Pipeline firms get great deals on Indian lands

By Kathy Helms
Diné Bureau

FORT DEFIANCE — Pipeline companies operating on Navajoland allegedly are getting "sweetheart deals" on rights of ways, according to a December 2004 article published by SmartMoney.com.

In August 2003, Alan Balaran, special master overseeing the Cobell v. Norton class-action lawsuit, filed a report in U.S. District Court alleging the Bureau of Indian Affairs (BIA) was giving pipeline companies "lowball deals" on Indian land being developed in the San Juan Basin. BIA has denied the charges.

A Bureau of Land Management (BLM) spokesman told SmartMoney.com that the Farmington field office has approved more rights of way than any other field office in the United States.

Last month, the U.S. House Resources Subcommittee on Energy and Minerals held a hearing to examine the growing global appetite for energy and its effects on the United States. The Energy and Minerals committee chairman introduced the North American Energy Freedom Act of 2005 to work toward U.S. energy independence by 2025.

The act is expected to be included in this year's comprehensive energy bill package to be introduced in Congress by Sen. Pete Domenici, R-N.M. The Energy Freedom Act would create a 16-member committee representing the United States, Canada and Mexico to work for energy independence within 20 years through natural gas, oil, coal, renewable and alternative energy development.

Domenici's previous energy bill, which did not pass Congress, would have provided more than $18 billion in tax incentives to boost development of oil, natural gas, coal and nuclear power, and an additional $20 billion for construction of a natural gas pipeline from Alaska to Chicago. Domenici and New Mexico's Sen. Jeff Bingaman are working on a new round of incentives to be included in this year's energy bill.

A March 2004 report from the U.S. Department of Energy noted that the world's remaining conventional oil resources total 2.7 trillion barrels, not including North America's total of 3.7 trillion barrels, with about 2 trillion in U.S. oil shale found in Colorado, Utah, Wyoming, Kentucky, Ohio and Indiana.

The report also found that it would be possible to start an oil shale industry by 2011 that would produce 200,000 barrels per day initially and 2 million bpd by 2020, with direct economic value to the United States of about $1 trillion.

Last November in an address to the National Coal Council, Secretary of Energy Spencer Abraham said the nation has a 250-year domestic supply of coal. Abraham said Department of Energy (DOE) researchers and scientists are working with counterparts in other nations to develop new methods for using coal.

The key is technology, he said. "They are developing the cutting-edge technologies that will permit not just us, but nations like Russia, China, Australia, and others, to burn coal cleanly and efficiently."

He said that's why DOE has laid out a $2 billion commitment to the development of clean coal technology, with the first round of grants unveiled around 2002. The Clean Coal Power Initiative is a cost-shared program between government and industry.

New Mexico is among the second round of grant recipients, with an unnamed project receiving $79 million to develop a multi-pollutant control process to remove 99.5 percent of sulfur dioxide, 89 percent removal of SO3 and nitrogen oxides, and 90 percent removal of mercury from plant emissions.

The New Mexico project and others will contribute to the FutureGen program a cost-shared, $950 million project to create the world's first near-zero-emissions fossil fuel plant. FutureGen is made up of a national network of public-private sector partnerships including more than 150 organizations in 40 states, three Indian nations and two Canadian partnerships, Abraham said.

Last November, The Wall Street Journal reported that Peabody Energy Corp. the world's largest U.S. coal producer and operator of the Black Mesa and Kayenta mines on Navajoland plans to double its annual production to 400 million tons by 2010.

RAG Coal International, one of the leading privately owned international hard-coal producers, stated in a 2004 report that it had signed final contracts with Peabody Energy for the sale of RAG Australia Pty. Ltd. and the Twentymile mine in Colorado.

RAG is the majority shareholder in STEAG AG, parent company of STEAG Power LLC, original developer of the Desert Rock Energy Project.