Working Effectively With Tribes On Energy Projects

Wherever and whenever it happens, managing the next Standing Rock controversy—better yet, mitigating or avoiding it—should be on every energy developer’s agenda.
By Troy Eid | September 06, 2017

Pipelines and Native America
The United States depends on 2.4 million miles of pipeline systems to transport fossil fuels across the country, but none has triggered more attention than the Dakota Access Pipeline (DAPL). This $3.8 billion, 1,172-mile crude-oil pipeline, owned and operated by Houston-based Energy Transfer Partners, L.P., entered service last June after months of construction delays—in part, due to concerns from Native American tribes—and now moves nearly half the total daily oil production in North Dakota.

Litigation, politicking and protests delayed the project’s completion. By December 2016, delays were costing DAPL’s investors $83.3 million per month and totaled $450 million. Post-DAPL, tribes are scrutinizing projects even more closely, including new pipelines as well as right-of-way renewals for existing systems.
Federal Consultation Policies Give Tribes More Leverage
Indian tribes—the third sovereign recognized in the U.S. Constitution, along with states and the federal government—are protected as “domestic dependent nations,” in the words of the U.S. Supreme Court, with the inherent power to “make their own laws and be ruled by them.” The term “tribal consultation” means the federal government’s legal responsibility to consult with tribes on a government-to-government basis whenever energy projects need federal approval both on and off Indian reservation lands. President Barack Obama expanded the executive branch’s consultation policies to give tribes more say in decision-making, establishing detailed consultation requirements at both the cabinet and sub-cabinet department level.  President Trump has not yet issued any policies on tribal consultation, but those on the books remain. 

As federal agencies have adopted more sweeping consultation guidelines, tribes are seeking to enforce them in the federal courts. This gives tribes more leverage to influence energy infrastructure projects. 

Supporting Tribal Consultation as a Risk-Management Strategy for the Energy Industry
Supporting the consultation process between federal and tribal officials (or states and tribes, as the case may be) has distinct practical advantages for the energy industry. The more informed tribal officials’ understanding of a proposed project, the more effectively they can consider and comment on that project as federal law requires. Regardless whether tribes support or oppose a project, it is imperative that their concerns be actually considered by decision-makers and documented for potential review by the courts.

As a former senior federal and state official who has participated in many tribal consultations, I know how critical it is for energy companies to support tribal consultation.   Companies can strengthen the process by understanding agencies’ consultation policies. Most officials conscientiously approach their duties to tribes, but unfortunately some do not.  Companies should monitor the process and encourage individualized interaction with tribal officials—not group informational meetings, mass-mailings or unfocused “outreach.” Under federal law, consultation must be “meaningful” to stand up in court. If officials just go through the motions and don’t actually consider tribes’ views in decision-making, a project can be delayed or worse.

Some project proponents—an interstate pipeline company and a public utility, to give just two recent examples—also support the process by providing financial and in-kind support so tribes can retain their own attorneys, engineers and other experts to evaluate projects.  Such arrangements may take the form of confidential mitigation agreements between companies and tribes to supplement government-to-government programmatic agreements among federal, state and tribal officials. Funding agreements can benefit tribes and companies if structured and monitored to avoid any actual or perceived conflicts of interests. 

Best Practice: El Paso Corporation’s Ruby Pipeline
An example of the energy industry’s effective support of tribal consultation is the Ruby Pipeline Project—a 700-mile interstate pipeline that delivers natural gas produced in the Rockies Basin to the West Coast. As with DAPL, Ruby does not cross any Indian reservation lands but passes through former treaty and aboriginal lands of various tribes. The late David Lester, executive director of the Council of Energy Resource Tribes, a non-profit tribal advocacy organization, assisted Ruby’s owner, El Paso Corp. (since acquired by Kinder Morgan), in strengthening tribes’ ability to participate more effectively in tribal consultation.  Prior to construction, Ruby entered into funding agreements that tribes used to retain their own legal and ethnographic experts to document cultural resources for federal consultation purposes. 

The tribes also worked with Ruby to create a tribal monitoring program, paid for by the company, which trained more than 100 tribal members to assist archaeological teams prior to, during and after construction. At tribes’ request, the Ruby pipeline was rerouted—including more than 900 “micro-reroutes” to avoid culturally important sites—at a total cost of approximately $11 million. Traditional plants were harvested for seeds and preserved in greenhouses prior to ground-disturbing activity and replanted post-construction in the reclaimed right-of-way. Ruby also worked with tribes to develop a tribal employment program.  Because skilled pipeline construction jobs typically require union membership, Ruby supported tribes’ requests to pay union dues and apprenticeships for tribal members seeking work on the project. A later internal review by the company found that such reroutes and tribal capacity-building measures saved the company at least $250 million in avoided project delay costs from potential tribal litigation and protests. 

Wherever and whenever it happens, managing the next Standing Rock controversy—better yet, mitigating or avoiding it—should be on every energy developer’s agenda. Supporting tribal consultation is an effective way for the energy industry to manage business risk in post-DAPL America.   

Author: Troy Eid
Attorney, Mediator with Greenberg Traurig LLP,
Co-chair of the firm’s American Indian Law Practice