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Renewable Energy on Native American Lands
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By Lauren D'Souza

In the United States, tribal lands comprise only two percent of the total landmass, yet hold about 35 percent of the country’s fossil fuel resources and tremendous renewable energy potential in solar, wind, and biomass. Utility-scale renewable energy development on Indian reservations offers a chance at tribal revitalization and increased employment for tribal members.

At the start of US-tribal political relations, federal officials placed reservations in remote and rural areas of expansive states in order to displace them from their original territories, which were then desired by American settlers moving westward. As a result, today’s reservations are far from metropolitan centers and often isolated from quality educational and employment opportunities. Native Americans who live on reservations are one of the most economically disadvantaged groups in the nation. Those living on reservations experience disproportionately high rates of poverty and unemployment, as well as high reliance on federal support and subsistence income.

Mineral extraction is often the only thread to economic prosperity—for example, coal revenues make up 88 percent of the Hopi Nation’s tribal budget on a reservation that suffers from an unemployment rate of 50 percent. Although fossil fuel development provides relatively high-paying jobs and a valuable, steady income for the tribe, tribal leaders are beginning to realize the environmental justice concerns with siting fossil fuel operations adjacent to already vulnerable populations.

The Navajo Nation, by far the largest reservation in the country, is still not fully on the electrical grid—37% of its households do not have electricity—but its land has the highest solar and geothermal potential of any reservation in the United States. Renewable resources offer promising opportunities for rural electrification and reliable generation in remote areas. Though coal jobs are enticing for Native Americans on reservations, renewable energy development could provide more stable, long-term “green collar” jobs with far fewer health and safety risks.

While Native American reservations are theoretically energy-rich, there are few utility-scale renewable projects located on tribal lands. Native American leaders are reluctant to form partnerships with non-tribal entities for fear of losing sovereignty and management of their own resources. However, without outside funding, large-scale renewable energy projects are nearly impossible for tribes to undertake. Furthermore, because Native American tribes are not taxable entities, they are not eligible to receive federal tax credits that are typically vital in initiating and sustaining large-scale renewable projects, thus further discouraging renewable energy development on reservations.

In a clear exception, Navajo Nation officials approved a partnership with a non-tribal entity, the Green Economy Coalition, in 2009 to finance and build a wind farm near Flagstaff, AZ that would generate 85 Megawatt-hours annually. The Navajo Nation invested $10 million of upfront capital into the project, all of which was dedicated to developing and training tribe members in jobs at the wind farm. Despite this large initial investment, outside funding was still necessary to pay for the planning, construction, operation, and maintenance of the wind farm. Although the Navajo Nation was able to provide the $10 million for the project, other tribes may not be able to meet this level of financial contribution.

In 2005, Congress passed the Indian Tribal Energy Self-Determination Act as part of the Energy Policy Act, aimed at incentivizing renewable energy development on tribal lands while maintaining tribal sovereignty. Tribes can now bypass approval from the Interior Secretary by utilizing a Tribal Energy Resource Agreement (TERA). A TERA allows tribes to lease their land for a period up to 30 years for the purpose of generating, transmitting, or distributing electric power.

In 2009, Congress strengthened the TERA system by adding requirements from the federal National Environmental Policy Act (NEPA) process. Now, before an energy project on tribal land can proceed, tribal leaders must evaluate alternatives, submit an environmental impact statement, and take on mitigation for any damage resulting from the project. These policy reforms are vital steps toward giving tribal leaders the tools they need to maintain independence and successfully finance desirable renewable energy projects.

Renewable energy development on tribal lands is an issue of environmental justice, socio-economic justice, and tribal energy independence. While fossil fuel development can appear lucrative for tribes, mining and drilling on Native lands poses a threat to public health and often puts tribal governments at the whims of non-tribal entities. Although there are historical and financial barriers to renewable energy development, successful projects can create stable jobs on reservations, contribute to rural electrification, and reinforce the valuable principle of tribal sovereignty.

Lauren D’Souza is a manager for the Roberts Environmental Center at Claremont McKenna College and Publisher for the Low Institute for Political Economy.

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