1. Impact of Recent Environmental Protection Agency “Indian Country” Determination Prepared for the National Mining Association/Nuclear Regulatory Commission Annual Conference Prepared by Thompson & Simmons, PLLC: Presented by: Anthony J. Thompson, Esq. Christopher S. Pugsley, Esq.

2. Introduction Given the Recent Resurgence in the Demand for New Sources of Uranium, It is Imperative that Prospective Licensees (Applicants) Understand All Aspects of the Licensing Process; Given the Recent Resurgence in the Demand for New Sources of Uranium, It is Imperative that Prospective Licensees (Applicants) Understand All Aspects of the Licensing Process; Since Many, if Not Most, New Near-Term Uranium Recovery Projects Will Utilize the In Situ Recovery (ISR) Process, It is Important to Know Which Licenses/Permits are Required and What Issues Will Arise Since Many, if Not Most, New Near-Term Uranium Recovery Projects Will Utilize the In Situ Recovery (ISR) Process, It is Important to Know Which Licenses/Permits are Required and What Issues Will Arise

3. Emerging Issues for ISR Uranium Recovery Projects ISR Uranium Recovery Projects Generally Require Three Types of Licenses/Permits or Approvals: ISR Uranium Recovery Projects Generally Require Three Types of Licenses/Permits or Approvals: Nuclear Regulatory Commission (NRC)/Agreement State Uranium Recovery License; Nuclear Regulatory Commission (NRC)/Agreement State Uranium Recovery License; Environmental Protection Agency (EPA) Aquifer Exemption for Activity in Aquifer or Portion Thereof Exempted from Use as Drinking Water Source; Environmental Protection Agency (EPA) Aquifer Exemption for Activity in Aquifer or Portion Thereof Exempted from Use as Drinking Water Source; EPA/State/Tribal Underground Injection Control (UIC) Permit for Injection of Lixiviant EPA/State/Tribal Underground Injection Control (UIC) Permit for Injection of Lixiviant

4. Emerging Issues for ISR Uranium Recovery Projects A Prospective Licensee Must Understand to Which Agency/Entity an Application Must be Submitted: A Prospective Licensee Must Understand to Which Agency/Entity an Application Must be Submitted: Uranium Recovery License >>> NRC/Agreement State; Uranium Recovery License >>> NRC/Agreement State; Aquifer Exemption >>> EPA; Aquifer Exemption >>> EPA; UIC Permit >>> EPA/State/Tribe UIC Permit >>> EPA/State/Tribe

5. Underground Injection Control Permitting Who Has Control Over UIC Permitting Has Become More Difficult to Determine; Who Has Control Over UIC Permitting Has Become More Difficult to Determine; Lack of Clarity Over Which Agency/Entity Has Jurisdiction Over Issuance of UIC Permits Potentially Could Cause Delays in Development of New ISR Uranium Recovery Projects Lack of Clarity Over Which Agency/Entity Has Jurisdiction Over Issuance of UIC Permits Potentially Could Cause Delays in Development of New ISR Uranium Recovery Projects

6. Safe Drinking Water Act/Underground Injection Control Program Origins In the 1970s, Congress Identified the Need for Harmonization Between: In the 1970s, Congress Identified the Need for Harmonization Between: Protection of Underground Sources of Drinking Water (USDWs); Protection of Underground Sources of Drinking Water (USDWs); Mineral Recovery (e.g., Uranium) in USDWs Mineral Recovery (e.g., Uranium) in USDWs Congress Enacts the Safe Drinking Water Act to Include a UIC Program: Congress Enacts the Safe Drinking Water Act to Include a UIC Program: EPA Promulgates a UIC Program That: EPA Promulgates a UIC Program That: Sets Parameters for Exempted Aquifers, or Portions Thereof, Where Mineral Recovery Activities Can Occur; Sets Parameters for Exempted Aquifers, or Portions Thereof, Where Mineral Recovery Activities Can Occur; Sets Requirements for Remedial Action if Production or Post-Production Mineral Recovery Operations Cause Impacts on Adjacent, Non-Exempt Aquifers or Portions Thereof; Sets Requirements for Remedial Action if Production or Post-Production Mineral Recovery Operations Cause Impacts on Adjacent, Non-Exempt Aquifers or Portions Thereof; Promotes Active State/Tribal Involvement in UIC Permitting Process Promotes Active State/Tribal Involvement in UIC Permitting Process

7. Jurisdictional Authority: “Primacy” UIC Program Enacted to Provide A Simplified Jurisdictional Program: UIC Program Enacted to Provide A Simplified Jurisdictional Program: Primary Jurisdiction Over UIC Program and Issuance of UIC Permits Rests with EPA; Primary Jurisdiction Over UIC Program and Issuance of UIC Permits Rests with EPA; State and Tribal Governments May Petition EPA to Obtain “Primacy” Over the UIC Program Within Their Jurisdiction (i.e., Issuance of UIC Permits) State and Tribal Governments May Petition EPA to Obtain “Primacy” Over the UIC Program Within Their Jurisdiction (i.e., Issuance of UIC Permits) EPA Must Approve All Aquifer Exemptions EPA Must Approve All Aquifer Exemptions

8. “Primacy” Under EPA’s UIC Program, “Primacy” is Intended to Offer State and Tribal Governments the Opportunity to Manage a UIC Program Consistent With EPA Regulations & Guidelines: Under EPA’s UIC Program, “Primacy” is Intended to Offer State and Tribal Governments the Opportunity to Manage a UIC Program Consistent With EPA Regulations & Guidelines: State or Tribal Authority Must Submit Petition/Application to EPA requesting Primacy and Demonstrating a Viable UIC program; State or Tribal Authority Must Submit Petition/Application to EPA requesting Primacy and Demonstrating a Viable UIC program; Requirements Must be At Least as Stringent as EPA’s Requirements Requirements Must be At Least as Stringent as EPA’s Requirements

9. Jurisdictional Authority: “Primacy” Jurisdiction to Issue UIC Permits Rests with the Following Agencies/Authorities Under the Following Scenarios: Jurisdiction to Issue UIC Permits Rests with the Following Agencies/Authorities Under the Following Scenarios: Lands in Question “Non-Indian Country” & No State “Primacy” >>> EPA Issues Permit; Lands in Question “Non-Indian Country” & No State “Primacy” >>> EPA Issues Permit; Lands in Question “Non-Indian Country” & State Has “Primacy” >>> State Issues Permit; Lands in Question “Non-Indian Country” & State Has “Primacy” >>> State Issues Permit; Lands in Question “Indian Country” & No Tribe “Primacy” >>> EPA Issues Permit; Lands in Question “Indian Country” & No Tribe “Primacy” >>> EPA Issues Permit; Lands in Question “Indian Country” & Tribe Has “Primacy” >>> Tribe Issues Permit; Lands in Question “Indian Country” & Tribe Has “Primacy” >>> Tribe Issues Permit; Lands in Question “In Dispute” >>> EPA Issues Permit Lands in Question “In Dispute” >>> EPA Issues Permit

10. Current “Primacy” Status The Status of “Primacy” for Traditional ISR Injection Wells (Class III) in Uranium-Producing States Are: The Status of “Primacy” for Traditional ISR Injection Wells (Class III) in Uranium-Producing States Are: Nebraska: State Shares “Primacy” with EPA Over Class III Wells; Nebraska: State Shares “Primacy” with EPA Over Class III Wells; Utah: State Has “Primacy” Over Class III Wells; Utah: State Has “Primacy” Over Class III Wells; Arizona: EPA Has “Primacy” Over Class III Wells; Arizona: EPA Has “Primacy” Over Class III Wells; Nevada: State Has “Primacy” Over Class III Wells; Nevada: State Has “Primacy” Over Class III Wells; Wyoming: State Has “Primacy” Over Class III Wells; Wyoming: State Has “Primacy” Over Class III Wells; South Dakota: EPA Has “Primacy” Over Class III Wells; South Dakota: EPA Has “Primacy” Over Class III Wells; New Mexico:State Has “Primacy” Over Class III Wells; New Mexico:State Has “Primacy” Over Class III Wells; Texas: State Has “Primacy” Over Class III Wells Texas: State Has “Primacy” Over Class III Wells Colorado: EPA Has “Primacy” Over Class III Wells Colorado: EPA Has “Primacy” Over Class III Wells

11. Recent Issues for Underground Injection Control Programs Hydro Resources, Inc. (HRI) and Some Members of the Navajo Nation Have Engaged in Litigation Regarding UIC Permit for Church Rock Section 8 (New Mexico) Project Site: Hydro Resources, Inc. (HRI) and Some Members of the Navajo Nation Have Engaged in Litigation Regarding UIC Permit for Church Rock Section 8 (New Mexico) Project Site: Section 8 Property is Fee Land (Surface & Subsurface); Section 8 Property is Fee Land (Surface & Subsurface); HRI Obtains UIC Permit from New Mexico; HRI Obtains UIC Permit from New Mexico; Navajo Nation Alleges Section 8 is “Indian Country;” Navajo Nation Alleges Section 8 is “Indian Country;” U.S. Court of Appeals for Tenth Circuit Remands UIC Permit Issue to EPA for Decision on Section 8 “Indian Country” Status (2000) U.S. Court of Appeals for Tenth Circuit Remands UIC Permit Issue to EPA for Decision on Section 8 “Indian Country” Status (2000)

12. “Indian Country” Determinations EPA’s Determination is Based on the Federal Definition of “Indian Country:” EPA’s Determination is Based on the Federal Definition of “Indian Country:” 18 U.S.C. § 1152 Defines That “Indian Country” as Either: 18 U.S.C. § 1152 Defines That “Indian Country” as Either: Reservation Lands; Reservation Lands; Allotted Lands; Allotted Lands; Dependent Indian Community Dependent Indian Community

13. “Indian Country” Determinations Supreme Court Has Considered The Determination of “Indian Country” Based on Status as a “Dependent Indian Community” in State of Alaska v. Native Village of Venetie Tribal Government: Supreme Court Has Considered The Determination of “Indian Country” Based on Status as a “Dependent Indian Community” in State of Alaska v. Native Village of Venetie Tribal Government: All “Indian Country” Lands Must Fulfill Two Basic Standards: All “Indian Country” Lands Must Fulfill Two Basic Standards: Land Must Be: Land Must Be: Set Aside by Federal Government for Use by Native Americans; Set Aside by Federal Government for Use by Native Americans;AND Under Active Federal Superintendence for the Benefit of Dependent Native Americans Under Active Federal Superintendence for the Benefit of Dependent Native Americans

14. “Indian Country” Determinations Tenth Circuit Considers The Dependent Indian Community Issue in HRI v. EPA (2000) and Holds: Tenth Circuit Considers The Dependent Indian Community Issue in HRI v. EPA (2000) and Holds: Circuit Court’s “Community of Reference” Test Should Be Used to Determine in What Context Lands in Question Must Be Evaluated; Circuit Court’s “Community of Reference” Test Should Be Used to Determine in What Context Lands in Question Must Be Evaluated; Status of the Area in Question as a “Community;” AND Status of the Area in Question as a “Community;” AND “Community of Reference Within the Context of the Surrounding Area” “Community of Reference Within the Context of the Surrounding Area” Venetie Did Not Directly Address “Community of Reference” Test; Venetie Did Not Directly Address “Community of Reference” Test; HRI and Members of the Navajo Nation Must Return to EPA for Final Determination of “Indian Country” Issue HRI and Members of the Navajo Nation Must Return to EPA for Final Determination of “Indian Country” Issue

15. EPA Administrative Proceeding HRI, Navajo Nation, and Other Interested Persons/Groups Submit Comments/Argument to EPA; HRI, Navajo Nation, and Other Interested Persons/Groups Submit Comments/Argument to EPA; HRI ARGUMENT TO EPA: Section 8 is Not “Indian Country”: HRI ARGUMENT TO EPA: Section 8 is Not “Indian Country”: No Part of Section 8 Land is Reservation, Tribal Trust or Allotted Land; No Part of Section 8 Land is Reservation, Tribal Trust or Allotted Land; No Part of Section 8 Land is Now or Has Ever Been Set Aside by the Federal Government for Use of Native Americans (Navajo); No Part of Section 8 Land is Now or Has Ever Been Set Aside by the Federal Government for Use of Native Americans (Navajo); No Part of Section 8 Land is Now or Has Ever Been Under Active Federal Superintendence for Dependent Native Americans; No Part of Section 8 Land is Now or Has Ever Been Under Active Federal Superintendence for Dependent Native Americans; All Acres of Section 8 Land is Owned in Fee Simple and Surface & Subsurface Estates are Owned by HRI Through a Patent with United States All Acres of Section 8 Land is Owned in Fee Simple and Surface & Subsurface Estates are Owned by HRI Through a Patent with United States

16. EPA Administrative Proceeding NAVAJO NATION ARGUMENT TO EPA: The Character of Section 8 Lands Determines Indian Country: NAVAJO NATION ARGUMENT TO EPA: The Character of Section 8 Lands Determines Indian Country: Tenth Circuit Decision Distinguishes Section 8 From Classes of Land Such As Described in Venetie; Tenth Circuit Decision Distinguishes Section 8 From Classes of Land Such As Described in Venetie; Section 8 is Within Boundaries of “Church Rock Chapter” of Navajo Nation; Section 8 is Within Boundaries of “Church Rock Chapter” of Navajo Nation; Population is Predominantly Navajo; Population is Predominantly Navajo; Historic Uses of Land Based on Navajo Culture Historic Uses of Land Based on Navajo Culture

17. EPA Administrative Proceeding EPA/Department of the Interior (DOI) Issues Decision Finding Church Rock Section 8 Property to be “Indian Country:” EPA/Department of the Interior (DOI) Issues Decision Finding Church Rock Section 8 Property to be “Indian Country:” Tenth Circuit Decision Distinguishes Section 8 From Classes of Land Such As Described in Venetie; Tenth Circuit Decision Distinguishes Section 8 From Classes of Land Such As Described in Venetie; Section 8 is Within “Loose” Boundaries of Church Rock Chapter of Navajo Nation; Section 8 is Within “Loose” Boundaries of Church Rock Chapter of Navajo Nation; Population is Predominantly Navajo; Population is Predominantly Navajo; Historic Uses of Land Based on Navajo Culture Historic Uses of Land Based on Navajo Culture

18. Status of Section 8 Determination HRI Has Appealed EPA’s Decision to the Tenth Circuit Arguing: HRI Has Appealed EPA’s Decision to the Tenth Circuit Arguing: EPA’s Decision Relies on Flawed Tenth Circuit Determination in HRI v. EPA on “Community of Reference Test;” EPA’s Decision Relies on Flawed Tenth Circuit Determination in HRI v. EPA on “Community of Reference Test;” Section 8 is Private Fee Land and Fails the Venetie Test; Section 8 is Private Fee Land and Fails the Venetie Test; Briefs Expected to be Filed with Tenth Circuit by the End of Summer, 2007 Briefs Expected to be Filed with Tenth Circuit by the End of Summer, 2007

19. Status of “Indian Country” Jurisdiction Issue Line of Analysis for Determining What is a “Dependent Indian Community” is Murky at Best; Line of Analysis for Determining What is a “Dependent Indian Community” is Murky at Best; Circuits (Eighth, Ninth, & Tenth Circuits) Differ on Proper Interpretation of Issue: Circuits (Eighth, Ninth, & Tenth Circuits) Differ on Proper Interpretation of Issue: Ninth Circuit Adheres to Strict Venetie Interpretation Ninth Circuit Adheres to Strict Venetie Interpretation Scope of Supreme Court’s Venetie Decision Brought into Question by Tenth Circuit’s Opinion: Scope of Supreme Court’s Venetie Decision Brought into Question by Tenth Circuit’s Opinion: Resolution of Tenth Circuit Opinion in Supreme Court Would Resolve the Issue on a National Basis Resolution of Tenth Circuit Opinion in Supreme Court Would Resolve the Issue on a National Basis

20. Status of “Indian Country” Jurisdiction Issue In Light of EPA’s Decision and the Tenth Circuit’s Application of the Venetie Decision: In Light of EPA’s Decision and the Tenth Circuit’s Application of the Venetie Decision: Applicants for UIC Permits Have No Clear Parameters on What Constitutes “Indian Country;” Applicants for UIC Permits Have No Clear Parameters on What Constitutes “Indian Country;” Potential Scope of “Indian Country” Definition Could be Extremely Broad; Potential Scope of “Indian Country” Definition Could be Extremely Broad; All Lands (State, Private Fee, BLM, etc.) in New Mexico “Checkerboard” Area Could Be Classified as “Indian Country;” All Lands (State, Private Fee, BLM, etc.) in New Mexico “Checkerboard” Area Could Be Classified as “Indian Country;” All Lands Considered “Sacred” by Tribes Potentially Could Become “Indian Country;” All Lands Considered “Sacred” by Tribes Potentially Could Become “Indian Country;” Lands Defined as “Indian Country” Potentially Could Exceed Congress’ Mandate Lands Defined as “Indian Country” Potentially Could Exceed Congress’ Mandate Courts Will Be Unclear As to the Scope of Venetie and Can Offer No Clear Understanding for Applicants Until Resolved by the Supreme Court; Courts Will Be Unclear As to the Scope of Venetie and Can Offer No Clear Understanding for Applicants Until Resolved by the Supreme Court;

21. Conclusions With the Resurgence of Nuclear Power, Applicants for New Uranium Recovery Projects Need a Clear Understanding of the Licensing/Permitting Process; With the Resurgence of Nuclear Power, Applicants for New Uranium Recovery Projects Need a Clear Understanding of the Licensing/Permitting Process; Applicants Must Understand Where to Submit License Applications to Streamline the Licensing/Permitting Process; Applicants Must Understand Where to Submit License Applications to Streamline the Licensing/Permitting Process; Lack of Clarity in Application Process Could Lead to Significant Delays From: Lack of Clarity in Application Process Could Lead to Significant Delays From: Rejected Applications for “Lack of Jurisdiction;” Rejected Applications for “Lack of Jurisdiction;” Administrative Litigation to Determine Land Status Administrative Litigation to Determine Land Status

22. Conclusions New Uranium Companies Must Be Aware of All Licensing/Permitting Issues Associated with New Projects; New Uranium Companies Must Be Aware of All Licensing/Permitting Issues Associated with New Projects; Great Care Must Be Taken to Compose a Comprehensive, Accurate Critical Path for Licensing/Permitting; Great Care Must Be Taken to Compose a Comprehensive, Accurate Critical Path for Licensing/Permitting; Agency Outreach is Essential to a Proper Understanding of the Process and Jurisdiction Agency Outreach is Essential to a Proper Understanding of the Process and Jurisdiction