[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


                           THE EVOLVING WEST

=======================================================================

                           OVERSIGHT HEARING

                               before the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           February 28, 2007

                               __________

                            Serial No. 110-5

                               __________

       Printed for the use of the Committee on Natural Resources



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                     COMMITTEE ON NATURAL RESOURCES

               NICK J. RAHALL II, West Virginia, Chairman
              DON YOUNG, Alaska, Ranking Republican Member

Dale E. Kildee, Michigan             Jim Saxton, New Jersey
Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii             Wayne T. Gilchrest, Maryland
Solomon P. Ortiz, Texas              Ken Calvert, California
Frank Pallone, Jr., New Jersey       Chris Cannon, Utah
Donna M. Christensen, Virgin         Thomas G. Tancredo, Colorado
    Islands                          Jeff Flake, Arizona
Grace F. Napolitano, California      Rick Renzi, Arizona
Rush D. Holt, New Jersey             Stevan Pearce, New Mexico
Raul M. Grijalva, Arizona            Henry E. Brown, Jr., South 
Madeleine Z. Bordallo, Guam              Carolina
Jim Costa, California                Luis G. Fortuno, Puerto Rico
Dan Boren, Oklahoma                  Cathy McMorris Rodgers, Washington
John P. Sarbanes, Maryland           Bobby Jindal, Louisiana
George Miller, California            Louie Gohmert, Texas
Edward J. Markey, Massachusetts      Tom Cole, Oklahoma
Peter A. DeFazio, Oregon             Rob Bishop, Utah
Maurice D. Hinchey, New York         Bill Shuster, Pennsylvania
Patrick J. Kennedy, Rhode Island     Dean Heller, Nevada
Ron Kind, Wisconsin                  Bill Sali, Idaho
Lois Capps, California               Doug Lamborn, Colorado
Jay Inslee, Washington
Mark Udall, Colorado
Joe Baca, California
Hilda L. Solis, California
Stephanie Herseth, South Dakota
Heath Shuler, North Carolina

                     James H. Zoia, Chief of Staff
                   Jeffrey P. Petrich, Chief Counsel
                 Lloyd Jones, Republican Staff Director
                 Lisa Pittman, Republican Chief Counsel
                                 ------                                











                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on February 28, 2007................................     1

Statement of Members:
    Bishop, Hon. Rob, a Representative in Congress from the State 
      of Utah....................................................     2
    Rahall, Hon. Nick J., II, a Representative in Congress from 
      the State of West Virginia.................................     1

Statement of Witnesses:
    Box, Matthew, Vice-Chairman, Southern Ute Indian Tribe.......    49
        Prepared statement of....................................    50
    Herger, Hon. Wally, a Representative in Congress from the 
      State of California........................................    13
        Prepared statement of....................................    14
    Lee, Robert G., Ph.D., Professor, Sociology of Natural 
      Resources, University of Washington........................    63
        Prepared statement of....................................    65
    Marshall, Clifford Lyle, Chairman, Hoopa Valley Tribe........    44
        Prepared statement of....................................    46
    Nunes, Hon. Devin, a Representative in Congress from the 
      State of California........................................    11
    Propst, Luther, Executive Director, Sonoran Institute........    54
        Prepared statement of....................................    55
    Rehberg, Hon. Dennis R., a U.S. Representative in Congress 
      from the State of Montana..................................    10
    Schweitzer, Hon. Brian, Governor, State of Montana...........    16
        Prepared statement of....................................    17
    Vaagen, Russell C., Vice President, Vaagen Bros. Lumber Inc..    59
        Prepared statement of....................................    61
    Walden, Hon. Greg, a Representative in Congress from the 
      State of Oregon............................................     5
        Prepared statement of....................................     7
    Williams, Hon. Pat, Former Congressman and Senior Fellow, 
      O'Connor Center for the Rocky Mountain West, University of 
      Montana....................................................    21
        Prepared statement of....................................    25

Additional materials supplied:
    McMorris Rodgers, Hon. Cathy, a Representative in Congress 
      from the State of Washington, Statement submitted for the 
      record.....................................................    75
    Otter, Hon. C.L. ``Butch,'' Governor, State of Idaho, Letter 
      to The Honorable Nick J. Rahall dated February 28, 2007, 
      submitted for the record...................................    77
    Sparrowe, Rollin D., Theodore Roosevelt Conservation 
      Partnership, Statement submitted for the record............    79
    Wilson, Dick and Connie, EB Ranch, Broadus, Montana, Letter 
      submitted for the record...................................    81











 
                          OVERSIGHT HEARING ON
                         ``THE EVOLVING WEST''

                              ----------                              


                           February 28, 2007

                     U.S. House of Representatives

                         Committee on Resources

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 10:05 a.m. in Room 
1324, Longworth House Office Building, Hon. Nick J. Rahall, II 
[Chairman of the Committee] presiding.
    Present: Representatives Rahall, Bishop, Cannon, DeFazio, 
Herseth, Inslee, Sali, Napolitano, Pearce, Costa, and Flake.

STATEMENT OF THE HONORABLE NICK J. RAHALL, II, A REPRESENTATIVE 
          IN CONGRESS FROM THE STATE OF WEST VIRGINIA

    The Chairman. The Committee on Natural Resources will come 
to order. I welcome our panelists today, and I thank them very 
much for making the time to come before our Committee. It is 
especially good to see a former colleague of ours, Pat 
Williams, with whom many of us have served on this Committee, 
Pat having represented the State of Montana. Where did he go? 
He was here. There he is. OK. And another former member and 
member of this Committee is with us as well, Ray Cagozzi from 
the State of Colorado. We welcome Ray back to the Committee as 
well.
    As many of you know, I hail from the State of West 
Virginia. While west is part of its name, the mention of my 
state does not really evoke quite the same images that come in 
mind when we think of the west, and while my home state is not 
part of the region that qualifies as the west, I venture to say 
that we are probably more alike than we are different. I come 
from a district where certain counties have as much Federal 
ownership as do some counties in the west. Where that is not 
the case, the majority of land in southern West Virginia is 
owned by absentee corporations.
    Logging and mining have shaped our hills and our 
communities, and we live with their legacy, but more 
importantly, I think the people of West Virginia and the people 
of the west have an almost instinctive connection to their 
landscape, their homeland. Whether it is the red clay soil of 
the southwest, the hollers of Appalachia, or the jagged edges 
of the Rockies, our connection to land is deep and it is 
abiding.
    We share a desire to live and work in nature's glory, a 
desire that is driving changes in my state just as it is 
driving changes in the west. Clean air, clean water, open 
space, extraordinary landscapes and the pursuit of the American 
dream have drawn the young men to go west for centuries. Today 
the opportunities to step out your door and hike among red 
rocks, to seek peace in ancient forests or to fish in a 
mountain stream are creating a new type of western pioneer.
    The people who have come to testify here today are showing 
that a healthy economy can grow in harmony with a commitment to 
conservation. Again, I want to thank the panelists, and I look 
forward to a discussion about what positive role this Committee 
can play in helping your efforts. And before I recognize those 
who have traveled afar, it is my honor to recognize the 
distinguished Ranking Member, Mr. Bishop, for any opening 
statement he may have.

  STATEMENT OF THE HONORABLE ROB BISHOP, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF UTAH

    Mr. Bishop. Thank you, Mr. Chairman. I appreciate that. 
Thank you for holding today's hearing. I look forward to 
hearing from our witnesses. I particularly note three former 
members of this Committee: The gentleman from Oregon, Mr. 
Walden, the gentleman from Montana, Mr. Rehberg, and the 
gentleman from California, Mr. Nunes, who are here to testify, 
as well as I believe Mr. Herger from California, who will join 
us momentarily to speak about how their resource-dependent 
communities are affected by the Federal Land Management 
policies.
    It appears the premise of our hearing today is as the west 
becomes more urbanized, our domestic natural resource industry 
becomes less important and can be replaced by tourism and high-
tech industries. I believe this premise is somewhere between a 
gross oversimplification and just plain dead wrong analysis.
    The U.S. Geological Survey finds that 67 percent of my 
State of Utah and almost 57 percent of my district are owned by 
the Federal government, but at the same time, my district is 
commonly defined as being 90 percent urban. So I approach this 
issue of the evolving west based on my professional experience 
of 28 years as a public school teacher. I support public 
policies that are good for kids and for parents.
    Most states are greatly challenged in funding public 
education, but this has reached a crisis level in some states, 
particularly in the west. If you draw an imaginary line from 
Montana down to New Mexico, the 12 states that are west of that 
line are public land states. Fifty-two percent of all their 
land is controlled by the Federal government as opposed to 4 
percent for the rest of you. If one does not live between the 
Rockies and the Cascades and attempts to create a public policy 
in that area, it is really impossible to fully understand this 
impact.
    Of the 15 states with the slowest growth rate in funding 
education, 11 are public land states. Of the 15 states with the 
largest class size, 9 of those are public land states. The 
western public land states collect more taxes in Federal, state 
and local taxes than the rest of this nation, and they spend a 
greater portion of their budgets on education than the rest of 
this nation, but they simply cannot make it work, and the only 
common denominator in this situation is the amount of land 
owned by the Federal government in each of these struggling 
western states.
    If the Federal land were taxed at the lowest possible rate, 
the green space rate, it would generate $4 billion a year in 
revenue nationwide. In my State of Utah, if the Federal 
government paid the lowest average tax for this land, it would 
generate $214 million a year of which under our state funding 
formula $116 million a year would go to education. If my state 
had that type of money, we could pay decent salaries to 
teachers, reduce western class size, and have enough money left 
over to fully fund all the Federal programs in education and 
tell the Federal government to take No Child Left Behind and 
shove it.
    This funding inequity was not supposed to happen. If one 
reads the enabling acts of every western state except Hawaii, 
this was not supposed to be the way western lands were treated. 
Congress changed its philosophy almost 60 years ago. Starting 
in the 1950s, we changed our approach to western lands until 
today we accept this as the situation of the norm. We should 
not. To accept the situation is to condemn my fellow teachers 
to a life of poverty.
    My first check, my first salary, was $8,000 a year as a 
teacher. Twenty-eight years later, if I did enough stomps, I 
could maybe get it up to 40 grand a year, and if we accept this 
policy, it also takes my grandkids into a second-rate education 
situation. Our land policies hurt kids, and those who wish to 
acquiesce to the status quo or build new paradigms based on 
technology and tourism simply exacerbate the situation. Tourism 
will not fund education in the west.
    The future of our kids and their education depends on 
creating a more profitable business that pays taxes, employs 
their parents. We must indeed need a new paradigm shift but one 
that accepts the status quo as simply unacceptable.
    Let me cite one new business in San Juan County in Utah, a 
county that is recently ranked as one of the poorest in the 
nation. The Lisbon Valley Copper Mine, owned and operated by 
the Constellation Copper Company, began production last year. 
This mine is expected to produce the following tax revenues in 
this year, 2007, assuming the copper rate stays basically where 
it is today. Property taxes will be $780,000; severance tax, 
$1.2 million; Utah sales tax, $2.8 million; income tax, both 
Federal and state, $8 million; a total tax for this year of 
$13.1 million.
    An estimated 10-year lifespan of the mine would assume $131 
million in taxes. Tourism and high tech cannot equate to this 
level of potential funding, and to ignore this reality hurts 
education of western kids, and it is unacceptable.
    The mine's payroll will be estimated at $10.2 million, 
including benefits. Over a 10-year lifespan, that is 
approximately $102 million in wages and benefits. That equates 
to an annual wage of $73,000; excluding benefits, a base wage 
of $54,000 per employee; the average hourly rate between $12 
and $21 per hour, not including benefits and depending on the 
position and skill level.
    I understand this is approximately twice the going rate for 
tourism industry, not including the benefit packages which the 
mine offers to the employees, including health, dental, life, 
401[k], et cetera, and which the tourism industry simply cannot 
match. Mine employees will pay income taxes on their wages and 
sales taxes on their personal purchases. If we assume an 
average tax bracket of 25 percent for the employees, that is 
roughly $2 million annually in income taxes and $20 million 
over a 10-year span of the mine.
    This year alone, the mine anticipates the purchases of 
approximately $45 million in goods and services locally. Over a 
10-year lifespan, that is $450 million in purchases of goods 
and services. This demand for goods and services creates 
secondary jobs, contractors, fuel, truck drivers, salesmen, 
suppliers, manufacturers, not including the demand for local 
goods and services created by disposable income of employees 
spent on food and clothing and housing and transportation in 
local communities. A paradigm shift that does not recognize the 
need of this type of industry in the western balance hurts kids 
and is unacceptable.
    Besides these powerful economic arguments, the mine has 
brought a new set of educational professionals to rural western 
communities of Moab and Monticello. These include biologists, 
mining engineers, process engineers, geologists, environmental 
engineers, accountants, and many of them with kids and most of 
them are involved in the community.
    It brings an awareness, indeed a new perspective to the 
communities that did not exist previously which enhances the 
educational experience available to local kids and adults like. 
The mine has established local scholarships for high school 
graduates pursuing a college education. It encourages job 
training for graduates who seek employment either at the mine 
or with one of its suppliers, and for those graduates who wish 
to remain in or near their rural western communities with 
roots, the diverse opportunities are provided.
    A paradigm shift that does not provide real jobs for these 
kids of the west hurts those kids and is simply unacceptable. 
Mr. Chairman, the future of our kids and their education in the 
west depends on new industries like the Lisbon Valley Copper 
Mine. I challenge the presenters today to tell me how they will 
help education in the 12 public land states, really help them 
and not with simply idealistic numbers. And I also challenge 
the presenters today to recognize the west is more than the 
recreational playground of the east, and my friends and family 
deserve the chance to live the American dream of ownership, 
good jobs and control of their own destinies without the 
harassment of the heavy-handed Federal government or idealists.
    And I look forward to working with you, Mr. Chairman, on 
the policies that promote this goal. I bet you wish Don Young 
was here right now, do you not?
    The Chairman. Before recognizing our panel of Members of 
Congress, the Chair will ask unanimous consent that all 
members' opening statements, if they so desire, be made part of 
the record at this point. Without objection, so ordered.
    And the Chair will now recognize our colleagues. From left 
to right as they are sitting at the table, from my left to 
right, is Congressman Greg Walden from Oregon's Second 
District, Congressman Dennis Rehberg from Montana, and 
Congressman Devin Nunes from California, 21st District. 
Gentlemen, you are welcome to proceed as you wish. Each will be 
recognized for five minutes, and your statements will be made a 
part of the record.

  STATEMENT OF THE HONORABLE GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Thank you very much, Mr. Chairman. I am Greg 
Walden. I represent the people of Oregon's vast second district 
in the U.S. House of Representatives. I appreciate your holding 
this hearing today on the evolving west, and before I get into 
my prepared remarks, I would be remiss if I did not make the 
top of the agenda the need to ask for your earliest 
consideration on a hearing and action on H.R. 17, the 
reauthorization of the Curry County roads and schools 
legislation of which you are a sponsor, as you were last year.
    Counties in most of the west are suffering dramatic cuts in 
their budgets right now. Teachers are being given pink slips. 
Libraries are going to close in the most populous county in my 
district in April if we do not act in this Congress to keep a 
promise that has been made to these counties since Theodore 
Roosevelt basically created the forest reserves 100 years ago. 
So I would encourage the earliest possible consideration in 
this Committee as we did in 2005 to move that legislation 
forward.
    The fact that the west is changing is certainly not a new 
revelation. Changing technologies, economies and demographics 
have always affected the social, political and even natural 
landscape. In some cases, these changes are beneficial to the 
environment and the human condition, and in some cases, they 
are not.
    For example, as Federal grazing allotments disappear due to 
increased litigation and regulation, many ranchers find that 
they do not have enough of their own private base property to 
run a herd of sufficient size to remain profitable. 
Consequently, those ranchers then subdivide and sell their land 
for an unsustainable revenue stream, and the west loses another 
piece of its prized open space. It is a true lose-lose 
situation.
    The influence that politicians and Federal employees in 
Washington, D.C., have over the lives of westerners through 
land regulation is unimaginable to many in the east. In my own 
Oregon district, more than 50 percent of the land base is owned 
by the Federal government. As laws and regulations concerning 
Federal land management are churned out from within the 
beltway, westerners feel their impact most intently. I would 
like to name just a few of the laws which our Federal land 
management agencies and local communities must deal with.
    The Forest and Rangeland Renewable Resource Planning Act of 
1974, the National Forest Management Act of 1976, the Federal 
Land Policy and Management Act of 1976, the Forest and 
Rangeland Renewable Resources Research Act of 1978, the 
Cooperative Forestry Assistance Act of 1978, the Wilderness Act 
of 1964, the National Environmental Policy Act of 1969, the 
Federal Advisory Committee Act of 1972, the Endangered Species 
Act of 1973, and the Clean Water Act of 1977, just to name a 
few.
    Now individually each of these laws can provide important 
environmental safeguards, but collectively they intertwine and 
overlap in often contradictory ways that make it nearly 
impossible for Federal land managers, local elected officials, 
partnership groups and private citizens to navigate. Even 
simple decisions are vulnerable to lawsuits on procedural 
grounds, and the result is legal gridlock.
    In a speech he delivered in Salt Lake City 100 years ago, 
President Theodore Roosevelt spoke of the purpose of the forest 
reserves, public lands and the need for local support to ensure 
this new Federal policy would work. He said, and I quote, 
``Almost every industry depends in some more or less vital way 
upon the preservation of the forest, and while citizens die, 
the government and the Nation do not die, and we are bound in 
dealing with the forest to exercise the foresight necessary to 
use them now but to use them in such ways as will also keep 
them for those who are to come after us.''
    ``The first great objective of the forest reserves is, of 
course,'' according to President Theodore Roosevelt, ``the 
first great objective of the whole land policy of the United 
States, the creation of homes, the favoring of the homemaker.'' 
Those were his words when he created the forest reserves.
    In 1986, the national forests in my district produced a 
timber sale program of 2.26 billion board feet as a value of 
about $213 million, a quarter of which went to the local 
communities for schools and roads. Twenty years later, in 2006, 
the timber sale volume was a mere 198 million board feet worth 
revenues of $17 million, less than 10 percent of the 1986 
levels. The loss of family wage jobs and the impacts on many 
local economies and their basic community infrastructure has 
been dramatic.
    The collapse of the timber sale program and the resulting 
job losses were felt across the Nation in counties near 
national forests, as can be seen in the first chart I have 
here. Annual nationwide Federal land harvest averaged about 11 
billion board feet for decades, dropping to below 2 billion 
board feet in the 1990s. Now, as less wood from national 
forests in the United States became available, did Americans 
consume less wood products? The answer obviously is no.
    As we can see in the second chart, this need for wood was 
met by increasing imports to record levels, largely from 
countries with poor environmental policies and safeguards. Were 
job losses in rural America necessary? Is it necessary for us 
to ship our jobs overseas and then rely on foreign natural 
resources from countries that lack sound environmental 
standards?
    As you can see on the third chart, long before 1986, 
national forest growth had begun to exceed harvest beginning in 
the 1930s. In fact, on the fourth chart, it is evident that not 
only has growth exceeded harvest, but mortality in our forests 
has exceeded harvest as well. Many more trees are dying on our 
national forest than are being harvested. The rest of the story 
unless you have been a hermit for the last few years was not 
just predictable but inevitable.
    So, on the fifth chart, you can see that the explosive 
increase in forest fuels combined with drought has resulted in 
a huge increase in the number and size of catastrophic 
wildfires to a record-breaking 10 million acres last year, and 
we spent a billion and a half of Federal taxpayer dollars to 
extinguish these fires. Teddy Roosevelt was many things, but 
principal among them, he was a man of action. If he were here 
to join us today, I hardly believe he would be pleased to know 
that 190 million acres of his Federal forest reserves are now 
subject to catastrophic wildfire, disease and bug infestation.
    Let us not defend a system that allows a symphony of 
fiddlers to tie us up in Court for years while bugs devour our 
forests and fires ravage our communities and pollute our air 
sheds. Let us not defend a system so complicated that it takes 
three times longer to remove a burned dead tree than to rebuild 
the Pentagon, and let us not forget that we have the power and 
the responsibility to correct things. Too often my colleagues 
in Congress blame agencies and the Courts for what we see is 
wrong, and yet we are the writers of the laws. We are the ones 
in power to solve problems. The time has come for us to do the 
heavy lifting.
    Finally, healthy communities, healthy forests and healthy 
rangelands do go hand-in-hand. If we are to see broad and long-
term stewardship success, Congress must step up to the plate 
and pass laws that allow for thoughtful, quick and active 
stewardship of our Federal lands. In my lifetime, I have seen 
much change in the west. There has also been much that has 
remained constant: A general sense of individual responsibility 
and independence, the neighborly kindness, a strong work ethic 
and a genuine appreciation and respect for the natural 
environment.
    As your Committee and the rest of us in Washington discuss 
issues and pass laws that affect the west, may we always be 
mindful that our actions often weaken the basic strengths that 
make the west uniquely the west. I thank you for holding this 
hearing and for your indulgence with my testimony this morning, 
Mr. Chairman. It is an honor to be back before the Committee on 
which I served for eight years. Thank you.
    [The prepared statement of Mr. Walden follows:]

 Statement of The Honorable Greg Walden, a Representative in Congress 
                        from the State of Oregon

    Chairman Rahall, Mr. Young and Members of the Committee, I 
appreciate the opportunity to testify here today on The Evolving West--
a subject involving vast and innumerable issues. Hopefully today I can 
shed some light on at least a few of them.
    The fact that the West is changing is not a new revelation. 
Changing technologies, economies, and demographics have always affected 
the social, political and even natural landscape. In some cases these 
changes are beneficial to the environment and the human condition; in 
some cases they're not. On the ``not'' side, for example, as federal 
grazing allotments disappear due to increased litigation and 
regulation, many ranchers find that they don't have enough of their own 
private, base property to allow them to run a herd of sufficient size 
to remain profitable. The result is that many ranchers have to find 
other sources of revenue, often involving the subdivision and sale of 
their land. This revenue stream is obviously not sustainable in the 
long run, affecting the economics of local communities, but is also a 
major contributor to the loss of open space and the broad undeveloped 
vistas so emblematic of the western landscape.
    In the West--my State of Oregon and the Second Congressional 
District, in particular--one of the most obvious and overriding 
influences is land ownership. In my district, over 50% of the land base 
is owned by the federal government. In other words, politicians and 
federal employees in Washington, D.C. have an influence over my 
constituents unimaginable to most in the East. As laws and regulations 
are churned out from within the beltway, westerners feel their impact 
most intensely, particularly those concerning the management of federal 
lands. I'd like to name just a few of the laws which our federal land 
management agencies and local communities must deal with:
      The Forest and Rangeland Renewable Resources Planning Act 
of 1974;
      The National Forest Management Act of 1976;
      The Federal Land Policy and Management Act of 1976;
      The Forest and Rangeland Renewable Resources Research Act 
of 1978;
      The Cooperative Forestry Assistance Act of 1978;
      The Wilderness Act of 1964;
      The National Environmental Policy Act of 1969;
      The Federal Advisory Committee Act of 1972;
      The Endangered Species Act of 1973;
      The Clean Water Act of 1977.
    Individually each of these laws provides important environmental 
safeguards, but collectively they intertwine and overlap in often 
contradictory ways that make it nearly impossible for federal land 
managers, local elected officials, partnership groups, and private 
citizens to navigate---even simple decisions are vulnerable to lawsuits 
on procedural grounds. The result is legal gridlock.
    In a speech he delivered in Salt Lake City 100 years ago, President 
Theodore Roosevelt spoke of the purpose of the forest reserves, public 
lands and the need for local support to ensure this new federal policy 
would work. Let me share with you his words from that day:
        ``Almost every industry depends in some more or less vital way 
        upon the preservation of the forests; and while citizens die, 
        the government and the nation do not die, and we are bound in 
        dealing with the forests to exercise the foresight necessary to 
        use them now, but to use them in such a way as will also keep 
        them for those who are to come after us.
        The first great object of the forest reserves is, of course, 
        the first great object of the whole land policy of the United 
        States--the creation of homes, the favoring of the home-maker. 
        That is why we wish to provide for the home-makers of the 
        present and the future the steady and continuous supply of 
        timber, grass and above all, of water. That is the object of 
        the forest reserves, and that is why I bespeak your cordial 
        cooperation in their preservation.
        Remember you must realize, what I thoroughly realize, that 
        however wise a policy may be it can be enforced only if the 
        people of the States believe in it. We can enforce the 
        provisions of the forest reserve law or of any other law only 
        so far as the best sentiment of the community or the State will 
        permit that enforcement. Therefore it lies primarily not with 
        the people of Washington, but with you, yourselves, to see that 
        such polices are supported as will redound to the benefit of 
        the home-makers and therefore the sure and stated building up 
        of the State as a whole.''
    In 1986 the national forests in my district produced a timber sale 
program of 2.226 billion board feet at a value of about $213 million, a 
quarter of which, $53 million, went to the local counties for schools 
and roads. Twenty years later, in 2006, the timber sale volume was a 
mere 198 million board feet worth revenues of $17 million, less than 10 
% the 1986 levels. The loss of family wages and the impacts on many 
local economies and their basic community infrastructure has been 
dramatic. For example, unemployment in Grant County, Oregon is 
currently 9.8%. There are areas in my district which are doing just 
fine but many others continue to feel the stinging loss of family wage 
jobs and have no economic diversification in reach.
    The collapse of the timber sale program and the resulting job 
losses weren't restricted just to my district but were felt across the 
country in nearly all counties near national forests, as can be seen in 
the first chart I have here: annual nationwide federal land harvest 
averaged around 11 billion board feet for decades, dropping to below 2 
billion board feet in the 1990's.
    As less wood from national forests became available did Americans 
consume less wood? No. As we can see on the second chart, this need for 
wood was responded to by increasing imports to record levels, largely 
from countries with poor environmental policies and safeguards. Were 
job losses in rural America necessary? Is it now further necessary for 
us to further ship our jobs overseas and rely on foreign natural 
resources? Let's look at the data.
    As you can see on the third chart, long before 1986, national 
forest growth had begun to exceed harvest, beginning in the 1930's. In 
fact, on the fourth chart it is evident that not only has growth 
exceeded harvest but mortality has exceeded harvest as well. Many more 
trees are dying on our national forests than are being harvested. The 
rest of the story, unless you've been a hermit for the last few years, 
was not just predictable but inevitable.
    On the fifth chart you can see that the explosive increase in 
forest fuels, combined with drought, has resulted in a huge increase in 
the number and size of catastrophic wildfires--to a record breaking 10 
million acres last year.
    In the words and actions of President Teddy Roosevelt we can still 
hear the echo of balance and multiple use; of providing for the needs 
of that day, and for the needs of the future.
    Teddy Roosevelt was many things, but principal among them he was a 
man of action. And if he were to join us today, I hardly believe he 
would be pleased to know that 190 million acres of the federal forest 
reserves are subject to catastrophic wildfire, disease and bug 
infestation.
    This Rough Rider of a President would throw a fit if he knew we 
were losing more than 4,500 acres a day to the spread of noxious weeds.
    The man who charged up San Juan Hill would never stand for the 
gridlock that has overtaken the ability of the educated and trained 
public land management professionals to effectively steward our natural 
resources and special places. And neither should we.
    Let us not defend a system that allows the symphony of fiddlers to 
tie us up in court for years while bugs devour our forests and fires 
ravage our communities.
    Let us not defend a system that is so complicated that it takes 
three times longer to remove a burned, dead tree than to rebuild the 
Pentagon.
    And let us not believe that we lack the power to change things.
    Gridlock; litigation; divisiveness; process predicament; and 
polarization---these are words and phrases that describe public lands 
issues today.
    Not only do we have the power to affect change, but also we have 
the solemn responsibility to identify what is wrong, engage the public 
in finding solutions and then take the action necessary to bring about 
a better policy.
    Too often my colleagues in Congress blame agencies and the courts 
for what we see as wrong. And yet, we are the writers of the laws. We 
are the ones empowered to solve problems. And the time has come for us 
to do the heavy lifting.
    There are many factors that have contributed to the creation of 
this state of affairs, such as:
      An inconsistent and often contradictory ``crazy quilt'' 
of laws and regulations, as former Forest Service Chief Jack Ward 
Thomas aptly put it;
      An increasingly urban population that in the East is far 
removed from forest realities;
      A well-funded environmental political industry that 
aggressively opposes active forest management;
      And an indecisive, if not bi-polar, Congress.
    Yes, the West is changing, not just because of changing 
demographics, but largely as a result of federal policies and judicial 
decisions which keep our forest and rangeland professionals from 
managing forests. Healthy communities, healthy forests and healthy 
rangelands go hand in hand. If we are to see broad and long-term 
stewardship success, Congress must step up to the plate and pass laws 
to allow for thoughtful, quick, and active stewardship of our federal 
lands.
    In my lifetime, I've seen much change in the West, but there has 
also been much that has remained constant; such as a general sense of 
individual responsibility and independence, a neighborly kindness, a 
strong work ethic, and a genuine appreciation and respect for the 
natural environment. These may be broad generalities, but I think they 
are mostly accurate and help to define the West not as just a segment 
of the country but also as a unique place with its own sense of 
character and beauty.
    As your Committee, and the rest of us in Washington, discuss issues 
and pass laws that affect the West, may we always be mindful that our 
actions often weaken the basic strengths that make the West uniquely 
the West.
    Thank you for your time.
                                 ______
                                 
    The Chairman. I assume you want to go in the order in which 
you all arrived here this morning. Denny, do you want to go 
next? It is up to you.
    Mr. Walden. And, Mr. Chairman, if I may, I have another 
hearing I am supposed to be at if I may be excused.
    The Chairman. Sure.
    Mr. Walden. Thank you.
    The Chairman. You are welcome to leave, I mean, if you 
want.
    Mr. Walden. Thank you, sir.

STATEMENT OF THE HONORABLE DENNIS R. REHBERG, A REPRESENTATIVE 
             IN CONGRESS FROM THE STATE OF MONTANA

    Mr. Rehberg. Thank you, Mr. Chairman, and for the record, I 
am Congressman Denny Rehberg. I represent the entire State of 
Montana, probably one of the most rural states, perhaps second 
only to maybe South Dakota, North Dakota, Wyoming and Alaska. I 
am pretty proud of our background, pretty proud of where we 
want to go in the future, and that is I guess where I want to 
talk a little bit today, and that is the unfortunate chasm that 
has been created between the old economy and the new economy.
    By definition or by description, I was told today that the 
hearing was to highlight the positive impact of the ongoing 
trends of sound resource conservation with a robust economic 
development. Unfortunately, I do not want to necessarily be the 
skunk in the party, but the difficulties or the realities or 
perhaps even the myth that there is robust economic development 
is perhaps truly a myth.
    The difficulty is the immutable laws of government are if 
it moves, tax it; if it still moves, regulate it; and when it 
finally quits moving, subsidize it. We find ourselves in a 
situation where our energy industries over the course of the 
last centuries have been the economic engine that have driven 
this country, but we have either taxed it or regulated it to 
extinction.
    I hope that the future of this Committee will be to look at 
the opportunities to break down some of the barriers as I think 
we have done within the State of Montana, and I am honored to 
be sitting in front of two gentlemen that I know are going to 
talk a little bit about Montana. One is Governor Schweitzer and 
the other is former Congressman Pat Williams, who I remember 
when I staffed this Committee 25 years ago, he was the last 
member of the Committee. He told me this morning that they 
added a seat for him, he was so far down in seniority, and you 
are still here, Congressman Rahall. You have lasted all those 
years.
    What we did in Montana that I think that the Federal 
government could learn from is a couple of different aspects, 
one of which is we created a consensus council, and I have 
introduced legislation that has not gotten very far. I hope you 
will take a look at it, Mr. Chairman. The consensus council is 
a recognition that energy policy within this country, if we 
even have one, is very emotional and controversial. People 
support reform as long as it does not change anything.
    If you begin to talk about the Endangered Species Act, 
people see boogeymen. Whether it is working or not, we do not 
want to make the appropriate changes. We look at Clean Water 
laws and make a determination, are they in fact keeping us from 
developing sensible alternatives to energy, and the difficulty 
is oftentimes the laws and regulations that have been created 
are conflicting and duplicative.
    The consensus council gives us an opportunity currently at 
the state level, hopefully at the Federal level, of an 
opportunity to sit down and before we divvy into corners and 
sue each other out of those corners to find commonality so we 
can actually move forward with some kind of a sensible policy, 
a holistic approach if you want to call it that, to energy 
policy, because, frankly, one way or another we are going to 
need the energy in this country.
    That is one of those truisms that is going to occur. It is 
just as true with supply and demand, and the worst decisions 
are made on energy policy when it is made in the crisis 
situation during the middle of a gas crisis, during the middle 
of blackouts or brownouts. We have all been a part of that, and 
we know that some of the worst decisions are made during those 
periods.
    The second thing we did in Montana that I think is 
necessary both to the Presidential and Executive level but also 
at the Congressional level is to take a look at the conflicting 
agencies and policies and set politics aside, Republicans and 
Democrats alike, and make a determination. Do we have too much 
review and, if so, rather than trying to portray it as 
lessening the opportunity for the public to have input say we 
want the same level of input, but we only want it to go through 
one agency?
    When I was Lieutenant Governor in Montana, we had three 
agencies that reviewed energy policy. We had the Department of 
Health, the Department of State Lands and the Department of 
Natural Resources. That did not make sense. One agency would 
get done reviewing. It would move to the second. It would make 
a change. The first one had to go over that change. By the time 
you got to the third, well, time is money. That is another one 
of the truisms. People make decisions based upon economics. 
That is not necessarily the right thing to do, but it is a 
fact.
    And so the difficulty we have in the State of Montana is we 
get to the altar, but we never quite say the vows. We have so 
many rules and so many regulations and so many laws that are 
conflicting that ultimately businesses throw up their hands and 
say it is not worth it.
    One of the interesting scenarios is we always have a 
tendency to want to talk about outsourcing without looking at 
the true cost or the true reason for the outsourcing, which is 
the basis of the discussion that I think the Committee ought to 
spend a lot of time on, and that is making a determination: Are 
the costs outweighing the benefits in the United States, and 
are we becoming dependent on foreign sources because we have 
created barriers for sound environmental and economic policy of 
natural resource production?
    So I think there are a lot of things that this Committee 
can look at. I would rather than look at the cup as half full 
look at it as half empty. Congressmen do not come to 
Washington, D.C., and Congresswomen, to fix things that are 
going right. They fix things that are going wrong. So, rather 
than trying to highlight the positives, I think that we really 
need to get down to the basics of what is creating the problem 
in this country: Do we have an energy policy? Can we fix it by 
eliminating much of the duplication? And the consensus-building 
process is something that I hope this Committee will seriously 
look at through legislation. Thank you.

  STATEMENT OF THE HONORABLE DEVIN NUNES, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Nunes. Thank you, Mr. Chairman. I appreciate the 
opportunity to testify today on the evolving west. As you know, 
the west was built by rugged individuals, many of whom worked 
in the forest, hard rock mining, irrigated agriculture and 
public land ranching and the production of fossil fuels. These 
folks were integral in helping the United States win two World 
Wars, put a man on the moon and generate energy resources for 
our robust economy. These folks are proud to call the west 
home.
    For generations, they have treasured their natural 
resources not only for economic activity but for recreational, 
social and cultural pursuits. They strongly feel that they can 
be better stewards of the land than someone who reads about the 
west in The New York Times or works from an environmental law 
office in Washington, D.C. The west is changing but much by 
force. So-called environmental organizations have waged 
aggressive fundraising campaigns and endless litigation to 
scare people and judges about environmental degradation.
    These practices and their not-in-my-backyard campaigns have 
significantly raised the costs associated with economic 
development, played a huge role in outsourcing, and turned 
traditional western recreational pursuits upside down. In its 
most basic terms, the west is experiencing the consequences of 
Federal, state and local government policies that limit 
economic development.
    By way of example, in 2005, it was reported that more than 
30 environmental and regulatory impairments were stalling 
domestic natural gas production, yet we continue to experience 
significant growth in demand. With that said, it may come as a 
surprise to many Americans that approximately 40 percent of our 
domestic supply of natural gas is off limits. Federal laws, 
including the Coastal Zone Management Act, Endangered Species 
Act put restrictions and barriers that are an impediment to 
develop these essential resources.
    Radical environmentalists as well as many other extremists 
activist groups spearheaded opposition to policies that benefit 
Americans. Some of this is like coal-fired power plants, plants 
that can use clean coal technology that can be funded by our 
abundant domestic supplies of coal not only in the west but 
even in your State of West Virginia, Mr. Chairman.
    Close to home, they have opposed new water supplies, water 
storage facilities, and even one environmentalist went on to 
say that this was the dumbest dam in America, a dam in my 
district. This was truly an enlightening comment for those of 
us that do not have enough water in the west. Some of the 
environmental groups have chosen to elevate salmon over the 
livelihood of my constituents. Some folks have said that the 
pending San Joaquin River settlement which will be before your 
Committee, Mr. Chairman, is a model of collaboration throughout 
the west. They are wrong.
    True collaboration happens when parties try to work 
together from the beginning, not through litigation and an 
activist judge. I might add that the restoration may end up 
costing the taxpayers two and a half billion dollars and will 
result in no fish returning back to the river that they are 
trying to revet and restore a chinook salmon run. Two and a 
half billion dollars later, there will be no salmon.
    It is issues like these that have darn near destroyed the 
economy in my district and left my constituents shell-shocked. 
Folks are afraid to open businesses, develop a farm or build 
necessary public infrastructure under the fear of being sued. 
We are a battered community on the brink of extinction. Some of 
this room will claim that this is an exaggeration, but the 
Congressional Research Service has provided us facts.
    Three years ago, I and six of my colleagues in a bipartisan 
effort asked CRS to do a report on our area. This area is 
greater than 10 states, and it has a population greater than 23 
states. It has the highest unemployment rate of any state and 
the lowest per capita income. Additionally, the region has the 
highest percentage of people living below the poverty line and 
the worst air quality in the nation, and not to mention that 
doctors per hundred thousand people are lower than any other 
state in the country.
    Mr. Chairman, I request that this study be included in the 
record. I think it is a study that is worthwhile to have in the 
record. And I would like to put up a chart now that compares 
the San Joaquin Valley to Appalachia, which is up there now, 
and we can see that there are $2,000 less per capita spent, 
Federal money spent below the national average. That is $1,000 
less than the Appalachia region. Furthermore, the poverty rate 
is nearly 10 percent higher and 7 percent higher than the 
Appalachia region.
    Consequently, it defies the imagination why some folks here 
today advocate policies that will vilify my constituents and 
send their jobs to third-world countries with abysmal 
environmental records. While we adopt environmental policies in 
the United States that thwart irrigated agriculture, livestock 
grazing in public lands, we increase the drive for 
environmental destructive burning and clearing of fragile rain 
forests in Brazil and Asia.
    Our country has the best environmental record in the world, 
and it improves every day. I suggest that those who have the 
west under siege turn their sights on nations that 
intentionally destroy the environment for economic gain and 
give my constituents the credit they deserve for being good 
stewards of the land.
    Mr. Chairman, collaboration is great only when people work 
together from the beginning, but the so-called collaboration of 
the environmental movement threatens to create two societies in 
the west: the haves and the have nots. Thank you, Mr. Chairman.

 STATEMENT OF THE HONORABLE WALLY HERGER, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Herger. Thank you, Chairman Rahall, and Congressman 
Bishop, and other members for holding today's hearing on the 
relationship between western communities and natural resources 
on public lands. In my home State of California, a human 
environmental tragedy of incredible proportions is brewing in 
our national forest unless action is taken to restore forest 
health. A century of fire suppression and now decades of legal 
restrictions on forest thinning have left forests overcrowded 
and susceptible to catastrophic wildfire.
    In parts of my district where 50 to 70 trees per acre were 
the historic norm, there are now 500 to 700 trees per acre, 
approximately 10 times as many. Modern fires are not like the 
natural low-intensity fires which burn close to the ground. 
Today's fires engulf the entire forest from the floor to the 
canopy, destroying virtually everything in their path.
    For example, the 2003 southern California fire destroyed 
750,000 acres and led to 30 fatalities. We desperately need to 
mechanically thin these unhealthy stands if we are to protect 
at-risk communities and watersheds. A hands-off approach to 
forestry has brought year after year of historic devastation. 
Taxpayers now pay billions of dollars to fight fires that could 
have been prevented throughout active forest thinning.
    Forest management traditionally brought revenues into the 
Treasury and shared 25 percent of proceeds with county schools 
and roads, but appeals and lawsuits have virtually halted any 
thinning from occurring, and rural schools have been devastated 
as a result. Unless Secure Rural Schools, a temporary program 
designed to rescue counties from declining thinning receipts, 
is reauthorized, counties like Siskiyou County in my district 
will experience a 91 percent cut from what they receive under 
current law.
    The good news is the face of the environmental catastrophe 
is that westerners are taking matters into their own hands. In 
the early 1990s, a citizens group consisting of local 
environmentalists, forest professionals and elected officials 
met at the nearby public library to seek common ground. This 
organization dubbed the Quincy Library Group was founded upon 
the realization that the environment, local communities and 
forest jobs have a mutually beneficial relationship. They 
concluded that protecting forests and communities would be 
impossible without mechanically thinning unhealthy forest 
stands.
    The program they developed was designed to pay for itself 
by supplying wood products to local mills. This grassroots 
vision was turned into bipartisan legislation which I sponsored 
along with Senator Dianne Feinstein. The QLG members walked the 
halls of Congress championing their legislation as a solution 
to the timber wars that had torn western communities apart.
    Congress responded by passing this legislation on a near 
unanimous vote, and the bill was signed into law by President 
Clinton in 1998. It was thought that the five-year QLG pilot 
program could be expanded throughout the west, but regrettably 
it has been to a large extent held up by a small group of 
forest extremists. However, the work that has been done 
demonstrated that the QLG concepts are beneficial for the 
forest and local community. Catastrophic fire that ran into 
QLG-type areas dropped to the forest floor to mimic a more 
historically consistent fire.
    Mr. Chairman, thank you again for holding today's hearing 
and for allowing me to testify.
    [The prepared statement of Mr. Herger follows:]

 Statement of The Honorable Wally Herger, a Representative in Congress 
                      from the State of California

    Chairman Rahall and Ranking Member Young, thank you for holding 
today's hearing on the relationship between western communities and 
natural resources on public lands.
    In my home State of California, a human and environmental tragedy 
of incredible proportions is brewing in our National Forests unless 
action is taken to restore forest health.
    A century of fire suppression, and now decades of legal 
restrictions on forest thinning, have left forests overcrowded and 
susceptible to catastrophic wildfire.
    In parts of my district, where 50 - 70 trees per acre were the 
historic norm, there are now 500 - 700 trees per acre--approximately 
ten times as many!
    Modern fires are not like natural low-intensity fires, which burned 
close to the ground.
    Today's fires engulf the entire forest, from floor to canopy, 
destroying virtually everything in their path.
    For example, the 2003 Southern California fire destroyed 750,000 
acres and led to 30 fatalities.
    We desperately need to mechanically thin these unhealthy stands if 
we are to protect at-risk communities and watersheds.
    A ``hands-off'' approach to forestry has brought year after year of 
historic devastation.
    Taxpayers now pay billions of dollars to fight fires that could 
have been prevented through active forest thinning.
    Forest management traditionally brought revenue into the Treasury 
and shared 25 percent of proceeds with county schools and roads. But 
appeals and lawsuits have virtually halted any thinning from occurring 
and rural schools have been devastated as a result.
    Unless ``Secure Rural Schools''--a temporary program designed to 
rescue counties from declining thinning receipts--is reauthorized, 
counties like Siskiyou County in my district will experience a 91 
percent cut from what they receive under current law!
    The good news in the face of this environmental catastrophe is that 
Westerners are taking matters into their own hands.
    In the early 1990s, a citizens group consisting of local 
environmentalists, forest professionals, and elected officials met at 
the nearby public library to seek common ground.
    This organization--dubbed the ``Quincy Library Group''--was founded 
upon the realization that the environment, local communities, and 
forest jobs have a mutually beneficial relationship.
    They concluded that protecting forests and communities would be 
impossible without mechanically thinning unhealthy forest stands.
    The program they developed was designed to pay for itself by 
supplying wood products to local mills.
    This grassroots vision was turned into bipartisan legislation which 
I sponsored along with Senator Dianne Feinstein. QLG members walked the 
halls of Congress championing their legislation as a solution to the 
``Timber Wars'' that had torn western communities apart.
    Congress responded by passing this legislation on a near unanimous 
vote; and the bill was signed into law by President Clinton in 1998.
    It was thought that the five-year QLG pilot program could be 
expanded throughout the West.
    But regrettably, it has been to a large extent held up by a small 
group of forest extremists. However, the work that has been done 
demonstrated that the QLG concepts are beneficial for the forest and 
local community.
    Catastrophic fire that ran into QLG-type areas dropped to the 
forest floor to mimic a more historically consistent fire.
    Mr. Chairman, thank you again for holding today's hearing and for 
allowing me to testify.
                                 ______
                                 
    The Chairman. We thank our colleagues for being before the 
Committee today, and we will now proceed to our next panel. The 
Committee is very happy to have with us today the Governor of 
the State of Montana, Brian Schweitzer. Governor Schweitzer 
became the twenty-third Governor of the great State of Montana 
on January 3, 2005. He was raised on his parents' registered 
cattle ranch in the Judith Basin in Montana. His parents still 
farm near Geyser. He earned a B.S. degree in international 
agronomy from Colorado State University and later earned a 
master of science degree in soil science from Montana State 
University.
    It is very clear to the Nation in fact that the Governor 
has promoted a vision for his state that capitalizes on the job 
opportunities in environmental restoration and the economic 
importance of resource conservation. Governor, we are very 
appreciative that you took the time and effort to be with us 
today. We welcome you.

              STATEMENT OF HON. BRIAN SCHWEITZER, 
                   GOVERNOR, STATE OF MONTANA

    Governor Schweitzer. Thank you, Chairman Rahall. I thank 
you Ranking Member Bishop. And if I may as a point of 
privilege, even though I have very little here, I would like to 
say hello to my neighbor from South Dakota, Stephanie.
    I am indeed honored to be before you here today, and I 
heard mention of my hero, Teddy Roosevelt, who indeed was a 
Republican President, but he understood 100 years ago that the 
greatest legacy that we can grant to the next generation is 
clean water, clean air and open spaces. For 100 years, 
Democrats and Republicans alike can agree that the greatest 
value, greatest American value, is to offer the next generation 
a clean environment.
    So I would suggest before we go into anything else, let us 
make sure that we maintain these lands that President Roosevelt 
understood were important to pass along to the next generation. 
Let us not sell them.
    Two and a half years ago, my good friend, John Bollinger, 
who is a Republican, and myself decided that we would try a new 
role for politicians in Montana. We would work together. So, as 
a Democrat and a Republican, we ran together, Governor and 
lieutenant Governor, and we simply asked the people of Montana 
whether they agreed with us that Democrats and Republicans 
could agree on some principles. So far they have said yes.
    When the first official expedition came to Montana, Lewis 
and Clark came to Montana, and they described in their journals 
the remarkable prairies, the wonderful rivers, the mountains, 
the wildlife, and then they described the Crow, the 
Assiniboine, the Blackfeet, the Salish, and they found that the 
people who have lived on that land for 10,000 years have a 
notion about sustainability. Their leaders, elders, always 
consider not just the next generation when they make a 
decision, not just their grandchildren and their 
grandchildren's children, they consider the consequences for 
seven generations, and with that kind of leadership, they were 
able to live in the western United States sustainably for 
10,000 years. We could learn a thing or two from the people who 
have lived there for so long.
    Later the settlers came. First the miners, the loggers, the 
ranchers, and then the homesteaders like my grandparents. They 
came here with nothing more than the clothes on their back and 
high hopes and faith in God and the belief that they could make 
their way on this rugged landscape. Many were successful. Most 
were not. The miners came in many cases not to stay but to hit 
it rich and go home.
    So it should not surprise us that as we look across the 
landscape of the Rocky Mountains and the western United States, 
we find many examples of where we mined in the wrong way. We 
have learned from those mistakes in the past, and indeed we 
found that there are good economic opportunities in cleaning up 
the mistakes that have been made in the past. While we clean up 
some of these mine mistakes and while we log in a much more 
sustainable way, we are finding that these technologies can be 
exported around the world.
    We are finding that these technologies that we are 
developing are cherished by other economies. I have been to 
more than 30 countries around the world, and I have found that 
the kinds of mistakes that we have made in the western United 
States have been made even sooner in places in Asia and Europe. 
And this sustainable restoration economy that we are developing 
in the western United States is not only good for business in 
Montana, it is good for business around the world as we export 
these technologies.
    Over 100 years ago, Montana was coined the Treasure State, 
and those who first called us the Treasure State called us the 
Treasure State because we have gold and silver, platinum and 
palladium and more coal than any other state. We have oil. We 
have gas. But more recently, during the last couple of decades, 
we found that the real treasure was not the minerals that are 
contained in the mountain but the mountains themselves, the 
rivers, the open spaces, the wildlife.
    In fact, Montana's economy is growing. We have the lowest 
unemployment in history. We have created more than 1,000 jobs 
per month for the last 24 months. We have the eighth lowest 
taxes in America, and people are coming in large numbers to 
Montana because of our quality of life. They come there because 
we have safe communities, good schools, abundant opportunities 
for hunting, fishing, camping. They start businesses, they 
prosper, and they build communities. We are changing our 
economy in Montana, and it is good for business in Montana.
    While we have made mistakes in the past, we are recognizing 
that we will develop energy resources for the future in 
Montana. Yes, we are mining gold and silver, and we are the 
only source of platinum and palladium in the western 
hemisphere. At the same time, we are developing oil and gas. We 
are one of two states that increased our oil production during 
the last year. We are also developing our coal resources, but 
we will develop the coal resources in Montana on our own terms.
    We ask that we have a cap and trade system for carbon 
dioxide. We ask that you give us the tools to produce clean 
coal technology so that we can produce not only electricity for 
this country but also clean fuels, ultra clean diesel fuel, 
aviation fuel coming directly from our coal resources. We 
refuse to be the boiler rooms of this country. But as your 
partners, we will produce the energy for the future, and we 
will continue to have sustainable communities in much the same 
way as the people who have occupied our lands for 10,000 years. 
Thank you for this opportunity.
    [The prepared statement of Governor Schweitzer follows:]

             Statement of The Honorable Brian Schweitzer, 
                       Governor, State of Montana

    Chairman Rahall and Ranking Member Young, a very sincere thanks for 
inviting me to address this committee, and allowing me the opportunity 
to share my experiences as the Governor of Montana with all of you.
    President Theodore Roosevelt understood 100 years ago that the 
greatest legacy we can grant to the next generation is clean water, 
clean air, and open spaces. Democrats and Republicans alike can agree 
that conserving the landscape for the next generation is an American 
value, not a political value.
    Two and a half years ago, my good friend Lieutenant Governor John 
Bohlinger and I took a proposition to the people of Montana. We simply 
asked if they were ready to accept a Republican and a Democrat working 
together in the executive branch. Enough people agreed with us, and 
gave us the opportunity. I continue to be grateful. If I can tell you 
one thing after serving the people of Montana for just over two years 
now, it is that they want to see Republicans and Democrats working 
together.
    When Lewis and Clark arrived in Montana and began to describe what 
they saw, they spoke of a wondrous landscape defined by wide rivers, 
endless prairies, and stunning mountains. They described the wildlife, 
the fisheries, and the first Montanans--the Crow, the Assiniboine, the 
Blackfeet, and the Salish. They found that the first Montanans, these 
people of the Great Plains who had lived sustainably on this land for 
10,000 years, as part of their tradition always considered the future 
impacts of decisions made today. As a matter of course, each decision 
made by tribal elders weighed the consequences out to the seventh 
generation.
    The settlers--the miners, the loggers, and the homesteaders like my 
four grandparents--arrived with nothing but the clothes on their back, 
high hopes, and faith in God. They plowed the sweat of their brow, the 
skin from their work-torn hands, and their very souls into the land 
with the hope that they would create new opportunities for their 
children and grandchildren.
    I mention this because I think we all appreciate the importance of 
bearing witness to the landscape and legacy we have inherited from all 
of our ancestors. We know we must be vigilant about leaving enhanced 
opportunities for future generations.
    To that end, I would like to share what we have been able to do in 
Montana to create both an economic and environmental legacy. During the 
past 24 months, we've created more than 24,000 jobs. Our unemployment 
rate is the lowest in history, at 2.8 percent. More people are working 
in Montana than at any other time in our state's history--and they are 
working for more money. Average wages in Montana are increasing at a 
faster rate than in most of the rest of the country. Our emerging 
economic development is in part a result of pounding the pavement 
across the country to promote our state as a great place to raise a 
family and to do business.
    When miners first came to Montana, their goal was to find as much 
metal as they could, and then go back to where they came from. The same 
was true of the cattle barons. They had no intention of moving to 
Montana, or of living in Montana. They wanted to get as much grass as 
they could get in a short period of time, make their herds fat, and 
leave. So of course they made environmental mistakes. Those of us in 
the natural resource business--farmers, ranchers, loggers, miners and 
drillers for oil and gas--realize that we're still living with some of 
them today.
    Some ask, ``Why should anybody outside Montana care what was done 
in your mines and forests 50 or 100 years ago? I explain to them that 
in Montana we have large mountain ranges that every year capture snow. 
It's a renewable project. That snow turns into the snowmelt that 
supplies water to much of the rest of the country. In fact, 50 % of the 
water stored in the Columbia River Basin system comes from Montana. 
Seventy percent of the water in the Missouri River comes from Montana 
snow. You may be interested to know that Montana is the only place in 
the U.S. where water flows to three different oceans--the Atlantic, the 
Pacific, and the Arctic.
    The people from 27 states around the country who drink this water 
have a dog in this hunt--and when we get it right at the continental 
divide, we protect your watershed, and the watershed of your 
grandchildren, and that of your grandchildren's grandchildren.
    I've been to 30-some countries around the world, and since I come 
from the natural resource business, I've noticed that others have 
actually been making mistakes much longer than we have in the U.S. 
We've only been around a couple hundred years. In Asia, Africa, and 
Central Europe you'll find mistakes much larger than ours--that went on 
for many more years--with more people living in closer proximity.
    As you may know, decades of historic mining and smelting in the 
Butte and Anaconda areas, most notably by the Anaconda Company, have 
greatly harmed the resources of the Clark Fork River Basin and have 
deprived Montanans of their full use for a century. We are well on our 
way to restoring the Clark Fork--one of the largest Superfund sites in 
America--and it has been good business: good jobs with a great product.
    In restoring the mistakes of the past, there is another benefit. We 
develop the technologies of the future. This too is good business. As 
we develop these technologies, we are increasing the opportunities for 
exporting them to the rest of the world. At the end of the day, we may 
spend as much money restoring some of our hard rock mines as we 
received from the metals we extracted from those mines 100 years ago. 
Congress must be involved by providing dollars for Superfund, abandoned 
mine lands, and other reclamation.
    We need to continue to challenge ourselves to get it right, because 
we're going to continue to develop our resources in Montana. We have 
world class ore bodies, and we will continue to be in the mining 
business. But we will get it right. Before we start, we will make sure 
mines can be properly reclaimed, and we will have adequate bonding in 
place to make sure the restoration occurs.
    As Montanans roll up their sleeves and find practical solutions, 
they are creating a budding restoration economy. Recently, conservation 
groups and timber companies agreed to a comprehensive strategy for the 
Beaverhead-Deerlodge National Forest, which focuses on stewardship and 
restoration forestry, and includes new Wilderness designation and 
sustainable timber management. Their vision is for a working forest 
that sustains not only the economy and livelihood of the region, but 
also the world class fishing, hunting, and other recreational 
opportunities of the area. This effort is a significant step forward in 
moving beyond today's forest gridlock. Remarkable things can happen 
when people actually talk to, and get to know, one another--and it's a 
phenomenon that is taking place in Montana and across much of the West.
    Let's look to the future as it concerns energy. I have been very 
aggressive in positioning the state to capitalize on emerging energy 
markets. Montana and many parts of the West are uniquely positioned to 
deliver not only renewables like bio-fuels, but also wind power. 
Montana has some of the most robust wind potential in America, but only 
in the last two years has significant development occurred. Over $300 
million has been invested already, but in just the projects now 
proposed, there will be another billion dollars invested in the next 
few years.
    We must make wind power a more significant part of our portfolio in 
this country, but it's impossible to use wind power unless we have 
redundant transmission capacity. Without it, we won't be able to use 
wind power much beyond 15% of our portfolio.
    During the last two years Montana has completed and announced an 
array of energy projects, from wind farms to refinery upgrades to 
interstate transmission projects to coal gasification and liquefaction 
plants. We also have a strong oil industry. Montana was one of only two 
states in the nation to appreciably increase its oil production, and we 
will increase it again this year.
    I hope this domestic oil prosperity continues, but it is our 
nation's dependence on foreign oil that ensures we will be involved for 
a long time not only in the Middle East, but also in unstable places 
like Venezuela, Nigeria, and Angola. Our addiction demands that we 
continue to send our soldiers--and their children, and their 
grandchildren--into harm's way, to ensure that we have boots on the 
ground for the protection of our strategic interests.
    Americans use 6.5 billion barrels of oil each year. We only produce 
2.5 billion barrels ourselves. We import 4 billion from some of the 
world's most unstable regions. America needs a plan to get out of this 
mess.
    We can save 1 billion barrels of oil a year through conservation--
things like more efficient cars, homes, businesses, and appliances. 
We've done this before. We reduced our energy use by a similar 
percentage during the oil crisis of the late 1970's, when President 
Carter asked us to sacrifice. During the period from 1975 to 1983, we 
decreased our consumption of oil by 17%, while we grew our economy by 
27%. Through informed consumers and the use of existing technology, we 
can do it again. That leaves us with a 3 billion barrel a year deficit 
to conquer.
    Another part of the solution is biofuels. A year ago, in his State 
of the Union address, President Bush recognized our addiction to oil. 
In his address to the nation just a few weeks ago, he talked about 
conservation and alternative fuels, and of setting a goal of producing 
35 billion gallons of ethanol by 2017. That's almost a billion 
barrels--about 15% of our entire annual consumption of petroleum. I'm 
an agronomist by training, so over the last few years I've been 
crunching the numbers on biofuels.
    I do think we can produce a billion barrels of biofuels, but they 
won't be just ethanol. Some of the biofuels we produce will be 
biodiesel from crops like canola, safflower, soybeans, and camelina, 
which is my personal favorite, because it is particularly well-suited 
to Montana's arid climate. And the net energy ratio of biodiesel is 
more favorable than with ethanol.
    So after we produce a billion barrels a year of biofuels and add it 
to the billion barrels gained through conservation, our 4 billion 
barrel oil deficit has been reduced to 2 billion barrels a year.
    What do we do to cover that remaining 2 billion barrels? In Montana 
we have a lot of coal--as much as 120 billion tons of it. That is 28% 
of the nation's reserves, and 8% of the world's coal, just in Montana. 
It is located close to the surface, and it represents some of the least 
expensive BTU's available in the world. Over a year ago representatives 
from Sasol, the South African coal liquefaction giant, came to visit. 
We toured Montana's coal country.
    On maps and from the air, I was able to show them our resources and 
infrastructure: our three varieties of coal; oil and gas resources; oil 
shale; railroads; transmission lines; pipelines, and so on. Especially 
notable were the two significant oil fields in Montana, where they 
eagerly await carbon dioxide for enhanced oil recovery. As I told Sasol 
about our great work force and our work ethic, and pointed out the 
distant towns and trade centers from the air, I mentioned that a 
facility built in this part of Montana is a very safe asset--we don't 
have hurricanes or major tornadoes or earthquakes. That was in August, 
just before Hurricane Katrina hit and reminded us all of the importance 
of safe geography.
    I informed Sasol that Montana has the greatest crack spread for 
fuels. All three of the oil refineries in Billings, Montana are some of 
the most profitable in the country for their parent companies, because 
the value of the crude oil they buy is low and the value of the refined 
product is high.
    When I began to talk about the numbers related to coal, these 
representatives thought I was off by a factor of ten. I then repeated 
that the lignite was indeed worth about 18 cents a ton in the ground, 
and about $4.50 a ton mined. They didn't seem convinced, but then we 
flew down to Colstrip, Montana. It really is one of the most impressive 
coal developments in the world. And they were impressed. We landed and 
showed them the value of this sub bituminous coal, the way we mine it, 
the way we reclaim it, and the four coal-fired plants where we generate 
electricity, mostly for export from the state. Sasol became intrigued.
    Since then, plants have been announced. At the Bull Mountain Mine 
near Roundup, Montana, a partnership involving Arch Coal, the 2nd 
largest coal company in America, has said they are going to develop a 
300 megawatt IGCC power plant and a 20,000 barrel a day coal-to-diesel 
plant. It will be a $2 billion project. Peabody Energy, the world's 
largest private coal company, and the technology company Rentech have 
agreed to move forward to assess the feasibility of a coal-to-liquids 
facility at the Big Sky Mine near Colstrip.
    But America is not going to develop coal in Montana or in other 
parts of the country if we continue the ways of the past. Development 
of coal the way we have in the past simply won't be financable in the 
future. That is because, as a nation, we are finally coming to grips 
with the risks of climate change.
    We need to use better ways of extracting energy from coal, and put 
the carbon back into the earth where it came from. To do so, we need to 
perfect geologic sequestration of carbon dioxide. We must identify 
geologic structures where we can store great quantities of carbon 
dioxide. In Montana, we have what we call the Big Sky Sequestration 
Partnership at Montana State University, working with the Department of 
Energy. We have identified some of these geologic zones, but there is 
much more work to be done. We need measuring devices and monitoring 
protocols, and we need to work out liability provisions. We clearly 
cannot be doing this haphazardly.
    Back to our 4 billion barrel oil deficit. A billion barrels a year 
can be met through conservation and efficiency, and another billion 
from biofuels. It is my hope that Americans can produce the final 2 
billion barrels a year from our enormous coal reserves--developing a 
clean-burning fuel for about $1.20 a gallon. We could do this, and over 
the next thirty years only touch a small fraction of our domestic coal 
reserves.
    Montana can and will lead the way in producing clean and green 
energy for the entire county with wind power, biofuels, and fuels from 
coal. With respect to energy in the West, California has led the way by 
challenging their utilities not to purchase electricity that increases 
the amount of carbon dioxide in the atmosphere. Montana will respond. 
We will sell electricity to the California market using power from wind 
and coal gasification with sequestration. We will continue to promote 
the development of these resources in Montana through a host of 
incentives, and we will export these technologies as well.
    Regular Montanans are appreciating the benefits of our economic 
growth, but Wall Street is paying attention too. For the first time in 
26 years, the state's bond rating was recently upgraded by Moody's 
Investment Services.
    I am proud of the progress, but cognizant of the impacts as well. 
While the wages for our workers are increasing, so is the price of real 
estate. Growth will continue to put pressure on our recreational 
amenities and access to our public lands and rivers and streams. 
Montana is unique in the Rocky Mountains in that its citizens have a 
constitutional right to access our streams. That is why, for this 
generation and the next, I have proposed $15 million for purchase of 
more access sites on our rivers and streams and public lands, and more 
state parks.
    I know you want the nation to keep up. Funding for the management 
of America's national forests, national parks, and federal natural 
resource agencies is critical--and they too have cleanup 
responsibilities. The Mike Horse Mine in the headwaters of the fabled 
Blackfoot River resides on national forest property. We want to ensure 
that it is never again the source of annihilation for the fishery that 
inspired Norman Maclean's ``A River Runs Through It.''
    When many of our ancestors arrived in the West, they sought the 
treasure within its mountains and streams. Today we realize that the 
real treasure is actually the mountains and streams themselves. These 
are the reasons people choose to live in Montana and throughout the 
West, and they are driving a good portion of the West's economy today.
    This hearing is about the Evolving West. I'm here to tell you that 
the Evolving West is about making the most with what we are given. It 
is about finding the opportunities in change and capitalizing on those 
opportunities in a way that sustains a quality of life for this and 
future generations. I can wake up each morning and fight the old, tired 
battles defined by the Lords of Yesteryear, or I can appreciate God's 
bounty and find opportunities where we don't take from one generation 
to provide for another.
    If I can share anything with you as you embark on making policy 
that affects my state and others it is this: Choose a different path. 
Choose a path that brings together Republicans and Democrats in a way 
that leaves an improved environmental legacy while providing for 
quality jobs and fuller lives today and tomorrow. It can be done. Watch 
Montana.
                                 ______
                                 
    The Chairman. Thank you, Governor. I note that you were 
Montana's first Democratic Governor since 1988. I did not 
realize Montana was in the dark longer than the U.S. Congress 
had been.
    It is now my privilege to recognize as I said in the 
beginning a former member of this Committee, still a dear 
colleague, but a former colleague of ours in the Congress, Pat 
Williams, who is now the Senior Fellow and Regional Policy 
Associate at the Center for the Rocky Mountain West. He is an 
educator, was Montana's United States Congressman from 1979 
until 1997, also a former member of the Montana State 
Legislature. He was a majority whip here in the Congress and 
Chairman of the Postsecondary Education Committee.
    He serves on the Board of Directors for the National 
Association of Governing Boards of Universities and Colleges, 
National Association of Job Corps, U.S. Education, which is 
Sallie Mae and the President's Advisory Commission for Tribal 
Colleges. Pat, it is indeed a delight to welcome you back to 
your old stomping grounds, and you are free to proceed as you 
wish.

 STATEMENT OF PAT WILLIAMS, FORMER CONGRESSMAN, SENIOR FELLOW, 
  O'CONNOR CENTER FOR THE ROCKY MOUNTAIN WEST, UNIVERSITY OF 
                            MONTANA

    Mr. Williams. Mr. Chairman, Mr. Bishop, my friends, Peter, 
you cannot imagine, Mr. Chairman, what a delight it is, Nick, 
to refer to you as Mr. Chairman. I always found this Committee 
interesting during my 18 years in terms here, and I find it 
equally interesting this morning that five good Republicans, 
three of them friends of mine and the others I just have not 
had the luxury of knowing yet who preceded Governor Schweitzer 
and I, talked about a west that I do not recognize. But they 
talk about a west that they were talking about 20 years ago on 
this Committee.
    I note the title of these hearings, The Evolving West. We 
all need to evolve with it. When Bob Dylan, one of America's 
great poets, wrote the words ``The Times They are A-Changin','' 
he could easily have been referring to the west. Today's west 
has undergone a significant transition. Our economy, population 
and culture have changed, and a historic threshold has been 
crossed, particularly in the states of the Rocky Mountains. The 
west is no longer what it was, nor are we who live there what 
we once were. We now live in an evolving west.
    Most Americans know the story of the Old West. It was the 
stuff of myth. Inaccurate but comfortable. Myths have a way of 
arresting ambiguity. The Hollywood movie producer and director, 
John Ford--he is the guy that produced ``Wagon Train'' and 
``Fort Apache'' and ``The Man Who Shot Liberty Valance''--was 
once asked toward the end of his life, Mr. Ford, did you show 
the west the way it was? He said, hell no. I showed it the way 
it should have been.
    For two centuries, that Old West, including Montana, which 
as the Governor has noted we once proudly called the Treasure 
State, had an economy based on extraction: timber and mining, 
oil and gas. Most of the new west, including Montana, which now 
with equal pride we refer to as the Last Best Place, has made 
the transition from that old extractive economy and culture to 
a new one based on conservation, restoration, high tech and 
services like healthcare and construction and design and 
architects.
    That early economy, the extractive economy, experienced its 
significant decline because of increasing productivity. They do 
not hire people like they used to. Worldwide competition, the 
international setting of commodity prices and a fairly recent 
national regionwide, worldwide environmental ethic. The west 
and its old industries cannot return to the heydays of 
yesteryear even if we wanted them to. The transition was and 
its effects continue to be, make no mistake about it, 
wrenching.
    People and places still feel the displacements and the 
dislocations. Whether that will be an asset or a liability 
depends at least in part on purposeful leadership, including 
from the members of this Committee, but we cannot deny the 
effects and power of the marketplace. The throws of the 
transition have passed, and it is today's west that is our 
future. We can rail against it, we can wring our hands and be 
swallowed, or we can guide it and prosper.
    Yes, subdivisions have replaced some sawmills, but our 
economy is healthier due to this new economic diversity. Taking 
care not to pave ourselves over with malls and parking lots, we 
westerners now realize that we can protect the land's ability 
to sustain us. Safeguarding watersheds and corridors, 
preserving our parks and playgrounds and assuring decent wages 
and working conditions are tall orders, but we can meet the 
challenges if at home we set aside paranoia and intolerance and 
recognize that government at all levels can be an asset and if 
here on Capitol Hill you will strive, particularly in this 
Committee as you are this morning, to understand today's west.
    One of the markers, the indicators, of today's west is the 
sharply rising number of organizations and initiatives that are 
going on out that way. In my written testimony, I have listed 
only some, but you will notice they take up four pages of the 
testimony that I have submitted to you. I would like to pay 
particular attention, quick mention, to just five: The Sonoran 
Institute from which you will hear later. The Udall Center for 
Public Policy named for the former Chairman of this Committee, 
Moe and his brother, the former Secretary of Interior, Stew. 
Moe's memory hangs on this wall and in this room's name.
    Another is the Wallace Stegner Center at the University of 
Utah, and then if I may, two of which I am affiliated, the 
O'Connor Center for the Rocky Mountain West, which is a western 
regional study center located at the University of Montana, and 
the final one I want to mention is brand-new. It is called 
Western Progress. The Governor and I have been engaged in the 
development of that. It is a new public policy advocacy center 
with new offices in Phoenix, Denver and Missoula, Montana. It 
is a nonpartisan, nonprofit organization dedicated to the 
coordination and advancement of progressive policy solutions 
throughout the eight states of the Rocky Mountain west.
    All of these relatively newly formed groups reflect not 
only on the west traditional role as an incubator of ideas but 
are also reflective of the flourishing, prosperous, maturing 
region. Look, the personal income of the people living in and 
around the city regions of the west is growing far faster than 
the national averages of people living anywhere else in 
America. During this decade, the states of Rockies have 
experienced 10 percent population growth. It is five and a half 
nationally.
    It serves us well to understand where and why those gains 
are happening. Population and income growth are occurring in 
the midsize and smaller cities that are located near natural 
beauty, national parks, open space, river and lakes, state 
parks, recreation areas, including wilderness areas. That is 
where people are moving in the west. The Rocky Mountain west 
has transitioned to an amenities economy.
    The irony should not be missed. Our natural resources are 
still leading the way for our growth, but this time it is the 
unscarred landscape that provides the economic engine that is 
driving our significant and historically high growth in 
population and income.
    One of the most unusual aspects about that amenities 
economy is that it is also footloose. That is one of the 
signatures of the west's transition. Footloose jobs are jobs 
that follow people. After two centuries in the west of people 
having to chase jobs in the gold fields, in the oil and gas 
fields, in the woods, in the copper and silver mines, you had 
to go to where the product was to get the job. Not today.
    The most important points that I hope to leave with you 
today is that of the west's amenities economy generating 
footloose jobs. The growth and prosperity in this region is 
indisputably occurring closest to the landscape that has the 
most natural beauty. In the entire west, much of which is 
represented on this Committee, there are 80 counties with 
geographic centers within 40 miles of a major national park 
such as Rocky Mountain or Capital Reef and Arches or 
Yellowstone and Glacier or Carlsbad.
    People are swarming into the west into the vicinities of 
natural wonders, beauty, cleanliness. In the west, the new 
mantra might be do not build it and they will come. This is not 
of course to suggest that development, including extractive 
development, in the states of the Rockies should or will cease. 
Rather, it is simply to draw this Committee's attention to an 
important aspect of the evolving west and to suggest that 
future development must meet the economic imperatives of 
respecting our land, air and water.
    As I move toward my close, I ask that this Committee and 
the Congress become more attentive, increasingly attentive, to 
the priorities of at least some of us, we believe a majority, 
significant majority who live in the west. I believe frankly 
that for more than a decade, Congressional understanding of the 
west has been lacking, and I say with respect worse, 
Congressional action or nonactions have actually been 
detrimental to the west.
    This hearing may be the dawn of a new recognition and 
partnership. We hope so. As you know, more than half of the 
land in the west is held by the Federal government, by you, by 
all of us, on behalf of all of us. The ownership of America's 
vast estate of open places demands stewardship, and it demands 
something it is not getting, balance. Right now we westerners, 
most of us, believe that the Federal government is not 
appropriately either finding or seeking that balance.
    Now if I may close by just mentioning several points of 
imbalance. National parks. Since Yellowstone 135 years ago, the 
national parks are still today America's best idea. They are a 
world-class asset for this country and for the Rocky Mountain 
west, and your own GAO estimates that the park repair backlog 
has reached $6 billion. You have to quit starving the parks.
    Land and water conservation fund. The combined funding 
between land and water conservation fund and the forestry 
legacy program has been slashed an astonishing 90 percent since 
George W. Bush took office. It was at $600 million. Now it is 
at $50 million.
    Wilderness. The only two states in America not to complete 
the old rare two designations are Idaho and Montana. Both 
states are now beginning to get back at it again. Please give 
us your attention.
    Drought. Let me give you one example. Lake Meade on the 
Colorado is now 90 feet lower than its historic average.
    Clean water and pipeline safety. We are assured out west 
that finally long overdue attention is going to be paid to 
clean water and pipeline safety because Chairman Dingle and 
Chairman Oberstar have both put those western problems at the 
front of their Committees' agendas.
    Renewable and alternative energy. Throughout virtually the 
life of this nation, the west has provided the oil, gas, hydro 
and coal necessary, along with West Virginia, to fuel America's 
needs, and we intend to continue to be helpful, but we need 
your partnership in moving toward cleaner alternatives and 
renewable energy sources.
    Restoration. Governor Schweitzer and I believe that a major 
new economy, a new economy, beckons in the west. Restoration. 
Let us work at it with this newly attentive Committee. 
Restoration of the landscape. The old scars intentionally or 
unintentionally. There are tens of thousands of jobs waiting in 
the west.
    Native Americans. For too many Indians, poverty tracks 
them. Indians have the worst housing, the lowest life 
expectancy, the highest infant mortality and the lowest income 
of any ethnic group in the United States. They are under your 
stewardship. Please.
    The final point and one that is beginning to raise alarm in 
the Governor's office and throughout Montana, mineral leasing. 
The Governor's state Department of Fish, Wildlife and Parks has 
only recently understood the breadth of mineral leasing 
throughout our state. In only the past three months, the BLM 
has leased 110,000 acres of land in Montana, and that is both 
public and private land. Millions of acres of Montana, in the 
tens of millions, have now been leased primarily for gas, often 
methane gas.
    Montana's Department of Fish, Wildlife and Parks tells us 
that this energy development will have more negative and 
perhaps disastrous consequences to fish and wildlife in one of 
the last great fish and wildlife states in America, and it will 
have within the next 10 years more impact than the fish and 
wildlife have had to undergo in the last 50 years.
    Yes, we can sustain our landscape and wildlife with 
appropriate energy development but not with the onslaught that 
is now planned, and remember--and I drew this matter to the 
attention of the Chairman this morning--once the minerals are 
leased under private land, the landowner must allow entry. The 
companies can cut the bolts on their gates and come in without 
their permission. We know that a member of this Committee, Mark 
Udall, has offered legislative help to that terrible problem, 
and I urge your consideration of it.
    Members of this Committee, you have the Committee which has 
always held jurisdiction over so many Federal issues of such 
importance to the west, and we need your immediate help to slow 
this virtually unrestrained onslaught of drilling rigs 
throughout the Rocky Mountain west and Montana. Will you not 
please at least consider a Congressionally ordered moratorium 
on the headlong mineral leasing in the Rocky Mountain west? The 
BLM we know is under direct orders to lease the west before 
this President leaves office. Please bring a little balance to 
this chaos.
    We are very pleased, Mr. Chairman, that you recognize that 
in the west the times they are a changing. Thank you all very 
much for inviting me.
    [The prepared statement of Mr. Williams follows:]

Statement of Pat Williams, Senior Fellow, O'Connor Center for the Rocky 
                Mountain West, The University of Montana

    When Bob Dylan wrote the words ``The Times They are A-Changin','' 
he could easily have been referring to the West.
    Today's West has undergone a significant transition--our economy, 
population and culture have changed. An historic threshold has been 
crossed, particularly in the states of the Rocky Mountains. The West is 
no longer what it was--nor are we who live there what we once were. We 
now live in an Evolving West.
    Most Americans know the story of the Old West. It was the stuff of 
myth, inaccurate but comfortable. Myths have a way of arresting 
ambiguity. The Hollywood movie director and producer John Ford, whose 
films include Wagon Train, Fort Apache, and The Man Who Shot Liberty 
Valance, was once asked, ``Did you show the West the way it was?'' Ford 
replied, ``Hell no. I showed it the way it should have been.''
    For two centuries that Old West, including Montana, which we once 
proudly called ``the Treasure State,'' had an economy based upon 
extraction: timber and mining, oil and gas. Most of the New West, 
including Montana which, with equal pride, we now call ``the Last Best 
Place,'' has made the transition from that old extractive economy and 
culture to a new one based on conservation, restoration, high tech and 
services. That early economy, the extractive economy, experienced its 
significant decline because of increasing productivity, worldwide 
competition, the international setting of commodity prices, and a 
fairly recent national and region-wide environmental ethic. The West 
and its old industries cannot return to those heydays of yesteryear 
even if we wanted to. The transition was, and its affects continue to 
be, wrenching. People and places still feel the displacement. Whether 
that will be an asset or liability depends, at least in part, on 
purposeful leadership. But we cannot deny the effects and power of the 
marketplace. The throes of the transition have passed and today's West 
is our future. We can rail against it and be swallowed or guide it and 
prosper.
    Yes, subdivisions have replaced some sawmills, but our economy is 
healthier due to this new economic diversity. Taking care not to pave 
ourselves over with malls and parking lots, we westerners now realize 
that we can protect the land's ability to sustain us. Safeguarding 
watersheds and corridors, preserving our parks and playgrounds, and 
assuring decent wages and working conditions are tall orders, but we 
can meet the challenges if, at home, we set aside paranoia and 
intolerance and recognize that government at all levels is an asset and 
if here on Capitol Hill you will strive, as you are today, to 
understand today's West.
    One of the markers, the indicators of today's West, is the sharply 
rising numbers of organizations and initiatives. In my written 
testimony I have listed only some--ones that, among others, have been 
created to reflect, inform, and consider the many facets of the 
evolving West.
      Headwaters News
      The New West Network
      Colorado College's Report Card of the Rockies
      The Atlas of the New West
      Western Progress
      The New West Project
      Sonoran Institute
      Natural Resources Law Center--University of Colorado
      Center of the American West--University of Colorado
      O'Connor Center for the Rocky Mountain West--The 
University of Montana
      Public Policy Research Institute--The University of 
Montana
      Ruckelshaus Institute of Environment and Natural 
Resources--University of Wyoming
      Udall Center for Studies in Public Policy--University of 
Arizona
      Andrus Center for Public Policy--Boise State University
      The Wallace Stegner Center for Land, Resources and the 
Environment--University of Utah
      Marias River Watershed--Liberty County, Montana
      Great Gallatin Watershed Council--Bozeman, Montana
      Upper Yellowstone Watershed Basin--Emigrant, Montana
      Idaho's Bounty--Ketchum, Idaho
      Smart Growth Advocates--Pueblo, Colorado
      Citizens for Dixie's Future--Hurricane, Utah
      Landowners Association of Wyoming
      Grow Montana--Butte, Montana
      Sustainability Alliance of Southwest Colorado--Hesperus, 
Colorado
      Sustain Taos--Taos, New Mexico
      Southwest Marketing Network--Hesperus, Colorado
      Property and Environment Research Center (PERC)
      Foundation for Research on Economics and the Environment 
(FREE)
      Corporation for the Northern Rockies
      Greater Yellowstone Coalition
      Grand Canyon Trust
      Quivira Coalition
      Red Lodge Clearinghouse
    I would like to pay particular mention to five: the Sonoran 
Institute, the Udall Center for Public Policy, the Wallace Stegner 
Center at the University of Utah and two with which I am affiliated--
the O'Connor Center for the Rocky Mountain West which is a western 
regional studies center located at The University of Montana and the 
final one is new: Western Progress. The latter is a new public policy 
advocacy center with offices in Phoenix, Denver and Missoula, Montana. 
It is a non-partisan organization dedicated to co-ordination and 
advancement of progressive policy solutions throughout the eight states 
of the Rocky Mountain West.
    All of these relatively newly-formed groups reflect not only on the 
West's traditional role as an incubator of ideas, but are also 
reflective of a flourishing, prospering, maturing region.
    The personal income of people living in and around the ``city 
regions'' of the West is growing far faster than the national averages. 
During this decade, the states of the Rockies have experienced 
approximately ten percent population growth, compared to six percent 
nationally.
    It serves us well to understand where and why those gains are 
happening. Population and income growth are occurring in the midsize 
and smaller cities that are located near natural beauty: national 
parks, open space, rivers and lakes, state parks, recreation areas 
including wilderness lands.
    The Rocky Mountain West has transitioned to an ``amenities-
economy.'' The irony should not be missed. Our natural resources are 
still leading our growth, but this time it is the unscarred landscape 
that provides the economic engine that is driving our significant and 
historically high growth.
    One of the most unusual aspects of our amenities economy is that it 
is ``footloose.'' That is one of the signatures of the West's 
transition. Footloose jobs are jobs that follow people--after two 
centuries of people in the West having to chase jobs--jobs in the gold 
and oil fields, the woods, and the copper and silver mines.
    The most important points that I hope to leave with you today is 
that of the West's amenities economy generating footloose jobs. The 
growth and prosperity in this region is indisputably occurring closest 
to the landscape that has the most natural amenities: the parks, the 
mountains, rivers and lakes, and the most diverse and beautiful land on 
the high plains. In the entire West, much of which is represented here 
today, there are 80 counties with geographic centers within 40 miles of 
a major national park: Rocky Mountain National Park in Colorado; 
Arizona's Grand Canyon; Capitol Reef and Arches in Utah; Yellowstone 
and Glacier; New Mexico's Carlsbad. People are moving in large numbers 
to the vicinities of natural wonders, beauty, cleanliness.
    In the West, the mantra might be: ``Don't build it and they will 
come.'' This is not, of course, to suggest that development, including 
extractive development, in the states of the Rockies should or will 
cease; rather it is to simply draw your attention to an important 
aspect of the evolving West and to suggest that future development must 
meet the economic imperative of respecting our land, air, and water.
    As I move to my close, I ask that this committee and the Congress 
become more attentive to the priorities of those of us who live in the 
West. I believe, frankly, that for more than a decade congressional 
understanding of the West has been lacking and worse, congressional 
actions or non-actions have been detrimental to the West. This hearing 
may be the dawn of a new recognition and partnership--we hope so.
    As you know, more than half of the land in the West is held by the 
federal government on behalf of all of us. That ownership of America's 
vast estate of open places demands stewardship balance--and right now 
we westerners, most of us, believe the federal government is not 
appropriately either finding or seeking that balance.
    I'll just mention several matters that point to imbalance:
    National Parks: Since Yellowstone, 135 years ago, the national 
parks remain America's best idea. They are world-class assets. Your own 
GAO estimates the park repair backlog at $6 billion. Congress must quit 
starving the national parks.
    LWCF: The combined funding between the Land and Water Conservation 
Fund and the Forest Legacy Program has been slashed an astonishing 90% 
since George W. Bush took office--from $600 million to around $50 
million.
    Wilderness: The only two states in the country to not complete our 
federal wilderness designations are Idaho and Montana. We urge this 
committee to be attentive to those efforts.
    Drought: One example--the water level at Lake Meade on the Colorado 
is 90 feet lower than its historic average.
    Clean Water and Pipeline Safety: We are assured that, finally, long 
overdue attention will be paid. Chairmen Dingell and Oberstar have put 
both of these western problems on their committee agendas.
    Renewable and Alternative Energy: Throughout virtually the life of 
this country, the West has provided the oil, gas, hydro and coal 
necessary to fuel America's needs. And we intend to continue to be 
helpful but we need your partnership in moving toward cleaner 
alternatives and renewable energy sources.
    Restoration: Governor Schweitzer and I believe that a major new 
economy beckons in the West--restoration. Let's work on it together 
with this newly attentive Congress.
    Native Americans: Far too many Indians still live in poverty. They 
have the worst housing, lowest life expectancies, and lowest income of 
any ethnic group in America. Please!
    A final point and one that raises alarm for Montanans--
    Mineral Leasing: Our state's Department of Fish, Wildlife and Parks 
has only recently understood the breadth of mineral leasing throughout 
our state. In only the past three months, the BLM has leased 110,000 
acres of land in Montana--both public and private land. Millions of 
acres of Montana have now been leased primarily for gas--often methane 
gas. Montana's Department of Fish, Wildlife, and Parks tells us that 
this energy development will have more negative consequences to fish 
and wildlife within the next ten years than has been realized during 
the past half century.
    Yes, we can sustain our landscapes and wildlife with appropriate 
energy development but not with the onslaught that is now planned. And 
remember--once the minerals are leased under private land, the 
landowner must allow entry. We know that a member of this committee, 
Mark Udall, has offered legislative help--please consider it.
    Members of this committee, a committee which has always held 
jurisdiction over those federal issues so important to the West, we 
need your immediate help to slow the virtually unrestrained onslaught 
of drilling rigs throughout Montana and the Rocky Mountain West. Please 
consider a Congressional-ordered moratorium on the headlong mineral 
leasing in the Rocky Mountain West. The BLM is under White House orders 
to lease the West before this president's term ends. Please bring 
balance to this chaos.
    We are very pleased that you, too, recognize that in the West ``the 
times they are a-changin'.''
    Thank you for inviting me.
                                 ______
                                 
    The Chairman. Thank you both for your superb testimony this 
morning. Let me ask Governor Schweitzer a quick question. You 
have painted quite a rosy picture about the west generally and 
in your state specifically where you have low unemployment, 
increasing wages, improved bond rating, all of which speaks 
superbly to your leadership. Many areas of the west are not 
experiencing such improved economic conditions, and I would 
ask, what would be your advice to those areas lacking behind? 
What lessons perhaps have you learned that you could share with 
those in less rosy parts of the west?
    Governor Schweitzer. Build the best education system and 
they will come. Bright people from all over the world are 
moving to the Rocky Mountain west because they can conduct 
their business with the world as long as they are connected 
with broadband. These bright engineers, these business leaders 
are moving to our communities in the Rocky Mountain west. They 
are placing their children in our public school system. They 
are taking their children out of private schools on the east 
and west coast, coming to places like Montana, and they are 
coming there because we have safe communities, good schools, 
and the ability to camp, hunt and fish.
    If you look at Montana's economy in the places that are 
within 25 minutes of good fishing, you will find that our 
communities are growing. If you are more than a half hour to 
great trout fishing, your community is probably shrinking.
    People are going to choose community with clean resources. 
I have to tell you the BLM is a little dysfunctional in Montana 
right now. They have been leasing acres all over the Powder 
River Basin for coalbed methane because there is a quest for 
this gas that we have, and yet Governor Freudenthal, the 
Governor of Wyoming, and myself were asked to come to a meeting 
here in Washington, D.C., with the BLM.
    And we sat down to this meeting with the BLM, and they 
said, Governors, you have to help us. The sage grouse are 
disappearing. The sage grouse are disappearing. And you know 
what we think the problem is? We think it is all the coalbed 
methane drilling that we have. Can you help us? We say, well 
you leased the land. We would love to help you, but you are 
going to have to cooperate with us a little bit. You did not 
even ask our opinion before you leased the land where the sage 
grouse live. You did not ask our opinion before you gave the 
permits for the folks to drill, and now you come back to us and 
say, I will be doggone. The birds are disappearing.
    So, in Washington, D.C., if you can get along with each 
other across the hall, then we will be able to work with you in 
the states. Thank you.
    The Chairman. Thank you. I recognize the Ranking Member, 
Mr. Bishop.
    Mr. Bishop. Thank you, Chairman Rahall. Governor, in your 
written testimony, you emphasize the importance of coal that 
plays in our energy security, and I think you called it America 
was the Saudi Arabia of coal, and I agree with you on that. It 
provides 50 percent of the electricity for our homes, and with 
the coal-to-liquid technology, which is a new clean technology, 
it could power our cars. It could do a whole lot of other 
things for our military as well.
    There has been a whole lot of discussion here in Washington 
to try and revolutionize energy, including climate change, et 
cetera, but environmentalists have been hitting us up fiercely. 
The coal to liquids would be excluded from the debate in any 
legislation. Chairman Rahall, on the other hand, wrote the 
Speaker last week insisting coal to liquids be included, and I 
applaud him for that. Am I understanding you correctly that 
Montana is on record that any legislation that would be 
detrimental to the commercial viability of coal to liquids is 
bad for the country?
    Governor Schweitzer. Not exactly. What I am saying is that 
we have 32 percent of all the coal in America. We have 8 
percent of the coal on the planet. We are more than happy and 
prepared to develop not only our coal for electricity but also 
for liquid fuels. There is simply no other way to get to energy 
independence without coal as part of the mix.
    We consume 6.5 billion barrels of oil every year in this 
country, and we are only able to produce 2.5 billion barrels. 
Now I think we can maintain that 2.5 billion. We have a four 
billion barrel problem. I think we can decrease our consumption 
by one billion barrels. The Administration has suggested is it 
20-by-10 or 10-by-20, whatever it is, that is a decrease of one 
billion barrels.
    They suggested biofuels. Now that is important. But I have 
to tell you I am an agronomist. I have done a little math, and 
if you converted every single acre of wheat, corn and soybeans 
in this country that we export, every single one of them, and 
every one of those acres were dedicated to producing biofuels, 
we could produce one billion barrels of biofuels.
    So we still have a two-billion-barrel problem. So either we 
continue to send $150 billion a year to dictators in the Middle 
East or we consider the ace in the hole that we have, which is 
coal. We have 400 billion tons of coal in this country. That is 
more BTUs than Iran and Saudi Arabia combined. If you converted 
that to liquid fuel, 400 billion tons times 2 barrels per ton, 
that is 800 billion barrels. The last 2 billion barrels that we 
have a problem with, that is a 400-year supply.
    But we are not going to burn another ton of coal in this 
country without finding new ways of using that coal because the 
world is simply not going to allow us, and most of the people 
in the United States and industry is saying to us, if you 
continue to increase the carbon dioxide in our atmosphere, you 
are going to destroy the way we have been living on this 
planet. We are not going to destroy the planet. We are going to 
destroy the way we are living on this planet.
    We have the technology to sequester this carbon dioxide. I 
would ask Congress to take some bold steps. I would ask 
Congress to help us with some research and development monies 
so that we can identify those geologic structures to store the 
carbon dioxide. I would ask Congress to take aggressive steps 
so that we do not vulcanize our carbon dioxide industry in this 
country. You have Washington, Oregon, Idaho, Arizona and New 
Mexico. They have decided that they are going to have their own 
carbon dioxide cap and trade system.
    Mr. Bishop. Governor, can I just interrupt the filibuster 
for just a minute here?
    Governor Schweitzer. Please.
    Mr. Bishop. To be honest, I agreed with almost everything 
you said, and I know that Chairman Rahall appreciated what you 
said about coal, and so do I, because it does create the 
history, and we need to look at that. The technology is there, 
and we need to develop that. That has to be part of the 
balance. I appreciate that. Let me try and get one other thing 
in here in about a minute. You have, I understand, about $300 
million that you invest in the state wind power efforts. You 
would like to expand that as well.
    Probably the largest European country to try and do that is 
Denmark, which tries to have 20 percent coming from wind power. 
It does not meet that criteria. Simply they do not produce 
that. The winds fail them. They have to have a backup, which 
drops it down to 8 percent, and to compensate for that, the 
Danes pass on the cost of the backup to their consumers.
    Am I under the assumption if you try to develop this--I am 
looking like I am going to give you about 30 seconds to answer 
this--as you try to develop your wind power, can you look at 
the guarantee that you are not going to try and pass on any 
kind of those preventive backup measures to the consumers? At 
the same time, can you deal with the issues of the takings 
legislation or takings decisions by the courts that have 
basically stopped windmill farms for one taking? And I am 
giving you now 20 seconds. I apologize for that.
    Governor Schweitzer. When we passed the renewable standard 
in Montana that would be 15 percent by the year 2050, and the 
utility industry flew into Montana in big numbers and said, 
wind? That is just for hippies that live on mountaintops and 
smoke marijuana. Real energy comes from coal and hydropower. We 
passed it anyway. Already Montana is at 10 percent, and our 
first big wind form is producing electricity for $41.30 a 
megawatt, which is about 80 percent of the cost of old coal 
technology. Wind power is less expensive in Montana, it is 
renewable, and we can use it for 10,000 years. Thank you.
    Mr. Bishop. Well, maybe on the second round, I can actually 
get back to the answer to the question, but I applaud you for 
doing that anyway.
    The Chairman. The Chair was willing to give the Governor as 
much time as he desired. I was going to yield to him my time. 
With the indulgence of the gentlelady from California, the 
Chair would like to recognize quickly the gentleman from Oregon 
for a question.
    Mr. DeFazio. I thank you, Mr. Chairman. I have 25 people 
waiting in my office. Governor, we share an issue on forestry. 
I see that on the Beaverhead Deer Lodge, you mention that you 
brought the industry, the environmental groups and others 
together on a stewardship and restoration forestry, sustainable 
forestry. Do you want to tell me how you did that? We are 
having a little problem in Oregon.
    Governor Schweitzer. I have to tell you cooperation is 
breaking out all over Montana. We are bringing industry folks 
and environmentalists together. There is outliers. There is 10 
percent on both sides that do not want to get in any room. They 
can just stay out of the room. So we will work with the 80 
percent, the ones who want to find a solution.
    So those who are concerned about timber policy, concerned 
about not having enough roads and enough timber, they decided 
the only way they were going to be able to build a consensus 
was to sit in the rooms with people who have said we are not 
against harvesting more timber, but we are for clean water and 
we are for a habitat for our animals, for our elk, for our 
deer, for our antelope. And so they were able to sit in a room, 
and they were saying, here is our suggestion. We are going to 
go to Washington, D.C., with a signed agreement that the 
environmental community and the timber industry agree on.
    We are going to suggest that we open these areas for 
additional timber harvest, but we are going to agree that these 
areas we will set aside for wildlife and water management. I 
have to tell you folks, 27 states depend on the water that 
comes from high in the Rocky Mountains in Montana. Fifty 
percent of the water that is stored in the Columbia River 
system comes from Montana.
    Mr. DeFazio. We appreciate that on the Columbia in 
particular. If I could, Governor, I mean, I just want to focus. 
Is there a strong component in there for restoration forestry 
and/or thinning fuel reduction? I mean, that seems to me to be 
part of a key toward solving some of these disputes.
    Governor Schweitzer. Absolutely, and we are creating 
thousands of jobs in Montana in the restoration economy. Some 
of these Congressmen who spoke to you earlier are absolutely 
right. The way we have managed the forests during the last 70 
years, which is fire suppression and simply to harvest the 
timber and walk away for 50 years, has yielded a forest that is 
on the brink of burning, but we need to thin those forests, not 
just clear-cut them.
    Mr. DeFazio. And is there a role for potentially, since you 
have talked about biodiesel and ethanol and that, do you think 
there is a potential of converting some through stewardship 
contracts other than direct burning for generation but 
otherwise to use the cellulose, the material?
    Governor Schweitzer. Absolutely. As they develop the 
cellulosity ethanol technology, wood chips will play a big 
role. We are already using the wood chips in what we call fuels 
for schools. We are heating our schools with those wood chips, 
but there are unintended consequences, folks. There is a paper 
industry in this country that is crying out for more wood 
chips. If we start using it in cellulosic ethanol, they are 
going to say, where is the paper? So there are unintended 
consequences to decisions that we make about energy.
    Mr. DeFazio. Thank you. Thank you, Governor. Thank you, 
Chairman. Thank you.
    The Chairman. The Chair recognizes the gentleman from Utah.
    Mr. Cannon. Thank you, Mr. Chairman, and welcome. I 
apologize. I have been in and out. We have been in a markup in 
Judiciary, and I missed some of the discussions, but I would 
like to explore, Governor, with you a little bit about coal and 
the problems coal development represents.
    I think, as you know, I have dealt with coal mining. 
Personally I oversaw Reclamation in the Interior Department as 
the lawyer in charge of that for some period of time, and I am 
a big, big supporter of coal to liquid. I think that that is a 
great prospect for our future energy development, and then you 
are obviously supportive of that.
    But you have been I think a little less supportive of oil 
and gas development, which is far less intrusive in the 
environment than coal mining is. Do you mind talking about that 
a little bit and talking about how we balance what is a more 
invasive process, coal mining, against oil and gas development?
    Governor Schweitzer. I love developing oil, too. In fact, 
Montana is one of two states that increased our oil production 
over the last year. I invited a bunch of folks from the Alberta 
oil industry down to Montana. We spent two days with them. We 
explained Montana's tax system and our regulatory environment. 
Now remember, Alberta is the biggest producer of oil of any 
place in North America. They are increasing, exploding their 
development.
    We brought these oil companies down to Montana, and once 
they knew our tax system and our regulatory environment, they 
were hitting each other with their elbows. They could not 
believe it. It is a better place to do business for the oil 
industry than even Alberta, and they have been moving their 
rigs down to Montana.
    We will continue to develop our oil and gas industry in 
Montana. We will continue to do our share to produce the oil 
and gas for this country, but we want to do it on our terms. We 
want to make sure that when we are done we have communities 
that will continue to be able to prosper in other industries. 
We want to develop our coal. We want to do it right, and we 
will continue to increase our oil and gas production in great 
strides.
    The oil and gas industry is asking me right now, Brian, 
when can we get that CO2 that comes from those coal 
to liquid plants, because our old oil fields in Montana, they 
are telling us that they could double, triple or even quadruple 
their production of oil if they had a steady stream of carbon 
dioxide to pump back into the earth. What could be better than 
sequestering carbon dioxide and increasing oil production? We 
hope that we can be a laboratory for the energy business in 
Montana.
    Mr. Cannon. Is Utah the other state that increased oil 
production, because I think we have?
    Governor Schweitzer. I was thinking it was North Dakota, 
but I think Utah is doing a great job, too. Gas in particular.
    Mr. Cannon. There always is a little lag. The biggest 
continental discovery of oil recently was in Utah. We hope that 
of course pans out for all of America for Utah's conquers.
    Governor, one of two options. One is you would always be 
welcome in the Republican party with those ideas, and second, 
if you stay a Democrat, I hope you will convince your 
Democratic colleagues of the reasonableness of that and not 
just have this be a relatively unique example of clear thinking 
about what we need to do to supply the energy that America 
needs and at the same time taking thoughtful steps to solve 
the, in my mind, remote possibility of the manmade contribution 
to global warming which is clearly happening but not 
necessarily manmade.
    But sequestering carbon dioxide I think is obviously--and 
you have spent a lot of time thinking about that--a key for 
controlling what the effect of man on carbon dioxide and on the 
temperature of the earth is. So anyway, any time you would like 
to talk about switching over, we would love to have you come.
    Governor Schweitzer. Well, I understand the Republicans 
have older whiskey and faster horses, but other than that, I 
think I will just stay with the Democrats.
    Mr. Cannon. Let us do what is good for America. Thank you, 
Mr. Chairman. I yield back.
    The Chairman. What was that, Rob? Not in Utah?
    Mr. Bishop. There is not older whiskey in Utah.
    Governor Schweitzer. Not in Utah.
    The Chairman. Chair recognizes Mr. Inslee for questions.
    Mr. Inslee. Thanks for coming. Pat, thanks for being such a 
great advocate for the west. We really appreciate it. Governor, 
I want to ask you about the future gen project. I just want 
your comments about it, if you have any critiques of it, and 
maybe why would Montana not have been a finalist in the 
competition for that? Is it a geological issue? What are your 
prospects for that? I have one more question.
    Governor Schweitzer. We actually have what we call the Big 
Sky Sequestration Project. It is a $17 million joint project 
between Montana State University and the Department of Energy 
to identify the geologic zones that we have in Montana to 
sequester carbon dioxide. We know that we can sequester a great 
deal of carbon dioxide in Montana. The future gen project was 
probably going to go to one of the bigger states. We saw that 
going in that it was probably going to arrive in Texas or 
Illinois.
    Kind of the way it works is the more Congress people you 
have the more power you have. I do not know how all the math 
works back here, but since we have one Congressman, and you met 
him--he is a nice guy--but we have one. That is a $1 billion 
project, future gen. Now let us just do a little math here. 
When the price of oil went from $30 to $60 a barrel and we are 
importing 4 billion barrels, we are sending $120 billion out of 
this country every year that goes to dictator's pockets, and we 
are going to spend $1 billion for research and development to 
develop clean coal technology? I think we are about 10 times or 
20 times off here.
    Coal will not be the energy source of the future until we 
get carbon sequestration correct, and at the pace that we are 
going, it will be 30 years.
    Mr. Inslee. Well, you would have been happy talking to 
Secretary Bodman the other day. In a hearing, we pointed out 
that our energy R&D total has gone down 65 percent since 1979 
while healthcare has gone up by a factor of 5 and R&D in 
defense has gone up by a factor in 20. So we have to seriously 
ramp up our R&D.
    I want to ask you about coal to liquids, separate issue, 
and I think it is important to keep them separate when we are 
thinking about them. Clear energy independence benefits because 
it is our energy and it is domestic, but I want to ask you 
about the carbon benefits, the COD benefits, if any.
    Now what I have been told--I have been trying to check this 
out--that you can do some COT sequestration during the process 
of the coal-to-the-liquid transformation, but when you burn the 
gas, you do release CO2, and the best information I 
can get, there was a DOD study that showed a net 2 to 12 
percent reduction in the cycle compared to a gallon of gasoline 
if you will. Do you have any information on that that you can 
share with us?
    Governor Schweitzer. Well, just very quick. The coal-to-
liquefaction process starts with a big old thermos jug. Think 
of one that is 30 feet in diameter and 130 feet high. Dump 30 
ton of coal in it. Screw the cap back on it. Give it a little 
heat. At high temperature and high pressure, natural gas comes 
off of the coal.
    Once you have the natural gas, you can either generate 
electricity or ship it to somebody's home like they are doing 
in Beulah, North Dakota, right now. But if you want to liquify 
it, you pump it back into another reactive chamber. You use a 
catalyst like cobalt or iron ore that splits the carbons from 
the hydrogens. You pump a little oxygen in, and then you can 
put those together like building blocks, make fertilizer, 
diesel, aviation fuel, whatever you would like.
    The carbon balance of a coal to liquid once you have the 
liquid and diesel or an aviation fuel is about the same. You 
burn the liquid fuel. It does not have sulfur in it. It is zero 
sulfur and no aromatics. It is a cleaner fuel that comes from 
coal, but it will produce the same amount of carbon dioxide as 
if you were using a petroleum product.
    The sequestration starts at the gasifier. When you gasify 
and you get the methane gas on one side, you have another 
stream of carbon dioxide as a gas. That is the stream that you 
pump back into the earth. If you do not pump the carbon dioxide 
back into the earth, if you do not sequester it, the coal 
liquefaction process will create almost three times as much 
carbon dioxide as you would in the petroleum business.
    Mr. Inslee. So if we get to a process where we can use a 
gas from a coal-to-liquid system in a car, for instance, is it 
fair to say that the same tankful of a gas produced from that 
system is going to be about the same CO2 emissions 
as regular old gasoline? Is that a fair statement?
    Governor Schweitzer. Yes, it is except for along the 
process of converting coal to that liquid fuel, there is a 
place where you get pure hydrogen in that stream. We do not 
even have to make liquid fuels because coal will make pure 
hydrogen and you can pump all of the carbon back into the 
earth, and once we get the hydrogen technology working so that 
the car does not cost a million dollars--I have driven one of 
those cars.
    It goes from about 0 to 60 in about 10 seconds, and it has 
got a tank in the trunk that would blow up the whole city if 
you are not careful, but once we get the technology down, we do 
not even have to go to a liquid fuel. We can go directly from 
coal to hydrogen fuels. And once again, we have so much coal in 
this country that we could produce all of our energy needs for 
centuries if we sequester the carbon dioxide.
    Mr. Inslee. Great. Thank you.
    The Chairman. The gentleman from New Mexico, Mr. Pearce.
    Mr. Pearce. Thank you, Mr. Chairman. It is an interesting 
discussion. I appreciate the hearing, both panels. I was just 
writing a couple scattered notes, and I wonder if the corollary 
we have heard, the theorem, do not built it and they will come, 
I wonder if the corollary is true, build it and they will 
leave. If that is the case, Washington is going to be empty 
next week. We will find all the population leaving out of here, 
and do not build it and they will come in New Mexico--and I 
think we are in the west--we do not have a lot of industry 
except oil and gas and mining, timber and ranching, and when 
the price of oil fell to $6 people left, and when the price 
went back up, people came back, and at the end of the day, 
people need a paycheck.
    Now I was hearing the testimony that actually the mines are 
dying and yet the copper mine--I hold a piece of copper here. 
In fact, Mr. Chairman, if you want, I will pass this around. It 
is only about 75 pounds. Everybody could take a look at it. 
Copper mines are back to hiring because there is a market. 
There is a market for stuff like this, 243 pounds of this stuff 
in every house.
    If Americans are going to change their consumption patterns 
and we do not need that stuff, that would be fine, but the 
consumption pattern is not changing, which means either we 
export the jobs, we send them out, we outsource them to other 
countries or we need to find someplace in America where these 
things come up.
    Congressman, I appreciate your service. I was listening, 
and you said that there is an attempt to lease up the west. 
Were you aware that we had testimony yesterday that the Bush 
Administration has actually leased 63 percent pure leases? I 
have been on the Bush Administration constantly because 
President Clinton had more APPDs, application for permits to 
drill. So would you like to comment on the fact that the 
Clinton Administration actually was leasing more and providing 
more applications for permits to drill? It is more restrictive 
under the Bush Administration.
    Mr. Williams. Thank you, Congressman. First, I do not 
suggest any of those things with regard to your example was 
copper. I came of age----
    Mr. Pearce. No, I was asking about the leases, the oil 
leases. You were saying the Bush Administration is trying to 
lease the west.
    Mr. Williams. I understand that, but I just wanted to 
respond quickly to your first minute or so in which you were 
asking about my statement that the mantra in the west might be 
do not built it and they will come. That is not to suggest, as 
I said following that statement, that there cannot be 
development in the west. There can. I grew up in an old copper 
mining town, one of the great old copper mining camps that has 
simply refused to die.
    Mr. Pearce. Mr. Chairman, if I could reclaim my time. I had 
a question, but I will go to the next----
    Mr. Williams. Well, I would be glad to answer the question.
    Mr. Pearce. Thank you, sir.
    Mr. Williams. The Clinton----
    Mr. Pearce. Governor, I would suggest that when I look at 
your testimony and you are talking about the coal mines, you 
really are strongly on behalf of coal, but when I look at the 
state's record on the oil and gas production that you have 
chosen to do it differently, which is fine, but now how are you 
going to get the approval to do these mines which are 
intricately more invasive?
    In other words, I am not seeing the congruity here. The 
mines are very invasive and you--the state, not you--the state 
is taking a position that we cannot do the production in the 
old way and restricting, and that is fine. That is a choice 
that states have, and I support choice of any state. But I am 
not seeing the congruity. Can you address that a little bit?
    Governor Schweitzer. So the question is, how will we 
develop coal without being invasive on the landscape? The 
beauty of coal is that you have a large quantity of BTUs that 
are concentrated in a very small area. As you know, in New 
Mexico, you have a big open pit coal mine, and I could get in a 
little plane and fly across New Mexico, north and south and 
east and west and east and west and then north and south again 
looking for that dang coal mine, and I would not be able to 
find it because it just does not jump out and grab you. It only 
occupies one-one hundredth of one percent of all of New Mexico, 
yet it is one of the largest coal mines in America.
    We will have half a dozen coal mines that are operating in 
Montana like they do in Wyoming, and once we remove the coal, 
we will reclaim the landscape. We will put it back to the 
native vegetation, and there will be antelope on it in the next 
10 years.
    Mr. Pearce. There are people who do not even want you to 
put the hole in the dirt. I mean, you just have to be honest 
with the situation. There are people who are going to file 
lawsuits beyond belief. We are running into the same problem 
with shale right now. There is 8 billion gallons or barrels of 
shale, but no one wants to get it out, and that is a huge 
problem for you to overcome. I just wondered if you have 
addressed that question.
    Governor Schweitzer. Well, people who show up and complain 
about ideas for energy production, I always ask them, how did 
you get here? Did you walk? Where are you living? Naked in the 
tree eating nuts? I mean, if you are using energy, you have a 
responsibility for solutions, conservation and production. I am 
simply saying that we can produce this energy in a cleaner way 
than we have in the past. I do not think there is anybody in 
this room that would disagree with me that we have made 
mistakes in the past, and we will do it better in the future.
    Mr. Pearce. I support you 100 percent. I think we should 
liquify coal and use it tomorrow, but I think we have a long 
road ahead of us. Thank you, Mr. Chairman.
    The Chairman. The Chair recognizes the gentlelady from 
California, Ms. Napolitano.
    Ms. Napolitano. Thank you, Mr. Chair, and I am sitting here 
just enjoying these gentlemen's testimony, the two witnesses, 
and I applaud you both for taking such a great interest in this 
Committee's work. We need your input. We need your ability to 
shed light on some of those issues that to some of us--I am a 
Californian born in Texas--have understood a long time that we 
can work both ways. We can be able to look for the solutions 
for oil production, for energy production and still maintain 
with help from everybody the environment.
    And I think that the more we look at it from that vantage 
point and work on both sides of it I think the better off our 
people are going to be. Specifically, I am interested in the 
American Indian, the Native American's plight, because they 
have been before this Committee before, and it is unfortunate 
that we do not pay as much attention. The Bureau of Indian 
Affairs' role in it is very questionable in my mind.
    My biggest concern is water simply because, as you have 
stated, the depletion of the aquifers, the status of some of 
those rivers and reservoirs is alarming, and we are not looking 
at how we are leaving clean water options to our future, to our 
children and grandchildren and their grandchildren. I, like the 
Indians, am looking at it from a standpoint of seven 
generations. I would hope that we all would take a lesson from 
them and be more cognizant of our role in maintaining that 
status.
    My question to both of you is: What do you see? What would 
you recommend us here in this Committee to have a focus on that 
would allow us to be better prepared to work on the issues that 
will help the states--and I am talking about the leadership in 
the states--be able to recommend? Make us understand or allow 
us to understand what steps need to be taken to protect the 
future of those areas, those pristine areas and those very 
beautiful areas that we all now enjoy. I know it is very vague, 
but I think you get my message.
    Mr. Williams. Thanks. Well, first by recognizing that the 
west has never been more prosperous than it is today, and it is 
due to two things: The diversity of our economy, which is a 
matter of transition--we never had a diverse economy before--
and second, those footloose jobs I mentioned where people now 
are flowing into the west. In some places, they are flooding 
into the west, and they are living near the natural amenities. 
So, if you want to protect our economy, help us protect the 
natural beauty of the landscape. All westerners that live near 
that natural beauty absolutely, copper riveted, ironclad want 
it protected. That is why they move there. So help us with 
that.
    The other thing that I hope you and the Chairman and others 
and the Ranking Member will do is continue, as the Chairman 
said publicly he intends to, these hearings about the evolving 
west and come west with one, two, three of these hearings. Come 
out into the states, your state as well as the state of the 
Rocky Mountains, and listen to a wide variety of people on both 
sides of these issues so that you are better able to apply the 
solutions that we need.
    It does seem to me that a good many people in the Congress 
have simply missed the west's enormous significant transition 
over the past decade and a half to two decades, and if you do 
not understand it, you do not know how to apply assistance to 
it.
    Ms. Napolitano. Well, I intend to do that in my 
subcommittee of which I am chair on water, but that is a great 
idea. Governor?
    Governor Schweitzer. As I mentioned earlier, the snow melt 
from the Rocky Mountains in Montana flows to 27 other states. 
Seventy percent of the water that flows in the Missouri River 
system came from Montana. Fifty percent of the water stored in 
the Columbia system came from Montana. The number one thing you 
can do is do not sell your watershed. Do not sell the land. 
Part of our responsibility to the rest of this country is to be 
the clean watershed in a renewable way, the same way it has for 
10,000 years. Do not sell your watershed.
    The second thing that you need to be made abreast of is 
that we will have fires, and we will have more fires in 
Montana. Ten of the 11 warmest years recorded in the last 150 
years have been during the last 11 years. We have insects that 
are eating specific species of trees because it is not cold 
enough in March to kill the larvae, and so since we do not kill 
the larvae and they are multiplying in large numbers, we have a 
lot of our forests in Montana and British Columbia that are 
dying.
    What is going to happen is we are going to trend to a 
different species of tree, but it will burn first, and when it 
burns, it is going to create more carbon in the atmosphere, but 
more importantly, it is going to create problems in the 
watershed because those trees are the filter system. So be 
cognizant that we need to work on healthy forests, and be 
cognizant that we will be your watershed. Do not sell it. It is 
a bad idea. Thank you.
    The Chairman. The gentleman from Idaho, Mr. Sali.
    Mr. Sali. Thank you, Mr. Chairman. Mr. Williams, I am 
trying to interpret your message to this Committee. On the one 
hand, I hear you talking about this new west that does not seem 
to need extractive industry, and I heard you criticize the 
extractive industries here today. Are you saying that there 
should be no more extraction of timber or minerals or oil or 
gas?
    Mr. Williams. Well, if you think you heard me criticize the 
extractive industry, then my words were not properly definitive 
or eloquent because I was not trying to criticize the 
extractive industry. In my old hometown of Butte, we mine 
almost as much copper as we did when I was a boy. When I was a 
boy, we had 15,000 miners doing it. Today we have 300.
    Timber and mining together in Montana hired 2 percent of 
the jobs that are hired in the state. It is not that they are 
not important. It is that they are not relatively as important 
as they were. Should they continue to be in the west? Of 
course, because it is where the resources are.
    Mr. Sali. So would you agree that we ought to continue 
extractive activities and their work in western states in the 
future?
    Mr. Williams. Sure, as long as those extractive industries 
realize they are in an evolving west. They are in a west that 
is more diverse than it was and relies upon an amenities 
economy. Now a lot of them get that, and a lot of the people 
that come to see Brian Schweitzer in his office, industry 
people, start out by saying to him and saying to me when they 
come to see me we get it now.
    Mr. Sali. You have answered my question.
    Mr. Williams. I am glad.
    Mr. Sali. Governor, I am struck with the notion that 
somehow drilling for methane is going to create problems for 
grouse but that you want to work to use coal as a new energy. 
What kind of environmental problems will the coal development 
cause that would be relative to this grouse problem for methane 
drilling?
    Governor Schweitzer. Just so we understand what is 
happening with the sage grouse, the sage grouse lives in a 
pretty widespread area. As you know, low precipitation where 
sage is the predominant species. When you develop coal bed 
methane, you drill to a coal seam and pump the water to the 
surface. Then you pump that water out into ponds to evaporate 
or to move to another drainage in some way.
    The sage grouse has a very low tolerance for West Nile. As 
soon as West Nile showed up in Montana, we noticed right away 
that the sage grouse populations were going down. Now Fish 
Wildlife have determined that these standing ponds have created 
big mosquito populations that are spreading this West Nile to 
these sage grouse. Remember, they lived on a terrain where 
there was not much water earlier on.
    Mr. Sali. Your testimony is there is no corresponding 
environmental issue with coal development?
    Governor Schweitzer. There certainly is, but as I suggested 
in New Mexico, I could fly over New Mexico for days before I 
could find that big coal mine, but you do not have to fly very 
long in the Powder River Basin of Montana and Wyoming to look 
down and see a coal bed methane well on every 20 acres.
    Mr. Sali. Well, I am trying to understand the distinction 
you are drawing between development of methane as an energy 
source versus development of coal as an energy source. You are 
saying one is good and one is bad, but you are saying that 
there are environmental issues with both. I mean, how can we 
distinguish which one is better than the other?
    Governor Schweitzer. Fortunately, I did not say one is good 
and one is bad. I like both because they are developing energy 
resources. Coal bed methane presents significant challenges 
because as you pump this salty water to the surface, it ends up 
in the Tongue and the Powder River, and then we have irrigators 
that have to use that water. I think that we can develop that 
natural gas from those coal seams and not put ranchers out of 
business. That is the concern we have.
    Mr. Sali. So your message to the Committee is that we do 
need to continue extractive industries into the future. We just 
need to do it responsibly.
    Governor Schweitzer. Giddyup. You bet.
    Mr. Sali. And, Mr. Williams, you would agree with that 
statement as well?
    Mr. Williams. Sure.
    Mr. Sali. Thank you.
    Mr. Williams. And that responsibility has been lacking.
    Mr. Sali. Mr. Chairman, I have a copy of a letter from my 
predecessor, Butch Otter, who is now the Governor of Idaho. I 
believe you have a copy of that. I would ask unanimous consent 
that it be entered into the record for the hearing today.
    The Chairman. Without objection, so ordered.
    Mr. Sali. Thank you.
    The Chairman. The Chair recognizes the gentlelady from 
South Dakota, Ms. Herseth.
    Ms. Herseth. Well, thank you, Chairman Rahall and Ranking 
Member Bishop for convening this engaging hearing on the 
evolving west. Now, though the State of South Dakota is just 
adjacent to the Census Bureau's definition of the west, we do 
border Montana, as the good Governor mentioned, and Wyoming, 
and we deal with a lot of the same issues, particularly in the 
western part of South Dakota.
    The state is home to nine sovereign tribes, 1.2 million 
acres of national forest, and a series of Federal dams up and 
down the Missouri River which are certainly affected by the 
snowpack up in Montana. So I appreciate the Committee's focus 
on all of the issues being raised today.
    I am particularly interested in the tribal component of the 
evolving west and pleased to see that in the next panel we will 
be hearing from two witnesses who represent two different 
sovereign tribal nations. I also know that Governor Schweitzer 
is privileged to represent and serve tribes in the great State 
of Montana. I appreciated the former Congressman's words in 
reminding us about our stewardship here on this Committee based 
on treaty obligations and other constitutional issues as well 
for sovereign nations without our states' borders.
    I am interested, Governor, on what sorts of opportunities 
you have pursued in your tenure, other opportunities that you 
see in working with tribal governments as partners to seize 
some of the opportunities to overcome some of the challenges 
facing the evolving west? A couple of times in your testimony 
you talked about the reason so many are attracted to Montana is 
because of safe communities, but in many of the reservation 
communities that I represent, safe communities are oftentimes 
hard to come by.
    And one of the biggest issues that I hear in addition to 
healthcare, in addition to housing, infrastructure development, 
is the issue of law enforcement. If you could comment. I think 
it is so important, especially those who serve as our Governors 
in addition to this Committee's responsibility of oversight and 
helping further economic development that if we are dealing 
with evolving economies how can we ignore tribes? How can we 
not seek to develop partnerships without asking them to seed 
their sovereignty and to give up elements of that? So I would 
be interested in your thoughts and perhaps Congressman 
Williams' as well.
    Governor Schweitzer. As you know, our Indian nations were 
formed in Montana before we were even a territory. This body 
formed those Indian nations, and there are jurisdictional 
issues in terms of law enforcement. The greatest beginning is 
mutual respect and trust.
    So we have negotiations, ongoing negotiations, with 
individual tribal councils as to jurisdictional issues. Some 
places highway patrols have X authority. Other places they have 
Y. Some places county sheriffs can do Q. Some places they can 
do T. But let us understand these are individual nations, and 
when we negotiate, we negotiate as an individual nation, not as 
a blanket discussion, because again, they were on the landscape 
well before us, and they have a jurisdiction that supersedes 
even the State of Montana.
    Ms. Herseth. I appreciate that, but if you could talk about 
some of what you are doing and you see in terms of partnerships 
economically, understanding that we need vast more oversight 
here as it relates to the BIA's obligation on the law 
enforcement side. But are you hearing from some of the tribal 
councils that you consult with regularly each one again 
represent a sovereign nation? Is law enforcement becoming one 
of the main priorities for tribes in Montana?
    Governor Schweitzer. Absolutely, and the greatest problem 
we have is methamphetamine on our Indian nations. It is 
exploding all across the rural areas, in particular on our 
reservations. So we are building a corrections system that 
actually treats drug addicts and not just warehouse them. We 
are asking elders in Indian country to help us develop 
culturally appropriate corrections systems so that we are 
treating the underlying drug addiction, alcohol addiction and 
mental illnesses. We cannot afford to just warehouse people. It 
is destroying communities, and it is destroying our correction 
budgets.
    I simply would say regarding development of the economy in 
Indian country that we have some great opportunities. High 
unemployment, 50 percent, and young age. The youngest 
population in Montana is on our Indian reservations, and like 
the Irish miracle, when Ireland grew while the rest of Europe 
was shrinking, they recognized that a young population has 
assets. Young people can learn things very quickly. You are not 
retraining adults.
    So we are trying to attract technology companies to come to 
Indian reservations. We are putting money in our tribal 
colleges, and we are saying to these companies we will train 
this young population for your emerging jobs, and then we give 
them incentives to locate on Indian reservations.
    Ms. Herseth. Thank you.
    Mr. Williams. Congresswoman, you might consider this. 
Reservations are the only communities in America where the 
local police are the FBI. Now some of them have local police 
forces, but violations on a reservation are a Federal offense 
and the FBI moves in. It is a law enforcement system that is 
dislocated.
    Ms. Herseth. Thank you, Chairman. Just one final comment if 
I might. I worked for the Federal District Court in the Central 
Division in South Dakota and know precisely of I think what you 
are alluding to there in terms of the problems when the local 
law enforcement is displaced and FBI investigations go on with 
again very little oversight. Thank you.
    The Chairman. The Chair thanks the gentlelady from South 
Dakota for her superb questions. Our responsibilities to our 
Native Americans is something this Committee takes very 
seriously. I know that you, Pat, had spoken quite a bit in your 
original testimony this morning about the Indian country, and 
that is going to be, as I say, at the top of our agenda in the 
next several weeks and months. So I appreciate very much the 
gentlelady's questions.
    I did have one final question, but before doing that, let 
me move the gentleman from New Mexico, and then we have another 
round.
    Mr. Pearce. Sure. I have one quick comment, Mr. Chairman, 
and then a unanimous consent request, but, Governor, in oil and 
gas, we are producing in New Mexico about one barrel of oil and 
20 of water. So I submitted legislation that will begin to 
clean that water up. In my hometown, we make a million barrels 
a day. That is 42 million gallons a day of salt water that 
needs to be cleaned up, but we are right now by regulation 
forced to put that water back in the ground, and it is cheap 
water. It is available. Clean it up, and it is available for 
all the things you are talking about.
    It is one of the things I think we should talk about, Mr. 
Chairman, and then I request unanimous consent to put these 
documents in that talk about the sources of energy in the west. 
Thank you, Mr. Chairman.
    The Chairman. Without objection, so ordered. Does the panel 
wish to respond? You are perfectly entitled to.
    Governor Schweitzer. Well, as those of you from the west 
know, there are very few planes that can actually get me home 
today, and the one that can get me home is leaving real soon. 
So I am about done here. Thank you very much.
    The Chairman. The Chair would recognize the gentleman from 
California, Mr. Costa.
    Mr. Costa. Thank you very much, Mr. Chairman. I appreciate 
the hearing. I appreciate the focus for all the right reasons 
this Committee and you are focusing on today for the west. 
Governor, because I have heard you speak before passionately as 
it related to the potential for coal to play an important role 
in reducing our dependency, and as you know, we are trying to 
put together a bipartisan package here to reduce our dependency 
on foreign sources of energy.
    I just saw an article--you may have seen it--February 20 in 
The New York Times talking about cleaner coal attracting some 
doubts, and they were talking about it is not being clear which 
technology that is best suited for goal gasification combined 
with cycle or pulverized coal that would allow for the easiest 
carbon capture because a lot of engineering still has to be 
done.
    Now there is no doubt, as you have said passionately about 
going back to World War II, the application of this energy 
source. However, we have, as you know, in California, 
especially the Central Valley where I am coming from, a 
significant CO2 problem, and so I would like to get 
your thoughts as it relates to the emerging technologies and 
where you think we are on that.
    Governor Schweitzer. Well, you mentioned integrated gas 
combined cycle for electricity production. That is actually the 
easiest one to sequester the carbon dioxide to split the 
CO2 off and pump it back into the earth. The carbon 
balance is better in producing electricity with coal than it is 
in producing liquid fuels.
    So, as we move forward and we move toward electric cars, 
coal is now 50 percent of the electrical portfolio in this 
country. It is likely to continue in those numbers for the 
foreseeable future. We can produce integrated gas combined 
cycle electricity, sequester the carbon dioxide, and be a 
source of electricity for Central Valley in California.
    Mr. Costa. Cost effectively?
    Governor Schweitzer. Yes, I think so. It will add about 25 
percent of the cost of producing electricity over polarized 
coal, but if we do go to a cap and trade system, it is going to 
be cheaper over the long haul than putting carbon dioxide into 
the atmosphere.
    That is why I asked this Committee to take a lead in a 
national cap and trade system so we are not vulcanized. 
California announced that they with Washington and Oregon and 
California and Arizona and New Mexico were going to their own 
cap and trade system. It makes it difficult for those of us who 
actually provide electrons for Washington, Oregon and 
California to determine where we will be in the future vis-a-
vis your supplier.
    Mr. Costa. I met with your colleague, our Governor, 
yesterday, and of course as you probably know in conversations 
with him that their whole focus is not choosing the energy 
source or the technology. They are going right now for 
diversification that will reduce CO2 levels, and 
they will let the marketplace and the technology determine 
which is the better fuels, what is the better technology, and 
so, I mean, it was with that--I am of course leading you on 
this point--but I do believe that coal is a part of our future, 
and I am concerned about the applications of the technology.
    Governor Schweitzer. It will not be the energy of the 
future unless we are able to sequester carbon dioxide and make 
sure that we are not putting mercury and sulfur in the 
atmosphere. If we can produce ultra clean coal technology, 
sequester the carbon dioxide, coal will be a significant part 
of the energy portfolio for the next 30 years. If not, it will 
have a diminishing role.
    Mr. Costa. Which of the leading academic institutions in 
the country are the other research that is taking place 
currently that you would reference as to in which we are moving 
in that direction?
    Governor Schweitzer. Princeton University is taking a lead 
in carbon sequestration. Columbia University, Montana State 
University and the Big Sky Sequestration Project are taking a 
lead in developing this technology to sequester carbon dioxide.
    Mr. Costa. Do you have any guess or approximation how far 
away we are you think?
    Governor Schweitzer. Well, we are already doing it.
    Mr. Costa. No. I mean in achieving the goals.
    Governor Schweitzer. I guess that is really up to Congress. 
We do have the technology now to begin sequestering coal. I 
listened to Dr. Solkalhoff from Princeton University testify 
before the Senate yesterday, and he said that he believes with 
very high certainty that all the carbon dioxide that we are 
putting in the atmosphere in this country today from pulverized 
coal could be stored underground, and he is a leading 
authority.
    Mr. Costa. Thank you, Governor, for your passion and your 
efforts.
    Governor Schweitzer. You are welcome. Thank you.
    The Chairman. Governor Schweitzer, our former colleague Pat 
Williams, thank you both very much. We deeply appreciate it.
    The Committee is ready to move on to our next panel, and I 
would ask the members to come forward. Mr. Clifford Lyle 
Marshall, the Chairman, Hoopa Valley Tribe; Matthew Box, Vice-
Chairman, Southern Ute Indian Tribe; Luther Propst, Executive 
Director, Sonoran Institute; Russell C. Vaagen, the Vice-
President, Vaagen Brother's Lumber, Inc.; Robert G. Lee, Ph.D. 
Professor, Sociology of Natural Resources, University of 
Washington.
    Gentlemen, we welcome you to the Committee on Natural 
Resources. We have your prepared testimony. Without objection, 
each will be made a part of the record, and you may proceed as 
you wish, each recognized for five minutes. If you want to go 
in the order I introduced you, fine.

             STATEMENT OF CLIFFORD LYLE MARSHALL, 
                  CHAIRMAN, HOOPA VALLEY TRIBE

    Mr. Marshall. Thank you, Mr. Chairman.
    The Chairman. OK. Now the door is shut.
    Mr. Marshall. Thank you, Mr. Chairman, members of the 
Committee. Thank you for this opportunity to testify today 
about Indian country and the evolving west. I am Clifford Lyle 
Marshall, Chairman of the Hoopa Valley Tribe. The Hoopa Valley 
Tribe Indian Reservation is the largest reservation in 
California consisting of 144 square miles. Over 95 percent of 
the reservation is still held in trust, and over 90 percent of 
that land is designated timber land.
    The Hoopa Valley Tribe is a self-governance tribe pursuant 
to the Indian Self-Governance Act of 1988, an amendment to the 
Indian Self-Determination Act. Being a self-governance tribe is 
something the tribe takes very seriously. It is in fact how we 
define sovereignty. The tribe governs itself. It governs as a 
municipality, and it manages lands and natural resources as any 
other regulatory agency does.
    The tribe has a public utilities district that provides 
water to our community. We have education programs, social 
services programs, a hospital, a dental clinic, the only 
ambulance service and emergency room within 70 miles of the 
reservation. We have a law enforcement program and a civil 
court. We have both wild land and volunteer fire departments to 
protect our lands and our homes from fire, and we have an 
environmental protection program, a forestry program, and a 
fisheries program to protect and manage our natural resources.
    The Hoopa Valley Tribe has compacted resources management 
from the Bureau of Indian Affairs, and we manage our forest 
lands under a 10-year forest management plan approved by the 
Bureau of Indian Affairs that exceeds environmental standards 
required by Federal law. This plan has allowed our timber to be 
smart with certified meaning that the certification allows 
lumber products produced from our timber to be exportable to 
Europe.
    The forest management plan has been extended through 2008, 
and we are in the process of evaluating and updating the plan. 
What we have strived for in timber harvest plans is balance 
between the need to generate revenues to fund government and 
other programs and maintain an employment base and the need to 
protect our cultural areas for gathering of traditional foods, 
basket weaving materials, firewood, to protect our spawning 
streams from erosion and sediment for fisheries. We also manage 
our timber lands to protect those places that our people deem 
spiritual and sacred.
    Managing our timber lands of course has a considerable 
cost. Indian tribes are essentially Federal contractors 
performing activities previously conducted by Federal 
employees. These contracts, however, do not provide for 
benefits that would otherwise be provided to the Federal 
employee were the BIA still performing these trust functions. 
Employee benefits of Federal employees such as worker's 
compensation and healthcare policies are more expensive to 
tribal employees who must purchase small group policies.
    To reduce these costs, we ask that Congress allow tribes 
that are compacting to perform these trust functions be allowed 
to purchase insurance through the Federal Insurance Program. 
Coverage by the Federal Employment Compensation Act and Federal 
Employees' Health Benefits Contracts can be extended to tribal 
contracts without cost to the Federal government. Federal 
health insurance policies covering millions of workers are 
negotiated by the Office of Personnel Management with private 
carriers. Cost are paid by the employees and the agencies.
    Permitting tribes to participate in those large, negotiated 
contracts will have a de minimis effect on the Federal 
insurance group size and characteristics. The tribes and tribal 
employees will pay for the cost of coverage. The Northwest 
Portland Area Indian Health Board and various Indian tribes 
participating in the self-governance program support permitting 
tribes to participate in these Federal benefit programs.
    An integral part of forestry management and forest 
protection is forestry protection from fire and theft. Hoopa 
created its own wild land fire protection program, the largest 
and most developed tribal program in California and possibly 
the nation. Our tribal firefighters meet the same qualification 
requirements of the United States Forest Service and California 
Division of Forestry.
    The lands adjacent to our eastern border were recently 
change to wilderness. I raise this today because of concerns 
regarding catastrophic fire. Last year, two fires on our 
eastern border each grew to 100,000 acres. Six years ago, a 
100,000-acre fire breached our border and was stopped by 
backfires ignited on our reservation, causing significant loss 
to plantation. Nature is a messy place. Nature cleans up its 
messes well through fire. Fire, however, is indiscriminate when 
it reaches a boundary.
    Prior to the designation of this area as wilderness, the 
Hoopa Valley Tribe was working with the Six Rivers National 
Forest on a stewardship agreement that would have allowed for 
manual release of these flammable fuels. We would like to 
address these concerns through such an agreement that would 
allow us to manually remove understory brush and downed timber 
and hardwoods for fire protection in the newly designated 
section of the Trinity Wilderness and Six Rivers National 
Forest.
    Our law enforcement program includes a resource protection 
component that is not eligible for Department of Justice 
funding because Hoopa is a Public Law 280 state. Without tribal 
law enforcement, there is no protection of our timber resources 
from theft or trespass. We ask that the law be amended to allow 
for application of funding for law enforcement funding in 
California.
    Hoopa's second major resource program is its fisheries 
program. This is not an income generator for the tribe, but 
protection of salmon, steelhead, sturgeon and lamprey has 
significant social, cultural, and economic significance to our 
people. These anadromous species have given sustenance to the 
Hoopa people since the beginning of time. They supplement our 
otherwise unhealthy diet and reduce our cost of living. Hoopa 
Valley Tribe is committed to advocating for, defending, 
protecting, and restoring the fishery of the Trinity and 
Klamath Rivers Basins.
    The Klamath and Trinity Rivers constitute the third largest 
producer of wild salmon on the west coast, but the system is 
under extreme stress, and its production has dropped to the 
lowest in recorded history. Restoration programs for both 
rivers need to be implemented and funded immediately. The Hoopa 
Valley Tribe strongly supports the removal of the four dams in 
the lower Klamath River and restore fishery habitat and access 
for salmon to the upper Klamath Basin. Thank you for your time, 
and if you have any questions, I would be happy to answer them.
    [The prepared statement of Mr. Marshall follows:]

                 Statement of Clifford Lyle Marshall, 
                      Chairman, Hoopa Valley Tribe

    Mr. Chairman, Members of the Committee,
    Thank you for this opportunity to testify today about Indian 
Country in the evolving West. I am Clifford Lyle Marshall, Chairman of 
the Hoopa Valley Tribe. The Hoopa Valley Indian Reservation is the 
largest reservation in California, comprised of 144 square miles. Over 
ninety five percent (95%) of the reservation is trust land and over 
ninety percent (90%) is designated timberland. The Hoopa Valley Tribe 
is a Self-Governance Tribe pursuant to the Self-Governance Act of 1988, 
an amendment to the Indian Self Determination Act of 1975, Public Law 
93-638. The Hoopa Tribe was one among the first tier of Self-Governance 
Tribes and was the first to have its compact signed in 1990. Before 
1988, the Hoopa Tribe had contracted most BIA programs under 93-638. 
Through Self-Governance, the Tribe has assumed management authority 
over all federal programs. Currently the Tribe manages fifty-three (53) 
programs.
    Being a Self-Governance Tribe is something that the Hoopa Tribe 
takes very seriously, it is in fact how we define sovereignty. The 
tribe governs itself; it governs as any municipality governs, and it 
manages its lands and natural resources as any other regulatory agency 
does. The Tribe has a public utilities district that provides water to 
our community through a reservation wide water system. We have 
education and social services programs and an Indian Health Service 
clinic to address our community's social needs. Hoopa was the first to 
compact health care with Indian Health Service in California and now 
has a hospital, a dental clinic and the only ambulance service and 
emergency room within 70 miles of the reservation. We have a law 
enforcement program to protect persons and property, a civil court to 
provide legal remedy to our citizens and to protect our children and 
elders from neglect.
    We have fire departments to protect our lands and our homes from 
fire. And we have a realty program, an environmental protection 
program, a forestry program and a fisheries program to protect and 
manage our natural resources. The Tribe has compacted realty from the 
Bureau of Indian Affairs (BIA) Regional office. Through tribal 
ordinances the Tribe assigns land to tribal members for housing, 
agriculture, and grazing.
    We have compacted resource management from the BIA and manage our 
forest lands under a ten-year forest management plan approved by the 
BIA that exceeds environmental standards required by federal law. This 
plan has allowed our timber to be ``Smart Wood'' certified, a 
certification that allows lumber products produced from our timber to 
be exportable to Europe. This is a ten-year plan, which has been 
extended through 2008. We are in the process of evaluating and updating 
the plan and expect it to be renewed at the end of next year. What we 
have strived for in timber harvest plans is balance between the need to 
generate revenues to fund government and other programs and maintain an 
employment base, and the need to protect our cultural areas for 
gathering of traditional foods, basket weaving materials, and firewood, 
to protect spawning streams from erosion and sediment for anadromous 
fisheries such as salmon, steelhead trout, sturgeon, and Pacific 
lamprey. We also manage our timberlands to protect those places our 
people deem spiritual and sacred.
    Balance is a concept that we stress in resource management. For 
nearly thirty years, beginning in the 1950's, the BIA sold 40 million 
board feet of timber per year from tribal timberlands. This over 
harvesting by clear cutting devastated our timberlands, and caused 
massive erosion that choked our tributary streams used for spawning by 
anadromous fisheries. Today our annual harvest is less than ten million 
board feet per year which is considered the ``sustainable yield'' for 
maintaining timber as a renewable resource. Balance was something that 
did not exist before the Tribe took over timber management.
    The Tribe's forestry program must comply with all federal laws and 
regulations that protect endangered species that live in our mountains 
and streams. We have a number of wildlife monitoring programs to 
protect species that are endangered, like the fisher and the peregrine 
falcon, and for other species that are not necessarily endangered such 
as the black bear, deer, and the pileated woodpecker. Our culture 
obligates us to protect all wildlife. We have our own nursery to grow 
trees for replanting. Hoopa has its own Tribal Environmental Protection 
Agency (TEPA) that ensures that our resource management programs 
perform in compliance with Federal EPA regulations. TEPA is also 
responsible for enforcement of the Tribes solid waste ordinance.
    Managing our timberlands has a considerable cost. Indian tribes are 
essentially federal contractors performing activities previously 
conducted by federal employees. These contracts, however, do not 
provide for benefits that would otherwise be provided to the federal 
employee were the BIA still performing these trust functions. Employee 
benefits of federal employees, such as workers compensation and health 
care policies, are more expensive to tribal employees who must purchase 
small group policies.
    We ask that Congress allow tribes which are compacting to perform 
trust functions be allowed to purchase insurance through the federal 
insurance program. Coverage by the Federal Employment Compensation Act 
(``FECA'') and Federal Employees Health Benefits contracts can be 
extended to tribal contractors without cost to the federal government. 
Federal health insurance policies, covering millions of workers, are 
negotiated by the Office of Personnel Management with private carriers. 
Costs are paid by the employees and the agencies. Permitting tribes to 
participate in those large negotiated contracts will have a de minimis 
effect on the federal insurance group size and characteristics. Tribes 
and tribal employees will pay the costs of coverage.
    Injured employees' FECA benefits costs are charged back to federal 
agencies in the following fiscal year. Such costs can also be charged 
back to tribal employers if FECA covers tribal employees. Tribal 
employees are already covered by the Federal Tort Claim Act when 
carrying out the Indian Self Determination Act, Pub. L. 93-638. The 
Northwest Portland Area Indian Health Board and various Indian tribes 
participating in the self-governance project support permitting tribes 
to participate in these federal benefit programs.
    The Tribe also owns and operates its own logging company creating 
seasonal employment and additional revenue from annual timber harvests. 
Here again we work to create balance. We have been very successful at 
protecting the environment, less successful, perhaps, at laying out 
profitable timber sales for our logging company as of late. This is 
because the Hoopa Reservation is made up primarily of steep rugged 
terrain, and because most of the more easily accessible timber was 
harvested in the 1950's, 60's and 70's. Hoopa Forest Industries has had 
to shift from primarily cat logging to logging the annual timber 
harvest by high lead yarder, a piece of equipment that lifts and 
suspends logs through use of cables as it yards them to the landing to 
reduce significantly the impact to topsoil and prevent erosion. Tribal 
loggers have an opinion of how logging should go and how to be more 
productive and we respect that. Our goal is to have both departments 
work together and agree on a harvest management plan that achieves the 
Tribe's two objectives of environmental protection and timber harvest.
    An integral part of forestry management is forestry protection from 
fire and theft. Hoopa created its own Wildland Fire Protection, the 
largest and most developed tribal program in the state and, possibly, 
the Nation. All tribal fire fighters meet the same qualification 
requirements of the United States Forest Service and the California 
Division of Forestry. Our fire crews are dispatched across the West as 
needed to fight fire on state, federal and tribal lands. Our program 
includes a wildland ``urban interface'' component to remove fuels and 
protect both homes and timberlands from fires. This program is also 
considered by the BIA and other tribes to be a model for Indian 
Country.
    The lands adjacent to our Eastern border were recently changed to 
wilderness. I raise this today because of concerns regarding 
catastrophic fire. Last year two fires on our Eastern border each grew 
to 100,000 acres. Six years ago a 100,000 acre fire breached our border 
and was stopped by backfires ignited on our reservation, causing 
significant loss to plantation. Nature is a messy place. There is 
significant blowdown and knockdown of timber and hardwoods annually 
from strong seasonal storms in our area. Nature cleans up its mess as 
well, through fire. Fire, however, is indiscriminate when it reaches 
the boundary of a wilderness area. Prior to the designation of this 
area as wilderness, the Hoopa Valley Tribe was working with the Six 
Rivers National Forest on a stewardship agreement that would have 
allowed for manual release of these ``fuels.'' We would like to address 
these concerns through such an agreement that would allow us to 
manually remove understory brush and downed timber and hardwoods for 
fire protection in the newly designated section of the Trinity 
Wilderness and Six Rivers National Forest.
    Our law enforcement program includes a resource protection 
component that is not eligible for United States Department of Justice 
funding because Hoopa is in a Public Law 280 state. Without tribal law 
enforcement, there is no protection of our timber resources from theft. 
We ask that the law be amended to allow application for law enforcement 
funding in California to support tribal law enforcement 
responsibilities. A priority is protection of timber resources.
    We also charge to logging the cost of road betterment. When Hoopa 
assumed forestry management, it also took over the BIA roads 
department. Though the reservation contains over two hundred miles of 
roads the Tribe receives $113,000 a year for roads maintenance, not 
enough to maintain five miles of road. To maintain and upgrade our 
forest roads neglected for decades by the BIA a percentage of annual 
timber sales goes towards roads maintenance. Five years ago the Tribe 
invested in an aggregate plant, with revenues generated from the sale 
of sand, gravel, road base, and cement, which now helps subsidize the 
roads program by paying the salaries of roads department employees. 
That plant, Hoopa Valley Tribal Roads and Ready Mix, also works and 
contracts with The Humboldt County Roads Department and the California 
Department of Transportation (``Cal Trans'') to coordinate roads 
maintenance and improvement. This program is now recognized as a model 
for Indian nations.
    Hoopa's second major resource program is its fisheries program. 
This is not an income generator for the Tribe, but protection of 
salmon, steelhead, sturgeon and lamprey has significant, social, 
cultural, and economic significance to our people. These anadromous 
species have given sustenance to the Hoopa people since the beginning 
of time. They supplement our otherwise unhealthy diet and reduce our 
cost of living. The Hoopa Valley Tribe is committed to advocating for, 
defending, protecting, and restoring the fishery of the Trinity and 
Klamath Rivers basins. The Klamath and Trinity Rivers constitute the 
third largest producer of wild salmon on the West Coast but this system 
is under extreme stress and its production has dropped to the lowest in 
recorded history. Restoration programs for both rivers need to be 
implemented and funded immediately. The Hoopa Valley Tribe strongly 
supports the removal of the four dams on the lower Klamath River to 
restore fishery habitat and access for salmon to the upper Klamath 
basin. These four dams provide no water for irrigation.
    Finally, the Hoopa Valley Tribe has sought to diversify by 
investing in a new industry to reduce it's reliance on its timber for 
income and jobs. The Tribe created Hoopa Modular Building Enterprises 
(HMBE) in 2005. Last year was a very rough year for this business 
because Northern California was declared a disaster area from a flood 
event that inundated the North State. We struggled through this first 
phase of development, learning as we went, and I believe that we have 
made a sound business decision that will achieve the Tribes objectives. 
HMBE builds low cost, high quality housing to meet the needs of new 
tribal and non-tribal homebuyers. We have created an enterprise that 
employs fifty employees inside the plant. Investment and 
diversification are difficult concepts for impoverished Indian 
communities. I believe we are blazing a trail that will create 
opportunity for the Hoopa Tribe, its people and its children for the 
future and for generations to come.
    Thank you for your time. I would be glad to respond to any 
questions that you may have.
                                 ______
                                 
    The Chairman. Thank you. Let us proceed with the rest of 
the panel first. Mr. Box, Vice-Chair.

           STATEMENT OF MATTHEW BOX, VICE-CHAIRMAN, 
                   SOUTHERN UTE INDIAN TRIBE

    Mr. Box. Chairman Rahall, members of the Council, good 
morning. I am Matthew Box. I am the Vice-Chairman of the 
Southern Ute Tribe of the Southern Ute Indian Reservation in 
southwestern Colorado. It is a great honor and a privilege to 
be here before you today. On behalf of my tribe, I thank you.
    With me today are Councilman Newton, our general counsel, 
as well as our Executive Director of the Southern Ute Tribal 
Growth Fund. The subject of the evolving west has many, many 
issues. Population, growth, infrastructure, environmental 
protection, preservation of open space, rural poverty, 
healthcare and immigration are just a few. We are glad to know 
this Committee also recognizes the issues of Indian country as 
an important part of your decision. Most of the 300 Indian 
reservations are found in the west, and nine of those Indian 
reservations are bigger than the State of Delaware.
    Approximately half a million Native Americans live on 
reservations, and we have unique challenges and needs. Every 
problem and challenge that exists elsewhere in the west also 
exists on Indian reservations. In addition, we are engaged in a 
constant struggle to maintain our sovereignty, our homelands 
and our culture. We are also compelled to call upon the Federal 
government to fulfill its obligation under the Federal Trust 
Responsibility.
    Our tribe is not a story about problems, needs or demands. 
However, our story is of success and evolution. Our 
reservation, my homeland, is located in the four corners 
region. There are approximately 710,000 acres within the 
exterior boundaries of our reservation. As a result of 
historical developments, including homesteading, more than half 
of the surface lands are owned by persons other than the tribe 
or its members. Our reservation sits on the northern end of the 
San Juan Basin and is a prolific natural gas field.
    Fifty years ago, our tribe existed in poverty. As a direct 
result of development of our natural gas resource, we are no 
longer impoverished. Our tribe is one of the strongest economic 
forces in our region. It is the largest employer in the four 
corners with over 1,000 employees. We have our own elementary 
school, which most of our young children attend. Our campus has 
modern buildings, including a courthouse and jail, recreational 
facilities and administrative offices. Our water treatment 
plant and wastewater treatment plants are state-of-the-art 
facilities and provide services to neighboring nonIndian 
communities.
    Our financial success has allowed us to provide retirement 
benefits to our elders, scholarships to our students, and 
payments to our members. Although we continue to struggle to 
improve healthcare on our reservation, we are making progress 
in securing health insurance for all of our members. These are 
just some of our accomplishments, and we are looking forward to 
moving every day.
    In my written testimony, I have outlined some of the steps 
we have taken to maximize the value of our natural gas 
resources. Under the supervision of the BIA Affairs, our tribe 
began issuing oil and gas leases in 1950, and we are no longer 
passive recipients of royalties. However, in 1992, we created 
our own oil and gas operating company and repurchased the 
working interests in many of our leases. In 1995, we formed a 
partnership with another company and purchased a major pipeline 
gathering and treating system on the reservation. Today 1 
percent of the nation's natural gas requirements are met by gas 
produced from our reservation and travels through our pipeline 
system.
    From a cultural perspective, we have been proud stewards of 
our land. Our companies have set the standards for sound 
environmental practices on the reservations. Our concerns about 
unnecessary surface disturbance even in situations where there 
are split surface and subsurface estates has allowed us to 
continue development without much of the bitter complaint heard 
in the western regions. I have provided more detail about these 
matters in my written testimony.
    As an Indian tribe, however, we are still limited by the 
complex series of Federal laws and regulations that govern our 
activities. Even in advocating self-determination, we are 
forced to rely on Federal agencies for approval and supervision 
in many areas. In our mind, the Federal agencies are neglecting 
their duties. The BIA seems near collapse, and we have been 
advised that BIA realty functions cannot be performed. This is 
a critical aspect of trust responsibility.
    Our local Indian irrigation project is also on the verge of 
ruin. We have concerns with the mineral management service and 
the trend to abandon proven royalty audit practices. Indian 
health services are also woefully inadequate. We have 
contracted to perform many Federal functions because we think 
we can do a better job, but the funding needed for us to carry 
out those functions are never enough and are inadequate.
    We have learned that we can do much to help ourselves, and 
we intend to continue to walk down that path. We are proud of 
our success but also remain concerned that the Federal trust 
responsibility is changing not by conscious decision but simply 
by neglect.
    As the future unfolds, we plan to continue our success so 
that our tribe can remain a presence in the west in perpetuity. 
We intend to build upon the strong relationships that we have 
with our neighbors, our state and our local governments. We 
have proven, however, that we are capable of chartering our own 
path, and we will continue to defend our sovereignty, our right 
to decide our own destiny for ourselves, our children, as well 
as the generations of the Southern Ute Tribe. Thank you for 
your time.
    [The prepared statement of Mr. Box follows:]

               Statement of Matthew Box, Vice-Chairman, 
                       Southern Ute Indian Tribe

    Chairman Rahall and Members of the Committee:
    On behalf of the Southern Ute Indian Tribe, I am deeply honored to 
be here today as a participant in your discussions of ``The Evolving 
West.'' Indian country is a significant part of the West, and our 
cultures have been a major influence on its history and themes. There 
are approximately 300 Indian Reservations in the United States that 
collectively represent more than 2% of the Nation's land base. Most of 
those reservations are located in the West. Nine of those reservations 
are larger than the State of Delaware.
    Based upon the 2000 Census, it is estimated that 2.5 million Native 
Americans live in the continental United States and Alaska, with 
approximately 500,000 Native Americans residing on Indian Reservations. 
We are the survivors of federal Indian policies that have varied 
dramatically through different periods of our Nation's history. 
Commencing with early treaty-making and sovereign recognition of 
tribes, those policies have included: removal of Indians from the East 
to the West, the creation of Reservations, the end of treaty-making, 
non-Indian settlement of aboriginal lands in the West, individual 
Indian land allotment, tribal re-organization, tribal termination, and, 
more recently, tribal self-determination.
    My homeland, the Southern Ute Indian Reservation, is located in 
southwestern Colorado in the Four Corners Region. Since 1868, Ute-
treaty lands that once comprised most of the western portion of the 
State of Colorado have been significantly reduced in size. Our 
Reservation now consists of approximately 710,000 acres; however, our 
Tribe owns less than fifty percent of that land. There are 1430 members 
of our Tribe, approximately half of whom live on the Reservation. Our 
people, land, and resources are our most important assets.
    Despite many challenges to our Tribe's survival, today we can 
report substantial success. We have emerged from relative poverty to be 
one of the strongest economic forces in our region. We are the largest 
employer in the Four Corners with over one thousand employees, 
including many non-Indians. Most of our young children attend our own 
school, which is funded principally by the Tribe. Additionally, we 
provide substantial scholarship opportunities for members seeking 
secondary and graduate level studies. Our community infrastructure 
includes modern office buildings, top flight recreational facilities, 
and a modern courthouse and jail. Our water treatment plant provides 
safe drinking water not just to tribal members, but also to several 
non-Indian communities. Our waste water treatment plant, which also 
serves non-tribal entities, is state of the art. In addition to per 
capita distributions and dividends to members from our financial 
investments, the Tribe provides retirement payments to our elders. We 
have a tribal member life insurance program, and we are pursuing health 
insurance programs. These are some of our accomplishments, and we are 
moving forward every day.
    The source of our success has been our land. Located on the 
northern portion of the San Juan Basin, our lands contain vast 
quantities of natural gas, including coalbed methane. Revenues from 
natural gas production have been our economic lifeblood. Commencing in 
the 1950s, under the supervision of the Bureau of Indian Affairs 
(``BIA'') we issued oil and gas leases to production companies. We 
relied heavily on the BIA and other federal agencies to ensure that 
companies complied with their lease terms. Our tribal leaders quickly 
learned, however, that lease compliance was not a priority for the 
federal government. In response, our Tribe created its own Energy 
Department in 1980. In the process of collecting and reviewing 
information about our leases, we found that several companies, which 
had not complied with drilling and development obligations, held 
thousands of acres of our mineral lands for speculation. Additionally, 
leasing companies often avoided their royalty payment responsibilities. 
Since forming our own Energy Department, we have been aggressive in 
ensuring that companies comply with their lease obligations. Those 
efforts have required us to work closely with a number of federal 
agencies, including: the BIA, the Bureau of Land Management (``BLM''), 
and the Minerals Management Service (``MMS'').
    In 1982, with the help of this Committee, Congress enacted the 
Indian Mineral Development Act, which for the first time authorized us 
to negotiate leases and flexible agreements directly with companies, 
subject to Secretarial approval. With the discovery of coalbed methane 
in our region, we took advantage of the new law, and by 1990, we had 
entered into more of those agreements than any other tribe. During that 
same time period, Congress approved settlement of our reserved water 
rights claims and appropriated funds for tribal economic development. 
This Committee has consistently supported implementation of that 
settlement agreement, and we remain extremely grateful for that 
support.
    With a portion of the water settlement funds, we created our own 
energy company, Red Willow Production Company. Over time we purchased 
back many of our old leases and improved operations. Red Willow is now 
one of the largest producers of natural gas in Colorado. We also 
purchased an interest in one of the major gas gathering and treating 
companies operating on our Reservation. Today, more than one percent of 
the natural gas needed to satisfy the Nation's natural gas requirements 
comes from our Reservation and flows through our gathering company 
facilities. Our in-house staff of engineers, geologists, landmen, 
accountants, and computer specialists is recognized as one of the best 
in the industry.
    While our tribal leaders actively pursued strategies for enhancing 
revenue from our natural gas resources, they also recognized that those 
resources are finite and non-renewable. In fact, gas production volumes 
have already begun to decline on our Reservation. In order to prepare 
for the future, we have diversified our investments into new areas, 
including: biomedical research, real estate development, home-building, 
radio scanning technology, and computer technology, and we are 
evaluating alternative energy technologies. Although gas will continue 
to be produced from our Reservation for several decades, our approach 
is long-term. We intend to remain on our lands forever.
    Natural resource development poses many challenges, including 
environmental concerns. We have attempted to lead the way in employing 
prudent environmental practices. Protection of the environment is part 
of our cultural teachings, we generally exceed the requirements of laws 
in such matters. For example, in response to those who wanted to employ 
less-expensive methods of disposal, our Tribe insisted on deep 
underground injection of water produced in conjunction of coalbed 
methane. Only by doing so could we protect our water resources from 
degradation. We have also insisted upon development practices that 
minimize duplication of well pads and pipelines needed to produce gas. 
We were one of the first governmental entities in our region to monitor 
air quality, and our historical air quality data and information have 
been critical in evaluating the effects of growth and resource 
development in our region. Our Environmental Programs Division, Natural 
Resources Department, and Energy Department work in cooperation with 
federal, state and local governments in establishing environmental best 
practices. As participants and sponsors of such organizations as the 
Western Governors' Association and the Council of Energy Resource 
Tribes, we have been at the table with leaders throughout the West to 
discuss many of the issues related to natural resource development.
    For example, one common circumstance that complicates energy 
resource development arises from ownership of split estates. Because of 
the federal reservation of mineral estates on many lands in the West, 
particularly lands patented after 1916, the federal government owns the 
oil and gas rights under lands where private parties own the surface. 
The patents under such lands guaranteed the federal government the 
right to develop those minerals. However, the issuance of federal oil 
and gas leases and the drilling of wells on those lands frequently 
raise objections from the private surface owners. Such conflicts are 
intensifying as more and more people build homes in once-rural areas 
and as more gas wells are drilled to recover leased resources. Although 
there are some unique federal aspects of the split estate issue, it is 
not just a federal matter. Even on lands patented in earlier time 
periods where there was initially no split estate, the private division 
of surface and subsurface interests has led to split estates.
    We have this same situation on our Reservation, where the Tribe is 
the beneficial owner of trust minerals that underlie private, fee 
surface lands. Just as the Nation's demand for energy calls for 
additional development on federal lands, our economic needs require us 
to proceed with development of our gas resources on split estate lands. 
We have, however, been able to avoid much of the conflict that has 
occurred in other areas. We work extremely hard to meet the reasonable 
requests of surface owners, including their preferences for location of 
wellpads and pipelines and non-duplication of such facilities. We also 
believe that advances in horizontal drilling technology hold 
significant promise in minimizing surface disturbance in the future. We 
believe we are part of the solution and not just part of the problem. 
Even though it will not occur overnight, we also recognize that, 
ultimately, less dependence on non-renewable energy resources and 
greater reliance on alternative energy sources could reduce the adverse 
surface effects of gas development.
    The success and growth of our Tribe has had a number of political 
and social consequences that deserve mention. While decades ago, our 
neighbors, and officials from federal, state and local governments gave 
consistent encouragement for us to improve ourselves, they had no idea 
that we would really succeed. While many of our friends and neighbors 
have congratulated us for our accomplishments, in some cases, there has 
been a backlash to our achievements. As one former tribal chairman put 
it, ``They liked us better when we were poor.'' People who feel that 
way simply have no understanding of the historical conditions that 
defined our path and the institutional disadvantages that we have had 
to overcome. Increasingly, we are called upon to defend the attributes 
of sovereignty that our Tribe possesses.
    Much of the last year, for example, has been spent deflecting the 
efforts of energy transmission companies to obtain condemnation powers 
over tribal lands in the West. A congressionally mandated study of this 
issue, called for in Section 1813 of the Energy Policy Act of 2005, is 
close to completion. We have reason to believe that the collective 
resistance of tribes to condemnation of tribal land will be positively 
reflected in the final report that you will receive in the near future 
from the Department of Energy and the Department of the Interior. We 
hope that members of this Committee and other Members of Congress will 
continue to honor the promises of tribal sovereignty made to Native 
Americans, and that you will resist efforts to limit our powers to 
control our lands or to subject tribes to the regulatory or taxing 
powers of State and local governments. We also hope that you will 
recognize the tremendous contributions that our achievements have had 
on the economic stability of our neighboring communities.
    Institutional obstacles to the success of tribes continue to exist 
in numerous areas. Unfortunately, many of those barriers are the direct 
result of federal laws and policies and lack of federal attention. 
Because of the pervasive role of the Department of the Interior in 
Indian affairs, we are limited by law in what we can do without 
Departmental approval or involvement. Despite the dedicated service of 
many in the agency, the BIA appears to be collapsing. Only last week, 
our local BIA Superintendent informed our Tribal Council that our 
agency no longer has the resources to maintain the realty records for 
our lands. The limited staff is overwhelmed with the thousands of 
transactions that take place on our Reservation each year. The 
maintenance of those records is a fundamental aspect of federal trust 
responsibility. We cannot function without reliable realty records. We 
are prohibited by federal law from granting leases or rights of way 
without BIA approval. In many cases, delays in the review of 
environmental reports, archeological reports, and land status are 
extending from months to years. Those delays directly affect our 
development and revenues as well as the operations of third parties who 
must cross our lands in the normal course of business.
    The shortfall in BIA support has affected our Tribe in other 
important areas. In 1972, Congress specifically authorized our Tribe to 
purchase lands for trust consolidation on our Reservation (25 U.S.C. 
Sec. 668). We have paid the money and purchased such lands. Most of 
these properties are agricultural or open space. None of them involve 
casinos or gaming issues. Currently, twenty applications are pending to 
place those lands into trust status. The applications have been 
awaiting approval anywhere from 3 to 11 years without action. Based on 
recent public comments of senior officials in the BIA, our situation is 
not unique. There are no resources anticipated to process those 
applications in the foreseeable future. Local BIA officials have also 
informed us that operational funds for our Indian irrigation project 
have dried up.
    Health care also remains a critical concern on our Reservation. 
Approximately, twenty years ago, our Tribe used its own funds to 
construct a health clinic, which was leased to the Indian Health 
Service (``IHS'') to care for Indians on our Reservation. To facilitate 
the delivery of care, we contracted to operate the health clinic under 
the provisions of the Indian Self-Determination and Education 
Assistance Act. For two years, our contract has remained in a state of 
limbo because we refused to accept less than the statutory rate for 
providing the health care service. We have requested a federal court to 
order the IHS to comply with the law. Again, our experiences are not 
unique in this area.
    We were one of the first tribes in the country to contract to 
perform royalty audits in conjunction with the MMS. Since 1985, our 
auditors have recovered more than sixty million dollars in 
underpayments from oil and gas companies operating on our Reservation. 
For reasons that we do not understand, the MMS wants to abandon or de-
emphasize the practice of conducting royalty audits. In place of 
royalty audits, the MMS wants to utilize ``compliance reviews,'' which 
rely principally on unverified company-generated data. The information 
supplied by the MMS to Congress in support of this policy change has 
been flawed and has materially understated the amounts recovered by 
State and tribal auditors. Despite our request that MMS present 
corrected data to Congress, it has not done so, and the Agency's 
reaction to our criticism has been hostile. In addition to demanding 
restrictive changes to our audit contract, the Southern Ute Indian 
Tribe no longer has a representative on the Royalty Policy Committee 
(``RPC'') where we have had a representative since creation of the RPC.
    In conclusion, Members of this Committee understand that federal 
Indian policy is complex and that our futures are tied in large measure 
to the actions of Congress. As the West evolves, we hope that Congress 
will take the actions needed to maintain the vibrancy of our people and 
cultures. We also urge you to protect tribal sovereignty. Our Tribe is 
a proud example of what can be accomplished through strong leadership, 
hard work, and prudent resource development. Although our Tribe has the 
tools to be largely self-reliant, many tribes remain principally 
dependent upon the federal government for their existence. Accordingly, 
the federal trust responsibility is extremely important in Indian 
country and will be so for the foreseeable future. As we evolve, 
historic relationships, including the federal trust responsibility, may 
also undergo changes and adjustments. We hope that refinements in the 
trust responsibility will be made consciously with the objective of 
giving tribes the option and the opportunity to prosper. We also hope 
that federal agencies charged with trust duties are not permitted to 
limit our dreams through neglect or incompetence. We look forward to 
building on our relationships with State and local governments, and we 
are confident that through mutual respect and cooperation we can 
protect the people and the lands of the West for many generations.
                                 ______
                                 
    The Chairman. Mr. Propst.

    STATEMENT OF LUTHER PROPST, EXECUTIVE DIRECTOR, SONORAN 
                           INSTITUTE

    Mr. Propst. Thank you, Mr. Chairman, Ranking Member Bishop 
and members of the Committee. My name is Luther Propst. I am 
Executive Director of the Sonoran Institute. We are based in 
Tucson. We have offices around the west and Montana and 
Colorado as well. Our mission is to inspire and to enable 
community decisions and public policies that respect the land 
and the people of western North America. We work all over the 
west in a variety of methods. A partnership with the National 
Association of Counties allows us to provide training programs 
for rural county commissioners, helping county commissioners in 
rural counties better manage growth as they deal with the 
evolving west.
    As we have heard, aside from the landscape, the ownership 
of public lands, the aridity, the American west finds itself in 
an almost unique position in the global economy. Nowhere else 
do you have such access to wide expanses of wild lands, 
wildlife habitat adjoining prosperous, well-educated, 
economically diverse cities as well as small towns.
    The opportunity in the west to live in a prosperous city or 
town tied into the global economy through the internet and 
through other mechanisms, access to air travel and so forth, 
coupled with the ability to be in communities that are 
surrounded by public lands is perhaps the most important 
competitive advantage that we have in the west in an 
increasingly global economy.
    The result is the west is changing rapidly. The five 
fastest growing states in the country are in the west. There 
are problems. Of course, too many communities are left behind. 
We have researched the relationship between public lands and 
local economic prosperity. Public lands correlate with economic 
prosperity in western counties. That is the case in 
metropolitan areas. That is the case in nonmetropolitan areas. 
The relationship is complex.
    It is multifaceted, but there are four quick points I would 
leave you with. The first is counties with more public land are 
more prosperous than counties with less. Second, counties with 
public lands and protected status are more prosperous than 
those that are managed for other uses. Third, counties--and I 
think this is critical--counties with a diverse economic base, 
a base that includes a wide range of economic activities, 
including extraction, including tourism and including this new 
economy that I would call the knowledge economy that Governor 
Schweitzer talked about, counties with a diverse economic base 
have better demonstrated economic performance than those with 
the dependence upon a single activity, whether that single 
activity is resource extraction or tourism or what have you.
    There are many factors that correlate with economic 
prosperity in the west. Public lands is one that our research 
indicates is important. It is important to aim the economy for 
high-wage producer services. How do you move beyond tourism, 
which is seasonal? How do you move beyond lower-paying jobs to 
a higher paid economy? How do you help these communities move 
to a more mature economy that includes healthcare, that 
includes finance, engineering, the whole range of professional 
services?
    As Governor Schweitzer said, education is a key factor. 
Proximity to the global economy through airports is a key 
factor. The presence of ski areas correlates with economic 
performance because again it attracts outside capital and 
ideas.
    The fourth factor is the major growth engine in the west. 
The major growth engine over the last 30 years is coming from 
new and innovative sectors. Services, if you will, make up 80 
percent of all new jobs, more than half of all the net growth 
in real personal income.
    You can look at a variety of case studies for how this 
plays out. We have recently done a research project that we 
produced with the Theodore Roosevelt Conservation Partnership 
looking at the correlation between hunting and angling and 
economic prosperity, and in every western state, you can see a 
dramatic amount of income that comes from the presence of 
hunters and anglers, around a half a billion dollars in income 
in most states, but more importantly, harder to connect, harder 
to discern, harder to measure but more importantly, sportsmen 
and sportswomen and other visitors to the west also quite often 
relocate to the west, and they bring jobs. They bring energy. 
They bring capital. They bring income. So the question in the 
west is, how do we capture this amenity growth, if you will?
    There are two major problems very quickly. The first is too 
many communities are left behind. We have to figure out a way 
to improve the economic performance in more communities. 
Second, the growth that has come in as a result of this 
knowledge economy is causing a whole new range of threats to 
public lands and to private lands in the west. We have heard 
about wildfire. The more development we have scattered around 
the west, the more challenging it is to manage fire.
    In summary, a quick comment. Extractive uses continue in 
the west. They are very important in a fairly small number of 
counties and communities around the west. Their contribution 
remains important, but it is diminishing because of the growth 
in other sectors of the economy. Jobs versus the environment is 
no longer the dominant paradigm in the west.
    The environment, conservation and sound management of our 
public lands provides the foundation for economic prosperity 
for good, sustainable jobs. With collaboration, with 
partnerships, basing our decisions on sound information, we can 
build a west that is both prosperous and environmentally 
healthy. As Wallace Stegner wrote, ``With a society to match 
its scenery.'' Thank you very much for the opportunity to 
speak.
    [The prepared statement of Mr. Propst follows:]

            Statement of Luther Propst, Executive Director, 
                           Sonoran Institute

    I commend the Committee on Natural Resources for holding this 
hearing on the ``Evolving West'' and thank you for the invitation to 
testify. My name is Luther Propst. I am the executive director of the 
Sonoran Institute, a non-profit organization dedicated to promoting 
community decisions that respect the land and the people of the West. 
At the Sonoran Institute, we work every day on key trends and issues 
that influence the health and prosperity of the rapidly changing 
American West.
About the Sonoran Institute
    The Sonoran Institute, founded in 1990, is based in Tucson, 
Arizona, with offices in Phoenix, Arizona; Bozeman and Helena, Montana; 
Grand Junction, Colorado; and Mexicali, Mexico. The Institute's mission 
is to inspire and enable community decisions and public policies that 
respect the land and people of western North America. Through civil 
dialogue, collaboration, and applied knowledge, we work toward a shared 
community vision of lasting conservation and prosperity.
    The Institute has numerous successes resulting from our 
collaborative and community-based approach to conservation. We have 
assisted more than 40 communities in western North America conserve or 
restore over 367,000 acres of public and private lands; secured more 
than $228 million for local conservation; and established more than two 
dozen organizations, programs, and partnerships across the West 
dedicated to furthering conservation efforts on public and private 
lands. A hallmark of this success is our ability to reach out and 
engage diverse decision-makers and rural community members in 
conservation partnerships that reach across public, state, and private 
lands.
    Our work is based on the premise that given a foundation of civil 
dialogue and meaningful public participation, a climate of inclusion 
and collaboration, and access to the best, most innovative tools and 
information, people in the private sector and all levels of government 
will make better decisions about conserving, developing and managing 
our land and waters; structuring our economy; and building livable 
communities.
    An example of this kind of collaboration is the partnership between 
the Sonoran Institute and the National Association of Counties (NACo). 
We jointly sponsor a training program for county officials, called the 
Western Community Stewardship Forum, which helps rural county 
commissioners better manage growth. Through our partnership with NACo, 
we have trained and assisted more than 286 local leaders from 49 
counties in eight Western states.
The West's Unique Position
    The West is a landscape that stirs deep passion for many people 
with its wide open spaces; historic ranches and picturesque small 
towns; intact wildlife habitat; and opportunities for outdoor 
recreation. The region is unique in that half of the region is public 
land.
    Aside from the landscape, the American West finds itself in a 
unique position in the global economy. Nowhere else do such vast and 
diverse expanses of wild lands and wildlife habitat adjoin prosperous, 
well-educated, economically diverse cities and towns.
    More than any other place on the planet, the West combines a 
vibrant, diverse, mature economy with the protected public lands that 
provide world-class hiking, fishing, hunting, skiing, river running, 
wildlife watching, and opportunities for outdoor solitude.
    In fact, the opportunity to live in a prosperous city or town 
surrounded by scenic, protected lands is perhaps the West's most 
important competitive advantage in an increasingly global economy.
    As a result of these factors, the West is changing rapidly. Our 
population is growing and diversifying. Our economy is prospering and 
changing rapidly, though too many communities are left behind 
economically. Our public lands and the communities that adjoin them are 
becoming ever more popular. And yet our perceptions and policies have 
often not been so quick to evolve.
    The Sonoran Institute has researched the economy of the West and 
the relationship between public lands and local economic prosperity. We 
present our findings in two recent reports: Prosperity in the 21st 
Century: the Role of Protected Public Lands and You've Come a Long Way 
Cowboy: Ten Truths and Trends in the New American West 
(www.sonoran.org/reports). To summarize several key points:
    Public lands are increasingly proving themselves to be a foundation 
for economic prosperity in a changing global economy. Traditionally 
this prosperity has occurred through ``boom and bust'' extractive and 
transformative industries, but now the relationship between public 
lands and local and regional economies is much more complicated. The 
economic value of these lands is no longer defined largely by their 
ability to produce timber, forage, minerals, or energy. While such 
traditional economic activities remain important to the West, 
especially in select communities, these lands make a much more 
significant economic impact by virtue of their contribution to 
developing a diverse ``knowledge economy'' in the West by retaining and 
attracting educated workers. Public lands in general correlate with 
local economic prosperity in Western counties, but types of management 
also matter. Unprotected lands that are the furthest from protected 
lands are the least likely to add to economic growth, while protected 
lands close to more protected lands are the most likely to boost that 
growth.
    Personal income in counties with more public land grows faster than 
in those with less. From 1970 to 2000, real per capita income in 
isolated rural counties with protected lands grew more than 60 percent 
faster than isolated counties without any protected lands. In rural 
counties that were connected to larger markets and had protected public 
lands, real per capita income grew 75 percent faster than in counties 
that were connected, but did not have protected lands.
    Counties with public lands in protected status are more prosperous 
than those that do not. Counties with large amounts of protected public 
lands have grown up to 66 percent faster than counties where a 
similarly high percentage of public land is not protected. The slowest 
economic growth occurs in counties with unprotected public lands and 
that are not close to protected areas. This applies not only to our 
well-known national parks and Forest Service wilderness areas, but also 
to the lesser-known protected areas managed in the National Landscape 
Conservation System by the Bureau of Land Management. In a study we 
completed in 2005, The National Landscape Conservation System's 
Contribution to Healthy Local Economies, we examined 32 counties with 
designations dating back to the 1980s. Of these, 26 experienced 
continued growth in total personal income, population, per capita 
income and total employment before and after designation.
    Counties with a diverse economic base perform better than those 
with a high degree of dependence on a single activity, be that resource 
extraction or tourism. Slow growth or economic decline is associated 
closely with remoteness, economies dependent on one industry, and few 
newcomers. Dependence on any one industry--whether it is resource 
extraction, agriculture, or manufacturing--makes an area vulnerable to 
fluctuations in global commodity prices and boom and bust cycles. In 
particular, we also found an inverse relationship between resource-
extraction economies and county prosperity. In other words, the more 
dependent a county's economy is on personal income earned from resource 
extractive industries, the slower the growth rate of the economy as a 
whole. Factors that stimulate the economy other than lands include: 
high-wage producer services, education, an airport, the arts, a ski 
area and mountains.
    Economic diversification is happening across the West--even in 
rural areas where one might assume that traditional industries still 
play a major role. In 1970 in the rural West, agriculture, mining, 
timber, oil and gas were 20 percent of the economy, but 30 years later, 
they were only 8 percent. Seven years ago, there were only 23 counties 
left in the West where more than 10 percent of the employment was based 
in transformative industries. This trend shows a maturation of Western 
economies--where once we relied on a single commodity, our towns and 
cities are now more diverse and therefore safer from global shifts in 
commodity prices.
    The major economic engine in the West is coming from new and 
innovative sectors. For example, ``services'' make up 80 percent of all 
jobs and more than half of all net growth in real personal income in 
the last 30 years. Jobs in services include high-wage occupations in 
medical care, finance, engineering, and business or professional 
services, and also those relatively lower-wage and seasonal occupations 
such as in tourism and food service. Since most of the growth in the 
West, whether in rural or urban areas, is in services, the prosperity 
of rural communities depends on their ability to move beyond lower-paid 
jobs and capture those higher-wage service sectors. For a county or 
state to capture these high-wage producer services, education is an 
essential factor--we found that from 1990 to 2003, real wages in 
counties where more than 50 percent of the jobs require a college 
degree grew by 26 percent, compared to 7 percent growth in counties 
where less than 50 percent of the jobs required a college degree. By 
2003 the average wage in the ``college degree required'' counties was 
$52,678, or 75 percent higher than the $39,409 average wage in counties 
where most jobs do not require a college degree.
    Non-labor income, which is primarily age-related payments or money 
earned from investments, is actually the largest source of real income 
growth in the rural West. Non-labor income is 30 percent of all 
personal income and more than 20 percent of income growth in the last 
30 years. These trends reflect an aging population and a different type 
of retirement--one where retirees are active citizens and are often 
attracted by recreational activities.
    Hunting and angling are major forces in the Western economy and 
their impact is felt in two completely different ways. According to 
Backcountry Bounty: Hunters, Anglers and Prosperity in the American 
West, a report published by the Theodore Roosevelt Conservation 
Partnership and the Sonoran Institute, the first is direct 
expenditures. For example, hunters and anglers contributed $548 million 
in total expenditures in Arizona, $542 million in Idaho, and $530 
million in Montana in 2001. In Montana, 68 percent identify themselves 
as public land hunters, while in Arizona it is 82 percent and in Idaho, 
88 percent. Sportsmen account nationally for a $70 billion dollar 
industry--larger than Home Depot or AT&T. According to the 
International Association of Fish and Wildlife Agencies, $4.7 billion 
was spent on retail sales and more than 9,000 jobs were created for 
hunting in Colorado in 2001.
    Second, hunters, anglers, and other outdoor enthusiasts who visit 
the West quite often relocate and bring income and jobs to the places 
they hunt, fish or visit. For example, Paul Bruun, who first visited 
Wyoming to fish with his grandfather in 1955, owns and operates the 
earliest float-fishing permit on the lower Snake River. He is quoted in 
Backcountry Bounty: ``I know my small operation and others like it are 
the economic foundation to many Western communities.'' Another example 
is Rhonda Fitzgerald, quoted in the Western Montana Business Journal in 
2004: ``Almost all the people who have opened new businesses here in 
the last 25 years came here as visitors and stayed because they loved 
it. That's what I did.''
    We have found that the influx of new people is very closely tied to 
economic growth. These people are attracted to places with reasonable 
access to markets, good educational systems, and the presence of 
amenities--almost always protected public lands, wildlife habitat, or 
wild rivers with good fishing.
    This ``amenity growth'' in the West offers opportunity and 
prosperity, but also presents a new generation of challenges. 
Addressing these challenges requires a partnership between the public 
and private sectors, and among cities and towns, counties, Western 
states and the federal government. Two of the most pressing challenges 
are:
        Some communities are left behind due to isolation, low 
        commodity prices, and played-out resource extraction. It is 
        encouraging to note that investment in alternative or renewable 
        energy resources offers great promise to many of these 
        economically struggling communities--wind in Montana and 
        Wyoming, oilseed crops in Oregon and Washington, and solar 
        facilities in the Southwest.
        Parts of the West are growing so rapidly that the growth 
        threatens to undermine the health of the lands and the quality 
        of life that people value so highly. The University of Colorado 
        Center of the American West projects 40 million new residents 
        in the West by 2040, a 65 percent increase. Five of the six 
        fastest growing states in the U.S. are in the Intermountain 
        West (Arizona, Nevada, Colorado, Utah and Idaho). For local 
        officials and public-land managers alike this rapid growth 
        creates daunting new challenges, ranging from sprawling 
        development that blocks wildlife corridors to scattered, hop-
        scotch development patterns that prevent effective fire 
        management and strain the ability of both urban and rural 
        counties to provide basic public services; from negative social 
        impacts that accompany energy development to escalating housing 
        prices that working people can no longer afford; from 
        groundwater pumping and water diversions that dry up precious 
        rivers and riparian areas to the robust challenges of an 
        oversubscribed Colorado River.
Summary: From Extraction to Attraction
    Western public lands have evolved from primarily being valued for 
the wealth that can be extracted from them and for their attractiveness 
to visitors, to their increasingly recognized value for the ecosystem 
services they provide (e.g. fish and wildlife habitat, water retention 
and storage) and for the contribution they make to creating a diverse, 
prosperous ``knowledge economy.'' Increasingly, Western decision-makers 
realize that one of the West's most important competitive advantages in 
an increasingly global economy is the opportunity to live and work in a 
prosperous city or town surrounded by public lands.
    Extractive uses continue, and play an important role in some 
regions; however, their contribution is diminishing as the economy of 
the West continues to diversify and grow. As the West's competitive 
advantage in a global economy, public lands are valuable for the fish 
and wildlife they protect, for the sustainable natural and economic 
assets they provide, and for the economic growth and diversity they 
bring to Western states and communities.
    One of the core principles that must be considered in managing 
public lands is that the role they play has grown increasingly complex. 
In response, Western communities and land managers are experimenting 
with new approaches and partnerships to protect our magnificent 
landscapes, while promoting sustainable, long-term prosperity. Good 
stewardship is essential to conserve the West's character, quality of 
life, and natural and economic assets. Fortunately, economic forces are 
not conflicting with this pursuit; rather, the economy supports it.
    With collaboration, partnerships and sound information, we can 
build a West that is ``both prosperous and environmentally healthy,'' 
with, as Wallace Stegner wrote, ``a society to match its scenery.''
    NOTE: Additional information submitted by Mr. Propst has been 
retained in the Committee's official files.
                                 ______
                                 
    Ms. Napolitano [presiding]. Thank you, Mr. Propst. Next we 
will hear from Russell Vaagen.

        STATEMENT OF RUSSELL C. VAAGEN, VICE PRESIDENT, 
                  VAAGEN BROTHER'S LUMBER INC.

    Mr. Vaagen. Vaagen, correct. Yes.
    Ms. Napolitano. Thank you, sir. You have five minutes.
    Mr. Vaagen. OK. Good afternoon, Committee. Thank you for 
having me and the rest of this panel. I think it is a very good 
discussion to have and move forward with. As was said, my name 
is Russ Vaagen. I am Vice-President of Vaagen Brother's Lumber. 
I also serve as Vice-President of the Northeast Washington 
Forestry Coalition. My family's company has been operating in 
northeast Washington since 1952, and my great-grandfather on 
land that my family owns now operated sawmills back into the 
1920s.
    Vaagen Brother's Lumber has always been a leader in 
utilizing as much fiber as possible from the forest, and in the 
late 1980s, we started pioneering small diameter sawmill 
technology in the U.S. and North America. Today our focus is 
small logs. We produce lumber out of logs starting at four-inch 
small in diameter, and we make chips from logs down to two-inch 
small in diameter. It is truly a small diameter process.
    In the past 55 years since my family has been operating 
sawmills in northeast Washington, we have seen many changes. I 
am going to talk about four points that address these changes 
and how we can begin improving the health of the forests and 
communities of the west.
    As mentioned before, I am part of a local collaborative 
group called the Northeast Washington Forestry Coalition that 
meets to discuss and solve issues related to management of the 
Colville National Forest. The Coalition consists of 
conservation groups, timber companies, a paper mill, a power 
company, consulting foresters, loggers, a ski area, and all 
interested members of the public that want to be involved. It 
is an open group.
    The timber industry and conservation groups had both been 
at odds with the agency and each other for a number of years. 
Four years ago, our group was formed to discuss our concerns 
with the management of the Colville National Forest, and out of 
that, we discovered that the interests of the local timber 
industry and the environmentalists were very similar.
    We both wanted healthy forests and healthy communities, but 
we were not seeing enough progress on either front. We have 
come to agree that we can have more timber harvested at the 
same time we protect other areas of the forest. We have not had 
a project appealed or litigated on the Colville for more than 
two years. I think that says a lot. The Northeast Washington 
Forestry Coalition has a memorandum of understanding signed 
with the Colville National Forest to collaborate on projects 
and issues of managing the forest.
    We are in constant communication with the Forest Service, 
and the process has been very successful and looks to build 
momentum in the future. Currently, the Colville National Forest 
sells about 35 million board feet. Our coalition has identified 
an area in need of responsible management that can support 80 
million board feet annually. Producing more logs from the 
forest is important, but we are also working on protecting more 
areas of the forest, possibly even new wilderness. It is what 
we call the blueprint for future management of our forest. The 
Forestry Coalition is a great group, an example of how people 
are working together to solve problems and build hope for a 
strong and balanced future.
    We have a serious problem in the west, especially on our 
national forests. Our forests by and large are overstocked with 
too many trees fighting for water and sunlight, making them 
strain to survive. This is due to decades of fire suppression 
to keep fires to a minimum in order to protect property, 
resources and habitat. Not allowing fires to burn when the fuel 
loads were lower had the consequence of putting too many trees 
and too much brush on the landscape. This means that when 
fires, insects and disease enter the forest, consequences can 
be catastrophic.
    In certain areas, we need to continue suppressing fires to 
protect homes and communities, but we need to manage the forest 
to keep the forest from becoming overgrown. Thinning these 
forests and providing products to local businesses is the best 
way to achieve this. It adds value at every step to the land, 
to the community, and to the economy.
    The Forest Service will spend almost $2 billion in fire 
preparedness and suppression this year. Those activities now 
account for 45 percent of the agency's budget. It is 
staggering. But fires are a symptom of a larger problem. The 
driving problem is poor forest health and overcrowded forests. 
Congress can help solve the problem by directing more funding 
to projects designed to reduce fuels and improve the health of 
the forest.
    If we just keep spending more money on firefighting, we 
will continue to see the problem get larger and become more 
expensive in the future. We can completely reverse this trend 
by harvesting valuable products from these areas while 
improving the health of the forest.
    Now sawmills are the greatest tool for treating our 
forests. Without sawmills, there are little or no market for 
valuable material that needs to be removed from project areas, 
because there is such a critical need to treat large areas at 
landscape level being able to sell large volumes of small and 
medium-sized logs is critical.
    Unfortunately, there are many areas in the west where 
sawmill infrastructure is gone or on the brink of disappearing. 
In areas of New Mexico, Colorado, California, Utah, Wyoming and 
others that used to have sawmills all over the place, they now 
have nothing. This makes it nearly impossible to do the work 
effectively.
    The cost of getting infrastructure back is also staggering. 
We need to make sure that the focus is placed on creating large 
projects where the infrastructure currently exists in order to 
maintain it, and then large projects should also be created in 
other areas in order to give incentives for new businesses to 
start. Small projects over short periods of time do not provide 
enough material or predictability to maintain a business. There 
have been projects that are more than 100,000 acres in size and 
10 years in length, and we need to see more of those.
    The fourth and final point I would like to touch on is 
about the economics. One thing people may not know is we have 
talked a lot about jobs and the diversity of jobs. The jobs in 
mills and in the woods are some of the highest-paying careers 
in the rural economy. This makes up a very important part of 
our economic engine for our communities. Having mills adds 
value to property owners by providing an outlet for them to 
sell their logs while taking care of their property. It also 
allows them to keep their land as working forests rather than 
development, which is also changing in the west.
    Timber revenue from rural west can also generate tax 
dollars. Increasing volumes of timber from the national forests 
from good projects can generate funds for counties. This could 
be part of the solution for secure rural schools in the county 
payments issue. Sawmills and the resource industry are not the 
cornerstone of the rural western communities that they once 
were, but they play a vital role in the overall economic 
picture.
    If you look at the vibrant towns in the rural west, they 
have an element of balance. I truly believe by treating our 
forests in a sensible way led by collaborative groups like the 
Northeast Washington Forestry Coalition we can add real 
economic and ecologic stability to communities.
    In conclusion, my key points are that collaboration makes 
sense, and it is very important to the management of our 
national forests. Forest health is an important issue with real 
consequences, and we must take action. Sawmill infrastructure 
makes forest health treatments possible, and finally the 
management of our Federal forests has a profound impact on our 
rural communities.
    The west is indeed changing, and my community is evidence 
of that. But while everything about our community is now more 
diverse and dynamic, we found that collaboration through groups 
like the Northeast Washington Forestry Coalition helps us find 
our common values and work together on solutions that meet all 
our needs.
    Congress can help by putting focus both financially and 
politically on getting larger projects together that improve 
the state of our forests and the vitality of our rural 
communities. Thank you.
    [The prepared statement of Mr. Vaagen follows:]

            Statement of Russell C. Vaagen, Vice President, 
                        Vaagen Bros. Lumber Inc.

    Good morning Chairman Rahall and members of the Committee. My name 
is Russ Vaagen and I am Vice President of Vaagen Bros. Lumber. I also 
serve as Vice President of the Northeast Washington Forestry Coalition. 
My family's company has been operating in Northeast Washington since 
1952. We pride our selves on running a business that is not only 
economically viable, but leaves things in better condition than we 
found them. Vaagen Bros. Lumber has always been a leader in utilizing 
as much fiber as possible from the forest. We utilize co-generation to 
create renewable power using wood waste; we sell all of our by-products 
to go into other products like paper, newsprint, particle board and 
pellets. In the late 80's our company started pioneering small diameter 
technology in the U.S. that had been in use in Scandinavian countries. 
Today our focus is small diameter logs. We produce lumber out of logs 
starting at 4 inch small end diameter and we make chips from logs down 
to 2 inch small end diameter. The largest log that we can make lumber 
out of is 14 inch large end diameter. It truly is a small diameter 
process.
    In the past 55 years since my family has been operating sawmills in 
NE Washington, we have seen many changes. Changes in our communities, 
our forests, our industry and changes in the ways we work out our 
differences. I am going to talk about four points that address these 
changes and how we can begin improving the health of the forests and 
communities in the West. My four key points are:
    1.  Collaboration
    2.  Forest Health and Wildfire
    3.  Sawmill Infrastructure
    4.  Rural Economics of the West
    I am part of a local collaborative group called the Northeast 
Washington Forestry Coalition that meets to discuss and solve issues 
related to the management of the Colville National Forest. The Colville 
National Forest is 1.2 million Acres of land in the counties of Ferry, 
Stevens, and Pend Oreille. The Coalition consists of conservation 
groups, timber companies, a paper mill, a power company, consulting 
foresters, loggers, a ski area, and interested members of the public. 
The county commissioners and local politicians are also involved.
    The timber industry and conservation groups had both been at odds 
with the agency and each other for a number of years. That all began to 
change when both sides started to see that they were not getting their 
interests met. Four years ago our group was formed to discuss our 
concerns with the management of the Colville National Forest and out of 
that we discovered that the interests of the local timber industry and 
the environmentalists were very similar. Both wanted healthy forests 
and healthy communities, but weren't seeing enough progress on either 
front.
    We have come to agree that we can have more timber harvested at the 
same time we protect other areas of the forest. As a result, we have 
not had a project appealed on the Colville in more than two years. The 
Northeast Washington Forestry Coalition has a Memorandum of 
Understanding signed with Colville National Forest to collaborate on 
projects and issues of managing the forest. We are in constant 
communication with the Forest Service and the process has been very 
successful and looks to build momentum into the future. Currently the 
Colville National Forest sells about 35 million board feet annually. 
Our coalition has identified an area in need of responsible management 
that can support 80 million board feet annually. Producing more logs 
from the forest is important, but we are also working on protecting 
more areas of the forest, possibly even new wilderness. It is what we 
call the blueprint for the future management of our forest. The 
Northeast Washington Forestry Coalition is a great group that is an 
example of how people are working together to solve problems and build 
hope for a strong and balanced future. The members of this coalition 
have the full spectrum of political view points; however these issues 
are not political by nature
    My second point centers on forest health and wildfire. We have a 
serious problem in the West, especially on our National Forests. Our 
forests by in large are over stocked with too many trees fighting for 
water and sunlight, making them strain to survive. This is due to 
decades of fire suppression to keep fires to a minimum in order to 
protect property, resources and habitat. Not allowing the fires to burn 
when the fuel loads were lower has had the consequence of putting too 
many trees and too much brush on the landscape. This all means that 
when fires, insects or disease enter these forests the consequences can 
be catastrophic. In certain areas we need to continue suppressing fires 
to protect homes and communities, but we need to manage the forests to 
keep the forests from becoming overgrown. Thinning these forests and 
providing products to local businesses is the best way to achieve this. 
It adds value at every step, to the land, to the community, and to the 
economy. It just makes sense.
    We are currently spending large amounts of money fighting these 
fires when, in fact the fires are a symptom of a larger problem. The 
Forest Service will spend almost $2 billion for fire preparedness and 
suppression this year. Those two activities now account for 45% of the 
agency's budget, up from 15% little more than a decade ago. The driving 
problem is poor forest health and over crowded forests. Congress can 
help by in solving the problem by directing more funding to projects 
designed to reduce fuels and improve the health of the forests. If we 
just keep spending more money on fire fighting, we will continue to see 
the problem get larger and become even more expensive in the future. We 
can completely reverse the trend by harvesting valuable products from 
these areas while improving the health and vitality of the forest
    My third point is the importance of sawmill infrastructure in 
getting this work done. Sawmills are the greatest tools for treating 
our forests. Without sawmills there is little or no market for valuable 
material that needs to be removed from project areas, which will 
require massive amounts of federal dollars to treat our forests. 
Because there is such a critical need to treat large areas at a 
landscape level, being able to sell large volumes of small and medium 
sized logs is critical. Unfortunately, there are many areas of the west 
where sawmill infrastructure is gone or on the brink of disappearing. 
Areas in New Mexico, Colorado, California, Utah, Wyoming and others 
used to have sawmills, but now they have nothing. This makes it nearly 
impossible to do the work effectively. The cost of getting that 
infrastructure back is staggering. We need to make sure that a focus is 
placed on to creating large projects where the infrastructure exists in 
order to maintain it. Large projects should also be undertaken in areas 
where sawmills don't exist in order to provide opportunity for local 
businesses to get started again. Small projects over short periods of 
time do not provide enough material or the predictability to start or 
maintain a business. There have been projects that have been more than 
100,000 acres and up to 10 years in length. We need to see more of 
that.
    My fourth and final point is about the rural economics of the West. 
With the advent of the internet and improved communications the rural 
economy has been evolving and changing. One thing that people may not 
know is that in the rural communities some of the highest paying 
careers are in sawmills and jobs in the woods. In our area the average 
sawmill worker makes between $35,000 and $45,000 annually not including 
benefits. This makes up a very important part of the economic engine of 
our communities. Having mills adds value to property owners by 
providing an outlet for them to sell logs while they take care of their 
property. It also allows them to keep their land as working forests 
rather than development, which is changing the West. A healthy sawmill 
infrastructure allows much more opportunity for specialty and value 
added manufacturing. Timber revenue in the rural west also generates 
tax dollars for the local governments. Increasing volumes of timber 
from the National Forests from good projects can generate funds for 
counties. This could be part of the solution to secure rural schools 
and county payments.
    Sawmills and the resource industries are not the cornerstone of 
these rural western communities that they once were, but they play a 
vital role in the overall economic picture. It is very important to 
create a balanced economy in these communities so they are able to 
weather the storms of economic downturns. If you look at the vibrant 
towns in the rural west they have the element of balance. I truly 
believe that by treating our forests in a sensible way led by 
collaborative groups like the Northeast Washington Forestry Coalition 
we can add real economic and ecologic stability to communities where it 
has been missing for far too long.
    In conclusion my key points are:
      That collaboration makes sense and is very important to 
the management of our National Forests;
      That forest health is an important issue with real 
consequences and we must take action;
      That sawmill infrastructure makes forest health 
treatments possible; and finally
      The management of our Federal forests has profound 
impacts on our rural communities.
    The West is indeed changing, and my community is evidence of that. 
But while everything about our community is now more diverse and 
dynamic, we've found that collaboration through groups like NEWFC can 
help us find our common values and work together on solutions that meet 
all our needs. Congress can help by putting focus both financially and 
politically on putting more large projects together that help improve 
the state of our forests and the vitality of our rural economies.
    Thank you.
                                 ______
                                 
    Ms. Napolitano. Thank you, Mr. Vaagen. Next is Professor 
Lee. Welcome.

  STATEMENT OF ROBERT G. LEE, Ph.D., PROFESSOR, SOCIOLOGY OF 
          NATURAL RESOURCES, UNIVERSITY OF WASHINGTON

    Mr. Lee. Thank you. I thank all members of the Committee 
for the invitation to speak here. I have been studying wood-
producing communities in the west for about 30 years, and in 
the current view, we find a far more complex and heterogenous 
landscape. Some communities are thriving on imported wealth, 
either as amenity-based retirement communities for the middle 
class or estates for the wealthy. Other communities have sunk 
into poverty with populations that increasingly resemble urban 
inner cities and crime, substance abuse and reliance on 
government assistance.
    Many of these poorer communities even in remote mountain 
locations are now occupied by growing populations of in 
migrants from Central America. Persistent poverty also 
continues among many of the Native American populations.
    So I want to speak for a few minutes about how these 
changes in the west may affect how we meet future challenges, 
and there are three challenges that I would like to emphasize. 
The first is climate change induced by global warming, and this 
has a real affect on how we deal with the forests and 
particularly the fact that existing technologies will permit us 
to manage forests for carbon conservation while protecting for 
biodiversity.
    The current forest management policies on Federal lands 
favor a hands off, passive approach with minimal intervention. 
Passive management perpetuates unhealthy forests that are 
vulnerable to catastrophic outbreaks of disease, insects and 
wildfire. Such outbreaks contribute to global warming by 
releasing carbon dioxide from trees that could have remained 
living or been converted to wood in use by society.
    Active management of forests throughout the west will 
provide multiple benefits and carbon conservation, green energy 
production, health ecosystems and wood products. Other benefits 
include containing runaway fire suppression costs as more 
forests come under active management. The second factor is oil 
exploration and development, and I will not say much about that 
because Governor Schweitzer has already commented on that 
extensively.
    The third factor, the decline in the value of the dollar, 
and it is I think important for us to recognize that the 
current forest management policies were adopted during a robust 
economy when the purchasing power of the dollar was relatively 
strong. Resource exploitation was exported to other nations so 
that we could protect our forests and wild areas. If we move 
into a world with a weaker dollar, as some think we might, 
there will be increasing demand for domestic natural resources.
    These factors then combine and may have an affect on how 
forests and other wild land areas of the west are treated, and 
I would like to suggest that there are at least four obstacles 
that will need to be overcome. The first is that development of 
a more resource-based economy in the west will require a 
knowledgeable and skilled workforce. You have heard how 
education in the west is suffering, particularly in rural 
areas, and in many areas, the skilled rural industrial 
workforce of the past has been degraded or no longer exists. 
Education and training will be needed especially for those new 
in migrants who lack traditional skills.
    The rising prices of oil for transportation and heating 
will have demographic consequences, leaving rural areas to 
those employed in natural resource industries, stranded poor 
and wealthy in migrants. All this will exaggerate a current 
trend toward rural class stratification.
    The ethic of undisturbed natural regulated ecosystems is 
embodied in current Federal land management policies. 
Challenges of climate change, energy transitions and sustenance 
for domestic resources could only be met if Americans learn to 
live in harmony with nature, not separate from it. Land 
management ethics and policies adopted in the 1990s must be 
adjusted to meet the emerging challenges of the 21st century.
    And fourth, residual resentment and lack of trust in the 
Federal government among many western citizens inhabits 
investment in rural enterprises. Federal action is required to 
reestablish the political and legal basis for rebuilding trust 
in Federal land management. And in conclusion, the world of the 
21st century demands a more pragmatic and principled approach 
to Federal forest land management in particular.
    This nation's experiment with protecting self-regulating 
ecosystems of the west for a privilege minority is costly, 
impractical and fails to satisfy principles guiding a 
sustainable land use. To illustrate principles that will work, 
I am submitting for the record a part of a chapter from Broken 
Trust, Broken Land, a book I wrote in response to the 
formulation of current land management policies in 1994. I 
thank you very much for your attention today.
    [The prepared statement of Mr. Lee follows:]

  Statement of Robert G. Lee, Ph.D., Professor, Sociology of Natural 
        Resources, University of Washington, Seattle, Washington

    My name is Robert G. Lee. I hold a faculty appointment in the 
College of Forest Resources at the University of Washington, Seattle, 
Washington. I reside in Bow, Washington. I have served as a department 
chair, associate dean, and professor at the University of Washington, 
and have authored or edited three books and over 75 publications. As a 
professional sociologist and forester, much of my research has focused 
on wood-producing communities in the United States, Canada, and Japan. 
I grew up on a California ranch and was educated at the University of 
California, Berkeley (B.S. and Ph.D.) and Yale University (Masters of 
Forest Science). Before seeking University employment, I worked for the 
forest products industry, the U.S. Forest Service, and the National 
Park Service (as a research sociologist). My work on wood-producing 
communities and sustainability has received international attention, 
and President Clinton invited me to give testimony at his 1993 Forest 
Conference. I take pride in maintaining an independent and pragmatic 
stance on controversial natural resource management issues.
    The ``Evolving West'' is best understood in light of its historic, 
current, and possible future contributions to the welfare of nation as 
a whole. The West has been shaped by demographic, social, economic, and 
political forces stemming from Eastern settlements and emerging cities 
of the Midwest and West. Hence, the image of the West has always been 
defined from the perspective of non-rural Westerners seeking to realize 
its economic or aesthetic value.
    The West was opened by two closely linked demographic policies: 
removal of the Native American population and permitted settlement by 
farmers, ranchers, and miners. Its value was then redefined by 
Easterners who explored the West via railroad and consumed products 
moving east through Chicago, Kansas City and other emerging centers of 
commerce. The national forests, national parks, and other federal 
management authorities were established to harbor the value of public 
domain lands unclaimed by settlers. The Frontier closed by the 
beginning of the 20th Century, and administrative agencies 
(particularly the U.S. Forest Service and what became the Bureau of 
Land Management) worked closely with rural people to develop permanent 
settlements dependent on ranching and timbering.
    The U.S. Forest Service distinguished itself by excelling in 
community and economic development. A social contract committing the 
federal government to rural social and economic welfare emerged and was 
maintained until the last decade of the 20th Century. Federal range 
allotments for ranchers and sustained-yield timber production for wood-
producing communities were embodied in federal land management plans. 
These federal policies were guided by a land stewardship ethic 
promising protection of the productive capability of the land and a 
flow of resources for perpetuity.
    Two noteworthy changes, that would ultimately collide, accompanied 
the economic boom that followed World War II: timber production on 
federal lands was accelerated to meet the growing demand for middle 
class housing and emerging affluence and mobility brought recreational 
visitors to federal lands throughout the West. A commitment to the 
economic optimization of multiple resources (institutionalized by the 
requirements of the National Forest Management Act of 1976) ultimately 
displaced the historic stewardship ethic. By 1970, federal timber 
production was guided by an industrial model appropriate to a public 
enterprise. An extensive road network was pushed into previously 
unoccupied lands and federal agencies became increasingly dependent on 
revenues from timber sales. Although federal management practices 
enjoyed the respect of forestry professionals, the visiting public grew 
increasingly intolerant of extensive road-building and clearcutting. By 
the 1980's, the growing concern with forest aesthetics was compounded 
by new ecological findings suggesting that the survival of plant and 
animal species was threatened by extensive timber harvesting and road-
building.
    Advocates for termination of federal timber harvesting used 
ecological research to successfully challenge federal land management 
practices. Courts issued injunctions to halt federal timber harvesting 
in vast sections of the Pacific Northwest. During his 1992 campaign, 
presidential candidate Clinton promised to resolve this issue. 
Immediately after taking office, he held a ``Forest Conference'' in 
Portland, Oregon in April 1993. At that conference President Clinton 
initiated an interagency planning process that resulted in the 
Northwest Forest Plan. This plan was accompanied by related efforts 
throughout the West to reform policies governing timber, grazing, 
mining, and other permitted public uses of federal lands. The Northwest 
Forest Plan and its companion reforms were guided by a new ethical 
commitment that rejected both economic optimization and the historic 
stewardship ethic. Federal lands were to the greatest extent possible 
to be dedicated to protecting biodiversity and restoring the historic 
natural integrity of Western landscapes. This biologically-focused 
ethic was devoid of any concern for human welfare, other than the 
perceived benefits to humans of restoring nature to undisturbed, self-
regulating ecosystems.
    Sudden reductions in federal timber harvesting throughout the West 
adversely affected the local communities and economies that had been 
nurtured by previous federal policy. Industrial wage jobs were lost and 
resource-dependent businesses declared bankruptcy. Dislocated workers 
and entrepreneurs sold real assets at a fraction of their previous 
value. Affected citizens felt betrayed by their government for breaking 
the social contract, suffered political alienation, and turned to new 
political leadership--often advocating an anti-government sentiment. 
One hundred years of federal trust-building was quickly squandered, 
leaving a dispirited and reactionary population in its wake.
    The unprecedented economic boom the 1990's caused many policy 
advocates to predict that the resource extraction economies of the West 
would be successfully replaced by recreation, tourism, and settlement 
by footloose industries relying on the internet for communications. A 
substantial redistribution of the nation's wealth, fed by the shrinking 
of the middle class, provided capital for rejuvenating many of the 
communities and economies devastated by a decline in resource 
extraction. Urban to rural migration of wealthy individuals seeking a 
simpler and safer rural life accelerated in the 1990's, and continued 
into the new century.
    But places without attractive amenities did not fare as well. Rural 
family income declined as low-paying service employment replaced 
family-wage jobs. Some communities were overtaken by even greater 
poverty, and were wracked by family instability, violence, substance 
abuse, and other well-known consequences of economic dislocation and 
political alienation. Out-migration was common.
    Today we find a far more complex and heterogeneous western 
landscape. Some communities are thriving on imported wealth. Others 
have sunk into poverty, with populations that increasingly resemble 
urban inner cities in crime, substance abuse, and reliance on 
government assistance. Many of these poor communities, even in remote 
mountain locations, having suffered economic decline, are now occupied 
by growing populations of in-migrants from Central America. These new 
residents tend to be very poor, have substandard educational 
opportunities, and rely on sporadic low-wage employment in agriculture, 
forests, or domestic services.
    How do these changes prepare the West for the future? While I will 
not pretend to predict the future of the West, three historical forces 
are likely to work in combination to bring sustainable development to 
the West in the coming decades. First, attempts to limit climate change 
caused by global warming will stimulate efforts to substitute green 
energy for fossil fuels. Bioenergy appears to be a promising green 
alternative, since it is carbon neutral (carbon absorbed by growing 
plants is equal to carbon released when plants are consumed for 
energy). Second, the petroleum stocks that have fueled the industrial 
era are growing increasingly scarce. Unless an inexpensive alternative 
source of energy is soon discovered, progressively rising energy prices 
will stimulate discovery and exploitation of remaining oil, gas, and 
coal deposits. Higher prices for oil will increase the economic 
feasibility of alternative energy sources, including biofuels. Third, 
the declining value of the dollar will increase the demand for domestic 
natural resources, including food, energy, and materials.
    Forests are critical sources of carbon storage. Existing 
technologies permit us to manage forests for carbon conservation while 
protecting biodiversity. Carbon can be effectively stored in living 
trees or wood products in use by society. Active, ecologically informed 
management of forests is necessary to achieve efficient carbon 
conservation. Current forest management policies on federal lands favor 
a hands-off, passive approach with minimal intervention. As a result, 
vast areas of the West remain occupied by over-crowded trees. These 
unhealthy forests are vulnerable to catastrophic outbreaks of insects, 
disease, and wildfire. Such outbreaks contribute to global warming by 
releasing carbon dioxide from trees that could have remained living or 
been converted to wood in use by society. More active management of 
federal forests necessitates the development of rural wood-based 
industries appropriate to a society concerned with environmental 
protection, carbon conservation, and green energy sources.
    Oil, gas, and coal resources in the West will become increasingly 
important for meeting the nation's energy needs as world oil deposits 
are depleted. The Rocky Mountain region appears to have the highest 
potential for resource discovery and exploitation. Existing knowledge 
and technology permits energy extraction while also protecting 
endangered species. In addition, volcanically active areas of the West 
offer potential for geothermal power.
    Active management of forests throughout the West will provide 
opportunities for joint production of biofuels and wood products, 
providing multiple benefits in carbon conservation, green energy 
production, healthy ecosystems, and wood products. Other benefits will 
accrue by containing run-away fire suppression costs as more forests 
come under active management.
    Current federal land management policies were adopted during a 
robust economy when the dollar was relatively strong relative to 
foreign currencies. Resource exploitation was exported to other nations 
in order to satisfy the demands of affluent urban citizens for 
environmental protection and restoration in the United States. Well-
functioning global markets permitted the nation to substitute foreign 
for domestic sources of wood, food, and energy. Domestic forests, 
rangelands, and fossil fuel deposits could be set aside without adverse 
affects on the national economy. A weakening of the dollar, 
particularly if coupled with a weakening of the economy, could result 
in increasing demand for domestic natural resources abundant in the 
West.
    Sustainable development of the West would face several obstacles. 
Some of these obstacles could be overcome by concerted federal action. 
Others would require slower changes in political culture. Foremost 
among these obstacles is a heterogeneous rural population.
    Development of a sustainable resource-based economy in the West 
will require use of new technologies and scientific information. The 
existing workforce is inadequate. The skilled rural industrial 
workforce of the past been degraded or no longer exists. Dislocated 
workers moved to jobs in urban areas, entered the service sector, 
dropped out of the economy, or retired. In-migrants are either retirees 
occupying with cheaper housing, wealthy urbanites seeking to reenact a 
romantic vision of the West, or Central Americans seeking a better 
life. The latter provide a valuable potential workforce, but could only 
fill this role only with the assistance of a substantial public 
investment in basic education and advanced training. Appropriate 
educational and training investments would also be necessary to up-
grade the skills of those who have remained underemployed in rural 
communities following economic dislocation.
    Growing shortages of oil could increase the costs of transportation 
to the point where living in rural areas will be prohibitively 
expensive for those with fixed or modest incomes. Demographic shifts 
could occur, with accelerated migration to population centers where 
public transportation was available. This would leave rural areas to 
those employed in natural resource industries, stranded poor, and 
wealthy in-migrants, exaggerating current trends in rural class 
stratification.
    Economically independent in-migrants seeking a rural lifestyle, 
along with urban residents committed to the protection of undisturbed 
landscapes, are the most likely to resist sustainable development of 
the West. Resistance would stem from the romantic ethic of undisturbed 
nature in which ecological self-regulating substitutes for human 
intervention. This ethic is embodied in current federal land management 
plans. Challenges of climate change, energy transitions, and sustenance 
from domestic resources can only be met if Americans learn to live in 
harmony with nature, not separate from it. A return to the earlier 
stewardship or economic optimization ethics is unlikely, and would not 
meet current challenges. As a result, federal land management agencies 
need to begin now to engage the full spectrum of stakeholders and 
policy advocates in an ongoing dialogue to reach new agreements about 
how to manage the natural landscapes of the West. Land management 
ethics and policies adopted in the 1990's cannot meet the emerging 
challenges of the 21st Century.
    Another challenge facing the evolving West are weak relationships 
between the federal government and rural communities and businesses 
shocked by the sudden shift in federal land management policy in the 
1990's. Sustainable development of the West will be most effective with 
active rural entrepreneurship. Residual resentment and lack of trust in 
the federal government inhibits investment in rural enterprises. 
Insecurity of property rights and federal resource supplies is a 
barrier to economic initiative. Federal action is required to establish 
the political and legal basis for rebuilding trust in federal land 
management.
    The world of the 21st Century demands a more pragmatic and 
principled approach to federal land management. The nation's experiment 
with protecting self-regulating ecosystems of the West for a privileged 
minority is costly, impractical, and fails to satisfy principles 
guiding sustainable land use. To illustrate conditions necessary for 
sustainable land use, I am submitting for the Record a part of a 
chapter from Broken Trust, Broken Land: Freeing Ourselves from the War 
over the Environment--a book I wrote in response to the formulation of 
current land management policies in 1994.
                                 ______
                                 
    Ms. Napolitano. Without objection, so ordered. It will be 
entered into the record. I thank you for your testimony, and I 
would like to open first with a first question to Chairman 
Clifford Lyle Marshall in regard to your fisheries management 
efforts. You list them as your second major resource program. 
In addition to removing the four dams along the lower Klamath 
River, what role can this Committee play in assisting your 
efforts in restoring these fisheries?
    Mr. Marshall. Well, as I said, the Klamath and Trinity 
River Basin is the third largest river system that produces 
anadromous fisheries, salmon, coho, both coho and chinook for 
the entire west coast. It drives the commercial and sport 
fishing industry off of the coast.
    Ms. Napolitano. But what role can we play?
    Mr. Marshall. What it desperately needs is restoration 
funding. There has been a constant tug-of-war for restoration 
funding. There is a record of decision and a restoration 
program for the Trinity River that has been cut annually. It is 
in desperate need. Restoration is not going to work unless it 
is consistent. It has to be maintained on an annual basis over 
a long-term. If funding is cut, shortchanged any given year, it 
affects a brood year cycle. So Klamath River, it has not even 
begun in the Klamath River. The Klamath River needs a 
restoration program immediately, and it needs to be funded 
adequately.
    Ms. Napolitano. Do you believe the Secretary of Interior is 
doing a good job in serving as the trustee to protect these 
fishery resources?
    Mr. Marshall. I do not register for any party. I try to say 
neutral.
    Ms. Napolitano. No. This is the Secretary of Interior. It 
is not a party.
    Mr. Marshall. Well, we have a new one. I would say the 
Department of the Interior is not doing an adequate job to 
protect the resources, the fisher resources in the Klamath and 
Trinity Basin.
    Ms. Napolitano. What do you see as a need?
    Mr. Marshall. A focus and a priority on the river system 
and on the fishery. There are many competing resources. These 
are the last two wild and scenic rivers in the State of 
California. They are designated as such. The law requires that 
adequate stream flows be provided for anadromous and endangered 
species. They are competing interests, but the priorities are 
upside down.
    Ms. Napolitano. Thank you. Thank you for your honest 
answer. I will say that we are expecting a vote shortly. We 
will be three votes and maybe some other motions, and so we 
will try to speed this up so we do not have to return. So I 
will keep my questions very brief. I would like to ask Matthew 
Box from the Southern Ute Indian Tribe, the Vice-Chairman, I 
have been very active in the removal of Moab's spent uranium 
tailings. Are you involved with that, and although this is part 
of restoration and removal of contaminants, it is right by the 
Colorado River?
    Mr. Box. No, I do not believe. I believe that is the 
Northern Ute Tribe that is----
    Ms. Napolitano. The lower. OK. Just as a question simply 
because it is something that we have been working on, my 
subcommittee, for a very long time, and we look forward to 
continuing that. In the interest of time, I will defer now to 
Ranking Member Bishop.
    Mr. Bishop. I thank you, and I will try to make these as 
quick as I can as well and go through them and hit everybody. 
Chairman Marshall, was tourism ever an economic option for your 
area?
    Mr. Marshall. Tourism in our area is, yes, it is a growth 
industry. It never replaced the timber industry as an industry, 
but it is a----
    Mr. Bishop. It can enhance but not replace.
    Mr. Marshall. I would say that that is true.
    Mr. Bishop. Should the Federal lands adjacent to Indian 
reservations be designated as wilderness without the consent of 
the tribe?
    Mr. Marshall. Well, I will not say without the consent or 
at least without consideration of the tribe's concerns. We have 
lived next to Trinity River or, excuse me, Trinity wilderness 
area since it was designated, and what has been eliminated now 
is the buffer between the reservation. We had a number of 
concerns about that area, and we raised them.
    Mr. Bishop. Let me say for both you as well as Mr. Box, I 
appreciate your testimony. Both of them were right on. One of 
the problems we face in the forest is simply the fact that we 
have turned over to the Federal government the ability of doing 
everything when we used to have private infrastructure that 
helped with the maintenance of those forests so that if we 
still have 20 billion board feet of new growth every year and 
10 billion board feet of old dead growth, dead trees every 
year, and the Federal government is only trying to get up to 3 
billion, we cannot maintain that without the private 
infrastructure that you are talking about in both of your 
areas, and I appreciate your elements with that.
    Vice-Chairman Box, can I just ask you about the wages that 
you do with your energy business, how that compares to other 
things like maybe the ski industry around Durango?
    Mr. Box. I believe that from our energy aspect for our 
tribe at the least is about 72 percent of what we operate on, 
75 percent, and not really too aware of what that would do like 
with the ski industry in that area.
    Mr. Bishop. OK. Any kind of a comparison to what you guys 
are paying down there in this industry versus what they are 
paying for wages up there?
    Mr. Box. No.
    Mr. Bishop. Unfair question. Never mind. Let me go on. With 
what you have been able to do, you have provided schools and 
scholarships, office buildings, a whole bunch of really good 
stuff down there. If you had not developed the coal bed methane 
resources, would you have had any other options to produce that 
kind of economic opportunity?
    Mr. Box. I would believe not, no.
    Mr. Bishop. I appreciate that. Mr. Propst, there was a 
report that was recently done by your institute that said over 
600,000 people visited the grand staircase Escalante Monument. 
We checked with the county commissioners in those areas. They 
were dumbfounded with the assertion. So what I wanted to find 
out is what was the basis you used for that number, and why 
were you so wrong?
    Mr. Propst. I would have to--in fact, I will. I will do the 
research on that and report back to you. I do not have the 
answer to that on the tip of my tongue right now.
    Mr. Bishop. The third premise that you established I liked 
because it talked about diversified economy was the basis of 
what would happen in the future, that all different types of 
jobs have to be there. When I started this first hearing, I 
came up with the concept of education funding. So I am going to 
ask you again, how do you fund my schools?
    And I will give you a perfect example. Park City is one of 
the fastest growing recreational areas in the United States as 
well as in my state. They are doing a lot of good things. A lot 
of growth is going on there, a lot of construction, yada, yada. 
However, 25 years ago, 30 years ago when I first started in the 
legislature, we had a recapture program for our education 
funding, which means if a community could actually generate 
more property tax than what the state put as the minimum, we 
would recapture that and spread it throughout the rest of the 
state.
    We recaptured while the oil industry was going well in 
Summit County, Park City. We no longer recapture. We are now 
still trying to subsidize even though this is the new economic 
growth. So I will ask you the same question I was hoping that 
others would come up with. How do you fund my schools 
adequately?
    Mr. Propst. You ask a very important question. Funding for 
education I think is the key to future economic prosperity in 
the west. It is a challenge with Federal lands. It is a 
challenge with the state trust lands in the western states to 
generate a meaningful amount of revenue given the economic 
growth we have. Our society, our western states are quite good 
at taxing resource extraction. That goes back I think to the 
progressive area.
    We have not learned how to tax well what has replaced 
resource extraction in many communities. That is tourism. It is 
interesting to see communities. Moab, Utah is a great example.
    Mr. Bishop. Well, let me interrupt you just for a second.
    Mr. Propst. Yes.
    Mr. Bishop. I apologize for that, but I am looking at this 
clock going down here.
    Mr. Propst. Sure.
    Mr. Bishop. It is true what you are trying to say. We do 
not tax well the tourism industry because that is not where the 
value is.
    Mr. Propst. That is right.
    Mr. Bishop. If you have a job in mining or oil, you are 
doing three times as much money as you are doing for a job.
    Mr. Propst. Right.
    Mr. Bishop. You have three times as much money coming in in 
income tax than you do from tourism.
    Mr. Propst. Agreed.
    Mr. Bishop. You cannot do it with tourism alone, and I am 
sorry. We just hit the red light there.
    Mr. Propst. I agree you cannot do it with tourism. The 
challenge is how do we move that economy from tourism like Moab 
is trying to do to a diverse more mature economy that includes 
finance and engineering? It is interesting that Moab no longer 
spends as much on--and I want to make sure I have my numbers 
right. They are doing less advertising for tourists and more 
advertising showing their mountain biking and their river 
running and hunting to attract people with those higher-paying 
professional jobs. That is the transition that we need.
    Mr. Bishop. And that is what gets me frustrated is--I 
cannot say hell in here, can I? That is what gets me frustrated 
because I spent 16 years in legislature trying to balance an 
education funding formula, and I realized that what they are 
doing still does not equate to the overall economic picture and 
does not equate to the education funding. I cannot do it.
    But I get one mine down in San Juan County, and I can do 
three times the amount of effort as I can for all the tourism 
that is coming into Moab. It is nice, but it cannot replace 
what we need to have in a very strong, diversified, that has a 
very strong mining and mineral base and manufacturing base. So 
I appreciate what you are doing. I appreciate the testimony you 
gave as far as the forest and what you are doing and the 
communication. That is extremely important. Everything you said 
is wonderful, Professor. How are you? Nothing. Never mind. I 
have the questions in for everybody.
    Ms. Napolitano. Thank you. Mr. DeFazio.
    Mr. DeFazio. Thank you, Madam Chair. I am sorry that I 
could not hear the entire testimony of this panel. I had a 
number of constituents I had to meet with, but particularly to 
Mr. Vaagen, I am very interested in the experience in the coal 
bill and want to congratulate you and other community members 
for having made some substantial progress there. I note with 
interest that you are saying right now you are selling 35 
million. Your coalition has identified an area in need of 
responsible management that can support 80 million board feet 
annually. What is the holdup?
    Mr. Vaagen. It looks to be the agency. It is interesting 
that you brought that up because we are at 35, and that is 
probably being generous. We identified through a program I 
believe that was developed at the University of Washington 
called Land Management Systems, and you put a series of inputs 
in there, and it cranks out an output. Eighty million was the 
low. It was 80 to 102 million, and it was a scientific process 
with the environmentalists that are part of our coalition that 
developed this.
    Our local forest leadership group came back and said, well, 
we think we can do 60. So I do not understand the disconnect. I 
am diligently working on that. I spend a lot of time over at 
the Forest Service building trying to get answers.
    Mr. DeFazio. Well, I would like to be helpful in trying to 
get to the bottom of that because, I mean, the Colville is 
maybe a little different than the backlog inventory the Forest 
Service talks about, but they are talking about six billion 
board foot backlog of commercially viable timber backlogged for 
reforestation thinning, west side of Oregon and Washington. Now 
the Colville is a little different case. You have more of the 
fuels issues and that there.
    On these sales, I am not as familiar with the conditions on 
the Colville as some of the west side forests. Are these sales, 
I mean, are they break-even sales, or is there a cost to the 
Forest Service?
    Mr. Vaagen. OK. You are asking break even for my company, 
or you are actually asking break even for the Forest Service?
    Mr. DeFazio. Forest Service.
    Mr. Vaagen. The Forest Service sells timber on the Colville 
National Forest, and I do not know of any sales recently that 
have been deficit sales.
    Mr. DeFazio. Really?
    Mr. Vaagen. We have a lot of competition there that really 
speaks to infrastructure. The small diameter four and a half to 
seven-inch diameter logs command upwards of $60 a ton. So that 
is a good price. That is a lot of dollars per load. So you can 
get a lot of work done. We have constantly wondered why we have 
not been able to get more work done, especially as we 
collaboratively develop these projects with the help of the 
conservation community and others within the local community 
that think that the project should go on, and every time they 
get turned back to the agency, they seem to get smaller and 
more restrictive.
    Mr. DeFazio. I am curious. There have been no appeals or 
you know----
    Mr. Vaagen. If I could present a little anecdote. There was 
one project in particular that had a bunch of lodgepole pine on 
there and, silviculturally, lodgepole pine is seen in many 
areas as being a weed species. Therefore, it needs to be 
replaced with another carnivorous species. So there were a 
couple of projects that were started prior to our coalition 
getting involved. So we did not collaborate from the get-go. So 
we said, well, we just will not call those a collaborative 
project, but we will stay in touch.
    Some of the conservation groups came in and looked at the 
project lay out of the Forest Service and said, we are going to 
appeal this and litigate it if you continue on this path. The 
president of our Forestry Coalition, which is a forester for my 
company, was called and brought in as an intermediary between 
the agency and an environmental group to solve the problem, and 
we solved the problem, and it is now moving forward as a 
project and will not be appealed or litigated.
    I think that is huge when you think about the implications 
that an industrial forester came in and solved the problem 
between environmentalists and the Forest Service.
    Mr. DeFazio. Well, I am very intrigued, and I am going to 
ask staff to follow up on why we cannot achieve some of these 
larger numbers particularly if it is not an issue. I mean, what 
I hear a lot of times down my way is, well, we are losing money 
on those sales, and so we cannot do any more of them, and that 
is one thing, and I can understand some budget realities. But 
if they are break-even or even marginally profitable for the 
Forest Service, I would not understand why they would not want 
to achieve the higher numbers since you are dealing both with 
fuel reduction and economic activity.
    One other quick question, and again in your testimony, you 
talk about size and years. This is something that I have had a 
number of people raise with me, saying if you could do some of 
these projects that would provide more certainty, that is, over 
say a 20-year period, we could get some investment into some of 
these rural counties for infrastructure to utilize that project 
or that product. I mean, is 10 years enough or would 20 years?
    Mr. Vaagen. I believe that the stewardship contract 
authority is 10 years is the maximum length currently.
    Mr. DeFazio. Right. We could theoretically change that.
    Mr. Vaagen. Yes, absolutely.
    Mr. DeFazio. Do you think that would engender some 
additional investment or better projects?
    Mr. Vaagen. I think it might. I think it is very critical 
that the investment be local business as well. I think that 
historically we had a lot of businesses that came in that 
bought companies and sawmills and small towns, and then when 
the going got tough, they left town. When you have a company 
like ours that is locally owned, you stick through the hard 
times. So I think if we are going to redo that and they are 
going to put out projects that influence investment locally, we 
need to make sure that it is incentivized locally and we follow 
the SBA program to give incentives to those local community 
businesses to thrive.
    Mr. DeFazio. OK. Those are excellent suggestions, and I 
appreciate your testimony.
    Mr. Vaagen. Thank you.
    Mr. DeFazio. And I also appreciate the other members of the 
panel. My time has expired. Thank you, Madam.
    Ms. Napolitano. Thank you, Mr. DeFazio. Mr. Flake?
    Mr. Flake. I know the vote is on, so I will be brief. Mr. 
Propst, in your testimony, you talk about the west kind of 
being a magnet now for knowledge economy and talk about the 
importance of public lands to drawing that knowledge economy. 
Around the rest of the country, I am just wondering how you 
draw that correlation. Where would you consider in the United 
States what specific urban areas or rural areas have kind of a 
knowledge economy?
    Mr. Propst. Well, around the country, probably most 
concentrated around the universities. In the west, Tucson, 
Phoenix, Boulder, Colorado. The places where we have made the 
significant investment and then the economic development tends 
to cluster around that.
    Mr. Flake. You kind of draw the correlation between public 
lands here. Public lands are proving themselves to be the 
foundation for economic prosperity in a changing global economy 
as an alternative I guess to the boom and bust of resources 
economy.
    Mr. Propst. As an alternative, perhaps it is not so much an 
alternative I think as an evolution. It is a continuation of a 
maturing economy. In the research we have done--and I have 
brought copies of the publication where we could get into more 
detail--looking at western communities, and we analyzed all 411 
counties in the west, three factors rose to the top. One was 
the proximity of protected public lands, and that is not only 
your well-known Yellowstone National Park and Grand Canyon. 
That is also your lesser well-known units like the BLM units in 
the National Landscape Conservation System. So proximity to 
public lands correlates.
    Two is the educational attainment level of local residents 
correlate. That has a lot to do with capital, and the third is 
access. As an organization that is interested in conservation, 
this is definitely a two-edged sword, but proximity correlates 
strongly with an airport that has at least say 25,000 
enplanements a year. It has to be where people can come and go 
and they can live in the I-70 corridor, but they have 
reasonable access to Los Angeles or Denver.
    Mr. Flake. Well, we have the situation in Arizona where we 
have roughly 50 percent Federal ownership, and then you have 
the state ownership, BLM land. I mean, we are about 87 percent 
publicly owned.
    Mr. Propst. Right.
    Mr. Flake. You understand the difficulties and the burdens 
that places on local communities to try to have infrastructure, 
schools and whatever else with such a small tax base, but when 
I look around the country, I see knowledge economies. Austin, 
Texas, is always talked about. Texas has very little public 
land.
    I think it has to do more with what you do with private 
land or small pieces of publicly owned land. It does not 
require half the state be owned by the Federal government. 
There are burdens that make it very difficult for local 
communities, and I was just wondering if that is where you were 
going with that and how sustainable it is to simply rely on the 
knowledge economy and move away completely from a resource-
based economy.
    Mr. Propst. I would not suggest that in the west we should 
or we are moving away completely from a resource economy. I 
think that is an element of it and will be. I am also not 
suggesting that public lands are the only way to build a 
diverse, mature economy that includes professional services and 
knowledge and high tech and so forth, but it is the competitive 
advantage that the west has is to attract that fly fisherman or 
fly fisherwoman who is tied into the broader economy through 
professional services, finance, real estate, whatever the case 
may be but as Governor Schweitzer said values that proximity to 
clean, high quality cold water.
    Mr. Flake. Thank you.
    Ms. Napolitano. Thank you. We have votes already upon us, 
but I would like to end this hearing--I am sure Chairman Rahall 
would love to be here--but I hear loud and clear and I am sure 
some of us are very well-aware of the implications of that 
growth potential in the west, especially as Congressman Flake 
was indicating the infrastructure it is going to take to be 
able to sustain that new migration if you will.
    Education has got to be a key for all of us, especially 
Native Americans. That has for decades been an area where we 
are falling behind, and I think it is incumbent upon us to 
ensure that we pass that along to others and then as we are 
building these new communities to ensure that they are being 
greened. The alternative fuel delivery systems, whatever the 
issue is, there are many of them.
    I do not want to go into it right now because we have to 
leave, but I thank the panel for being here. I will leave I 
believe it is 30 days for input for questions and additional 
testimony you may wish to put before this Committee. Yes, Mr. 
Bishop?
    Mr. Bishop. I would ask unanimous consent to insert into 
the record this Congressional Research Service Report on wages.
    Ms. Napolitano. Without objection, so ordered. And unless 
the panel has any last thoughts, we will adjourn this hearing. 
Thank you.
    [Whereupon, at 12:55 p.m., the Committee was adjourned.]

    [Additional material submitted for the record follows:]

    [A statement submitted for the record by Hon. Cathy 
McMorris Rodgers follows:]

Statement of The Honorable Cathy McMorris Rodgers, a Representative in 
                 Congress from the State of Washington

    The Oregon Trail, starting in the mid 19th century, helped shape 
the American West. It helped to expand our nation and start the great 
migration that has developed the West and Northwest into what it is 
today. My ancestors arrived in this region in the early 1850s and were 
some of the first pioneers of the Trail. This arrival started what has 
been a long family agricultural tradition in Eastern Washington.
    In the West and in Eastern Washington, we are proud. We are proud 
of our ancestry, our heritage, our land and the resources we are 
entrusted to preserve and protect.
    Today our focus is on how the West is changing. Our agriculture and 
resources industry in Eastern Washington has faced some pretty times 
over the past few years. It is devastating every time I hear of another 
farmer having to sell or discouraging his kids from following in his 
footsteps. Tight margins, failing safety nets, and fuel and fertilizer 
costs that have doubled have made it difficult for many of our farmers 
to survive. It was heartbreaking to watch the Vaagen Brothers mill 
close in Republic in 2003. In a town of 950 people the mill employed 
250 at its peak, when it closed it laid off its last 87 workers. This 
is not an easy situation to bounce back from. These stories have become 
too common throughout the West.
    Yet there are new opportunities on the horizon. Opportunities that 
can help our agriculture and resources industry become vital once 
again. New technologies and research in renewable energy has the 
potential to help bring these industries back to the national 
forefront.
    We live in a resource rich country and we should not be strangling 
ourselves economically by not utilizing the resources we have been 
given or putting them off limits. As is too often the case with 
environmental issues, politics instead of science is setting the terms 
of the debate. All of us are environmentalists, but the key difference 
is how we seek to accomplish environmental protection. I believe that 
market incentives and science should be the basis of policy.
    A healthy, well managed forest is an incredibly productive and 
constantly renewing resource. The power of a healthy forest means bio-
refining for newer and cleaner energy sources. It means healthy 
wildlife habitat. Clean air, clean water. It means reduced risk of 
catastrophic wildfire hurting our homes and our communities. It 
provides the timber and paper products we need. And it is sustainable--
a well managed forest will be around forever.
    A diseased, bug-infested forest leads to wildfires. The latest 
example in Eastern Washington was the Tripod Complex Fire, which burned 
over 200,000 acres last year on the Okanogan National Forest. The cost 
to suppress the fires was $100 million and is likely the costly fire in 
Washington state history. The damage to the tourism-based industries 
was significant for Northeast Washington. Outfitters lost an estimated 
$30,000 in revenue and many snowmobile, hiking and horse trails will 
not be available for use by local residents or tourists.
    To add insult to injury, only 1.5 percent will be salvaged from the 
total area burned on this fire. Even this small amount is being 
challenged because according to environmental groups, this salvage is 
too much--1.5 percent is too much. These are the same groups that 
stopped attempted sales to harvest dead and dying trees in some of this 
same area in the 1990s when it was still considered a valuable 
resource. Endless lawsuits have crippled the timber sale program and 
timber sales are the primary tool for vegetative management with new 
tools existing in hazardous fuels reduction and stewardship 
contracting. For decades, the annual Forest Service sale program 
averaged around 11 billion board feet, while today it sits at just over 
2 billion board feet.
    Our western water and power infrastructure and the irrigated 
agriculture it serves remains important for Eastern Washington and all 
of America. By recognizing the value of irrigated agriculture, creating 
an environment where an adequate degree of certainty exists, and by 
respecting commitments upon which investments have been made, we can 
together solve the water issues that today seem so insurmountable.
    In 1948, the Columbia Basin Project began transporting Columbia 
River water by canal to more than 600 thousand acres on farms in 
central Washington. Major irrigated crops include alfalfa, potatoes, 
mint, beets, beans, orchard fruit, and wine grapes. In fact, Washington 
is the second largest premium wine producer in the United States. It 
made a barren and dry land into a bountiful and transformed one of the 
most productive wheat producing areas in the United States.
    The dams on the Columbia and Snake rivers, which provide clean, 
renewable, inexpensive and efficient electricity for the Northwest, add 
greatly to the Pacific Northwest's quality of life in a variety of 
ways. Dams control flooding, provide irrigation for our farmlands, add 
millions of dollars to the Northwest economy through navigation and 
transportation, attract new businesses, and create recreational 
opportunities for local residents and tourists.
    With farming, ranching, and logging come open spaces, recreational 
forests, and beautiful views. Without them, we end up with 
subdivisions. In our quest to protect the environment we imposed 
regulations that killed our rural industries. We have created a more 
protected environment. Unfortunately, we have also increased the cost 
of doing business in the resources industries, pushing many farmers, 
ranchers and loggers to ``exit the market.''
    Professor Mathew Manweller at Central Washington University 
summarized it well when he wrote, ``Here is the irony. Activists who 
once crusaded against loggers, ranchers and farmers are now the same 
people who are expressing shock over the decreasing rural nature of 
Washington state. Refusing to accept they are the cause of this long-
term change, they seek an easy scapegoat. The simplistic blame 
developers. The ignorant blame inattentive county commissioners and the 
clueless blame free trade. Such people are misled by the mistaken 
belief that we are running out of farm or ranchland, when in reality we 
are simply running out of farmers and ranchers.''
    We all share a common goal for a vibrant West and a strong rural 
community. Where we differ is how we measure our success and achieve 
that goal. I am confident that by coming together we can strengthen and 
ensure an agriculture and resources industry in the West for 
generations to come.
                                 ______
                                 
    [A letter submitted for the record by The Honorable Bill 
Sali from Governor C.L. ``Butch'' Otter, State of Idaho, to 
Chairman Rahall dated February 28, 2007, follows:]

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    [A statement submitted for the record by Rollin D. 
Sparrowe, Theodore Roosevelt Conservation Partnership, 
follows:]

   Statement of Rollin D. Sparrowe, Theodore Roosevelt Conservation 
                      Partnership, Daniel, Wyoming

    Dear Chairman Rahall: I am writing on behalf of the Theodore 
Roosevelt Conservation Partnership (TRCP) to offer perspectives on the 
role of rapid energy development in changing the Rocky Mountain West. 
TRCP is a national partnership of hunting and fishing conservation 
organizations working to guarantee places to hunt and fish for future 
generations. To accomplish that task, we have primary interest in how 
public lands and public resources are sustained while other uses occur. 
Without secure habitat and strong wildlife and fish populations, there 
is no future for hunting and fishing. Our interest extends beyond 
public lands to adjacent private lands because wildlife knows no 
borders in their search for quality habitat.
    Hunting and fishing--first for food and survival in settling the 
West, later for pure enjoyment of reliving the experiences of early 
explorers and settlers in the wild outdoors--is a mainstay of local 
culture and community in the Rocky Mountain West. I am attaching 
Backcountry Bounty, Hunters, Anglers, and Prosperity in the American 
West. Done in partnership with the Sonoran Institute, this document 
provides economic data on the values of hunting and fishing to the 
economies of Arizona, New Mexico, Idaho, Utah, and Wyoming and includes 
references that cover the rest of the states. The report frames these 
data with the importance of public lands to hunters and anglers, 
including remaining roadless areas. These wild country values attract 
hunters and anglers who spend money in local communities--in many cases 
lifeblood support for local businesses.
    Sonoran Institute data indicate that the very presence of wild, 
protected, public lands enhances the quality of life so that 
communities with protected lands grow faster economically than where 
there is no protection. The more protected the lands are, the faster 
the growth. For example, counties where more than 50 percent of the 
federal public land is in protected status, such as wilderness, have 
grown 66 percent faster from 1970 - 2000 than counties where the same 
percentage of public land has no permanent protective status.
    Many influences are at work in the West--drought, housing 
development, roads, long-term climate change and more. Wildlife and 
fish populations are widely stressed by the intensity of human 
pressures--and the arrival of the largest ``boom'' yet in energy 
development has added to the stress. If urbanization and road-building 
need active management to assure that wildlife survive, the frenzy of 
gas development in the last decade needs management and moderation as 
much as any influence. While we recognize the economic prosperity that 
comes with oil and gas, there are important costs.
    Huge areas of the most important wildlife habitats occur above oil 
and gas deposits and direct conflicts may threaten the very existence 
of hunting and fishing programs as we have know them. In the Upper 
Green River Basin of Wyoming, rapid gas development activity and dense 
well spacing have been shown to reduce both wintering mule deer and 
breeding sage grouse. In the Powder River Basin (PRB) of Montana and 
Wyoming coal bed natural gas--with its smaller but more numerous 
wells--has produced water quality and disposal problems. Sage grouse 
research in the PRB predicts extirpation of grouse unless significant 
blocks of habitat are preserved. Newly authorized projects of similar 
size are coming on line in Wyoming's Red Desert and Colorado's Roan 
Plateau and Piceance Basin that harbor one of the West's largest mule 
deer and elk populations. Colorado's North Park and the San Juan Basin 
in Colorado and New Mexico are expecting new drilling and development, 
as are parts of Utah in vital mule deer ranges.
    The loss of wintering mule deer near Pinedale, Wyoming, has begun 
to negatively impact mule deer hunting in over 30 miles of the Wyoming 
Range. A new project at Atlantic Rim, along the Continental Divide near 
the Colorado border, will have strong negative impacts on hunting, 
outfitting, bird watching, and traditional outdoor uses. Both areas 
have been important hunting grounds for world class mule deer.
    The very nature of communities is being changed rapidly, with 
little or no planning. The boom in the Upper Green River area was 
highlighted in a February 5, 2007, article in the New Yorker magazine 
(Boomtown Blues--How Natural Gas Changed the Way of Life in Sublette 
County by Alexandra Fuller) and is a story starting to repeat itself. 
Baggs, Wyoming, and Craig, Meeker, and Rifle, Colorado, have been small 
towns with a strong heritage of hunting, fishing, outfitting, and the 
history that goes with it. President Theodore Roosevelt hunted near 
Meeker and stayed at the Meeker Hotel. The great conservation President 
would be aghast at the mechanized pace of industrialization spreading 
out into the surrounding public lands he loved to hunt.
    One of the things being lost by the pace and pervasive nature of 
the current boom is wildness. Exploration, well fields, pipelines, 
transmission lines, connector roads, infrastructure of all kinds is 
rapidly replacing wildness. Rural residents in ranching country who 
have been isolated for 100 years suddenly have heavy truck traffic 
24/7. The loss of solitude is compromising the quality of fishing and 
hunting and just living in the area.
    Citizens are revolting at the unrelenting pace of development, 
especially as it enters their favorite wild country. Two groups of 
citizens have recently formed to call for no more drilling in the 
Wyoming Range. Colorado hunters have pushed for state legislation to 
control the decision process--to the extent a state can influence a 
largely federal process.
    Even though huge Western landscapes have as much as 90 percent of 
public lands already leased, a new thrust of extensive leasing is 
occurring. Department of Interior Bureau of Land Management (BLM) lease 
offerings since the election last fall have offered sensitive wildlife 
habitats, private home sites, stream bottoms, and even historic sites 
in the Rocky Mountain West. Citizens, hunter and angler organizations, 
and state wildlife agencies are lodging formal protests, but the list 
of lease offerings remains large.
    Serious public involvement, with lead agencies like the BLM and 
Forest Service, truly opening up their decision processes to listen to 
what their public wants, could make a difference. But, that difference 
requires those agencies to say no to some of what is happening. To 
enter into truly transparent, public planning processes with 
development companies and other agencies from a premise of ``How do we 
develop and still assure that fish and wildlife values are sustained?'' 
could make a difference in how projects are implemented. Without this 
up-front planning, wildlife will continue to be considered an 
impediment to progress and what is done for wildlife will be reactive, 
after damage is done.
    Sportsmen and women across the nation are speaking out on this 
issue as they observe the public lands and waters where they love to 
hunt and fish being affected by energy development. Where energy 
development is increasing, hunters and anglers are seeing changes in 
both the numbers and behavior in the fish and wildlife populations they 
treasure. TRCP believes that these mounting impacts must be addressed 
by the federal government and energy companies as they continue to 
expand development on public land.
    Hunting and angling cannot be maintained as the social and economic 
engine they have been for small communities in the West if the fish, 
wildlife, and habitats that support them continue to be overrun as they 
have been so far. Our backcountry bounty is in danger, it needs your 
help and we stand ready to help make its future better.
Attachments
    1.  ``Boomtown Blues,'' Source: The New Yorker, dated February 5, 
2007.
    2.  ``Backcountry Bounty: Hunters, Anglers and Prosperity in the 
American West,'' Sonoran Institute, Theodore Roosevelt Conservation 
Partnership, dated June 2006.
                                 ______
                                 

NOTE: Attachments to Mr. Sparrowe's statement have been 
retained in the Committee's official files.
    [A letter submitted for the record by Dick and Connie 
Wilson, Broadus, Montana, follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    NOTE: The CRS memorandum dated February 1, 2005, on ``Wages 
of workers in the mining and tourism industries'' submitted for 
the record by The Honorable Stevan Pearce has been retained in 
the Committee's official files.

    NOTE: A report submitted for the record by The Honorable 
Rob Bishop entitled ``Living Wage Jobs in the Current Economy: 
2006 Northwest Job Gap'' by Dennis Osorio, Will Pittz and 
Gerald Smith, Northwest Federation of Community Organizations, 
has been retained in the Committee's official files.

                                 
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