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Energy and Economic Development – Putting it all together through Planning and

DEPARTMENT OF THE INTERIOR. Energy and Economic Development – Putting it all together through Planning and Inter- Governmental Cooperation. Assistant Secretary – Indian Affairs Office of Indian Energy and Economic Development DIVISION OF ENERGY & MINERAL DEVELOPMENT.

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Energy and Economic Development – Putting it all together through Planning and

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  1. DEPARTMENT OF THE INTERIOR Energy and Economic Development – Putting it all together through Planning and Inter- Governmental Cooperation Assistant Secretary – Indian Affairs Office of Indian Energy and Economic Development DIVISION OF ENERGY & MINERAL DEVELOPMENT

  2. Assistant Secretary – Indian Affairs Principal Deputy – Assistant Secretary Director Bureau of Indian Affairs Director Bureau of Indian Education Deputy Assistant Secretary Policy and Economic Development Deputy Assistant Secretary Management Office of Indian Energy and Economic Development Office of Self-Governance Office of Indian Gaming Division of Energy and Mineral Development We serve tribal communities by helping to stimulate job creation and economic development Division of Economic Development Division of Capital Investment

  3. Provide the best possible technical and economic advice and services in assisting Indian mineral owners to achieve economic self-sufficiency by creating sustainable economies through the environmentally sound development of their energy and mineral resources. Mission

  4. Summary of Economic Activity on Indian Lands (FY 2017) • Includes value of crops and jobs produced from irrigation water • ** Does not include renewable energy. Tribal renewable energy production was associated with about $100 million in value added, about $171 million in economic output, and supported an estimated 638 jobs. • *** Does not include the majority of existing sand and gravel or other industrial mineral projects. In FY 2017, tribal sand and gravel production was associated with about $103 million in value added, about $189 million in economic output, and supported an estimated 834 jobs. • Source: U.S. Department of the Interior Economic Report, Fiscal Year 2017

  5. Project Development Strategy • Develop the resource and the business together • Integrate with long term economic development plans • Build tribal capacity to match the development strategy • Technical assistance throughout project lifecycle

  6. “If you fail to plan, you plan to fail.” • - Benjamin Franklin

  7. WHY DOES PROACTIVE PLANNING MATTER? Creating or controlling the situation by CAUSING something to happen rather than RESPONDING to it.

  8. HOW TO BE PROACTIVE?

  9. Energy Planning • Define short term and long term goals • Work with tribal leadership to assess priorities and articulate vision for their energy future • Know your current energy usage • Residential, commercial, industrial, transportation • Evaluate available energy resources • Conventional and renewable • Inventory existing infrastructure and generation assets • Transmission & Distribution • Current Generation • Utility assessment • Current relationship • Interconnection and net-metering policies • Micro-grid: willingness to collaborate

  10. Interagency Collaboration Planning

  11. Tribal Economic Development through Energy and Mineral Development • Tribal Consultation • One project often cannot address all of these topics – so must either: • assess opportunities and match to goals, or • prioritize goals and assess opportunities that align with top goal(s). Primary reasons behind a Tribe’s desire to develop energy and mineral projects included one or more of the following topics: • Enhance Sovereignty • Energy Independence • Environmental Benefits • Economic Impacts • Reduce Energy Costs • Generate Revenue • Create jobs • Energy for new development

  12. U.S. ENERGY SYSTEM http://needtoknow.nas.edu/energy/interactive/our-energy-system/

  13. ENERGY QUESTIONS Do you know what the current energy flow is for your tribe? Do you know how energy is currently impacting economic development for your tribe? Do you know what your energy needs will be in 20 years? What resources are available for meeting long term demand?

  14. Additional Considerations • Infrastructure availability • Local policies and standards • Market forces • Current local energy supply mix • Power of current utility provider • Emerging technologies • Industry rivalry • Oil Prices (Supply / Demand; Strength of Dollar; OPEC / NOPEC cuts) • Gas Prices (Weather; New natural gas power plants; Increase in manufacturing) • Risk tolerance • Tribal capacity (technical, financial, and business) • Alignment with long term development plans

  15. ENERGY DEVELOPMENT CAPACITY Capacity Development Process Passive Aware Engaged Active Innovative Understand & monitor energy usage, costs, impacts & opportunities Pay the Utility Bills Evaluate & prioritize Energy Projects Invest in Energy Projects Collaborate & Optimize Source: Midwest Tribal Energy Resources Association (MTERA)

  16. Residential Energy Consumption

  17. Home Heating Fuel Cost Comparison1,500 square foot home with average insulation (prices as of May 2019)

  18. WOOD HEATING ECONOMICSCommercial Building - 4,000 sq ft

  19. WOOD HEATING ECONOMICSCommercial Building - 4,000 sq ft • Higher upfront cost than conventional heating appliances, but… • Fuel cost savings is substantial – after system is paid off, those dollars can go back into the community rather than to the fuel companies

  20. Low Cost Woody Supply Interagency Partnerships for Forest Health and Fire Mitigation

  21. Interagency CollaborationForest Management • BIA-USFS-BLM • Interagency Agreements (IAA) • Agreement between Forest Supervisors, BIA, and Tribe for forest management • 2017 Indian Tribal Energy Development and Self Determination Act • Biomass Demonstration Projects (638 contracts for management of federal forests)

  22. Solar PV Economics

  23. Interagency CollaborationCommunity Development • HUD, BIA, BIE, IHS • Compressed Earth Brick homes, schools, clinics, etc. • Tribe builds, agency leases • Community-wide renewable energy • Incorporate energy elements into community design • District heating • Community Solar vs. Residential Solar

  24. Fond du Lac Band of Lake Superior Chippewa • Issues • High energy costs • Ecological impacts of climate change • Goals • Reduce energy costs • Commitment to Kyoto accord to reduce use of fossil fuel by 20% by 2020 • Solutions • 1 MW PV solar facility near Black Bear Resort • Woody biomass district heating facility

  25. Fond du Lac Band of Lake Superior Chippewa, Minnesota • Achievements • 1 MW Black Bear Solar Project (2016) • $80,000annual cost savings • Up to 50% of Black Bear Casino & Resort electricity demand during peak output • Grant funding through Minnesota Power • Achieve 45% fossil fuel reduction by end of 2018 (all clean energy development combined)

  26. Fond du Lac Band of Lake Superior Chippewa, Minnesota • Achievements • Woody biomass district heating facility (2018) • Fully automated 1.7 MMBtu/hr biomass boiler system • Displaces 88% of propane use, ~$21,000/yr cost savings • 132 tons of wood chips per year

  27. Fond du Lac Band of Lake Superior ChippewaCollaborating Agencies • Office of Indian Energy and Economic Development • Environmental Protection Agency • Minnesota Department of Agriculture • Minnesota Power • National Renewable Energy Laboratories • NORESCO

  28. Blue Lake Rancheria, California Issues • Rural, geographically isolated community • Earthquake prone, at risk for tsunamis • Severe storms and flooding are common • Wildfire threat • Frequent power interruptions and outages Goals • Energy security • Disaster preparedness • Wildfire threat mitigation • Sustainable, clean energy development Solution - Advanced Microgrid: • 500 kW PV solar array • 950 kWh battery storage • 1 MW diesel generator • 175 kW Biomass gasification/fuel cell system (failed) Achievements • Off-grid emergency power for critical facilities • Designated Red Cross shelter-in place community Additional Benefits • $200,000 annual energy cost savings • 150 tons of carbon reduction per year

  29. Blue Lake Rancheria, CaliforniaCollaborating Agencies • Office of Indian Energy and Economic Development • California Energy Commission • Humboldt State University, Schatz Energy Research Center • Siemens • Idaho National Laboratory

  30. Aggregate is used for everything! • Road Construction and Maintenance • Emergency Preparedness and Response • Economic Development Gravel Planning and Aggregates Crushed Rock Sand

  31. Road Construction and Maintenance • Maintenance of the existing roads is vital. • 80% of reservation roads are unpaved gravel roads. • 83% of these roads are classified as “not acceptable.” Pro-active Planning • Use tribal aggregate resources when available as both potential $ savings for the project and as an economic driver for the tribe/allottee. • Use the right quality of aggregate for the right project.

  32. Examples of Interagency Collaboration The Confederated Tribes of the Warm Springs Reservation • Tribes, DEMD, and the Oregon Department of Transportation • Identify a viable aggregate source with a market • The BIA Regional Director and Superintendent were also informed of both the exploratory efforts and the ongoing meetings between the Tribe and State The Three Affiliated Tribes of the Fort Berthold Reservation • Tribes, DEMD, BIA, and BLM • Coordinated effort with to discuss trespassing claims at aggregate pits.

  33. Emergency Preparedness and Response Three Key Points in Time Development of a resource before a disaster occurs. Availability of a resource during a disaster. Access to the resource after the disaster. Construction Aggregates’ Role: The development and availability of the primary raw material required to mitigate, prepare, respond, and recover buildings, infrastructure, roads, bridges, and homes.

  34. Interagency Collaboration: FEMA/DEMD/TRIBE Lessons Learned: Location of Aggregate for Emergency Preparedness is Important Standing Rock Tribe • Post Flooding - The Tribe had 300,000 tons of gravel stockpiled prior to the flooding, however the stockpiles were unreachable due to muddy, impassable roads. • The Tribe currently has a sand and gravel EMDP grant from DEMD but the Tribe needed resources immediately. • DEMD informed the Tribe of two sites on the Reservation (based on an earlier visit) that had existing sand and gravel stockpiles, that were accessible. Sisseton-Wahpeton Oyate • The Tribes are currently encountering flooding on the Reservation. • They cannot get to the area where they usually get sand for sand bags so they had to resort to buying it from a fee owner on the Reservation.

  35. Economic Development • Most construction projects on or near reservations rely on aggregate resource supplies from non-Indian sources. • This is lost economic opportunities • Typical sales radius of aggregate – 30 miles • Remote reservations have paid up to THREE times as much for materials than consumers in metropolitan areas.

  36. Aggregate ConstructionOperation Example • Off Reservation Operation • Average cost of aggregate nationwide is ~$8.00/ton • Cost to transport is ~$.20/mile • Tribal Operation • Estimated cost to produce aggregate on Reservation is ~$5.00/ton (no taxes) • Minimum to no transportation costs • Assumptions • Both scenarios are new operations • Production is 100,000 tons/year • Capital costs ~$1.3 million • Buildings and equipment • *Sales price and taxes varies by state

  37. Aggregate ConstructionOperation Example Off Reservation Operation [100,000 tons/yr] • Assumes Tribe purchases aggregate from 40 miles away • ~$1.6 Million per year in cost • ~$9.3 Million over 5 years Tribal Operation [100,000 tons/yr] • ~$500,000 per year in cost • ~3.8 Million over 5 years including capital costs Total Tribal savings ~$5.5 Million over the course of 5 years Assumptions • Road construction at 1,200 tons/mile • ~83 miles/yr.  415 miles over 5 yrs.

  38. Planning for Growth and For Energy and Mineral Development Summarize RE and Agg here: • Construction and maintenance of roads. • Emergency preparedness. • Economic development. Reclaimed Gravel Pits

  39. Division of Energy and Mineral Development DEMD can assist with the following: perform initial exploration; define potential targets for development; perform market analyses to establish production/demand for a given commodity; provide outreach and education to tribes concerning energy or mineral development issues; perform economic evaluation and analyses of the resource; and promote completed projects at industry conferences and to prospective partners or investors.

  40. DEPARTMENT OF THE INTERIOR Website: http://www.bia.gov/WhoWeAre/AS-IA/IEED/DEMD/

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