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Dakota Access Changed Tribes' Outlook on Energy Companies, Denver Attorney Says

Native American protests over the Dakota Access Pipeline (DAPL) have had a profound impact on young leaders in tribes nationwide, and there are likely to be other confrontations going forward, a Denver-based energy attorney and former U.S. Attorney in the George W. Bush administration told a tribal energy conference in Albuquerque, NM, Monday.

In working with both tribes and energy companies, Troy Eid, with Greenberg Traurig LLP, said he witnessed "an amazing social protest moment," seeing young people from as far away as the Navajo Nation heading to North Dakota for the DAPL protest encampment near the Standing Rock Sioux Tribe's reservation. A former chair of the Law and Order Commission in the Obama administration, Eid offered opening remarks on federal policy regarding tribal resource development at the Law Seminar International's two-day program on "Tribal Energy in the Southwest."

"I think for a lot of Indian people, [the DAPL protest] has affected how a lot of future issues are going to be handled," Eid said. "Until the energy sector catches up with that reality, we are going to have a lot more potential for conflict. It is what it is, and things are quite different because of a lot of the images [lingering from the protest]."

Drawing on his past work on natural gas pipelines, Eid stressed the difference in regulatory permitting between gas and oil pipelines as part of the basis for the trouble DAPL encountered at the end of its four-state permitting process. Oil lines focus on state jurisdiction and gas pipelines are generally under the Federal Energy Regulatory Commission (FERC).

Eid contends that under FERC the process is more centralized, complex and generally takes longer -- five to six years -- compared to oil projects like DAPL, which go through separate state regulatory commissions and can be wrapped up more quickly -- about three years in the case of DAPL.

The split between regulatory focus for gas and oil projects dates back to the late 1930s, which was not a good time for Congressional sensitivity toward tribal interests, according to Eid, who thinks the tribes now get better consideration and input.

"In gas pipelines, you are dealing with the federal government, and tribes are used to that under the 'trust doctrine'. There is an ongoing relationship between the federal government and tribes," Eid said. "By definition, tribes don't normally have that same relationship with states."

He quoted the 19th Century Chief of the Supreme Court, John Marshall, who called states "the natural enemies of the tribes." States came into existence "at the expense of tribal lands," Eid said.

Eid said that North Dakota had much to gain from DAPL -- an estimated $110 million annually from severance taxes and another $10-$15 million in property taxes.  "And in addition, the state had all the risk of rail and truck transport of Bakken crude oil [that isn't shipped via pipeline]," he said.

As a result, the development of oil pipelines is subject to state interests as opposed to the national interest that is protected in gas pipeline cases before FERC, Eid said. "The trust responsibility is something that FERC has developed quite a bit of expertise on in understanding more about tribes. In contrast to state regulators, FERC deals with tribes all over the country on pipeline projects."

Another key distinction is the different federal roles in oil and gas projects, with the latter including the total scope of a project, while the oil oversight is piecemeal, limited to crossings of federal-managed lands. Thus, the U.S. Army Corps of Engineers' role in DAPL did not take into consideration the overall impact of the oil pipeline, but only its water crossing under a dammed portion of the Missouri River.

As a result, tribal consultations for oil projects do not get the same emphasis that they do in natural gas pipelines, said Eid, citing the 680-mile Ruby Pipeline project. Ruby operators identified 43 tribes along the route from Wyoming to the West Coast.

"In the Ruby project there were more than 900 re-routes as a result of the consultations with tribes," Eid said. "I had to help sell this to the company, and it was really unpleasant at the start, but when the audit was done at the end, we found that there was $11 million spent on re-routes, but that saved some $250 million in construction costs just by listening to the tribes on routing issues."

Eid noted that tribal monitors, trained by the pipeline company, were used extensively in the Ruby project, but in DAPL the company rejected their use.

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