Snatching Air Permitting Certainty from the Jaws of Tribal NSR Rule Vacatur for Non-Reservation Lands

Posted on February 19, 2014 by John Jacus

The recent decision of the D.C. Circuit in Oklahoma DEQ v. EPA vacated the 2011 Tribal NSR Rules with respect to non-reservation lands for which EPA has not made a prior determination of tribal jurisdiction. By its broad terms, the opinion’s reach extends well beyond lands solely within Oklahoma (“We…vacate the Indian Country NSR Rule with respect to non-reservation Indian country.”). States with EPA-approved implementation plans may once again permit facilities within their borders located on such non-reservation lands, in the wake of this decision. Though it may be decried by EPA and Native American tribes as effecting a partial loss of federal jurisdiction and/or tribal sovereignty, it should be praised by all who value legal and regulatory certainty, especially including those who wish to obtain air permits for their commercial activities within Indian Country.

EPA promulgated the Tribal NSR Rules to fill a regulatory gap created by the asserted general lack of state authority to regulate air quality within Indian Country. It did so by exercising its authority under Clean Air Act § 7601(d)(4) to administer a federal program over Indian Country in the stead of the tribes. This gap persisted for twenty years, until the Tribal NSR Rules were finalized as a Federal Implementation Plan (FIP) for Indian Country lands nationwide that lacked such a plan.

This twenty-year regulatory gap led to the inability to obtain air permits in Indian Country for certain activities, or the conduct of such activities without air permits at all: neither a good result. It also led to enforcement against even well-controlled activities and facilities in Indian Country because without a legally and practically enforceable limit on their emissions, such as in a valid permit, EPA and tribes were required to assume emissions were as high as their potential to emit without controls, often triggering the most serious, alleged violations. This unhappy state of affairs persisted from the passage of the 1990 CAA amendments until 2011, interrupted only in 2006 by the faint promise of proposed rules that would take another five years to be finalized.

When is a Regulatory Gap not a Gap?

EPA’s overbroad assertion of jurisdiction under the Tribal NSR Rules is what ultimately led to the vacatur of the rules for non-reservation lands. The case turned on the D.C. Circuit’s prior holding in Michigan v. EPA, which involved review of the Federal Operating Permits program for Indian Country. In that rule, EPA had established a federal CAA program throughout Indian Country, but declared it would “treat areas for which EPA believes Indian Country status is in question as Indian Country.” 64 Fed. Reg. at 8262. The court in Michigan sided with the petitioners and confirmed § 7601(d)(4) permits the EPA to act only in the shoes of a tribe, and EPA could not regulate in Indian Country where a tribe could not, i.e., on non-reservation lands where there had been no demonstration of tribal jurisdiction. The Oklahoma DEQ decision was controlled by this prior interpretation of EPA’s authority under § 7601(d)(4), and confirmed that a state “has regulatory jurisdiction within its geographic boundaries except where a tribe has a reservation or has demonstrated its jurisdiction.”

The good news is that part of the gap EPA sought to fill was not a gap at all: states with valid SIPs were authorized all along to issue permits for activities on non-reservation lands for which tribal jurisdiction has not been demonstrated.  The decision reaffirms such authority of states for such non-reservation lands, so air permitting with respect to them may proceed, albeit after a period of transition (EPA had loudly proclaimed in the Tribal NSR Rules that states don’t have jurisdiction anywhere in Indian Country).

While this result is not optimal from a tribal perspective, and appears to complicate the future ability of tribes to assume the broadest possible authority to regulate air quality, it is not all bad. For example, in Oklahoma, where no reservation lands remain due to the assimilationist policies of the last century, and where title to allotment lands is a legal quagmire preventing anyone from easily determining if a project is on non-reservation lands within Indian Country, the state may once again issue permits to protect air quality. I suggest it is also not a bad thing in other states, since the ability to obtain valid state air permits for activities on non-reservation lands within Indian Country will not only protect air quality there, but will create air permitting certainty, thereby removing some of the regulatory barriers to economic development on non-reservation lands.



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