Energy rights of way draft report up for public comment

WASHINGTON – A worrisomely awaited draft report to Congress on energy rights of way across tribal lands will be the subject of public meetings held through the end of August in key cities around the country.

The departments of Energy and the Interior, which drafted the report as a charge of Section 1813 of the Energy Policy Act of 2005, hope to collect responses to the report by Sept. 1. The final report is scheduled for submission to Congress by Sept. 30, an extension of the statutory completion date of Aug. 7.

At present, Congress is scheduled to break on Sept. 29 for the November midterm elections and related campaigning.

Tribes, especially those that derive significant revenue from leasing rights of way to energy companies that construct oil and gas pipelines, power wires and other energy transport infrastructure across tribal lands, generally oppose any change in their current authority to negotiate energy rights of way. Pursuant to a 1948 act of Congress, tribal consent is required for the secretary of the Interior to authorize rights of way leases across tribal trust land.

Tribes remain wary of the Section 1813 study, urged on Sen. Pete Domenici, R-N.M., Energy Committee chairman, by an energy industry leader in his state, El Paso Natural Gas Co. As taken up by notably few EPNG allies, the energy industry position is that tribal rights of way negotiations should be standardized in one way or another – streamlined for efficiency at the expense of tribal consent.

Taken altogether, the draft report supports the tribal counterargument that oil companies are complaining about a change in the business climate since tribes have become more capable of negotiating rights of way agreements. The entire underlying reason for the report, namely the negotiation of energy rights of way on tribal lands, “does not appear to be consequential for the nation or consumers in general,” the report holds.

But tribes are still concerned, among other things, that during a “lame duck” congressional session following the mid-terms, the report could furnish a one-line “rider” amendment, inimical to tribal interests, from a congressional member friendly to the energy industry. Because voted-out members who are serving out their terms may not share the more predictable political motivations of returning lawmakers, lame duck sessions sometimes produce unusual results.

That would not be altogether out of keeping with the draft report, an ambiguous document as congressional reports go.

On the one hand, at dozens of points in the course of 51 pages, it supports tribes as self-determining decision-makers over their own lands. It reaches none of the conclusions urged by the energy industry – in particular, tribal authority over rights of way leasing is not found to be a threat to national energy security, and neither negotiations with tribes over rights of way nor the prices obtained by tribes for rights of way leases are found to be significant factors in overall energy costs.

At other points, after recording tribal reasoning and that of the energy industry on key points, the report concludes by noting a lack of factual evidence for the industry position.

Indeed, the report identifies “a negotiating climate often marked by uncertainty and a lack of shared objectives” as the primary problem in negotiating tribal energy rights of way leases, while downplaying the industry-touted absence of standardized methodologies for rights of way valuation on tribal lands. “In this uncertain environment, negotiations can take longer, information about the energy ROW in question may be limited, the parties may feel constrained by older practices that limit creative business solutions, or the parties may lack the common ground needed to explore potential solutions.”

The report goes on to imply that in these situations, fault lies with energy companies that do not meet tribes on their own sovereign negotiating grounds: “Energy companies that built productive relationships and partnerships with tribes commented that they find tribes to be fair negotiators for energy ROW valuation on tribal lands.”

On the other hand, after pulling the rug out from under the industry campaign against the status quo, the report offers a set of options “for Consideration by Congress.”

“Some of these options,” the report notes, “would involve major changes to the long-standing relationship between the tribes and the federal government concerning tribal sovereignty and the federal policy of tribal self-determination – in particular, the principle that tribal lands should not be alienated without a tribe’s consent.”

The first option for Congress might be called the no-action option: “Many comments from tribal parties and energy companies indicate that current policies for granting and renewing energy ROWs are, in general, working. Only a small number of parties have had significant problems arriving at ROW agreements ... the present practice ... allows tribes and energy companies to use their own methods for valuing a ROW and to conduct negotiations on their own terms.”

A second congressional option would be to extend, by statute, the requirement that tribes must consent to the authorization of an energy right of way on tribal land. “Such a new statute, or an amendment to the 1948 Act, would clarify that consent is required from all tribes for an energy ROW across tribal lands, not only tribes organized under the IRA [Indian Reorganization Act] or the OIWA [Oklahoma Indian Welfare Act]. Such legislation would also constitute a strong affirmation by Congress of the principles of tribal sovereignty and self-determination.”

A third congressional option would be for Congress to determine fair compensation for energy rights of way, in the process “developing a valuation methodology (and the attendant regulations) to calculate fair compensation for the use of the land. However, each party (tribes or industry) would reserve the right to accept or reject the calculated value.” Another option along these lines would be for Congress to “resolve any impasse that may result in negotiations” by requiring binding valuation, probably through a third-party arbitrator, reserving no right of acceptance or rejection.

Finally, and most ominously for tribes, the report reviews the authority of Congress to condemn lands as an “exercise of eminent domain by the government.” Although “no legislation authorizes the condemnation of Indian tribal lands in specific terms,” various district court decisions and congressional acts “may furnish authority for taking land within an Indian Reservation.”

Topping off the numerous ambiguities of the draft report, it characterizes these options as follows: “In this draft report, the Departments [of Energy and the Interior] provide options, as opposed to recommendations, for consideration by interested participants.” The sentence is loaded, implying that an option or options could become recommendations once the draft report becomes final.

Washington lobbyist Paul Moorehead, who has represented the Council of Energy Resource Tribes and the Northern Ute of the Uintah and Ouray reservation in Utah on energy rights of way, said part of the parlor game tribes must play going forward is to sort out the meaning of the report’s words but more importantly, how they are apt to play out on Capitol Hill. “We’ve always known the battle would not be over the words between the binders of this report, but on Capitol Hill. ... Just as we’re mining the report for words that will support our positions, the energy industry is doing the same. They’ll have their white paper, and they’ll take it up to the Hill, saying, ‘The report found trouble on standards of valuation and negotiating practices,’ etc.”

The public meetings will be held Aug. 24 in Denver; Aug. 25 in Salt Lake City; Aug. 28 in Cabazon, Calif.; and Aug. 30 in Albuquerque, N.M. The Denver meeting will be open to the public from 9 a.m. to 5 p.m.; the subsequent sessions will be open to the public for two hours beginning at 9 a.m., before being given over to government-to-government sessions.

The draft report appeared in the Federal Register for Aug. 9 and is available at http://1813.anl.gov.