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Energy development

The potential of tribal power

WASHINGTON - Only weeks shy of the release in August of rules and regulations that will implement new law streamlining the process around tribal power production, Law Seminars International offered a mid-July conference on energy development on tribal lands.

Attendance so exceeded expectations that LSI had to book a larger venue at the last minute. Greg Smith of Johnston & Associates in Washington, co-chair for the program along with Douglas MacCourt of the Portland-based law firm Ater Wynne, said participation approached 200 people, a surge of interest reflected at a busy walk-up registration table.

The conference had been in the works for more than a year, but three trends accelerated recently to highlight it on the conference calendar: a growing national consensus that global warming is a human phenomenon has produced a historic ''intellectual turning point'' on energy production, in Smith's words; new laws and proposed ones have positioned tribes to prosper from energy production by putting them in charge of the process, once a project gets initial government approval; while both government agencies and tribal energy leaders have recognized their important parallel interests (energy security for the government, economic development for tribes) in reducing the national reliance on imported energy.

The bias of the conference was business - LSI specializes in conferences that familiarize lawyers with potential business clients and clients with the legal issues affecting their business. To that end, the jam-packed agenda of July 17 - 18 featured on-the-ground tribal power generation projects based on both fossil fuels (mainly coal) and renewable fuels (wind, solar, biomass). Also included were full reviews of the new regulations around Tribal Energy Resource Agreements, and extensive panel discussions on making deals and attracting investors.

Smith said the goal was to present an audience of tribal decision-makers with relevant information on a variety of approaches to power generation. Beyond that, ''It's really up to the tribes to decide what kind of [energy development] portfolio they want to put together.''

Perhaps the biggest news going into the conference, according to a prominent Indian energy professional that would not be identified in print, is that tribes haven't made more attempts to enter the lucrative energy production market. The TERA regulations are expected to change that, but not quickly. For despite the availability of government technical assistance and funding for tribes that want to produce their own power, and some in-the-pipeline incentives for distribution companies to purchase it, energy production is still a mammoth undertaking, in an industry former federal energy regulatory commissioner Nora Brownell called ''an insider game.'' Barriers to entry are many, and a great deal of skill, experience and money is required to even get started.

On top of all that, the tribal perspective on the environment, on the elements as partners in nature and on the earth as home, means tribal energy production processes will seldom if ever be all business.

''Our connection to the unseen world is extremely strong,'' said David Lester, executive director of the Council of Energy Resource Tribes, ''and we won't surrender that to make a deal. ... We have to reach out. We're expecting industry to reach out in like fashion.''

The potential for tribal energy production is vast enough that it could happen. J. Bennett Johnston, former chairman of the Senate Energy Committee and now founder of Johnston & Associates, provided a brief rundown of tribal energy resources. ''With so many tribes, the amount of energy opportunity is truly overwhelming. With less than 1 percent of the population of the United States, less than 2 percent of the land resources, tribes have 10 percent of the energy resources; 30 percent of coal in the West; 5 percent of the onshore oil; 10 percent of the natural gas; And of course, huge resources in renewables.''

He added that in the past several decades, the energy extracted from tribal lands has amounted to $10 billion worth of coal, $15.3 billion of oil, $7.96 billion of natural gas (all by 2001 prices). ''But listen to this. The unproduced and undiscovered resources are infinitely larger than what has already been produced. These resources are a hundred and eighty-seven billion dollars worth of oil. ... Five hundred and thirty-seven billion dollars worth of coal, and a hundred and fifty-one billion dollars worth of natural gas. And these are 2001 prices.''

A voice from the audience questioned his economics, compelling him to acknowledge that the figures are for present generating capacity and do not include new plant costs; and Johnston himself put in a strong word for ''cleaner'' fossil fuel extraction practices ''in the age of global warming.'' But he insisted there's no choice either, given the current cost of 20-some cents to produce a kilowatt-hour of energy from solar power, compared with less than 3 cents for the same duration of energy produced from pulverized coal.

He faced challenges on that point, too (''There's a place for coal all right - in the ground,'' said a speaker shortly afterward). But after his presentation, there seemed less reason than before to challenge the assessment of Navajo Nation President Joe Shirley Jr., who called tribal energy development ''the future of U.S. domestic energy production and tribal economic development.''

As the first official speaker following the invocation, Shirley struck a stirring tone as he reminded the audience that high stakes are on the table for all concerned. ''Today the Native nations and the United States are at a crossroads. In our increasingly uncertain world, where terrorists and unstable countries can upset the flow of energy, the U.S. needs to drastically decrease its reliance on foreign sources of energy.

''While the natural solution to such a problem is the production of more domestic energy, Indian production must also consider renewable energy resources. For Native nations, the most pressing concern is the crushing poverty that limits the ability of average Native Americans from achieving even a modicum of economic success. This poverty renders impossible the ongoing dream of regaining our independence and protecting our language and our culture.

''I believe that the federal government and the Native nations can come together as sovereigns and solve these problems in a mutually beneficial way. The Navajo Nation, as with other Native nations, has tremendous reserves of fossil and renewable energy resources. In fact, the energy reserves located on tribal lands represent the single largest source of untapped energy resources in the United States. With a federal government concerned with the security of its energy imports, then the fossil and renewable energy resources located on tribal lands represents a significant contribution to the energy security and independence of the United States. If a way can be found to ensure that tribes can develop their energy resources in a manner that simultaneously protects and strengthens tribal sovereignty, the resulting revenues can be used for much-needed economic development programs on tribal lands.''