could make the Navajo Desert Rock approval process obsolete.

Moorehead spoke at the conference but couldn't stay the full two days. He missed Straussfeld's presentation and couldn't comment on it. ''But I can say that the administrative delays and burdens, and associated costs, are what drove a lot of tribes to propose and support what became Title V of the EP Act of 2005. I would also suggest that the pendulum of federal Indian policy is clearly swinging in the direction of tribal decision-making and authority, and finding ways to minimize federal intervention and involvement in what are or should be tribal decisions and matters.''