Indian Energy Development: Poor Management by BIA Has Hindered Energy Development on Indian Lands
Highlights
What GAO Found
Bureau of Indian Affairs' (BIA) management shortcomings and other factors—such as a complex regulatory framework, tribes' limited capital and infrastructure, and varied tribal capacity—have hindered Indian energy development. Specifically, BIA does not have the data it needs to verify ownership of some Indian oil and gas resources, easily identify resources available for lease, or identify where leases are in effect, as called for in Secretarial Order 3215 and internal guidance. BIA also faces staff limitations and does not have a documented process or the data needed to track its review and response times, as called for in implementation guidance for Executive Order 13604, and therefore it cannot ensure transparency in its review of energy-related documents. These shortcomings can increase costs and project development times, resulting in missed development opportunities, lost revenue, and jeopardized viability of projects. Examples are as follows:
- Missed development opportunities: According to a tribal official, BIA took 18 months to review a wind lease. According to the developer of the project, the review time caused the project to be delayed and resulted in the project losing an interconnection agreement with the local utility. Without this agreement, the project has not been able to move forward, resulting in a loss of revenue for the tribe.
- Lost revenue: According to a tribal official, BIA's review of some of its energy-related documents took as long as 8 years. In the meantime, the tribe estimates it lost more than $95 million in revenues it could have earned from tribal permitting fees, oil and gas severance taxes, and royalties.
- Jeopardized viability of projects: One lease for a proposed utility-scale wind project took BIA more than 3 years to review and approve. According to a tribal official, the long review time has contributed to uncertainty about the continued viability of the project because data used to support the economic feasibility and environmental impact of the project became too old to accurately reflect current conditions.
Several factors have deterred tribes from seeking tribal energy resource agreements (TERA). These factors include uncertainty about some TERA regulations, costs associated with assuming activities historically conducted by federal agencies, and a complex application process. For instance, one tribe asked the Department of the Interior (Interior) for additional guidance on the activities that would be considered inherently federal functions—a provision included in Interior's regulations implementing TERA. Interior officials told GAO that the agency has no plans to provide additional clarification.
Interior's Office of Indian Energy and Economic Development (IEED) provided grants to build tribal energy development capacity to 25 tribes from 2007 through 2013, but the effectiveness of the grants to move tribes closer to demonstrating that they have the capacity to enter into TERAs is unknown. The Standards for Internal Control in the Federal Government call for agencies to compare actual performance with planned or expected results and to monitor performance; however, IEED has not tracked how, if it all, the grants have eliminated capacity gaps.
Why GAO Did This Study
Indian energy resources hold significant potential for development, but remain largely undeveloped. Interior's BIA reviews and approves leases and other permits required for development. Other Interior components and federal agencies also have roles in this process.
The Energy Policy Act of 2005 provided the opportunity for interested tribes to pursue TERAs—agreements between a tribe and Interior that allow the tribe to enter into energy leases and agreements without review and approval by Interior. The act also authorizes Interior to provide grants to tribes to develop the capacity needed to enter into a TERA. However, no tribe has entered into a TERA.
GAO was asked to review Indian energy development. This report examines (1) factors that have hindered Indian energy development, (2) factors that have deterred tribes from pursuing TERAs, and (3) the effectiveness of Interior's efforts to build tribes' capacity to enter into TERAs. GAO analyzed federal data; reviewed federal, academic, and other literature; and interviewed tribal, federal and industry stakeholders.
Recommendations
GAO recommends that Interior take steps to address data limitations, track its review process, provide clarifying guidance, and evaluate the effectiveness of grants. Interior generally agreed with most but not all of the recommendations because it is taking other actions to address some data limitations. GAO continues to believe that its recommendations are valid.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Interior | To ensure it can verify ownership in a timely manner and identify resources available for development, the Secretary of the Interior should direct the Director of the Bureau of Indian Affairs or the Director of the Office of the Indian Energy and Economic Development, as appropriate, to take steps to complete its geographic information system mapping module in the Trust Asset and Accounting Management System. |
In 2018, BIA made significant progress integrating and deploying data viewing and map creation capabilities into its database for recording and maintaining historical and current data on ownership and leasing of Indian land and mineral resources in the Trust Asset and Accounting Management System (TAAMS). This enhanced capability is intended to help BIA ensure it can verify ownership in a timely manner and identify resources available for development.
|
| Department of the Interior | To ensure it can verify ownership in a timely manner and identify resources available for development, the Secretary of the Interior should direct the Director of the Bureau of Indian Affairs or the Director of the Office of the Indian Energy and Economic Development, as appropriate, to work with the Bureau of Land Management to identify cadastral survey needs. |
According to BIA officials, BIA requested each of its 12 regions to review and identify historic survey requests that were contained within a defunct cadastral request system to determine if the requests are still valid. According to BIA officials, BIA and BLM identified about 1,900 survey requests that were not funded. BIA developed a new database that includes this inventory and new survey requests since 2015. BIA also developed a mechanism for its regions and agency offices to make new survey requests. According to BIA officials, the agency has limited funding for cadastral surveys and conduct surveys that are needed for litigation purposes and those surveys that are mandated. Officials said that BIA and BLM coordinators meet bi-monthly to discuss survey requests.
|
| Department of the Interior |
Priority Rec.
To improve the efficiency and transparency of its review process, the Secretary of the Interior should direct the Director of the Bureau of Indian Affairs or the Director of the Office of the Indian Energy and Economic Development, as appropriate, to develop a documented process to track its review and response times. |
The Indian Energy Service Center established a plan to develop an inventory of pending transactions of energy development activities at field offices, and to begin meeting regularly with field offices to monitor their processing of these transactions. According to the Indian Energy Service Center's plan, the Center will review certain transaction types in fiscal year 2023 (rights of way and revenue sharing agreements) and additional transaction types in the following years. The Indian Energy Service Center also plans to participate in monthly meetings with regional realty officers and report average processing times of key energy development activities.
|
| Department of the Interior | To improve the efficiency and transparency of its review process, the Secretary of the Interior should direct the Director of the Bureau of Indian Affairs or the Director of the Office of the Indian Energy and Economic Development, as appropriate, to enhance data collection efforts to ensure it has data needed to track its review and response times. |
BIA made system enhancements to its Trust Asset and Accounting Management System (TAAMS) in response to our recommendation on data collection. BIA now has the capability of capturing key dates during the review and approval process for oil and gas leases, communitization agreements, and right of way grants. For example, for leases BIA can now capture key dates during the review and approval process for a lease package, including, but not limited to, the initial receipt of a lease package and approval of the leases, incorporating the key identifiers and data fields needed to track and monitor review and response times for oil and gas leases and agreements. With these system enhancements, BIA now has the capability to evaluate and review workload processing timeliness to improve efficiencies. BIA provided system demonstrations and reports which we reviewed related to its actions for this recommendation.
|
| Department of the Interior |
Priority Rec.
The Secretary of the Interior should direct the Director of the Bureau of Indian Affairs or the Director of the Office of the Indian Energy and Economic Development, as appropriate, to provide additional energy development-specific guidance on provisions of TERA regulations that tribes have identified to Interior as unclear. |
In September 2017, in response to our recommendation, the Department of the Interior's Office of Indian Energy and Economic Development (IEED) added information to its website identifying a mechanism that allows a tribe interested in pursuing a tribal energy resource agreement (TERA) to obtain specific guidance and clarification for TERA regulations. For example, any tribe can request technical assistance through IEED's Division of Energy and Mineral Development (DEMD) to provide guidance regarding the programs, functions, services, and activities that can be included under a TERA. Upon request from a tribe and receipt of the activities that a tribe is interested in performing through a TERA, DEMD will provide technical guidance regarding the proposed activities, and opinions on whether they are inherently federal functions; however, final determination on inherently federal functions would come from Interior's Solicitors Office. This additional notification to tribes about the technical assistance is included as part of a DEMD "Tribal Toolbox" that contains numerous resources intended to help tribes develop and manage energy resources. In addition, IEED is developing a primer document on TERAs that will provide further guidance for tribal officials in an easy to absorb question and answer format. IEED officials stated the primer will be drafted in 2018 and will be available to tribal officials upon completion of Interior's internal review process.
|
| Department of the Interior | To ensure the tribal energy development capacity (TEDC) grant program is effective in moving tribes closer to developing the capacity needed to pursue TERAs, the Secretary of the Interior should direct the Director of the Bureau of Indian Affairs or the Director of the Office of the Indian Energy and Economic Development, as appropriate, to develop a documented process for evaluating the effectiveness of TEDC grants. |
In March 2021, BIA reported that Interior's Division of Energy and Mineral Development (DEMD) developed a plan for reviewing the effectiveness of TEDC grants. The plan includes an annual stakeholder meeting to evaluate the program, outcomes, and identifies barriers to grant effectiveness. The plan also includes questionnaires for tribal applicants to complete when applying for a grant and at the close of the grant, with questions that would demonstrate growth in capacity development. The questions include information on tribal staff dedicated to energy development, and policies and regulations the tribe has in place for energy development. DEMD also developed procedures for monitoring TEDC grants. Taken together, these actions establish processes and procedures that DEMD will implement so key characteristics and measures may be captured to review the effectiveness of the TEDC grants.
|
| Department of the Interior | To ensure the TEDC grant program is effective in moving tribes closer to developing the capacity needed to pursue TERAs, the Secretary of the Interior should direct the Director of the Bureau of Indian Affairs or the Director of the Office of the Indian Energy and Economic Development, as appropriate, to identify features of the TEDC grant program that could limit the effectiveness of the program to help tribes eliminate capacity gaps. |
The Office of Indian Energy and Economic Development completed a survey of grant recipients to identify any features of the TEDC program that could limit the effectiveness of the program.
|