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Energy production - not just for the Rockefellers anymore

WASHINGTON - These are strange days in the energy industry. For the first three months of the year, industry leader Exxon Mobil Corp. has reported the second-highest quarterly profit in American history: $10.89 billion.

But the financial markets didn;t like it, as earnings underperformed analyst expectations by about half a billion. And shareholders, led by the heirs of founder John D. Rockefeller himself, warned that the company won't compete in the future if it doesn't respond to the demand for ''green'' energy brought on by global warming.

In this business climate, with the promulgation of final rules implementing tribal energy resource agreements, tribes are expected to become prosperous contributors, in the long run, to the national energy supply. The Interior Department's Office of Indian Energy and Economic Development is offering the data, technical expertise and financial resources for them to get started. A healthy handful of tribes have already turned the corner into energy prosperity; others are poised to move quickly once federal agencies come across with long-awaited permits, licenses and approvals for ''green'' energy innovations.

But in the short term, as the Senate Committee on Indian Affairs heard May 1, it would be a strange industry indeed if tribes could rely on accurate information, timely licensing and respect for experimentation.

A BIA inventory of Crow net mineral acres initially missed 50,000 such acres with an approximate value of a quarter of a million dollars, discovered only by the tribe's oil and gas committee and an energy partner, according to Crow Chairman Carl Venne. In a similar example, he said, the Bureau of Land Management turned over abandoned gas wells to the surface owner, only to determine that the mineral rights (the reason for the exhausted wells) belonged to the Crow Nation.

Multiple tax jurisdictions, overlapping regulatory frameworks, and federal fees that spike suddenly to make up for shortfalls in federal appropriations all serve to chase away business partners, Venne said.

At the Navajo Nation, one of Indian country's most experienced energy-producing tribes, the Desert Rock Energy Project is poised to test the effectiveness of carbon capture and sequestration in a ''cleaner'' approach to coal-fired power. But according to Dine' Power Authority General Manager Steven C. Begay, the project is still in the throes of a permitting process that has been extended from the statutory 18 months to four years.

''Until the [clean air construction process] permit has been issued, it will not be possible to complete negotiations on [all-important] power purchase agreements or make progress on obtaining financing for the project. Further delay costs the Navajo Nation approximately 5 million desperately needed dollars every month.''

If the Navajo are being penalized for their forward thinking in the energy field, Alaska Natives are being parted from their rural subsistence cultures by the status quo. Julie Kitka, president of the Alaska Confederation of Natives, warned the committee of ''a full-blown economic crisis of energy costs in rural Alaska's 230-plus Native villages.''

The dramatic surge in energy costs threatens to erase the economic gains of recent decades in rural Alaska, she said, and to eradicate Native culture in some parts as villagers flee to urban settings for their economic opportunities and more manageable energy costs.

Kitka said that Alaska's enormous energy producing potential, especially regarding alternative energy, take a world of complex, frustrating and expensive translation to practicality before they become operational.

All the same, Robert Middleton of Interior's Office of Indian Energy and Economic Development emphasized potential - 15 million acres of undeveloped energy and mineral resources on individual Indian and tribal lands, 5 billion barrels of oil, 37 trillion cubic feet of natural gas, 53 billion tons of coal recoverable with current technologies.

But with even the Rockefeller heirs calling for ''green'' energy, Indian country's wind energy potential continues in the forefront of attention. Site-specific analysis by IEED of all trust lands has identified 77 reservations that meet all the measures of wind energy potential, Middleton said.

''Based on this analysis, we intend to develop an Indian Wind Atlas ... to attract potential investors and developers for commercial-scale wind development projects on Indian lands. IEED will create a map for each reservation that features publicly available wind data, transmission lines, and a digital elevation model, along with some general information about the tribe[s] as well as contact information. The Wind Atlas will serve as a marketing tool that can be displayed at conferences. Each of the 77 reservations will be offered the opportunity to be included in the Indian Land Wind Atlas.''