Renewable Energy Development on Native American Land

Taylor Kugler*

For many Native American tribes, energy development is their “economic lifeblood.”¹ While revenue from fossil fuel extraction is the most significant source of revenue for many tribes², there remains a large amount of untapped renewable energy potential on tribal lands.³ Tribal land is estimated to contain 6.5% of the total utility-scale renewable energy potential in the United States.⁴ Specifically, many tribes occupy lands with geothermal resources, several dozen tribes occupy lands ripe for wind power development, and over one hundred tribes occupy lands that have a high potential of producing biomass.⁵ Furthermore, many characteristics of tribal land “like open space and extreme weather patterns make vast portions of Indian Country well-suited for renewable energy development.”⁶

Moreover, many tribal households need reliable and affordable energy. It is estimated that one in seven households on tribal lands have no access to electricity.⁷ Of the households that do have electricity, some are forced to pay 275% more than the national average for electricity.⁸ This is due in part to some tribal lands being geographically isolated, making “energy hard to produce and expensive to deliver reliably to many tribal communities.”⁹ However, even tribes that are not geographically isolated face challenges to energy connection. For example, “only 30% of the Navajo Nation reservation has electricity despite being surrounded by large cities like Phoenix.”¹⁰

While the need for affordable and reliable energy is clear, tribes may hesitate to engage in renewable energy development for various reasons. Firstly, energy-related projects have historically harmed Native Americans.¹¹ Throughout time, Native American land has been poisoned through nuclear waste, power plants, or fossil-fuel development.¹² Unfortunately, energy projects still harm tribal land today, as seen through the Dakota Access Pipeline.¹³ Another source of hesitation stems from the regulations the project could be subject to. While tribes have sovereign authority over their lands, there are numerous ways in which a tribe could be subject to various state and federal regulations when constructing renewable energy projects.¹⁴ For example, federal law will likely be implicated if a tribe works with a third-party developer on a renewable energy project. The involvement of an outside third-party will likely cause the project to be subject to the Long-Term Leasing Act, the Right of Way Act, or the Indian Mineral Development Act.¹⁵ An even more complicated question arises once a renewable energy project begins to produce electricity––who regulates that electricity? Electricity is a highly regulated industry implicating Congress, federal agencies, states, regional transmission organizations, and municipalities.¹⁶ The complexity of electricity regulation may cause tribes to “be tied up in a tangle of state regulations that it was not prepared for . . . [and] hinder development.”¹⁷

Lastly, one of the most significant barriers to renewable energy development is a lack of financing and funding.¹⁸ Congress has passed many statutes, including the Indian Reorganization Act, the Indian Mineral Leasing Act, the Indian Mineral Development Act, and the Long-Term Leasing Act, which aim to give tribes different ways to use or lease their lands for various projects, including renewable energy development. However, the majority of these laws fail to promote tribal sovereignty adequately.

First, the process required by each statute is time-consuming and consequently disincentivizes investment. Second, the Secretarial approval process requires an inquiry about whether projects are in the interest of tribes, which inherently diminishes the opportunity for tribes to make those decisions themselves. Finally, none of the laws provide tribes the ability to play an active role in renewable energy development like the [Indian Mineral Development Act] IMDA provides for “traditional” resources.¹⁹

The Helping Expedite and Advance Responsible Tribal Homeownership Act (HEARTH Act), amended the Long-Term Leasing Act and aimed “to promote tribal self-determination and control over tribal lands.”²⁰ Specifically, “[u]nder the HEARTH Act, once Tribes’ governing Tribal leasing regulations are submitted to and approved by the Secretary of the Interior, they are authorized to negotiate and enter into surface leases under their approved HEARTH Act regulations without further approval from the Department of the Interior.”²¹ The HEARTH Act is now “the primary mechanism used thus far by Indian country renewable generators.”²² As of 2024, over one hundred tribes have had their land leasing regulations approved by the Department of the Interior.²³

While the HEARTH Act has many benefits, it is also vital to consider the drawbacks. The Act requires tribal regulations to be approved by the Secretary of the Interior, which imposes “delay, cost, and resource commitment at the front end.”²⁴ Additionally, the process requires that tribes “undertake extensive environmental reviews of proposed leases.”²⁵ Lastly, the Act allows for authorization solely of tribal leases but not any other type of development instruments.²⁶ While the HEARTH Act is a well-intentioned attempt to give Native American tribes more significant control over the surface leases, there are still many barriers preventing more wide-spread engagement.

In 2022, Congress passed the Inflation Reduction Act (IRA), their largest investment in tribal energy to date.²⁷ Specifically, the IRA allocated $220 million for tribal climate resilience²⁸ and adaptation programs, approximately $150 million for a tribal electrification program,²⁹ $15 million for fish hatchery operations and maintenance programs,³⁰ and $12.5 million for emergency drought relief.³¹ Additionally, the IRA “reformed the tax code in ways that may improve the administrability and efficiency of tax incentives for Indian Country.”³² As tribes are tax-exempt entities, they cannot monetize tax credits on their own.³³ The IRA helped provide a solution to this because the IRA “allows tribes and other tax-exempt entities to access the incentives in the form of a direct payment, instead of a typical tax break.”³⁴ Lastly, under the IRA, $75 million was allocated to the Tribal Energy Loan Guarantee Program.³⁵ The Tribal Energy Loan Guarantee Program “provide[s] loan guarantees…for the unpaid principal and interest due on any loan made to an Indian tribe…for energy development.”³⁶ “These guarantees means that if a project fails to break even, the federal government, rather than the tribe, is responsible for paying back the loan.”³⁷

Unfortunately, like the earlier statutes, tribes struggle to reap the benefits of the IRA fully. One of the main roadblocks preventing tribes from accessing this crucial funding is the requirement that they “secure an agreement to connect to the regional electrical grid . . . [which] is an expensive process that can take years and requires technical expertise that most tribes lack.”³⁸ Tribal representatives have stated that “unlike their bigger corporate rivals, tribes lack the upfront capital and internal know-how to navigate the regulatory hurdles to building and connecting a major power project to the grid.”³⁹ As a result, many tribes are left trying to get through the grid connection queue, spending millions in the process.⁴⁰ For example, the Standing Rock Sioux have spent three million dollars on technical studies and fees for their wind farm project but remain in the grid connection queue, with no guarantee of approval.⁴¹ Moreover, the deadlines placed on the allocation of funds risk the tribes missing out on the funding altogether.

Despite the need and potential for renewable energy development on tribal land, numerous barriers to development prevent the execution of these projects. Ultimately, the federal government must amend the current legislation to allow tribes to more freely use and access the programs, funds, and resources allocated to them. Operating under the current framework will continue to result in a frustrating and burdensome process where few tribes can actively develop renewable energy projects.

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* Taylor Kugler, J.D. Candidate, University of St. Thomas School of Law class of 2025, Digital Communications Editor of the University of St. Thomas Law Journal. 

1. Judith V. Royster, Tribal Energy Development: Renewables and the Problems of the Current Statutory Structures, 31 Stan. Env’t L.J. 91, 92 (2012). ↩︎
2. Id. ↩︎
3. Id. at 93. ↩︎
4. Anelia Milbrant, Donna Heimiller, & Paul Schwabe, Techno-Economic Renewable Energy Potential on Tribal Lands,Nat’l Renewable Energy Lab’y, NREL/TP-6A20-70807, at 44 (2018), https://www.nrel.gov/docs/fy18osti/70807.pdf. ↩︎
5. Royster, supra note 1, at 93–94. ↩︎
6. Malcolm M. Gilbert & Aspen B. Ward, What the Trust? Overcoming Barriers to Renewable Energy Development in Indian Country, 46 Pub. Land & Res. L. Rev. 133 (2023). ↩︎
7. Sara C. Bronin, The Promise and Perils of Renewable Energy on Tribal Lands, 26 Tul. Envtl. L.J. 221, 227 (2013). ↩︎
8. Gilbert & Ward, supra note 6, at 134. ↩︎
9. Gilbert & Ward, supra note 6, at 134. ↩︎
10. Valerie Volcovici, Why Native American Tribes Struggle to Tap Billions in Clean Energy Incentives, Reuters (Sept. 8, 2023, 8:35 AM), https://www.reuters.com/sustainability/climate-energy/why-us-tribes-struggle-tap-billions-clean-energy-incentives-2023-09-08/. ↩︎
11. Michael Maruca, From Exploitation to Equity: Building Native-Owned Renewable Energy Generation in Indian Country,43 Wm. Mary Envtl. L. & Pol’y Rev. 391, 418 (2019). ↩︎
12. Id. ↩︎
13. A New Hope for Shutting Down the Dakota Access Pipeline, The Sierra Club (Nov. 14, 2023), https://www.sierraclub.org/sierra/new-hope-shutting-down-dakota-access-pipeline. ↩︎
14. Margaret Schaff, Regulation of Electric Utilities on Indian Reservations: Tribal Governments’ Oversight of Renewable Energy Development and Utility Providers and Authority to Create Tribal Utilities, 41 Energy L.J. 261 (2020). ↩︎
15. Pilar M. Thomas, Developing Energy Resources and Other Economic Projects on Tribal Lands, in Emerging Issues in Tribal-State Relations1, 6 (2016). ↩︎
16. John Beaty, The Impact of the Inflation Reduction Act on Energy Justice and Green Energy Development in Indian Country, 12 LSU J. Energy L. & Res. 1, 25 (2024). ↩︎
17. Id. at 34. ↩︎
18. Thomas Elisha Jones & Len Edward Necefer, Identifying Barriers and Pathways for Success for Renewable Energy Dev. on Am. Indian Lands 12 (2016), https://www.energy.gov/sites/default/files/2017/05/f34/Sandia_Report_2016-311J.pdf. ↩︎
19. Gilbert & Ward, supra note 6, at 140. ↩︎
20. Royster, supra note 1, at 122. ↩︎
21. HEARTH Act Leasing, U.S. Department of the Interior, Indian Affairs, https://www.bia.gov/service/hearth-leasing (last visited Apr. 29, 2024). ↩︎
22. Maruca, supra note 11, at 426. ↩︎
23. Approved HEARTH Act Regulations, U.S. Department of the Interior, Indian Affairs, https://www.bia.gov/service/HEARTH-Act/approved-regulations (last visited Apr. 29, 2024). ↩︎
24. Royster, supra note 1, at 124. ↩︎
25. Royster, supra note 1, at 124. ↩︎
26. Royster, supra note 1, at 124. ↩︎
27. Fact Sheet: Inflation Reduction Act Advances Environmental Justice, The White House (Aug. 17, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/17/fact-sheet-inflation-reduction-act-advances-environmental-justice. ↩︎
28. Inflation Reduction Act of 2022, Pub. L. No. 117–169, 136 Stat. 2088 § 80001. ↩︎
29. Inflation Reduction Act of 2022, Pub. L. No. 117–169, 136 Stat. 2088 § 80003. ↩︎
30. Inflation Reduction Act of 2022 § 80001. ↩︎
31. Inflation Reduction Act of 2022, Pub. L. No. 117–169, 136 Stat. 2088 § 80004. ↩︎
32. Gilbert & Ward, supra note 6, at 155. ↩︎
33. Gilbert & Ward, supra note 6, at 155. ↩︎
34. Volcovici, supra note 10. ↩︎
35. Gilbert & Ward, supra note 6, at 154. ↩︎
36. Beaty, supra note 16, at 23. ↩︎
37. Beaty, supra note 16, at 23. ↩︎
38. Volcovici, supra note 10. ↩︎
39. Volcovici, supra note 10. ↩︎
40. Volcovici, supra note 10. ↩︎
41. Volcovici, supra note 10. ↩︎