Minor Source Program on the (2018)

Minor Source Program on the

Southern Ute Indian Reservation:

Options and Factors to Consider

Southern Ute Indian Tribe/State of Colorado

Environmental Commission Meeting

December 5, 2018

Presentation outline

1. Review of minor source programs

2. Three options for Commission and Tribe’s regulation of minor

sources

a)

b)

c)

d)

Summary

Air quality considerations

Cost

Feedback

3. Tribe’s recommendation

What is a minor source?

A source with the Potential to Emit (PTE) regulated pollutants

below the major source thresholds and above the minor source

thresholds.

What are the different types of minor

sources?

 True Minor Source: A source that emits, or has the PTE

pollutants in amounts that are less than the major source

thresholds but greater than the minor source thresholds.

 Synthetic Minor Source: A source that has the PTE pollutants in

amounts at or above the major source thresholds, but has

established enforceable restrictions to reduce emissions below

the major source thresholds.

How many minor sources are on the

Reservation?

Source Type

Facility Type

Amount

True Minor Sources

natural gas and oil production well sites,

central delivery points,

water injection facilities,

gravel pits

306

Synthetic Minor Sources

natural gas compression facilities,

natural gas treatment plants

6

Small Oil and Gas Sources PTE below the minor source

thresholds

gas and oil production well sites,

municipal solid waste disposal facility,

gas compression facilities,

water injection sites

≈2600

What is the purpose of a minor source

program?

To protect public health and the environment.

Specifically, to ensure that:

 Air quality is not significantly degraded where the air

is currently clean (areas attaining the National

Ambient Air Quality Standards (NAAQS))

 Air quality is improved in areas that are not attaining

the NAAQS

How are minor sources regulated on the

Reservation?

 EPA currently regulates minor sources in areas of Indian Country that

are classified as “attainment areas” under the “Tribal Minor New

Source Review” (TMNSR) program at 40 CFR Part 49

https://www.epa.gov/tribal-air/tribal-minor-new-source-review

 The TMNSR Program was first implemented for oil and gas sources in

2014.

Basic information on the Federal Tribal Minor

Source Program

TMNSR program contains two components:

1. TMNSR Permit Program

 Site-specific permits and synthetic minor permits

 General permits available for 6 source categories

2. Federal Implementation Plan (FIP) for Oil and Natural Gas True Minor

Sources (first implemented in 2016)

 Provides coverage to new or modified true minor oil and natural gas sources

through a registration program

 Requires sources to comply with 8 specific federal rules when certain pieces of

equipment are installed at new or modified oil and gas sites

Why should the Commission consider a minor

source program for the Reservation?

 For 2017, the Reservation had an ozone design value of 69 parts per

billion (ppb) one ppb below the 2015 NAAQS ozone standard of 70 ppb.

 Minor sources are a large contributor of ozone precursors on the

Reservation (NOx and VOC) in relation to the total oil and gas emissions

on the Reservation

What are the emission contributions from

minor oil and gas sources on the Reservation?

How do ozone precursor emissions on the

Reservation compare with New Mexico

2015 Southern Ute Indian Reservation Emissions Inventory and WRAP O&G Emissions Inventory Project: Greater San

Juan and Permian Basin

What are the Commission and Tribe’s options

for regulating minor sources?

1. Continued EPA implementation of federal TMNSR permit program

and FIP

2. Seeking administrative delegation of all or part of the federal

TMNSR program and FIP

3. Developing and submitting a Tribal Implementation Plan (TIP) to

administer a Reservation-specific minor source program

Criteria for evaluating options

1. Air Quality Considerations

2. Costs to the Commission, Tribe and regulated industry

• Time

• Resources

• Fees

3. Feedback provided by Stakeholders, the State of Colorado, EPA, and the

Tribe

Summary of option #1 - continued EPA

implementation of federal minor source programs

 EPA remains the permitting, compliance and enforcement

authority for minor sources

(Tribe’s role: commenting on proposed minor source permits,

accompanying EPA on inspections, commenting on compliance

actions, enforcing minor source permit terms as applicable

requirements under Tribe’s Title V permits)

Option #1 - air quality considerations

• The federal minor source programs are meeting the current air

quality needs of the Reservation (Reservation is in attainment for

all national air standards)

• AQP would like to see an increased compliance presence by EPA on

the Reservation

• EPA inspects only the largest six of approximately 306 minor sources, once

every five years

Option #1 – costs to the Tribe and regulated

industry

# Of Additional

Employees

Estimated Annual

Cost to the Tribe

Funding Source

Cost to Regulated

Industry

0

$0

NA

$0

Option #1 – feedback from stakeholders

• Stakeholders stated that the current TMNSR programs, including the

FIP, as administered by EPA, are adequately meeting their needs

• Stakeholders had no concerns regarding the continued

implementation of the current TMNSR program

Option #1 – feedback from Colorado, EPA,

and Tribal Council

• This is the least preferred option of Colorado

• The EPA has no issues with continuing to implement the federal

program on the Reservation

• Tribal Council does not prefer this option, due to low compliance

presence by EPA, and the potential confusion to regulated industry of

having two air permitting agencies on the Reservation (the Tribe and

EPA)

Summary of option #2 - Tribe seeks administrative

delegation of the federal minor source programs



At the Environmental Commission’s request, the Tribe applies for

administrative delegation of all or part of EPA’s TMNSR permit program and

FIP



Upon delegation, the AQP could:

 Issue TMNSR permits

 Review FIP registrations for completeness

 Conduct inspections



Enforcement authority cannot be delegated

Option #2 – air quality considerations

• The federal minor source programs are meeting the current air

quality needs of the Reservation (Reservation is in attainment for

all national air standards)

• Increased compliance presence by AQP, through more frequent

inspections, could have potential benefits to air quality

Option #2 – cost to the Tribe and regulated

industry

# Of Additional

Employees

Estimated Annual

Cost to Tribe

Funding Source

Cost to Regulated

Industry

1-2

$210,500

EPA Grants

$0

Option #2 – feedback from stakeholders

Stakeholders unanimously recommended the Commission and

Tribe consider Option #2 for the following reasons:

1. No additional costs at a time when natural gas prices are low

2. Requires less time and resources from Commission, Tribe, and

industry than development of a Reservation-specific program

3. Provides the Tribe additional time to assess the resources needed

to develop and implement a Reservation-specific program

4. Allows Tribe to gain technical minor source permitting experience

Option #2 – feedback from EPA, Colorado and

Tribal Council

• Colorado prefers the Tribe pursue option #3 to get ahead of any

potential ozone non-attainment designations – but understands the

financial, resource, and time benefits of pursuing option #2

• EPA is supportive of the Tribe seeking administrative delegation of the

federal programs

• Tribal Council recommends option #2 because:

• The Tribe assumes a greater role in the regulation of minor sources

• Eliminates confusion to regulated industry of having two air permitting agencies on the

Reservation - establishes the Tribe as the single permitting agency

• Increased compliance presence through increased compliance inspections by the Tribe

Summary of option #3 – development of a

Reservation-specific minor source program

The Environmental Commission requests that the Tribe

develop a Reservation-specific program to replace all or

portions of the federal minor source programs.

Upon Commission and EPA approval, the Tribe could:

 Issue permits

 Conduct compliance inspections

 Enforce against non-compliance

Option #3 – air quality considerations

• Reservation-specific program can target the air quality needs of the Reservation

• A Reservation-specific program could include mechanisms for quickly obtaining true minor

source and synthetic minor source permits that are protective of air quality

• Could better posture the Tribe in expedient development of a maintenance plan to

reduce ozone precursor emissions if the Reservation were designated non-attainment

• Reservation is a small contributor of emissions in the greater San Juan Basin

• If New Mexico does not implement controls for sources operating in New Mexico, it could

be unlikely that a control program imposed by the AQP would result in significant

reductions in ozone concentrations on the Reservation

Option #3 – cost to the Tribe and regulated

industry

# Of Additional

Employees

At Least 2

Estimated Annual Cost

$328,500

Funding Source

The Tribe would be able to

cover the annual program

cost after five years based

on the following fees to

regulated industry

Fees, and

additional sources

$3,700/yr for each new true

minor source

$8,000/yr for each new

synthetic minor source

Option #3 – feedback from stakeholders

• Stakeholders were not in favor of this option due to:

• Increased permitting fees

• The potential to regulate existing sources

• The possibility of AQP developing unreasonable permitting thresholds

• Thought that it was premature to develop air programs for a potential non-attainment

designation of the ozone standard

Option #3 – feedback from EPA, Colorado and

Tribal Council

• The State of Colorado favors option 3 (development of a Reservation-specific

program mirroring the federal program) as a proactive step in preparation for a

possible non-attainment designation for ozone.

• The State of Colorado acknowledged the additional funding and staffing challenges

associated with option #3

• EPA thought it unlikely the Reservation would be designated as non-attainment for

ozone when reevaluated in 2020.

• EPA clarified, if the Reservation were designated non-attainment, the Commission

and Tribe would have 36 months to develop a Reservation-specific minor source

program.

What does the Tribe recommend?

The Tribe recommends Option #2 for the following reasons:

1. The federal program is effective on the Reservation

• Reservation is in attainment for all national standards

• EPA is processing permits in an acceptable timeframe

2. The Commission and Tribe can assume a greater role in regulating minor sources on the

Reservation without incurring the costs, time and resources required to develop a

Reservation-specific program

• Will build the AQP’s technical permitting skills and capacity

• Air quality benefits through increased compliance inspections by the Tribe

• Reduces confusion in obtaining an air permit on the Reservation since all permitting would go through

the Tribe

What does the Tribe recommend? (cont.)

The Tribe recommends Option #2 for the following reasons:

3. Little or no cost to the Tribe – funding for administration of program is likely

available through EPA grants

4. Option #2 is favored by stakeholders

• No cost to regulated industry on the Reservation

5. Brings the Commission and Tribe closer to IGA goal of having a single air quality

program for the Reservation

Why not option #1 or #3?

• Cost

• Effect on air quality

• Time

Questions?

• If you have any questions please contact either of the AQP staff listed here:

Oakley Hayes

Daniel Powers

Air Quality Technical Manager

Air Quality Program Manager

970-563-2244

970-563-2265

ohayes@southernute-nsn.gov

dpowers@southernute-nsn.gov