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PRELIMINARY DRAFI' - SUBJECT TO CHANGE - 05/13/99 mines and oil & gas wells. The Southern Ute Indian Tribe is currently producing coal bed methane gas, while the Ute Mountain Ute Indian Tribe is producing oil and conventional gas. The gas production of both tribes is tied into a national gas pipeline network. Both tribes expect their gas production to decline over the long term [Ute Mountain Ute Tribe, p. 29; Richardson]. The Southern Ute Indian Reservation overlies about 16 billion tons of Fruitland Fonnation coal, about 500 million tons of which lies within 500 feet of the surface [Sandberg, pp. DI0 and D17]. The coal in the northern San Juan Basin (where the reservations are located) is generally high-volatile A bituminous to medium volatile bituminous [Ibid.], and is currently being mined for use in generating electric power. Just south of the Southern Ute Indian Reservation the La Plata Mine produces coal for the San Juan power plant near Farmington, New Mexico, which has about 1780 megawatts of generating capacity [U. S. ErA, "Inventory," p. 158]. The Ute Mountain Ute Indian Reservation overlies Fruitland Formation coal deposits, as well. Approximately 14.4 million tons of coal are considered attractive for strip mining [Shomaker, p. 14], but this deposit is thought to be too small to be mined separately. The economic appeal would increase if the deposit were mined in conjunction with adjacent off-reservation deposits U!lliI.]. More recent studies than those cited above have increased the amount of coal considered recoverable in the entire San Juan Basin, implying that the reservations' recoverable resources may be greater than stated above [U.S. ErA, "U.S. Coal Reserves," p. 10] The tribes' energy resources offer several opportunities for development. Tribal coal could be mined and shipped off the reservations to fuel power plants. The reservations are not presently served by railroads, so the coal would have to be trucked or shipped by slurry pipeline. Tribal coal and/or gas could be burned in on-reservation power plants, and the electricity generated would be transmitted into the power grid. Much of the tribal coal is deep, and eventually could either be mined by auger or underground mining or gasified in situ. All of these options and perhaps others may be considered by the tribes in the future. Many of the opportunities to develop energy resources will require water. Surface mining needs water for dust suppression and land reclamation. Coal- or gas-fired power plants typically use water for cooling, as would a coal gasification plant. A coal slurry pipeline would mix pulverized coal with water and pipe the resulting slurry. For the purposes of this report we have included some of what currently seem to be the more likely opportunities in an energy development scenario. The tribes have not made any decisions about the scenarios discussed in this report and may eventually decide to take a very different approach. If and when the tribes do choose to pursue a specific development opportunity they would need to meet the NEP A requirements before implementing any plan, 4