### Navajo Nation Consultation o n the Mercury Air Toxics Rule

US EPA Ariel Rios Building 1200 Pennsylvania Avenue, N.W. Washington, DC 20004

(Wednesday, 10/12/11 )

Participants

EPA: Janet M c Cabe, Laura McKelvey, Darrel Harmon, Colleen McKaughan, Jeb Stenhou se, Gregory Green

Navajo Nation Participants : Anoop Sukumaran, Charlene Nelson, Eugenia Quintana, Greg Kelly, Stephen Etsitty, Michelle Morris, Simon B o yce , and President Ben Shell e y

I ntroductions

Janet M c Cabe welcomed the Navajo Nation and reinforced our thanks for their input and that
EPA takes our consultation obligation seriously

.
President Shelley expressed unhappiness about the proposed mercury rule and its potential impacts on the economic, social, and sovereign rights of the tribe. He encouraged EPA to consider the social costs of our rules in our decision making processes. He expressed that they have simil ar concerns about the BART rule. He expressed concern that the Navajo Nation has 300,000 people but is one of the poorest communities in the United States with high unemployment, with a large percentage of the population that doesn’t have indoor plumbing, electricity, n atural gas heat

, and phones. He remarked that the revenue generated by NGS helps to contribute to tribal scholarships that ha ve helped train the Navajo air staff and others to come back to support the tribe.

He expressed concern that the rule will have an impact on the Navajo Generating Station and the supporting coal mining operations ; both of which contribute significantly to jobs for the Navajo Nation and other tribes as well as being significant sources of revenue for the tribe. In addition, the potential shutdown of NGS or even cost increases can have significant impact on the water supply and cost to the tribe and other tr ibes in the area and potentially impact their treaty rights and further revenue sources for some tribes. He reminded EPA that many members of the tribe use coal as a heating source provided by the coal mining operations which may be in jeopardy of the NG S shutdown s and makes the mining operations no longer viable.He expressed frustration that the government encouraged the development of coal energy and the

NGS and now through this and other rulemakings are undermining that development and may be

seen as a “taking” or disestablishment of that development.

He expressed frustration that the level of consultation on this rule was not adequate and reinforced that a “ one size all ” approach does not work when consulting with tribes. He expressed concern that the Agency wasn’t taking seriously President Obama’s E xecutive Order
1 3175 (Consultation and Coordination with Indian Tribal Governments) to consider impact on the economy and jobs in our rulemaking. He said his people have always had to struggle to survi ve and they are continuing that struggle through trying to balance their economic development with sustainable protection of their sacred sites.

He remarked that the Navajo Nation is developing their own energy strategy to explore other energy options in a ddition to the NGS and coal plants. They are interested in clean coal but are at green energy. He has a mandate to move forward with the D esert R ock P ower P lant and has support from the Governor of New Mexico to move forward with the permit demonstrating new
state

- of

- the

- art (non

- coal) options for generating power. He would like to see Desert Rock become a blueprint for green energy for other sources across the country. He would like EPA to work with his people to make Desert Rock happen. At the same time

, he wants to see negotiations on clean coal and how it can be used in the future.

He also discussed a new gridline that would open energy generated on the Navajo reservation to a broader market. He also expressed dismay that Texas was exempt from on e of the rules

- Cross

- State Air Pollution Rule (CSAPR).

Janet thanked him for his comments and clarified that the MATS was a national rule

, that the BART was local and applied individually to NGS

, and the Cross State rule only applied in the Eastern part of the country. She expressed interest in work ing with them on their energy advisory committee.

Stephen Etsitty then expressed concern about the application of the Agency’s consultation policy with regard to this rule. He acknowledges they were able to c onsult with the RAs and key leadership for both Regions 6 and 9 on the BART issues . However, he expressed concern that the accountability aspects of the consultation haven’t been address ; he expects to see a written letter explaining how we responded to t he issues brought out in the consultation. He reiterated the consultation activities of the Agency could be improv ed and reiterated the “ one size fits all ” approach does not work for consultation. He recognized that there are constraints on the Agency fo r travel and other activities needed for good consultation.

He stated that he felt that more consultation on rules impacting energy development was important. He noted the Navajo Nation has been working with EPA for 35 years and 10 years in grants and $ 50 million inv e sted in building his staff’s capacity to address air quality issues. He encouraged EPA to involve his staff and their expertise as we develop rules affecting the powerindustry in the future. As an example

, he pointed out that the power pl ants current leases are up

for renewal. With the uncertainty generated by these rules and the uncoordinated compliance schedule

, the lease renewal processes was being complicated

. Janet McCabe agreed that a “ one size all ” approach for consultation doesn ’t work and that one of the challenges on n ational rulemaking is balancing the needs and different directions for individual tribes.

Laura McKelvey offered that OAR/OAQPS is starting a process to update our consultation policy and would like to involve t he Navajo Nation in that process.

Stephen then continued with concern that national rulemakings often overlook western concerns and particularly the concerns and needs of the tribes. He ask ed what discretion EPA might have in co n sidering the needs of trib es in addressing the sources in Indian country.

Janet explained that the CAA required the EPA to identify the industries that emit the HAPs and then regulate them based on the top performing sources. So that new sources will operate with the best technolo gy and existing sources have to im p rove to a set emissions level. The flexibility the CAA provides is how EPA “slices and d ices” the source category to set emissions levels that make sense, factors we can consider are class, size and type. There is also flexibility on how each individual source chooses to meet those emissions limits. In considering additional flexibility we have to be consistent with the law. The CAA also requires compliance within 3

year s with potential for another year.

President She lley expressed concerns about the compliance schedule ; he felt there had been progress in negotiating with EPA on compliance options for BART and understood the compliance timeframe to be 10 year s . Now

, MATS seems to have over

- ridden these agreements. He suggested that EPA find a compromise and potential match for some of the compliance costs for the sources to ensure they don’t shut down. He expressed concern that the US was spending lots of money in nation building overseas and we should consider suppo rting similar building in our own backyards.

Michelle Morris expressed a desire to understand how health information was used in establishing the MATS rule. Janet responded that these standards are technology standards

, we don’t consider health in setting these standards until we reach the r esidual risk stage. However, in the preamble

, we have extensive information in the “n ecessary and a ppropriate ” finding on the health implications of the HAPs covered in this rule particularly for mercury and fish

consu mption for Native Americans and other communities. She also reiterated that BART is a rule to address Regional Haze and the CAA has very specific visibility requirements that must be addressed. She acknowledge d we would like to see more health data in th e future but these studies are expensive to conduct.Greg Kelly asked for more information on what flexibilities we have in the rulemaking for sub

categorization and how we justified the cutoff between the small and large sources. He offered that fuel t ype would be one approach. Janet responded that she didn’t believe we could use fuel type and we would need to follow up with the engineers to get them this information

. Greg expressed that we stated that we set the limits but it is up to the source to determine the best approach to complying with that limit. He brought up the model prediction that showe d NGS would shut down which implied to Navajo that these would be the requirements that the source would need to meet. He also raised concerns that the proposed rule seems to imply fabric filters would be required. We assured him that the modeling was a nation al projection to help us estimate actions of the power sector as a whole

, but did not look at local issues and priorities nor did it impose an out come for the individual source. We promised to look at the language in the proposal to better understand their concern.

Greg brought up the compliance timeframe and noted with request s from various parties to delay the rule, with the lease status and tryi ng to coordinate with the imposition of all the new rules

, they would be interested in any flexibility or ways to coordinate these timeframes. Janet acknowledged this compliance issue was an issue for other sources as well and we are currently exploring t he options that might be available to us.