Air Pollution Control on the Southern Ute Indian Reservation

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1 From the SelectedWorks of Sam W. Maynes October 1, 2012 Air Pollution Control on the Southern Ute Indian Reservation Sam Maynes Available at:

2 Air Pollution Control on the Southern Ute Indian Reservation by Sam W. Maynes Maynes, Bradford, Shipps & Sheftel, LLP Since 1999, the Southern Ute Indian Tribe and State of Colorado have been working cooperatively under a unique intergovernmental agreement (sometimes referred to herein as IGA ) to develop air pollution control programs for the Southern Ute Indian Reservation. 1 On March 2, 2012, the United States Environmental Protection Agency delegated authority to the Tribe to administer the first program developed under the cooperative effort. 2 The Tribe thereby became the first Indian tribe in the country with authority to administer the Clean Air Act s Title V, 40 C.F.R. Part 70, operating permit program. 3 Title V of the Clean Air Act Congress added Title V to the Clean Air Act in , at the same time provisions were added that authorize EPA to treat Indian tribes in the same manner as states for purposes of administering air pollution control programs on their reservations. In Title V, Congress gave states three years to develop and submit for EPA approval a permitting program for major sources of air pollution. 5 Major sources are defined, in a complex way, as any stationary facility or source of air pollutants which directly emits or has the potential to emit one hundred tons per year or more of any air pollutant. 6 To be approvable, the state programs must include certain minimum elements that are listed in Title V and EPA regulations. 7

3 Among the required minimum elements, Title V permitting programs must require owners and operators of major sources to apply for and receive an operating permit within 12 months after the source has begun to operate or within 12 months of the source becoming subject to an approved program. 8 The permits contain monitoring, record keeping and reporting requirements. 9 Owners of sources with operating permits must certify that the source is in compliance each year, and the permits must be renewed every five years. 10 The permit fee provisions of Title V require sources to pay fees sufficient to cover the costs of developing and implementing the permit program. 11 Title V does not impose new substantive air pollution control requirements 12 ; rather, operating permits compile all of the requirements of the Clean Air Act applicable to a facility into one document. 13 Congress objective, by requiring the incorporation of the underlying applicable requirements into a single document, was to enable owners and operators, states, EPA, and the public to understand better the requirements to which each source is subject and whether the source is meeting those requirements. 14 In obtaining delegation to administer a Part 70 program on the Reservation, the Tribe overcame several obstacles. An examination of those obstacles reveals that the Tribe s and State s system for regulating air pollution on the Reservation satisfies most of the IGA s objectives but is administratively cumbersome and may not be a model for other tribes. The Southern Ute Indian Reservation 2

4 Located in southwestern Colorado, the Southern Ute Indian Reservation is approximately 700,000 acres in size. 15 The Reservation includes tribal trust lands, Indian allotments, homestead fee tracts, tribally-owned or Indian-owned fee land, Bureau of Reclamation, National Forest, and Bureau of Indian Affairs lands, and State-owned land. This patchwork pattern of reservation land ownership is commonly referred to as a checkerboard reservation. The Southern Ute Indian Tribe currently owns (either legally or as a federal trust beneficiary) approximately 300,000 acres of the surface estate within the exterior boundary of the Reservation as well as title to much of the mineral estate. The Reservation includes substantial portions of the northern San Juan Basin, and, since the 1950s, natural gas exploration and development have been widespread. As a result of that energy development, several thousand well-pads dot the Reservation, and roads and gathering pipelines crisscross much of the land of the Tribe and its neighbors. Among the many oil and gas facilities on the Reservation, there are currently 42 major sources of air pollution, consisting mainly of natural gas wells, compressors, and associated processing facilities and equipment. 16 The number of major sources on the Reservation amounts to approximately one third of the major sources in all of Indian country nationwide. 17 There are also an estimated one thousand minor sources of air pollution located on the Reservation. 18 Regulation of Air Pollution Inside and Outside Indian Country 3

5 Outside Indian country, air pollution is generally regulated by the state where the source is located. EPA delegates responsibility to any state that desires to create its own air pollution control programs, provided the state program is no less stringent than those established by the EPA. 19 Clean Air Act 301(d) authorizes the EPA to treat Indian tribes as states for various CAA programs. In order for a tribe to receive a delegation of authority from EPA to implement a particular CAA program on its reservation, the tribe must apply for and receive Treatment in the same manner as a State (TAS) status. Under the Clean Air Act, EPA is authorized to grant TAS status when a tribe meets the following criteria: (A) the Indian tribe has a governing body carrying out substantial governmental duties and powers; (B) the functions to be exercised by the Indian tribe pertain to the management and protection of air resources within the exterior boundaries of the reservation or other areas within the tribe s jurisdiction; and (C) the Indian tribe is reasonably expected to be capable, in the judgment of the Administrator, of carrying out the functions to be exercised in a manner consistent with the terms and purposes of this chapter and all applicable regulations. 20 In the absence of a delegation of authority to a tribe, EPA regulates the emission of air pollutants from sources in Indian country. 21 Obstacles to Obtaining Delegation egation of the Title V Program I. A State Challenge to the Scope of the Tribe s Authority to Regulate Air Pollution Sources. The Southern Ute Indian Tribe overcame two major obstacles in obtaining 4

6 approval of its TAS application for the purpose of administering the Part 70 operating permit program. The first obstacle was a potential challenge by the State of Colorado to the scope of the Tribe s authority to regulate air pollution sources on the Reservation. Under section 301(d) of the Clean Air Act, one of the required eligibility criteria for obtaining TAS approval is that the functions to be exercised by the Indian tribe pertain to the management and protection of air resources within the exterior boundaries of the reservation or other areas within the tribe s jurisdiction. EPA interprets that provision, and the overall structure of the Clean Air Act, as a delegation of federal authority, to tribes approved by EPA to administer Clean Air Act programs in the same manner as states, over all air resources with the exterior boundaries of a reservation for such programs. 22 Under that interpretation, tribes with checkerboard reservations are not required to demonstrate inherent authority over fee lands within their reservation. 23 Instead, they can rely on the federal statute as a grant of authority. 24 In 1998, the Tribe submitted a TAS application. In its application, the Tribe requested it be treated as a state with respect to the administration of Clean Air Act programs over all land located within the exterior boundaries of the Reservation. The specific purposes of the TAS application were to receive grant funding under Clean Air Act section 105 and recognition as an affected state to comment on draft operating permits proposed by neighboring permitting authorities. The basis for the Tribe s assertion of jurisdiction to regulate all sources of air 5

7 pollution located within the Reservation s exterior boundaries under the Clean Air Act, including non-indian owned sources located on fee lands, was two-fold. First, the Tribe relied on EPA s interpretation that, in adding section 301(d) to the Clean Air Act, Congress specifically delegated federal jurisdiction to tribes. Second, even if a demonstration of inherent tribal jurisdiction were required, the Tribe would still qualify for TAS status under the Clean Air Act for all lands within the Reservation because air pollution is a matter that affects the general welfare of the Tribe. 25 In comments on the Tribe s TAS application, the State of Colorado objected insofar as the application requested tribal Clean Air Act authority over non-indian owned sources located on fee land within the Reservation. At that time, in the absence of a federal Title V permitting program and in the absence of an EPAapproved tribal Part 70 program, the State was issuing Title V permits to sources located on the Reservation. The State was doing so notwithstanding that EPA s approval of the State s Part 70 program specifically excluded sources located on the Southern Ute Indian Reservation and in other areas of Indian country. 26 In objecting to the scope of the Tribe s TAS application, and in support of its authority to permit non-indian owned source on fee land, the State cited the Act of May 21, 1984, Pub. L. No , 98 Stat. 201, 202 ( P.L ). 27 In P.L , Congress confirmed the Reservation s exterior boundaries. 28 The law, however, also provides that the Tribe s territorial jurisdiction... over persons other than Indians and the property of such persons [is] limited to Indian trust lands within the [Southern Ute Indian] reservation. 29 In other words, in 6

8 exchange for obtaining confirmation of the Reservation s exterior boundary, the Tribe relinquished territorial jurisdiction over non-indians and the property of non- Indians located on fee land within the Reservation. That relinquishment made explicit what already was arguably the state of the law on checkerboard reservations generally. 30 The State s contention was that the above-quoted language in P.L , by negative implication, established State jurisdiction to regulate non-indian owned sources located on fee lands. In reply, the Tribe argued that Congress grant of federal authority to eligible tribes over reservations supersedes or repeals by implication any preexisting limitations on the Tribe s authority to regulate non-indian sources located on fee land. That argument was consistent with the determination made by EPA in its interpretation of section 301(d). 31 EPA s position was that, without an EPA delegation of authority, neither the Tribe nor the State had authority to administer Clean Air Act programs on the Reservation; in the absence of a delegation, EPA is the regulatory authority on the Reservation. All of the entities agreed that split or dual regulation within the Reservation was not desirable. Notwithstanding the deference that would be given to EPA s interpretation of section 301(d) and the legal support for the argument that the section superseded any previous limitation on the Tribe s authority, the Tribe realized that it likely would face lengthy and costly litigation regarding its TAS application. Accordingly, to avoid a prolonged legal dispute and in hopes of achieving several other benefits, the Tribe and State negotiated an intergovernmental agreement. 7

9 Under the intergovernmental agreement, the Tribe and State became partners and share responsibility for the regulation of air pollution on the Reservation. Together, the Tribe and State formed a joint commission called the Southern Ute Indian Tribe/State of Colorado Environmental Commission ( Environmental Commission ). 32 The Environmental Commission consists of three members appointed by the Governor and three members appointed by the Tribal Council. 33 The Environmental Commission has two responsibilities. First, the Environmental Commission selects the Clean Air Act or other air pollution control programs that will apply on the Reservation and adopts the program regulations. The Environmental Commission carries out this responsibility through a public review and comment rulemaking process similar to the rulemaking processes used by federal and state agencies. 34 The second responsibility of the Environmental Commission is to serve as an administrative review body hearing appeals from owners and operators who are dissatisfied with tribal decisions made in the administration of the programs. For example, if the operator of a natural gas compressor station believes that the Tribe has unfairly taken an enforcement action for alleged noncompliance with a tribally-issued Part 70 permit, the operator can appeal to the Environmental Commission. Under the Environmental Commission s procedural rules, the appellant is entitled to a hearing at which evidence can be presented, and matters at issue must be proven by a preponderance of the evidence. The Tribe s responsibility under the intergovernmental agreement includes seeking EPA approval to administer the Clean Air Act programs that are adopted 8

10 by the Commission and to act as the administrator of the programs, once EPA approves them. The Tribe incorporates the regulations and standards set by the Environmental Commission as part of its application to EPA for delegation of authority to administer Clean Air Act programs on the Reservation. Once the delegation is received, the Tribe has the responsibility for day-to-day administration and enforcement of the Commission s standards, rules and regulations. As noted above, tribal civil enforcement actions are subject to administrative review by the Environmental Commission. Final decisions of the Environmental Commission are subject to judicial review in federal court. 35 EPA grants, during the initial phases of program development, and permit fees, during the implementation phase of the programs, fund the staff and program costs of the Tribe, as well as the Environmental Commission s necessary expenses, if any. In addition to avoiding litigation, the other benefits the parties hoped to achieve through the IGA included (1) eliminating jurisdictional confusion and providing certainty to would-be regulators and to the owners and operators of air pollution sources, (2) minimizing duplicative efforts and expenditures of monetary and program resources, (3) crafting air programs that reflect the particular interests of the Tribe yet remain compatible with State air quality goals, and (4) guaranteeing local input in the setting and enforcement of air quality standards. Following the signing of the IGA in 1999, it took five years to obtain passage by Congress of the legislation needed to implement the IGA. 36 Federal legislation was needed for several reasons. First, without federal legislation, it was unclear 9

11 who had jurisdictional authority to regulate non-indian owned sources located on non-indian fee land. Second, implementation of the IGA was expressly conditioned on passage of federal legislation. And third, federal legislation was needed to clarify and provide for enforcement authority through the federal courts. The legislation authorizes the EPA to grant the Tribe treatment as a state status under the Clean Air Act for such time as the intergovernmental agreement remains in effect. 37 This status enables the Tribe to administer air quality programs on all lands within the exterior boundaries of the Southern Ute Indian Reservation, as delegated by the EPA and in accordance with the rules promulgated by the Environmental Commission. Additionally, the legislation provides for exclusive federal judicial review in the United States Court of Appeals for the Tenth Circuit of final actions by the Environmental Commission 38 and authorizes the Tribe or the Environmental Commission, as is appropriate, to file a petition for declaratory or injunctive relief in federal district court, or for other orders in aid of enforcement, where there is a failure to comply with a final civil order of the Tribe or the Environmental Commission made pursuant to an air quality program established under the IGA. 39 With the signing of the intergovernmental agreement and the passage of the federal legislation, the Tribe was finally able to obtain, without objection by the State, delegated jurisdictional authority over all sources of air pollution located within the Reservation, notwithstanding land ownership status. 10

12 In considering whether to follow the path chosen by the Southern Ute Indian Tribe, other tribes with checkboard reservations should consider the following: From a tribal sovereignty perspective, the Southern Ute Indian Tribe s approach is a jurisdiction sharing approach under which the State has more and the Tribe has less of a role than if the Tribe had sought and obtained a delegation without an intergovernmental agreement with the State. In light of the United States Court of Appeals for the District of Columbia Circuit decision in 2000, holding that EPA s interpretation of the Clean Air Act as a delegation to tribes of authority over all air resources within reservations is a correct interpretation of Congress s intent, other tribes with checkerboard reservations probably do not need to make such a jurisdictional compromise. 40 The author is unaware, however, of any case ruling on whether section 301(d) supersedes or repeals by implication, any other federal statute. 41 From a time, cost, and certainty perspective, the Southern Ute Indian Tribe s approach has probably taken at least the same amount of time as a litigation approach, but the cost has been less and the approach has resulted in more certainty for interested parties (i.e., the Tribe, State, EPA, and regulated entities). From an intergovernmental relations perspective, the Southern Ute Indian Tribe s approach has undoubtedly led to a much closer and better relationship between the Tribe and State than if the parties had litigated the scope of the Tribe s authority to regulate sources of air pollution on the Reservation. II. Navigating the Approval Process. Navigating the layers of approval required for Environmental Commission adoption of the necessary program regulations and EPA approval of the program was the second obstacle the Tribe overcame in obtaining the delegation of authority to administer a Part 70 operating permit program on the Reservation. 42 That process, which took years to complete, included the following: tribal staff development of regulations for the Part 70 program (which was a difficult and long process that included consultation with 11

13 internal tribal entities and the EPA, even though the federal regulations define what must be included); review and approval of the regulations by the Tribe s governing body, the Southern Ute Indian Tribal Council, for recommendation to the Environmental Commission; the Environmental Commission s public notice and comment rulemaking process; Tribal Council review of the final Environmental Commission-adopted rule and Tribal Council approval to submit the rule to EPA as part of a tribal application for program approval, along with a tribal application for TAS status; and processing EPA-required and recommended changes to the regulations (which involved a repeat of the process for obtaining Environmental Commission adoption of the initial regulations and Tribal Council approval). III. Demonstrating Capability. Finally, the Tribe had to develop and demonstrate its capability to administer an air pollution control program in order to obtain the delegation to administer the Title V program. The Tribe demonstrated its capability by citing its experience managing federal programs, including other federal environmental programs, a public health program, and the Southern Ute Indian Health Clinic, under federal grants and contracts. 43 The Tribe also cited its experience managing triballyfunded programs and businesses. 44 There were two other important ways, however, that the Tribe demonstrated it was capable. First, the Tribe showed that its air quality program staff has the technical training and specialized expertise to write permits, conduct inspections, and enforce compliance with program regulations. Finding and hiring individuals with the requisite knowledge and experience was 12

14 not an easy task because industry frequently hires those professionals into better paying industry jobs. Through assistance from EPA and the State s Air Pollution Control Division, however, tribal staff received technical training and hands-on experience in permit writing, inspections, and compliance enforcement. 45 Second, although not required by EPA, the Tribe determined that a web-based permitting and compliance computer system was needed so that both tribal staff and industry could file and track the processing of permit applications and monitor compliance. The Tribe did not want to take on responsibility for the Title V program using an antiquated hard-copy paper system. For development of the web-based system, the Tribe hired an outside environmental software contractor. Lessons Learned in the Development of the Reservation Air Program to Date As a result of the Tribe s experiences, some practical lessons were learned and some observations can be made about the Reservation Air Program and about development of tribal air pollution control programs in Indian country generally. First, although the process was complex and protracted, the development and implementation of the Reservation Air Program is a good example of how intergovernmental cooperation can be used to resolve difficult jurisdictional issues and to manage a shared resource for the benefit of all residents in a common airshed. In this case, no one disputed that it was in the Tribe s and State s interests, as well as in the best interest of the owners and operators of sources of air pollution, for there to be a single Reservation Air Program applicable to all sources of air pollution on the Reservation without regard to the ownership status of the 13

15 land on which the source is located. The alternative was separate tribal, state, and federal air pollution control programs and potential jurisdictional disputes. Structuring and implementing a system for achieving the objective of a single regulatory program on the Reservation involves an extraordinary level of intergovernmental cooperation. Such cooperation takes many forms, including monthly status meetings and consultations between tribal and EPA staff, periodic planning meetings between tribal and State staff, technical assistance provided by both EPA and the State to the Tribe, sharing technical information and expertise, training by EPA of tribal staff in inspections and permit writing, funding support from EPA, and collaborative planning. Second, from a tribal sovereignty perspective, it has long been important to the Tribe to be the primary regulatory authority for air quality control on the Reservation. In an era of judicial erosion of tribal sovereignty 46, achieving primacy, albeit through a shared approach with the State and EPA, is a significant accomplishment. In becoming a primary regulator, the Tribe is asserting its sovereignty with regard to environmental regulation, and through more frequent inspections the Tribe hopes to improve the degree of environmental protection on the Reservation. Third, good relations with industry are important. In addition to public review and comment rulemaking, the Environmental Commission utilizes a stakeholder process involving the Tribe and members of the Reservation s oil and gas industry. So far, the result has been increased collaboration between the Tribe 14

16 and industry in the development of program regulations, which has resulted in less discord at Environmental Commission meetings. Fourth, EPA support for the development of the Reservation Air Program is critical to the success of the program. EPA has supported the development of the Reservation Air Program through both Clean Air Act 105 grant funding and through technical assistance. 47 Fifth, development costs are an important factor for tribes to consider in deciding whether to seek to become primary regulators of Clean Air Act programs. Notwithstanding EPA s substantial grant funding support, achieving the ability to administer the Title V program on the Reservation took years of work and cost the Tribe a considerable amount of its own money. 48 For many tribes, a better alternative to becoming primary regulators, at least from a time and cost perspective, may be to allow EPA to administer Clean Air Act programs on their reservations. When faced with the choice of seeking delegation or allowing EPA to administer the programs, some could view allowing EPA to administer the programs as an infringement of tribal sovereignty. Making a reasoned choice to forgo seeking a delegation of authority, however, and allowing EPA to administer those programs, subject to tribal monitoring, arguably is as much of an exercise of tribal sovereignty as choosing to seek a delegation of authority. A question tribes which are considering development of air pollution control programs on their reservation may want to ask themselves is, Could the tribe obtain its desired result by requesting improved EPA administration? Another good question to ask is 15

17 whether the desired result can be obtained at less cost to the tribe through a cooperative agreement whereby the tribe acts as EPA s agent. 49 Sixth, teamwork is important. The success of the Reservation Air Program has depended on the ability of many people to work together toward the common goal of developing and administering the Reservation Air Program. On the tribal side, the Tribe established an air quality team consisting of the Tribe s air quality program manager and staff, the Division Head of the Tribe s Environmental Programs Division, and the Tribe s legal counsel. The Tribe s team works closely with the Environmental Commission, EPA, and the Administrator of the State s Air Quality Control Commission, who is the State s designated representative to the Environmental Commission. 50 As a result of state development of environmental programs two decades or more ago, often with EPA funding assistance, states generally have a very capable and sophisticated institutional infrastructure to set and enforce environmental standards consistent with local state needs and policies. As a partner with the Tribe in the development of the Reservation Air Program, the Colorado Department of Public Health and Environment has played a helpful and constructive role in assisting the Tribe. 51 Seventh, even if desirable, the Reservation Air Program will be difficult to duplicate. Notwithstanding the positive intergovernmental cooperation and tribal sovereignty aspects of the Reservation Air Program, the development of program regulations requires the navigation of multiple layers of approval, sometimes more than once. To date, the Environmental Commission has adopted, and EPA has 16

18 delegated to the Tribe, only one program. 52 Because of the layers of required approvals, new programs and new regulations cannot be adopted quickly or easily. Although it was hoped that local regulation would be more agile and efficient, development of local regulations is slow and cumbersome. Eighth, in exercising its new role as primary regulator on the Reservation, the Tribe faces challenges both internally and in relation to members of the regulated community. Not only is the Tribe the primary regulator of the Part 70 program on the Reservation, it is also a Reservation owner and operator of fourteen Title V permitted sources. 53 That means the Tribe s Environmental Programs Division is responsible for ensuring compliance by the Tribe s energy companies with their tribally-issued Part 70 permits. Because the Tribe is responsible for administering the Part 70 program in a fair and impartial manner 54, the Tribe s companies may no longer be entitled to the same compliance assistance they received from EPA under EPA administration of the Title V program. 55 Ninth, much work remains before there is a single regulatory authority overseeing compliance with all air pollution control regulations that are applicable to sources on the Reservation. A primary, if not the primary, objective of the intergovernmental agreement between the Tribe and State is to establish a single air quality program applicable to all lands within the exterior boundaries of the Reservation. While there is a possibility that the Tribe eventually will become the sole regulatory agency for air pollution control on the Reservation, that goal has not yet been realized. Currently, EPA s Part 71 permits are being transitioned to 17

19 tribal-issued Part 70 permits. 56 Once the transition is complete, the Tribe will be the primary regulator of the Title V program on the Reservation but EPA remains the primary regulator for ensuring compliance with federal New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants that apply to Reservation sources. Those are the substantive standards and requirements with which the sources on the Reservation must comply. EPA also is the primary regulator under the major source pre-construction permitting program known as the Prevention of Significant Deterioration program and the primary regulator under the recently finalized minor new source review and nonattainment major new source review programs for Indian country. Conclusion Air pollution control on the Southern Ute Indian Reservation has a complex and unique history. The Environmental Commission s and the Tribe s focus to date has been on program development and TAS approval. With the Part 70 program finally approved, that program now is entering a new phase with the Tribe issuing initial permits for facilities. As the Tribe gains experience with the program, the focus will shift to compliance enforcement, and it is likely that the Environmental Commission will be called upon by owners and operators to administratively review tribal actions. The costs associated with developing and implementing air pollution control programs, like other federally delegated or contracted programs, have assumed greater prominence today due to the current economic climate. Other tribes 18

20 interested in becoming primary regulators of air pollution on their reservations should carefully consider a number of factors this article addresses, not the least of which is the cost and time required for program development. 1 A copy of the Intergovernmental Agreement Between the Southern Ute Indian Tribe and the State of Colorado Concerning Air Quality Control on the Southern Ute Indian Reservation can be found at C.R.S Clean Air Act Full Approval of Title V Operating Permits Program; Southern Ute Indian Tribe, 77 Fed. Reg (2012). 3 The Southern Ute Indian Tribe received a delegation of authority to administer what is known as the Part 70 operating permits program. In 2004, the Navajo Nation received a delegation of authority to administer the Part 71 federal operating permits program. Technically, the Navajo Nation is acting as an agent of EPA in administering the federal operating permit program whereas the Southern Ute Indian Tribe will be acting on its own, in the same manner as a state, in administering the Part 70 program U.S.C f U.S.C. 7661a(d) U.S.C. 7661(2); 42 U.S.C. 7661a(a) (making it unlawful to operate without a permit a major source, as well as sources that require a Prevention of Significant Deterioration permit, nonattainment review, or are regulated as significant sources under the Hazardous Air Pollutants Program, the New Source Performance Standards Program or the acid rain program, or sources in a category designated by the United States Environmental Protection Agency); 40 C.F.R. 70.3(a) (requiring the permitting of major sources, which is defined in 40 C.F.R. 70.2, and other listed sources) U.S.C. 7661a(b); 40 C.F.R. Part U.S.C. 7661b(c); 40 C.F.R. 70.5(a)(1) U.S.C. 7661c(b), (c); 40 C.F.R. 70.6(a)(3) C.F.R. 70.6(b)(5)(i); 40 C.F.R. 70.6(a)(2) U.S.C. 7661a(b)(3)(A); 40 C.F.R Fed. Reg (1992) U.S.C. 7661a(b)(5)(C); 40 C.F.R. 70.4(b)(3)(i); 40 C.F.R (defining applicable requirement ). 19

21 14 57 Fed. Reg (1992). 15 Congress confirmed the exterior boundaries of the Southern Ute Indian Reservation in the Act of May 21, 1984, Pub. L. No , 98 Stat. 201, Revised Transition Plan, Application for Full Approval of the Southern Ute Indian Tribe s 40CFR Part 70 Operating Permits Program dated January 30, 2012, Tab 9. Thirty-eight of the major sources are natural gas compressor stations, three are natural gas processing plants and one permit is for a local landfill. Twelve of the sources hold what are considered hollow permits with no PSD requirements and 30 hold complex permits incorporating MACT, NSPS, NESHAP, or PSD requirements. 17 from Regina Chappell, OID Regulatory Contact, Community & Tribal Programs Group, Outreach and Information Division, Office of Air Quality Planning & Standards, Environmental Protection Agency, to Laura McKelvey, EPA OAQPS Headquarters, Research Triangle Park, North Carolina, (forwarded to Brenda Jarrell, Air Quality Program Manager, Southern Ute Indian Tribe), Re: Number of Reservation Title V Sources Located on Southern Ute Indian Reservation (July 3, 2012; 12:14 p.m.) 18 Interview with Brenda Jarrell, Air Quality Program Manager for the Southern Ute Indian Tribe, on July 19, U.S.C. 7661a(d); 40 C.F.R. 70.1(c) U.S.C. 7601(d)(2) U.S.C. 7601(d)(4); Environmental Protection Agency, EPA Policy for the Administration of Environmental Programs on Indian Reservations (1984), 84.pdf; see also, Indian Tribes: Air Quality Planning and Management, 63 Fed. Reg (1998) (commonly known as the Tribal Authority Rule or TAR ) (explaining EPA s intent in the absence of an approved tribal program, to directly implement Clean Air Act programs in Indian country; EPA Region 8 Policy for Environmental Protection in Indian Country, Sec. VI (1996), (explaining Region 8 s intent to directly implement environmental programs in Indian country in the absence of an approved tribal program); Review of New Sources and Modifications in Indian Country, 76 Fed. Reg , n. 9 and Sec. VI (2011) (explaining EPA s belief that, in the context of programs under the Clean Air Act, states generally lack the authority to regulate air quality in Indian country and that primary jurisdiction over land that is Indian country rests with the federal government and the Indian tribe inhabiting it); see generally 40 C.F.R. Part Indian Tribes: Air Quality Planning and Management, 63 Fed. Reg (1998). 23 Id. 24 Id; Arizona Public Service Co. v. EPA, 211 F.32d 1280, (D.C. Cir. 2000)(affirming EPA s interpretation of the Clean Air Act as a delegation to tribes of authority over all air resources within their reservations). 25 As support for this assertion, the Tribe cited Montana v. United States, 450 U.S. 544 (1981) under which tribes are recognized as having inherent authority to regulate the conduct of non-indians on non-indian fee land in circumstances where the conduct threatens or has some direct effect on the 20

22 political integrity, the economic security, or the health or welfare of the tribe. The Tribe also cited Lyon, et al. v. Amoco Production Company, et al., 923 P.2d 350 (Colo. App. 1996), which held that the Montana principles apply on the Southern Ute Indian Reservation. 26 Clean Air Act Final Interim Approval of Operating Permits Program; State of Colorado, 60 Fed. Reg. 4563, 4567 (1995). 27 The Act of May 21, 1984, Pub. L. No , 98 Stat. 201, 202 can be found at Other Provisions note to 25 U.S.C.S Id Id. 4(a). 30 Montana v. United States, 450 U.S. 544 (1981) (holding that, absent delegation by federal statue or treaty, Indian tribes lack inherent authority to regulate the conduct of non-indians on non-indian fee land unless a tribe can demonstrate either that the non-indians have entered into consensual relationships with the tribe or its members, through commercial dealing, contracts, leases, or other arrangements, or that the conduct the tribe seeks to regulate threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe. ) Fed. Reg. at 7256 and 7256 n.5 (citing Adkins v. Arnold, 235 U.S. 417, 420 (1914) for the proposition that the CAA delegation of authority to eligible tribes over reservations represents a more recent expression of Congressional intent and will generally supersede other federal statutes. ) 32 In accordance with the IGA, state and tribal laws were enacted to create the Southern Ute Indian Tribe/State of Colorado Environmental Commission with the authority to promulgate rules and regulations for one air quality program for all lands, all persons, and all pollution sources within the exterior boundaries of the Reservation. C.R.S to 1309; Resolution of the Council of the Southern Ute Indian Tribe # Among the three State appointees, one must reside on fee land within the exterior boundaries of the Reservation and at least two must be residents of either Archuleta or La Plata county. C.R.S Historically, the Tribe s appointees have included a tribal member and have been employees of various tribal entities involved in on or off-reservation oil and gas development with knowledge or experience in the area of environmental regulation. 34 The Environmental Commission s rulemaking procedures are included in the Commission s Procedural Rules, a copy of which is available upon request from the Tribe s Air Quality Program. 35 Section 6 of the Act of October 18, 2004, Pub. L. No , 118 Stat Act of October 18, 2004, Pub. L. No , 118 Stat Id Id Id. 5(a). 40 Arizona Public Service Co. v. EPA, 211 F.3d 1280, (D.C. Cir. 2000). 21

23 41 In Arizona Public Service Co. v. EPA, 211 F.3d 1280 (D.C. Cir. 2000), the Court held that the petitioners claim that EPA s final rule abrogates preexisting agreements by Native American nations not to regulate certain individual parties, was not ripe for review. 42 The regulations for the Tribe s Part 70 Operating Permit Program are located in Art. II, Part 1 of the Reservation Air Code, a copy of which can be found on the Part 70 Operating Permit Program page of the Tribe s Air Quality Program website: 43 Application for Treatment as a State Pursuant to Section 301(d) of the Clean Air Act and Section 4(a) of the Southern Ute and Colorado Intergovernmental Agreement Implementation Act of 2004 for the Purpose of Approval of the Southern Ute Indian Tribe s Part 70 Operating Permit Program, p (January 14, 2009). 44 Id. 45 The Tribe s Title V program staff is supervised by an Air Quality Program Manager and includes an air quality scientist/permit writer and two air quality specialists/inspectors. 46 See generally, David H. Getches, Beyond Indian Law: The Rehnquist Court s Pursuit of States Rights, Color-Blind Justice and Mainstream Values, 86 Minnesota Law Review 267 (2001). 47 The EPA technical support team from EPA Region 8 includes Alexis North, who is an Environmental Scientist in Region 8 s Office of Enforcement, Compliance and Environmental Justice, and Elyana R. Sutin, who is a Regional Judicial Officer in Region 8 s Office of Regional Counsel and who has expertise in the Clean Air Act. The Team of North and Sutin, together with Eric Wortman (Environmental Scientist in Region 8 s Air Permitting, Monitoring and Modeling Unit) and other Region 8 staff, do an excellent job of explaining EPA s required revisions to the Environmental Commission s program regulations, interceding on the Tribe s behalf with EPA headquarters to minimize delay associated with multiple reviews, and providing technical advice to the Tribe s team. Their support has contributed to the Tribe s ability to provide environmental protection on the Southern Ute Indian Reservation. 48 It is estimated that the Part 70 program will be self sustaining through permit fees at the end of its sixth year of operation due to the staggered transition of Title V sources from EPA-issued Part 71 permits to tribal-issued Part 70 permits. Southern Ute Indian Tribe s Reservation Air Program Part 70 Operating Permit Program Fee Demonstration, p. 6 (January 19, 2012) (submitted to EPA as part of the Tribe s Application for Full Approval of the Southern Ute Indian Tribe s 40 CFR Part 70 Operating Permit Program (January 30, 2012)). 49 An example of this approach is found in EPA s new minor New Source Review permitting program for Indian country under which tribes may, in lieu of developing and seeking EPA approval of a tribal implementation plan, choose to assist EPA in implementing all or some portion of the Federal minor NSR program for their reservations. 40 C.F.R The Administrator with whom the tribal team first worked was Douglas Lempke. Currently, the Administrator is Mike Silverstein. 51 Colorado Department of Public Health and Environment personnel with whom tribal staff has worked and who have contributed to the Reservation Air Program s success to date include Martha Rudolph (Environmental Programs Director), Paul Tourangeau (formerly the Division Director for the Colorado Air Pollution Control Division ( APCD )), Roland C. Hea (APCD Permitting Section 22

24 Supervisor), Kirsten King (Program Manager for the APCD Stationary Sources Program), and Gordon Pierce (Program Manager for the APCD Technical Services Program). 52 The Environmental Commission has expressed its support for the Tribe seeking up-front approval from EPA to implement and enforce Clean Air Act section 111 and 112 rules, emission standards, and requirements on the Reservation. Additionally, the Environmental Commission is in the process of developing a minor source program for the Reservation. In its current draft form, the program will apply not only new sources and minor modifications at major sources, as is the norm for state minor source programs, but also to existing sources. The draft minor source program has been through several rounds of public comment and is currently undergoing an unofficial review by EPA. 53 The fourteen tribal Title V sources on the Reservation are operated by either the Tribe s on- Reservation oil and gas production company known as Red Willow Production Company or by Red Cedar Gathering Company, which is an on-reservation gas gathering joint venture in which the Tribe is the majority owner. 54 There are many procedural and substantive safeguards in place to ensure due process and fair and impartial administration of the Reservation Air Program. Examples include (1) the composition of the Environmental Commission, with an equal number of members appointed by the State and Tribe, and the requirement that the Environmental Commission can only act by a majority vote of all of its members; (2) objective standards used in making key determinations in the administration of the program (e.g., annual permit fees are calculated without regard to the identity of the owner or operator of the source); (3) EPA oversight; and (4) the right of operators to appeal to the Environmental Commission and then to federal court. 55 EPA s compliance assistance program is described in principle 8 of EPA s Indian Policy. Environmental Protection Agency, EPA Policy for the Administration of Environmental Programs on Indian Reservations (1984), EPA Region 8 s Indian compliance assistance procedures can be found at 56 At the time of writing this article, the Tribe has received and is processing sixteen permit applications. 23

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