El Paso asks feds to intervene
Pipeline company doesn't believe it needs tribe's consent on right of way

By Kathy Helms
Diné Bureau

WINDOW ROCK — El Paso Western Pipelines and the Navajo Nation have agreed to disagree for now on the value of the company's 900-mile network of natural gas pipelines crossing Navajo soil while waiting on the feds to draw a line in the sand determining whether El Paso even needs the tribe's consent.

El Paso doesn't believe it does and is asking the Department of the Interior to approve its application in order to avoid a conflict with the Federal Energy Regulatory Commission's (FERC) jurisdiction over El Paso under the Natural Gas Act.

El Paso, whose right-of-way expired Oct. 17, contends that failure by the Interior to give its approval "would be tantamount to requiring an unauthorized abandonment of El Paso's pipeline facilities."

In its Sept. 29 letter to Interior Solicitor Sue Ellen Wooldridge, El Paso said it has been engaged in lengthy negotiations with the Nation in an effort to renew its 1985 right-of-way contract on "fair and reasonable terms."

"To date, the Nation has demanded that El Paso remit several hundred times fair market value as remuneration (payment) for the Nation's consent to the renewal," the company said.

"The Nation's demand translates to about $50,000 per acre for an easement. In contrast, the fair market value of a perpetual easement on comparable off-reservation land is generally between $100 and $500 an acre," El Paso said.

The more than $400 million the Nation is asking for "equates to a $22 million payment annually over a 20 year period," according to El Paso. The Nation has rejected El Paso's most recent offer worth in excess of $200 million, forcing it to seek federal approval to bypass getting the Nation's permission.

"The parties are therefore approximately one quarter of a billion dollars apart on a 20 year renewal," El Paso said.

Bruce Connery, vice president for Investor and Public Relations for El Paso Corp. in Houston, said last week that the company is asking the Department of the Interior to "approve our application that it would not require Navajo consent. Keep in mind that the land is owned by the United States in trust for the Navajo Nation.

"I don't want to interpret the legal arguments. Better for it to speak for itself," he said.

Disrupting threat
El Paso contended in its filing with the Interior that the Oct. 17 expiration of its rights-of-way, which have been in existence since 1950, "threatens to disrupt El Paso's pipeline operations and service to millions of consumers in Arizona, New Mexico, Nevada, and California who depend on these very rights-of-way for their energy needs."

El Paso said the Nation's "unreasonable conditions for consent" do not bar the Interior's immediate approval of its application and its rights-of-way. El Paso argued:

• Under the Navajo Nation's Treaty of 1868 with the United States, "the Nation expressly agreed to permit construction of works of utility or necessity upon Navajo Lands subject to the payment of damages," and that Congress has not abrogated its treaty. Nor can Interior Secretary Gale Norton act in a manner or impose a regulation that would abrogate the treaty's provisions, El Paso said.

The Treaty of 1868 states: "They will not in future oppose the construction of railroads, wagon roads, mail stations, or other works of utility or necessity which may be ordered or permitted by the laws of the United States;

"(B)ut should such roads or other works be constructed on the lands of the reservation, the government will pay the tribe whatever amount of damage may be assessed by three disinterested commissioners to be appointed by the President for that purpose, one of said commissioners to be a chief or head man of the tribe."

In its discussion, El Paso said the Nation consented to its pipeline rights-of-way back in 1868 when the treaty was signed. "Under the Treaty, the Nation relinquished its power to oppose, then and in the 'future,' works of utility or necessity upon Navajo Lands ordered or permitted by the laws of the United States.

'Utility or necessity'
"Moreover, the Nation acquired its lands subject to the right of the Government to order or permit construction and operation of works of utility or necessity thereon," El Paso said.

"Thus, the Nation's right to occupy and use its lands has, since its inception, been subject to and burdened by the right of persons, including El Paso, 'to pass over, settle upon, or reside in [Navajo Lands]' as authorized by the United States and 'ordered or permitted' by FERC," the company said.

• The Bureau of Indian Affairs' (BIA) implementing regulation requiring tribal consent to rights-of-way crossing Indian land cannot be lawfully applied to tribes, including the Nation, that have chosen not to reorganize under the Indian Reorganization Act.

By not reorganizing under IRA, "the Nation is barred from invoking the consent provisions that are available solely to IRA tribes," El Paso said.

• Renewal of El Paso's right-of-way is necessary to avoid a conflict with FERC's jurisdiction over El Paso under the Natural Gas Act. "Neither Secretary Norton nor the Nation can effectively veto the decision of FERC to certificate El Paso's pipeline for public convenience and necessity."

The company said Secretary Norton has an obligation to consider El Paso's 54-year history of natural gas transportation over these rights-of-way "to ensure their actions do not interfere with the continuous supply of this gas at reasonable rates over rights-of-way maintained on reasonable terms."

• The Nation's imposition of unreasonable terms for its consent to renewal of the rights-of-way "is tantamount to an unlawful exercise of regulatory authority over non-Indians and is well beyond the scope of its tribal jurisdiction as defined by federal law," El Paso said.

"As such, the Nation's terms of consent are invalid and cannot prevent Secretary Norton from granting the rights of way sought in El Paso's renewal application," the company said.

El Paso's Connery said that literally, nothing has happened since the Oct. 13 deadline.

"There's nothing else that we can do, I guess, is the short answer. It takes a movement on their part to do that. The gas is flowing, we're serving our customers. There's been no impact. There's been no response from the Department of Interior as yet, so things just proceed on. We're hopeful the leadership will urge the negotiating team to take a more reasoned approach," he said.

"The bottom line is that the negotiating team will need to take a different stance vs. where they are today or hopefully members of the tribal council or others will persuade them to look at it in a more reasoned way," Connery said.