Epilogue

New Era, Similar Results

IRONICALLY, AS FEDERAL policy makers, energy executives, and tribal leaders collectively hailed the 1982 Indian Mineral Development Act as a momentous victory for tribal sovereignty, several of those most responsible for its passage were not present to share in the celebration. One month before President Reagan signed the act into law, at the Council of Energy Resource Tribes’ annual meeting in Denver, the organization announced plans to replace its longtime director, Ed Gabriel. A former Federal Energy Administration official, Gabriel had led CERT from the beginning, using his contacts to secure federal support and push through legislative changes that empowered tribal governments. Gabriel had tactfully guided the organization’s evolution from an Indian advisory body for federal policy makers to the polemical “Native American OPEC” and ultimately into a professional association dedicated to improving tribal governance. He was an integral player in CERT’s rapid rise to becoming a formidable national institution capable of empowering tribal leaders and enlarging tribal sovereignty.1

But Ed Gabriel’s departure signaled a shift within an organization that had come of age. His replacement, David Lester, was the current commissioner of the Department of Health and Human Services’ Administration for Native Americans and could match Gabriel’s understanding of the federal bureaucracy. He also possessed attributes his predecessor did not. As an enrolled member of the Creek Tribe of Oklahoma, Lester would be CERT’s first Native American director. The move held great symbolic meaning, representing the passage of responsibility and expertise for reservation energy development from federal to Indian hands. Yet David Lester’s hiring was more than just a symbolic act. His unique skill set would shape CERT’s new direction. As commissioner of the Administration for Native Americans, Lester had administered a multimillion-dollar federal grant program to aid social and economic development on reservations. He also was a former economic development specialist for the National Congress of American Indians and former director of the United Indian Development Association. His experience in growing reservation economies replaced Gabriel’s aptitude for lobbying for federal support, and over the next several years, Lester would oversee the closing of CERT’s Washington, D.C., office to focus on providing technical assistance to tribes seeking to develop their resources. With tribal governments now possessing clear legal authority over tribal minerals, energy tribes shifted their attention from the nation’s capital back to the reservations. More than at any time in their history, the tribes were well positioned to capitalize on their vast resources.2

Sadly for these groups, forces beyond their control would thwart the successful execution of their recently clarified authority over reservation development. Not only did Ronald Reagan’s budget cuts inflict financial woes on CERT and its members, but the same president who signed into law the Indian Mineral Development Act also pursued energy and economic policies that made the development of Indian energy, particularly low-sulfur coal, economically nonviable. Reagan accelerated President Carter’s deregulation of oil prices, which produced a temporary surge in domestic oil supplies as producers moved reserves into the unregulated market to take advantage of higher prices. The expected increase in domestic output, however, was matched by an unexpected rise in global exploration and production by non-OPEC countries seeking to capitalize on higher international oil prices following the “energy crisis” of 1979. In the face of higher international prices, OPEC’s discipline broke down, and its members raced to capture the economic windfall. By 1983, OPEC was frantically trying to regain control of global supplies and prices by lowering its production quotas, but the damage was done. The world was flooded with oil, and the demand required to consume this across-the-board increase failed to materialize. Reagan’s austere fiscal and monetary policies exacerbated a global recession, and conservation measures instituted during the Ford and Carter administrations contributed to an overall decline in energy consumption. With demand waning and production soaring, the “energy crises” of the 1970s turned into the “oil glut” of the mid-1980s.3

Cheap oil collapsed the market for Indian energy just as tribes had secured the authority to develop their minerals. Low-sulfur Indian coal development was particularly hard hit—why buy coal when oil was so cheap? Tribes struggled to find development partners to invest in reservation coal mines, and those that had negotiated potentially lucrative deals now saw the projects shelved. In 1980, for instance, the Crow had secured the nation’s first alternative coal agreement with the Shell Oil Company, but by 1985 Shell had determined that the project was economically infeasible. In a curt letter to the tribal government, the multinational energy firm explained that due “to the current status of the coal market,” it must surrender all rights to Crow coal. The Westmoreland Coal Company had reached a similar conclusion a few years earlier, releasing rights to portions of its Crow coal lease.⁴

Tribes possessing oil and gas deposits faced similar struggles. Many rushed to exercise their newfound flexibility to negotiate energy deals only to find their bargaining position undercut by the oil glut. In these altered economic conditions, the new negotiated contracts began to resemble the old leases. Better-informed tribal leaders were able to secure important concessions like tribal hiring preferences, environmental protection clauses, and fluctuating royalties tied to market prices, but energy companies now refused to give up control over mining operations. With an abundance of oil, developers had little reason to begin new projects in which they could not dictate the pace and scale of development. Without control, tribes remained subject to corporate decisions over whether or not to develop and at what scale. The glutted market meant reduced oil and gas production, and the drilling that did occur produced diminished revenue because royalties were now tied to declining market prices. Tribal revenue from oil and gas development reached its peak of $198 million in 1982, then plummeted by 60 percent over the next four years. The same energy tribes that had successfully increased their governing capacity and altered federal law to authorize tribal control of reservation development found mastery over a shifting global energy market to be more elusive.5

Ongoing intratribal disputes over whether to pursue development, and on what terms, also continued to challenge energy tribes. The Crow example is again instructive, for after the contentious July 1977 impeachment of Tribal Chairman Patrick Stands Over Bull, the Crow community shuffled through a series of leaders as it debated energy development. In fact, of the five tribal chairmen elected in the twenty years following the first serious coal proposal in 1966, only Edison Real Bird (1966–1972) escaped calls for impeachment. Two leaders, Stands Over Bull (1972–1977) and Donald Stewart (1982–1986), were either forcibly removed from office or had all executive powers stripped by tribal resolution. And in every impeachment episode—each of which mirrored in intensity the debates surrounding Stands Over Bull—the driving argument for removal was the alleged mismanagement of tribal energy resources.⁶

These passionate internal debates both did violence to communal relations and drove away potential energy partners. Firms desiring Crow minerals found the tribe’s constantly changing political landscape confusing and too risky for business. After Stands Over Bull’s impeachment, energy companies pleaded with the Department of the Interior to provide clarity as to which Crow faction held the authority to strike coal deals. Mindful of the new policy of Indian self-determination, however, federal officials responded by refusing to “substitut[e] [their] judgment for that of the tribe’s in an internal dispute of this sort.” Without clarity, several energy firms abandoned development plans, and those that continued to pursue Crow minerals pushed the tribe to restructure its government to provide a more stable negotiating body.⁷

Ultimately, the Crow tribe responded to pressures to develop by, once again, altering its governing structure. In 1980, a new majority disbanded the cautious Coal Authority and authorized the tribal chairman to aggressively pursue development projects. But as indicated by Shell’s and Westmoreland’s surrender of Crow coal rights, market conditions hampered these efforts. Ongoing battles within the tribal council, which still included all adult members of the tribe, also continued to drive away potential investors. By 2001, a frustrated majority had seen enough and took dramatic action to overhaul the entire tribal government structure. The Crow ratified a new constitution that replaced its hyper-democratic tribal council with a system based on the United States’ model of representative government, including separation of powers and a strong executive branch.8

Finally, with this new governing structure in place and oil prices again skyrocketing due to disruptions in global supply, the Crow negotiated a 2004 agreement with the Westmoreland Coal Company to allow the first commercial coal mining on the reservation. The deal, in fact, merely extended the company’s ongoing operations in the Ceded Strip southward onto the reservation proper. Most years, revenue from this enlarged Absaloka Mine provides two-thirds of the tribal government’s nonfederal budget—more than $20 million in 2010. The mine also employs a 70 percent tribal workforce. The relationship between the Crow and Westmoreland has become so strong that Tribal Chairman Darrin Old Coyote recently affirmed to a congressional subcommittee that “without question, [the Absaloka Mine] is a critical source of jobs, financial support, and domestically produced energy. [Westmoreland] has been the Crow Nation’s most significant private partner over the past 39 years.”⁹

But on a reservation with 47 percent unemployment and a per capita income less than half the U.S. average ($11,987 to $27,334), coal mining’s benefits still do not reach all tribal members. The tribal government thus continues to explore more development opportunities, largely with the blessing of the tribal majority. Since Westmoreland’s extension, the Crow have granted the mining firm more coal rights in the Ceded Strip and also announced three new energy ventures with other companies on the reservation itself. One of these projects could be the nation’s first mine-mouth, coal-to-liquids gasification plant; the others look to export Crow coal to Asia. Billions of tons of coal and millions of dollars of tribal revenue are once again on the table. Of course, not all are thrilled about the prospect of impending development and some tribal members continue to fear the potential impacts. The tribe will continue to wrestle with these decisions. But while it is too early to judge the effects of these potential projects on the Crow community and landscape, it is clear that a restructured tribal government, informed by decades of energy development experience, possesses the clear legal authority to make the deals.¹⁰

With global oil prices remaining relatively high in recent years, the Crow tribe is not alone in using its sovereign authority to once again explore tribal-led energy projects. On the Navajo Reservation, where the postwar exploitation of tribal minerals began and rampant poverty remains, the tribe has taken a two-step approach to exerting control. First, the community has acted largely in unison to shut down dirty and unwanted projects. Second, some portions of tribe have pushed for tribal-controlled ventures to replace them. In 2005, for instance, the tribal government passed a moratorium on uranium development and, in partnership with the Hopi Tribal Council, withdrew tribal water rights necessary to operate Peabody Coal Company’s Black Mesa Mine. That same year, Indian and non-Indian environmental groups forced the closure of the Mohave Generating Station after the facility failed to install costly pollution control technology. These actions delivered death blows to some of the reservation’s more notorious energy projects, but Navajo energy development was far from dead. Starting in 2003, the Diné Power Authority, a tribal enterprise, pursued plans to build its own coal-fired power plant on the reservation, the Desert Rock Energy Project. This facility was proposed to provide electricity to another ambitious tribal endeavor, the Navajo Transmission Project, which would have provided the infrastructure needed to carry reservation-produced electricity to distant markets. Neither project, however, was realized. Local environmental opposition emerged from the outset and the requisite permits were never obtained.11

Undeterred, the Navajo tribal government now has gone back to the infamous mine that began the tribe’s tumultuous experience with commercial coal development. On December 31, 2013, the Navajo Transitional Energy Company, another tribal enterprise, bought the Navajo Mine from the world’s largest mining firm, BHP Billiton. This massive facility—once the planet’s biggest strip mine—had fed coal for over fifty years to the Four Corners Generating Station—once the country’s dirtiest power plant. Now the Navajo own it. But the community cannot agree on whether this is a good thing. Proponents point to the protection of Navajo jobs and the secure revenue stream gained by continuing to sell coal to the Four Corners plant, which would have likely shut down had Billiton not found an interested buyer to keep the mine open. These supporters also hail the deal as a victory for tribal sovereignty, positioning the tribe to control the future of these coal reserves, whether that be exploring cleaner coal gasification technology or exporting coal to Asian markets. Opponents, of course, question the sanity of now participating in an industrial process that has brought so much harm to the community. Detractors also fear the environmental liabilities the tribe has inherited and argue that buying a worn-out coal mine to supply an outdated power plant makes little business sense. The arguments on both sides are fair. But these are the dilemmas faced by a sovereign government representing diverse constituencies and attempting to wield its power to participate in a risky global energy industry.12

In the thirty-four years since the Northern Cheyenne negotiated the oil and gas deal with the Atlantic Richfield Company that triggered fundamental changes to federal Indian law, the tribe’s reservation has seen little development. In the early 1980s, ARCO drilled dozens of prospecting wells, but most came up dry. By 1984, the company was forced to walk away, leaving behind unreclaimed drill sites and a community becoming more, not less, impoverished. Two years after ARCO shuttered its operations, reservation unemployment reached 60 percent—up from 34 percent in 1979. It has remained there ever since. According to the 2000 census, the per capita income was only $7,247, and more than 50 percent of the population was mired below the poverty line. No doubt, the Northern Cheyenne’s 1970s actions allowed the tribe to maintain control of its resources and protect the reservation. That place is still the Cheyenne homeland, free of the non-Indian interlopers tribal members worried so much about. But it is also free of desperately needed economic development.¹³

Further, the Northern Cheyenne’s success in keeping its land a distinctly tribal space has not protected the community from the pernicious influences of the outside world. Today, the reservation is completely encircled by coal development. A dozen miles to the north, the Colstrip Power Plant continues to burn coal extracted from a massive adjacent strip mine. On the eastern border, Arch Coal, Inc., the nation’s second largest coal company, is developing the vast Otter Creek Tracts, which span more than 8,000 acres and are estimated to hold over 1,200 million tons of coal. Twenty-five miles to the south, several strip mines operate in the vicinity of Decker, Montana, and the reservation’s the western boundary is flanked by the Crow Reservation and its impending development. Testifying to Congress in 2014, Tribal President Llevando Fisher complained that the surrounding activity puts constant pressure on the Northern Cheyenne’s inadequate public services and facilities and “produces major influxes of newcomers to the area [that] leads to undesirable socio-economic effects on the Tribe, including on-reservation crime, traffic, and accidents.” But the tribe reaps none of the financial rewards that would help combat coal mining’s ill effects. As Fisher explained, “We suffer the impacts of development but receive no revenues that would allow us to minimize the ills inflicted by this development.”14

For this reason, the Northern Cheyenne—the tribe that halted the exploitation of tribal energy resources and was labeled as the anti-development tribe—will soon vote on whether to pursue reservation coal mining once again. Already once, in 2006, a tribal referendum directed the tribal government to do just that. Intervening elections, however, have placed a succession of alternating pro- and antidevelopment leaders in the tribe’s highest office. The community is clearly divided on the issue. On February 13, 2014, President Fisher, once a coal mining opponent, asked for clarity. Explaining that “the bleak financial future facing our nation” had persuaded him to now personally prefer development, Fisher announced that he would nevertheless “let the people decide.” “We may not all agree,” he warned, “but we’ll let the majority decide . . . [and] if the Northern Cheyenne vote yes by a majority for coal development on our reservation, we will go strongly in that direction.” Considering the mountains of coal underlying the Cheyenne Reservation and the tribe’s historical importance to Indian energy development nationally, federal officials, energy executives, and other tribal leaders look on anxiously as the tribe deliberates its decision.¹⁵

In each of these cases of potential reservation development, the debates over tribal survival continue. The infighting is particularly intense when changes to tribal governing practices are proposed to facilitate energy development, as they often are. Some Indians hail the creation of tribal enterprises or new governing committees endowed with the authority to dispense tribal property as necessary improvements to tribal governance. Employing modern and efficient management techniques, they argue, will help the tribes conduct business and alleviate poverty. Others deride the new governing methods as an affront to traditional tribal practices and a threat to the continued existence of the tribe. Of course, the labels of “modern” and “traditional” forms of governance are deeply problematic. Both assume the authenticity of a particular governing structure and then argue that exterior forces either demand change or require its preservation. The labels are, in essence, ahistorical. But the point here is that the battles over resource development, tribal governance, and indigenous identities continued unabated after energy tribes secured authority to control development. Changing the law to recognize tribal sovereignty was an incredible victory; taking back control over reservation development saved the tribe. But this victory was not the end of the struggle to capitalize on reservation resources. Tribal communities remain subject to the same national and global pressures that first brought energy companies to their doorstep. For that matter, so do indigenous peoples worldwide. Here in the United States, these communities sometimes have been able align the desires of the tribal majority with market forces and reap mining revenues. More often, they have not. Their responses to these forces, however, continue to shape their communities, their landscapes, and the tribal governments that patrol both.16

*

In yet another example of the inner turmoil that often accompanies tribal energy development, CERT’s 1982 annual conference not only witnessed the departure of Executive Director Ed Gabriel, but it also marked the last meeting for CERT and Navajo Tribal Chairman Peter MacDonald. Just two weeks before the Denver gathering, the Navajo Nation voted MacDonald out of office in favor of Peterson Zah, the head of the DNA People’s Legal Services, which represented individual Navajos fighting energy projects often supported by MacDonald’s administration. Zah’s position with DNA had given him a political base to attack MacDonald’s pro-development policies, and MacDonald’s defeat meant the longstanding chairman could no longer serve as CERT’s leader. At exactly the moment energy tribes secured authority to develop their own minerals, CERT was faced with replacing its entire leadership team.¹⁷

Like its new director, David Lester, CERT’s new chairman, Wilfred Scott, brought a different perspective to Indian energy development. Scott’s Nez Perce tribe did not possess substantial hydrocarbons and showed little appetite for pursuing large-scale energy projects. In fact, the Nez Perce had recently rejected a hydroelectric facility due to potential harm to its tribal fishery. In addition to this different perspective, Scott also brought a different leadership style, replacing MacDonald’s combative bluster with a conciliatory approach that cultivated cooperative relationships between member tribes, CERT officials, and federal agencies. The new leadership tandem of Scott and Lester continued to advocate for tribal control of mining projects and made available CERT’s consulting services to tribes desiring development. But in contrast to their predecessors, they did not push mineral development as a panacea for tribal problems. More wary of the potential social and environmental impacts of development, CERT’s leaders counseled tribal governments to take calculated approaches to reservation development that considered their preparedness to manage potential projects and their community’s support for them.18

The difficult market conditions of the 1980s also meant there was little upside to pushing hard for development until tribes were ready to manage and support it. In the interim, energy tribes focused on improving their capacity to regulate mining and consolidated legal authority over tribal resources. CERT continued to provide technical assistance to help tribes determine their resource inventories, improve accounting systems to better track royalties, and, with the increasing support of the Environmental Protection Agency, monitor environmental impacts of existing development.¹⁹

To match this continued growth in capacity, the tribes pushed through a series of new federal laws designed to further extend tribal control over reservation development. The 1992 Indian Energy Resources Act directed the Department of the Interior to help tribes develop a “vertically integrated energy industry on Indian reservations,” and the 2003 Energy Policy Act provided grants and technical assistance to achieve this end. Tribal control over energy development reached its legal apogee in 2005 with the passage of the Indian Tribal Energy Development and Self-Determination Act, which authorized tribes to completely forego federal approval of development projects once they had established a “tribal energy resource agreement” (TERA). Serving as “master agreements” between individual tribes and the federal government, TERAs must include adequate procedures for constructing tribal energy deals, provisions related to the tribe’s economic return, lists of all tribal laws governing reservation mining, and assurances of the tribe’s capacity to monitor and manage environmental and social impacts. Once a TERA is approved, a tribe has complete regulatory authority over reservation energy development, from contract negotiations to enforcement of the deal’s terms. Critics argue that TERAs remove important federal protections for tribal lands—such as the requirements of the National Environmental Policy Act and the National Historic Preservation Act—but these agreements represent the fullest manifestation yet of Indian self-determination. Such autonomy has always come with risks, as well as benefits.20

The significant change in CERT’s leadership that accompanied the passage of the 1982 Indian Mineral Development Act thus ushered in a new era in the tribes’ approach to energy development. New leaders counseled a more measured, though still active, pursuit of development, and energy tribes continued to expand their knowledge of and sovereignty over reservation resources. Distant market forces and intratribal turmoil, however, stifled potential projects, leaving the end results, for now, largely unchanged. Energy tribes continue to wait for the day when they can capitalize on their valuable minerals, which they now possess the capacity and authority to do.

Beyond ushering in a new era in Indian energy development, the 1982 changeover in CERT’s leadership also provided an opportunity to reflect on how far the tribes had come. Seizing the moment, out going chairman Peter MacDonald delivered a farewell address at CERT’s annual meeting that recounted the entire history of the organization he helped create. The flamboyant leader did not disappoint. Applying a Star Trek metaphor to characterize CERT’s voyage as a long-imperiled mission with little hope of success, MacDonald began by listing the many challenges facing “Starship CERT” at its outset. These included the energy tribes’ immense diversity, their lack of geological and market data, and the resistance of federal agencies to relinquish control over Indian resources. He also noted the universal hostility created “just by dubbing ourselves the ‘Native American OPEC’” and the criticism CERT received from some American Indians when it obtained “the thing that we feared most . . . a federal grant, and not just one federal grant, but numerous federal grants.” The early days of CERT, the chairman recalled, were characterized by confusion over its mission, the ignorance of its members, and the reluctance of federal officials to faithfully carry out their trustee duty.²¹

But the message MacDonald hoped most to convey was that despite these long odds, CERT survived in the same way American Indians had survived since European contact, by adapting to constantly changing circumstances. In his words, the organization “evolved from a means to increase bargaining leverage to an end in itself—a forum for giving tribes power in national politics.” Now that CERT and its allies had exercised their power to change federal law and clarify the tribes’ expansive sovereignty, MacDonald predicted:

CERT will become a symbol for the next voyage of the human species—a voyage to a post-industrial world. It is a voyage which Native Americans are uniquely equipped to make. . . . We retain our traditions, our sense of community, and the medicine bundles of sacred soil, brought from previous worlds and preserved to enable us to achieve harmony in a new world, yet unknown. . . . Spaceship CERT is ready for its next five-year voyage—ready to create the think tanks, the social experiments, the new institutions, and the new linkages for our peoples, the First Americans. We are equipped by long tradition and practice to adapt, adjust, and yet survive with our identity miraculously preserved.22

MacDonald’s last point was the most important to American Indians. The onslaught of demand for tribal resources had brought the world’s largest energy firms to reservation borders, where a flawed legal regime invited them in. Proposed mining not only imperiled reservation landscapes, but it threatened to erase established customs and norms that defined the communities living there. Yet, as alluded to by MacDonald, the energy tribes survived with their identities intact. Belying perceptions encoded in federal law that American Indians were incapable wards, these tribes mobilized a defense of their homeland and developed the institutional capacity to regulate industrial activities within that land. Based on this increased capacity, the 1982 Indian Mineral Development Act recognized tribal authority to direct reservation development, which subsequent laws strengthened. Now equipped with the legal authority to pursue development in line with their communities’ desires, only the successful execution of that power is left unfinished. The fact that external, often global, structures continue to limit the exercise of this sovereignty—while internal debates rage over how to respond to these pressures—does not diminish the energy tribes’ accomplishments. Rather, it makes them historical actors like any other, operating among forces they can shape but not fully control.