CHAPTER 9 A PRACTICAL GUIDE TO TRIBAL ISSUES ASSOCIATED WITH PLANNING AND PERMITTING A PIPELINE

• Jurisdiction: United States

Midstream Oil & Gas from the Upstream Perspective
(Apr 2018)
CHAPTER 9
A PRACTICAL GUIDE TO TRIBAL ISSUES ASSOCIATED WITH PLANNING AND PERMITTING A PIPELINE
Alvina L. Earnhart
Partner
Fredericks Peebles & Morgan, LLP
Louisville, CO

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ALVINA EARNHART is an enrolled member of the Navajo Nation and a Partner in the Colorado office of Fredericks Peebles & Morgan, LLP (FPM). FPM is dedicated to the representation of American Indian tribes and organizations throughout the United States. Alvina practices in the areas of Federal Indian Law, Tribal Government, Tribal Court and Federal Court Litigation, Administrative Law, Legislation and Code Drafting, Energy and Natural Resource Law, Environmental Law, Commercial and Business Law, Wills, Trusts and Estates, and Housing and Taxation Law. Alvina has extensive experience in assisting clients with internal tribal governmental matters pertaining to administration, human resources, Tribal Employment Rights Office compliance, probate, taxation, land issues, housing, economic development, and natural resource development, including oil and gas development and environmental law compliance under federal and tribal laws, including, but not limited to the National Environmental Policy Act, Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Endangered Species Act and regulations promulgated therein. Alvina serves as General Counsel and Special Counsel to various tribes advising tribal committees, boards and commissions, drafting tribal laws, drafting policies and procedures, and assisting with tribal reorganization and/or restructuring. Alvina received her Juris Doctor from the University of Colorado in 2003 and her Bachelor's degree in Political Science and American History from the University of Denver in 2000. Alvina is licensed to practice in the state of New Mexico, Navajo Nation Courts, Cheyenne and Arapaho Courts, Yankton Sioux Tribal Court, Ute Indian Tribal Court, Hopi Tribal Court and Crow Nation Tribal Court.

Summary: This presentation will explore and provide insight on the various tribal-related issues that can arise with permitting and approval of midstream infrastructure projects, including the new Indian Rights of Way Rule, potential changes to the regulatory permitting process, and tribal consultation policies resulting from a federal review of the consultation process as a result of the Dakota Access Pipeline controversy.

I. Permitting and Approval of Midstream Infrastructure Projects in Indian Country.¹

The process for receiving approval of an interstate natural gas pipeline is different from the process for receiving approval of an interstate oil pipeline. Pursuant to Section 7 of the Natural Gas Act, the Federal Energy Regulatory Commission ("FERC") reviews applications for construction and operation of interstate natural gas pipelines. 15 U.S.C. § 717 (2005). Before beginning a project, companies that would like to build a pipeline must obtain a "Certificate of Public Convenience and Necessity" from FERC. This is a multi-step process.

1. Pre-Filing and Environmental Review. Pre-filing involves notifying all stakeholders of the proposed project and offering a medium for said stakeholders to voice concerns related to the project. This phase also includes a study of the potential project site. This process begins about seven to eight months before the application for the actual certificate is filed.

2. Application for FERC Certificate. This is the beginning of the formal process. Applicants must turn in data on the project, such as construction plans, route maps, schedules, and more.

3. Environmental Review. An official study is carried out on how the project will impact the environment; either in the form of an Environmental Impact Statement of an Environmental Assessment depending on the scope of the project. The public is then given an opportunity to comment on the results of the study. After this, the FERC will consider the comments and issue formal approval, with or without modifications, or deny the project.

FERC itself has no jurisdiction over pipeline safety or security, but actively works with other agencies with safety and security responsibilities. The formal process takes about a year.

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FERC's application process for receiving and reviewing natural gas certificate applications is reflected in the following chart.²

The permitting of oil pipelines is not subject to FERC regulation. National oil pipeline regulation started with the Hepburn Act of 1906, which brought the regulation of oil pipelines

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under the Interstate Commerce Act ("ICA") of 1887, an act that formerly applied only to railroads.³ Falling under the ICA "common carrier" designation oil pipelines were initially regulated by the Interstate Commerce Commission ("ICC").⁴ However, subsequent to the passage of the Department of Energy Organization Act of 1977, regulatory authority was transferred to FERC.⁵ Per the terms of the ICA, FERC has the authority to regulate the "transportation of oil."⁶ The ICA delegates to FERC the power to regulate the rates assessed by interstate oil pipelines for interstate movement of oil and terms and conditions of service, but not the construction and operation or termination and abandonment of pipelines.⁷ This lack of a federal regulating authority over the entry into or exit from the marketplace by oil pipelines is filled by regulation on a state-by-state basis.⁸

No federal law preempts state and local siting requirements for oil pipelines.⁹ While companies constructing oil pipelines are required to obtain federal permits such as those described under the Clean Water and Clean Air Acts,¹⁰ state approvals are the only governmental authorizations required for oil pipeline construction projects to move forward. "Construction or operation of any oil or gas pipeline, whether interstate or intrastate, may require additional federal or state authorizations or consultations, depending on the proposed route of the pipeline and its potential to discharge pollutants or affect natural, cultural, or historical resources."¹¹ "States retain broad authority to regulate to control pollution, as well as to protect and conserve natural, cultural, and historical resources."¹² States play a significantly reduced role, however, with respect to applications for pipeline rights-of-way over federal lands.¹³ In most cases, when an oil pipeline crosses Indian Country, state law does not apply and only the federal permitting requirements apply. For example, a pipeline project might have to obtain a right-of-way ("ROW") over lands that the United States holds in trust for an Indian tribe or that individual Indians own with

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restrictions on alienation imposed under federal law.¹⁴ Various federal statutory provisions authorize the U.S. Department of Interior ("DOI") to grant or approve ROW over Indian lands.¹⁵

In carrying out its obligations and responsibilities to substantively and effectively include tribes in infrastructure permitting and development, the federal government must also adhere to its duties under various environmental, historic, and cultural protection statutes. These statutes stand as congressional declarations of the United States' responsibilities not only to the environment and other resources, but to Tribal governments as well. These include the National Historic Preservation Act¹⁶ (NHPA); National Environmental Policy Act¹⁷ (NEPA); Clean Air Act¹⁸ (CAA); Clean Water Act¹⁹ (CWA); Rivers and Harbors Act²⁰ (RHA); Mineral Leasing Act²¹ (MLA); Native American Graves Protection and Repatriation Act²² (NAGPRA); American Indian Religious Freedom Act²³ (AIRFA); Archaeological Resources Protection Act²⁴ (ARPA); and other federal laws.

a. New Indian Rights of Way Rule

On November 3, 2015, Kevin Washburn, Assistant Secretary-Indian Affairs signed a final rule revising the Bureau of Indian Affair's ("BIA") regulations governing grants of right-of-way ("ROW") on Indian lands compiled at 25 C.F.R. Part 169 ("Final Rule"). The Final Rule was published in the Federal Register on Thursday, November 19, 2015.²⁵ The Final Rule "comprehensively updates and streamlines the process for obtaining Bureau of Indian Affairs (BIA) grants of rights-of-way on Indian land, while supporting self-determination and self-governance."²⁶ The Final Rule effects significant changes in the rights and responsibilities of applicants and grantees of ROWs on tribal and allotted lands. The Final Rule was originally scheduled to become effective December 21, 2015; however, BIA extended the effective date of the Final Rule March 21, 2016.

Highlights of this final rule include:²⁷

• Simplifying requirements by relying on general statutory authority to grant rights-of-way and eliminating outdated requirements that apply to specific types of rights-of-way;

• Clarifying processes for BIA review of right-of-way documents;

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• Streamlining the process for obtaining a right-of-way on Indian land by:

o Eliminating the need to obtain BIA consent for surveying in preparation for applying for a right-of-way;

o Establishing timelines for BIA review of rights-of-way requests;

• Adding certainty to applicants by allowing BIA disapproval only where there is a stated compelling reason;

• Providing Indian landowners with notice of actions affecting their land;

• Deferring to individual Indian landowner decisions subject to an analysis of whether the decision is in their best interest;

• Promoting tribal self-determination and self-governance by providing greater deference to Tribes on decisions affecting tribal land;

• Clarifying tribal jurisdiction over lands subject to a right-of-way; and

• Incorporating tribal land policies in processing a request for a right-of-way.

"The general approach to the final rule is...