Indian Natural Resources--Part II:

Coal, Oil, and Gas--Better Management Can Improve Development and Increase Indian Income and Employment

RED-76-84: Published: Mar 31, 1976. Publicly Released: Feb 7, 1977.

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Indian income from oil and gas in fiscal year 1974 amounted to about $43.1 million. Indian income from other minerals, including a large amount from coal, amounted to about $9.6 million during the same period. There are opportunities to improve development of mineral resources, increase the economic benefits to the Indian people, and provide the Nation with increased energy sources. Such development can provide needed jobs and income to Indians living on or near reservations, a group with a high rate of unemployment.

The Bureau of Indian Affiars has placed limited emphasis on developing Indian coal, oil, and gas resources. Thirteen of the 16 Indian coal leases had fixed royalty rates and, therefore, the income per ton produced did not rise during periods of rising coal prices. The Geological Survey has not adequately fulfilled its responsibilities for mineral resource development on Indian reservations.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: To improve development of mineral resources, the Secretary of the Interior should direct the Commissioner of the Bureau of Indian Affairs (BIA) to: develop complete mineral inventories for all reservations having such resources; develop, through use of available resource information, mineral management plans taking into consideration the wishes of the Indian people, and update these plans as additional information becomes available; determine the mineral expertise staffing BIA needs to adequately fulfill its trust responsibilities at its headquarters and field locations and take the steps necessary to meet these needs; establish procedures to exchange and distribute between area and agency offices information relating to experience gained by the tribes in developing mineral resources; and update and maintain BIA's operations manual and expedite revisions to the Code of Federal Regulations when changes are necessary. To increase Indian employment in the minerals industry, the Secretary should direct the Commissioner of BIA to: establish specific requirements in all Indian mineral leases for Indian preference in hiring as well as procedures for lessees to regularly report to BIA and the tribes on the status of Indian employment; and establish procedures for either BIA or the tribe to insure that Indian preference in hiring provisions and requirements are being followed. To help insure that the Indian people benefit from the increasing value of their coal resources and to improve coal-lease management, the Secretary should direct the Commissioner of BIA to: establish a coal-lease royalty rate policy based on a percentage of the selling price of coal, with a fixed amount (floor) below which the price cannot fall; determine whether the 2,560-acre limitation and the criteria for exceeding the limitation are valid and revise the Code of Federal Regulations accordingly; and insure that BIA's lease files are adequately documented to support all actions. To improve Geological Survey management of leases for Indian mineral lands the Secretary should require the Director of Geological Survey to: establish a penalty fee for late payment of royalties and enforce such requirements as necessary; instruct lessees to submit reports required by Federal regulations and lease terms when they are due and require purchasers of Indian mineral resources to submit reports on products purchased; establish procedures to coordinate reservation reclamation activities among the various

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