Welcome to The New Interior, a periodic update from Steptoe & Johnson LLP to keep you informed of coming changes at the Department of Interior, and for related matters on Capitol Hill and elsewhere with a new administration taking charge in Washington, DC.  We intend to bring you the very latest on anticipated moves by the Obama Administration and in the 111^th Congress over the next several months, as a new direction takes shape for Interior-related positions and policies.

If you would like to speak with a Steptoe attorney about our Interior practice, please reply to this email or contact Tom Collier (202.429.6242 or tcollier@steptoe.com) or Jody Cummings (202.429.8096 or jcummings@steptoe.com). 

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Secretary Salazar Announces Five Exploratory Leases for OCS Wind Energy Projects

Secretary Salazar has just issued five exploratory leases for renewable wind energy production on the Outer Continental Shelf offshore New Jersey and Delaware.  These leases are the first of their kind ever issued by the federal government.  The leases were granted to Bluewater Wind New Jersey Energy, LLC; Fishermen’s Energy of New Jersey, LLC; Deepwater Wind, LLC; and Bluewater Wind Delaware, LLC.  The leases authorize data gathering activities, allowing for the construction of meteorological towers on the OCS from six to 18 miles offshore to collect site-specific data on wind speed, intensity, and direction.  The Secretary has indicated that the data collected under these leases will be shared with the Minerals Management Service and used to inform and support future commercial renewable energy projects, such as wind turbine farms, to help coastal States meet mandated renewable energy portfolio standards.   

Carcieri v. Salazar: Tribes Anxious About Next Steps

Much of Indian country is closely watching the Department and Capitol Hill these days to determine who will move first to address the Supreme Court’s February ruling in Carcieri v. Salazar.  The decision limits the Secretary’s authority to take land into trust under the Indian Reorganization Act to only those tribes that were “under federal jurisdiction” in 1934.  We have seen promising signals of support for a Carcieri fix among key Congressional leaders.  Senate Indian Affairs Committee Chairman Byron Dorgan (D-ND) and House Natural Resources Committee Chairman Nick Rahall (D-WV) have both indicated in hearings that their respective committees have held on the issue that legislation should be passed to ensure that all federally-recognized tribes can have land taken into trust.  In subsequent discussions with Chairman Dorgan, he confirmed to us an interest in having the Secretary’s land-into-trust authority restored for all tribes in the near future via legislative action.  To restore the Secretary’s authority, language has been proposed to Chairman Dorgan, Indian Affairs Ranking Member John Barrasso (R-WY), Interior Appropriations Subcommittee Chairman Norm Dicks (D-WA), and other Members that amends the IRA to: 1) remove the phrase “now under federal jurisdiction” from the statute and 2) retroactively affirm the status of parcels that have already been taken into trust by the Secretary.

The effort, however, will likely depend on attaching a legislative fix to a bill that is certain to end up on the President’s desk.  This could mean that Senate Appropriations Chairman and longtime Indian country advocate Daniel Inouye (D-HI) will be a huge player in any effort to push a legislative fix forward.  Still, tribes should not be overly optimistic about a fix occurring right away.  The powerful lobby of 17 states Attorneys General has weighed in with Sen. Dorgan’s and Rep. Rahall’s committees, asking that Congress not move quickly to restore the Secretary’s authority to take land into trust for all tribes.  Their effort presents a significant obstacle for any hopes that a Carcieri fix would pass as stand-alone legislation or even as part of some other measure.

While tribal advocates work on Congress to pass a permanent legislative fix, many continue to ask Interior to move forward with pending trust applications that are being held up because the Department has yet to decide for itself what it means for a tribe to have been “under federal jurisdiction” in 1934.  The Supreme Court never reached the meaning of that phrase in Carcieri, leaving Administration officials and Indian law attorneys nationwide to wrestle with how to interpret it.  Some tribes are asking the Administration to develop a task force composed of representatives from various federal agencies with hopes of reaching a broad, legally-supportable definition for the term.  We have heard rumblings that some at Interior may be pushing a definition that requires a tribe to demonstrate some form of interaction with the federal government prior to 1934 to meet the definition of being “under federal jurisdiction” at that time.  If adopted, such a standard would be problematic for many tribes. 

What steps the Department will take next are unclear.  It was encouraging to hear the new Assistant Secretary for Indian Affairs tell NCAI last week in Niagara Falls that a Carcieri fix is needed.  With the new Solicitor also now in place, tribes may see some action soon.  Tribes will have their shot to talk with Interior about the issue at the end of this month and in early July, as three consultation sessions have been scheduled: Minneapolis/St. Paul (June 29); Sacramento (July 1) ;Washington, D.C. (July 8). 

In the meantime, tribes with pending trust applications or plans to submit a trust application in the near future who have even the slightest question about their status as of 1934 ought to be gathering whatever data is available to them suggesting that they were “under federal jurisdiction” then.  Until Congress passes a legislative fix that restores the Secretary’s land-into-trust authority under the IRA for all federally-recognized tribes, it is very possible that any interim solution fashioned by Interior will require tribes to demonstrate, on a case-by-case basis, that they were “under federal jurisdiction” when the IRA was passed.    

House Appropriations Committee Approves 2010 Budget for Interior

Late last week, the House Appropriations Committee approved its FY 2010 budget for Interior and the Environment.  Both the President’s request and the Committee’s mark for 2010 is $32.3 billion, which is $4.7 billion more than the total enacted for 2009.  Key areas for the legislation include:

Climate Change: $420 million, $24 million above the President’s request and $189 million above 2009, for programs to address global climate change. This includes: $28 million to implement the Energy Independence and Security Act; $50 million for EPA’s Energy Star program; $10 million for new EPA grants aimed at reducing greenhouse gas emissions; $17 million to continue development of a Greenhouse Gas Registry; $67 million for USGS climate change research; $32 million for U.S. Forest Service climate change research; $15 million for the USGS National Global Warming and Wildlife Science Center; and $58 million to promote the development of renewable clean energy sources on Federal lands and waters.

Native Americans and Alaska Natives: The Committee approved $6.8 billion for American Indian programs, $654 million above the 2009 level and $39 million above the President’s request.  The funding measures focus on improving health care, tribal law enforcement and education.  There is also an emphasis on funding and direction for domestic violence and substance abuse in Indian country.  $4.0 billion was approved for the Indian Health Service, $18 million above the President’s request and $471 million above 2009 levels; Bureau of Indian Affairs funding was set at $2.6 billion, which includes monies for law enforcement officers, teachers, and jobs programs.

Wildland Fire: The Committee approved $3.66 billion, $669 million above 2009 and $165 million above the President’s request, for Interior and Forest Service efforts to prevent and fight wildfires.

National Parks: $2.7 billion has been approved for the National Parks, including funds for the 10-year initiative to upgrade parks before the 100th anniversary of the National Park Service in 2016, and $25 million for the new Park Partnership Project Grants Program.

U.S. Forest Service: $2.77 billion, including $100 million for the Legacy Road and Trail Remediation program aimed at protecting streams and water systems from damaged forest roads.

There are also a handful of important policy items in the bill:

• Language is included that disallows coal lease purchasers to pay bonus bids over 5 years. Instead, bonus payments would be made in the same manner as all Federal oil and natural gas purchasers, providing a $207 million scoring credit because bonus payments will be made in one year rather than spread over five.

• Language is included that defers $50 million in funding from oil and gas receipts that were a part of the 2005 Energy Policy Act of 2005. The ultra deepwater fund provides $50 million annually for research for recovering oil and gas from ultra-deep waters in the Gulf of Mexico.

• Language is included to implement a new fee for inspections of offshore oil and gas facilities. The fee ($2,000 to $6,000 per facility per year), will provide $10 million to partially offset the cost of the inspection program.

• Language is included (as in previous years) that takes 2 percent of the federal royalties from oil, gas, and mineral extraction ($49 million) and uses the scoring credit to partially offset the cost of administering the program.

• The bill includes language that prohibits EPA from including emissions from manure management systems in the mandatory reporting of greenhouse gas emissions.

• The bill includes language that prohibits EPA from promulgating a regulation to require Clean Air Act permits for emissions from biological processes associated with livestock production.

Interior Issues Report on Revoked Utah Oil and Gas Leases

The Department released a report in recent days prepared by Deputy Secretary David Hayes indicating that there were flaws in the process through which a set of 77 oil and gas leases were offered in Utah in the last days of the Bush Administration.  In releasing the report, Secretary Salazar indicated that in the rush to sell the leases, the Bush Administration bypassed normal reviews and consultations with the National Park Service.

On January 17, 2009, a federal district court enjoined the Department from entering into oil and gas leases for the 77 parcels in Utah that had been included in a December 19, 2008 auction. The court entered a temporary injunction against the sale of the parcels based on plaintiffs’ claims under the National Environmental Policy Act, the Federal Land Management Policy Act and the National Historic Preservation Act.  On February 6, 2009, Secretary Salazar concluded that the issues raised by the court, along with other concerns that had been raised about the lease sale, merited a special review.  Secretary Salazar directed that the leases be withdrawn from further processing, and requested that Deputy Secretary Hayes lead a Departmental team that would evaluate the lease sale and make recommendations.

The Hayes report is based on a review of the administrative record that accompanied the auction of the 77 parcels; an inspection of the parcels in question via overflight or on-the-ground inspection; interviews of BLM, National Park Service, and other Interior Department officials involved in lease-related decision-making; a listening session with state and local officials and representatives; a public town hall meeting held in late May in Utah; and conference calls with other interested parties.

The Hayes Report made several recommendations, all of which Secretary Salazar has directed to be implemented.  These include:

• communication and cooperation should be improved between BLM, the Park Service, and other leaseholders regarding leasing decisions;

• BLM should develop guidance to assist officials in making parcel-specific leasing decisions on lands near parks and other sensitive landscapes, including parcels that have wilderness characteristics or other values that may not be consistent with oil and gas development;

• the Acting BLM Director should appoint a multi-disciplinary team of officials who have not been involved in decision-making regarding the 77 parcels to make site-specific decisions on whether to reinstate any of the 77 parcels; and

• BLM should initiate a comprehensive air quality strategy for the region, in consultation with the Park Service, EPA, and state officials.

Among the recommendations, the Hayes report indicates that 14 of the 77 parcels are located near current production areas that are largely already dedicated to oil and gas development, and have existing infrastructure to facilitate such development, suggesting that reinstatement of the sale of those leases may be appropriate.  Another 16 parcels are located where the intensity of existing production is more limited, but not near particularly sensitive landscapes, suggesting that reinstatement of the sale of that 16 may also be appropriate.  The report indicates that the remaining 47 parcels need more detailed site-specific analysis.

Plan Announced to Reduce Environmental Impacts of Mountaintop Mining

The Obama Administration has announced that it will be targeting environmental impacts of mountaintop coal mining in Kentucky, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia through a coordinated approach between EPA, Interior, and the Army Corps of Engineers.  The agencies have signed a Memorandum of Understanding to implement an Interagency Action Plan on mountaintop coal mining.  The effort seeks to:

• minimize adverse environmental consequences of mountaintop coal mining through short-term actions to be completed in 2009;

• undertake longer-term actions to tighten the regulation of mountaintop coal mining;

• ensure coordinated and stringent environmental reviews of permit applications under the Clean Water Act and Surface Mining Control and Reclamation Act of 1997;

• engage the public through outreach events in the Appalachian region to help inform the development of Federal policy; and

• have federal agencies will work with appropriate regional, state, and local entities to help diversify and strengthen the Appalachian regional economy and promote the health and welfare of Appalachian communities.

ACE and EPA have planned immediate steps under the CWA for 2009 in efforts to minimize environmental harm:

• requiring more stringent environmental reviews for future permit applications for mountaintop coal mining;

• within 30 days of the date of the MOU, the Corps will issue a public notice proposing to modify Nationwide Permit 21 to preclude its use to authorize the discharge of fill material into streams for surface coal mining activities in the Appalachian region, and will seek public comment on the proposed action;

• strengthening permit reviews under CWA regulations in examining environmental impacts from mountaintop coal mining on streams and watersheds;

• strengthening EPA coordination with states on water pollution permits for discharges from valley fills and state water quality certifications for mountaintop coal mining operations; and

• improving stream mitigation projects to increase ecological performance and compensate for losses of these important waters of the United States.

Interior will also take on several initiatives:

• re-evaluate how the Office of Surface Mining Reclamation and Enforcement can more effectively oversee state permitting, enforcement, and regulatory activities under SMCRA;

• ensure the protection of wildlife resources and endangered species by developing CWA guidance with the U.S. Fish and Wildlife Service; and

• if the 2008 Stream Buffer Zone Rule is vacated (an April 27, 2009 request from Interior is currently pending in federal court), Interior will issue guidance clarifying the application of stream buffer zone provisions in a pre-existing 1983 SMCRA regulation to ensure mining activities will occur in a more environmentally protective way in or near Appalachian streams.

The three agencies plan to undertake a comprehensive, coordinated review of their existing regulations on mountaintop coal mining.  Further, they plan to create an interagency working group that will promote federal collaboration.  EPA and ACE also indicate that they have already directed their field offices to coordinate under new procedures to ensure CWA permit decisions are consistent with science and the law, reduce adverse environmental impacts, provide greater public participation and transparency, and address pending permits in a more timely manner.

Appointments Buzz

• Hillary Tompkins was confirmed as Solicitor of Interior late last Wednesday after Sen. Tom Coburn (R-OK) withdrew his hold on her nomination.

• Anne Castle has been confirmed as Assistant Secretary for Water and Science.

• Sylvia V. Baca has been named Deputy Assistant Secretary for Land and Minerals Management.  Her appointment does not require Senate confirmation.  Most recently, Baca served as general manager for Social Investment Programs and Strategic Partnerships at BP America Inc. in Houston.  She returns to Interior after serving as Assistant Secretary for Land and Minerals Management from 1995 to 2001.

• Michael Bean has been appointed Counselor to the Assistant Secretary for Fish and Wildlife.  Bean comes to the Department from the Environmental Defense Fund, most recently serving as co-director of its Center for Conservation Incentives.  Bean will advise the Assistant Secretary on endangered species policy and actions, as well as other wildlife policy issues.