[Senate Hearing 107-66]
[From the U.S. Government Publishing Office]
S. Hrg. 107-66
FOREST SERVICE'S ROADLESS AREA RULEMAKING
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HEARING
before the
SUBCOMMITTEE ON
FORESTS AND PUBLIC LAND MANAGEMENT
of the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
TO CONDUCT OVERSIGHT ON THE ENERGY IMPLICATIONS OF THE FOREST SERVICE'S
ROADLESS AREA RULEMAKING
__________
APRIL 26, 2001
Printed for the use of the
Committee on Energy and Natural Resources
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U.S. GOVERNMENT PRINTING OFFICE
73-348 WASHINGTON : 2001
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
COMMITTEE ON ENERGY AND NATURAL RESOURCES
FRANK H. MURKOWSKI, Alaska, Chairman
PETE V. DOMENICI, New Mexico JEFF BINGAMAN, New Mexico
DON NICKLES, Oklahoma DANIEL K. AKAKA, Hawaii
LARRY E. CRAIG, Idaho BYRON L. DORGAN, North Dakota
BEN NIGHTHORSE CAMPBELL, Colorado BOB GRAHAM, Florida
CRAIG THOMAS, Wyoming RON WYDEN, Oregon
RICHARD C. SHELBY, Alabama TIM JOHNSON, South Dakota
CONRAD BURNS, Montana MARY L. LANDRIEU, Louisiana
JON KYL, Arizona EVAN BAYH, Indiana
CHUCK HAGEL, Nebraska DIANNE FEINSTEIN, California
GORDON SMITH, Oregon CHARLES E. SCHUMER, New York
MARIA CANTWELL, Washington
Brian P. Malnak, Staff Director
David G. Dye, Chief Counsel
James P. Beirne, Deputy Chief Counsel
Robert M. Simon, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
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Subcommittee on Forests and Public Land Management
LARRY E. CRAIG, Idaho, Chairman
CONRAD BURNS, Montana, Vice Chairman
PETE V. DOMENICI, New Mexico RON WYDEN, Oregon
DON NICKLES, Oklahoma DANIEL K. AKAKA, Hawaii
GORDON SMITH, Oregon TIM JOHNSON, South Dakota
CRAIG THOMAS, Wyoming MARY L. LANDRIEU, Louisiana
JON KYL, Arizona EVAN BAYH, Indiana
RICHARD C. SHELBY, Alabama DIANNE FEINSTEIN, California
CHARLES E. SCHUMER, New York
MARIA CANTWELL, Washington
Frank H. Murkowski and Jeff Bingaman are Ex Officio Members of the
Subcommittee
Mark Rey, Professional Staff Member
Kira Finkler, Democratic Counsel
C O N T E N T S
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STATEMENTS
Page
Akaka, Hon. Daniel K., U.S. Senator from Hawaii.................. 4
Bingaman, Hon. Jeff, U.S. Senator from New Mexico................ 4
Cantwell, Hon. Maria, U.S. Senator from Washington............... 3
Craig, Hon. Larry E., U.S. Senator from Idaho.................... 1
Eppink, Jeffrey, Vice President, Advanced Resources
International, Inc., Arlington, VA............................. 11
Hochheiser, H. William, Manager, Oil and Gas Environmental
Research, Office of Fossil Energy, Department of Energy........ 9
McGarity, Professor Thomas O., University of Texas School of Law,
Austin, TX..................................................... 60
Morton, Peter A., Ph.D., Resource Economist, Ecology and
Economics Research Dept., The Wilderness Society............... 29
Murkowski, Hon. Frank H., U.S. Senator from Alaska............... 7
Phillips, Randle G., Deputy Chief for Programs and Legislation,
U.S. Forest Service, accompanied by Larry Gadt, Director for
Minerals and Geology Management................................ 13
Schaefer, Greg, Director, External Affairs, Arch Coal Inc., on
behalf of the National Mining Association, Wright, WY.......... 47
Segner, Edmund P., President, EOG Resources, Inc................. 55
Sparrowe, Dr. Rollin D., President, Wildlife Management Institute 41
Thomas, Hon. Craig, U.S. Senator from Wyoming.................... 5
Wyden, Hon. Ron, U.S. Senator from Oregon........................ 6
FOREST SERVICE'S ROADLESS AREA RULEMAKING
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THURSDAY, APRIL 26, 2001
U.S. Senate,
Subcommittee on
Forests and Public Land Management,
Committee on Energy and Natural Resources,
Washington, DC.
The subcommittee met, pursuant to notice, at 2 p.m. in room
SD-366, Dirksen Senate Office Building, Hon. Larry E. Craig
presiding.
OPENING STATEMENT OF HON. LARRY E. CRAIG,
U.S. SENATOR FROM IDAHO
Senator Craig. Good afternoon, everyone. The Subcommittee
on Forests and Public Lands will convene this afternoon. The
subcommittee will hear testimony on the energy implications of
the roadless area rule promulgated by the Clinton
administration on January 12.
During the development of this rule, the energy
implications of the proposal received little note and less
concern. In retrospect, this was a significant oversight in
light of today's developing energy crisis.
As a result of a December 14 document request conducted
jointly by the House of Representatives, we have learned that
senior Clinton administration officials met with environmental
group representatives on December 1 to discuss data from the
Department of Energy and others on the rule's energy impacts.
No official record of that meeting exists.
However, today we will hear testimony from DOE on those
data and about how they were treated in the rulemaking process.
This testimony will add to the growing record demonstrating the
inadequacy of this rule.
I had originally planned with this hearing to initiate a
Congressional Review Act evaluation of the roadless area rule.
However, I am no longer convinced that this rulemaking will
survive the U.S. court system long enough for Congress to act
one way or another.
To date, the rule has spawned eight different lawsuits in
three separate judicial circuits. Litigants, including
communities, county governments, Indian tribe interest groups,
and four States represented by the Democrat and Republican
governors and attorney generals.
Based upon public statements by other governors and local
officials and interest groups, more suits will be forthcoming
in the near future. Soon the roster of Federal judges reviewing
the rule will be sufficient to fill positions of a baseball
lineup card, with a few judges left over.
By that time, PETA will be leading demonstrations
protesting all of the innocent animals sacrificed in making the
briefcases for all the lawyers filing motions in these cases.
And that of course says nothing of the trees that are being
mowed down in the creation of the necessary paperwork both in
the courts and through the U.S. Postal Service. A bit tongue in
cheek, but a reality of the process.
Earlier this week the Sacramento Bee reported that last
year more than 160 million environmental group pitches swirled
through the U.S. Postal Service, according to figures provided
by major organizations. That's enough envelopes, stationery,
decals, bumper stickers, calendars, and personal address labels
to circle the earth more than two and a half times.
The courts have not been particularly kind on this effort
so far. On April 5, U.S. District Court Judge Edward Lodge held
that the rule constituted an obvious violation of the National
Environmental Policy Act. The judge wrote that because of the
hurried nature of this process, the Forest Service was not well
informed enough to present a coherent proposal or meaningful
dialogue, and the end result was predetermined.
Justice hurried on a proposal of this magnitude is justice
denied. That was a quote of Judge Lodge. The other legal
challenges cited violations of other statutes beyond NEPA, I
suspect based upon the record of four oversight hearings by
this subcommittee that the courts will find additional legal
infirmities.
Now, some may argue that the Government's defense of this
rule was insufficiently robust to properly defend its obvious
worthy content. However, by granting standing to environmental
group intervenors, Judge Lodge heard all of the arguments
available to defend the rule and he expressly rejected each one
of them. Others will suggest that an appeal to the 9th Circuit
will remedy this judicial malady. Perhaps an appeal will be
taken, however the 9th Circuit has developed an extensive body
of case law supporting the integrity of the NEPA process.
The appeal of Judge Lodge's decision will require
appellants, perhaps the same litigants who helped create much
of the precedent to now argue against its application.
That could prove a bit awkward for even the most
intellectually flexible legal minds. Meanwhile, cases will
proceed in other circuits. The judicial bottom line so far is
indelible. By spending less time on a national rulemaking
affecting 58 million acres than it normally would spend on an
environmental evaluation of an individual medium-sized project
on a single national forest.
The Clinton administration broke the law. The court has
given the Government until May 4 to suggest a remedy. Now it
will be left to this administration and this Congress to decide
how best to go forward from here. I hope that we can get back
to a previously honored process of evaluating roadless areas on
a forest by forest and a State-by-State basis for their
potential for inclusion into the National Wilderness System,
and then act legislatively on that potential.
It is a remarkable fact that the Clinton administration in
its 8-year tenure did not send a single national forest
wilderness proposal to Congress. It is also beyond dispute that
the Clinton administration had the worst record of any
administration since the passage of the 1964 Wilderness Act for
securing statutory wilderness designation.
I, for one, would like to reverse this sad trend. I invite
my colleagues from both sides of the aisle to join with us in
that endeavor. I think the only sound and proper way is to
evaluate these important lands on a case by case, forest by
forest basis.
With that, let me turn to the ranking member of the full
committee who has joined us this afternoon, Senator Bingaman.
[A prepared statement from Senator Cantwell follows:]
Prepared Statement of Hon. Maria Cantwell, U.S. Senator From Washington
Mr. Chairman, I would like to thank you for holding this hearing on
the Roadless Rule. This rule, which simply precludes new road
construction on 58 million acres of public land--will result in the
preservation of open space for recreational uses including mountain
biking and snowmobiling. It will protect watersheds that are sources of
clean drinking water for present and future generations. And it will
keep intact pristine habitat for fish and wildlife.
We have been through major technological changes in this country,
and one of the consequences of this wireless revolution is that people
can now live and work anywhere that they wish. Business no longer ties
people to urban areas. But what we've gained in mobility, we've lost in
open space. With the pace of development of open space and cropland
doubling over the past ten years, preservation of publicly owned open
space becomes more important and more valuable. America's ``wide-open
spaces'' are quickly disappearing and cannot be recovered.
I support the Roadless Rule, and the long-term view it takes on the
preservation of national forests for future generations. It is a
reasoned approach, particularly given that the Forest Service already
has 380,000 miles of roads on Forest Service property and that most of
these roads are in disrepair. In fact, the Forest Service has an $8.4
billion road maintenance backlog.
I am confident that competing uses for public lands could be better
managed if we focus on improving the condition of existing roads on the
millions of acres of forest lands that remain open to road building and
leasing for timber, oil, gas and coal.
The Roadless Rule is the result of a massive three-year effort by
the Forest Service and the Department of Agriculture. The rulemaking
process included over 600 public meetings and the receipt and review of
1.6 million public comments in three separate stages of the process.
The comments that were received and given due consideration include
the estimates of resources in Roadless areas submitted by the
Department of Energy that we are discussing today. In the state of
Washington alone, 60,000 people submitted comments and over 96 percent
of the comments supported the rule. The Roadless Rule does not change
the natural environment. What it does is leave nature alone. Leaving
nature alone places different requirements on the Forest Service in
preparing an Environmental Impact Statement than does development which
makes sense if the point is to protect our open spaces and remaining
natural resources. I believe that the EIS the Forest Service prepared
meets and surpasses the legal requirements.
I am extremely concerned by reports in today's Washington Post that
the White House has instructed the Department of Justice lawyers to
find a way to ``set aside'' this regulation until the Administration
can produce a less restrictive rule or eliminate it altogether. I find
this particularly troubling given Attorney General Ashcroft's
commitment to me in his confirmation hearing that he would defend any
rule that has the force and effect of law, as this rule does.
I completely respect the right of the Bush Administration to
disagree with the Rule, and to explore options to modify or even to
repeal the rule. But let us be clear--this is a final rule. It has been
published in the Federal Register and it is subject to judicial review.
Any attempt to alter this rule must be accomplished through a process
that complies with the Administrative Procedures Act and provides an
opportunity for notice and comment. The point of the Administrative
Procedures Act is to make government provide good justifications for
its policies--to open government decision making to public scrutiny--
and to ensure that views on all sides of an issue are heard.
And because this rule is a reasonable policy that sets forth
justified rationales for protecting a portion of our national forests,
I believe that the Administration faces serious hurdles in successfully
repealing this rule.
If the Administration chooses to modify this rule, it must not do
so by procedural maneuvering--by issuing further extensions or stays--
or by non-defense of a valid rule in the hope of favorable judicial
intervention.
Yet, that is exactly the sort of maneuvering that the
Administration appears to be contemplating. That is contrary to the
Attorney General's commitment to me, and it is contrary to sensible
balancing of energy needs and preservation of open space. This Rule is
a well-considered policy and it should be allowed to take effect on May
12.
STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR
FROM NEW MEXICO
Senator Bingaman. Thank you very much. I welcome the
witnesses and appreciate the chance to hear the testimony. I do
think it would be very useful to have a record and clarify what
this rule which is now being reviewed actually does in the way
of restricting development or use of our public lands and what
it does not do. My impression is that there's substantial
misconception out there about that, and so I think that would
be useful.
I would be interested in hearing from the Forest Service as
to the justification they believe exists for continuation of
the rule, and the impact that it will have on our individual
States and on oil and gas production and on mining activity as
well. I think those are issues that are very valid and clearly
ones that I think we need to know more about, thank you.
Senator Craig. Thank you, Senator. Let me now turn to
Senator Akaka, do you have any opening statement.
STATEMENT OF HON. DANIEL K. AKAKA, U.S. SENATOR
FROM HAWAII
Senator Akaka. Thank you very much, Mr. Chairman, for
calling this hearing and giving us an opportunity to hear from
the Department of Energy and the Department of Agriculture in
the mining and petroleum industry, and wilderness groups
regarding the implications of the U.S. Forest Service's
roadless area rules.
Some of you may be aware that Hawaii and the Native
Hawaiian culture are strongly linked to the natural world
around us. For centuries we have lived on Pacific islands
interdependently with the world around us, the land and the
ocean.
The State of Hawaii has an extensive forest reserve system,
additional areas which are designated as natural area reserves,
State wilderness preserves and even private reserves. Although
we do not have national forests in Hawaii, the State of Hawaii
is playing its part in reserving areas for native ecosystems of
trees and animals.
The Forest Service's roadless area initiative has
identified areas in national forests that should remain
roadless. However, we should all remember that under this rule
a roadless area does not mean it is not useful to humans. There
are already exceptions to the rule for existing leases, treaty
rights, and human health and safety.
Roadless areas are useful as harbors for wildlife, filters
and producers of clean water, and areas where humans can hunt,
fish, and hike. In other words, the roadless policy doesn't
mean that we can't use national forests.
The Forest Service has stated that the total oil and gas
production from the entire National Forest System (not just
roadless areas) is currently about .4 percent of the current
national production. It further estimates that resources in
roadless areas may be only about half of that figure which puts
it at less than .2 percent of the total oil and gas production.
This appears to be a small amount of oil and gas, in
inaccessible areas with no roads, which may not be economically
recoverable, depending on future market prices. These
resources, even if opened tomorrow, are unlikely to be
available for up to 10 years or more. Opening roadless areas
will not help our short-term energy crisis.
The recent study contracted by the U.S. Department of
Energy argues that the USFS underestimated the energy resources
in roadless areas. The study was based on a sample of States
used public and proprietary data not available for replication
and made questionable assumptions about the distribution of the
resources. All studies have inherent weaknesses, but I wish I
had more confidence in this quickly completed study.
I am not convinced that we should overturn the roadless
policy on such speculative information. The question we need to
ask is whether the amount of oil and gas resources in roadless
areas is greater and or more compelling than available oil and
gas resources elsewhere.
There are Bureau of Land Management lands, offshore
reserves, national forest areas outside of roadless areas,
State lands and private lands. Given the information I have
seen so far, it makes no sense to open roadless areas for such
a small percentage of overall resources that could be
available.
I want to thank you, Mr. Chairman for this opportunity to
make a statement, and I look forward to this hearing.
Senator Craig. Now, let me turn to our colleague from
Wyoming, Senator Craig Thomas.
STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR
FROM WYOMING
Senator Thomas. Thank you, Mr. Chairman. I appreciate your
holding this hearing. I have to run to another confirmation
hearing in a few minutes but I do want to thank you for this
and I subscribe to what you said in your opening statement. I
would like to specifically mention my friend Greg Schaefer who
will be here testifying from Wyoming and to welcome him here.
I just would like to say that I think what we're talking
about here in the broader sense is access. Access to resources,
access to public lands, access to, you know, some people have
tried to paint the picture that if you have access you suddenly
are going to ruin the resource. It doesn't need to be that way
and there's a great deal of evidence that it's not. You can
have access and you can utilize the resources without doing
irreparable damage.
Furthermore, and this is a little outside the function
here, I suppose, on energy but I'll tell you what. I've heard
from all kinds of folks who say, look, I want access to my
public lands, to my forest, disabled veterans, lots of people.
That doesn't mean you have to have roads everywhere, obviously.
But there ought to be a process that's more workable than this
one and it seems to me it ought to go with the forest plan so
that people have some input and do things.
I happened to go to a number of these meetings that were
held by the Department on roadless areas, and I can tell you,
that at the time they were doing it, the chief talked a lot
about having all these meetings, no one even really knew what
they were talking about, not even the forest people on the
ground had a real idea of what the rule meant or what it was to
mean. And so all of those hearings, many of them did not have a
great deal of substance.
I do think we need to look at it. I think we need to come
up with some reasonable solution and I appreciate you're having
this hearing, sir.
Senator Craig. Thank you, Senator. Now let me turn to the
ranking member of the subcommittee, Senator Ron Wyden.
STATEMENT OF HON. RON WYDEN, U.S. SENATOR
FROM OREGON
Senator Wyden. Thank you, Mr. Chairman. I very much
appreciate the chance to be here if only for a few minutes.
This early in the session we shouldn't have all these things
going on simultaneously. But I'm going to be in and out and I
appreciate the chance to make a brief opening statement.
Mr. Chairman, as you know, from the beginning of this
debate I've made it clear that I would support significant
additions in terms of roadless protection because protecting
additional unspoiled areas can produce gains for fish runs,
habitat and watershed quality that very often outweigh the
benefits of commercial development on those lands.
At the same time, as you and I have talked about, I
strongly support the multiple use concept and I feel that you
should not evaluate roadless rules in a vacuum, which was why
our county payments legislation was so important. It begins to
show that you can have an approach that protects treasures and
at the same time is sensitive to local economics.
I haven't had a chance to look at your opening statement in
depth, Mr. Chairman, but I want to say that the comment that I
see in your statement on page 5 really is very encouraging to
me, and I would like us to look at trying to work, as we did in
the county payments area, on this idea of trying to evaluate
roadless areas on a forest by forest and State-by-State basis
for potential inclusion in the National Wilderness System and
then move forward, as you suggest, legislatively.
I think that's a very constructive idea. I think we showed
in the county payments debate that we could get away from the
kinds of issues that are polarizing. You and I have talked
about my concerns about the Forest Service when energy
production experts say that the Forest Service is responsible
for producing only about .4 percent of our national energy
production. We get into a pretty polarized situation with that
debate comparing energy production and the environment.
Your suggestion in your prepared remarks about how to start
looking at this national wilderness system in a constructive
way is something that I am very interested in and I want to
make it clear as the ranking member of this subcommittee that I
look forward to working with you on it and appreciate you're
making the suggestion.
Senator Craig. Well, Ron, thank you very much. As you know,
if this committee, either the full committee or the
subcommittee and all of its members get ample opportunity to
examine the forest, either on a State-by-State, system by
system or forest by forest basis, and we bring the experts
before us based on the knowledge that's available and we
analyze the given areas, then we can make choices.
If there is a potential gas reserve, we can decide whether
it ought to be set aside or left accessible, and that is the
kind of conscious, open decision making we ought to be about
instead of broad sweeping areas that have not had that
opportunity of examination and the kind of detailed work that
really is the responsibility of the authorizing committee of
the kind that you and I are involved in here. And so I
appreciate those comments.
Let us turn to our panelists today and we thank you all for
being with us. I'm going to ask, panel one, first of all,
William Hochheiser, Manager, Oil and Gas Environmental Research
Office of Fossil Energy, U.S. Department of Energy in
Washington, D.C. to testify and he is accompanied by Jeffrey
Eppink of Advanced Resources International of Arlington,
Virginia who also has testimony, and so we will start with you,
Mr. Hochheiser.
Just a moment. Before you get started, the chairman of the
full committee has just arrived and we will ask him if he has
any opening comments before we turn to the panel. Senator
Murkowski.
STATEMENT OF HON. FRANK H. MURKOWSKI, U.S. SENATOR
FROM ALASKA
The Chairman. You're very kind, Mr. Chairman. I do
appreciate the accommodation. I will try to be brief because I
know the witnesses have been with us for some time. But I join
with you in expressing my concerns over what I consider a very
cavalier treatment of national energy needs in the roadless
rulemaking, the natural gas, the low sulfur coal, phosphate
reserves, these are put off limits through rulemaking and I
look forward to the testimony today with regard to those.
As we look at our energy policy or lack of energy policy,
it's not much of a point to point fingers. The question is how
do we go ahead from here. But I think in the case of the
roadless rule, in the midst of what the court has already
criticized as a ``hurried process''.
If there's a responsibility for reviewing the decision to
put permanently off limits significant energy resources, and
this was a little more than a passing note, if you would, in
the rush to preconceive judgment. There's absolutely no
question in my mind about that. I think that is wrong. I think
it is a disservice to every--both elderly and low-income
citizen of the United States concerned about the spiralling
energy costs.
Nevertheless, I think it is indicative of a denial in this
country of our energy policies as they apply to the increased
demand and the declining supply. I think energy development
decisions should be made on a case by case basis with thorough
environmental analysis based on sound science and not emotion.
That's why I hope we will shortly see the administration
review this matter and, you know, it's been pointed out to me
that sometimes a public policy has to reach the point of high
comedy or satire before we can get any sense of perspective to
make intelligent decisions.
I think the issue has probably now reached the point where
we're seeing comedians, I think 2 weeks ago Dennis Miller
commented and I quote, ``that every other vehicle in this
country is a Lincoln Navigator with an Earth First bumper
sticker.''
Now, I don't think you can blame George W. Bush for not
being able to let you have it both ways. But we do have a
problem here and as a consequence I think that the procedure of
how we go ahead and review the final record of decision is
paramount in addressing a portion of this. There's no summary
of the meetings in the Forest Service rulemaking document as
the Administrative Procedures Act requires. Consequently, some
of those ex parte contracts between previous administration
officials and environmental groups. After the close of the
public comment period and after the final EIS was published
represents, I think, another statutory violation which the
courts will undoubtedly be asked to review.
But in the meantime, many people in this country are going
to suffer as a consequence of the time delay, and that is
unfortunate. You know, interestingly, the same week that Judge
Lodge was overturning the roadless rule, Judge James Singleton
in anchorage was throwing out the claim administration's 1999
plan for the Tongass National Forest.
To give you some idea of the complexity of this, this plan
had been developed over 10 years, and $13 million, had been
expended for the plan. But what good is the plan? Obviously,
it's been revised. It's never had an opportunity to work. Now
Judge Singleton ruled against the administration, the Clinton
Tongass plan in part because Undersecretary Lyons violated the
law by having ex parte contracts with parties affected by his
review of the plan.
This thing has just gone, it's ridiculous. You have to
focus in on the objective behind this and in this harvesting of
the national forest, you have to get the Sierra club credit.
They come out and say it. The rest of it is subterfuge.
You know, I visited southeastern Alaska in the last couple
weeks and on-ground social and economic impacts of the decision
are devastating. I held a town hall meeting in Ketchikan and
had grown men crying because they felt that they had done
everything possible to ensure the continuity of the small
timber industry we have left.
But they couldn't get the timber. Now, out of a 17 million
acre forest the proposal was to allow 4 percent, and now that's
tied up in litigation. Now if we don't do something about it,
it isn't going to be done, Mr. Chairman.
And that's why I commend you in re-addressing this matter
and the severity of it and the realization that what have we
taken? 21 trillion cubic feet of gas on lands that are affected
by this Federal roadless withdrawal, taken them off limits for
the benefit of the consumer in the United States. I think
that's irresponsible. I wish some of the folks that were
responsible for it were here to explain it to us. Thank you.
Senator Craig. Well, Mr. Chairman thank you very much. Now
we will turn to our panelists and we thank you gentlemen for
your patience. Let me turn first of all to William Hochheiser.
Again, Manager of Oil and Gas, Environmental Research Office,
Fossil Energy, U.S. Department of Energy.
STATEMENT OF H. WILLIAM HOCHHEISER, MANAGER, OIL AND GAS
ENVIRONMENTAL RESEARCH, OFFICE OF FOSSIL ENERGY, DEPARTMENT OF
ENERGY
Mr. Hochheiser. Thank you, Mr. Chairman for the opportunity
to speak today on the Department of Energy's work regarding the
impacts of the Forest Service roadless area conservation
rulemaking on the development of oil and natural gas and coal
resources.
On October 12, 2000, staff of the Department of Energy's
Office of Fossil Energy met with DOE's Deputy Secretary, T.J.
Glauthier, concerning the impacts of the roadless rule on the
exploration and production of oil, natural gas, and coal
resources.
He requested that our office conduct an analysis of these
potential impacts and we tasked Advanced Resources
International, ARI, under an existing support contract to
perform an oil and gas analysis. And additionally I gathered
information on the coal impacts.
ARI completed its analysis of technically recoverable oil
and gas resources under the inventoried roadless areas in mid-
November and they presented it to a meeting convened by the
Office of Management and Budget on November 20, 2000.
Attending that meeting were representatives from the Forest
Service, the Council on Environmental Quality, OMB and DOE.
Jeff Eppink, sitting here to my right from ARI is going to
present the details of that analysis in separate testimony, but
I will just summarize the results. Between 3.5 and 23.1
trillion cubic feet or Tcf of technically recoverable natural
gas are estimated to underlie the roadless areas in the Rocky
Mountain region.
The mean estimate within that range is 11.3 Tcf of gas.
Between 120 million and 1.2 billion barrels of technically
recoverable oil are estimated to underlie the same roadless
areas with a mean estimate of 550 million barrels. Now,
comparing these estimates with the National Petroleum Council
natural gas study from December 1999, the roadless rule could
add 9.4 Tcf of gas to the resource they estimated to be off
limits to the development in the Rocky Mountain region. That is
a 32 percent increase.
Perhaps most importantly, it is estimated that 83 percent
of the affected gas, that's 9.3 Tcf, 83 percent is located
under 2.7 million acres of roadless area. That's 5 percent of
the 58 and a half million acres covered by the roadless rule.
So 83 percent of the gas could be found under 5 percent of the
area.
As a result of questions during and following the November
20 meeting, DOE further tasked ARI to estimate how much of the
technically recoverable gas would be economically recoverable
and to estimate how technology advances might affect the amount
of technically recoverable gas. The results were delivered on
November 30.
Basing their methodology on the NPC study, Advanced
Resources estimated that 7.7 to 8.5 trillion cubic feet of gas,
that's 68 to 75 percent of the technically recoverable
estimate, would be economic at prices of three to four dollars
per thousand cubic feet. Additionally, they calculated that
advances in technology would increase the mean technically
recoverable gas from 11.3 up to 13.5 Tcf by 2015.
Now with regard to the impacts on coal, I gathered
information from mining companies from the Forest Service
Minerals Group and electric utilities and my results were
written in a white paper dated November 30 that I forwarded to
the Forest Service and to OMB.
In summary, I estimated that in Colorado and Utah the
roadless rule could make at least 500 million tons of high
quality economic coal inaccessible. This coal would have a
value of $7 to $10 billion dollars.
In western Colorado, three active coal mines are hemmed in
by roadless areas. These mines currently produce 16 million
tons per year of bituminous, high Btu, low sulfur coal. In
general, the impact on each of these three mines would be to
preclude operators from extending operations into currently
unmined areas. As portions of the seams are mined, normal
practice would be to expand the mining operations to sustain
production. Hence, if this cannot be done production from the
existing areas would eventually decline and these mines would
be forced to close prematurely.
In central Utah, three tracts in the roadless areas could
contain 185 tons of economic coal worth 2.8 to 3.7 billion
dollars. One of these tracts is adjacent to an operating coal
mine which needs these resources for future expansion. This
mine produces 6 million tons per year and employs 252 people
with an annual payroll of over $19 million.
The Forest Service added the results of the analysis to the
text of the mineral section of the regulatory impact analysis
and to the summary table of the rule's costs and benefits. The
revised appendix described the DOE analysis and included
additional information we provided on the growing oil and gas
activity in the Rocky Mountain region.
After review of this information, the Forest Service
concluded that the additional information provided by the
Department of Energy did not change the magnitude of the
effects as disclosed in their final environmental impact
statement.
DOE believes that the amount of resources potentially
impacted by the roadless rule could be significant. With U.S.
demand for natural gas projected to grow significantly in the
next 15 to 20 years according to Energy Information
Administration, the National Petroleum Council and others,
interest for development of natural gas resources on Federal
lands will increase. Thank you, and I'll be happy to answer any
questions.
Senator Craig. Thank you very much, now let me turn to
Jeffrey Eppink, advanced resource international and your
relationship to DOE was a contractor.
Mr. Eppink. That's correct.
Senator Craig. To study and supply information.
Mr. Eppink. That's correct.
Senator Craig. Please proceed.
STATEMENT OF JEFFREY EPPINK, VICE PRESIDENT, ADVANCED RESOURCES
INTERNATIONAL, INC., ARLINGTON, VA
Mr. Eppink. Good afternoon, Chairman Craig and members of
the committee. My name is Jeffrey Eppink, I'm a vice president
with Advanced Resources International, an energy consulting
firm based in Arlington, Virginia. At Advanced Resources we
have conducted a number of oil and gas resource assessments in
recent years. I participated in the National Petroleum
Council's 1999 study on natural gas and I'm currently
conducting a major study on the impacts of leasing stipulations
upon natural gas resources, which I'll elaborate upon later.
Today, I'd like to present an analysis that we conducted
last fall concerning undiscovered oil and gas resources
associated with the then-proposed Forest Service inventoried
roadless areas. We performed the study for the Department of
Energy as a task under a multi-year technical and analytical
support contract to the Department.
I will first discuss briefly how this study was conducted,
present conclusions, and then briefly mention additional
similar studies that we are conducting.
The roadless study was comprehensive and a map will be put
up. The Rocky Mountain region that it covers, New Mexico to
Montana plus a portion of North Dakota contains a vast majority
of oil and gas on Federal lands. In the analysis we inventoried
the so-called inventoried roadless areas which are shown in red
on the map. These areas without which road access would
effectively prohibit oil and gas resource development.
Within the roadless areas we also discounted areas of high
slope which are shown in dark red on the map. These are areas
of mountain tops, ridges, and similar features which we assumed
to be less prospective because they would be locations where
it's physically difficult to site a drill rig or because they
represent difficult geologic settings for oil and gas to occur.
We used resource estimates from several expert groups in
the analysis, all of which are publicly available. The vast
majority of resource play data was taken from the USGS 1995
national assessment. For a few selected plays where analysis
had been conducted subsequent to the 1995 assessment, we
supplemented the USGS data with resource estimates conducted by
ourselves, the Utah Geological Survey and the potential gas
committee and industry group.
The areas of occurrence of resources in the analysis are
defined by the intersection of the resource plays with the
roadless areas. Estimates of high, low, and mean technically
recoverable oil and gas resources were made.
High estimates have low probability for occurring.
Conversely, low estimates have a high probability for
occurring. Technically recoverable resources are those that are
recoverable using current technology. The results show that the
roadless areas contain a range of three to 23 Tcf of natural
gas with a mean value of 11 Tcf, at minor amounts to over 1
billion barrels of oil with a mean value of 550 million barrels
of oil.
Further in the analysis we examined the issue of access
using guidelines established in the 1999 NPC study. We
determined that for the mean natural gas resources in the Rocky
Mountains, 7 Tcf of resources presently under standard lease
terms will become subject to access restrictions. You can see
this on the chart where in the pre-roadless conditions we have
7 Tcf of under standard lease terms, that moves to the closed
development column with the implementation of the roadless
rule.
Further, the implementation of the roadless areas will
raise natural gas resources close to development estimated by
the NPC at 29 Tcf to 38 Tcf, an increase of 32 percent.
To examine the economic impacts for eliminating access to
these technically recoverable resources, we also provided a
cursory examination of economically recoverable natural gas
resources. Based on the mean resource values and prices of
three and four dollars an MCF, about 68 to 75 percent of the
technically recoverable gas can be recovered economically,
representing $23 to $34 billion of economic activity.
We also estimate that the nine largest resource plays in
the study area comprise about 83 percent of the total impacted
resources. We determined that these nine plays represent less
than 5 percent of all roadless areas nationwide, a robust
conclusion from policy analysis point of view. And you can see
that on the map here where the plays are in the bright colors,
the roadless areas are in the red, the green, by the way, is
areas where there are oil and gas resources of one kind or
another, according to USGS.
I mentioned earlier that we're conducting ongoing resource
studies. As a follow up to the 1999 NPC study we are currently
conducting a major study of the cumulative impacts upon
undiscovered natural gas resources of leasing stipulations. We
are conducting that study on a detailed township by township
basis. The study we are now just concluding covers southern
Wyoming and northwestern Colorado, the greater Green River
basin.
We will next be examining the Uinta-Piceance Basin in Utah
and Colorado. The studies are being conducted for the
Department of Energy and we'd be happy to share those results
with you when they are available.
I appreciate this opportunity to present our roadless
analysis to you and would be glad to answer any questions. I
might add that the analysis can be found on the Internet at the
website listed in the written statement. Thank you.
Senator Craig. Mr. Eppink, thank you, very much. We've just
been joined by Senator Cantwell. Do you have an opening
statement you would like to make before we proceed?
Senator Cantwell. Thank you, Mr. Chairman. Perhaps when we
get to questions I'll have some comments.
Senator Craig. That is certainly fine. Thank you. So we
will now turn to Randy Phillips, Deputy Chief of Programs and
Legislation for the U.S. Forest Service. He's accompanied by
Larry Gadt, Director of Minerals and Geology Management, U.S.
Forest Service.
STATEMENT OF RANDLE G. PHILLIPS, DEPUTY CHIEF FOR PROGRAMS AND
LEGISLATION, U.S. FOREST SERVICE, ACCOMPANIED BY LARRY GADT,
DIRECTOR FOR MINERALS AND GEOLOGY MANAGEMENT
Mr. Phillips. Thank you, Mr. Chairman. It's nice to see you
again and be in front of this committee. And thank you for the
opportunity to talk about the roadless rule. With your
permission, I'll summarize my comments and ask the full text be
submitted for the record.
Mr. Chairman, on January 20 of this year, the assistant to
the President and White House Chief of Staff issued a
memorandum to agencies requesting that all new rules and
regulations not yet in effect be delayed for 60 days to give
the administration time to review those rules.
In accordance with that direction, the Secretary delayed
the effective date of the roadless area conservation final rule
from March 13 to May 12 of this year. Now because the roadless
rule is currently under review by the Department of Agriculture
and because of litigation, my comments today will be limited to
the effects documented in the final EIS and the final
regulatory impact analysis that was prepared in conjunction
with the final rule.
In brief, the roadless rule would generally prohibit road
construction and reconstruction in inventoried roadless areas
on 58.5 million acres of national forest and grasslands. The
prohibition of road construction and reconstruction is
anticipated to have some impact on leaseable energy minerals.
The final rule would not affect road construction and
reconstruction providing access to and development within
existing mineral lease boundaries or access needed for existing
rights such as private or State-owned mineral deposits.
The prohibitions would likely prevent expansion of existing
mineral lease areas into adjacent inventoried roadless areas or
exploration and development of new mineral leases except in
situations where development can be done without road
construction.
In 1998, over 75 million tons of coal produced from Federal
leases on national forest lands accounted for about 7 percent
of total national production and about 22 percent of production
from Federal leases. The final roadless rule could affect
exploration for or development of known coal reserves on
approximately 61,000 acres not currently leased in inventoried
roadless areas. These reserves are estimated at between 237
million and 1.3 billion tons of coal near or adjacent to active
mines.
In addition, there are over 2.5 million acres of
inventoried roadless areas with varying levels of potential to
obtain coal resources suitable for commercial development.
There are also other coal resources in inventoried roadless
areas, however the extent of the resource is not known.
The mining of coal from inventoried roadless areas is not
extensive, but there are active mines on the Grand Mesa,
Uncompahgre, Gunnison National Forests in Colorado and the
Manti-Lasal National Forest in Utah. On the Grand mesa,
Uncompahgre, Gunnison, Arch Coal is interested in expansion
into a contiguous inventoried roadless area. Although the mine
is an underground operation, expansion may require road access
for exploration and development drilling and construction of
ventilation shafts. If production cannot be expanded into
inventoried roadless areas, the mine could close within 2 to 5
years when current reserves are exhausted. Potential effects
from closure of this mine could include the loss of 361 direct
jobs, and affect 2,119 total jobs.
Currently, over 6 million acres of National Forest System
land is under lease for oil and gas. This includes
approximately 759,000 acres of inventoried roadless areas
considered to have high potential for oil and gas leasing.
The areas currently under lease will not be materially
affected by the roadless rule. Near the completion of the
roadless area, conservation, FEIS, the Department of Energy
raised additional concerns about the potential impacts on
production of coal, oil and gas resources if the final roadless
rule did not allow road building in support of exploration and
development of these leaseable minerals.
The Forest Service evaluated the information provided by
the Department in accordance with agency procedures. The agency
concluded that there was no change in the magnitude of the
effects as disclosed in the FEIS. The Forest Service included
the DOE information in the regulatory impact analysis that
accompanied the final rule.
Using information from the Department of Energy, an
estimated mean 11.3 trillion cubic feet of natural gas and 550
million barrels of oil could potentially underlie inventoried
roadless areas. They also estimate that between 63 percent and
78 percent of these potential reserves may be economically
recoverable.
DOE estimates that historically about one-third of the oil
in place at known reservoirs is recovered. Department of Energy
also estimates that about 2.7 million acres of inventoried
roadless areas contain about 83 percent of the natural gas
resource in inventoried roadless areas. There's nothing in the
final roadless rule that would prohibit construction of new
power lines or oil and gas lines in inventoried roadless areas.
However, having to construct these facilities without the use
of roads would generally increase the construction and
maintenance costs.
In summary, while the roadless rule does not impact
existing mineral leases and outstanding rights, it could impact
expansion of existing leases and exploration and development of
new mineral leases on National Forest System lands that require
road construction or reconstruction in inventoried roadless
areas. Outside of known reserves such as active coal mines in
Colorado, the actual impacts can only be estimated.
However, in those identified communities with a history of
mining dependence, prevention of existing mining expansion due
to the roadless rule could likely have a significant impact.
This concludes my statement. I'd be happy to answer any
questions, Mr. Chairman.
[The prepared statement of Mr. Phillips follows:]
Prepared Statement of Randle G. Phillips, Deputy Chief for Programs and
Legislation, U.S. Forest Service
Mr. Chairman and members of the subcommittee: Thank you for the
opportunity to appear before you today to talk about the potential
impacts of the roadless rule on energy mineral leasing from National
Forest System lands. I am Randy Phillips, Deputy Chief for Programs and
Legislation, and with me today is Larry Gadt, Director for Minerals and
Geology Management of the Forest Service. I am here today to discuss
with you the effects of the roadless rule based on the analysis in the
Roadless Area Conservation Final Environmental Impact Statement (FEIS)
that was released on November 9, 2000 and the final rule that was
published on January 12, 2001.
As you know, on January 20, 2001, the Assistant to the President
and White House Chief of Staff issued a memorandum to agencies
requesting that all new rules and regulations not yet in effect be
delayed 60-days to give the Administration time to review the rules. In
accordance with that direction, the Secretary delayed the effective
date of the Roadless Area Conservation final rule from March 13, 2001,
until May 12, 2001.
The roadless rule is currently under review by the Department of
Agriculture, so my comments today will be limited to the effects
documented in the FEIS and the final regulatory impact analysis that
was prepared in conjunction with the final rule.
In brief, the roadless rule would generally prohibit road
construction and reconstruction in inventoried roadless areas (IRAs) on
58.5 million acres of national forests and grasslands. The prohibition
of road construction and reconstruction is anticipated to have some
impact on leasable energy minerals. The final rule would not affect
road construction and reconstruction providing access to and
development within existing mineral lease boundaries or access needed
for existing rights, such as private or State owned mineral deposits.
The prohibitions would likely prevent expansion of existing mineral
lease areas into adjacent inventoried roadless areas or exploration and
development of new mineral leases except in situations where
development can be done without road construction.
Before I talk about the impacts of the rule on energy mineral
leasing, I first want to briefly discuss energy mineral leasing on
National Forest System lands.
BACKGROUND
Leasable mineral resources are those mineral resources that can be
explored for and developed under one of several mineral-leasing acts.
They include energy resources such as oil, gas, coal, and geothermal.
Exploration and development of oil, gas, coal, and geothermal
resources are discretionary activities, meaning that leasing of them
may or may not be allowed. The Bureau of Land Management (BLM) has the
authority to lease minerals on National Forest System lands; however,
they may only be leased subject to Forest Service concurrence.
Environmental impact statements are generally prepared before the
issuance of mineral leases in inventoried roadless areas. The effects
of any future lease exploration or development are also addressed in
subsequent environmental analysis.
EFFECTS OF THE ROADLESS RULE
Locatable mineral access is a right granted by statute and
therefore not materially affected by the subject to the road
prohibition. Saleable minerals are subject to the road prohibition, and
therefore eliminated as a permissible activity within inventoried
roadless. However, the economic effect of eliminating saleable minerals
is insignificant because saleable minerals (sand, gravel, limestone for
aggregate, etc.) are not economic unless very close to market due to
haul costs, therefore there is a minimal amount of this activity in
roadless.
For leasable energy minerals, the road prohibition would not
materially affect road construction and reconstruction providing access
to and development within existing lease boundaries, even if those
leases are extended beyond their current termination dates. However,
the road prohibition would likely prevent expansion of existing mineral
lease areas into adjacent inventoried roadless areas. In many cases,
such expansion is more economically advantageous to the operator than
developing new deposits.
Where reserves are known to occur in inventoried roadless areas,
the road prohibition is likely to preclude future development, except
in situations where development can occur without road construction.
The economic impacts of precluding development of an area depends on a
variety of external factors that would lead to development including
market prices, transportation, access, plus other factors such as the
availability of alternate resources in areas that may be available for
leasing (either on other National Forest System lands or on other
ownerships). Since mineral deposits tend to be concentrated in some
geographic areas, it is likely that the impacts on mining jobs and
income would also be concentrated in a few areas. The most immediate
economic effects are associated with current proposals to expand
existing leases into adjacent inventoried roadless areas for phosphate
and coal mining.
Coal
In 1998, over 75 million tons of coal produced from Federal leases
on National Forest System land accounted for almost 7 percent of total
national production, and about 22 percent of production from Federal
leases.
The final roadless rule could affect exploration for or development
of known coal reserves on approximately 61,200 acres not currently
leased in inventoried roadless areas. These reserves are estimated at
between 237 million and 1.3 billion tons of coal near or adjacent to
active mines. In addition, there are over 2.5 million acres of
inventoried roadless areas with varying levels of potential to contain
coal resources suitable for commercial development.
Some of these reserves or resources would likely be developed
within the next 5 years if offered for lease. There may also be other
coal resources in inventoried roadless areas. However, the extent of
the resource is not known and there is no demonstrated industry
interest in these.
The mining of coal from inventoried roadless areas is not
extensive, but there are active mines on the Grand Mesa, Uncompahgre
and Gunnison National Forests (GMUG) in Colorado and the Manti-Lasal
National Forests in Utah.
On the GMUG, Arch Coal is interested in expansion into a contiguous
inventoried roadless area. Although the mine is an underground
operation, expansion may require road access for exploration and
development drilling, and construction of ventilation shafts. The mine
currently produces about 7 million tons per year. If production cannot
be expanded into inventoried roadless areas, the mine could close
within two to five years, when current reserves are exhausted.
Potential effects from closure of this mine could include the loss of
361 direct jobs and affect 2,119 total jobs.
Two other operating mines adjacent to roadless areas on the GMUG
could also be affected. Data was not available on when current reserves
may be depleted for these mines, but together the two mines produce
about 9 million tons per year and employ 368 people. If future
expansion of these operations is precluded by the road prohibition, and
no alternative sources of production are economically attractive, then
these mines could be closed after current reserves under lease are
mined.
There are also three tracts with known recoverable coal reserves on
the Manti-Lasal National Forest that currently are not under lease. Two
of the potential tracts have relatively small recoverable reserves, but
the third tract has an estimated 135 million tons of recoverable
reserves, of which 50 million tons is within inventoried roadless
areas. Included in the recoverable reserve estimate are about 22
million tons of recoverable reserves owned by the State of Utah. Access
to coal owned by the State of Utah would be guaranteed, as would access
to any privately held rights. This tract would require development
facilities in an inventoried roadless area, which may preclude
development of the rest of the tract once the State's portion of the
reserve is extracted.
Oil and Gas
Federal leases are an important source of oil and gas production,
but most of the production is from off-shore leases. Production from
national forests and grasslands currently accounts for only 0.4 percent
of total U.S. oil and gas production. However, interest may increase in
response to increasing prices and demands. Although much of the
increased development is expected to be off-shore, a number of national
forests and grasslands either have current leases, or have applications
for permits to explore for natural gas.
Currently over 6 million acres of National Forest System land is
under lease for oil and gas. This includes approximately 759,000 acres
of inventoried roadless areas considered to have high oil and gas
potential under lease. The areas currently under lease will not be
materially affected by the roadless rule.
Near the completion of the Roadless Area Conservation FEIS, the
Department of Energy (DOE) raised additional concerns about the
potential impacts on production of coal, oil, and gas resources if the
final roadless rule did not allow road building in support of
exploration and development of these leasable minerals. After being
informed about these concerns, the Forest Service evaluated the
information provided by DOE, in accordance with agency procedures under
the National Environmental Policy Act for new information. After
careful review of the information provided, the agency concluded that
there was no change in the magnitude of the effects as disclosed in the
FEIS. The Forest Service included the DOE information in the regulatory
impact analysis that accompanied the final rule.
Department of Energy, undertook an analysis that focused on the
potential impacts to undiscovered oil and gas resources in the two U.S.
Geological Survey (USGS)-defined Rocky Mountain regions. Overlaying
USGS oil and gas ``play'' areas on Forest Service maps of IRAs, DOE
estimated the acres of IRAs in each of the play areas. (A play is a
USGS-designated area with common geologic characteristics that have
potential to produce oil or natural gas.) The calculations of oil and
gas resources that are estimated to occur beneath inventoried roadless
areas are tied to these acreage estimates.
Using information from the Department of Energy, an estimated
(mean) 11.3 trillion cubic feet of natural gas and 550 million barrels
of oil could potentially underlie inventoried roadless areas.
(Estimates range from 3.5 trillion cubic feet to 23.1 trillion cubic
feet of natural gas and from 119 million barrels to 1,212 million
barrel of oil.) They also estimate that between 63 percent and 78
percent of these potential reserves may be economically recoverable.
DOE estimates that historically about one-third of the oil-in-place of
know reservoirs is recovered. At the assumed prices ($3-4 per Mcf), the
value of the economic activity for these natural gas resources would
range from $23 to $34 billion dollars, which would be realized over a
number of years.
In addition, on the Los Padres National Forest in California the
prohibition of road construction or reconstruction in inventoried
roadless areas could affect exploration and possible development of
five high potential oil and gas areas and preclude possible future
development of up to an estimated 21.4 million barrels of oil.
Based on DOE's figures of total undiscovered resources within the
208 Rocky Mountain play areas examined, estimated resources beneath
IRAs account for about 3 percent of undiscovered gas and almost 7
percent of undiscovered oil resources in these play areas. DOE
estimates that 2.7 million acres of inventoried roadless acres contain
83 percent (9.3 trillion cubic feet) of the natural gas resource in all
inventoried roadless areas. Based on information from the National
Petroleum Council this is less than 1 percent of the nation's natural
gas resources.
If exploration and development did occur, it would be 5 to 10 years
before any production is likely because oil and gas leasing is
typically a lengthy process. The value would not be realized in the
near future and any production would be spread over multiple years in
the future. It is unlikely that exploration in IRAs would be a high
priority because of issues independent of the Roadless Area
Conservation Rule, such as access limited by rugged terrain, low
probability of occurrence of oil and gas resources, distance to
markets, and potential restrictions of other environmental laws.
Transmission Lines
There is nothing in the final roadless rule that would prohibit
construction of new power lines or oil and gas lines in inventoried
roadless areas. However, having to construct these facilities without
the use of roads would generally increase the construction and
maintenance costs.
Hydropower and Geothermal Energy
The roadless rule FEIS also did not identify any impacts to
existing or proposed hydropower or geothermal energy projects.
SUMMARY
While the roadless rule does not impact existing mineral leases and
outstanding rights it could impact expansion of existing leases and
exploration and development of new mineral leases on National Forest
System lands that require road construction or reconstruction in
inventoried roadless areas.
Outside of known reserves such as the active coal mines in
Colorado, the actual impacts can only be estimated. However, in those
identified communities with a history of mining dependence, prevention
of existing mining expansion due to the roadless rule could likely have
a significant impact.
Predicting the impact on undiscovered resources is difficult since
it is unknown how much of these potential reserves are actually
underneath inventoried roadless areas or how much of the reserves will
be economically recoverable in the future, or what future prices will
be.
It is reasonable to assume, under the current demand conditions,
that there will be increased interest for development of natural gas
resources on Federal lands and elsewhere. However, while it is unlikely
that inventoried roadless areas would be a significant contributor at
current prices, since exploration in inventoried roadless areas may not
be a high priority because of existing rugged terrain and access issues
independent of the roadless rule, at higher market prices development
of gas resources on Federal lands could increase.
This concludes my statement. I would be happy to answer any
questions.
Senator Craig. Mr. Phillips, thank you very much. Mr. Gant,
do you have any additional comments to add?
Mr. Gant. No, I do not.
Senator Craig. If not, let us use the 5 minute rule on
questioning rounds, so we can move through this and have all of
us participate. Mr. Hochheiser, in your testimony you indicated
that on October 12, 2000, the DOE's Office of Fossil Energy met
with Deputy Secretary T.J. Glauthier concerning the impact of
the roadless rule on the exploration and development of oil,
gas, and coal resources. Prior to that time had anyone at the
Forest Service or the Secretary of Energy's office or anywhere
else in the Executive branch for that matter asked the Office
of Fossil Energy for such an analysis?
Mr. Hochheiser. No, they did not.
Senator Craig. So the first request for this analysis came
on October 2, 2000. That would be after the President's
announcement of October 1999 that he was going to set aside
these 58 million acres of land; is that correct?
Mr. Hochheiser. Yes, it is.
Senator Craig. Approximately a year later.
Mr. Hochheiser. Yes.
Senator Craig. And that would have also been after the
December 1999 speech by the then Secretary Dan Glickman at the
national summit on private land conservation where he announced
that road building would be prohibited on pristine national
forest lands, would it not?
Mr. Hochheiser. Yes.
Senator Craig. That would also be after the State of the
Union speech in January 2000 in which the President took credit
for already protecting these areas, is that not correct?
Mr. Hochheiser. That's correct.
Senator Craig. And of course that would have been well
after the May 2000 remarks by then Vice President Gore that
there would be no more destructive development, destructive
development, new road building, or timber sales in the roadless
areas of the national forest, would it not be?
Mr. Hochheiser. Yes, sir.
Senator Craig. So really in perspective and notwithstanding
the quality of your analysis, there was no reason for you to
believe that you would have any appreciable impact on the
course of the rulemaking, was there?
Mr. Hochheiser. Well, whether we would have an impact, I
think would be determined by people making policy decisions. We
were asked to provide the analysis and we have provided the
analysis. Of course, I imagine I'm disappointed when our
analysis doesn't result in an impact.
Senator Craig. The Forest Service did respond to your
analysis in a January 5, 2000 letter to OMB. Would you go
through their major points and give us your thoughts you may
have? Mr. Eppink can assist you if you would like, and then we
will let the Forest Service respond to that, if you would
please.
Mr. Hochheiser. Well, I would just hit some high points
given the time limit, but one issue raised was that our
analysis, our maps were at a very gross level and not fine
enough to make the kind of estimates that we did, and that the
play boundaries that Jeff described were only approximate
within 1 to 5 miles.
First of all, we only made estimates to the nearest 100
billion cubic feet which is a fairly gross level and if you
wanted to round it to the nearest trillion cubic feet it would
still be 11 Tcf, which we think is significant. The play
boundaries are probably good within one to two miles, given the
ability to map rocks. And the major point here is that we find
that most of the inventoried roadless areas are wholly within
the play boundaries. In doing a computer analysis we found only
8 percent of the IRAs were within five miles of a boundary, so
that would introduce less than a 10 percent uncertainty to the
analysis.
They also brought up the fact that we assumed homogenous
distribution of resources within each play, and that's very
true with two significant exceptions. But first of all we did
look at 116 plays within that Rocky Mountain region, so that's
a fairly good level of detail. The assumption of homogenous
resources is within those plays.
Now, there are two large unconventional resource plays, gas
plays where we did not assume homogenous distribution because
ARI had done a lot of research for us in those plays, and we
have in those cases, and those are two of the top nine plays we
talked about, in those cases we have detail down to the
township level. A township is 6 by 6 mile square.
They also quoted the National Petroleum Council in saying
that the majority of gas resources are going to be found in the
basinal areas rather than at the edges and that the forest
lands are only at the edges of the basin. We think our analysis
is consistent with that because the Forest Service also pointed
out that only 3 percent of the Rocky Mountain gas resources was
found to be within the IRAs, the roadless areas. So that's
consistent with saying most of, the majority of the resource is
in the basinal areas. We found 3 percent in the roadless areas.
And we also, they also said that the oil and gas resources are
not evenly distributed and that's, of course, true. But in
doing that they pointed out that the current activity, the
current well drilling is not in the roadless areas.
I hope you don't mind if I share with you that when I asked
a Forest Service minerals expert in the field about that, he
said that was akin to telling a timber company that they should
go and cut timber where they did last year. They should do it
next year where they did last year because that's where they
found the trees last year.
And I don't mean to be flip but the fact is that this
future resource is not necessarily found where the current
wells are. I mean if that were true we'd still all be drilling
in Pennsylvania.
Some of the undrilled areas in the roadless areas are
expected to have very high potential, according to geologists,
and maybe I could let--Jeff is a geologist so maybe he could
comment on that.
Mr. Eppink. I think some of the areas do have some very
good potential. I'd just like to say the one issue is this
assumption of homogeneity of the resources that we used. I
think in most plays we did make that assumption and given the
state of knowledge, that's an appropriate assumption. But I
think we definitely, within the vertical column of a given area
we captured numerous plays so that we are capturing the
geological variety that underlies it and that we're looking at
undiscovered resource, and I just want to amplify the point
that Bill made that you don't look for undiscovered resources
in discovered fields. That's reserves growth and that's a
totally separate issue.
Mr. Hochheiser. Just a couple of more points. In
economically recoverable resources, the Forest Service pointed
out that this production wouldn't take place for probably 5 to
10 years. We don't think that's a reason to obviate the value
of those resources. And they state that the 11 Tcf would only
be 6 months of production. I feel that's a specious argument.
The country needs all the natural gas resources it can get. And
the 11 Tcf or whatever is eventually found would be produced
over probably a 20 to 30 year period and be a significant part
of our supply during that period.
And as Jeff said, I just want to point out that we only
looked at undiscovered resources so current production would be
in addition to the resources that we have, that we've been
talking about. And Federal lands are an increasingly important
part of our oil and gas production domestically. I think
especially in the Rocky Mountains that that's going to
continue.
Senator Craig. Thank you very much. Let me turn to Senator
Bingaman.
Senator Bingaman. Thank you very much. Let me just be sure
that I understand correctly what the import of this is, this
inventoried roadless area rule. As I understand it, any
existing leases in these areas were exempt from the rule, is
that right?
Mr. Phillips. That is correct.
Senator Bingaman. And as I also understand it, these so-
called inventoried roadless areas had been available for
drilling or for obtaining permits or for lease applications for
decades, am I right about that? It is not as though this land
had been locked up prior to the issuance of this rule, am I
right about that or not?
Mr. Phillips. That is correct, some of those leases,
however, may have had some stipulations placed on them for some
other concerns but not with regard to roadless.
Senator Bingaman. So that to the extent that any company
felt there was a recoverable resource there, that was
economical to recover, they were in a position to go ahead and
drill for that or explore for that or make application to lease
that area up until the issuance of this roadless rule, am I
right about that? Yes, Mr. Eppink.
Mr. Eppink. I think you're entirely correct but your key
word there is economic. We've experienced a gas bubble for the
last 12 to 15 years which has now popped. Gas prices have
substantially changed and during that time it's up to the
individual companies, but it may or may not have been economic
to pursue those resources.
Senator Bingaman. So your thought is that since the price
of gas is now substantially higher than it has been for the
last 10 or 15 years, that there are areas that now would be
attractive for exploration and development?
Mr. Eppink. All other things being equal, that's correct.
Senator Bingaman. I'm a little concerned, I guess, about
the estimates, Mr. Eppink that you've come up with here,
because there's such an enormous range that you deal with. For
example, on gas you say that there's somewhere between 3.5 and
23.1 trillion cubic feet, so it's either 3.5 or it's 7 times
that. That seems like a very large range of estimate. Is that a
normal thing to estimate that kind of a range?
Mr. Eppink. Yes, it is. If you look at it, most of the data
is driven by the USGS resources estimates and if you look at
given plays within the USGS national assessment you see ranges
like that.
Senator Bingaman. Why wasn't USGS requested to do this
work?
Mr. Hochheiser. I think it was they don't do this kind of
geographic information system analysis which consisted of
having to get the digitized maps from Forest Service and
overlay them with the resource assessment, both in the interest
of time and we had a very short time to do this, and because
the surface types of analysis are not done by USGS, just the
resource assessment work. We use their numbers principally but
they were not available to do that.
Senator Bingaman. Do you know if they support these
conclusions or generally do or want to disassociate themselves
from them?
Mr. Hochheiser. I don't think they have a position that I
know of. Probably because we didn't exclusively use USGS
numbers they wouldn't wholly support the analysis because they
would only support their own numbers. And just to comment on
one of your previous questions, just to say that in the Forest
Service impact analysis, in their letter to Mr. Spotila they do
note that there are, some of the roadless areas are currently
unavailable for leasing so not all of them are available to the
companies.
Senator Bingaman. Some of those were unavailable before the
issuance of the roadless area initiative?
Mr. Hochheiser. Yes.
Senator Bingaman. So the figures you're giving us here are
not the figures for what has been made unavailable by the
roadless rule?
Mr. Hochheiser. They are figures for, as I said, we would
say that of the 11 Tcf, about 9 would be made unavailable by
the roadless rule and the other two were already unavailable.
Senator Bingaman. They were unavailable. This article in
the paper this morning caught my eye. I don't know how accurate
it is. I just would ask any of you if you have any information
about it. It says the White House has instructed the Justice
Department to research ways to scuttle the Clinton's
administration's regulation protecting 60 million acres of
national forest from logging and road building, sources said
yesterday. That the reference they make, do any of you know if
that is a valid statement.
Mr. Phillips. I'm not aware of any instructions like that.
Senator Bingaman. Anybody else?
Mr. Hochheiser. I don't know about that, sir.
Senator Bingaman. I'll stop with that, Mr. Chairman.
Senator Craig. Jeff, thank you. Let me turn to the
chairman.
The Chairman. Thank you very much. I'm curious, Mr.
Phillips, relative to the latter part of your extended
statement and you indicate under transmission lines, and I
quote, ``there is nothing in the final roadless rule that would
prohibit construction of any new power lines or oil or gas
lines in inventoried roadless areas.'' Are you familiar with
the Intertie proposal in southeastern Alaska from Ketchikan
roughly to Wrangell?
Mr. Phillips. I am aware of that, probably not as much as
you are, but, yes I am aware of that.
The Chairman. In your opinion, would the transmission line
be allowed under this order or disallowed or can you enlighten
us a little bit on the status of the case from Judge Singleton
that, in the Tongass has challenged, if you will, the
inadequacy of the Forest Service in not considering extended
wilderness in their evaluation.
Mr. Phillips. I guess the best way to answer that is if the
transmission line required physical road construction, then it
probably wouldn't be able to do that.
The Chairman. Well, who makes that decision, is it Forest
Service? I mean, you've got to have access to put in
transmission. It's not intended to be a road for the purpose of
a road. It may be a road for purpose of putting in a
transmission line. What's your criteria?
Mr. Phillips. Well, we have definitions for what
constitutes a road.
The Chairman. Can you build a transmission line without a
road?
Mr. Phillips. In some places I think you can.
The Chairman. Can you in southeastern?
Mr. Phillips. Some places I've been in southeastern Alaska
it would be very difficult.
The Chairman. Could you get that material for the record? I
mean this right-of-way has been approved by the Forest Service
and I'm not knowledgeable on whether it assumed a road. But
since it was approved, I would assume you'd have access to some
extent.
Mr. Phillips. Let me respond for the record on that, if I
may.
The Chairman. Mr. Phillips, I want to talk to you for a few
minutes about a meeting and I would ask that you look in some
detail. You'd better hold that up a little higher it's a little
low. This is a group of bureaucrats that went to a meeting in
December 2000, I discussed that, I think Senator Craig
discussed it, but the blow up chart you see before you is a
list of the meeting's attendees, and looking at the handwriting
it suggests that at least one person, John Spotila at OMB kept
this record, and apparently his colleagues at OMB including Wes
Warren wanted to make sure he was there so he registered a
second time to make sure his presence was noted.
I don't know the significance of that, but nevertheless,
it's a rather curious effort to be recognized. Now I want to
make sure that this December 1 meeting occurred after the final
environmental impact statement was published, is that correct?
Mr. Phillips. The final environmental impact statement was
published November 17, 2000.
The Chairman. So this meeting occurred then December 1,
2000.
Mr. Phillips. That would be after November, yes, sir.
The Chairman. Now, the meeting did involve a discussion of
the Tongass National Forest because documents presented to us
include a number of letters urging the administration to modify
the final environmental impact statement to immediately include
the Tongass; is that correct?
Mr. Phillips. I'm not aware of that. I haven't seen those
documents, sir.
The Chairman. Do you have access to those documents?
Mr. Phillips. The staff advises me we don't have access to
them.
The Chairman. Well, can you advise us where those documents
might be? We happen to have the documents, and we'd be happy to
give them to you. We got them from you.
Mr. Phillips. I don't think those came from the Forest
Service.
The Chairman. Well, they came from OMB, I'm sure you can
get them from OMB. Do you want our documents that we got from
OMB?
Mr. Phillips. We'll try to get them from OMB. If we can't
we'll call staff and see if we can----
The Chairman. Well, the purpose here is to simply highlight
and share, I guess, and the process that's been going on here
for some time, it's subterfuge. These documents are available
to us and my contention is this meeting obviously involved a
portion of the Tongass National Forest. Would you acknowledge
that this meeting involved the Tongass?
Mr. Phillips. I really don't know if it involved the
Tongass.
The Chairman. I would like to have you then respond after
you've seen these documents to that question, fair enough?
Mr. Phillips. Fair enough.
The Chairman. We asked for and were told there is not a
summary of that meeting in the Forest Service public docket for
this ruling and I gather from my previous question that's
correct, you don't have a record.
And a little further along the line, as a general matter
was the Forest Service in the habit of including summaries of
meetings such as this in the public common docket.
Mr. Phillips. Yes.
The Chairman. So this was an exception to the rule,
evidently, that you don't have it?
Mr. Phillips. It might be. Again, I need to look at the
documents and then we'll respond to you.
The Chairman. Is there some other method we could find out
what was said at this meeting about the Tongass, are there
personal notes or diaries, e-mails, phone logs which might show
what was said at that meeting?
Mr. Phillips. We can do further checking. We'd be happy to
do that for you.
The Chairman. Do you know of anybody or is there anybody
that could enlighten us, that is here, relative to where we
might find some information regarding those documents?
Mr. Phillips. The staff have informed me they don't have
any.
The Chairman. Did they know where any are?
Mr. Phillips. No.
The Chairman. Do you know anyone who might have knowledge
of those documents?
Mr. Phillips. Personally, no, I don't.
The Chairman. Isn't it rather unusual that it's a policy to
have some documentation and in this case there isn't any?
Mr. Phillips. Normally. Depending on who's attending a
meeting, somebody usually keeps notes, but I don't know what
happened in this case.
The Chairman. Well they kept notes there who was in
attendance, they can't seem to find out what went on. Well, I
think I've made my point. Clearly there's been a pattern here
that has occurred under the previous administration that I
think is inexcusable, and the public has a right to have some
idea of what's going on when people's livelihood is affected.
And I think you share that, and the reality is, these decisions
were made on the basis of a clear objective which was to
terminate harvesting in the national forest, and the easiest
place to start was the largest of all our national forests and
that is the Tongass.
Less than one tenth of one percent of the commercial timber
has ever been cut in that forest. So when I respond to my
constituents, they look to me for some relief. When I try and
get information relative to how and what happened, there's no
record of the meeting.
Well, hopefully, Mr. Chairman, you can give me a call when
that material comes in.
Senator Craig. Thank you, Mr. Chairman. Now let me turn to
Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chairman, for holding this
hearing on the roadless rule and thank you to this panel and
the one that follows for testifying today. The roadless area
rule was a result of a massive 3-year effort by the Forest
Service and Department of Agriculture. The rulemaking process
included over 600 public meetings and received review of 1.6
million comments. This process also included information
submitted by the Department of Energy that we are discussing
today, about which I have a few questions.
But first I want to point out that in the State of
Washington alone over 60,000 people submitted comments with
over 96 percent of those comments supporting the rule. So like
Senator Bingaman, I was concerned when I read the Washington
Post this morning, and albeit not all attributable to sources,
that the White House has instructed the Department of Justice
lawyers to find a way to ``set aside'' this regulation until
the administration can proceed with a less restrictive rule, or
eliminate the rule entirely.
I want to make it very clear that this is a rule. It has
been published in the Federal Register. It's subject to
judicial review and any attempt to alter the rule must be
accomplished through a process that complies with the
Administrative Procedures Act, and provides opportunity for
notice and comment.
The Administrative Procedures Act is designed to make
government provide good justification for its policies. That's
why the APA was established, to open up government decision
making to public scrutiny. And so obviously you are here to
talk about that process as it related to the agencies that you
are involved with.
If the Bush administration wants to disagree with the rule,
which I think they're totally entitled to do, then they have to
go through the same APA procedures and notification and comment
process.
So my questions pertain to the information that was
provided. I want to start with Mr. Eppink's comments about the
process, and I just want to make sure . . . am I correct that
DOE submitted its study to the Forest Service during the
rulemaking process, and that the Forest Service essentially
agreed with the DOE analysis, because estimates that the Forest
Service had made about resources were similar?
Mr. Eppink. We presented the analysis just before
Thanksgiving and I'm not sure of the timing of the rulemaking
period. And as to whether they agreed with it, they certainly
saw the merit of the analysis and I can tell by follow up
questions that they had, I wrote the economic analysis and a
couple of other memos subsequent to the meeting just before
Thanksgiving. So there was a lot of interest in the analysis
and what the meaning of the analysis was.
Senator Cantwell. So they had this same information and
they took that into consideration?
Mr. Eppink. I can only assume so.
Senator Cantwell. I don't know if you want to answer this
or others do. In the assessments that DOE provided, you're
making some assumptions about the distribution of resources in
the roadless areas and in adjacent areas, right? It's not as if
the resource maps are so precise, so we're making some
assumptions here.
For the estimates that you provided, such as 11.3 trillion
cubic feet of natural gas, what kind of supply are we talking
about, in terms of length of time?
Mr. Eppink. In terms of the time it would take the industry
to develop that.
Senator Cantwell. No, usage--how long would it take?
Mr. Eppink. To use 11 Tcf?
Senator Cantwell. How does that compare to our other
resources?
Mr. Eppink. It's about a half a year's supply.
Senator Cantwell. A half a year's supply for?
Mr. Eppink. The U.S. nationally.
Senator Cantwell. A half of a year's supply for the U.S.
nationally.
Mr. Eppink. Yes. It equates that number. I'm not sure it's
fruitful to couch it in those terms.
Senator Cantwell. Well, of course we are making assumptions
about the supply distribution, first of all, and then we have
to consider the economics of extracting it, but you're saying
that if we had that source, it would be somewhere around----
Mr. Eppink. I made an assessment of undiscovered resource.
That's different than supply. Supply implies that the industry
has gone out and developed it and it's economic and they bring
it to market.
Senator Cantwell. But that would be if everything worked
out.
Mr. Eppink. If everything worked out I estimate probably 75
percent of the technically recovered would be recovered
economically over a period of about 20 years.
Senator Cantwell. But the supply of it would be a very
narrow window.
Mr. Eppink. I think of the amount that would be produced in
a given year would be 11 Tcf divided by 20. It's hard to do
math when you're up here.
Senator Cantwell. But if the total amount was half a year's
supply, then you're looking at spreading it over 20 years . . .
Mr. Eppink. It would be one 20th each year.
Senator Cantwell. And then secondly, am I right, from your
testimony that 80 percent of the potential natural gas reserves
in the roadless areas are concentrated in 5 percent of the
roadless areas?
Mr. Eppink. Yes.
Senator Cantwell. In the Rockies basically.
Mr. Eppink. Most of that resource is in the Rockies.
Senator Cantwell. How difficult is extraction there?
Mr. Eppink. Relative to other areas?
Senator Cantwell. Yes.
Mr. Eppink. I would say for the roadless areas in
particular it's more difficult than other areas, but not as
difficult as some. To give you an example, the overthrust belt
in Wyoming which is very robust play, there were 300 wells that
were drilled in play before they figured out the play. And now
it's drilled quite frequently.
The same sort of thing could happen in the Montana fold
belt were discoveries to be made. So it would, it's complex
geologically, don't get me wrong. But it's, given technologies,
3D seismic, and that sort of thing, imaging techniques have
gotten better, so the ability of the industry to actually turn
these undiscovered resources into supply is probably quite
good.
Senator Cantwell. Thank you. I know my time has expired,
Mr. Chairman, but I will have further questions that I will
submit, or ask in a second round.
Senator Craig. Thank you. As I turn to my colleague from
Wyoming let me submit two documents for the record. This is an
analysis of the comments in the comment period involved in the
roadless area review of approximately 1.1 million public
comments on the draft proposal. About 70 or 97 percent were
post cards and form letters, observed to be most likely the
result of an orchestrated campaign. In fact, of the 1.1 million
comments 800,000 of them were form letters delivered by an
environmental consortium on the final day of the comment
period.
On the other hand, detailed comments from governmental
entities included States and localities wrote 62 percent
against the proposal.
Senator Craig. Also I had asked the Washington Legal
Foundation to do an analysis of administrations and their
support of processes, proposals, and rulemaking. They've drawn
this conclusion I found quite interesting, and I'll submit this
for the record.
Based on our review of reported decisions, it appears that
the Clinton administration on at least 13 occasions refused to
defend resource management decisions of its predecessors,
choosing to accept an injunction or a remand from a U.S.
District Court rather than to defend those decisions in a U.S.
Court of Appeals.
On at least 28 other occasions, the Clinton administration
refused to defend its own resource management decisions in a
court of appeal after receiving an injunction or a remand from
a U.S. District Court.
On these 41 occasions, the Clinton administration chose to
abandon rather than defend timber sales, grazing allotments,
mining approvals, and wildlife management decisions that were
carefully made by professional resource managers. The Clinton
administration defended efforts, defense efforts in the Supreme
Court were even worse. Apart from the district court losses
that it refused to defend, the Clinton administration lost over
20 resource management cases in U.S. Courts of Appeal after
winning in the District Court. More than half of these losses
were in the Ninth Circuit Court of Appeals, the appellate
court, with the highest reversal rate of 90 percent in the
Supreme Court. Yet, in the 8 years of offices the Clinton
administration asked the Supreme Court to review and advise
resource management decisions by a court of appeals just once.
I think it's an interesting comparative record and probably
if we look at other administrations, we might find a similar
pattern.
With that I turn to my colleague from Wyoming.
Senator Thomas. Mr. Chairman, since I missed the questions,
I won't go into it, but I might have one that reflects your
last comment. The assumption is I don't know how many millions
of acres are involved to get those 11 trillion feet, I wonder
how many acres of surface would be disrupted to do that. Have
you dealt with that?
Mr. Hochheiser. I'm trying to remember back to the
analysis, I think the total amount, there were 116, 116 plays
that had some potential and I think they involved around 14
million acres, if I remember. Is not that right? But what we
found was that over 80 percent of that resource was
concentrated on 2.7 million acres.
Senator Thomas. I think that is the point. As we move
forward in the use of multiple use I think we are finding, are
we not, techniques to have less surface disruption to obtain
most of this available resources?
Mr. Hochheiser. Those 2.7 million acres are the gross
amount that is underlain by that resource. In fact the
footprint for developing it would be much smaller because you
would have well pads that would probably have multiple wells
and directional drilling and so on.
Senator Thomas. Thank you, I will pass then, Mr. Chairman.
Senator Craig. Thank you, Senator Thomas. Mr. Hochheiser,
the coal resource is particularly troubling to me. We are end
users of this coal resource and how easy would it be for them
to find alternatives when we look at this analysis?
Mr. Hochheiser. Well, what I found is the coal in the
Colorado and Utah lands that were talked about by the Forest
Service is a unique coal in that it is a high Btu, bituminous
coal and low sulfur, about half a percent sulfur.
Senator Craig. You are saying that from a clean coal basis
this is the best coal available potentially.
Mr. Hochheiser. Very clean coal and what I've found was
that it is actually shipped to the East and used by the eastern
electric utilities as a major part of their compliance strategy
with the Clean Air Act. In fact, if that, and I talked to for
instance a manager at the Tennessee Valley Authority who said
they rely on using that coal, mixing with other coals to meet
their sulfur emissions targets. And if they did not have that
coal, they would either have to use a high Btu, higher sulfur
coal and do some emissions trading which would be on the order
of one to seven dollars a ton equivalent for the coal, or use a
low Btu, low sulfur coal, in which case they would have to
derate their plants because of the higher volume of coal that
would be needed or the same volume of coal would contain less
energy. They would have to derate their plants by about 20
percent.
So that was the impact on the utility users of the coal
that I found.
Senator Craig. Thank you. Mr. Eppink, your testimony
suggests that 5 percent of the inventoried roadless areas
involved 80 percent of the potential energy resources that are
at issue in the disagreement between the Department of Energy
and the Forest Service over the impact of the rule.
Mr. Eppink. That is correct.
Senator Craig. Does that suggest to you that a more
studied, case by case approach dealing with the roadless area
matter might have reduced significantly the energy implications
of this rule without dramatically changing the amount of
acreage that was protected?
Mr. Eppink. I think that is very clear, yes.
Senator Craig. I mean, that is also my general conclusion
in looking at your findings, that if we had been allowed to
analyze this in a constructive manner, we could have exempted
those areas of high potential, or potential, and still have
protected a substantial chunk of property.
Mr. Eppink. I think that is correct. We do a number of
these analyses and I think this is one where, from the
implication, from the analysis it was fairly clear that if you
dealt with just a small amount of the areas that were being
considered you would affect a very large amount of the
resource. And as these sorts of analyses go, that is pretty
robust.
Senator Craig. Did you evaluate the secondary impacts on
the roadless rule such as pipeline access across roadless
areas?
Mr. Eppink. No, we did not.
Senator Craig. Well, let me turn to the Forest Service. Mr.
Phillips, in former director Dombeck's letter dated January 5,
2001 to John Spotila of OMB, he said after the final EIS was
published, two additional coal mines that would be affected by
the roadless rule were identified. How did the Forest Service
overlook the existence of two coal mines on national forest
lands?
Mr. Phillips. The two mines that I think you may be
referring to there are the two in Colorado which we did not
receive information for in order to reflect the economic
impacts to those operations. So I am not sure that we
overlooked them. They did not submit the information that we
needed to do the evaluation of the impacts.
Senator Craig. Does the Forest Service not keep records of
coal mining operations located on Forest Service lands?
Mr. Phillips. We do our best. Yes, we do.
Senator Craig. The answer is yes.
Mr. Phillips. The answer is yes.
Senator Craig. And still throughout this process of over a
year until it was finalized, it was not realized that two coal
mines had been missed.
Mr. Phillips. Well, it was realized that they were there, I
think, but we did not have the job-related impacts associated
with that, I believe is the case.
Senator Craig. If the Forest Service did not know these
mines existed--or does now I guess--how could it in good faith
maintain it had done a comprehensive environmental impact
analysis and meaningful initial regulatory flexibility analysis
as required by the Regulatory Flexibility Act?
Mr. Phillips. In completing that and in response to Mr.
Eppink's, actually, his question on whether or not we, how we
used the additional information that was brought forward into
the final regulatory impact analysis, we went with the
information we had. I believe the total employment effects for
coal alone were about $89 million.
Senator Craig. Okay, did you believe that it is within the
spirit and legal requirements of NEPA, RFA, and APA to publish
a proposed rule and a draft environmental impact statement when
the regulatory agency does not know who the rule would affect?
Mr. Phillips. I believe it was felt that the impacts were
adequately--well, let me say this, let me back up a minute.
That is actually a legal issue, an issue in litigation. I would
prefer not to get into speculating on that.
Senator Craig. All right. We will leave it at that. I
appreciate the reality of that situation. With that let me turn
once again to Senator Cantwell. And Senator take as much time
as you want with this panel. I am going to step out for a
moment.
Senator Cantwell. Mr. Chairman, I was going to in light of
the fact that we have a second panel, I was going to submit
whatever additional questions I have since we have had quite a
bit of discussion about what has been collected and documented,
and we are going back and forth on when and where, what was
submitted and how it was reviewed.
But if you like, Mr. Chairman, I would be happy to submit
those and go to the next panel and have them testify.
Senator Craig. Fine. I tell you, I am going to have to make
a phone call and I am going to start the next panel and let you
work down through it for the record and then I will be able to
step back in.
Senator Cantwell. Thank you.
Senator Craig. Gentlemen, thank you very much, any
additional questions will be submitted to you, Senator Cantwell
has some and I will probably have some also, but we thank you
very much for your time here.
Gentlemen, thank you very much for coming this afternoon to
provide testimony on this most important issue. Let us start
with Dr. Peter Morton of the Wilderness Society, Denver
Colorado. Dr. Morton, welcome before the committee.
STATEMENT OF PETER A. MORTON, Ph.D., RESOURCE ECONOMIST,
ECOLOGY AND ECONOMICS RESEARCH DEPT., THE WILDERNESS SOCIETY
Dr. Morton. Thank you, Mr. Chairman. I am Pete Morton, a
natural resource economist in the research department of the
Wilderness Society. We are a 200,000 member national
conservation group founded by Aldo Leopold, Bob Marshall, and
other visionaries. We focus specifically on public land issues
and I appreciate the opportunity to testify today. As you know
the Wilderness Area Conservation Rule conserves approximately
58 million acres of the public estate managed by the Forest
Service. Conserving these roadless wild lands will provide
multiple uses, multiple goods and services and multiple
economic benefits for current and future generations. Fishing,
hunting, hiking, mountain biking, skiing, rafting, camping are
just some of the multiple activities allowed in these areas,
and these activities are very important to the economies of the
Western United States.
I would like to include for the record a letter from the
Ecological Society of America, the world's premier society of
professional ecologists underscoring the scientific
justification for the wilderness area conservation rule. With
regards to energy, while gas is a clean burning rich fuel for
the future, the drilling for gas generates significant
ecological threats centered mostly on water. As a result of
drilling, aquifers are drained, water tables are lowered,
drinking water wells dry up, water quality is threatened and
you have sediment loads discharged into streams which damage
fisheries.
If there is one thing more valuable than oil and gas in the
arid West it is water. Other problems from exploiting energy
resources include erosion from roads and landslides. In
Colorado alone over 1 million acres of Forest Service roadless
areas have high risk for landslides that dump tons of sediments
into streams. All of these impacts carry price tags but they
are almost never captured in cost benefit analysis. Such costs
need to be considered especially since roadless watersheds
provide clean water for hundreds of downstream communities and
thousands of affected citizens. A more detailed discussion of
these costs are included in my written testimony.
I would like now to turn to the Wilderness Society's
analysis of oil and gas in roadless areas in six Western
States. Using GIS intersection analysis of oil and gas plays
with roadless areas, we estimate that roadless areas in these
States contain only four-tenths of one percent of the Nation's
oil resources and six-tenths of one percent of the Nation's gas
resources. These numbers were estimated using USGS data. These
are the technically recoverable resources, which drop
significantly when financial and economic factors are
considered.
Our most recent GIS analysis of Colorado highlights the
small role that roadless areas play in oil and gas development.
If you look at the map on the right, in the gray are all the
acres in Colorado with oil and gas potential. The yellow
indicates roadless areas with oil and gas potential, while the
blue indicates roadless areas without oil and gas potential. As
shown on the map, a majority of the roadless areas have no oil
and gas potential. Roadless areas with oil and gas potential
account for approximately 3 percent of the total acres in
Colorado with oil and gas potential, a small amount.
With respect to the actual amounts of the Roadless Area
Conservation Rule, currently 759,000 acres of the roadless
areas with high oil and gas potential are already under lease
and will not be impacted by the roadless rule. The remaining
land, much of which is on steep slopes, has been available for
leasing for 60 or 70 years with little or no interest from the
industry.
We have a second map which shows roadless areas combined
with the coverage of oil and gas leases. What is interesting
about this map, we have both wilderness areas and roadless
areas, and what is significant is the important role that the
roadless areas play in terms of ecological connectivity between
the a lot of the well-known roadless areas in Colorado. Also it
shows that only 2 percent of the roadless areas in Colorado are
under lease, reinforcing the lack of interest in these areas
from the oil and gas industries. Copies of these maps will be
submitted for the record.
It is also important to note that 41 percent of the
roadless areas already had management prescriptions developed
through the normal planning process with local and national
input that prohibit road construction. As such, when examining
the impact of the roadless rule we should focus only on the 59
percent of the roadless areas where management prescriptions
were actually changed.
When all these factors are considered, the potential
negative impacts from the roadless rule are much, much less
than have been estimated by the oil and gas industry. And as
importantly, when estimating economic impacts, it is proper to
examine the net impacts of the rule, fully accounting for the
benefits. While economics should not drive public land
management, when the net impacts are considered we agree with
the conclusion of the Forest Service that the benefits of the
Roadless Area Conservation Rule far outweigh the cost.
And finally with respect to the current spike in energy
prices, the quantity of oil and gas in the national forest
roadless areas are small, relatively, and will have absolutely
no impact on energy prices in the global market. In addition
the undiscovered oil and gas resources in roadless areas cannot
be added to current production for at least 5 to 10 years.
The already discovered gas reserves and expected growth in
those reserves account for 42 percent of U.S. on-shore gas
supplies. It is these resources, the financially feasible gas
resources in and around already discovered reserves that have
the potential to impact short-term energy prices, not the
hypothetical, unknown small quantities of undiscovered gas
resources in roadless wild lands far from existing pipelines.
Thank you.
[The prepared statement of Dr. Morton follows:]
PREPARED STATEMENT OF PETER A. MORTON, PH.D., RESOURCE ECONOMIST,
ECOLOGY AND ECONOMICS RESEARCH DEPT., THE WILDERNESS SOCIETY
I am Dr. Peter Morton, Resource Economist in the Ecology and
Economics Research Department for The Wilderness Society, a 200,000-
member national conservation group that focuses on public land issues.
I appreciate the opportunity to testify today regarding potential
effects of oil and gas resource development in national forest roadless
areas.
The Forest Service Roadless Area Conservation Rule has raised
concerns by some over the economic impact of prohibiting road
construction on domestic energy supplies. The environmental impact
statement for the rule presents a good overview of the rule's potential
effects on oil and gas development, including some detailed information
on reasonably foreseeable development activities. The objective of this
testimony is to evaluate the impacts--both positive and negative--of
the Roadless Area Conservation Rule to provide decision-makers with
additional information relevant to the current debate.
ECONOMIC IMPACTS FROM THE ROADLESS RULE
The Roadless Area Conservation Rule conserves approximately 58.5
million acres of the public estate managed by the U.S. Forest Service.
Conserving these roadless areas will provide for multiple uses,
multiple goods and services, and multiple economic benefits for current
and future generations. Roadless areas provide multiple backcountry
recreation opportunities (fishing, hunting, birdwatching, mountain
biking, hiking, skiing, horseback riding, rafting, etc.) represent
critical habitat for fish and wildlife--including threatened and
endangered species, provide the scenic backdrop for motorized and non-
motorized visitors outside roadless areas, generate ecosystem services
such as carbon sequestration, natural pest control and watershed
protection for local communities, and preserve the option of protecting
additional wilderness for future generations. A letter from the
Ecological Society of America (Attachment 1), the world's premier
society of professional ecologists, underscores the scientific
justification for the Roadless Area Conservation Rule.
Although roadless wildlands are highly valued by society, without
formal markets, the benefits of wildland conservation are difficult to
quantify in economic terms. As a result, non-market wildland benefits
are typically under-produced by private landowners responding to market
signals. This is a serious shortcoming as certain functions of nature,
although they have no market value and their benefits are only
partially understood, are necessary to keep America's market economy
running. Public lands can help correct market failures by sustaining
roadless wildlands that cannot survive the market forces driving
private land use decisions. The failure of markets to protect roadless
area benefits provides the economic justification for implementing the
roadless rule.
The record number of public comments received by the Forest Service
in support of the roadless policy provides empirical recognition and
support for the multiple uses and benefits generated from roadless area
conservation. While no quantitative estimate of the benefits of the
rule was provided in the Roadless EIS, the Forest Service believes the
benefits of the rule outweigh the costs (USDA Forest Service 2001,
Regulatory Impact Analysis). In a more sophisticated analysis, Loomis
and Richardson (2000) estimated that in their current, unroaded
condition, Forest Service roadless wildlands in the lower 48 states can
be expected to provide almost $600 million in recreation benefits each
year, more than $280 million in passive use values, and nearly 24,000
jobs. The authors also estimated annual benefits from roadless area
ecosystem services to include between $490 million and $1 billion worth
of carbon sequestration services as well as $490 million in waste
treatment services. Estimating the net impacts of the roadless rule
should fully account for the benefits of conserving roadless areas as
well as the potential costs with respect to the decline in quality and
quantity of the other multiple uses generated by the public estate as a
result of exploiting energy resources.
THE ECOLOGICAL FOOTPRINT OF OIL AND GAS EXPLORATION AND DRILLING
Oil and gas drilling operations leave behind a large footprint on
the landscape--a footprint that extends well beyond the several-acre
drilling sites. Beginning with exploratory activities, large trucks
with seismic surveying equipment criss-cross the landscape using a
crude system of roads designed for lowering the financial costs of
gathering geophysical information with at times little consideration
for wetlands, storm water runoff or critical habitat. Exploratory
drilling operations then require more large trucks with drill rigs
using a network of constructed roads to access drill sites. If the
exploratory well is determined to have no potential for production, the
well is plugged, but the landscape scars remain. Depending on the
agency with oversight, there is typically little enforcement or
monitoring of environmental regulations. In addition, no surety bonds
are required for restoration or clean up.
If the well has potential for production, the well is cased with
pipe and cemented (in an attempt to prevent oil and gas from seeping
into nearby aquifers), and the drilling rig is replaced by a well head.
Electric or gas powered motors are used to power the pumps that collect
the gas at each well and to power the series of 24-hour compressor
stations that pressurize gas for pipeline transport from the wells to
customers in distant markets (WORC 1999). Many drill sites also involve
the construction of sediment ponds and retention reservoirs to collect
storm water drainage and store the ground water brought to the surface
as a result of the drilling and extraction operation--the latter
process is called dewatering. Injection wells are sometimes used to
dispose of the water produced and to enhance oil and gas recovery--an
action that may necessitate additional drilling of a few to hundreds of
injection wells throughout the field (Gauthier-Warinner 2000). The
ecological footprint not only extends across the forest and range
landscape, it also penetrates to shallow aquifers as well as aquifers
thousands of feet below the earth's surface.
WATER AND THE UNCOUNTED COSTS FROM OIL AND GAS EXTRACTION
The major uncounted environmental cost associated with oil and gas
drilling concerns water. National Forest roadless areas provide
important watershed protection services for downstream communities,
services that are negatively impacted by oil and gas drilling. In the
lower 48 states, 55% of the watersheds that contain IRAs provide water
to downstream facilities that treat and distribute drinking water to
the public (LaFayette 2000, Watershed Health Specialist Report).
Greatly increased drilling activity for coal bed methane is having
profound real life impacts on many families and communities in the West
and illustrates well some of these impacts. In order to ``release'' the
methane gas from coal beds, enormous amounts of ground water must be
pumped from coal aquifers to the surface. The water discharged on the
surface comes from shallow and deep aquifers containing saline-sodic
water. The total amount of water produced from individual coalbed gas
wells is generally much higher than that from other types of oil and
gas wells (USGS 1995). Coal bed methane wells in Wyoming and Colorado
discharge between 20,000 to 40,000 gallons per day per well, onto the
ground surface (Darin 2000). The disposal of the water produced with
coalbed gas not only affects the economics of development, but also
poses serious environmental concerns. Water disposal can vary from
inexpensive methods, such as discharge into streams, to more costly
alternatives, such as underground injection and surface discharge after
water treatment.
The amount of water discharged from CBM wells in Wyoming has
skyrocketed in recent years, increasing from approximately 98 million
gallons (300 acre feet) per year in 1992, to 5.5 billion gallons
(17,000 acre feet) per year in 1999 (Wyoming State Engineer's Office
cited in Darin 2000). The discharging of 17,000 acre feet of water in
the arid west is wasteful in the short-term (generally an acre-foot of
water will supply a family of four for one year), and has potentially
devastating economic impacts for affected communities in the long-term.
Dewatering of deep aquifers may upset the hydrologic balance,
eliminating or reducing the availability of this water for future
agricultural and domestic uses, as well recharge for shallow aquifers
and surface water.
The discharge of ground water can deplete freshwater aquifers,
lower the water table, and dry up the drinking water wells of
homeowners and agricultural users. Monitoring of wells maintained by
the BLM in the Powder River Basin, Wyoming already indicates a drop in
the coal aquifer of over 200 feet (WORR 1999). The short-term economic
costs include drilling new, deeper wells for current and future
homeowners, ranchers and farmers, assuming successful wells can be
found and/or the costs of relocating families to new homesites. If the
freshwater aquifers do not fully re-charge, the long-term economic
costs to affected landowners, homeowners, communities, and states
across the west could be severe, including the foregone opportunity
(option value) to use aquifer water in the future.
The water discharged from oil and gas wells is highly saline with a
very high sodium absorption ratio (SAR)--a ratio that affects how water
interacts with soil. Water with a high SAR can permanently change
chemical composition of soils, reducing soil, air and water
permeability and thereby decreasing native plant and irrigated crop
productivity. Test results from water discharged from CBM wells from 3
sites in Wyoming all revealed SARs exceeding a level that could result
in a 30-40% decrease in plant productivity (Powder River Basin Resource
Council 2000).
The discharge of tens of thousands of gallons of ground water
transforms many streams that normally flow intermittently only during
spring runoff or after storms into all-season streams (Powder River
Basin Resource Council 2000). The influx of water has resulted in deep
channel scouring, erosion, and increased sedimentation. Increased
sedimentation in-streams can negatively impact native fisheries found
in mainstream drainages with increased likelihood and financial costs
from fishery restoration projects. The discharge of water into
intermittent stream channels damages native flora and fauna not adapted
to year-round water and promotes the spread of noxious weeds such as
Scotch burr and Canadian thistle. The change in native vegetation
composition, combined with the increase in noxious weeds, negatively
impacts threatened and endangered species and other wildlife, as well
as cattle. The loss of native species and the spread of noxious weeds
across the west has enormous economic costs to the public and private
interests.
The landscape is also impacted from the retaining ponds or
reservoirs constructed to store the water discharged from the drilling
operation. The constructed earthen dams and retaining ponds destroy
additional habitat and introduce artificial structures to the
landscape. Habitat and homes on property nearby reservoirs also have
potential flood risk from structural failure of the poorly designed,
quickly built retaining ponds and reservoirs during storm events, for
example.
And finally, drilling for oil involves ecological risks and
potential economic costs associated with blowouts--the catastrophic
surge of the highly pressurized fluid from the drill hole that can
cause fires, loss of life and property, and the potential contamination
of surface drinking water sources. To reduce the number of blowouts,
rotary drilling operations typically inject a fluid of drilling muds
into the drill hole in order to lubricate and cool the drill bit. While
reducing the number of blowouts, the drilling fluids themselves create
a risk of contamination of adjacent freshwater aquifers (Gauthier-
Warinner 2000).
the uncounted costs from drill sites, pipeline and road infrastructure
Exploiting the gas in unconventional, continuous-type deposits will
require drilling a significant number of wells, as the distribution of
these resources is not well understood. Based on existing technology,
the USGS indicates that nationwide approximately 960,000 productive
wells will be required to recover potential gas reserve additions of
300 trillion cubic feet. However, the habitat loss would not end there
as extrapolation of present-day success ratios indicates that roughly
570,000 ``dry'' holes would have to be drilled in addition to the
productive wells--for a total of 1,530,000 drilling sites on public and
private lands. Based on an industry report in Alaska (cited in NPC
1999) while past drilling pads consumed about 65 acres of habitat,
recent operations average less than 10 acres. If we assume 5 acres per
drilling pad and 1,530,000 drill sites, exploitation of just the
continuous-type gas deposits would consume approximately 7.7 million
acres of habitat on public and private land across the nation. As noted
by the USGS (http://energy.usgs.gov/factsheets/GIS/gis.html), ``land-
use planners are not in a good position to determine the societal
impacts of the drilling (density) that would be necessary if these
continuous reservoirs of (tight) gas were exploited.''
In order to bring gas to market, thousands of miles of pipeline
must also be constructed--extending the impacts of gas drilling far
from the actual drill site. There are currently more than 270,000 miles
of gas transmission pipelines and another 952,000 miles of gas
distribution lines. The National Petroleum Council (1999) projects a
need to build 38,000 and 255,000 miles of additional transmission and
distribution pipelines, respectively, by 2015.
Oil and gas exploration also requires roads that increase
ecological costs and invite cross-country travel and habitat damage by
ORVs. Oil and gas drilling often require daily vehicular trips to
monitor and maintain wells and pipelines. The increased traffic
disrupts wildlife, may result in more road kill, and diminishes quality
of life for local residents. The linear deforestation associated with
road construction degrades habitat and fragments travel corridors
needed by wildlife species such as grizzly bears, wolves, and other
large, wide-ranging predators. Roads become conduits for non-native
species that displace native species resulting in significant
mitigation costs for taxpayers. Roads, by providing access, increase
the frequency of human-caused fires. Humans cause ninety percent of all
wildfires in the national forests; more than half of those wildfires
begin along roads. In addition, roads increase the damage to
historical, cultural and archeological resources due to increased ease
of access.
Roads increase sediment deposits in streams resulting in reductions
in fish habitat productivity. In addition to keeping sediment from
access roads and drill sites out of community water sources, roadless
areas protect communities from mass wasting (e.g. landslides). Mass
wasting from landslides and debris flows is a key source of sediment,
particularly in western forests, and many of the roadless areas are at
high risk from landslides. In Colorado and Wyoming, for example, over
1,146,000 and 645,000 acres of roadless areas, respectively, have high
susceptibility to landslides (Table 3). While landslides are a natural
process, management activities like road construction and logging
accelerate the incidence of mass wasting by several orders of magnitude
(Swanson 1971, Anderson and others 1976, Swanson and Swanston 1976,
Sidle and others 1985, Swanston 1991). For example, a joint FS and BLM
study in Oregon and Washington found that of 1,290 slides reviewed in
41 subwatersheds, 52% were related to roads, 31% to timber harvest, and
17% to natural forest (USDA Forest Service 1996 cited in LaFayette
2000, Watershed Specialist Report). The Forest Service concluded that
the Roadless Area Conservation Rule ``would have a considerable
beneficial effect on water quality, particularly in Regions 1 and 4.''
(the Northern Rockies)
Table 3.--NATIONAL FOREST ROADLESS AREAS WITH HIGH LANDSLIDE
SUSCEPTIBILITY FOR SELECT STATES
------------------------------------------------------------------------
Acres of Percent of FS
roadless areas roadless areas
State with high risk with high
of landslides susceptibility
* to landslides
------------------------------------------------------------------------
Colorado................................ 1,146,000 33
Wyoming................................. 645,000 21
Montana................................. 564,000 15
Utah.................................... 492,000 14
------------------------------------------------------------------------
* NOTE: This is a conservative estimate of roadless acres classified as
highly susceptible to landslides, as these totals did not consider the
21 million acres in roadless acres allocated to prescriptions that do
NOT allow road construction and reconstruction, some of which have may
high susceptibility to landslides (USDA FS Watershed Specialist Report
2000).
The uncounted economic costs from road construction for oil and gas
drilling include increased ORV monitoring costs, increased frequency
and costs of stream restoration projects, increased noxious weed
mitigation costs, increased damage to archaeological sites and the
decline in future benefits from visiting these sites, increased water
treatment costs for downstream communities, and increased road
maintenance and closure costs for taxpayers. On average, the annual
maintenance cost of a mile of road is about $1,500 per mile (USDA FS
1999). Each new mile of road added to the FS transportation system
competes for limited road maintenance funding, as Congressional funding
is less than 20% of the funding necessary to maintain the existing road
infrastructure. One must seriously question the wisdom of building more
roads when current roads can't be maintained, and each year's unmet
maintenance needs increase the backlog as roads deteriorate and the
costs of repairs increase over time.
Examples of the economic costs from energy exploitation are
summarized in Table 4 and should be included as part of the discussion
on the net impacts from the Roadless Areas Conservation Rule.\1\ While
many of these costs are difficult to estimate, academic and federal
agency economists have made great advances in developing methods to
value non-market costs and benefits. Included in the table are methods
available for estimating the economic costs, to drive home the point
that these costs are quantifiable and should be included in the
economic calculus. Many heretofore-unquantifiable wildland benefits and
costs are now quantifiable and available to agency officials
responsible for developing the policies and procedures for guiding
public land management. We therefore strongly encourage the USGS to
internalize non-market costs into the cost functions used to estimate
economically recoverable resources.
---------------------------------------------------------------------------
\1\ While the discussion and the economic costs included in Table 4
focus on oil and gas, coal mining has similar environmental impacts
that should not be ignored. For example, coal mines cause subsidence
(i.e. the settling of the earth after the coal is removed) that can
result in landslides and damage to the hydrological function of
streams, wetlands and groundwater wells. Even underground coal mines
require roads on the surface in addition to a drilled ventilation
system to release methane, a deadly greenhouse gas, directly from the
mine into the atmosphere.
Table 4.--THE UNCOUNTED ECONOMIC COSTS OF MINING, OIL AND GAS EXTRACTION
----------------------------------------------------------------------------------------------------------------
Cost category Description of potential cost Methods for estimating cost
----------------------------------------------------------------------------------------------------------------
Direct Use Decline in quality of recreation including hunting, Travel cost, contingent
fishing, hiking, biking, horseback riding. valuation surveys.
----------------------------------------------------------------------------------------------------------------
Community Air, water and noise pollution negatively impacts Surveys of residents and
quality of life for area residents with potential businesses. Averting
decline in the number of retirees and households expenditure methods for
with non-labor income, loss of educated workforce estimating costs of mitigating
with negative impacts on non-recreation business. health and noise impacts.
Decline in recreation visits and return visits Change in recreation
negatively impact recreation businesses. visitation, expenditures and
business income. Documenting
migration patterns.
----------------------------------------------------------------------------------------------------------------
Science Oil and gas extraction in roadless areas reduces Change in management costs,
value of area for study of natural ecosystems and loss of information from
as an experimental control for adaptive ecosystem natural studies foregone.
management.
----------------------------------------------------------------------------------------------------------------
Off-site Air, water and noise pollution affect quality of Contingent valuation surveys,
downstream and downwind recreation activities. hedonic pricing analysis of
Drilling rigs in viewsheds reduce quality of property values, preventive
scenic landscapes, driving for pleasure and other expenditures, well replacement
recreation activities and negatively impacts costs, restoration and
adjacent property values. Groundwater discharged environmental mitigation
can negatively impacts adjacent habitat, property, costs, direct impact analysis
and crop yields, while depleting aquifers and of the change in crop yields
wells. and revenues.
----------------------------------------------------------------------------------------------------------------
Biodiversity Air, water and noise pollution can negatively Replacement costs, restoration
impact fish and wildlife species. Ground water and environmental mitigation
discharged changes hydrological regimes with costs.
negative impacts on riparian areas and species.
Road and drill site construction displaces and
fragments wildlife habitat.
----------------------------------------------------------------------------------------------------------------
Ecosystem services Discharging ground water negatively impacts Change in productivity,
aquiferrecharge and wetland water filtration replacement costs, increased
services. Road and drill site construction water treatment costs,
increase erosion causing a decline in watershed preventive expenditures.
protection services.
----------------------------------------------------------------------------------------------------------------
Passive use Roads, drilling and pipelines in roadless areas Contingent valuation surveys,
results in the decline in passive use benefits for opportunity costs of not
natural environments. utilizing future information
on the health, safety and
environmental impacts of oil
and gas drilling.
----------------------------------------------------------------------------------------------------------------
Adapted from Morton (2000)
PRELIMINARY ANALYSIS OF OIL AND GAS RESOURCES IN
NATIONAL FOREST ROADLESS AREAS
As indicated by the Forest Service in the EIS for roadless rule, it
is very difficult to evaluate the reasonably foreseeable potential for
oil and gas development in Inventoried Roadless Areas (IRAs). While
significant energy resources underlie some IRAs, there has been very
little interest in leasing or drilling in roadless areas or other
national forest lands. It is wildly unrealistic to estimate the
potential economic impacts of protecting IRAs based on total quantities
of oil and gas resources in IRAs. That is like estimating timber
industry impacts based on the total number of board feet of timber in
IRAs--a pointless exercise that would result in a grossly inflated and
inaccurate economic impact estimate. While the EIS does not include
extensive data on oil and gas resources in IRAs, it presents a
realistic picture of the overall economic effects of prohibiting roads.
As a starting point in evaluating economic effects, The Wilderness
Society undertook an assessment of the energy potential of federal
lands in general and roadless areas specifically. The assessment
included a GIS analysis of the oil and gas resources in national forest
roadless areas for 6 states in the Intermountain West. These 6 states
were selected as they represent the states with major oil and gas plays
and they have significant acreage of national forest IRAs. Following
are some preliminary results; we expect to have final results later
this spring.
Data
We obtained data from the USGS 1995 National Assessment of United
States Oil and Gas Resources, which divides the U.S. into eight regions
and subdivides those regions into 72 geologic provinces, with each
province containing a number of individual plays. Plays are defined by
the USGS as a set of known or postulated accumulations of oil or gas
that share similar geologic, geographic and temporal properties. A
separate GIS coverage for each of the 199 plays in the six western
states (North Dakota, Wyoming, Montana, Colorado, Utah and New Mexico)
was obtained from the USGS in ARCANFO export format (Weller 2001).
These coverages define the boundaries of the oil and gas plays. The
National Inventoried Roadless Areas (IRA) GIS coverage was downloaded
in ARC/INFO export format from the USDA Forest Service Roadless Area
Conservation website. This dataset contains all National Inventoried
Roadless Areas (IRAs) for the lower 48 states.
Methods
A Geographic Information System (GIS) and ARC/INFO software were
used to determine the area of overlap between IRAs and oil and gas
plays. The IRA coverage was clipped to the boundary of each of the six
states in the study area to create an IRA coverage for each state. The
state IRA coverages were then intersected with each play that falls
within that particular state to identify the IRAs that overlap with
each play. Plays could not be appended into a single oil and gas play
coverage, because different plays are located within different geologic
formations, and therefore their geographic boundaries often overlap
each other.
The results of the intersection analyses were then used to
calculate the number of acres of each play that lie within IRAs, as
well as the number of acres of each individual IRA that overlap with
different plays. The total acres of each play were also determined in
order to obtain the percent of each play that coincides with IRAs. In
order to estimate technically recoverable oil and gas resources in IRAs
we multiplied the percentages by the estimated oil and gas resources
for each play, taken from the USGS 1995 Assessment. Economically
recoverable resources within IRAs were then estimated using a model
based on the financial cost functions and recovery rates developed by
Attanasi (1998). Our estimates are based on the USGS mean value for
each resource. USGS mean values represent the expected value and
provide the best, unbiased estimate of oil and gas resources.
Results for Technically Recoverable Resources
The technically recoverable oil in national forest IRAs for the 6
states in the intermountain west are reported in Table 1. The
technically recoverable resources are those that may be recovered using
existing technology without regard to cost or profit. For this report,
oil totals include both petroleum oil and gas liquids from discovered
and undiscovered conventional and unconventional sources. The 754
million barrels of technically recoverable oil represent only four-
tenths of one percent (0.4%) of the nation's oil resources. The
technically recoverable gas in the ERAS in the 6 western states is
reported in Table 2. The 8.7 trillion cubic feet (Tcf) of gas in IRAs
represents six-tenths of one percent (0.6%) of the nation's gas
resources.
Table 1.--MEAN ESTIMATES OF TECHNICALLY AND FINANCIALLY RECOVERABLE OIL IN INVENTORIED ROADLESS AREAS ON THE
NATIONAL FORESTS
----------------------------------------------------------------------------------------------------------------
Technically
recoverable Financially Financially
Technically oil as recoverable recoverable
recoverable percent of oil at $18/ oil at $30/
State oil U.S. oil barrel barrel
(millions resources (millions (millions
of barrels) (on and off- of barrels) of barrels)
shore)
----------------------------------------------------------------------------------------------------------------
Montana..................................................... 9 0.004 4 6
Wyoming..................................................... 663 0.35 367 501
N. Dakota................................................... 13 0.007 1 3
Colorado.................................................... 32 0.017 11 19
New Mexico.................................................. 2 0.001 1 2
Utah........................................................ 34 0.018 14 22
----------------------------------------------------------------------------------------------------------------
6-State Total............................................... 754 0.39 398 552
----------------------------------------------------------------------------------------------------------------
Results for Financially Recoverable Resources
The financially recoverable resources are that part of the
technologically recoverable resources that can be recovered with a
profit based on a cash flow analysis. In contrast, the economically
recoverable resources are a smaller subset of the financially
recoverable resources estimated once the non-market costs and benefits
are internalized into the calculus. To be considered financially
recoverable the market costs of gas recovery must be less than or equal
to the gas price (Goerold 2001). When financial criteria are considered
the oil and gas actually recoverable drops significantly (USGS
1998).\2\ For the lower 48 states, only 38 and 39 percent of the
technically recoverable undiscovered oil and gas, respectively, can be
extracted profitably when oil is $18 per barrel and gas is $2 per mcf
(thousand cubic feet). At $30 per barrel and $3.34 per mcf, two-thirds
of the technically recoverable oil and gas is financially profitable to
recover (Attanasi 1998).
---------------------------------------------------------------------------
\2\ The results reported are based on USGS estimates of
economically recoverable resources. For this analysis the term
financially recoverable is used because the USGS cost functions exclude
non-market costs and more closely resembles a financial analysis (see
below for more discussion).
---------------------------------------------------------------------------
Financial recovery rates are even less for unconventional oil and
gas resources (continuous-type gas and coal bed gas) than for the
conventional resources. For continuous-type gas, only 7 and 15 percent
of the technically recoverable gas is financial to find, develop and
produce at $2/mcf and $3.34/mcf, respectively (Attanasi 1998). For
continuous-type oil accumulations at $18 and $30 per barrel, about 7
percent and 50 percent, respectively, of the technically recoverable
oil is financially feasible to exploit (Attanasi 1998). For
unconventional coal bed gas, about 30 percent of the technically
feasible gas is financially recoverable at $2 per mcf, while at $3.34
per mcf, the financial portion increases to slightly more than 50
percent (Attanasi 1998).
The financially recoverable oil in ERAS on the national forests is
shown in Table 1. Assuming oil prices of $18 or $30 per barrel, oil in
the IRAs of these 6 states would meet total U.S. oil consumption for
approximately 21 or 29 days, respectively (e.g. 552/18.92=29). When
financial factors are considered, the quantity of gas available also
drops dramatically (Table 2). At $2 and $3.34 per thousand cubic feet
(mcf), the financially recoverable gas in these ERAS would meet total
U.S. gas consumption for approximately 2 or 3 months, respectively.
Table 2.--MEAN ESTIMATES OF TECHNICALLY AND FINANCIALLY RECOVERABLE GAS IN INVENTORIED ROADLESS AREAS ON THE
NATIONAL FORESTS
----------------------------------------------------------------------------------------------------------------
Technically Gas
Technically recoverable Gas financially
recoverable as percent financially recoverable
State gas of U.S. gas recoverable at $3.34/
(trillion resources at $2/mcf mcf
cubic ft.) (on and off- (trillion (trillion
shore) cubic feet) cubic feet)
----------------------------------------------------------------------------------------------------------------
Montana..................................................... 0.405 0.029 0.191 0.256
Wyoming..................................................... 5.278 0.386 2.108 2.798
N. Dakota................................................... 0.125 0.009 0.006 0.013
Colorado.................................................... 2.336 0.171 0.885 1.363
New Mexico.................................................. 0.067 0.005 0.019 0.026
Utah........................................................ 0.486 0.036 0.224 0.332
----------------------------------------------------------------------------------------------------------------
6-State Total............................................... 8.696 0.636 3.446 4.782
----------------------------------------------------------------------------------------------------------------
The financially recoverable totals reported above are based on USGS
estimates of economically recoverable resources. The costs that the
USGS uses in assessing the costs of oil and gas production include
items such as the direct costs of exploration, development and
production of gas. Not included in the USGS calculus are non-market
costs such as the off-site ecological costs and cumulative negative
environmental impacts that might result on a public resource such as a
watershed (Goerold 2001). An economic analysis of benefits and costs
must account for non-market benefits and costs, as well as those more
readily observed and measured in market prices (Loomis and Walsh 1992;
Pearse 1990). An economic analysis is conducted from the viewpoint of
society, which should also be the viewpoint of politicians and managers
of the public estate. In contrast, a financial analysis only examines
costs and benefits as measured by market price; it is the viewpoint of
private industry and is more concerned with profits or losses.
The USGS economically recoverable analysis more closely resembles a
financial analysis than an economic analysis. A more accurate estimate
of the economically recoverable resources from a public perspective
should include a full accounting of non-market costs. If economic
analysis accounted for the uncounted, non-market costs discussed
earlier, the quantities of oil and gas estimated to be economically
recoverable would be much less than reported here.
energy impacts from the roadless area conservation rule are minimal
As discussed earlier, raw estimates of technically or financially
recoverable oil and gas resources do not provide even a remotely
accurate measure of the reasonably foreseeable economic effects of
roadless area protection. For example, the roadless area conservation
rule conserved approximately 58.5 million acres of public wildlands on
the national forests. However, the roadless rule would not change
management prescriptions on 24.2 million acres, representing 41% of the
ERAS. There would be no impacts from the roadless rule on these acres
as existing land management plan prescriptions already prohibit road
construction (USDA Forest Service 2001). The policy discussion on
impacts of the roadless rule should therefore focus on the 59% of the
IRAs where management policy was actually changed as a result of the
final rule.
Furthermore, the oil and gas industry has demonstrated little
interest in exploiting potential energy resources in ERAS. Because of
the downturn in the domestic oil and gas economy, the amount of
National Forest System land under oil and gas lease dropped from about
35 million acres in the mid-1980s to 5.8 million acres in 1998 (USDA
Forest Service 2000). The national forests are not a major supplier of
gas. In 1999, the National Forest system produced about 0.4% of the
nation's gas supply, with about half of that total coming from Little
Missouri Grasslands (USDA Forest Service 2000). As such the impacts on
current and reasonably foreseeable supply from a change in national
forest management are minimal.
Most roadless areas have been available for leasing for decades.
Extensive portions of the lands which the oil and gas industry believes
have high potential are already under lease and therefore would not be
affected by this rule. Currently, 759,000 acres of IRAs with high oil
and gas potential are under lease (USDA Forest Service 2001). Most of
these areas are within the Intermountain, Northern, and Rocky Mountain
regions. Existing leases are not subject to the prohibitions. The
roadless rule would have no effect on existing oil and gas leases. In
fact, it provides for future leasing, with roadbuilding, on lands
currently under lease. This exception will reduce economic impacts on
current operators, by avoiding the possibility of increasing the costs
of production or precluding future development on the lease.
Public concerns and environmental safeguards for protecting
sensitive lands and resources are also key factors limiting oil and gas
development. The NPC (1999) estimates that standard leases govern gas
drilling on 59% of Federal land in the Rocky Mountain region. Only 9
percent of the federal land in the region is actually off limits, while
32 percent is subject to lease stipulations design to protect the
environment. For example, seasonal closures necessary to protect elk
populations may slow down the rate of gas exploitation but protect the
wildlife and other multiple-uses under which public land is managed.
Such protection is warranted economically, as watershed protection,
hunting, fishing and recreation generate significantly more economic
benefits to all Americans, including affected residents and business in
the Rocky Mountain Region, than oil and gas extraction. Legislative
intent and public sentiment indicate that public lands should not be
for the exclusive use of the oil and gas industries and that managers
must attempt to balance the many uses that occur on public land. Leases
with environmental protection stipulations help internalize the
uncounted costs from oil and gas extraction by protecting other
multiple uses enjoyed by the public.
With respect to energy prices, the quantities of financially
recoverable oil and gas in IRAs are very small and will have no impact
on energy prices that are set on the world market. Extracting or not
extracting oil and gas in IRAs will have absolutely no impact on short-
term energy prices since IRAs resources could not be added to current
production for at least 5-10 years (USDA Forest Service 2001). In
addition, a substantial amount of undiscovered, unconventional gas
resources in the IRAs are categorized by the USGS as hypothetical
resources and are associated with higher extraction costs than
conventional resources. Producers have limited ability to exploit
hypothetical sources within an expedient time frame. The hypothetical
nature of much of the unconventional resource underscores the inability
of IRA oil and gas resources to impact current energy prices.
The oil and gas resources that may affect energy prices already
exist in discovered known reserves and in the growth of these reserves.
Currently discovered reserves and expected reserves growth account for
42% of U.S. onshore gas supplies (USGS 1995). It is these resources,
the financially feasible gas resources in and around the already
discovered reserves, that have the potential to impact short-term
energy prices--not the unknown and hypothetical, small quantities of
undiscovered gas resources in roadless wildlands far from existing
pipelines.
CONCLUSION
Based on our analysis, The Wilderness Society concludes that
national forest IRAs likely hold a very small proportion of the
nation's oil and gas resources, and drilling in IRAs is economically
inefficient and will do nothing to reduce current energy prices for
consumers.\3\ While economics should not be the driving force behind
public policies, we agree with the Forest Service conclusion that IRAs
should be protected from oil and gas drilling as the benefits of the
Roadless Area Conservation Rule outweigh the costs. While The
Wilderness Society also agrees that gas is the bridge fuel for the
future, it is important to recognize that the extraction of gas, a
cleaner burning fuel than coal, involves significant ecological and
economic costs. It is important for the public to be aware if these
costs and internalize them into their public land management and energy
consumption decisions. The United States has less than 5 percent of the
world's population but consumes 40% of the oil and 23% of the gas (USGS
2001). As such there is much we as a nation can do via investments in
energy conservation and renewable energy to reduce our consumption, and
the ecological and economic costs associated with our consumption
levels (NRDC 2001).
---------------------------------------------------------------------------
\3\ The impact of the Roadless Area Conservation Rule on the
nation's coal resources, while not examined in detail here, is minimal.
The U.S. has an estimated 1.7 trillion tons of coal, with an annual
consumption rate of 1 billion tons per year. In fact, U.S. coal
resources are so bountiful that just our financially recoverable
discovered reserves (i.e. not including undiscovered resources) have
enough coal to last more than 400 years at current consumption rates
(Goerold 2001b). In addition, advances in fuel cell and solar
technology--and the resulting price declines--will significantly
``stretch'' our supply of coal (and oil). This is especially true if
continued government investments in solar and fuel cell technology have
payoffs similar to that seen from past public investments in computer
technology. Some economists believe that if investments in solar
technology continue, solar energy alone will displace fossil fuels to a
growing extent over the next 50 years (Chakravorty et al. 1997).
---------------------------------------------------------------------------
We strongly support the Roadless Area Conservation Rule's
prohibition on road construction for oil and gas development and other
forms of resource extraction. At the same time, we believe the
protection of roadless areas should not be used as an excuse to
exacerbate the impacts of drilling for gas next to homes or private
property where the families do not own the sub-surface mineral rights
(i.e. split estate). We recommend a programmatic EIS on gas drilling
where it is adversely affecting homeowners, ranchers, and communities.
Such an approach is needed until adequate baseline conditions are
firmly established and funding is obtained for long-term monitoring and
mitigation to assess and minimize environmental impacts and long-term
costs. Such a comprehensive approach is desperately needed in Wyoming
where gas drilling, especially drilling for coal bed methane, is
causing extreme damage to water supplies and other environmental
values.
References (partial list)
Attanasi, E.D. 1998. Economics and the 1995 National Assessment of
United States Oil and Gas Resources. USGS Circular 1145.
Chakravorty, U., et al. 1997. Endogenous substitution among energy
resources and global warming. Journal of Political Economy,
December 1997, pp 1201-34.
Darin, T. 2000. Coalbed methane coming to a town near you. Frontline
Report. Wyoming Outdoor Council. Spring 2000.
Ecological Society of America, 1999. Letter to Forest Service Chief
Dombeck on the Roadless Area Conservation Rule.
Gauthier-Warinner, R.J. 2000? Oil and gas development. In: Drinking
water from forest and grasslands: A synthesis of the scientific
literature. USFS GTR SRS-39. S. Research Station.
Harmer, D. 2000. Roadless Area Specialist Report. Analysis of effects
for recreation, wilderness, scenic quality, and recreation
special uses. USDA Forest Service
Krause, J. 2000. Roadless Area Specialist Report. Effects analysis for
the FS Road System. USDA Forest Service
LaFayette, R. 2000. Roadless Area Specialist Report. Analysis of
effects for watershed health. USDA Forest Service
Loomis, J. and Richardson, R. 2000. The economic benefits of Forest
Service roadless areas. Report prepared for The Wilderness
Society.
Morton, P. 2000. Wildland economics: theory and practice. In: Cole,
David N.; McCool, Stephen F. 2000. Proceedings: Wilderness
Science in a Time of Change. Proc. RMRS-P-000. Ogden, UT: U.S.
Department of Agriculture, Forest Service, Rocky Mountain
Research Station.
Powder River Resource Council 2000. Coal Bed Methane News
USDA Forest Service, 2000 Forest Service Roadless Area Conservation
Rule, Final EIS.
USDA Forest Service, 2001. Final Regulatory Flexibility Analysis for
the Roadless Area Conservation Rule.
USDA Forest Service, 2001. Regulatory Impact Analysis of the Roadless
Area Conservation Rule.
U.S. Geological Survey, 1995. The 1995 National Assessment of United
States Oil and Gas Resources. CD-ROMs
Western Organization of Resource Councils, 1999. Coalbed methane
development: boon or bane for rural residents? Billings, MT.
Senator Craig. Thank you very much, Dr. Morton. Now let us
turn to Rollin Sparrowe of Wildlife Management Institute here
in Washington. Doctor?
STATEMENT OF DR. ROLLIN D. SPARROWE, PRESIDENT,
WILDLIFE MANAGEMENT INSTITUTE
Dr. Sparrowe. Thank you, Mr. Chairman. The Wildlife
Management Institute is a nonprofit organization staffed by
experienced professional wildlife managers dedicated to
improving wildlife and habitat management in North America. As
such we work extensively with the 50 States and the public land
management agencies and a wide array of conservation groups
ranging from environmental groups to hunter-conservationists.
This large array of organizations, particularly the hunter-
conservationists, do not seem to have been heard very loudly on
this issue as we have begun to talk about both the roadless
area issue and development of energy on the public lands.
The main concern, the attention of this committee is to the
interaction between the roadless rule and energy development,
and I am here to present a view that there is a strong
interaction for wildlife and fisheries and their future in the
interaction of the thought process that is going on right now.
I would like to mention that there have been 16
congressional hearings since February 28 on the need to extract
energy from the public lands. A lot of it has mentioned the
Northern Rockies as well as some other very celebrated issues,
and very few of the testimonies that we have seen have looked
at the renewable natural resources and how they fit into this.
The press accounts, the public statements, the testimony,
and now the potential to look at possibly a rollback of
roadless area rules causes us great concern. We hear from
energy companies, the administration, and the Congress--many in
the Congress--that we must remove restrictions on exploration,
development and operations and open new areas, without
specifying them, and without specifying which restrictions are
of concern.
The implications for wildlife are profound and there is a
lot of published data, some of which I have referred to in my
testimony, and I would be happy to provide the committee with
help in finding more of these or specific references if that
will be useful. Important biological science drives our
concerns. I have mentioned some things in the testimony about
the impact of roads in general, regardless of why the roads are
there, on elk and hunting and some important economic benefits
of those kinds of things to local communities.
The fact is there are some profoundly important aspects of
this whole access and roading issue that have not been in the
dialogue for the past several years, let alone in recent weeks.
Forest management must really look at road management to
effectively steward the natural resources, and renewable
natural resources. Too much access is not necessarily a good
thing.
Our fisheries colleagues point out that roads profoundly
affect streams, things like cutthroat in the Northern Rockies
are especially affected and vulnerable to siltation and road
building. In some cases roadless habitats seem to be the only
thing standing in the way of listing under the Endangered
Species Act for some of these fish populations, and thus loss
of State and local control over the resource.
The fish and wildlife resources on national forests are
highly valuable to local communities and to nonresidents who
travel there to partake of them. World class hunting and
fishing are still available to the public on remote areas of
the national forests. I documented briefly the effects of
roadless activity on--or roadless designation on outfitting and
outdoor use in Montana, and mentioned some things that you hear
commonly when you talk to local people, that in some cases half
of the money that comes into stores and motels and local
businesses comes in the fall during the hunting season. It is
important to note that these are long-term substantial benefits
that accrue regularly to local communities, only if their
wildlife and habitats are secure.
Wildlife and fishery organizations want a seat at the table
in these discussions. We are ready to help deal with the
generalized calls to open up these areas, once we know exactly
where they are and exactly which resources are being dealt
with. This cannot be effectively dealt with in a broad,
sweeping basis at the national level.
Referring back to the 16 hearings that have been held and
even the hearing today so far, there is extensive data being
developed and paid for to demonstrate GIS-based, geographical
information based extrapolations of where energy might be, but
I have seen nothing that relates this to the extensive data
that are available on fishery and wildlife resources, on
endangered species distributions and on critical habitats for
these animals.
I personally just jotted down knowledge of range-wide elk
habitat assessments being done by the Rocky Mountain Elk
Foundation, mule deer being done in cooperation between that
organization and the Mule Deer Foundation, gap analysis on a
State basis, State natural history survey data, the incredible
maps of the Bureau of Land Management showing the overlay of
endangered species with their land holdings. We would be
pleased to help guide the committee to these data sources,
should they be useful.
Finally, we suggest a reasonable platform with a series of
ideas for consideration of energy development on public lands
and suggest that a similar one be developed based on science
for consideration of road decisions. It should start with a
platform that roadless areas in general are roadless for a
reason, and probably most of them should stay that way. We also
have many in our community that are interested in testing what
it means to manage within the current rules for these areas.
Rather than continuing the dog fight in public, we would like
to get on with the show and see what we can do. And if there
are problems, maybe they can be worked out.
My final point on behalf of hunter conservation
organizations and the hunters and anglers of America is that
they do not want to see sportsmen's dollars have to pay for
restoration of the same wildlife and fishery populations again.
These were done once in the past 70 years with dollars from
those people, and we think additional resources and thought
ought to go into the future as these developments and road
considerations occur.
[The prepared statement of Dr. Sparrowe follows:]
PREPARED STATEMENT OF DR. ROLLIN D. SPARROWE, PRESIDENT,
WILDLIFE MANAGEMENT INSTITUTE
Mr. Chairman: I am pleased to be here representing the Wildlife
Management Institute, a nonprofit organization staffed by experienced
professional wildlife managers, dedicated to the improvement of
wildlife and habitat management in North America. While I speak only
for the Institute, our role in wildlife affairs in this nation brings
us in regular contact with the 50 state agencies and the federal land
management agencies concerning every aspect of management of public
lands and wildlife habitat. We are not experts on energy needs, but we
have been deeply involved in tracking and commenting on proposed and
ongoing development in Wyoming's Green River Basin and Red Desert. This
experience serves as a contemporary laboratory for how accelerated
energy development occurs in our society.
We work extensively with wildlife, fisheries and hunter/
conservation organizations that have a variety of attitudes and
concerns about road management on National Forests, the Roadless Rule,
and needs for ``hands-on'' management as well as protection of National
Forest lands, based on specific knowledge and expertise about
individual geographical areas of particular importance to them. The
groups we have talked to about the issues before the hearing range from
the Rocky Mountain Elk Foundation and Mule Deer Foundation that each
work range-wide for their species of interest and it's habitats, to
Trout Unlimited that works to conserve, protect and restore North
America's cold water fisheries and their watersheds. The Izaak Walton
League of America represents grassroots hunters and anglers concerned
with the quality of the environment and the ability to utilize fish and
wildlife, and Wildlife Forever, a Minnesota-based National Conservation
Organization whose members fund wildlife habitat management projects
and conservation education. These specific organizations work together
through the Theodore Roosevelt Conservation Alliance (TRCA). As we have
previously explained to you Mr. Chairman, the TRCA is an alliance of
these independent organizations working to engage hunters and anglers
themselves in dialog about the future of their national forests.
These organizations and many others, including the National
Wildlife Federation and The Wildlife Society, representing millions of
conservationist, wildlife managers, hunters and anglers believe in
careful, active management of National Forests, reasonable access to
public lands, and balanced approaches to using renewable resources from
those public lands. These groups understand the need to use
nonrenewable resources to meet the needs of the nation.
WHAT IS OUR MAIN CONCERN?
The most unifying concern among these and many other groups is that
wildlife, fish and their habitats must be given strong consideration in
the management of roads on National Forests and other public lands, and
especially in decisions to extract energy resources from those lands.
Studies of hunter attitudes in the states of the Northern Rockies
reveal that solitude and expectations of seeing game are most important
to them. Wildness and wild country are of increasing importance to
Americans, and particularly to the hunting experience. Truly wild
country is increasingly hard to find, and we want to preserve as much
of it intact as we can.
The issues before this hearing today bring huge challenges to
wildlife resources for the future. During the past several weeks press
accounts, public statements about energy planning, and testimony in the
House and Senate before other committees seem to have pitted wildlife
against energy production. Statements have been made in testimony by
industry that protections on winter range for big game herds are a
``subsidy to hunting'' that should be reevaluated by the American
people, suggesting that they are paying higher energy prices because of
it. Energy development means more roads that are created to satisfy the
needs of producing energy, not to accommodate fish and wildlife or its
management. We know that roads and their management are critical to
fish and wildlife and that each development situation offers a specific
biological challenge. Moreover we have observed closely how development
is proceeding in the Green River Basin of Wyoming. It is for these
reasons that we are deeply concerned about the broad generalizations
that claim that our country ``can accelerate energy development in an
environmentally sound matter.''
We hear from energy companies, the Administration, and many in the
Congress that we must remove restrictions on exploration, development,
and operations, and open new areas--without specifying which ones. If
we add the consideration of removal of roadless status that would
affect areas of high importance to wildlife, we do not have much
confidence that such actions will proceed with greater thought and
evaluation than some accuse the previous Administration of doing in
establishing the Roadless Rule in the first place.
WHAT ARE SOME SPECIFIC IMPLICATIONS FOR WILDLIFE?
As an indication of how important decisions on roadless areas are,
an overlay of elk summer range with roadless areas in the lower 48
states reveals that almost 70% of roadless areas are elk summer range.
Winter range for elk includes 23% of the roadless areas in that same
area. Some will be quick to point out that these are huge areas
composed of millions of acres scattered through many states, and they
can't all be absolutely critical to wildlife. While that is true, it
equally extends to sweeping generalizations about removing restrictions
and opening up areas without being specific about them. Some areas are
simply so important that their entry will come at a high cost to
wildlife, associated recreation, and to local communities that depend
on them. A prime example of this with high fish and wildlife values is
the decision by the Forest Service not to enter four areas of the
Bridger/Teton National Forest in the Hoback Basin, Upper Green River,
Union Pass, and Moccasin Basin of Wyoming.
Important biological science drives our concerns. Studies of elk,
including work from Idaho and Oregon conclusively identifies how road
existence and use affects vulnerability of bulls, herd composition, and
structure of herds. Basically, if more than 3 miles of roads per
section are open during elk hunting season, no bulls survive beyond 2.5
years of age. If roads are held to about half of that, survival age for
bulls is doubled, and with no roads, survival age doubles again.
Reproduction and calf recruitment also are key points. Long-term
studies in the Blue Mountains of Oregon reveal that if bull numbers
remain low, bulls breed at an earlier age, and calf recruitment and
survival is lower than is necessary to sustain a healthy herd. The
general rule of thumb from a number of studies is that too many roads
(greater than about 2.5 miles of road per section) reduce elk habitat
effectiveness by 50%. What this means is that there are some profoundly
important aspects to access and roading that go well beyond concerns
that lands are being ``locked up''.
We could extend this discussion to a very sensitive species, the
grizzly bear. There is abundant information that too much access leads
to both avoidance of habitat by bears and a likelihood of greater
negative interaction with people, contributing to consistently lower
populations. In states that welcome repopulation of grizzly bears, the
only hope of moving away from federal control under the Endangered
Species Act is to effectively manage habitats resulting in bear
populations that reach sustainable levels, and can be delisted. At that
time, states will again be in control of bear management, but it won't
ever happen if roads enter many of the remaining wild areas.
In the Upper Green River country in Wyoming, extensive timber
cutting in the 1980's resulted in a latticework of roads largely left
unmanaged. Lack of enforcement of road closures, and opposition to
attempts to close roads has kept this unplanned access. The long-term
result is an elk population that cannot rise to its numerical potential
based on lack of security, and the hunting seasons and therefore
hunting opportunity for the public continue at a reduced rate. That is,
there are more restrictive seasons because there is too much access.
Mr. Chairman, we are confident that similar statistical data could
be accumulated for your state of Idaho and for Wyoming, Utah and other
states in the Northern Rockies that would be affected profoundly by any
decision on roadless areas or acceleration of energy development.
My colleagues at Trout Unlimited have supplied several examples of
Western roadless areas that are vital for trout and salmon resources as
well as for big game. The following are a few examples from Montana
National Forests:
The South Fork of the Flathead River has perhaps the state's
strongest populations of bull trout and westslope cutthroat
trout. Most of the watershed is roadless (mainly in the Bob
Marshall wilderness).
The Blackfoot drainage has some of the healthiest
populations of migratory bull and cutthroat trout in Montana.
The three most important spawning tributaries for bull trout
are Monture Creek, the North Forth and the Landers Fork. Large
portions of these watersheds are roadless. Bull trout are
uncommon in heavily roaded drainages of the Blackfoot drainage.
Rock Creek is one of the most popular wild trout fisheries
in the state. Approximately half of the watershed is roadless.
Biologists have found that most of the important spawning and
rearing areas for bull trout are in waters flowing through
roadless areas such as the Quigg Peak and Stony Mountain areas.
The majority of the remaining pure-strain native westslope
cutthroats in the upper Missouri drainage, where these fish
hang on by a thread, are in roadless areas found along the
Rocky Mountain Front, in the Elkhorns, in the upper Big Hole
watershed and in the roadless fragments found near the
Continental Divide.
In these cases roadless habitats seem to be the only thing standing
in the way of listing under the Endangered Species Act, and loss of
state control of the resource.
EFFECTS ON HUNTING AND FISHING AND THE LOCAL ECONOMY
Fish and wildlife resources found on National Forests, such as
those highlighted above, sustain hunting and fishing recreation that is
extremely valuable to local economies. According to a 1999 report from
the American Sportfishing Association, in 1996 fishing on the National
Forests produced $8.5 billion to the nation's economy. Hunting yielded
$6.1 billion. Much of this value comes from trout and salmon fishing,
and big game hunting. Roadless area protection is tied to the long-term
sustainability of these huge benefits.
Simply put, world class hunting and fishing are still available to
the public in the remote areas of our National Forests and use trends
show hunting and angling use rising at five percent per year
nationwide. In some areas like California, hunting use of National
Forests is doubling in eight years, while fishing use of Alaska's
Tongass National Forest doubled in the last seven years. Further, if
America's 50 million hunters and anglers double in numbers as the U.S.
population doubles during this century, wild space open to the public
will be at an absolute premium.
Rural towns in the Green River Basin of Wyoming tell us that half
their annual income comes during hunting season to motels, restaurants,
grocery stores and the like. Last year the Montana Wilderness
Association published a booklet entitled Wildland Outfitters:
Contributions to Montana's Economy, which outlines the value of wild
areas to their business. According to that booklet Montana outfitters
depend on roadless areas for over half of their total service days and
over 107,000 service days were in roadless areas. The average wildland
outfitter in Montana earned $109,000 in 1998, 49% from hunting, 24%
from stock/hiking trips, and 27% from other trips. Total income for
wildland outfitting was $33 million in 1998, employing over 2,881
people. Additionally 1,500 jobs were supported in other industries
connected to wildland outfitting, with an industry impact of $107
million. According to the Fish and Wildlife Service outdoor recreation
survey, hunting and fishing and observing wildlife in Montana accounts
for expenditures of $290 million per year.
It is important to note that these are long-term, substantial
benefits that accrue regularly to local communities only if wildlife
and their habitats are secure. Local people will need to rely on
wildlife and fish resources to sustain their local economy and culture
long after energy development is gone.
WHAT DO WILDLIFE AND FISHERY ORGANIZATIONS WANT?
There is widespread concern that if roadless issues and accelerated
energy development are to be revisited, that they be done with much
more attention to detail and careful evaluation of costs and benefits
than is evident in much of the recent dialogue. Importantly,
organizations representing hunters and anglers have a lot to offer that
has not yet been used by government or the Congress. The diverse array
of wildlife and fishery organizations can provide evaluation and
analysis of important resource values, and we are ready to help. The
generalized calls to ``open things up'' must get back to reality and
deal with specific, geographically identified areas that we can relate
to.
While Congress and state legislatures often focus on the welfare of
local hunters and anglers, and local communities, the role of
nonresidents cannot be ignored. They are the funding engine of state
wildlife programs in states like Wyoming and Idaho and Montana through
their license purchases and expenditures in those towns. The
biological, sociological, and economic costs and benefit of all the
resources involved including fish and wildlife as long-term assets to
local communities and to the rest of the people of the nation should be
a part of the process.
We at the Institute suggest a reasonable platform for the
consideration of energy development on public lands: (1) development
and production of energy on public lands should be conducted with at
least as much care as such development on private lands; (2) renewable
resources such as mule deer and cutthroat trout require equal
consideration under law along with mineral extraction; (3) scarce
hunter and angler dollars from excise taxes should not have to pay to
monitor the effects of development nor fund remedial action, but those
tasks need to be done and paid for as a required cost of development
and (4) where development occurs, it must be carefully authorized on a
site by site basis with specific attention to the fish and wildlife
resources.
Such a platform would avoid repeating the mistakes that many are
upset about in recent sweeping designations of land uses. A comparable,
science-based and business-like approach should be developed for
consideration of road decisions. We believe it should begin on a
platform that roadless areas are roadless for a reason--and most should
remain that way.
A critical need for coping with these changes as they occur is for
effective, science based monitoring to answer specific questions. Many
of the potential effects of roading or accelerated energy development
are subtle, long-term in nature, and difficult to measure. This results
in a continuing standoff where wildlife managers say ``look at all
those roads and activities, they have to have an impact'', and
development interests say ``look at those wildlife standing around the
structures, they don't care at all''. Our wildlife and fish resources
cannot stand this impasse while development occurs.
The real question: is at what cost do wildlife and fish adapt to
further intrusions on the landscape? The issue in most cases will not
be that a single road or a single development should be blamed for its
effects on wildlife. Our mule deer, elk, pronghorn and sage grouse have
been affected by roads, fences, ranching and farming, towns, second
home development and long-term reduction in habitat quality. Migratory
herds in Wyoming live on the National Forest in summer where
accelerated development would occur, and migrate over 100 miles to the
sage desert where accelerated development is already underway. Herds of
elk that used to migrate even further from Jackson Hole to the sage
deserts along the Green River can no longer do so because of those
multiple influences. At some point the next new activity will be the
one that leads to a potential irreversible reduction in the ability of
some of these herds to survive--and certainly to sustain the current
level of public use and local economic benefit.
In conclusion, a wide array of wildlife and fishery organizations
and our hunters and anglers across America have a stake in the outcome
of any decision to change. roadless status or accelerate energy
development. Most organizations with which we work would like to see
the dialog on roads return to the complex task of management of the
entire road system on National Forests. Many don't like the sweeping
manner in which designations were made, but also think we should get on
with the business of managing roads comprehensively rather than
continuing to focus on confrontation. Many are interested in testing
how and where management of forests for fire and wildlife and fish can
occur within the current rules. We ask that all of this be considered
carefully, with strong attention to fish and wildlife resources and
science, and with careful balancing of costs and benefits for the
tradeoffs to be involved. Whether maintaining an area roadless or
opening it to development of this nature will have costs and benefits
to wildlife, fish and people.
Senator Cantwell. Thank you, Dr. Sparrowe, for your
testimony. We are now going to hear from Greg Schaefer who is
with the National Mining Association.
STATEMENT OF GREG SCHAEFER, DIRECTOR, EXTERNAL
AFFAIRS, ARCH COAL INC., ON BEHALF OF THE NATIONAL MINING
ASSOCIATION, WRIGHT, WY
Mr. Schaefer. Thank you. I am Greg Schaefer with the Arch
Coal Company and I am here on behalf of the National Mining
Association and Colorado, Wyoming, and Utah mining
associations.
The Forest Service mineral policy which was developed in
1970 states: National forests and grasslands have an essential
role in contributing to an adequate and stable supply of
mineral and energy resources. This policy is as important today
as the day it was written. The mineral and energy policy
further states that the Forest Service require reclamation
plans for all proposed surface disturbing activities to return
the land to productive uses in accordance with land management
goals.
One of the justifications for the roadless area rule itself
was the backlog of maintenance costs and the need by the Forest
Service to spend more money, but with regard to coal mining,
keep clearly in mind that any road that we construct must be
reclaimed at our expense to a condition at least as good as the
pre-mining land condition.
The final rule stated this action was not designed to
prohibit mining, it only prohibits road construction and
reconstruction. Roads are needed even with an underground
mining operation for such activities as exploration drilling,
construction, maintenance of mine ventilation and for emergency
situations. The inability to construct a road for these
purposes is a de facto prohibition on mining.
California has drawn a great deal of attention over the
past year. Currently the State of California is importing 25
percent of their electricity from other Western States. There
are no major coal-fired powerplants in the State of California
but coal-fired generated electricity still accounts for 20
percent of their total electricity consumption. Some of these
sources include the Intermountain Power Project located in Utah
which is owned by the city of Los Angeles and burns Utah coal.
The Reid-Gardner unit number 4 in Nevada burns Utah and
Colorado coals. The Deseret G&T plant in Utah burns Utah coal.
The Boardman plant in Oregon burns Utah, Colorado, and Wyoming
coals. And there are various other sources going into
California including a couple of Pacific Corp., coal-fired
plants in Utah which is supplied by Utah coal.
Each of these powerplants obtains coal from mines that are
either on or immediately adjacent to the new roadless areas.
Switching to Colorado, the State of Colorado produces roughly
between 25 and 30 million tons of low sulfur coal annually.
Roughly 40 percent of this coal is used in the State and the
remainder is exported to other States such as Kentucky,
Illinois, Wisconsin, Michigan, Oregon, Minnesota, Texas, Iowa
and Utah.
The North Fork Valley of Colorado which is shown on the map
here produces between 50 and 60 percent of the total volume of
Colorado coal and is the fastest growing region in Colorado.
These underground mines employ about 700 people in rural
Colorado with an annual payroll of about 50 million dollars.
The Department of Energy reported that the West Elk mine
requires access--do you want to point that out, Dave, where
that is located--in the next 1 to 5 years of high quality coal
resources that lie partially or entirely under roadless areas.
Approximately 200 million tons of high quality coal would be
put off limits, roughly a 35 to 40 year supply of coal for that
mine, and the mine would be forced to close prematurely. As a
result, the 100 million dollars of infrastructure already
invested in this mine would be abandoned.
The Bowie mine, which is just to the north of that, is
hemmed in on the north and west by roadless areas. These are
the logical directions for expansion of this mine. The mining
company estimates the roadless area would put 50 million tons
of high quality coal off limits to the Bowie mine. The other
mine, the Oxbow mine, acknowledges an impact but was unable to
quantify the number of tons due to the lack of exploration
data.
Switching to Utah the map shows that a significant portion
of Utah's coal production, nearly 70 percent, is located in the
Manti-La Sal National Forest and is either overlaying or
adjacent to the roadless area boundary. Over half of Utah's
coal production is used in generating plants within the State
of Utah. Utah coal is also exported to Nevada, Missouri,
Oregon, Illinois, Kentucky, Nebraska and to the Pacific Rim.
The State of Utah is unique among coal producing States in
that it does not have an extensively developed rail system for
many of their coal-fired powerplants. This means in most
instances the Utah plants are reliant on local sources of coal.
For example, the Hunter Power Plant which has no rail service
is planning on a significant expansion to meet energy demands
in Utah and other Western States such as California. As
mentioned, the city of Los Angeles owns the Intermountain Power
Project in Utah. This plant is also considering a significant
expansion. The proposed powerplants and expansions in Utah
could add as much as a 40 percent increase in in-State demand
for Utah coal used in electricity generation.
As a result of this rule we are now facing a long-term
impact to the coal supplies in Colorado and Utah. I am hoping
that the Senate and Congress carefully looks at this impact to
energy production in the West and corrects the mistakes that
have been made due to a lack of sufficient information. Thank
you, again for the opportunity to speak today.
[The prepared statement of Mr. Schaefer follows:]
PREPARED STATEMENT OF GREG SCHAEFER, DIRECTOR, EXTERNAL AFFAIRS, ARCH
COAL INC., ON BEHALF OF THE NATIONAL MINING ASSOCIATION, WRIGHT, WY
Good afternoon and thank you for the opportunity to speak to you
today regarding the Roadless Area Final Rule. My name is Greg Schaefer
and I am Director External Affairs Western Operations for Arch Coal,
Inc. I am also here on behalf of the National Mining Association (NMA)
as well as the Colorado, Utah and Wyoming Mining Associations. As
background, Arch Coal is the second largest coal producer in the
nation, producing about 112 million tons of high quality coal annually.
We serve 149 power plants in 30 states. We currently have six operating
coal mines in the western United States, four of which operate at least
partially on National Forest Service lands.
At the outset let me say that the Forest Service, throughout the
rulemaking process, stated the rule was not designed to prohibit
mining, it would only prohibit the construction and reconstruction of
roads. In fact the preamble to the rule states that ``[m]ineral leasing
activities not dependent on road construction such as ``underground
development, would not be affected by the prohibition.'' This
proposition was refuted in the record by a Department of Energy report
(``Impact of the Roadless Initiative on Coal Resources'' Bill
Hochheiser, November 30, 2000) which provided, ``[w]hile these
resources are recovered using underground mines, roads are needed to
build ventilation shafts and for safety.'' Simply put, one must have
roads for mineral exploration and development. This point was clearly
made in the rulemaking record and obviously ignored by the rule's
authors.
IMPACTS ON ENERGY RESOURCES
The Forest Service has a stated policy regarding minerals on Forest
Service Lands which provides:
``The Federal Government's policy for minerals resource
management is expressed in the Mining and Minerals Policy Act
of 1970--`. . . foster and encourage private enterprise in the
development of economically sound and stable industries, and in
the orderly and economic development of domestic resources to
help assure satisfaction of industrial, security, and
environmental needs.' Within this context, the national forests
and grasslands have an essential role in contributing to an
adequate and stable supply of mineral and energy resources
while continuing to sustain the land's productivity for other
uses and its capability to support biodiversity goals.''
This policy is as important today as it was on the day it was
written. Coal and mineral resources from Forest Service lands are vital
to supplying electricity at a reasonable price and in an
environmentally sound manner. The mineral policy also states that the
Forest Service ``require reclamation plans for all surface-disturbing
activities to return the land to productive uses consistent with the
ecological capability of the area and in accordance with land
management goals.'' This policy is consistent with state and federal
laws and regulations governing coal mining activities.
As I will describe in more depth later in this testimony, the
Forest Service proposed and promulgated the Roadless Area Conservation
Rule without sufficient information to perform an adequate analysis of
the rule's impact on coal production from Forest Service lands. Only
after the abbreviated 69-day comment period closed did it become clear
what areas would be affected and to what degree. When this information
became available to the Forest Service, it was glossed over or
completely ignored in the Final Environmental Impact Statement (FEIS),
the final rule and its preamble.
Due to the lack of detailed information, the Department
significantly underestimated the rule's impact on energy supplies in
the western United States. The preamble to the final rule shows the
extent to which the Department has gone to try and minimize the impact
of the rule. Faced with the additional information that we provided,
the Forest Service concluded:
``Moreover, it seems likely that even if resources do
underlie inventoried roadless areas, they would be among the
last areas entered for exploration and development . . . the
agency has determined that the information does not materially
alter the environmental analysis disclosed in the FEIS and does
not constitute significant new circumstances or information
relevant to environmental concerns bearing on the rulemaking
effort.''
The fallacy of this statement can be seen on the attached maps. The
additional coal resources needed to keep the West Elk Mine alive would
be among the first areas entered for exploration and development--not
among the last.
The Department also downplayed the significance of National Forest
Service lands as a source of high quality, low sulfur coal. In the
preamble to the final rule it stated:
``The FEIS described the coal production from NFS lands as
accounting for about 7% of national production in 1999.''
This statement implies that tightening up access simply will not
have much impact on energy production from National Forest Service
lands. However, last year our Black Thunder Mine in Wyoming alone
produced over 60 million tons of coal, which represents over 5% of
national production by itself. The Black Thunder Mine is located in the
Powder River Basin of Wyoming and is located on the Thunder Basin
National Grasslands which is managed by the National Forest Service. In
speaking with Forest Service personnel, it was learned that they do not
have a good method of estimating coal production from National Forest
Service lands. A quick survey of some of producers on the Thunder Basin
National Grasslands revealed that these few mines in Wyoming accounted
for 8-10% of national coal production. This completely ignores coal
production from National Forest Service lands in Colorado and Utah. If
accurate data were used, the percentage of national coal production
from National Forest Service Lands could very likely be 15-20%, which
is a very significant percentage.
In the justification for limiting access to high quality coal
reserves on National Forest Service lands, which ultimately leads to
phasing out the existing mining operations, the Department concluded:
``Overall, the U.S. has abundant coal reserves. Also,
alternative sources of low-sulfur coal do exist, concentrated
in the western U.S., mostly in Colorado, Montana and Wyoming.
Additionally, the abundant sources of low cost-coal and
available technology, such as scrubbers, will enable electric
utilities to meet their Clean Air Act compliance goals.''
This statement writes off significant sources of high quality
compliance coal in Utah and parts of Colorado and creates major
problems for the generators of electricity in Utah. The premise for
this statement is simply incorrect, and will be discussed below.
Colorado Impacts
The State of Colorado produces close to 30 million tons of high
quality bituminous coal annually. Roughly 45% of this coal is used
within the state and the remainder is exported to other states. The
North Fork Valley near Paonia, Colorado (roughly 90 miles east of Grand
Junction, Colorado) produces approximately 60% of the total volume of
Colorado coal, and is the fastest growing coal-producing region in
Colorado. This area consists of three underground coal mines: Arch's
West Elk Mine, the Oxbow Mine and Bowie Resources. It is anticipated
that these three mines will produce up to16 million tons of coal in
2001 with about 700 employees and an annual payroll of $50 million.
In 1999, coal from these three mines was shipped to power plants in
Colorado, Kentucky, Illinois, Wisconsin, Michigan, Oregon, Minnesota,
Missouri, Texas, Iowa, and Utah. The Utah power plant supplied by this
coal was the Intermountain Power Project (IPP) which is owned by the
City of Los Angeles and provides low cost reliable power to California.
The Department of Energy report referenced above highlights some of
the energy impacts created by the roadless rule:
``This coal is highly valued by these utilities because of
its low sulfur content (0.5%) and high Btu value. Utilities
such as Tennessee Valley Authority rely on this coal as their
Clean Air Act compliance strategy. The utilities blend this
coal with other, higher sulfur, lower Btu coal to achieve
compliance, and burn the Colorado coal exclusively during time
of high demand in order to avoid derating of their plants while
staying under air emissions limits.''
The Department of Energy report also describes specific energy
impacts in the North Fork Valley:
``The West Elk Mine requires access in the next one to five
years to three areas of high quality coal resources that lie
partially or entirely under roadless areas. Approximately 200
million tons of high quality coal would be put off limits and
the mine would be forced to close prematurely. In addition, as
much as 50 million tons of coal on the existing lease would
likely not be mined because planned longwall panels that would
extend into unleased federal coal would not proceed. As a
result, the $100 million of infrastructure already invested in
this mine would be abandoned.
The West Elk Mine produces seven million tons of coal per
year, providing $26 million dollars per year of direct labor
income and almost $90 million of direct plus indirect income.
The potentially unminable 200 million tons of coal have a value
of $3 billion. Using the multiplier of 3.5, as used in the FEIS
(p.3-316, table 3-68), this represents a total of over $10
billion in foregone economic activity.
The Bowie mine, northwest of the West Elk mine, is hemmed in
on the north and west by roadless areas. These are the logical
directions of expansion for this mine. This mine produces five
million tons of high Btu/low sulfur coal and employs 178 people
at the mine, with an annual payroll of $9 million per year.
This translates to more than $30 million per year of direct
plus indirect economic impact.
The mining company estimates that the roadless rule would put
50 million tons of high quality coal off limits to the Bowie
mine, coal with a value of $750 million. Using the multiplier
from the previous bullet, this translates to over $2.5 billion
of economic activity.''
Utah Impacts
In Uinta coal region of Utah, the Forest Service analysis
concentrated on only three tracts: the Muddy, Ferron, and North Horn
tracts. These tracts are either next to an existing mine or contain
sufficient high quality reserves to support a new mine. The FEIS that
preceded the final roadless rule estimates these three tracts contain
185 million tons of high-Btu coal. This coal would have a value of over
$2.8 billion to $3.7 billion if mined.
While these three tracts represent a sizable amount of coal, they
also represent only the tip of the iceberg as shown on the attached map
of the Uinta region. The roadless areas block mine development and
expansion across the entire western boundary of the region. None of
this information regarding resource information outside of the three
tracts was considered by the rule writers nor the authors of the FEIS.
The primary impact of the roadless area rule in Utah will be on the
Manti-LaSal National Forest. The map shows that a significant portion
of Utah's coal industry is located in the Manti-LaSal National Forest
and is either overlain or adjacent to the roadless area boundary. The
State of Utah annually produces roughly 25 to 27 million tons of high
quality, low sulfur coal, half of which is used in the State of Utah.
Just under 50% of the coal is exported to states such as Nevada,
California, Oregon, Illinois, Missouri, Kentucky, Idaho, Colorado,
Washington, Wyoming and Tennessee for electric generation (about 26%)
and other industrial/commercial/residential uses (16%). Depending on
the exchange rate and the demand for steam and metallurgical coal,
about 10% of Utah coal is exported to Pacific Rim countries through the
Los Angeles Export Terminal.
The existing coal mines that are overlain by or adjacent to the
roadless areas are the SUFCO, Deer Creek, Trail Mountain, Crandell and
Star Point mines. In 1999 these mines represented almost 70% of the
coal production in the State of Utah.
The State of Utah is unique among coal producing states in that it
does not have an extensively developed rail system for many of the
mining operations and coal-fired power plants. This means that in many
instances the Utah power plants are much more reliant on local sources
of coal than counterparts in other states. For example, the Huntington
Power Plant has no rail service and must rely on local mines to supply
coal by truck. This plant is planning a significant expansion to meet
energy demand needs for the State of Utah, as well as for export to
other western states (e.g., California).
The City of Los Angeles owns the Intermountain Power Project (IPP),
with the power generated by this plant being exported to California. As
a part of the current energy crisis in California, the IPP plant is
also considering a significant expansion. The vast majority of the coal
used at this plant is from the State of Utah.
The potential power plant expansions in Utah could add as much as a
40% increase in in-state demand for Utah coal. This is at a time when
the number of coal mines in Utah have been decreasing and significant
uncertainty has been added due to the roadless rule. A complicating
factor in the State of Utah is the settlement agreement between the
state and the federal government over the lost coal resources as a
result of the designation of the Grand Staircase Escalante National
Monument. In this settlement agreement, the federal government
transferred temporary ownership of some coal reserves to the State of
Utah (SITLA). The final rule states that these tracts have valid
existing rights and can be mined. However, after a certain amount of
coal has been produced from these tracts, they revert back to the
federal government. Furthermore, some of these tracts will need
adjacent coal in order to justify the capital needed to build a mine.
Where that adjacent federal coal is encumbered by the roadless area
prohibitions, the likelihood of one investing capital in these mines is
diminished.
California
This section briefly discusses the role of coal in the State of
California. This State was chosen since it is currently in the middle
of a critical energy crisis and has generated a great deal of
attention. Currently, the State of California is meeting 75% of its
electric needs by in-state generation and is importing the remaining
25% from other western states. There are no major coal-fired power
plants in the State of California, but coal-fired-generated electricity
still accounts for 20% of their total energy mix.\1\ Some of these
sources include the Intermountain Power Project in Utah (Utah coal);
Reid-Gardner Unit 4 in Nevada (Utah and Colorado coals); Deseret G&T in
Utah (Utah and Colorado coals); Boardman Plant in Oregon (Utah,
Colorado and Wyoming coals). Each of these sources receives a portion
of its coal from mines either adjacent to or underlying areas affected
by the roadless rule. The State of California also has various
``northwest contracts'' from various sources including Pacificorp in
Utah, which is supplied by Utah coal and similarly affected by the
rule. As can be seen, the Utah and Colorado coal industries are an
integral and critical part of not only the Utah and Colorado electric
supply but the State of California as well.
---------------------------------------------------------------------------
\1\ Source: 1999 Net System Power Calculation, Electricity Analysis
Office, California Energy Commission, April 2000.
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Summary
The Nation must use its vast domestic resources to meet the growing
energy requirements that an expanding economy requires. Many of these
resources, including coal, are found on lands administered by the
Forest Service and on other public lands. Demand for coal for
affordable, reliable electricity is expected to increase by over 25%
during the next 20 years. Nearly 90% of this additional coal production
will come from public lands in the West; much from Forest Service
administered lands impacted by this rule. If this affordable coal is
not available, high costs for alternative fuels will mean higher
electricity costs and lower electricity reliability. Also, the coal
industry will continue to be required to reclaim any surface
disturbance to at least as good a condition as the premining landscape.
THE ROADLESS AREA INITIATIVE PROCESS
I have been involved in the roadless area proceedings since
President Clinton announced the initiative on October 13, 1999. I
attended several public scoping meetings, including one in Grand
Junction, Colorado in December, 1999 and subsequently requested an
extension of time of the scoping period. In our letter, dated December
17, 1999, requesting an extension of time we made several requests that
have never been adequately addressed in this process:
``It is difficult, if not impossible, to provide
knowledgeable comments on the proposal when the Forest Service
has not provided the public with sufficient detail. For
example, the Forest Service has not provided maps with any
level of detail to be able to develop questions or comments
relative to our operations. Just prior to writing this letter,
I went to the Forest Service website dedicated to the Roadless
Area initiative and it still states that the maps are `Under
Development'. In Colorado, a public hearing was held in Grand
Junction, Colorado. Once again, the Forest Service provided
maps, but in this case they were `conceptual', and lacked any
meaningful detail. We have asked for detailed maps, that
included coordinates, townships, ranges, and sections, but have
been unable to acquire the requested information. Local Forest
Service personnel have tried to help, but they have warned us
that even when the maps are available, they may not be
accurate? At a minimum, the Forest Service should provide the
following so that meaningful comment can be submitted:
``Detailed maps showing the location of the proposed roadless
areas, with coordinates, sections, townships and ranges.
Identify the coal reserves that are located within the proposed
roadless areas, as well as quantify the coal quality of those
reserves. Identify the location of existing mining operations
that could access these reserves, and provide an analysis of
the socio-economic consequences of the inability to obtain
additional reserves. If there are no nearby mining operations,
assess the impact on the loss of those coal reserves from the
reserve pool.''
The Forest Service never addressed this request. Subsequently, maps
were posted on the website after the close of the public comment
period, but the scale and lack of legal description made them virtually
useless for assessing local impacts, but did give us a sense that we
should look very closely at our Colorado operation in particular. The
same information was requested by the NMA though a Freedom of
Information Act (FOIA) request during the comment period for the
proposed rule. After the close of the comment period, NMA was told in a
formal response from the Forest Service that, in short, the maps and
the relationship between roadless areas and mineral reserves were
available on the Forest Service web site. Anyone who saw the
information on the Forest Service web site knows this statement is just
plain wrong.
Fearing that we would not have any data in which to assess the
boundary of the roadless area relative to our West Elk Mine in
Colorado, we set out on a mission to try and develop our own map(s).
Working with a local Forest Service employee we dug up the RARE II
boundary that was proposed in 1979 and plotted that information on our
mine plan map. It was found that the boundary passed right over the top
of the West Elk Mine and contained nearly all future reserves
accessible by this underground mine. As it turned out, the 1979 RARE II
boundaries were used in setting the boundaries of the roadless area
without any further review of any changes over the 20-year period. Of
particular interest is that this boundary encompasses lands that
contain a significant number of existing roads.
Once this map was developed, we met with the Regional Forester's
Office in Denver, Colorado in early February 2000. Their response was
that they were pleased to have a map with this level of details, as
they had not been provided with any detailed information from the
Washington, D.C. Office of the Forest Service. The Regional Office
acknowledged the problem and asked what relief we were seeking. Our
response was that since the West Elk Mine was on the margin (edge) of
the proposed Roadless Area that we would like the boundary slightly
modified in order to provide a future for the West Elk Mine. The reply
was that there was not an opportunity to move the boundaries as that
decision had already been made.
Even though the public comment period had closed, we provided the
map that we had developed to the national Forest Service Team working
on the Roadless Area Environmental Impact Statement. One member of the
team reiterated that there was no opportunity to move the boundary as
that decision had already been made. Our question was how could that be
if the Draft Environmental Impact Statement was only now being
prepared?
All of our efforts during this period were reflected in one small
paragraph of the DEIS, which stated:
``[The prohibition of road construction] could increase
exploration and development costs for leaseable minerals so
that deposits in inventoried roadless areas may be less
economically feasible for development. For example, one
Colorado coal company has submitted information showing that
the opportunity to access coal resources adjacent to their
existing leases would be severely limited by a prohibition on
road construction.''
Leadership in the Department either did not have adequate
information or chose to ignore it. The problem remained that there was
a lack of detailed map information. Arch Coal commissioned a consultant
to develop the location of existing, and in some instances prospective
coal leases, on the Grand Mesa, Uncompaghre and Gunnison (GMUG)
National Forest in Colorado. Significant resources were put into
developing this map, but the most difficult aspect was obtaining the
legal descriptions of the proposed roadless areas.
During the development of these maps, we continued to meet with the
minerals branch of the Forest Service, the Department of Energy, Office
of Management and Budget, Council on Environmental Quality, among
others. A scheduled meeting with Forest Service Chief Mike Dombeck was
``delegated'' as the Director and other senior members of the Forest
Service delegated the meeting to lower level staff at the last moment.
During one meeting with the Department of Energy we were shown a
roadless area delineation map supplied to them by the Forest Service
that showed several areas of significant impact to the coal industry on
the Manti-LaSal National Forest in Utah. This information was stunning
for two reasons: first, the Forest Service had never made this
information public; and second, our company had been told several times
by local forest service officials that there was no impact to our
underground coal mining operations in Utah. Unfortunately, we took that
declaration at face value.
Upon the revelation that the issue extended beyond our Colorado
operations, we also commissioned the consultant to perform the same
mapping exercise for the Manti-LaSal National Forest in Utah. The
Colorado and Utah maps were finally completed right about the time the
Final Environmental Impact Statement was issued, and are attached and
incorporated in this testimony. Although the final rule can be
published as soon as 30 days following publication of the FEIS, the
message these maps conveyed manifested a significant impact the Forest
Service failed to project and the message was conveyed to the
Department of Energy, the Office of Management and Budget, the Council
on Environmental Quality and the Forest Service.
Notwithstanding this compelling information, the preamble to the
final rule states:
``The Department has decided not to adopt the exception for
future discretionary mineral leasing because of the potentially
significant environmental impact that road construction could
cause to inventoried roadless areas.''
This is clearly an excuse and not a valid reason. State and federal
mining regulations require that all surface disturbances associated
with the mining operation must be reclaimed to a condition at least as
good as the pre-mining condition. This means that any roads developed
in conjunction with the mine, including exploration, development or
operation must be reclaimed. Further, state and federal mining
regulations require that the quality of surface and ground water must
be protected.
In a further effort to convince the public that these lands need to
be off-limits for future mineral development the preamble states that
if road construction and reconstruction were allowed for future energy
and mineral leasing, an additional 59 miles of road over a five-year
period would be built in roadless areas (including oil, gas and non-
fuel minerals). The preamble further states that at this rate, 10
million acres would be affected, which is interesting considering that
the Department only identified 8 million acres that have the potential
for oil and natural gas (of which 2.5 million acres have potential for
coal and coal bed methane). Again, the Forest Service has conveniently
ignored the fact that roads developed in conjunction with mining must
be fully reclaimed to a condition at least as good as the pre-mining
condition.
PROTECTIONS FOR ROADLESS VALUES ALREADY EXIST
The Forest Service chose to accept these severe proscriptions for
roadless areas even though roads associated with coal mines are
temporary and the Surface Mining Control and Reclamation Act (SMCRA)
mandates that these roaded areas be reclaimed to a condition as good or
better than they were before mining. Furthermore, surface coal mines
cannot be permitted at all on Forest Service lands unless the Secretary
of Interior ``finds that there are no significant recreational, timber,
economic or other values which may be incompatible with surface mining
operations . . .'' (Section 522(e)2)) In other words, the values the
rule is intended to safeguard have already been considered and
protected by an existing statute.
During the rulemaking process, the Forest Service also ignored the
fact that the SMCRA provides the exclusive statutory scheme for
designating areas unsuitable for coal mining. The first question the
authors of this rule should have asked was whether the agency has the
authority to deny reasonable access to federal coal.
Other Mineral Related Impacts of the Roadless Area Conservation Rule
Stillwater Mining Company produces platinum and palladium from its
mine located partially on Forest Service lands in Montana. Two of the
roadless conservation areas cover portions of these reserves, which
represent the only operating platinum/palladium mine in the Western
Hemisphere. Even though Congress specifically drew the boundaries of
the Absaroka-Beartooth Wilderness to exclude these important deposits,
the roadless rule ignores this obvious congressional intent.
Platinum and palladium are critical elements in catalytic
converters as well as components in high temperature and corrosion
resistant alloys used in jet aircraft and other defense applications.
The environmental, economic and national security implications of
denying access to develop these unique and important deposits are
significant.
Like coal underlying Forest Service lands, holders of federal
phosphate leases will be limited in their ability to expand production
levels beyond the boundaries of existing leases. The FEIS states that
873.3 million tons of phosphates not yet leased could be affected by
the roadless rule and additional amounts could be affected when land
management plans are revised or amended. The cumulative impact of the
increased energy costs and the escalated cost of fertilizer on western
farmers and ranchers will be profound.
Conclusion
The Final Roadless Area Conservation Rule will clearly result in
the loss of millions of tons of coal and phosphates, as well as
substantial quantities of metallic and other hardrock minerals, that
could otherwise be recovered from Forest Service administered lands.
The economic impact on energy, agriculture and mining sectors is
hundreds of millions of dollars. The cost/benefit analysis appears to
under-estimate grossly the impact, and the Forest Service has ignored
the cumulative effect the rule will have on sectors of the economy
already reeling because of elevated energy costs.
In its evaluation of the adequacy of the regulatory framework for
hard rock mining, the National Research Council stated:
The lack of information appeared to be greatest among highly
placed officials who have the greatest need to know.
Consequently, those responsible for regulatory management and
change, and for keeping the public and Congress adequately
informed, appear to be severely limited in their ability to do
so.\2\
---------------------------------------------------------------------------
\2\ Hardrock Mining on Federal Lands, National Research Council
(September, 1999).
Although this observation was made in a different regulatory
context, it is clearly applicable to the situation at hand.
The authors of the rule went to great pains first to dismiss then,
when confronted, understate the impacts this rule will have on the
Nation's ability to meet its energy needs. The agency completely
ignored the existing regulatory scheme, including the Clean Water Act,
the Endangered Species Act, the Surface Mining Control and Reclamation
Act, and most notably the Wilderness Act, that protects the values this
rule claims to defend. The price the entire Country will pay of this
failure has already been witnessed in California and is spreading
across the West.
Senator Cantwell. Thank you, Mr. Schaefer. Now we are going
to hear from Mr. Edmund Segner with EOG Resources Inc,
representing the American Petroleum Institute.
STATEMENT OF EDMUND P. SEGNER, PRESIDENT,
EOG RESOURCES, INC.
Mr. Segner. That is correct. And also representing the
Domestic Petroleum Council and the IPAA and also the Public
Lands Advocacy. The U.S. oil and natural gas industry has a
long record of providing a reliable and affordable supply of
energy to America. The Federal Government has always played a
pivotal role in determining how well producers meet U.S. energy
needs. It is important that government and industry develop a
workable national energy policy that both protects the
environment and delivers the energy to insure continued
prosperity. We believe both goals can be achieved.
Most natural gas we use come from U.S. sources. According
to the National Petroleum Council demand will rise by more than
30 percent by the year 2010 and 60 percent by 2020. We will
need an additional 7 trillion cubic feet of natural gas
annually over the next decade and 14 trillion cubic feet a year
of additional supplies in less than 20 years.
The NPC study also found that producers would have to
invest almost $660 billion in new capital to meet that
increased need for energy. We are capable of meeting this
demand if energy companies have greater access to Federal lands
now off limits or subject to severe restrictions. The
Department of Energy study on the roadless rule estimated it
would close off 11 trillion cubic feet of natural gas estimated
to be beneath these lands.
The study also illustrates the disregard given to energy
values. More than 80 percent of the predicted 11 trillion cubic
feet of natural gas is located on just 5 percent of the land
covered by the rule. The new rule bans reconstruction, creating
new roadless areas in lands that have previously been available
for multiple use. As a result the Forest Service is changing
congressional intent.
When the Forest Service devised its long-term strategic
plan in 1990 under the Resource Planning Act it stated
petroleum leasing activity was designed to meet most demands
for access to explore and develop mineral resources, except
when doing so would pose unacceptably high risk to other
resources. Since then the Forest Service has paid little
attention to mineral resources in drafting their land use
plans.
Advanced technology enables us to develop and produce oil
and natural gas with far less impact on the environment than
even 10 years ago. A 1990 DOE study of environmental benefits
of today's technology found: With advanced technologies the oil
and gas industry can pinpoint resources more accurately,
extract them more efficiently, and with less surface area and
with less surface disturbance, minimizing associated waste, and
ultimately restore sites to original or better condition.
Even with these advances in technology, the domestic
producing industry is not asking to drill in areas set aside by
acts of Congress. We seek solely to access lands designated as
multiple use by Congress so that exploration and production can
take place in an environmentally compatible manner.
The roadless rule continues the trend towards less
development of the natural resources beneath Federal lands. The
resulting decrease in petroleum activities will have a
significant impact on jobs and local economies. Moreover, the
withdrawal of these lands from leasing will have a seriously
negative impact on the U.S. Treasury and State governments. The
Forest Service rule will cost the Federal Government and State
governments millions of dollars in lost leasing revenues and
production royalties. Revenues will steadily decrease if
currently producing oil and gas new leases are not continued.
One argument advanced by proponents of the roadless rule is
the high cost of maintaining roads. In the proposed rule, the
Forest Service claimed a $10 billion backlog for maintenance
and reconstruction of existing roads. However, the oil and gas
industry funds the construction, maintenance and reclamation of
the roads needed to find and produce oil and gas beneath Forest
Service lands, and if a prospect turns out to be a dry hole,
the industry removes the road and reclaims the land.
This industry is very concerned that the roadless rule has
withdrawn 60 million acres without a balanced assessment of the
energy implications of such a decision. This rule prohibits
activities that are consistent with congressionally mandated
multiple use, and we believe the rule will inflict economic
harm to many people, including residents of local communities.
We urge Congress to carefully review the final roadless
rule. A new plan can be developed so that a projected 11
trillion cubic feet of natural gas can be produced in an
environmentally compatible manner.
Overall, our energy policy needs to have the following
characteristics. We need to balance energy needs with
environmental needs. We need to fully staff our regulatory
offices. We need to streamline the permitting processes, and we
need processes that in fact can change and be flexible over
time, incorporating the facts that we will see improvements in
technology over time. Thank you very much.
[The prepared statement of Mr. Segner follows:]
PREPARED STATEMENT OF EDMUND P. SEGNER, PRESIDENT, EOG RESOURCES, INC.
Good afternoon. My name is Edmund Segner, president of EOG
Resources, Inc., one of the largest independent producers of oil and
natural gas in the United States.
Thank you for inviting us to testify. I am a member of the
Executive Committee of the Domestic Petroleum Council and today I am
also testifying on behalf of the American Petroleum Institute, the
Independent Petroleum Association of America, and Public Lands
Advocacy, who together speak for thousands of oil and natural gas
producing companies in the United States. I will discuss the energy
implications of the U.S. Forest Service (USFS) Roadless Rule that was
finalized in January 2001.
The U.S. oil and natural gas industry has a long record of
providing a reliable and affordable supply of energy to American
families. At the same time, the federal government has always played a
pivotal role in determining how well producers meet U.S. energy needs.
With U.S. energy demand now at an all-time high, it is important that
government and industry develop a workable national energy policy that
both protects the environment and delivers the energy to ensure
continued U.S. prosperity. Both goals can be achieved.
My testimony focuses on Forest Service multiple use lands
containing oil and natural gas resources that were placed off limits to
exploration and production as part of the so-called ``Roadless Rule.''
The effect of that rule is to put off limits lands estimated to hold
between 3.5 and 23.1 trillion cubic feet (Tcf) of natural gas. The
final rule chose to ignore such vast potential reserves despite our
industry's comments highlighting those energy implications.
Today, we import 57 percent of our crude oil. Last year's gasoline
price volatility was due in part to a cutback in production by foreign
oil producing countries even as demand grew rapidly. While we cannot
eliminate our dependence on imported oil, there are many things that
can be done to offset it. And one of them is to do all we can to
encourage greater production in this country of all kinds of energy.
Unlike crude oil, most of the natural gas we use comes from U.S.
sources. According to a study by the National Petroleum Council (NPC)--
an Energy Department advisory group--U.S. natural gas demand will rise
by more than 30 percent by the year 2010, and by 60 percent to an
estimated 36 Tcf by 2020.
We will need an additional seven trillion cubic feet of natural gas
annually by the end of this decade, and 14 Tcf a year in additional
supplies in less than 20 years. Almost half of that will be needed to
produce electricity because many new power plants are predicted to be
powered by natural gas.
The 1999 NPC study that produced the numbers on natural gas demand
also found that producers will have to invest almost $660 billion in
new capital to meet that increased need for energy over the next
quarter century. The study also concluded the United States is capable
of meeting this additional demand, but only if energy companies are
given greater access to available federal lands that are now off limits
or severely restricted as a result of discretionary federal actions.
There must be a new policy permitting companies to explore for, and
produce in multiple-use federal lands, including some of those placed
off limits by the USFS.
THE EFFECTS OF THE FINAL RULE
A recent study conducted for the Department of Energy in the last
days of the Clinton Administration on the energy implications of the
Roadless Rule estimated that the new rule would completely close to
development 9.4 Tcf of the total 11 Tcf of natural gas found on the
lands covered by the initiative.
The study also illustrates the casual disregard given to energy
values in the USFS Rule. More than 80 percent of the predicted 11 Tcf
of natural gas is located on just five percent of the land covered by
the Forest Service rule on roadless construction. In other words, if
the Forest Service had left out that five percent, it would have made
available the vast majority of the natural gas beneath USFS lands in
the Rocky Mountain region. It is precisely this type of cavalier
dismissal of energy values in federal land use decision-making that has
aggravated our current energy difficulties.
Specifically, the new rule bans road reconstruction, thus
effectively creating new roadless areas in lands that have previously
been available for multiple use. As a result, the Forest Service is
circumventing congressional intent, and bans activities that are
consistent with multiple use.
Moreover, the Rule effectively withdraws more public lands from oil
and gas development without justification, to the detriment of the
nation's domestic energy supply. It also exacts costs from local
economies in affected states and causes a decline in federal revenues
from bonus bids, rents and royalties on exploration and production on
federal lands.
When the Forest Service devised its long-term strategic plan in
1990, under the Resource Planning Act, its stated petroleum leasing
strategy was designed to ``meet most demands for access to explore and
develop mineral resources, except when doing so would pose unacceptably
high risks to other resources.''
This goal was articulated by the agency in the aftermath of a 1988
controversy in which the Forest Service admitted that it paid ``little
attention . . . to minerals while making land use decisions that
restrict mineral exploration access.'' Since that time, the managers of
the National Forests have paid minimal attention to mineral resources
in drafting their land-use plans. As a result, a vast amount of Forest
Service acreage had been placed off-limits to oil and gas leasing prior
to the final Roadless Rule.
In the last administration, the Forest Service asserted that its
policies and road construction bans were based on goals that have
changed over the years, from a system ``largely funded and constructed
to develop areas for timber harvesting and to allow the development of
other resources. In the last two decades, interest in the appropriate
uses of the resources . . . has shifted toward recreation and
wildlife.''
This shift away from development of the natural resources on
federal lands, without a balanced assessment of competing uses, is of
great concern to the oil and gas industry. From 1983 to 1996, oil and
gas leasing on National Forest and Bureau of Land Management lands in
eight western states declined by a drastic 72 percent, from 114.2
million acres to 32.6 million acres. Across the entire National Forest
system, lands in Designated Wilderness Areas, which are barred from
petroleum leasing, increased substantially--from 9.3 million acres in
1964 to 35 million acres in 1996. Moreover, nearly 6.1 million acres of
Forest Service lands remain in limbo as Wilderness Study Areas. The
Forest Service decisions regarding potential Wilderness were made as a
result of the Roadless Area Review and Evaluation (RARE) I and II
processes, and what industry terms RARE III, which was conducted as
part of the Forest Service land and resource management planning
process completed between 1985 and 1990.
It is evident that the real issue at stake is expanding wilderness
acreage throughout the entire National Forest System. The first
Wilderness designated by Congress in 1964 totaled 9 million acres.
Since then, an additional 100 million federal acres have been
designated as Wilderness nationwide. In addition, other categories,
including the Forest Service's ``further planning'' areas, recommended
Wilderness Areas, and Wilderness Study Areas (designated by the agency
and Congress), amount to more than 27 million acres. Combined with
other set-asides, such as national parks and refuges, native claims
selections in Alaska, and special management areas, more than 50
percent of federal lands--some 300 million acres--are already
completely off-limits to oil and gas leasing and exploration. Of the
federal lands available to leasing, more than half are subject to
severely restrictive land classifications or lease stipulations. The
cumulative effects of this expansion have major consequences for those
whose role in the economy depends on important resources located on
federal lands and for the nation.
TECHNOLOGY
Any discussion of increased access to natural gas reserves
inevitably turns to the technology used in the 21st century to find and
remove the gas.
A 1999 Department of Energy report entitled, Environmental Benefits
of Advanced Oil and Gas Exploration and Production Technology had this
to say about the industry's approach to protecting the environment:
``. . . innovative E&P approaches are making a difference to
the environment. With advanced technologies, the oil and gas
industry can pinpoint resources more accurately, extract them
more efficiently and with less surface area and with less
surface disturbance, minimize associated wastes, and,
ultimately, restore sites to original or better condition.
(The industry) has integrated an environmental ethic into its
business and culture and operations (and) has come to recognize
that high environmental standards and responsible development
are good business.''
These advances in technology apply to exploration and production on
hundreds of millions of acres of lands owned by the federal government.
However, the domestic producing industry is not asking to drill on
parklands or in wilderness areas set aside by Acts of Congress. Rather,
we seek access to lands designated as ``multiple use'' by Congress on
Forest Service lands so that so that exploration and production can
take place in an environmentally compatible manner.
Critics often portray the industry as careless about environmental
concerns. They have probably never visited a rig where safety and
environmental protection are the central concerns, regardless of their
location, and where our obligations with the government require us to
return the land to its original status once oil or gas production
ceases.
ECONOMIC IMPACTS
The Roadless Rule continues the trend toward less development of
the natural resources beneath federal lands. No new leases of Forest
Service lands could be granted where roads must be constructed to
achieve the purposes of the lease. The resulting decrease in petroleum
activities will have a significant impact on jobs. Drilling activities
for a single well require as many as 20 workers for up to three months,
generating some $150,000 in wages. Another $1 million must be expended
on equipment, goods and services for a typical well. Most of this money
is spent in the local area where a well is drilled--for severance
taxes, production royalties, payments in lieu of taxes (PILT), income
taxes and so forth, where previous decreases in oil and gas activity
have already had a significant economic impact.
Moreover, the withdrawal of these lands from leasing will have a
seriously negative impact on the U.S. Treasury. Under the competitive
leasing system, the federal government receives a minimum bid of $2 an
acre to lease these lands for petroleum development. By imposing this
moratorium on roads--which are essential to oil and gas development--
the Forest Service is foregoing a potential for at least $66 million in
leasing revenues. If there is more than one company interested in
leasing in a parcel of land, the high lease bid in the past has gone up
to as high as $1,000 an acre or more. Bonus bids amounting to the first
year's rent are also paid at the time a lease is sold. In addition, the
Roadless Rule not only diminishes lease rentals and bonuses, but also
production royalties that would be paid during the life of production
of the lease.
Petroleum reserves and federal ownership of lands are extensive in
the West and oil and gas are important sources of state revenues. In
Montana, for example, oil and gas producers and refiners paid nearly
$100 million in state and local taxes in 1996. In Wyoming, the oil and
gas production industry paid $378 million, and in North Dakota, $53
million. In Utah, the state severance tax on oil and gas produced $46
million in 1983--but only $12 million in 1996.
Revenues, in these and other states, will steadily decrease if
currently producing oil and gas leases on Forest Service lands are not
augmented by new leases and subsequent development. The Roadless Rule
will discourage, delay and very likely eliminate further petroleum
activity on Forest Service lands.
ROAD MAINTENANCE COSTS
One argument advanced by proponents of the Roadless Rule is the
high cost of maintaining roads. In the proposed rule, the Forest
Service claimed a $10 billion backlog for maintenance and
reconstruction of existing roads on its lands. However, it should be
noted that the oil and gas industry funds the private construction,
maintenance and reclamation of the roads needed to find and produce oil
and gas from beneath Forest Service lands. It does not depend on
assistance from the federal government. Moreover, if a prospect turns
out to be a ``dry hole,'' the industry removes the road and reclaims
the land. The only time the petroleum industry leaves intact a road
that it has constructed is when the Forest Service requests it. Thus,
the Forest Service is only required to maintain roads for public use.
Ironically, while road maintenance payments to the Forest Service have
declined in recent years, it is the decreasing access of commercial
users, including the oil and gas industry that has led to this decline.
MULTIPLE USES
It is also important to note that oil and gas development does not
prevent leased land from being used for other purposes or by other
users. Under the terms of a federal oil and gas lease, the operator
cannot construct housing, farm the land, or remove any minerals other
than oil and natural gas. The Forest Service is free to grant permits
for non-petroleum uses to others or allow activities which require
roads but do not require permits, such as mountain biking, cross-
country skiing, fishing, hunting, sight-seeing or picnicking.
The oil and gas industry supports reasonable measures to protect
fish, wildlife and environmental resources. This industry has
repeatedly demonstrated its commitment to operating in an
environmentally compatible manner, with vigilant consideration given to
sensitive resource values. This record should provide a basis for a
policy that does not prevent oil and gas activity in the unroaded
areas. Moreover, the Forest Service's authority under current policies
gives the agency almost complete control over how surface resources are
managed, providing additional assurance that exploration and production
will be conducted with respect for environmental values.
CONCLUSION
This industry is very concerned that the Roadless Rule has placed
60 million acres in de facto wilderness withdrawal without a balanced
assessment of the energy implications of such a decision. These lands
have repeatedly been found not to meet the 1964 Wilderness Act
criteria, and were released to multiple use during the comprehensive
RARE I and II processes and the Forest Service planning process. This
Rule appears to be an alternate method of prohibiting activities that
are consistent with congressionally mandated multiple-use. The Rule
imposes high costs on many people--severe economic impacts on local
communities, effects on the price and availability of oil and gas,
hardrock minerals, lumber and paper products and other goods and
services. Moreover, there is also a cost in more limited recreational
opportunities to the public. The gain--preserving unroaded acreage with
the National Forest System--does not appear to equal the cost.
We urge Congress to carefully review the Forest Service's Final
Roadless Rule. A new plan can be developed in these unroaded areas
without halting all activities on these lands so that a projected 11
trillion cubic feet of needed domestic natural gas can be produced in
an environmentally compatible manner.
We must find a way to eliminate government obstacles and regulatory
complexity so that our companies will be better able to produce the
enormous amounts of energy that will be required over the next decade
and beyond. That includes the Forest Service's capricious rule banning
new road construction on multiple use Forest Service lands that are
most promising for oil and gas exploration.
Senator Cantwell. Thank you, Mr. Segner. Finally, Professor
Tom McGarity from the University of Texas School of Law at
Austin. Thank you for being with us as well.
STATEMENT OF PROFESSOR THOMAS O. McGARITY, UNIVERSITY OF TEXAS
SCHOOL OF LAW, AUSTIN, TX
Mr. McGarity. Than you. I am a professor of law at the
University of Texas School of Law where I have taught
administrative law and environmental law for the last 20 years.
I am pleased to testify here on the legal issues concerning the
Forest Service's final rule on roadless areas and the Bush
administration's response to that rule. The testimony that I am
giving, however, I represent only myself and I do not
necessarily represent the views of the University of Texas.
As is typically the case when an administration during the
transition between administrations and the following
administration, the volume of proposed and final regulations
issued by many executive departments increases--that happened
in the Clinton administration. This is not at all unusual for
any decision-making institution to increase its output at the
end of its appointed term.
The roadless rule was one of these. It was not an ill-
conceived product of a hasty decision-making process. As
Senator Cantwell has pointed out, there was a great deal of
notice and comment, a great deal of public participation with
respect to this rule over a long period of time. Impressive to
me, more impressive than 800,000 form letters sent in is the
430 public meetings which were attended by 23,000 people. That
is a pretty impressive record of public participation to me. On
January 20, the White House Chief of Staff, Andrew Card, wrote
a memorandum to the heads of the agencies asking them to
withdraw rules that had been submitted and published in the
Federal Register--or at least to stay them, I'm sorry, for a 60
day period.
It is certainly conceivable that at the end of this 60 day
period the Forest Service's 60 day stay will either be extended
or perhaps even be made indefinite. I think that the demand
that the agency extend the effective date for 60 days was, as
at least explained in the Federal Register notices, violative
of the Administrative Procedures Act. The rulemaking process is
by its very nature open ended, and one administration may
certainly rescind or replace a rule issued by a prior
administration; however, a regulation may only be deferred,
modified, withdrawn, or repealed through the same notice and
comment procedures that the APA, the Administrative Procedures
Act, prescribes for promulgating regulations in the first
instance.
Moreover, any decision to appeal, withdraw, defer, or amend
a regulation may ordinarily be accomplished only with the same
degree of study, analysis, and deliberation, and supported by a
rulemaking record.
The postponement of the effective date of a rule is itself
a rule, and therefore rulemaking procedures should be
undertaken in that exercise. So long as the action does not
come within one of the exceptions to notice and comment
rulemaking in section 553 of the Administrative Procedures Act,
the postponement may legally be accomplished only through the
procedures prescribed therein. There was a boilerplate
paragraph in the Forest Service rule, as in all of the rules
that were issued pursuant to the Card memorandum, taking the
position that it was either a procedural rule--which it clearly
is not--or that there was good cause for the 60 day
postponement, but with little explanation for that, other than
there had been a change of administrations. And the law is very
clear that simple deadline or change of administrations is not
good cause for extending the effective date of a rule.
It is possible that the Forest Service may, during the time
that it reviews this rule, decide to withdraw or amend the
rule. It has certainly been suggested here that that is an
action the Forest Service should take. Two important
impediments stand in the way of an attempt to implement that
option. First, any rescission must be accomplished through
notice and comment rulemaking with full public participation.
Second, any such action must be supported with data and
analysis capable of demonstrating that the rescission or
modification is not arbitrary and capricious. The leading
Supreme Court holding on this question, the State Farm case,
says that agency rule rescissions must be reviewed with the
same degree of scrutiny as the review of initial rule
promulgations.
The Court said, and I quote, ``an agency changing its
course by rescinding a rule is obligated to supply a reasoned
analysis for the change beyond that which may be required when
an agency does not act in the first place.''
I have submitted my full comments for the record and I ask
that they be printed with the hearings. I would simply conclude
with the conclusion that the Chief of Staff's memorandum did
send a message to ordinary people that it is acceptable to
circumvent the legally binding procedural requirements set out
in the Administrative Procedures Act. I think that neither the
President nor Congress should reinforce that message by
arbitrarily rescinding, at the behest of a few interests,
protective regulations like the roadless rule that have been
years in the making. Thank you.
[The prepared statement of Mr. McGarity follows:]
PREPARED STATEMENT OF PROFESSOR TOM MCGARITY, UNIVERSITY OF TEXAS
SCHOOL OF LAW, AUSTIN, TX
My name is Tom McGarity. I hold the W. James Kronzer Chair in Law
at the University of Texas School of Law, where I have for the last 20
years taught courses in Administrative Law and Environmental Law. As my
attached Curriculum Vitae indicates, I have published many articles and
two books in the area of Administrative Law and Regulatory Reform, and
I have co-authored a casebook on Environmental Law. I am, therefore,
pleased to testify today on the Forest Service's Final Rule on Roadless
Area Conservation and the Bush Administration's response to those
regulations.
THE ROADLESS AREA CONSERVATION RULE.
As is typically the case during the transition between one
Administration and the following Administration, the volume of proposed
and final regulations issued by many Executive Branch agencies
increased during the last few weeks of the Clinton Administration. The
same thing happened at the end of the Carter and Bush Administrations
when a President from a different political party was elected.
It is not at all unusual for a decisionmaking institution to
increase its output substantially at the end of its appointed term. The
volume of Supreme Court opinions invariably increases dramatically in
June and July as the October term comes to an end. Legislative bodies,
including this body, typically pick up the legislative pace and enact a
disproportionate number of laws at the end of a legislative session. It
is in the nature of a deliberative law-making body to deliberate longer
and harder over difficult decisions and, consequently, to leave them to
the end of the deliberations.
One of the regulations issued at the end of the Clinton
Administration was the Forest Service's Final Rule on Roadless Area
Conservation.\1\ This regulation was not an ill-conceived product of a
hasty decisionmaking process. The Forest Service proposed to suspend
road construction and reconstruction in most inventoried roadless areas
in January, 1998, three years before the issuance of the final rule.\2\
After considering more than 119,000 public comments on the proposal,
the Forest Service a little more than a year later issued an interim
rule temporarily suspending road construction and reconstruction in
most inventoried roadless areas.\3\
Having temporarily suspended road construction and reconstruction
in roadless areas, the Forest Service began the process of providing
long-term protection of the areas by announcing, in October, 1999, that
it planned to initiate a rulemaking and to prepare a Draft
Environmental Impact Statement (DEIS) analyzing various alternative
approaches to protecting roadless areas.\4\ After issuing this notice,
the Forest Service conducted 187 public meetings that were attended by
about 16,000 people, and the agency received more than 517,000
responses.\5\
On May 10, 2000, the agency issued a proposed regulation,\6\ and
soon thereafter it made the DEIS available to the public.\7\ The
documents and much other background information were published on the
agency's website.\8\ The agency hosted two cycles of public meetings on
the proposed rule and the DEIS, resulting in a total of about 430
public meetings attended by more than 23,000 people.\9\ On November 17,
2000, the agency published a notice announcing the availability of the
Final Environmental Impact Statement (FEIS). By the time that the
rulemaking period had closed, the agency had received more than 60,000
original letters, 90,000 e-mail transmissions and one million postcards
or other written submissions.\10\ The agency carefully analyzed those
submissions in a full volume of the FEIS and responded to significant
negative comments in the preamble to its final rule.\11\
All interested members of the public thus had ample opportunity to
present their views and to have them considered by the agency.
Moreover, the preamble to the final rule carefully analyzed the public
comments on the alternatives identified in the DEIS, and it changed
various aspects of the regulation in light of the comments that it
received.\12\ The final rule has been challenged in a federal district
court in Idaho on the ground that it is arbitrary and capricious.
Assuming that the rule is not withdrawn, that challenge will presumably
go forward and the court will address the merits of the regulation
under the Multiple-Use Sustained-Yield Act of 1960 \13\ and the
National Environmental Policy Act.\14\
THE CARD MEMORANDUM AND SUBSEQUENT DELAY OF EFFECTIVE DATE
On January 20, 2001, White House Chief of Staff Andrew Card wrote a
memorandum to the heads and acting heads of all Executive Branch
agencies to communicate to them President Bush's ``plan for managing
the Federal regulatory process at the outset of his Administration.''
\15\ Subject to some limited exceptions for emergencies and urgent
situations relating to public health and safety, the memorandum asked
the agency heads to ``withdraw'' any regulation that had been sent to
the Office of the Federal Register, but had not been published in the
Federal Register. The regulation was not to be published in the Federal
Register ``unless and until a department or agency head appointed by
the President after noon on January 20, 2001, reviews and approves the
regulatory action.'' \16\ With respect to final regulations that had
been published in the Federal Register but had not taken effect, the
agency heads were asked to ``temporarily postpone the effective date of
the regulations for 60 days.'' \17\ The memorandum defined the term
``regulation'' to mean ``any substantive action by an agency (normally
published in the Federal Register) that promulgates or is expected to
lead to the promulgation of a final rule or regulation, including
notices of inquiry, advance notices of proposed rulemaking, and notices
of proposed rulemaking.'' \18\
The Forest Service responded to the Card Memorandum by publishing
on February 5, 2001, a notice in the Federal Register ``temporarily
delay[ing] for 60 days the effective date'' of the roadless area rule,
which the agency had previously published in the Federal Register.\19\
Although it is not clear how the Forest Service will proceed at the end
of the 60-day delay period, it is certainly conceivable that the agency
will suspend the effective date indefinitely while it decides whether
to modify portions of it or to rescind it altogether.
LEGAL AND POLICY ANALYSIS
The rulemaking process is by its very nature open-ended, and rules
that are promulgated during one administration may be rescinded and
replaced during another, if the relevant agency statutes give the
agencies discretion to do so. The agencies' substantive statutes are
the determinants of the substantive legitimacy of the regulations and
of their amendment or repeal. Unless an agency's statute prescribes a
different process, the Administrative Procedure Act (APA) is the
determinant of the procedural aspects of rule promulgation, amendment
and repeal.\20\
In general, a regulation may only be deferred, modified, withdrawn
or repealed through the same notice-and-comment rulemaking procedures
that the APA prescribes for promulgating regulations in the first
instance. Moreover, any decision to repeal, withdraw, defer, or amend a
regulation should ordinarily be accomplished with the same degree of
study, analysis and deliberation that went into the promulgation of
those regulations. Anything less would represent a disservice to the
intended beneficiaries of the protections that the rules provided.
Legal considerations aside, it is bad public policy cavalierly to throw
out important environmental protections solely because they were
promulgated during a previous administration. It makes no more sense to
erect a presumption against retaining regulations promulgated near the
end of a presidential administration than it would make to erect a
presumption against the wisdom or legitimacy of legislation enacted
during the end of a congressional session.
POSTPONEMENT OF THE EFFECTIVE DATE OF THE ROADLESS AREA RULE
As an initial matter, the APA exempts rules involving ``public
property'' from notice-and-comment rulemaking procedures. In 1971,
however, the United States Department of Agriculture (USDA), acting
pursuant to a recommendation of the now-defunct Administrative
Conference of the United States, published a regulation voluntarily
waiving this exemption.\21\ This regulation ``fully bound the Secretary
to comply thereafter with the procedural demands of the APA.'' \22\
Thus, until such time as it revokes the 1971 regulation, the Forest
Service must follow the prescriptions of section 553 of the APA in
promulgating regulations related to Forest Service lands.
Once a rule has been published in the Federal Register, it is a
final rule for purposes of the APA, even if the effective date of one
or more of its legally binding requirements occurs some time in the
future.\23\ The agency may not modify the rule except through the
section 553 notice-and-comment rulemaking procedures.\24\ The Card memo
requested the executive branch agencies to ``temporarily postpone the
effective date'' of the already published regulations for 60 days to
allow newly appointed agency heads to review and approve those
regulations,\25\ and the Forest Service complied with that request.
The law is clear that the postponement of the effective date of a
rule, either indefinitely or for a set period of time, is
``rulemaking'' within the meaning of the APA. The court in Natural
Resources Defense Council, Inc. v. EPA,\26\ the leading case on the
subject, observed that ``it makes sense to scrutinize the procedures
employed by the agency all the more closely where the agency has acted,
within a compressed time frame, to reverse itself by the procedure
under challenge.'' \27\ In ``postponing the effective date'' of the
rule, the agency in that case had ``reversed its course of action up to
the postponement,'' and it had done so ``without notice and an
opportunity for comment, and without any statement . . . on the impact
of that postponement.'' \28\ The indefinite postponement of the
regulations was a ``rule'' within the meaning of the APA that could
lawfully be promulgated only through the procedures provided for in the
APA.
So long as the action postponing the regulation does not come
within one of the exceptions listed in section 553 of the APA, the
postponement may legally be accomplished only through the notice-and-
comment rulemaking procedures provided for in section 553. The
exemptions, in turn, are quite narrow. As the D.C. Circuit Court of
Appeals has noted: ``it should be clear beyond contradiction or cavil
that Congress expected, and the courts have held, that the various
exceptions to the notice-and-comment provisions of section 553 will be
narrowly construed and only reluctantly countenanced.'' \29\
The Forest Service's Federal Register notice for the 60-day delay
of the roadless area rule contained a boilerplate explanation for why
the delay was either a ``rule of procedure'' within section 553's
exemption for such rules from the notice-and-comment rulemaking
requirements or were subject to the ``good cause'' exception.\30\ In
relevant part, the boilerplate reads as follows:
To the extent that 5 U.S.C. section 553 applies to this
action, it is exempt from notice and comment because it
constitutes a rule of procedure under 5 U.S.C. section
553(b)(A). Alternatively, the Department's implementation of
this rule without opportunity for public comment, effective
immediately upon publication today in the Federal Register, is
based on the good cause exceptions in 5 U.S.C. section
553(b)(B) and 553(d)(3). Seeking public comment is
impracticable, unnecessary and contrary to the public interest.
The temporary 60-day delay in effective date is necessary to
give Department officials the opportunity for further review
and consideration of new regulations, consistent with the
Assistant to the President's memorandum of January 20, 2001.
Given the imminence of the effective date, seeking prior public
comment on this temporary delay would have been impractical, as
well as contrary to the public interest in the orderly
promulgation and implementation of regulations. The imminence
of the effective date is also good cause for making this rule
effective immediately upon publication.\31\
The boilerplate explanation for neither exemption is at all convincing.
The 60-day suspension of the effective date of the roadless area
rule issued in response to the Card memo cannot reasonably be
characterized as a ``procedural rule'' within the meaning of the APA.
The law is well established that ``[a] procedural rule is one that does
not itself alter the rights or interests of parties, although it may
alter the manner in which the parties present themselves or their
viewpoints to the agency.'' \32\ Agency actions that ``jeopardize or
substantially effect the rights and interests of private parties'' are
not procedural rules.\33\ The effective date of a substantive rule is a
substantive, not a procedural component of that rule. Procedural rules
are rules that govern the procedures under which an agency exercises
its powers or under which private parties interact with the agency.
They address how the agency goes about its substantive work.\34\ They
do not affirmatively implement the agency's substantive
responsibilities. The roadless area rule implemented the Forest
Services substantive responsibilities under the Multiple-Use Sustained-
Yield Act of 1960.
Just as clearly, the suspension did not come within section 553's
``good cause'' exemption. An agency may rely upon that exemption when
it ``for good cause finds . . . that notice and public procedure
thereon are impracticable, unnecessary, or contrary to the public
interest.'' \35\ The courts have repeatedly held that the ``good
cause'' exemption is to be ``narrowly construed and only reluctantly
countenanced . . . [and] should be limited to emergency situations.''
\36\ In particular, ``the mere existence of deadlines for agency action
. . . [can]not in itself constitute good cause for a
Sec. Sec. 553(b)(B) exception.'' \37\ Otherwise the ``good cause''
exception could easily swallow the rule that regulations must be
promulgated through notice-and-comment procedures.\38\ The good cause
exemption is not an `escape clause' that may be arbitrarily utilized at
the agency's whim.'' \39\
The boilerplate rationale that the Forest Service provided in its
Federal Register notice was that the ``temporary 60-day delay in
effective date is necessary to give Department officials the
opportunity for further review and consideration of new regulations,
consistent with the Assistant to the President's memorandum of January
20, 2001.'' An agency's desire to re-consider a regulation that it has
already considered cannot conceivably constitute the sort of emergency
that is required to support the ``good cause'' showing under section
553. An agency is free to reconsider a previously promulgated
regulation while it remains in effect by issuing a notice of proposed
rulemaking, inviting public comment on any changes the agency has in
mind, and either withdrawing the previously promulgated rule or
promulgating an amended rule. The Forest Service's postponement of the
effective date of the final roadless area regulation cannot possibly
fit within the intentionally narrow ``good cause'' exemption to section
553's notice and comment procedural requirements.
WITHDRAWAL OF PUBLISHED FINAL RULES
The Card memo contemplated that ageny heads would ``review and
approve'' postponed published final rules. Although not made explicit,
it no doubt also contemplated that the agencies would rescind
regulations that did not receive the approval of the agency heads.\40\
Thus, the Forest Service may decide to withdraw or amend the roadless
area rule. Two important impediments, however, stand in the way of any
attempt to implement that option.
First, as discussed above, any rescission or modification of a
published final rule must be accomplished through notice-and-comment
rulemaking procedures, unless the action comes within the good cause
exception. Section 553 defines ``rulemaking'' as ``agency process for
formulating, amending, or repealing a rule.'' \41\ Hence, the amendment
or repeal of a final rule must be accomplished through section 553
notice-and-comment rulemaking procedures.
Second, and perhaps more importantly, any such action must be
supported with data and analysis capable of demonstrating that the
rescission or modification is not ``arbitrary and capricious.'' \42\ In
the leading Supreme Court opinion on this question, the Court held that
courts should review agency rule rescissions with the same degree of
scrutiny as they review initial rule promulgations, and it explicitly
rejected the claim that the courts should review the repeal of a
regulation as a decision declining to promulgate regulation in the
first place.\43\ The Court noted that ``an agency changing its course
by rescinding a rule is obligated to supply a reasoned analysis for the
change beyond that which may be required when an agency does not act in
the first instance.'' \44\ The Court then articulated the test for
``substantive'' judicial review of agency action under the arbitrary
and capricious test.\45\ The same standard applies to the indefinite
suspension of a previously promulgated rule.\46\
As noted above, the Forest Service assembled a massive record on
the roadless area rule, and it supported that rule with extensive
analysis both in the FEIS and the preamble to the Notice of Final
Rulemaking. While it is possible that the agency could adequately
justify a decision to amend or repeal that rule with less extensive
data and analyses than those that went into the promulgation of the
original rule, a reviewing court would no doubt insist that the agency
back up such an action with a substantial record and very strong
reasons. The mere fact of a change of Administrations is not a
sufficient justification for the modification or repeal of a
promulgated rule.
REPEALING RULES UNDER THE CONGRESSIONAL REVIEW ACT
One alternative to the unlawful postponement or withdrawal of a
published final rule is action under the Congressional Review Act to
rescind a major rule. When Congress takes this rather extreme step,
however, the rescinded regulation cannot be promulgated in
``substantially the same form'' without explicit authorizing
legislation.\47\ Because it has the effect of undoing all of the work
that the agency has put into the rule, this relatively blunt tool has
the potential to waste huge amounts of public and private resources. In
the case of the roadless area rule, the Forest Service has spent years
of time and huge quantities of its limited analytical resources on the
recently promulgated regulation. The congressional review process is
not likely to devote nearly the same degree of care and analysis to the
rule, should Congress elect to take it up.
Congress should not hastily exercise its power to undo the
legitimate products of a deliberative rulemaking process. In general,
neither the offices of individual congresspersons nor the committee
staffs are populated with persons who have the technical expertise to
second-guess the technical conclusions of agency staff and upper-level
agency decisionmakers. With the demise of the Office of Technology
Assessment in 1995, Congress lost its institutional capacity to elicit
the technical advice of experts in particular subject areas relevant to
federal regulation. The primary determinants of congressional decisions
under the Congressional Review Act are likely to be political, not
technical considerations. The fate of individual regulations, long in
the making, should not turn on a hasty and unprincipled exercise of raw
political power. In the years since it enacted the Congressional Review
Act, Congress has wisely refrained from using that statute to reward
political benefactors and punish political enemies. It should continue
to do so in the future.
CONCLUSION
Like the Bush Administration before it, the Clinton Administration
issued a comparatively large number of rules and proposed rules during
its last few weeks. When Chief of Staff Card, at the President's
request, asked agencies to postpone the effective date of published
final regulations, he was asking them to take an action that was
unlawful under the Administrative Procedure Act. The fact that it may
be impossible, as a practical matter, for an affected citizen to
challenge the unlawful conduct of the agencies in court does not render
that conduct any less unlawful. Federal agencies should obey the law,
just as they expect ordinary citizens to obey the law. The Chief of
Staff, in asking the agencies to engage in unlawful conduct, sent a
message to ordinary citizens that it is acceptable to circumvent
legally binding procedural requirements in pursuit of political ends.
Congress should not reinforce that message by arbitrarily rescinding,
at the behest of a few special interests, protective regulations like
the roadless area rule that have been years in the making.
END NOTES
\1\ 66 Fed. Reg. 3244 (2001).
\2\ See 66 Fed. Reg. at 3247.
\3\ 64 Fed. Reg. 7290 (1999).
\4\ 64 Fed. Reg. 56306 (1999).
\5\ See 66 Fed. Reg. at 3248.
\6\ 65 Fed. Reg. 30276 (2000).
\7\ 65 Fed. Reg. 31898 (2000).
\8\ 66 Fed. Reg. at 3248.
\9\ Id.
\10\ Id.
\11\ Id.
\12\ 66 Fed. Reg. at 3249-67.
\13\ 16 U.S.C. Sec. Sec. 1600, et seq.
\14\ 42 U.S.C. Sec. 4321, et seq.
\15\ Memorandum for the Heads and Acting Heads of Executive
Departments and Agencies from Andrew H. Card, Jr., dated January 20,
2001, 66 Fed. Reg. 7702 (2001) [hereinafter cited as Card memo].
\16\ Id.
\17\ Id.
\18\ Id.
\19\ Forest Service, Special Areas; Roadless Area Conservation:
Delay of Effective Date, 66 Fed. Reg. 8899 (2001).
\20\ 5 U.S.C. Sec. 551 et. seq.
\21\ 36 Fed. Reg. 13804 (1971).
\22\ Rodway v. USDA, 514 F.2d 809, 814 (D.C. Cir. 1975).
\23\ Indeed, under section 553(d) of the APA, the effective date of
a regulation is ordinarily at least 30 days after promulgation in the
Federal Register.
\24\ See Alaska Professional Hunters Association, Inc. v. FAA, 177
F.3d 1030, 1034 (D.C. Cir. 1999) (the term ``rulemaking'' in the APA
``includes not only the agency's process of formulating a rule, but
also the agency's process of modifying a rule'').
\25\ Card memo, supra, at 7702.
\26\ 683 F.2d 752 (3d. Cir. 1982) (indefinite suspension of a
published regulation is rulemaking that must follow notice-and-comment
rulemaking procedures). See also Environmental Defense Fund, Inc. v.
Environmental Protection Agency, 716 F.2d 915 (D.C. Cir. 1983)
(attorney fee recovery case in which court noted that ``[flhe
suspension or delayed implementation of a final regulation normally
constitutes substantive rulemaking under the APA''); Environmental
Defense Fund, Inc. v. Gorsuch, 713 F.2d 802, 816 (D.C. Cir. 1983) (``an
agency action which has the effect of suspending a duly promulgated
regulation is normally subject to APA rulemaking requirements'').
\27\ 683 F.2d at 760.
\28\ Id.
\29\ New Jersey v. United States Environmental Protection Agency,
626 F.2d 1038, 1045 (D.C. Cir. 1980).
\30\ The agency did not claim that the suspension constituted an
``interpretative rule'' or a ``statement of policy,'' both of which may
be promulgated without full notice and comment procedures. That route
was foreclosed by judicial opinions rejecting such contentions in other
contexts. See Environmental Defense Fund, Inc. v. Gorsuch, 713 F.2d
802, 816-17 (D.C. Cir. 1983).
\31\ For other notices delaying previously published regulations
pursuant to the Card memo, see Department of Health and Human Services,
Public Health Service, Alcohol, Drug Abuse and Mental Health
Administration (ADAMHA) Substance Abuse and Mental Health Services
Administration (SAMHSA), Opioid Drugs in Maintenance and Detoxification
Treatment of Opiate Addiction; Repeal of Current Regulations and.
Issuance of New Regulations: Delay of Effective Date and Resultant
Amendments to the Final Rule, 66 Fed. Reg. 15347 (2001); Department of
Labor, Mine Safety and Health Administration, Diesel Particulate Matter
Exposure of Underground Metal and Nonmetal Miners; Delay of Effective
Dates, 66 Fed. Reg. 15032 (2001).
\32\ Chamber of Commerce v. Department of Labor, 174 F.3d 206 (D.C.
Cir. 1999).
\33\ Thomas v. State of New York, 802 F.2d 1443, 1447 (D.C. Cir.
1986).
\34\ A possible example of a true procedural rule for which an
agency legitimately extended a deadline pursuant to the Card memorandum
is the revision of the Department of Housing and Urban Development's
regulations for implementing the Freedom of Information Act. Department
of Housing and Urban Development, Revision of Freedom of Information
Act Regulations; Delay of Effective Date, 66 Fed. Reg. 8175 (2001).
\35\ 5 U.S.C. Sec. 553(b)(B).
\36\ Environmental Defense Fund, Inc. v. EPA, 716 F.2d 915, 920
(D.C. Cir. 1983).
\37\ United States Steel Corp. v. United States Environmental
Protection Agency, 595 F.2d 207, 213 (5th Cir. 1979).
\38\ See Council of the Southern Mountains v. Donovan, 653 F.2d 573
(D.C. Cir. 1981) (finding good cause in the ``possibly unique''
situation in which: (1) the forces requiring the rule postponement were
beyond the agency's control; (2) the agency acted diligently to
overcome the hurdles erected by other parties; (3) the record strongly
indicated that the agency intended to implement the regulations on
schedule; (4) the agency deferred the implementation date for only a
short time; and (5) government counsel assured the court that the
regulations would be fully implemented by a date certain).
\39\ American Federation of Govt'l Employees, AFL-CIO v. Block, 655
F.2d 1153, 1156 (D.C. Cir. 1981) (quoting S. Rept. No. 752, 79th Cong.,
1st Sess. (1945)).
\40\ At least one agency has done just that. On March 23, 2001, EPA
published a notice of proposed rulemaking to extend indefinitely the
final rule for arsenic in drinking water. Environmental Protection
Agency, National Primary Drinking Water Regulations; Arsenic and
Clarifications to Compliance and New Source Contaminants Monitoring:
Delay of Effective Date, 66 Fed. Reg. 16134 (2001).
\41\ 5 U.S.C. Sec. 551(5).
\42\ 5 U.S.C. Sec. 706.
\43\ Motor Vehicle Manufacturers Ass'n v. State Farm Mutual
Automobile Insurance Co., 463 U.S. 29, 41-42 (1983).
\44\ 463 U.S. at 42. See also Atchison, T.&S.F.R. Co. v. Wichita
Bd. of Trade, 412 U.S. 800, 807-808 (1973) (observing that a ``settled
course of behavior embodies the agency's informed judgment that, by
pursuing that course, it will carry out the policies committed to it by
Congress. There is, then, at least a presumption that those policies
will be carried out best if the settled rule is adhered to.'').
\45\ 463 U.S. at 43. The test prescribed by the court is as
follows:
Normally, an agency rule would be arbitrary and capricious if the
agency has relied on factors which Congress has not intended it to
consider, entirely failed to consider an important aspect of the
problem, offered an explanation for its decision that runs counter to
the evidence before the agency, or is so implausible that it could not
be ascribed to a difference in view or the product ofagency expertise.
Id.
\46\ Public Citizen v. Steed, 733 F.2d 93 (D.C. Cir. 1984).
\47\ Congress has exercised its power under the Congressional
Review Act, enacted in 1996, on only one occasion--the recently
rescinded OSHA Ergonomics standard.
Senator Cantwell. Thank you, Professor McGarity.
Senator Craig. Senator Cantwell, why do not you go ahead
and start with questions.
Senator Cantwell. I would be happy to, thank you Mr.
Chairman.
I think I will start with Dr. Morton. On your comments
about the possible supply from these lands, it sounds like the
last panel used a different formulation and came up with 75
percent that was really extractable, there would be half a
year's supply. Your numbers, as they relate to consumption, are
approximately 21 to 29 days of oil supply and 2 to three months
of natural gas supply. That is what your study and analysis
show as far as what might actually be produced from the
roadless areas?
Dr. Morton. That is correct.
Senator Cantwell. So why would we want to undertake these
activities at such great cost? This seems almost like a guise
by which to overturn the rule, when in my State we are seeing
11 times the rate in the mid Columbia for electricity prices
over last year. There are a lot more urgent questions people
want answered today than whether or not energy companies can
enter parts of our pristine forests to go and look for reserves
that are only going to provide us with two to three months of
supply over 20 years.
Dr. Morton. Yeah, I spent several hours yesterday listening
to the testimony on high gas prices in the West and it seemed a
lot of the experts suggested that it has to do with refining
capacity and bottlenecks in the infrastructure. And actually
there is been articles showing increased profits for oil
companies, they just had record profits, so I think that is
probably a good place to focus some of our attention, not in
the roadless areas.
Senator Cantwell. But your point as well is that there have
been years of opportunity to do resource extraction in these
roadless areas and it has not happened. Probably for these same
reasons.
Dr. Morton. Yeah. I think these areas have a low potential
to begin with. A lot of the high potential, as I mentioned the
high potential areas are already under lease and they have
difficult operating conditions, and they have been available
for leasing for 60, 70 years and there has not been much
interest. So I think the Forest Service did an adequate job in
doing an analysis because if nobody has been interested in your
product and they have the high potential lands already leased,
I do not think it was worth taxpayer's dollars to spend a lot
of time doing the analysis, I think--any more analysis than
what they already did. So I think they did a good job.
Senator Cantwell. Thank you. And Professor McGarity, I want
to ask you a question because I want to make sure I understood
you correctly. You believe that the rule is in force, and that
the postponement of that rule is actually a----
Mr. McGarity. The postponement of the effective date of the
rule does not make it not a final rule. It is still a final
rule. If it has not become effective yet, it can still have
legal significance. And certainly to amend that rule even to
postpone the effective date is itself a rulemaking process and
requires notice and comment.
Senator Cantwell. And so you believe that the Card memo
does not quite meet that standard, that it is actually a
violation of the APA?
Mr. McGarity. Yes, I think the memo was urging agencies to
violate the Administrative Procedures Act, yes.
Senator Cantwell. That said, there was some discussion
about changing this rule that now is in force. How would one go
about doing that?
Mr. McGarity. Well, I think we need to go through the full
notice and comment process, and it needs to be supported by
such evidence, data, analysis, et cetera, as would survive
judicial--or as to not be arbitrary and capricious.
In addition, by the way, under the National Environmental
Policy Act, any change or modification might very well require
a supplemental environmental impact statement or even a totally
new environmental impact statement if the change was that
dramatic.
Senator Cantwell. Well, it seems now that if there were
some agreement on, for example, this 5 percent area in the
Rockies, you could go back with an amendment to the APA and go
through the APA procedures? Which would make sense, as opposed
to overturning the entire rule to go after a very small area
that somebody wanted to investigate?
Mr. McGarity. Yeah. Two points on that, one is certainly
you could do that and that would be an amendment to the rule,
that would again require notice and comment and need to be
supported in the record. The other is probably that would not
require a fresh environmental impact statement but could be
accomplished through a supplemental EIS.
Senator Cantwell. And why does that not seem to be a simple
solution here, if we're discussing such a limited segment of
the roadless areas? Do any of the other panelists want to
comment?
Mr. Segner. I certainly cannot get into the legal side, but
in terms of thinking about a couple of issues here, one is we
do not know at this time what areas will prove to be
beneficial. Obviously we have got some areas that have been
designated at this point in time as having potential, but as
technology changes, our knowledge of the where will also
change, and so taking steps that permanently cut off areas
could be harmful in the long term.
Senator Cantwell. Why not just keep the whole United States
open then, under that scenario? I mean, you are saying that we
should not close off anything to resource extraction.
Mr. Segner. I think the correct process is to look at areas
by area as circumstances arise.
Senator Cantwell. Offshore?
Mr. Segner. Certainly----
Senator Cantwell. Off our coast of Washington? Where do you
draw the line here? Part of this process was saying what areas
do we want to make sure.
Mr. Segner. No, I understand your point.
Senator Cantwell. So what is wrong with going through APA
procedures if later technological advancements determined that
there were recoverable resources in the Rockies or somewhere
else? Why couldn't we go through the APA process? As Professor
McGarity was saying it would not even necessarily require
another EIS, but you could do an amendment to the APA and
thereby get at that the resources. I know my time is expiring,
Mr. Chairman, but if he could answer that, it would be
appreciated.
Senator Craig. Certainly. Please proceed.
Mr. Segner. I am not a specialist on the process so I
really do not have a view there.
Mr. McGarity. There is something called site specific
rulemaking that would accomplish this just exactly, you could
amend the rule to a site specific rule and accomplish what you
wanted to accomplish, I think.
Senator Cantwell. Thank you, Mr. Chairman.
Senator Craig. Thank you very much. Mr. Sparrowe, I have a
letter that you and a good many others signed to Secretary
Veneman on April 11 in which you said: We urge the department
to rescind the new planning regulations and to initiate the
development of a regulatory framework that will enable the
Forest Service to pursue resource stewardship on our national
forests rather than confound its ability to do so. We offer our
assistance in this important effort.
I say that in passing, and I wanted to enter that into the
record. What was your thinking in signing this letter along
with, I haven't counted the other groups, but a good number of
other conservation groups?
Dr. Sparrowe. There are some specific wordings in that
planning reg for example that require Forest Service managers
to certify certain things about the sustainability of actions
and resources and other things which we see as largely an
invitation to challenge, and possible continuation of gridlock
in management of the public lands which is currently going on.
And we think some of that is worth rethinking.
Senator Craig. Thank you. Mr. Schaefer, let me turn to you.
In his January 5, 2000 letter, John Spotila, the Office of
Management and Budget, former Forest Service Chief Mike Dombeck
stated several times that the agency could not determine the
impact of the rule on coal production in Colorado's Grand Mesa,
Uncompahgre, and Gunnison national forests or Utah's Manti-La
Sal Forest because no operators indicated a need for access to
contiguous reserves in inventoried areas to continued existing
operations.
According to, the question then is according to Chief
Dombeck, Arch Coal Company was the only coal operator to
provide comments during the abbreviated DEIS scoping period.
Would you explain how you determined your West Elk mine would
be affected by the roadless rule?
Mr. Schaefer. Yes, Mr. Chairman. Dave, would you put up the
Colorado map one more time?
In the assessment in--the letter that Arch Coal was the
only coal company that commented was not correct. The National
Mining Association provided comments as did Interwest Mining
which is based in Salt Lake City. Dave, if you'll get up and
point, since it is fairly small over there, point where the
West Elk mine is, right there. And then the roadless area to
the right of that, that is the location of all our future
reserves. When we started through this process, we initially
started in the public scoping comment. When they had presented
the concept we are going to expand the roadless areas
throughout the United States, our question was how does that
impact our mine? They said, do not worry about it, we will
provide you maps, they will be on the Internet shortly.
The public scoping comments closed in January. In February
the maps were finally posted on the Internet themselves, but
were on such a gross scale that they were absolutely useless to
be able to determine. So what we have done is we were able to
get finally the RARE II boundary and took that and plotted that
over our West Elk mine. And that was ultimately how we
determined there was an impact. We then took these maps and
provided them to the Forest Service.
And this map was done in about February or March of 2000,
and Dave, pull back up the other Colorado map. We finalized
this which shows the entire North Fork Valley, that was
finalized in the October, November 2000 time frame. And the
Utah map which you can see took quite a bit more to develop
where the lease areas were, we finally finished that in
December of last year and provided that to the Forest Service.
But this was all done under our own volition. And it was very
difficult to put those together. It took almost a year process
to put those together.
Senator Craig. It strikes me that the spirit, if not the
letter of the Administrative Procedures Act and NEPA, require
an agency to define its proposal in sufficient detail to allow
the public to understand the impact of the proposal and the
alternatives and provide substantive and meaningful comment on
them. In your opinion, did the information provided by the
Forest Service either in the proposed rule, notice of intent to
publish an EIS, the draft EIS, or anywhere else including
communications with individual forests or other Forest Service
and Agriculture Department personnel, give you sufficient
information to determine the true impact of the roadless rule
on Federal coal accessibility or production?
Mr. Schaefer. Absolutely not. We were not able. That again
was done completely on our own volition in taking that
information to the Forest Service. In fact the only Federal
agency that asked us for our opinion on what kind of impacts
there were, was the Department of Energy and Mr. Hochheiser.
Senator Craig. Former director Dombeck took a very
aggressive stand against minimizing the impact to the coal
industry in Colorado and Utah. Did you ever meet with Mr.
Dombeck personally to discuss the rule's impact.
Mr. Schaefer. We had set up a meeting with Mr. Dombeck and
scheduled it for, it was around the October, November time
frame. A couple of days before we had the meeting with Mr.
Dombeck we got a call from the Forest Service mineral staff,
and said you might as well not come over, it has been delegated
clear down into our staff level functions now and you have
already talked to us. So we never did get the chance to sit
down face to face with Mr. Dombeck.
Senator Craig. Did you or the National Mining Association
file a FOIA request to get adequate information to determine
the impact of the roadless rule?
Mr. Schaefer. The National Mining Association did file a
Freedom of Information request. The information that came back
was, see our website, and that was just about it. Again those
maps were on such a gross scale as to be unusable for
determining site specific impacts.
Senator Craig. Thank you. Senator Cantwell, do you have any
further questions?
Senator Cantwell. Thank you Mr. Chairman. I'm sorry to hear
the Internet was not as accommodating as it should have been in
this process. But being new here I am trying to understand
this. I almost feel like we are having a hearing about a law
that we passed and that now people are coming to say what parts
of the public comments were listened to and what parts were
not.
So I am really trying to understand the APA from a process
perspective. And so if you could, Professor McGarity, go
through that again, because my impression is that some of this
discussion is about the process and now what steps we can take
from here. And my sense is that this applies no matter which
administration is in place. There are probably many examples of
Administrative Procedure Act decisions. And since there is a
legal process here, I am very concerned. Because every day it
seems like there is an article in the paper about another rule
or action that had been proposed by the past administration and
yet is now being overturned by this administration.
In this case, the APA is a rulemaking which has the force
of law . Is that--?
Mr. McGarity. The final rule, there were a number of
regulations affected by the Card memorandum in various degrees
of status. I testified in the House a month ago about those.
Some of them could easily be rescinded, withdrawn from the
Office of Federal Register with no legal consequence at all.
The one kind of regulation where the law is very clear is a
regulation that has been submitted to and published by the
Office of the Federal Register. There the law is clear that
that is a final rule, that is when it becomes final, whether or
not its effective date has gone or some other condition
subsequent may have occurred.
A final rule then may only be amended through the
rulemaking process absent good cause. And I spoke and my
testimony speaks about the good cause exemption. That is how it
works. The Administrative Procedures Act was set up in 1946 as
a result of the New Deal creation of lots and lots of
regulatory agencies with regulatory authority over people. And
the notion was that the Government should not act arbitrarily
and that that should apply to the Government across
administrations as well as to the tiniest official operating at
some locale.
Senator Cantwell. So our Attorney General should be acting
as if it has the force of law?
Mr. McGarity. I think that the regulation that is written
right now is the final rule. Its effective date has been
postponed, I think that that was an unlawful postponement of
the effective date and violative of the Administration
Procedures Act. The consequence of that of course is difficult
to determine because one has to ultimately have litigation to
know what the ultimate consequences of that will be.
Senator Cantwell. Is this the only one of the various
environmental issues being discussed that was part of an APA
rulemaking?
Mr. McGarity. The Forest Service?
Senator Cantwell. Yes.
Mr. McGarity. No, there were several, the arsenic rule, the
EPA arsenic rule, there was several environmental regulations
that had likewise been submitted to the Office of Federal
Register and published in the Federal Register.
Senator Cantwell. Thank you.
Mr. Segner. Senator, could I respond perchance to the same
question that you asked Dr. Morton earlier?
Senator Cantwell. Yes.
Mr. Segner. You asked about the impact effectively of 11
trillion cubic feet and in the first panel you asked Mr. Eppink
about spreading that over a period of time.
Senator Cantwell. I did not care if you spread it out or
used it all at once, I was just trying to get the amount.
Mr. Segner. The point I would like to get back to is that
changing our national supply by just a few percentage, even 2
percent, 1 percent, and much less 5 percent, actually can have
a huge impact on price.
If we go back and look at this past year, where prices
obviously have increased dramatically and have come down now
some, but still higher than they have been in the past, in most
of the past, we would find that really it is the change in
storage levels, which is really a function of either supply or
a major demand change, obviously on the supply side was one of
the critical factors and why storage was what it was. Had
storage been simply one or two percent on a per day basis
higher in terms of injection capability, that would have a
fairly impactful effect on price.
Senator Cantwell. I am sure you can imagine if you are
dealing with 100 percent or more rate increases, and tens of
thousands of jobs being lost, for example, in the aluminum
industry and in agriculture, you can imagine that people would
like to see a more direct, easier path with larger results in a
shorter period of time.
Mr. Segner. Absolutely.
Senator Cantwell. Not that there could not be, as you said,
as technology advances, more specific targeting that would
allow us to go back with a particular proposal and amendment
for a very rich resource area. Thank you for your comments.
Senator Craig. Thank you. Gentlemen, thank you. We will
keep the record open for any additional questions we might
submit to you through next week, but we thank you all for your
testimony and the building of this record. The subcommittee
will stand adjourned.
[Whereupon, at 4:20 p.m., the hearing was adjourned.]
[The following letter was received for the record:]
Washington Legal Foundation,
Washington, DC, April 25, 2001.
Hon. Larry E. Craig,
Chairman, Subcommittee on Forests and Land Management of the Senate
Committee on Energy and Natural Resources, U.S. Senate,
Washington, DC.
Dear Mr. Chairman: This letter is in response to your letter of
April 3, 2001, requesting the Washington Legal Foundation (WLF) to
survey and analyze ``(1) the Clinton Administration's record in court
on defending or abandoning the resource management decisions of
previous administrations; as well as (2) cases where the Clinton
Administration was called upon to defend its own resource management
decisions.'' Your inquiry was prompted by unfounded criticism with
respect to the Bush Administration's handling of the Roadless Rule
issue in the courts.
We appreciate the opportunity to be of assistance to you and the
committee. WLF is a non-profit public interest law and policy center
that promotes principles of free enterprise and private property rights
through litigation, the administrative process, and civic
communications. WLF does not lobby for or against pending legislation.
As you properly noted in your letter, WLF has been actively
involved in several resource management issues, such as the Roadless
Rule issue. That rule would needlessly lock up approximately 58 million
acres of our national forests, and as you are no doubt aware, the
federal court in Idaho recently granted a motion to preliminarily
enjoin enforcement of the rule because of the flawed rule making
process in that proceeding. State of Idaho v. U.S. Forest Service, No.
CV01-11-N-EJL (D. Id. Apr. 5, 2001). WLF has recently filed a formal
petition with the Department of Agriculture to repeal the Roadless
Rule, a copy of which is enclosed for your information.*
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* Retained in subcommittee files.
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Based on our review of reported decisions, it appears that the
Clinton Administration on at least 13 occasions refused to defend
resource management decisions of its predecessors, choosing to accept
an injunction or remand from a U.S. district court rather than defend
those decisions in a U.S. court of appeals. On at least 28 other
occasions, the Clinton Administration refused to defend its own
resource management decisions in a court of appeals after receiving an
injunction or remand from a U.S. district court. On these 41 occasions
the Clinton Administration chose to abandon rather than defend timber
sales, grazing allotments, mining approvals and wildlife management
decisions that were carefully made by professional resource managers.
The Clinton Administration's defense effort in the Supreme Court
was even worse. Apart from the district court losses that it refused to
defend, the Clinton Administration lost over 20 resource management
cases in U.S. courts of appeals after winning in the district court.
More than half of these losses were in the Ninth Circuit court of
appeals, the appellate court with the highest reversal rate (over 90%)
in the Supreme Court. Yet in its eight years in office, the Clinton
Administration asked the Supreme Court to review an adverse resource
management decision by a court of appeals just once.\1\
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\1\ Thomas v. Pacific Rivers Council, 514 U.S. 1082 (1995)
(petition for writ of certiorari was denied).
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I. 13 RESOURCE MANAGEMENT DECISIONS MADE BY PRIOR ADMINISTRATIONS AND
THEN ABANDONED BY CLINTON ADMINISTRATION; NO APPEAL OF U.S. DISTRICT
COURT INJUNCTION OR REMAND ORDER
1. Defenders of Wildlife v. Babbitt, 958 F. Supp. 670 (D.D.C.
1997). The court overturned Fish and Wildlife Service (FWS) decision
not to list Canada lynx under Endangered Species Act (ESA). On March
11, 1993, the new FWS regional director asked FWS national director to
rescind prior administration's finding that listing was not justified.
2. Oregon Natural Desert Association v. Green, 953 F. Supp. 1133
(D. Or. 1997). The court enjoined Bureau of Land Management (BLM) plan
for eastern Oregon river for violations of Wild and Scenic Rivers Act
and National Environmental Policy Act (NEPA).
3. Southwest Center for Biological Diversity v. Babbitt, 926 F.
Supp. 920 (D. Ariz. 1996). The court overturned FWS decision not to
list northern goshawk west of 100th meridian under ESA.
4. Greater Gila Biodiversity Project v. Forest Service, 926 F.
Supp. 914 (D. Ariz, 1994). The court enjoined Forest Service timber
sale on Apache-Sitgreaves National Forest pending NEPA compliance.
5. Friends of the Bitterroot, Inc. v. U.S. Forest Service, 900 F.
Supp. 1368 (D. Mon. 1995). The court remanded Forest Service timber
sale to the agency to correct NEPA violation in 1990 environmental
impact statement (EIS).
6. Carlton v. Babbitt, 900 F. Supp. 526 (D.D.C. 1995). The court
overturned FWS decision not to move grizzly bears from threatened to
endangered under ESA. On remand, the agency again decided that there
was no justification to reclassify grizzly bear. The district court
again ruled against agency and remanded matter to agency for a second
time. Carlton v. Babbitt, 26 F. Supp. 2d 102 (D.D.C. 1998).
7. Shoshone-Paiute Tribe v. United States, 889 F. Supp. 1297 (D.
Id. 1994). The court enjoined Air Force training range development for
NEPA violations in 1992 EIS.
8. Ayers v. Espy, 873 F. Supp. 455 (D. Col. 1994). The court
enjoined Forest Service timber sale approved in 1992 on Arapaho and
Roosevelt National Forests pending NEPA and National Forest Management
Act (NFMA) compliance. The government's motion for reconsideration was
denied.
9. Anacostia Watershed Society v. Babbitt, 871 F. Supp. 475 (D.D.C.
1993). The court enjoined transfer of portions of Anacostia Park, a
national park, to local government for development for children's park,
pending preparation of EIS or environmental assessment (FA).
Plaintiff's motion for clarification was denied. 875 F. Supp. 1 (D.D.C.
1995).
10. Hells Canyon Preservation Council v. Richmond, 841 F. Supp.
1039 (D. Or. 1993). The court ordered the Forest Service to issue final
regulations for Hells Canyon National Recreation Area.
11. Alpine Lakes Protection Society v. U.S. Forest Service, 838 F.
Supp. 478 (W.D. Wash. 1993). The court enjoined Forest Service road
access permits to private timber company pending NEPA compliance.
12. Sierra Club v. Lujan, 1993 WL 151353 (W.D. Tex. 1993). The
court ordered FWS to impose minimum streamflows on San Antonio water
source to remedy ESA violations.
13. National Wildlife Federation v. Babbitt, 1993 WL 304008 (D.D.C.
1993). The court remanded BLM coal leasing regulations pending new EIS.
II. 28 CLINTON ADMINISTRATION RESOURCE MANAGEMENT DECISIONS LATER
ABANDONED BY CLINTON ADMINISTRATION; NO APPEAL OF U.S. DISTRICT COURT
INJUNCTION OR REMAND ORDER
1. Greenpeace Foundation v. Mineta, 122 F. Supp. 2d 1123 (D. Ha.
2000). The court enjoined National Marine Fisheries Service (NMFS)
approval of Hawaiian lobster fishery pending ESA and NEPA compliance on
monk seals.
2. Wilderness Society v. Bosworth, 118 F. Supp. 2d 1082 (D. Mon.
2000). The court enjoined Forest Service timber sale in Clearwater
National Forest for NEPA and NFMA violations.
3. Greenpeace v. NMFS, 106 F. Supp. 2d 1066 (W.D. Wash. 2000). The
court enjoined fishing in critical habitat of endangered Stellar sea
lion pending ESA compliance by NMFS.
4. Federation of Fly Fishers v. Daley, 2000 WL 33225295 (N.D. Cal.
2000). The court overturned decision by NMFS not to list steelhead as
threatened under ESA.
5. Center for Biological Diversity v. Badgley, 2000 WL 1513812 (D.
Or. 2000) The court ordered FWS to make 12-month ESA finding on yellow-
billed cuckoo.
6. Siskiyou Regional Education Project v. Rose, 87 F. Supp. 2d 1074
(D. Or. 1999) The court enjoined BLM rule easing mining restrictions
for NEPA violation.
7. Defenders of Wildlife v. Ballard, 73 F. Supp. 2d 1094 (D. Az.
1999). The court enjoined nationwide Corps of Engineers wetlands fill
permits pending NEPA compliance on pygmy-owl.
8. Oregon Natural Resources Council v. U.S. Forest Service, 59 F.
Supp. 2d 1085 (W.D. Wash. 1999) The court enjoined 35 Forest Service
and BLM timber sales and all new sales pending compliance with survey
and manage requirements of Northwest Forest Plan.
9. Alaska Center for the Environment v. West, 31 F. Supp. 2d 714
(D. Ak. 1998) The court enjoined nationwide Section 404 permit to fill
wetlands for home construction pending further Clean Water Act analysis
by Corps of Engineers.
10. Conservation Council for Hawai'i v. Babbitt, 24 F. Supp. 2d
1074 (D. Ha. 1998). The court ordered FWS to publish 100 proposed
critical habitat designations by November 30, 2000, and additional 145
by April 30, 2002.
11. Sierra Club v. United States, 23 F. Supp. 2d 1132 (N.D. Cal.
1998). The court enjoined housing construction in Yosemite National
Park pending NEPA compliance by National Park Service.
12. National Wildlife Federation v. Cosgriffe, 21 F. Supp. 2d 1211
(D.Or. 1998). The court ordered BLM to prepare management plan under
Wild and Scenic Rivers Act.
13. Kentucky Heartwood, Inc. v. Worthington, 20 F. Supp. 2d 1076
(E.D. Ky. 1998). The court enjoined all Forest Service timber sales on
Daniel Boone National Forest pending ESA and NEPA compliance.
14. Sierra Club v. Babbitt, 15 F. Supp. 2d 1274 (S.D. Ala. 1998).
The court set aside two FWS incidental take permits for housing
projects pending additional ESA and NEPA review.
15. Oregon Natural Resources Council v. Daley, 6 F. Supp. 2d 1139
(D. Or. 1998). The court set aside NMFS decision not to list coastal
coho salmon as arbitrary and capricious and ordered new decision in 60
days.
16. Pacific Coast Federation of Fishermen's Associations v.
National Marine Fisheries Service, No. 97-775R (W.D. Wash. 1998). The
court enjoined 23 Forest Service and BLM timber sales in southwestern
Oregon pending ESA compliance.
17. Save Our Springs v. Babbitt, 27 F. Supp. 2d 739 (W.D. Tex.
1997). The court overturned FWS decision not to list Barton Springs
salamander under ESA.
18. Friends of the Wild Swan v. FWS, 12 F. Supp. 2d 1121 (D. Or.
1997). The court ordered FWS to reconsider decision not to list bull
trout under ESA.
19. Curry v. Forest Service, 988 F. Supp. 541 (W.D. Pa. 1997). The
court enjoined Forest Service timber sales in Allegheny National Forest
pending NEPA and NFMA compliance.
20. House v. Forest Service, 974 F. Supp. 1022 (E.D. Ky. 1997). The
court enjoined Forest Service timber sales in Daniel Boone National
Forest pending ESA compliance.
21. Restore: The North Woods v. U.S. Dept. of Agriculture, 968 F.
Supp. 168 (D. Vt. 1997). The court enjoined Forest Service land
exchange for ski resort expansion in Vermont pending NEPA compliance.
22. Friends of the Wild Swan v. FWS, 945 F. Supp. 1388 (D. Or.
1996). The court overturned FWS decision that listing bull trout under
ESA, although warranted, was precluded by higher-priority species. On
remand, FWS listed bull trout only in certain geographical areas rather
than throughout species' entire range. That decision was also
overturned. Friends of the Wild Swan v. FWS, 12 F. Supp. 2d 1121 (D.
Or. 1997).
23. Biodiversity Legal Foundation v. Babbitt, 943 F. Supp. 23
(D.D.C. 1996). The court overturned FWS decision not to list Alexander
Archipelago wolf under ESA.
24. Southwest Center for Biological Diversity v. Babbitt, 939 F.
Supp. 49 (D.D.C. 1996). The court overturned FWS decision not to list
Queen Charlotte goshawk under ESA.
25. Klamath Tribes v. United States, 1996 WL 924509 (D. Or. 1996).
The court enjoined eight Forest Service timber sales within former
Klamath reservation in Oregon for violations of tribal rights despite
release language in 1995 Rescissions Act.
26. Sierra Club v. Martin, 71 F. Supp. 2d 1268 (N.D. Ga. 1996). The
court enjoined Forest Service timber sales on Chattahoochee and Oconee
National Forests pending NEPA and NFMA compliance.
27. Washington Trails Association v. Forest Service, 935 F. Supp.
1117 (W.D. Wash. 1996). The court enjoined Forest Service trail
reconstruction project pending NEPA compliance.
28. Leavenworth Audubon Adopt-A-Forest Alpine Lakes Protection
Society v. Ferraro, 881 F. Supp. 1482 (W.D. Wash. 1995). The court
enjoined three Forest Service timber sales on Wenatchee National Forest
prepared under Northwest Forest Plan pending NEPA and NFMA violations.
We hope that this information is of help to you and your committee.
We would also like to express our appreciation to students enrolled in
WLF's Economic Freedom Law Clinic at George Mason University School of
Law for assisting in this research.
If we can be of any further assistance to you, please feel free to
call on us.
Sincerely yours,
Daniel J. Popeo,
Chairman and General
Counsel.
Paul D. Kamenar,
Senior Executive Counsel.