CHAPTER 4B WILL SOVEREIGNTY REALLY MEAN SOMETHING: TRIBAL ENERGY DEVELOPMENT IN THE CURRENT ADMINISTRATION

• Jurisdiction: United States

Indian Law and Natural Resources: The Basics and Beyond (Sep 2017)
CHAPTER 4B
WILL SOVEREIGNTY REALLY MEAN SOMETHING: TRIBAL ENERGY DEVELOPMENT IN THE CURRENT ADMINISTRATION
Pilar M. Thomas, Esq.
Of Counsel
Lewis Roca Rothgerber Christie LLP
Tucson, AZ ¹

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PILAR M. THOMAS (Pascua Yaqui) is Of Counsel at Lewis Roca Rothgerber Christie LLP in Tucson Arizona, where she provides strategic legal advice to tribal governments and tribal enterprises on energy planning and policy; renewable energy project development and finance; and federal and state energy regulatory programs and policy efforts. Ms. Thomas also represents clients on energy projects located on tribal lands. Ms. Thomas previously served as the Acting Director and Deputy Director for the Office of Indian Energy Policy and Programs at the U.S. Department of Energy, where she developed and implemented federal policy and programs to promote clean energy development on Indian lands. Ms. Thomas also served as the Deputy Solicitor for Indian Affairs in the U.S. Department of the Interior, where she provided day-to-day legal advice and counsel to the Secretary, the Assistant Secretary - Indian Affairs, and other officials of the Department on matters related to federal Indian law, tribal law, and legal issues involving Indian tribes. Ms. Thomas was Of Counsel at Lewis and Roca LLP, in the firm's Tribal Affairs and Tribal Gaming practice groups, where she concentrated her practice in Indian gaming, tribal economic development, and renewable energy. Ms. Thomas has also served as interim attorney general and chief of staff of the Pascua Yaqui Tribe. Ms. Thomas started her legal career in 2002, when she was appointed to the position of Trial Attorney in the U.S. Department of Justice, Environment and Natural Resources Division, Indian Resources Section, where she worked on treaty rights, water rights, and land into trust issues. Prior to her law practice, Ms. Thomas worked for fifteen years in the financial services industry for a Fortune 250 company. Ms. Thomas received her J.D. from the University of New Mexico School of Law, magna cum laude, with an Indian Law Certificate, and her bachelor of arts degree in economics from Stanford University.

Introduction

When Donald Trump won the election in November 2016, it is safe to say that Indian Country was just as surprised as everyone else. On top of that, the Republicans obtained control of the Senate, thus creating Republican rule over both the legislative and executive branches of government (with the judiciary coming up from behind). In the 9 months since the election, Tribes continue to ponder their energy future under the current administration and congress. So far, the prognosis is, at best, a mixed bag. The Trump Administration has begun a considerable regulatory effort to roll-back the signature efforts of President Obama to combat climate change, increase clean energy deployment, and protect public health and the environment through fossil fuel emissions regulations. Starting with several executive orders signed in the first couple of months that direct agency action to rescind, repeal, or amend final or proposed regulations and related guidance, the administrative effort has spread across the multiple agencies that have a direct role in energy development. To date, however, there has not been an overt effort to revisit 25 CFR regulations that control energy development on tribal lands. And despite a Department of the Interior request for comments to gather ideas of which regulations should be looked at, no Indian tribes have submitted comments making such recommendations. Not to be outdone, the congress - especially in the House of Representatives - has busily introduced legislation to streamline energy infrastructure permitting, reduce environmental review requirements, and limit public participation. Only two bills directly related to Indian energy development have been reintroduced, but other legislation will likely provide a greater opportunity to promote energy development on tribal lands. The greatest irony of these efforts is that Tribes can benefit from some of these expedited regulatory efforts for energy development - whether fossil or renew able - on tribal lands, while potentially suffering from these same expedited review processes for energy and energy infrastructure projects near tribal lands. This paper will focus on some of the current administration's efforts to promote energy development, and some of the key opportunities for Tribes to take control of their own energy resources and services on tribal lands.

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I. Tribal Jurisdiction Over Energy Development on Tribal Lands ²

A lot of ink has been used to describe Tribes' jurisdictional authorities over tribal lands, so I will limit my discussion here to a summary of this jurisdiction. We start with the well-established rule that Indian Tribes have inherent authority to determine how it will govern its people, lands, resources and territories.³ Indian Tribes exercise these authorities in familiar ways-through acts of their legislative bodies, executive or administrative departments, and judiciaries. Indian Tribes have adopted ordinances, statutes, and codes to regulate development of tribal lands.⁴ Many Indian Tribes have established regulatory and taxation authorities to control and tax economic activity on Indian lands and to regulate environmental issues. And, Indian Tribes have established tribal court systems to adjudicate disputes that arise over the use of or activities on Indian lands. The degree of formality in action varies by Indian Tribe, but regardless, federal law generally recognizes the validity and supremacy of an Indian Tribe's sovereign acts as applied to an Indian Tribe's members or related to an Indian Tribe's lands and resources.⁵

Although an Indian Tribe's authority, like any government, is co-extensive with its jurisdiction, Indian Tribes do not possess plenary authority or power. Instead, tribal government authority and jurisdiction may be limited based on a number of factors, including location, land ownership, tribal membership or Indian status, action to be taken, and government entity to take such action.

When non-Indians engage in activities on Indian lands, or non-Indian fee land lands within an Indian reservation, Indian Tribes' authority over that non-Indian activity has been delineated by the Supreme Court under Montana.⁶ Under this rule, Indian Tribes do not have jurisdiction (and thus authority) over non-Indian activities on fee land within the exterior boundaries of the reservation, unless one of two exceptions apply: 1) the non-Indian activity may have a detrimental effect on a tribe's public safety, welfare, economic integrity or ability to govern itself; or 2) the non-Indian has entered into a consensual commercial relationship. Despite the limitations of tribal jurisdiction over non-Indians on non-Indian fee land, federal courts acknowledge Indian Tribes' sovereign rights to impose taxes and regulations and authorize the use of tribal lands and resources.⁷

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II. Federal Energy Policy and Regulatory Schemes

The federal government regulates energy development on Indian lands in many ways, and under several federal statutes. Indian energy development statutes, such as the Indian Mineral Leasing Act,⁸ Indian Mineral Development Act,⁹ and the Energy Policy Act of 2005,¹⁰ in addition to land development statutes, such as the Rights of Way Act¹¹ and the Long-Term Leasing Act,¹² are the more commonly known and invoked legal requirements for the federal government and tribes to regulate and control energy development on Indian lands. The Secretary of the Interior is required to approve oil, gas, and geothermal leases under the Indian Mineral Leasing Act¹³ or the Indian Mineral Development Act.¹⁴ Leases for renewable energy projects, such as wind, solar, or biomass, are typically approved under the Long-Term Leasing Act.¹⁵ And, to the extent that transmission lines or pipelines are developed with the project, then the Secretary is required to approve rights-of-ways¹⁶ for those facilities.

The federal government, through the Federal Energy Regulatory Commission ("FERC"), also regulates energy services on tribal lands through, among other laws, the Federal Power Act,¹⁷ the Public Utility Regulatory Practices Act,¹⁸ and the Natural Gas Act.¹⁹ Under the FPA, FERC regulates electric transmission and electric wholesale sales rates and services, and hydroelectric dam licensing and safety. The FPA, however, substantially defers to state regulation and state jurisdiction over electric companies in the states for retail sales, distribution, and intra-state transmission.²⁰ FERC also has also has authority under PURPA to certify and decertify "Qualifying Facilities," and oversight of QF-utility transactions. PURPA also applies to electric utilities with total sales greater than 500 million kWh.²¹ PURPA further requires state regulatory authorities to consider, but doesn't require the state to adopt, federal standards established under PURP A.²² There are nineteen (19) standards, including: cost of service; time of day rates; net metering; integrated resource planning; investments in conservation, energy efficiency, demand management; fuel sources (diverse source of fuel, including renewable energy); interconnection; and smart grid investments. Not within FERC jurisdiction are the United States government and its agencies and instrumentalities, the States and their agencies and instrumentalities (including municipalities) - with certain limited exceptions - and RUS-financed cooperatives and smaller

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cooperatives. While Tribes are not specifically identified in the statutory exemptions, the FERC has administratively disclaimed jurisdiction over tribal-owned entities, including tribal utilities, and tribal energy companies.²³ Lastly, the...