Most of this energy was produced from non-Indian resources, but Indian  energy resources hold significant potential for future development. Additional factors, generally outside of BIA’s management  responsibilities, have also hindered Indian energy development, including  (1) a complex regulatory framework, (2) fractionated ownership interests,  (3) tribes’ limited access to capital and federal tax credits, (4) dual  taxation by states and tribes, (5) tribal capacity, and (6) infrastructure  limitations. BIA Does Not Have Comprehensive Data Identifying Ownership and Use of Indian Resources

BIA does not have the data it needs to verify ownership of some oil and  gas resources, easily identify resources available for lease, or easily  identify where leases are in effect. BIA Does Not Have a Documented Process or Data to Track Its Review and Response Times

BIA review and approval is required throughout the development process,  including the approval of leases, ROW agreements, and appraisals;  however, BIA does not have a documented process or the data needed to  track its review and response times. A few  stakeholders we interviewed and some literature we reviewed identified  that BIA’s review and approval process can be lengthy and increase  development costs and project development times, resulting in missed  development opportunities, lost revenue, and jeopardized viability of  projects. For example, in 2011, the President for the Rosebud Sioux  Tribe in South Dakota, reported that it took 18 months for BIA 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. In another example, in 2014, the Acting Chairman for the Southern Ute  Indian Tribe reported that BIA’s review of some of its energy-related  documents took as long as 8 years. In yet another example, BIA took more than 3 years to review and  approve a lease for a proposed wind project and, according to a tribal  official, the lease was only reviewed and approved after multiple calls and  letters from the tribe to BIA headquarters. Long review times can  contribute to uncertainty about the continued viability of the project  because data used to support the economic feasibility and environmental  impact of the project can become too old to accurately reflect current  conditions. A Variety of Factors Have Deterred Tribes from Entering into TERAs

A variety of factors have deterred tribes from entering into TERAs,  including: (1) uncertainty about TERA regulations, (2) limited tribal  capacity and costs associated with assuming activities currently  conducted by federal agencies, and (3) a complex application process,  according to some of the literature we reviewed and stakeholders we  interviewed. Specifically, TERA regulations authorize tribes to assume responsibility  for energy development activities that are not “inherently federal   According to officials from one tribe we interviewed, the tribe  functions.”has repeatedly asked Interior for additional guidance on the activities that  would be considered inherently federal functions under the regulations. Without additional clarification to address these concerns  Limited tribal capacity and associated costs. IEED Has Provided TEDC Grants to 25 Tribes, but Their Effectiveness at Building Tribal Capacity Is Unknown

IEED allocated more than $2 million through 29 grants provided to 25  tribes from 2007 through 2013 under the TEDC program, but the  effectiveness of the program is unknown because Interior has not tracked  the benefit of the grants and does not have a documented process to  assess whether the grants have moved tribes closer to building the  capacity needed to pursue a TERA. Recommendations for Executive Action

We recommend that the Secretary of the Interior 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 the following seven  actions:
To ensure it can verify ownership in a timely manner and identify  resources available for development, BIA should (1) take steps to  complete its GIS mapping module in TAAMS and (2) work with BLM  to identify cadastral survey needs. Interior also agreed with our recommendations for a documented process  to evaluate the effectiveness of TEDC grants and to improve the agency’s  data collection efforts. Appendix I: Scope and Methodology

To determine what factors have hindered Indian energy development and  factors that have deterred tribes from seeking Tribal Energy Resource  Agreements (TERA), we searched literature relevant to Indian energy  development, including fossil sources, such as oil and gas, as well as  renewable sources. We also  obtained information from BIA documents and officials to identify its  process for tracking its review of energy-related documents. We  compared this information with an executive order and best practices for  modernizing the federal permitting and review process identified by an  interagency committee, and the Standards for Internal Control in the  Federal Government.
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.

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.

What GAO Recommends

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.