Could renewable energy development help alleviate poverty on reservations?
A new study suggests significant potential, but also a sharp disparity: Native reservation lands are 46 percent less likely to host wind farms, and more than 110 percent less likely to host solar farms than adjacent lands with similar suitability.
The gap, per the study’s authors, stems from regulatory tangles associated with starting energy projects on reservation lands. The disparity is striking — and a bit galling — given the abundance of solar and wind energy-suitable resources on the poorest reservations.
“It’s kind of an accident of history that the poorest reservations have been set on lands that tend to be windy and sunny,” report co-author Dominic Parker told Tribal Business News. “They were set in places where known agriculture potential was weak, but those places tend to be windy and sunny, so you have a big potential for renewable energy.”
Parker and his colleagues estimate that fully developing renewable energy resources across the poorest 25 percent of reservations could create revenues of upwards of $50,000 per tribal member. However, energy project approvals require an average of 49 steps on reservation lands, compared to just four steps on private lands. The regulatory hurdles can cost years of delays due to Bureau of Indian Affairs approvals, interagency communications, and feasibility or environmental studies.
Parker, a professor of applied economics at University of Wisconsin-Madison and senior fellow for the Renewing Indigenous Economies at Stanford’s Hoover Institution, spoke with Tribal Business News to discuss the study’s findings and implications. This interview has been edited for brevity and clarity.
Your report highlights the regulatory complexity on reservation lands. Are there other factors that make energy development more challenging in Indian Country?
I’d add there is also more regulatory uncertainty. The number of agencies and regulations involved in Indian Country often results in confusion, overlap, and a lack of coordination among agencies. Both complexity and uncertainty raise the costs of doing business and tend to stunt development.
Can you give some examples of what’s causing all the complexity and uncertainty?
Crossing a reservation boundary can mean entering an entirely different set of legal and property institutions. Inside reservations, there can be a mix of private and trust land implying differences in regulatory oversight that can be vested in a mix of federal, tribal, and state governments. This makes coordination of large scale energy projects and transmission lines difficult and costly.
What can be done to de-tangle some of those responsibilities?
In the short term, you streamline. For example, Section 70007 of the Inflation Reduction Act provides a fund for a federal permitting improvement steering council (though the complexities of permitting are far from resolved.) In the long term, you consolidate — move towards vesting regulatory authority in Indian Country with one entity, mainly the tribe in question.
Tribal Energy Resource Agreements were designed to streamline energy development on tribal lands. How effective have they been in practice?
Anecdotally, using a Tribal Energy Resource Agreement, or TERA, is costly and complex. In theory, once a TERA is approved by the Bureau of Indian Affairs, the tribe no longer needs to acquire separate approval for each business arrangement it makes in order to undertake resource development. In practice, to my knowledge no tribe has executed an agreement yet. As more tribes utilize the process, I expect it to become more streamlined, more effective.
What makes energy development so important for Indian Country?
In terms of economic development potential, the lowest-income tribes have the most valuable wind and solar potential. And they tend to be in remote locations lacking other income-generating opportunities like casinos and urban labor markets.
For these tribes, we estimate that resolving the current renewable development disparity on versus off between reservations could lead to a present value gain of $50,000 per person.
How realistic are these potential economic gains for tribes? Would it require excessive amounts of development?
This gain would be achieved by keeping pace with adjacent lands with similar wind and solar potential. It wouldn’t require massive development beyond what is forecasted to happen off of reservations.
How does Indian Country fit into the national transition to clean energy, and what considerations should be kept in mind?
I’d say a grid that does not include Indian Country would be less efficient and more costly than a grid that does include Indian Country.
That said, I’ll emphasize this research is not a call to impose federal energy priorities on unwilling tribes, as was done in the 1940s and 1950s for hydroelectric power. I’d say the key to avoiding green colonialism [forcing tribes into renewable energy development] is to not pressure uninterested tribes — while at the same time making it feasible for those wanting the income by cutting the red tape.
What you're saying is that tribes need to be able to make these decisions for themselves.
I'd say true energy sovereignty is exactly that. It's the ability to make that choice: to develop or not to develop. You shouldn't have barriers that stand in the way of that. I think if these barriers were eliminated and streamlined … not every tribe is going to want to develop (renewable energy), but a subset would, and there would be big economic potential for them.
