About Tribal Energy Resource Agreements (TERAs)

A Tribal Energy Resource Agreement (TERA) grants authority to a tribe to review and approve leases, business agreements, and rights-of-way for energy development on tribal lands.

Title V of the Energy Policy Act of 2005 amends several sections of Title XXVI of the Energy Policy Act of 1992. Specifically, Sec. 2604 is amended to require that the U.S. Department of the Interior (DOI) establish a process by which a tribe can obtain a Tribal Energy Resource Agreement (TERA) granting authority to the tribe to review, approve, and manage leases, business agreements, and rights-of-way for energy development on tribal lands, without the approval of the Secretary of the Interior. In March 2008, the DOI issued its final TERA regulations (25 CFR Part 224). A flow chart outlining the basic TERA process is available.

Under a TERA, a tribe, at its discretion, may enter into leases and business agreements for the purpose of energy resource development on tribal land for:

1. Exploration for, extraction of, or other development of the energy mineral resources of the Indian tribe located on tribal land including, but not limited to, marketing or distribution;
2. Construction or operation of an electric generation, transmission, or distribution facility located on tribal land; and
3. A facility to process or refine energy resources developed on tribal land.

Under an approved TERA, a tribe may grant rights-of-way for the purpose of energy resource development on tribal land for construction or operation of a pipeline or electric transmission or distribution line serving:

1. An electric generation, transmission, or distribution facility located on tribal land, or
2. A facility located on tribal land that processes or refines energy resources developed on tribal land.

For tribes that do not elect to pursue a TERA or for energy resources that are not included in an existing TERA, existing regulatory programs for energy resource development on Indian lands continue to be available.

In accordance with 25 CFR 224.52, a TERA may address development of all or just a portion of a tribe's energy resources, but it must specify which type(s) of energy resources are included. It may provide for the tribe to assume all or some of the activities normally carried out by the DOI (except those activities that are inherently federal functions) but it must specify which activities the tribe will assume. The issuance of a TERA does not affect the applicability of federal law except for Section 106 of the National Historic Preservation Act and the National Environmental Policy Act (NEPA). Under an approved TERA, Section 106 consulting does not apply because there is no federal undertaking required to approve leases, business agreement, or right-of-way. In addition, NEPA does not apply because there is no federal action required to approve leases, business agreements, or grants of rights-of-way entered into under the TERA.

To obtain a TERA, a tribe must submit an application and a proposed agreement for review and approval by the DOI. The requirements for the TERA application and proposed agreement are itemized in 25 CFR 224.53 and 25 CFR 224.63. In its TERA application, a tribe must describe the expertise it will use to regulate the development of its energy resource(s), including evaluation of the environmental effects and effects on cultural resources of leases, business agreements, and rights-of-way it may enter into under the TERA. In its proposed TERA, a tribe must include an environmental review process for individual leases, business agreements, and rights-of-way it may enter into under the TERA.

Each approved TERA must have a provision under which the tribe will establish and ensure compliance with an environmental review process for individual leases, business agreements, and rights-of-way (25 CFR 224.63(c)). The environmental review process must ensure that the tribe will, at a minimum:

1. Identify and evaluate all significant environmental effects (as compared to a no-action alternative), including effects on cultural resources, arising from a lease, business agreement, or right-of-way;
2. Identify proposed mitigation measures, if any, and incorporate appropriate mitigation measures into the lease, business agreement, or right-of-way;
3. Inform the public and provide opportunity for public comment on the environmental impacts of the approval of the lease, business agreement, or right-of-way;
4. Provide for tribal responses to relevant and substantive public comments before tribal approval of the lease, business agreement, or right-of-way;
5. Provide for sufficient tribal administrative support and technical capability to carry out the environmental review process; and
6. Develop adequate tribal oversight of energy resource development activities under any lease, business agreement, or right-of-way under a TERA that any other party conducts to determine whether the activities comply with the TERA and applicable federal and tribal environmental laws.

In addition, to ensure appropriate implementation, each TERA must provide for the following:

• Interested party petitions. An interested party (i.e., person or entity that has demonstrated that its interest has sustained or will sustain an adverse environmental impact as a result of a tribe's failure to comply with a TERA) may petition the Secretary to review a tribe's compliance with a TERA, provided the interested party has exhausted all remedies established by the tribe (25 CFR 224, Subpart E).
• Periodic reviews and evaluations. The IEED will conduct periodic reviews and evaluations to monitor a tribe's performance of activities associated with the development of energy resources and review compliance with a TERA (25 CFR 224, Subpart F). These reviews will be conducted at least annually during the first three years of the agreement. If noncompliance conditions are identified, the IEED must undertake specific actions.
• Reassumption of authority by the DOI. The DOI may reassume all activities included within a TERA without the consent of the tribe if it issues a written finding of imminent jeopardy to a physical trust asset as part of (1) its response to an interested party petition or (2) a periodic review and evaluation (25 CFR 224, Subpart G).
• Rescission of a TERA by the tribe. A tribe may rescind a TERA and return all authority and activities assumed under that TERA to the Secretary (25 CFR 224, Subpart H).
• General appeals. DOI decisions and inaction may be appealed by an entity that would/could be adversely affected by a decision of inaction. Entities that may file an appeal include (1) a tribe; (2) a third party that has entered into a lease, business agreement, or right-of-way with a tribe; or (3) an interested party (25 CFR 224, Subpart I).

Approval of a TERA is contingent on a determination by the IEED that the application addresses all required elements specified in the TERA regulations. This includes demonstration that the tribe has sufficient capacity to perform the technical, administrative, and regulatory functions associated with energy resource development activities, as well as the ability to evaluate the environmental effects of energy development actions, conduct adequate public review processes, and ensure compliance with applicable environmental laws.

The TERA regulations also require the DOI to conduct evaluations of all TERA applications in accordance with the requirements of NEPA.