EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 1

______________________________________________________________

 ENVIRONMENTAL PROTECTION AGENCY

 Proposed General Permits and Permits

 By Rule for Indian Country

____________________________________________________________

 PUBLIC HEARING

____________________________________________________________

Elyana Sutin, EPA Regional Judicial Officer

Dierdre Rothery, Unit Supervisor, Air Program

Matthew Langenfeld, USEPA

Theresa Martin, CDPHE

 The above-entitled matter came on for hearing on

Wednesday, March 12, 2014 at 8:32 AM, at 4300 Cherry Creek

Drive South, Colorado Department of Public Health, Denver,

Colorado, before Martha Loomis, Certified Shorthand Reporter

and Colorado Notary Public.
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 2

1 P R O C E E D I N G S

2 JUDGE SUTIN: Good morning, everyone. I think we're

3 going to get started this morning.

4 I'm Judge Sutin from the EPA, and the Regional

5 Judicial Officer at EPA Region 8. Thank you all for coming

6 this morning. I will be chairing the hearing today.

7 Also on the panel today is Deirdre Rothery. She is

8 the Unit Supervisor in the Air Program here in EPA's Denver

9 office.

10 We are here today to listen to your comments on

11 EPA's proposed rule titled General Permits and Permits by Rule

12 for the Federal Minor New Source Review Program in Indian

13 Country.

14 We announced the proposal in the Federal Register

15 notice January 14, 2014. In a moment, Ms. Rothery will

16 explain in more detail what was proposed in that notice. But

17 before I turn it over to her, I want to explain a little bit

18 how the hearing would work today.

19 I will call scheduled speakers to the microphone.

20 So if you have registered, you will be called up. And we will

21 not be putting an time limit on speaking this morning. We do

22 not have a large crowd, so people will not be limited in their

23 time.

24 That said, we will be, if testimony is going on and

25 on and on and not on point, I will ask you to turn back to the
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 3

1 topic at hand, and possibly to wrap up your testimony.

2 When you are called up, if you could please state

3 your name and your affiliation, and spell your name for the

4 court reporter, who is sitting here to my left, so that we get

5 the correct spelling of your name.

6 After you finish your testimony, members of the

7 panel may ask clarifying questions.

8 As I said, there's a court reporter today so we will

9 have a written transcript of the hearing. The transcript for

10 the hearing will be available as part of the official record

11 for this rule.

12 If you have written copies of your testimony, please

13 give a copy to our staff at the registration table. Matt will

14 be the person. I'll introduce him in a second.

15 If you have other written comments or supporting

16 documentation, you also may leave those at the table or

17 provide them to Matt. Matt is standing right at the door

18 there. He will make sure that they are entered into the

19 docket for this proposed rule.

20 You may also submit written comments directly to the

21 docket for this rule through March 17, which is next Monday.

22 Instructions for submitting comments are included in the fact

23 sheet which is on the back table. The instructions are also

24 available on EPA's website.

25 EPA will consider your comments as we move forward
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 4

1 to complete a final rule, which we anticipate issuing later

2 this year.

3 Today's public hearing is scheduled to end once the

4 last registered speaker has provided comments. So if you

5 would like to testify and have not registered yet, please sign

6 up with Matt, or at the table on the other side of the door

7 outside this room.

8 At this time I will turn it over to Dee Rothery, who

9 will summarize the proposal. Thank you.

10 MS. ROTHERY: Good morning. Thank you, everyone,

11 for coming.

12 As you heard from Judge Sutin, this hearing concerns

13 EPA's proposed general permits and permits by rule for minor

14 or small sources located in Indian country.

15 As our preferred approach, EPA has proposed draft

16 general permits for new or modified minor sources in five

17 categories of emissions sources: 1, hot mix asphalt plants,

18 2, stone quarrying, crushing, and screening facilities, 3,

19 gasoline dispensing facilities, 4 petroleum drycleaners and 5,

20 auto body repair and miscellaneous service coating operations.

21 General permits streamline the existing minor source

22 NSR permitting requirement, and minimize the burden on

23 reviewing authorities and sources.

24 General permits standardize requirements that apply

25 to multiple stationary sources with similar emissions
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 5

1 characteristics. The owner of one of these types of

2 facilities in Indian country would need to apply to EPA to be

3 covered by the applicable proposed general permit.

4 As an alternative, EPA is proposing permits by rule

5 for new or modified minor sources in three or five source

6 categories. No. 1, gas dispensing facilities, No. 2,

7 petroleum drycleaners, and No. 3, auto body repair and

8 miscellaneous service coating operations.

9 Permit by rule is similar to a general permit in

10 that it contains a set of standard requirements that can apply

11 to multiple stationary sources that have similar emissions

12 characteristics, but it differs from a general permit in that

13 the control and other requirements are established in a rule

14 rather than in a general permit document.

15 The process for a source to seek coverage under a

16 permit by rule is more streamlined compared to a standard

17 general permit or a site specific permit. Under the proposed

18 permits by rule program, an applicant would notify the

19 reviewing authority that it meets the eligibility criteria for

20 the permit and the permit conditions without having to submit

21 a completed application for review and approval.

22 In addition to proposed general permits, EPA is

23 proposing to extend the permitting deadline for true minor

24 sources in the oil and gas source category from the

25 September 2, 2014 deadline to a date within a range from
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 6

1 September 2, 2015 and March 2, 2016.

2 An extension of permitting deadline would provide

3 EPA additional time to complete a general permit for this

4 sector.

5 EPA is also seeking comment on a portion of the

6 proposal that would change the policy in the Indian country

7 minor NSR rule to allow for the use of general permits and

8 permits by rule to create synthetic minor sources.

9 As Ms. Sutin mentioned, we'll accept public comments

10 through this public hearing and through email, fax, or mail

11 during the 60-day public comment period. The 60-day public

12 comment period will end on March 17, 2014.

13 With that, we'll begin our hearing.

14 JUDGE SUTIN: Okay. I'd like to call up Scott

15 Mason.

16 MR. MASON: Good morning.

17 JUDGE SUTIN: Morning.

18 MS. ROTHERY: Morning.

19 MR. MASON: My name is Scott Mason. I'm the

20 environmental lead for Enerplus Resources Corporation. We're

21 a oil and gas operator in the Bakken Fort Berthold Indian

22 Reservation. It is our hallmark play for us, and critically

23 important for Enerplus' success.

24 Today, because I'm oil and gas, I'd like to

25 primarily talk about the oil and gas extensions and other
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 7

1 things. But also I'd like to highlight some concerns that

2 I've had after reviewing the general permit for the asphalt

3 plants.

4 I spent ten years as an inspector for the Air

5 Pollution Control Division here with the Department of Health,

6 and spent many many hours at asphalt plants so I have quite a

7 bit of experience with that.

8 First, on the extension for oil and gas true minor

9 source permitting, the consideration for extension on the

10 permitting deadline, the proposed date between September 2,

11 2015 and March 2, 2016, a 16-month extension, we respectfully

12 request an 18-month extension.

13 What I'd like to point out is first, it's taken

14 30 months from the date the Indian country minor source rule

15 was published as final in the Federal Register to the date on

16 January '14 when the first bundle was submitted.

17 So the fact that it's taken 30 months to get to this

18 point, and also after my review of the general permit for

19 asphalt plants, it appears the EPA has taken a very stringent

20 stance on the general permitting and permit by rules.

21 And I think there's, it's going to take quite a long

22 time to work through this further bundle, let alone what's

23 proposed in oil and gas general permit or permit by rule.

24 In addition, I'd like to point out that oil and gas

25 operators on tribal lands needed adequate time to move from a
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 8

1 post construction registration process, which we're under now,

2 to a pre construction permitting process.

3 I'm going to talk a little more about post

4 construction permitting. But we have to have some lead time

5 to have permits in place on the date that permits are

6 required; if we don't, that drill rig will be laid down on

7 tribal lands and they will move off of tribal lands.

8 So we're requesting at least 12 months lead time in

9 between the date that the general permit or permit by rule is

10 finalized, and the date that Industry, oil and gas operators

11 are required to have permits in hand.

12 So first I'd like to talk to you about what a

13 general permit or permit by rule would look like, a permit by

14 rule that we cannot live with would look like for oil and gas

15 operators.

16 First is no allowance for post construction

17 permitting, which is allowed now. Because operators are

18 unable to adequately guess at their potential to emit, post

19 construction permitting is critically important to us.

20 Also, no exceptions for existing requirements and

21 existing federal regulation or federal action, such as consent

22 decrees. We have extensive requirements for monitoring,

23 recordkeeping, inspections, reporting under rules such as the

24 Fort Berthold Indian Reservation Federal Implementation Plan,

25 all the MSDSs such as OOOO, IIII, JJJJ, the MACT rules, HH,
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 9

1 ZZZZ, non road engine rules, and parts 89 and 1048.

2 So already extensive requirements are in place, and

3 I'd hate to see redundant requirements. If a permit is issued

4 that we can't live with we wouldn't apply for it; we would

5 simply go for individual permits.

6 As you know, EPA doesn't have the resources to issue

7 hundreds and hundreds of individual permits on an annual

8 basis.

9 So the combination of these two considerations would

10 be a deal killer for oil and gas on tribal lands. Most

11 operators would then apply for individual permits. This, in

12 turn, would we -- well, we would apply for individual permits

13 to avoid duplicative requirements, in turn putting the burden

14 of oil and gas development on tribal lands back on the EPA.

15 I'd like to switch gears to the asphalt plant

16 general permit. First off, little consideration was given to

17 the portable nature of the asphalt industry. They move in and

18 out of locations based on jobs. They come in, do a highway

19 job or a road or parking lot, and then they're gone.

20 So the portable nature of that industry brings

21 forward many things to consider. One is, if an asphalt plant

22 had an issued construction permit on an adjacent state by an

23 adjacent state to the tribal lands, the EPA should honor that

24 permit and allow the industry to operate under that permit.

25 Also, if an asphalt plant has an existing proved
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 10

1 stack test on adjacent state lands, the EPA should honor that.

2 It's a very extensive, expensive stack test for an industry

3 that has pretty thin margins as it is.

4 Also, as it reads in the Federal Register, operators

5 are required to know every location that they will be at when

6 they register or request coverage under the general permit,

7 and this industry doesn't know. They will bid a job, and they

8 go.

9 So also source data for the general permits, EPA

10 chose a review of existing state general permits to act as the

11 standard for which to draft this hot mix asphalt general

12 permit, and failed to recognize what states may require in

13 individual permits in states that contain tribal lands. This

14 should be your measure.

15 From the state general permits review, the EPA

16 appears to have cherry-picked the most stringent permit

17 requirements. States have the opportunity to take the

18 position that if you don't like the general permit, you can

19 apply for an individual permit and we'll negotiate out the

20 permit terms and conditions.

21 States are staffed for that; they can timely issue

22 those permits. The EPA is not.

23 EPA did not provide any allowance or justification

24 for not allowing wet scrubbers for particulate controls, and

25 no opportunity to use on-specification waste oil or used oil,
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 11

1 which is very common in the asphalt industry. In fact, that's

2 who uses our waste oil.

3 So also the EPA provided emissions rate limitations,

4 emissions concentration limitations, throughput limitations,

5 consumption limitations, routine inspections, Method 9

6 capacity readings, portable analyzer testing, and continuous

7 perimetric monitoring, all in one permit for an asphalt claim,

8 creating a very major source-like requirement for a true minor

9 source.

10 From my review, this is a very complex permit for a

11 not very complex industry. EPA created

12 duplicative requirements for engines that already have

13 extensive federal requirements applicable through MSDS, MACT,

14 and on road engine rules.

15 In conclusion, Enerplus respectfully requests EPA

16 extend the deadline for permitting under the Indian country

17 minor source rule to the 18 months, utilize a permit by rule

18 and post construction permitting structure as currently

19 allowed, and to provide exceptions from new requirements in an

20 oil and gas permit by rule if they already exist.

21 Enerplus also recommends EPA revise their proposed

22 permit structure from, What is the most stringent we can find

23 to, How can we ensure there is as little barrier as possible

24 for tribal lands while still being protective of public health

25 and the environment.
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 12

1 Before closing, I just want to re-emphasize post

2 construction permitting is the most important thing for oil

3 and gas. It doesn't appear from the Federal Register that

4 there is consideration for post construction permitting with a

5 general permit. It appears like the door may be open for

6 permit by rule for post construction permitting.

7 You'll see more about that in my written public

8 comment.

9 JUDGE SUTIN: Okay, thank you.

10 MS. ROTHERY: Thank you.

11 MR. MASON: Thank you. Any questions?

12 JUDGE SUTIN: No, I don't think so. Thank you,

13 Mr. Mason.

14 MR. MASON: Thank you.

15 JUDGE SUTIN: Next I'd like to call Jennifer Biever.

16 MS. BIEVER: Thank you. My name is Jennifer Biever.

17 I'm an attorney with the law firm of the Hogan Lovells. I'm

18 here on behalf of Crescent Point Energy US Corporation.

19 Crescent Energy, Crescent Point Energy operates oil

20 and gas wells in northwestern North Dakota and in the Uinta

21 Basin in Utah. In 2013, Crescent Point registered 39 minor

22 sources, and they expect to register or permit at least

23 50 minor sources in Indian country annually.

24 First, Crescent Point appreciates EPA's attention to

25 past comments and petitions related to oil and gas operations
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 13

1 under the tribal minor NSR program.

2 Second, Crescent Point supports extension of the

3 permitting deadline for minor sources within the oil and gas

4 source category, and the proposals to amend the timeframes

5 within which the minor sources must register.

6 Crescent Point agrees with EPA that a significant

7 number of sources will require permits under EPA's tribal

8 regulations, and that EPA should delay the permitting deadline

9 in order to develop a streamlined method for permitting these

10 facilities prior to that deadline.

11 Specifically, EPA should extend the permit deadline

12 to March 2, 2016 to allow EPA adequate time to develop the

13 appropriate streamlined method for permitting these

14 facilities.

15 Without a streamlined mechanism for permitting these

16 facilities, EPA will be inundated with permit requests, and

17 will not have the adequate necessary resources to process the

18 permits even for the minor and typically straightforward

19 sources associated with oil and gas operations.

20 Because of the significant sources and the need for

21 such streamlining, Crescent Point requests that EPA develop a

22 permit by rule for oil and gas sources in Indian country as

23 opposed to a general permit.

24 Crescent Point is only one of many operators on

25 tribal lands, and its 50 annual permits, when compounded with
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 14

1 those of other operators, warrant use of a permit by rule

2 regime.

3 Streamlining the permitting process or a permit by

4 rule will allow operators such as Crescent Point to focus

5 resources on implementation and compliance, not administrative

6 paperwork and processing.

7 Crescent Point understands that in Utah, the Ute

8 Indian Tribe strongly supports the use of permit by rule for

9 these very reasons.

10 Crescent Point encourages EPA to consider tribal

11 concerns about available resources, timing of permitting, and

12 other relevant considerations.

13 Specifically, Crescent Point believes that the

14 notification-only process contemplated under the permit by

15 rule significantly reduces administrative burden for both

16 operators and EPA, and does not in any way undermine the

17 environmental benefits or compliance with the requirements.

18 Operators that fail to comply will be in violation.

19 And there's no evidence that violations are more likely to

20 occur with a permit by rule than with a general permit.

21 The majority of sources associated with oil and gas

22 operations will be true minor sources, and thus definitely

23 appropriate for permitting through a permit by rule process.

24 Additionally, the types of sources, the anticipated

25 types of controls, the expected number of sources, and the
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 15

1 potential operational requirements are well-known, and lend

2 themselves to a permit by rule.

3 All emissions sources in the oil and gas industry

4 should be covered by the streamlined approach so that there's

5 no overlapping areas requiring an individual permit for these

6 sources.

7 Use of a permit by rule process is not new or

8 unique, particularly for states and local reviewing

9 authorities, and should be used by EPA for oil and gas

10 sources.

11 Crescent Point agrees with EPA regarding its

12 proposal to allow creation of synthetic minor sources either

13 through general permits, or permits by rule.

14 Crescent Point does not agree that all synthetic

15 minor sources warrant use of a general permit as opposed to a

16 permit by rule, and thinks that EPA should evaluate this on a

17 case by case basis.

18 Specifically with respect to oil and gas operations,

19 Crescent Point believes a permit by rule could reasonably be

20 used to create synthetic minor sources; a general permit would

21 not be necessary.

22 If using a general permit, Crescent Point supports

23 reducing the review time from 90 days, but proposes an even

24 further reduction to 30 days to ensure streamlining and

25 reduced administrative processing.
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 16

1 Regardless, Crescent Point believes it's critical

2 that EPA focus on developing a permit by rule for all oil and

3 gas sources that will operate within Indian country, and it

4 cannot finalize delay, cannot delay finalization of that

5 permit beyond any extended permit deadline.

6 That said, EPA should be cautious about simply

7 pulling concepts from existing general permits, including the

8 ones proposed to date, in developing these oil and gas

9 general -- in developing oil and gas permit requirements.

10 To ensure that a permit by rule is timely put in

11 place, Crescent Point encourages EPA to engage Industry

12 stakeholders and tribes in the very near future to begin

13 developing a permit by rule for oil and gas sources.

14 Industry representatives have valuable information

15 for EPA that will assist as it determines the scope, terms,

16 and conditions of any permit by rule.

17 Additionally, Crescent Point cannot emphasize enough

18 the need to engage with the tribes as EPA moves forward in

19 developing a permit by rule.

20 Finally, Crescent Point requests that in Utah, in

21 the Uinta Basin where jurisdiction and the boundaries of

22 Indian country can be uncertain, EPA, Ute Indian Tribe, and

23 the Utah Division of Air Quality cooperate, and consider

24 entering into a memorandum of understanding addressing

25 consistency between EPA and Utah Division of Air Quality
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 17

1 requirements regarding permitting, operational requirements,

2 and jurisdictional concerns.

3 Any such cooperation should acknowledge the

4 difficulties associated with identifying the proper governing

5 body on certain lands, and ensure that companies are not

6 penalized for good faith but erroneous efforts to determine

7 the appropriate jurisdiction.

8 Thank you for your time.

9 JUDGE SUTIN: Thank you.

10 Next I'd like to call Chad Schlichtemeier.

11 MR. SCHLICHTEMEIER: Morning. My name is Chad

12 Schlichtemeier. I will spell my last name for you. It's

13 S-c-h-l-i-c-h-t-e-m-e-i-e-r.

14 I'm the HSE air manager for the Anadarko Rockies

15 operation. Anadarko is one of the largest independent oil and

16 gas exploration and production companies, and we're the

17 largest operator in the Uinta Basin. We're very interested in

18 this rulemaking, and it may have significant impact on us

19 depending on the decision.

20 We definitely support EPA's proposal to defer the

21 effective date of the tribal NSR. We recommend and support

22 ATI's proposal to basically defer the effective date to the

23 latter of September 2, 2015, or 12 months after the effective

24 date of a general permit or permit by rule.

25 Anadarko supports the flexibility to use a general
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 18

1 permit or a permit by rule. Both of these are proven

2 regulatory tools, and are effective in protecting the

3 environment as well as allow public participation.

4 We also support the ability to use synthetic minors

5 through the general permit process. These types of permits

6 are not going to result in an increase in emissions, so they

7 therefore would not add any additional regulatory risk. It

8 also provides a mechanism to put appropriate restrictions on

9 these types of facilities.

10 Unless we have an extension in place by September of

11 this year, we're going to have to obtain a permit through the

12 case by case pre-construction permitting process outlined in

13 the tribal NSRs. This permitting process by rule is six

14 months in length.

15 With oil and gas production, there's a lot of wells

16 out there that, until you drill them and you're allowed to

17 produce them, you don't know what you have. So given the

18 permitting timelines, we're going to have to submit

19 applications six to 12 months in advance to ensure we have a

20 permit in hand to drill the well. This is going to lead to a

21 lot of misinformation in our applications.

22 I would suggest you take a look at surrounding

23 states such as Colorado and Wyoming that have proven oil and

24 gas permitting programs. And both of those states have

25 provisions in their rules that allow companies to basically
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 19

1 drill and produce a well before they determine the permitting

2 process that they have to go through.

3 Another concern we have is resources. If we're

4 going through the formal process in the tribal NSR, Anadarko

5 has budgeted 300 wells to be drilled between September of this

6 year and through the end of 2015.

7 You put this on top of all the other operators'

8 activity, this is a significant workload increase for the

9 region. We have concern whether you can maintain an effective

10 permitting program with this number of applications coming in.

11 There's also current regulatory framework in place

12 to address emissions growth during the extension period. You

13 have NSPS subpart OOOO, which requires controls on oil and gas

14 for new and modified facilities.

15 There's a push to go to more consolidated

16 operations, not only from an economic standpoint but from a

17 footprint from the BLM and things like that. That's resulting

18 in some existing sites being modified to new sites, and

19 basically controls being installed.

20 There's also Records of Decisions through

21 environmental impact statements. RODs require us to not only

22 control new sources, but it also requires us to go back and

23 retrofit existing sources.

24 There's also the natural decline in production. You

25 know, as time goes on, production declines. And there's
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 20

1 direct correlation between VOC emissions and production.

2 For the reasons above, Anadarko strongly recommends

3 that EPA move forward with extending the effective date of the

4 tribal NSR as well as the other considerations I presented

5 here.

6 A couple other things, since I'm not limited to my

7 five minutes, you mentioned earlier on that you were looking

8 at maybe finalizing this rule toward the end of this year.

9 We got to make decisions here shortly on whether we

10 bombard Deirdre and her group with permit applications on

11 whether the extension is going to come into play or not.

12 I would encourage you, you know -- one thing, I

13 don't know if you can separate out this portion of it and let

14 Industry know what your plans are for the extension;

15 otherwise, we got to have applications so we don't come to a

16 point, come September this year we don't have permits in hand,

17 and basically we're done drilling out there.

18 So I think it's important that EPA moves this at a

19 fast pace to give resolution to this extension issue.

20 Another thing that I would suggest, in developing a

21 general permit or permit by rule, that while I think it's

22 consistent to have a program that mirrors with what the State

23 is doing out there, the operators have worked very closely

24 with the State on developing GAO that they're trying to go

25 forward with.
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 21

1 There's lots of concerns from the operators'

2 standpoint as far as the ability and effectiveness of that GAO

3 going forward. So if that is something the EPA wants to push

4 as far as going forward using that as a template, we hope that

5 you would engage with the operators basically to get feedback

6 on some concerns we have with the development of a general

7 permit or PBR.

8 Thank you very much.

9 JUDGE SUTIN: Thank you.

10 Next, Mike Smith, please.

11 MR. SMITH: Thank you. Unlike Chad, I'm not often

12 asked to spell my name. But it's M-i-k-e, S-m-i-t-h, just

13 like it sounds.

14 JUDGE SUTIN: We'll get it right. Thank you.

15 MR. SMITH: I'm here this morning representing QEP

16 Resources. QEP is a leading independent natural gas and crude

17 oil exploration and production company, with operations in the

18 Rocky Mountains and the mid continent.

19 And for purposes of today's hearing, it's important

20 to note that we have, for our company, significant operations

21 in the air sheds in and around both the FBIR Reservation in

22 North Dakota and the UNO Reservation in Utah.

23 I will be very brief this morning mainly because our

24 comments will follow those of the other companies. But we

25 wanted to make sure you understood that there's a large group
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 22

1 of us that share those concerns. And we will also participate

2 in the more formal commenting period ending on Monday.

3 I guess I'd just emphasize where Chad left off on

4 his concerns about the timing. We are quickly in the next

5 week or so faced with a decision on whether we need to move

6 forward with the individual permitting process in order to

7 protect ourselves should we not hear about an extension in

8 time to have these permits in hand by the current September 2,

9 2014 deadline.

10 So we bring with us strong support of the extension.

11 We think the 18-month extension makes some sense, but actually

12 the best idea I've heard is an extension that runs until

13 12 months after the effective date of the general permit or

14 permit by rule. That would give us all the lead time that we

15 need to be ensured that we can utilize this very important

16 program.

17 Finally, I just want to note that we'd like you to

18 make clear that gathering is included in the NICS Code

19 twenty-one one eleven, oil and gas production operations. We

20 think it is; that's the way we operate. But without that

21 clarity, there could be some confusion as to whether all of

22 the oil and gas sector can utilize this extension and so we'd

23 like you to pay close attention to that as well.

24 So again, we support the comments you're going to

25 hear from other companies and those that we've heard so far,
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 23

1 and appreciate the opportunity to be here.

2 JUDGE SUTIN: Thank you.

3 TJ McReynolds?

4 MR. MC REYNOLDS: Good morning. I'm TJ McReynolds,

5 M-c-R-e-y-n-o-l-d-s. I come before you as the NSD of the Ute

6 Indian Tribe, who I represent as legal counsel.

7 And Tribe, first and foremost, supports any

8 extension of the minor source permitting regime for the oil

9 and gas sector either, you know, 12 months out to September 2,

10 2015, or through March of 2016, or any other extension that,

11 you know, our Industry partners would like to see.

12 We support them; they support us. We work hand in

13 hand with one another in the Uinta Basin. And we'd like to

14 continue that relationship.

15 With that, EPA's proposed minor source permits are

16 five categories in Indian country. Though the EPA has not yet

17 proposed a minor source permit for the oil and gas sector,

18 these five permits may set the precedent for forthcoming oil

19 and gas permits.

20 The current permitting regime is flawed in three

21 significant areas. One, it may pose pre-construction review,

22 two, it relies on throughput limits and three, it imposes

23 unnecessarily stringent pollution control requirements. This

24 creates disincentive for investment on our reservation.

25 Tribal/Industry partners plan drilling schedules
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 24

1 months in advance, and schedules must be flexible. Industry

2 needs predictability and certainty in any permitting regime.

3 The proposed permitting regime scheme provides neither.

4 The Tribe requests that EPA will offer permits by

5 rule for oil and gas development so that permitting delays do

6 not force delays in drilling on the reservation, which will

7 lead to our Industry partners moving off the reservation.

8 The existing FIP for Fort Berthold Indian

9 Reservation should serve as a model, not the state of Utah's.

10 EPA's preferred approach seems to be one of using

11 general permits for all minor sources which would require pre12 construction review; however, the EPA seeks comment on using

13 permits by rule for three categories that have the simplest

14 compliance requirements.

15 The Tribe seeks clarification if the oil and gas

16 industry would qualify for permits by rule.

17 We'd also like to point out that the EPA lacks the

18 resources to process general permits in a timely manner, much

19 less site source-specific permits.

20 Permits by rule require less resources, while at the

21 same time protecting the air quality of our reservation.

22 As proposed, the general permits incorporate

23 throughput and production limit on many source categories. A

24 well's production cannot be predicted in advance of bringing

25 it on line.
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 25

1 Throughput limits can cause uncertainty and cost to

2 the oil and gas sector. Ultimately, oil and gas operators

3 approaching throughput limits would be required to restrict

4 production in order to meet the permit limits.

5 This, in turn, denies the tribe royalty payments

6 which it relies on to operate the tribal government, and

7 provide much needed social services to its tribal members, and

8 also denies the tribe full benefit of its natural resource.

9 Some of the general permits include provisions that

10 are significantly more stringent than the new source review

11 performance standards for this area's largest category. This

12 leaves open the possibility EPA would go even further than

13 OOOO NCS requirements for true minor sources.

14 Again, this overreach by the EPA will force our

15 Industry partners to leave our reservation for state lands,

16 and thus deny the Tribe of a much needed revenue source.

17 The proposed permits include burdensome

18 recordkeeping and reporting requirements for minor sources

19 that are more restrictive than for permits on state land.

20 This, in turn, hurts our tribal-member operated

21 facilities on the UNO Reservation. The EPA's proposed setback

22 requirements for at least two source categories, but the EPA

23 does not have jurisdiction over the surface use of tribal

24 lands. It is the tribe that has the authority to regulate

25 land use on its reservation, not the EPA. This must be
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 26

1 deleted from any permitting regime.

2 The Federal Register notice provided little

3 information on the possibility of using general permits or

4 permits by rule for synthetic minors. Synthetic minor permits

5 offer the potential for voluntarily reducing environmental

6 impacts in a cost effective manner. We request that EPA

7 pursue this option more forcefully.

8 The EPA must consult with the tribe on any proposed

9 permit affecting the reservation under executive orders, EPA's

10 consultation policy, and the government-to-government

11 relationship between the tribes and federal government.

12 Many tribes and tribal governments depend on energy

13 revenue to fund essential services, including healthcare,

14 housing, law enforcement, youth programs, and many others.

15 If our Industry partners leave the reservation, our

16 members and economies will suffer.

17 I would like to also include the fact that the Uinta

18 Tribe respectfully requests government-to-government

19 consultation on any general permit or permit by rule that the

20 EPA is considering for the oil and gas sector.

21 The Tribe also requests consultation on any permit,

22 general permit, or permit by rule for these five source

23 categories in bundle 1 in order to come up with a workable

24 permit that works for the reservation and its tribal members

25 who own such businesses within the reservation boundaries.
EPA PUBLIC HEARING 3/12/2014

scheduling@huntergeist.com HUNTER + GEIST, INC. 303.832.5966 / 800.525.8490

Page 27

1 And with that, I thank you for your time.

2 JUDGE SUTIN: Thank you, Mr. McReynolds.

3 So, those are the registered speakers we have so

4 far. Is there anyone else who would like to provide testimony

5 or make comments? Last chance.

6 Okay. Well, then, I think we will conclude the

7 hearing. Before we conclude I just want to make sure no one

8 wants to speak. Okay.

9 If there are no further comments, I will conclude

10 this hearing. Thank you for participating today. Have a nice

11 day.

12

13 (Whereupon the within proceedings adjourned at

14 9:11 AM.)

15

16

17

18

19

20

21

22

23

24

25

EPA Public Hearing Sign-in Sheet 

March 12, 2014, 8:30 AM to 5 PM 

Location: CDPHE 

General Permits and Permits by Rule for the Federal Minor New Source Review Program in Indian 

Country (EPA-HQ-OAR-2011-0151; FRL-9904-09-0AR, RIN 2060-AQ95) 

Page I 

Name Company/Organization 

f 

y:-'f-)21( ~~ )~~'r'('\d ) ·IT-A\/) 

, r '\...../"' 
EPA Public Hearing Sign-in Sheet 

March 12, 2014, 8:30 AM to 5 PM 

Location: CDPHE 

General Permits and Permits by Rule for the Federal Minor New Source Review Program in Indian 

Country (EPA-HQ-OAR-2011-0151; FRL-9904-o9-0AR, RIN 2060-AQ95) 

Page I 

Name Company/Organization Email/Contact