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





   LAND-USE ISSUES ASSOCIATED WITH ONSHORE OIL AND GAS LEASING AND 
                              DEVELOPMENT

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

                        JOINT OVERSIGHT HEARING

                               before the

                SUBCOMMITTEE ON NATIONAL PARKS, FORESTS
                            AND PUBLIC LANDS

                             joint with the

                       SUBCOMMITTEE ON ENERGY AND
                           MINERAL RESOURCES

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                        Thursday, April 26, 2007

                               __________

                           Serial No. 110-21

                               __________

       Printed for the use of the Committee on Natural Resources



  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
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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 Sandlin, 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
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                    JIM COSTA, California, Chairman
          STEVAN PEARCE, New Mexico, Ranking Republican Member

Eni F.H. Faleomavaega, American      Bobby Jindal, Louisiana
    Samoa                            Louie Gohmert, Texas
Solomon P. Ortiz, Texas              Bill Shuster, Pennsylvania
Rush D. Holt, New Jersey             Dean Heller, Nevada
Dan Boren, Oklahoma                  Bill Sali, Idaho
Maurice D. Hinchey, New York         Don Young, Alaska ex officio
Patrick J. Kennedy, Rhode Island
Hilda L. Solis, California
Nick J. Rahall II, West Virginia, 
    ex officio
                                 ------                                

        SUBCOMMITTEE ON NATIONAL PARKS, FORESTS AND PUBLIC LANDS

                  RAUL M. GRIJALVA, Arizona, Chairman
              ROB BISHOP, Utah, Ranking Republican Member

Dale E. Kildee, Michigan             John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii             Chris Cannon, Utah
Donna M. Christensen, Virgin         Thomas G. Tancredo, Colorado
    Islands                          Jeff Flake, Arizona
Rush D. Holt, New Jersey             Rick Renzi, Arizona
Dan Boren, Oklahoma                  Stevan Pearce, New Mexico
John P. Sarbanes, Maryland           Henry E. Brown, Jr., South 
Peter A. DeFazio, Oregon                 Carolina
Maurice D. Hinchey, New York         Louie Gohmert, Texas
Ron Kind, Wisconsin                  Tom Cole, Oklahoma
Lois Capps, California               Dean Heller, Nevada
Jay Inslee, Washington               Bill Sali, Idaho
Mark Udall, Colorado                 Doug Lamborn, Colorado
Stephanie Herseth Sandlin, South     Don Young, Alaska, ex officio
    Dakota
Heath Shuler, North Carolina
Nick J. Rahall II, West Virginia, 
    ex officio






















                                 ------                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, April 26, 2007.........................     1
Statement of Members:
    Costa, Hon. Jim, a Representative in Congress from the State 
      of California..............................................     3
    Grijalva, Hon. Raul M., a Representative in Congress from the 
      State of Arizona...........................................     1
        Prepared statement of....................................     2
    Pearce, Hon. Stevan, a Representative in Congress from the 
      State of New Mexico........................................     7
    Peterson, Hon. John E., a Representative in Congress from the 
      State of Pennsylvania......................................     4
Statement of Witnesses:
    Adami, Steven M., Rancher, Powder River Basin Resource 
      Council, Sheridan, Wyoming.................................    77
        Prepared statement of....................................    78
        Response to questions submitted for the record...........    80
    Bisson, Henri, Deputy Director, Bureau of Land Management, 
      U.S. Department of the Interior............................    17
        Prepared statement of....................................    18
        Response to questions submitted for the record...........    22
    Emmerich, John, Deputy Director, Wyoming Game and Fish 
      Department, on behalf of the Western Governors' Association 
      and The Association of Fish & Wildlife Agencies............    43
        Prepared statement of....................................    45
    Ferguson, Tony L., Director, Minerals and Geology Management, 
      National Forest System, Forest Service, U.S. Department of 
      Agriculture................................................    11
        Prepared statement of....................................    13
        Response to questions submitted for the record...........    15
    James, Jewell, Policy Analyst, Lummi Indian Nation...........    47
        Prepared statement of....................................    49
    Jurrius, John, Financial Advisor to the Ute Tribe, 
      representing Maxine Natchees, Chairwoman, Northern Ute 
      Tribe......................................................    63
        Prepared statement of....................................    65
        Response to questions submitted for the record...........    69
    Korenblat, Ashley, President, Western Spirit Cycling.........    81
        Prepared statement of....................................    83
        Response to questions submitted for the record...........    86
    Moseley, Claire M., Executive Director, Public Lands Advocacy    87
        Prepared statement of....................................    88
        Response to questions submitted for the record...........    96
    Muggli, Roger, Manager, Tongue and Yellowstone River 
      Irrigation District, Miles City, Montana...................    98
        Prepared statement of....................................   100
    Utesch, Peggy, Western Organization of Resource Councils & 
      Western Colorado Congress..................................   102
        Prepared statement of....................................   104
Additional materials supplied:
    Devaney, Earl E., Inspector General, U.S. Department of the 
      Interior, Letter submitted for the record by Hon. Stevan 
      Pearce.....................................................     8
    Hoeven, Hon. John, Governor of North Dakota, Chairman, 
      Interstate Oil & Gas Compact Commission, Letter submitted 
      for the record by Hon. Stevan Pearce.......................   112
    Natchees, Maxine, Chairman, Business Committee, Ute Indian 
      Tribe, Uintah & Ouray Reservation Utah, Letter submitted 
      for the record by John Jurrius.............................    63












 
OVERSIGHT HEARING ON ``LAND-USE ISSUES ASSOCIATED WITH ONSHORE OIL AND 
                     GAS LEASING AND DEVELOPMENT''

                              ----------                              


                        Thursday, April 26, 2007

                     U.S. House of Representatives

        Subcommittee on National Parks, Forests & Public Lands,

      joint with the Subcommittee on Energy and Mineral Resources

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittees met, pursuant to call, at 10:08 a.m. in 
Room 1334, Longworth House Office Building. Hon. Raul M. 
Grijalva [Chairman of the Subcommittee] presiding.
    Present: Representatives Grijalva, Costa, Pearce, Holt, 
Lamborn, Shuler, and Udall.

 STATEMENT OF THE HONORABLE RAUL M. GRIJALVA, A REPRESENTATIVE 
             IN CONGRESS FROM THE STATE OF ARIZONA

    Mr. Grijalva. Let me call to order the joint hearing of the 
Subcommittee on National Parks, Forests and Public Lands, and 
the Subcommittee on Energy and Mineral Resources on land uses 
associated with onshore oil and gas leasing and development.
    Our colleagues, the Ranking Members, will be here shortly. 
One is testifying and one is on the Floor, but we will begin 
with our opening statements and by the time we are done I think 
they will be arriving.
    I am pleased today to join Chairman Costa in welcoming our 
witnesses and audience to this joint oversight hearing. Today's 
hearing will examine how the accelerated pace of oil and gas 
development on public lands in recent years is affecting other 
public uses and resources.
    Today, we will hear from witnesses who have come a long way 
to tell us about what the oil and gas boom has meant to the 
ranchers, their homes, their health, and their livelihoods. 
Most have never testified before Congress. One is a living 
descendent of Chief Seattle, and another has never traveled 
east of the Mississippi. At least two of our witnesses have had 
to sell their homes because of oil and gas development that 
drove them off the land that they loved. Other witnesses will 
tell us of leasing operations that have been permitted to 
undermine Federal and state investments, and clean water, 
endangered species protection, and invasive species control.
    It is not surprising that regular citizens can't get 
satisfaction out of BLM when they complain about the harm that 
their cattle, property, and water is suffering. The BLM 
sometimes can't even be bothered to address concerns of the 
National Park Service, its sister agency in the Interior 
Department. I have here copies of numerous letters sent to BLM 
from park superintendents in Utah, Colorado, and New Mexico who 
wrote to express worries and possibly unacceptable damage to 
park resources.
    The letters talk about threats to the park's pristine air 
and sparkling waters, to views of starlit night skies and 
majestic western panoramas, to the backcountry solitude, and 
the quiet that visitors treasure when they visit these sights, 
to the archeological jewels and to the wild creatures that call 
the parks their home. In most cases, the superintendents did 
not request that the parcels be withdrawn, merely that the 
leases be delayed until stipulations could be put in place to 
protect those park values.
    In some cases, BLM made changes reflecting the parks' 
concerns. In others, BLM ignored the superintendents' pleas, 
belittled their concerns, or simply did not respond.
    I would like to enter these letters into the record.
    [NOTE: The letters submitted for the record have been 
retained in the Committee's official files.]
    Mr. Grijalva. We also will hear today from a representative 
of the Western Governors' Association, which has called for the 
repeal of a provision in the Energy Policy Act of 2005, that 
exempted more than a thousand new permits to drill annually 
from any environmental review and public comment.
    Industry supporters are always asking those who worry about 
the impact of oil and gas development if we drive gas-powered 
cars or heat our houses with natural gas. They imply that if we 
use oil and gas, we have no right to complain about how these 
products are produced. That is a false choice. Our 
irreplaceable natural resources and critical wildlife 
populations are paying the price not for our energy needs but 
for the lack of vigilance and oversight.
    There are right places and right ways to develop our energy 
resources, and there are wrong places and wrong ways to 
undertake that development. Balancing energy production with 
the care of our parks, our wildlife, and the livelihoods of our 
Western citizens is possible. We simply need the resolve to 
meet that standard.
    At this point let me turn to my colleague, Mr. Costa, for 
any opening remarks he may have.
    [The prepared statement of Mr. Grijalva follows:]

          Statement of The Honorable Raul Grijalva, Chairman, 
        Subcommittee on National Parks, Forests and Public Lands

    I'm pleased to join Chairman Costa in welcoming our witnesses and 
audience to this joint oversight hearing of the National Parks, Forests 
and Public Lands Subcommittee and the Energy and Mineral Resources 
Subcommittee.
    Today's hearing will examine how the accelerated pace of oil and 
gas development on public lands in recent years is affecting other 
public uses and resources.
    Today, we will hear from witnesses who have come a long way to tell 
us about what the oil and gas boom has meant to their ranches, their 
homes, their health and their livelihoods. Most have never testified 
before Congress. One is a lineal descendent of Chief Seattle and 
another has never before traveled east of the Mississippi.
    At least two of our witnesses have had to sell their homes because 
oil and gas development drove them off the land they loved. Other 
witnesses will tell us of leasing operations that have been permitted 
to undermine federal and state investments in clean water, endangered 
species protection and invasive species control.
    It's not surprising that regular citizens can't get satisfaction 
out of BLM when they complain about harm to their cattle, property and 
water. The BLM sometimes can't even be bothered to address concerns of 
the National Park Service, its sister agency in the Interior 
Department.
    I have here copies of numerous letters sent to the BLM from park 
superintendents in Utah, Colorado and New Mexico who wrote to express 
worries about possibly unacceptable damage to park resources.
    The letters talk about threats to the parks' pristine air and 
sparkling waters, to views of starlit night skies and majestic western 
panoramas, to the backcountry solitude and quiet that visitors 
treasure, to archeological jewels and to the wild creatures that call 
our parks home.
    In most cases, the superintendents did not request that the parcels 
be withdrawn, merely that the leases be delayed until stipulations 
could be put in place to protect those park values. In some cases, BLM 
made changes reflecting the parks' concerns. In others, BLM ignored the 
superintendents' pleas, belittled their concerns, or simply did not 
respond. I would like to enter these letters in the record.
    We will also hear today from a representative of the Western 
Governors Association, which has called for the repeal of a provision 
in the Energy Policy Act of 2005 that exempted more than a thousand new 
permits to drill annually from environmental review and public comment.
    Industry supporters are always asking those who worry about the 
impact of oil and gas development if we drive gasoline-powered cars or 
heat our houses with natural gas. They imply that if we use oil and 
gas, we have no right to complain about how those products are 
produced.
    But that is a false choice. Our irreplaceable natural resources and 
critical wildlife populations are paying the price not for our energy 
needs, but for lack of vigilance.
    There are right places and right ways to develop our energy 
resources, and there are wrong places and wrong ways to undertake that 
development. Balancing energy production with the care of our parks, 
our wildlife and the livelihoods of our western citizens is possible. 
We simply need to resolve to meet that standard.
                                 ______
                                 

 STATEMENT OF JIM COSTA, A REPRESENTATIVE IN CONGRESS FROM THE 
                      STATE OF CALIFORNIA

    Mr. Costa. Thank you very much, Mr. Chairman. It is indeed 
my honor to hold this joint hearing between the two 
Subcommittees, the Subcommittee on National Parks, Forests and 
Public Lands. I know what passion and energy you and your staff 
and your committee members bring to your efforts in the 110th 
Congress, to focusing on prioritizing the needs of our national 
parks, our forests, and public lands.
    Our Subcommittee on Energy and Mineral Resources, as it 
relates to our efforts on public lands, complements the efforts 
that you work on, and so it is fitting and appropriate that 
this morning the two Subcommittees meet together in a joint 
hearing to examine how we can better be stewards, responsible 
stewards in producing the necessary energy for our country, for 
our citizens to maintain our ability to provide a quality of 
life, and to continue economic opportunities for all. But, as 
we know, therein lies the challenge of the balance between 
providing the sustenance for our economy and at the same time 
protecting that quality of life that all of our citizens, I 
think, feel very serious about, and concerned.
    So as we look about producing energy from a variety of 
resources, as we talk about the overlapping jurisdictions 
between these two Subcommittees, we need to look at how we do 
so in a responsible way that allows for sustainability. So we 
will have witnesses testifying this morning in three panels 
that we are all looking forward to hearing from, including our 
first witness, a colleague of ours, Congressman Peterson, that 
talks about this balance, that talks about the sustainability, 
that talks about how we do so in a responsible fashion.
    Certainly we know that the effect of oil and gas 
development impacts our quality of life. It impacts our lands, 
our water, communities--especially in the West where it is 
predominant. So this morning will give us a chance to better 
understand and collaborate how we deal with the effects, for 
example, of coalbed methane production that are associated with 
``split-a-state'' concerns.
    We will have a chance to look at the impacts of the 2004 
1.5 trillion cubic feet of coalbed methane that was produced in 
five Rocky Mountain states that provides an important source of 
energy. Six percent of the total U.S. natural gas supply, of 
course, by the Western Governors' Association account, is 
derived from there. We know that oil and gas currently provides 
63 percent of the U.S. consumption needs.
    We held a hearing with our Subcommittee on March 14. 
Testimony was added from the acting Bureau of Land Management 
Director Jim Hughes that 44 million acres of onshore bedroll 
lands nationwide are currently under lease out of 270-million-
plus acres of Federal lands. You can do the math and understand 
clearly what percentage 44 million acres is of 270 million 
acres.
    In five Rocky Mountain states, 85 percent of all the oil 
resources and 88 percent of all the natural gas resources on 
Federal lands are currently available for leasing. There is 
always the argument we are not doing enough. Well, I would 
submit for the record that 85 percent of Federal lands that 
currently are available is quite a bit.
    Finally, let us talk about where we go from here, and I 
think that is something that we are looking forward to in the 
testimony this morning, because this hearing is about balance, 
it is about sustainability, and it is about being good stewards 
of our environment.
    So, Mr. Chairman, I am pleased that we could hold the two 
Subcommittees in a joint hearing for the purpose of doing good 
public policy, and I look forward to hearing the testimony from 
the witnesses. Thank you.
    Mr. Grijalva. Thank you very much, Mr. Chairman, and let me 
by way of an announcement, when Ranking Member Pearce and 
Ranking Member Bishop arrive from the commitments that they 
have outside this hearing, wherever we are in the process, I 
will suspend that and allow the gentlemen to give their opening 
statements.
    With that, let me turn to our first witness today, our 
colleague from Pennsylvania, Representative John Peterson. 
Representative Peterson, thank you so much for being here, and 
we look forward to your comments.

  STATEMENT OF JOHN E. PETERSON, A REPRESENTATIVE IN CONGRESS 
                 FROM THE STATE OF PENNSYLVANIA

    Mr. Peterson. Thank you very much. It is a delight to be 
back at my committee, or what I have been a part of for 10 
years. I fought to stay here, but got bumped off. I want to 
thank Chairman Grijalva, Chairman Costa, and Ranking Members 
Bishop and Pearce for allowing me to come back to my old 
committee and testify today.
    I spent 10 years here, and represent the most rural 
district east of the Mississippi, a district that looks an 
awful lot like the West. My district is home to Pennsylvania's 
only national forest, abundant supply of coal, natural gas, 
some oil, and I live five minutes from Drake Well, the first 
oil well ever produced in the world, and I want to just talk 
about that a minute.
    Oil Creek Valley that culminated from Drake Well is a 
valley between Titusville and Oil City, Pennsylvania, and the 
City of Oil City was where Quaker State, Pennzoil and Kendall, 
and all the major refineries, Standard Oil, they all started 
there. That valley was decimated. Back then they didn't know 
how to produce oil. They punched holes in the ground and oil 
sprayed everywhere. I have pictures of that valley and the 
hillsides surrounding it where there was not a blade of grass, 
not a tree alive; just dead snags and nothing alive.
    Today, that is a state park. It is a mature hardwood 
forest. The springs are clear. Three are brook trout streams 
which is a pretty good symbol that water quality is back, and 
Oil Creek itself, which was called Oil Creek before they 
produced oil there because oil pressure pushed oil up out of 
the ground, and so there was always a scum of oil on Oil Creek 
historically because of the oil sand being close to the 
surface. It was only 68 feet deep there when they discovered 
oil. That is why they discovered it there.
    That valley today, that stream today, trout and small-mouth 
bass both propagate there naturally. That is not very common. 
It is one our best fisheries in eastern Pennsylvania. It shows 
you what nature does when allowed to recuperate.
    My district is the shining example of how we can both 
produce energy responsibly while preserving the natural beauty 
of our land. I know this is the purpose of the hearing today, 
to help us strike this balance.
    However, I fear the committee may be moving beyond 
mitigation of energy production on our public lands toward 
decreased access, which I hope will not be the case. It will 
cause serious economic security, energy security, and national 
security issues, and I will try to explain that more clearly.
    So that is why I am here, to hopefully remind us all that 
energy production on our public lands can be done responsibly 
while supporting our economy, enhancing our security, and 
maintaining wildlife habitat and recreation right along side of 
it.
    Today, our energy consumption in this country is 86 percent 
fossil fuel. I know that is what distresses us all, 86 percent. 
We have 8 percent nuclear. That leaves us a small percentage of 
renewables, which I will talk about in a minute. About 90 
percent of America's energy is on public land, and as it is 
under our prevail. Thus, we must have access to our public 
lands in order to have affordable domestic energy to heat and 
cool our homes and businesses, and to employ workers, and 
produce goods in America.
    Much of this public land is already locked up for energy 
production, and the numbers were just given, and locking up 
more I think would be bad public policy. It needs to be 
produced right, by the laws, by the rules. It can be done 
correctly. The resources in the West do not belong to the West. 
They belong to all Americans. My constituents need access to 
those resources as the rest of America does.
    I am a strong supporter of renewables. I have worked with 
my staff all year on how we can increase renewables, and the 
farther I dig into it the more concerned I get. There is no 
silver bullet when it comes to renewables. I wish there were, 
and we have the chart here of today's consumption, and when you 
get down the renewables the number is scarcely small: 86 
percent fossil fuels, 8 percent nuclear, 6 percent renewables, 
and 5 percent of that is hydroelectric or biomass. One percent 
makes up all the ones we are trying to build our future on--
wind, solar, biofuels and hydrogen, and I haven't found one of 
them that can double in the next 10 years in volume, though we 
are increasing our use of energy 3 percent a year.
    I think we need to be careful how we target big oil also. I 
am not a fan of big oil, but some may criticize so-called big 
oil and say they don't need increased access to oil and gas. 
Policies aimed at hurting big oil, whether they are tax 
increases by Ways and Means, or decreased access to public 
lands by this committee, don't reach their intended targets 
because independent oil and natural gas producers drill 90 
percent of the nation's oil and gas wells.
    These small business operators are responsible for 
supplying 68 percent of American's oil and 82 percent of 
overall American natural gas. At the same time increased taxes 
and decreased access here at home simply serve to push 
production overseas. When we produce energy at home, lots of 
Americans make money, lots of people make livings, it is a part 
of our economy. When we buy energy from overseas, there are no 
American jobs, there is no American economy. We just send our 
money to foreign countries.
    So let us be careful when we use big oil as an excuse to 
block production because in reality it is the small producers 
who we are hurting most.
    The negative impacts from decreased access to domestic 
energy are felt across our country. I believe the biggest 
threat to America's economic future is not terrorism. It will 
be available, affordable energy. The world's energy supplies 
are very tight. We have never faced this before. We have never 
had China and India that are soon going to be larger consumers 
of energy than us, and we are going to fight--and probably the 
word is fight--to have energy for this country, affordable 
energy for this country.
    American businesses are already being driven offshore by 
rising prices and specifically natural gas. Polymers, plastic, 
chemicals, fertilizer, glass, steel, aluminum are struggling to 
compete in America because they pay the highest natural gas 
prices in the world. When oil is $70 a barrel, the whole world 
pays. But we have had the highest natural gas prices in America 
now for six years, and it is causing our major companies to 
decide whether they are going to remain here or whether they 
can remain here, and be competitive when other countries have 
natural gas at a fraction of the cost that they pay here.
    They are crying for Congress to make it easier to harness 
energy here at home, not harder. I can also point to the trade 
deficit as an example of inadequate domestic energy supply 
hurting our economy. A third of our trade deficit comes from 
buying foreign energy from unstable governments, countries who 
don't support us, countries who could very quickly be our 
enemy.
    I don't know about you, but I don't feel very comfortable 
with that.
    There is a world shortage of energy. We must conserve. We 
waste a lot of energy, and we must do everything we can to use 
energy more wisely. What has concerned me--I have been in 
Congress, this is my eleventh year--is that we have increased 
dependence on foreign oil by 2 percent a year from unstable 
foreign countries who don't like us and whose governments are 
not even friends of ours.
    I am not advocating that industry have carte blanche with 
our public lands. We can have access to plentiful domestic 
energy while also improving our environment and public lands 
thanks to improved technology.
    Yes, we should mitigate environmental impact on public 
lands from oil and gas production, but we should do so in a 
reasonable manner that doesn't have the end result of shutting 
down production, moving jobs overseas, increasing our reliance 
on foreign energy, and decreasing our security.
    It is my view that if we don't find a way to have more 
affordable energy and prevent the next spikes of energy costs 
in this country, we will be saying to the working men and women 
of America you won't have a job here. We won't make bricks 
here. We won't make glass here. We won't bend steel here. We 
won't bend aluminum here. We will not make petrochemicals 
because 55 percent of their cost is natural gas. Seventy 
percent of the cost of some kinds of fertilizer is natural gas.
    Affordable natural gas is the mother's milk of the future 
of America, and we have to somehow figure out how to produce 
natural gas for this country, both onshore and offshore. In my 
view, those who think buying LNG from unstable foreign 
countries is the answer should look in another direction. I 
don't think we should because we have ample supplies of natural 
gas.
    We must look at these issues like a three-legged American 
stool made up of energy, environment, and economy. If one leg 
collapses, we all fall. The chair cannot stand.
    I thank you for the chance to speak with you and will be 
glad to take any of your questions.
    Mr. Grijalva. Let me see if there are any questions? Mr. 
Pearce, Gentlemen?
    Thank you very much, sir.
    Mr. Peterson. Thank you.
    Mr. Grijalva. At this point let me turn to Ranking Member 
Peace for any opening comments he may have.

 STATEMENT OF STEVAN PEARCE, A REPRESENTATIVE IN CONGRESS FROM 
                    THE STATE OF NEW MEXICO

    Mr. Pearce. Thank you, Mr. Chairman. I apologize for being 
late, testifying in another committee actually, so appreciate 
the opportunity to visit, appreciate Mr. Peterson's comments 
also. He has been dedicated to the idea of affordable energy 
for the entire career that I have seen him here.
    Before I start, Mr. Chairman, I would like to submit a 
letter for the record. You know, we that get into this business 
we know that there are going to be scraps and scrapes, but we 
have a lot of public servants out there who work year after 
year after year, and sometimes we thoughtlessly pull them in. 
We play our games with them, and one of our witnesses today, 
Mr. Bisson, from the BLM had an allegation made a year ago that 
he was somehow breaking the law by meeting with state and local 
officials, and coordinating with them.
    After a year-long investigation, the IG put a report out 
that completely exonerates him, and said he was doing a job. He 
wasn't meeting with state and local officials. He was 
coordinating Federal government affairs. So I would request 
unanimous consent to submit this for the record so that his 
good name has been cleared in an official way in this 
committee.
    Mr. Grijalva. Without objection.
    [The DOI letter submitted for the record follows:]


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Pearce. Thank you.
    We have had a series of hearing today, and as we have the 
different panels come up I would like to note that we had a 
hearing called ``The Evolving West'' where we described maybe 
the production should not be oil and gas production, mining 
those activities maybe should not be a part of the West; that 
there were people calling on the new West, the evolving West.
    We also had a hearing called ``Access Denied'', and then 
the third title was a little curious, ``Implementation of Title 
3, Oil and Gas of the Energy Policy Act,'' but the letters that 
went out inviting asked if you would like to testify about 
anything you would like to repeal instead of implementing that 
Act, and today we are having the hearing called ``Land-use 
Issues Associated with Onshore Oil and Gas Leasing and 
Development.''
    Now, my caution is that I would like for you to think about 
to an earlier time in our history when we began to talk about 
the timber industry as if it we exploiting, as if it were doing 
an illegal and an immoral thing, and we used the words of fine 
people who came into these rooms and testified to create an 
illusion that an industry needed to be gone, and today it is. 
Over 20,000 jobs just in the timber mills, we had 22 timber 
mills in New Mexico. We are down to two, and they can't get 
enough boards to actually do their business, and that decision 
was made on words that were casually and innocently spoken in 
these hearing rooms, and then used to justify.
    So contemplate very deeply where we as policymakers might 
be wanting to move. I will tell you that as I look and listen 
to Mr. Peterson I remember the testimony from last week or the 
week before that said that we were giving away over 3 million 
manufacturing jobs. We have outsourced them because of the high 
cost of energy.
    Now, if we continue to that, we have to realize our 
standard of living is going to change, that we won't have the 
time for the leisure activities or the money. So as we describe 
the oil and gas industry, I appreciate your objectivity, but 
also remember, if I could get my staff to hold up a chart, we 
are not producing nearly--I mean, when we look at the amount of 
public lands, the large piece of that pie is what is not 
produced. The small piece is what we actually have a footprint 
on, what we actually lease.
    So when people are telling me that we are using all of our 
public lands and destroying them with oil and gas and mining, I 
will tell you it is simply not true. The facts speak otherwise. 
The American people deserve more because right now we are in a 
tremendous race with China and India. They would like our jobs, 
and we have people, frankly, in this country that are willing 
to them our jobs to them. They have given our timber jobs to 
Canada, to other nations. Now they would like to give our oil 
and gas jobs away, and you contemplate if you want to pay three 
or four times as much for your energy.
    For instance, if you are a mountain bike firm, how do your 
people get there? Your customers come because they fly. Your 
customers come and stay in hotels that are heated with natural 
gas. If the price of gasoline, the price of oil goes up to 
three and four times, how many of your people are going to come 
visit?
    So let us be working for the balance here. Let us talk 
about the truth, and while we are trying to turn this country 
away from oil and gas and coal, remember that the Chinese are 
building 10 plants in the next year, one plant per week, 544 
coal plants already being built. So they are willing to have 
cheap energy while we are trying to move toward expensive 
energy. It is a contemplation that all should spend a lot of 
time on, and that we should be very thoughtful about.
    Mr. Chairman, I appreciate the opportunity to make a couple 
of statement, and I yield back.
    Mr. Grijalva. Thank you, sir, and let me at this point call 
our first panel forward, please.
    Mr. Ferguson, Mr. Bisson, let me welcome you. Thank you 
very much for being here today, and I would like to also advise 
you that your full statements will be made part of the record, 
and we would like to ask you to limit your oral statement to 
five minutes, and let me begin with Mr. Ferguson. Sir.

 STATEMENT OF TONY L. FERGUSON, DIRECTOR, MINERALS AND GEOLOGY 
 MANAGEMENT, UNITED STATES FOREST SERVICE, U.S. DEPARTMENT OF 
                          AGRICULTURE

    Mr. Ferguson. Thank you for the opportunity to discuss this 
important topic and the role of the Forest Service in natural 
and oil and gas leasing and development. I am very pleased to 
be with you today.
    The Forest Service manages 193 million acres in the natural 
forest system. More than 7,200 authorized oil and gas leases 
covering over 6.1 million acres are located on natural forest 
and grass lands. The Forest Service works in partnership with 
the Bureau of Land Management to manage oil and gas resource 
development on the Forest Service lands. The BLM, through the 
authority of the Secretary of the Interior, has management 
responsibilities for the Federal mineral estate, which includes 
leasing Federal minerals that underlie national forest system 
lands. The Forest Service is responsible for the management of 
the surface resources on oil and gas projects proposed and 
operating on Forest Service.
    Before the BLM may lease oil and gas resources underlying 
national forest system lands, the Forest Service completes 
broad-scale leasing analyses to determine which land are 
appropriate for development. When Forest Service lands are 
nominated by industry for leasing, the leased parcel may be 
offered for sale subject to Forest Service validation and 
verification of consistency with planned requirement, Forest 
Service planned requirements in compliance with the National 
Environmental Policy Act and other environmental laws. BLM 
cannot issue a lease on Forest Service lands over the objection 
of the Forest Service.
    After the lease has been issued, the lessee must submit an 
application for permit to drill, and you will commonly hear 
this called an APD, to the BLM prior to the surface disturbing 
activity. The application consists of two parts or plans. The 
first part is a surface use plan of operation, and that is 
commonly called the SUPO, S-U-P-O. The second part is the 
drilling plan.
    When the application for drilling on Forest Service land is 
received by the Bureau of Land Management, they send us, the 
Forest Service, the surface use plan of operation for 
processing. The Forest Service establishes the terms and 
conditions of approval for both the surface use plan and any 
necessary associated authorizations.
    Concurrently, the BLM processes the drilling plan. After we 
have notified the BLM that the surface plan has been approved, 
the BLM can approve the application for drilling. When the well 
is drilled and operating, agencies share inspection and 
enforcement responsibilities.
    Today, I would like to focus on a couple of sections in the 
Energy Policy Act of 2005 that also relate to oil and gas 
operations on national forest system lands. There is some 
additional information in my submitted statement.
    Tasks described in Section 362 of the Energy Policy Act 
resulted in the update and re-issuance of the Gold Book, which 
is sometimes called--it is the Surface Operating Standards and 
Guidelines for oil and gas exploration and development. This 
book specifically addresses best management practices for oil 
and gas operations, and this was a joint effort by the BLM and 
Forest Service.
    Section 366 resulted in the update and recent re-issuance 
of the Onshore Oil and Gas Order No. 1, which is a set of rules 
for conducting operations on Federal oil and gas leases. The 
Forest Service worked closely with the BLM to revise the 
onshore order and the Gold Book as joint authors. We are also 
coordinating with the BLM to develop a training module for oil 
and gas operators which will explain changes in the onshore oil 
and gas order.
    Section 390 of the Energy Policy Act directed the 
Secretaries of Interior and Agriculture to use five new 
categorical exclusions for approving oil and gas activities 
conducted pursuant to the Mineral Leasing Act. The Section 390 
categorical exclusions are limited to oil and gas activities in 
existing areas of development, previously analyzed through a 
National Environmental Policy Act process with full public 
notice and comment.
    New activities must be within land use plans approved 
within the previous five years or with surface disturbance 
limited to five acres and a previous NEPA project decision. To 
date, the Forest Service has used the Section 390 categorical 
exclusion to approve about 300 projects.
    In addition to the categorical exclusions in Section 390, 
the Forest Service has also promulgated a new administrative 
categorical exclusion for limited oil and gas exploration and 
development activities in newly identified fields. The Council 
of Environmental Quality, upon review of this exclusion, found 
that it was in conformance with NEPA and its implementing 
regulations.
    Since approval of this new categorical exclusion in 
February of this year, February 15th of this year, the category 
has only been used two times. For the 2007 program, the Forest 
Service will continue to process and coordinate energy mineral 
projects on national forest system lands in accordance with the 
Energy Policy Act, the agency's strategic plan, and the 
Department of Agriculture's priorities. We will also continue 
to process new lease applications and surface use plans within 
the established time frames, and finally, the Forest Service 
will continue to coordinate closely with the BLM to meet the 
mandates of the Energy Policy Act.
    I want to thank you for this opportunity to briefly discuss 
the Forest Service oil and gas program, and I am happy to 
answer any questions you may have.
    [The prepared statement of Mr. Ferguson follows:]

     Statement of Tony L. Ferguson, Director of Minerals & Geology 
     Management, National Forest System, U.S. Forest Service, U.S. 
                       Department of Agriculture

    Mr. Chairman and members of the Subcommittee, thank you for the 
opportunity to discuss land use issues related to the Forest Service's 
role in the federal oil and gas leasing and development program. I am 
pleased to be here with you today.
Forest Service Oil and Gas Resources
    The Forest Service manages 193 million acres in the National Forest 
System (NFS). More than 7,200 authorized oil and gas leases which cover 
over 6.1 million acres are located on national forests and grasslands.
Forest Service Oil and Gas Program Authorities
    The Forest Service works in partnership with the Bureau of Land 
Management (BLM) to manage oil and gas resource development on NFS 
lands. The BLM through the Secretary of the Interior has management 
responsibilities for the federal mineral estate including federal 
minerals that underlie NFS lands. The Forest Service is responsible for 
management of surface resources on oil and gas projects proposed and 
operating on NFS lands.
    Before the BLM may lease oil and gas resources underlying NFS 
lands, the Forest Service completes broad scale leasing analysis to 
determine lands that are appropriate for development and made 
administratively available. This leasing analysis process is conducted 
with public involvement and in compliance with the NEPA. When analysis 
is completed, the Forest Service informs the BLM of the available lands 
and under what surface resource protection stipulations they may be 
leased. When NFS lands are nominated by industry for leasing, the lease 
parcel may be offered for sale, subject to validation and verification 
of consistency with forest plan requirements and adequacy of NEPA and 
other environmental law compliance completed by the Forest Service. BLM 
cannot issue a lease on NFS lands over the objection of the Forest 
Service.
    When the lease has been sold--and prior to development and surface 
disturbing activities such as drilling, the lessee must submit an 
application for permit to drill, commonly called an APD, to the BLM. 
The APD includes a surface use plan of operations (SUPO) and a drilling 
plan. The BLM sends the SUPO portion of the APD to the Forest Service 
for processing with appropriate environmental analysis and public 
involvement. At the same time BLM continues to process the drilling 
plan. The Forest Service establishes the terms and conditions of 
approval for both the SUPO and any associated special use 
authorizations. After the Forest Service notifies the BLM that the SUPO 
is approved, the BLM can approve the APD. When the well is drilled and 
operating, agencies share inspection and enforcement responsibilities.
National Energy Policy and the Energy Policy Act
    In May of 2001, the President's National Energy Policy included 
goals to diversify and increase energy supplies, encourage 
conservation, and ensure adequate energy distribution. The National 
Energy Policy goals include increasing energy supplies while protecting 
the environment. Increasing energy supply means to ensure that, where 
appropriate, lands are made available for energy mineral development 
and production, as well as for the necessary infrastructure such as 
energy facility corridors for pipelines. Development of domestic energy 
supplies will be an essential component to meet future national energy 
demands. This goal to increase energy supplies while protecting the 
environment is consistent with the mission of the Forest Service to 
sustain the health, diversity, and productivity of the Nation's forests 
and grasslands to meet the needs of present and future generations.
    Today I will focus on the portions of the Energy Policy Act of 2005 
related to oil and gas operations on National Forest System lands. The 
Act tasks Federal agencies to help facilitate energy development and 
encourage the efficient use of resources within the U.S. borders, 
consistent with economic growth and environmental responsibility, and 
to work to improve energy use and efficiency from both traditional 
sources, such as oil and gas, and from new resources such as wind and 
solar power. The Act directs agencies to emphasize efficiencies to 
facilitate the timely processing of energy leasing and permit 
applications.
    As previously described, the Forest Service, as a surface 
management agency, works closely with the BLM to implement those 
portions of the Energy Policy Act affecting National Forest System 
lands. The Secretaries of the Interior and Agriculture signed the 
Memorandum of Understanding required under Section 363 to coordinate 
timely processing of lease applications and permits to eliminate 
duplication and coordinate stipulations to protect the natural 
resources. We are making significant progress in developing the joint 
data tracking and retrieval system and GIS mapping system for tracking 
lease parcel requests and permit applications. The joint GIS mapping 
system will provide a critical spatial component that will help to more 
easily analyze the relationship and management of surface resources 
across land ownership boundaries.
    Section 366 of the Energy Policy Act sets timeframes and other 
provisions for processing permit applications. Section 362 provides for 
development of Best Management Practices for improved enforcement and 
inspection of oil and gas activities and terms and conditions of 
permits to drill. These two sections combined resulted in the update 
and re-issuance of the Onshore Order #1 and the Gold Book--Surface 
Operating Guidelines. The Forest Service worked with the BLM to revise 
the Order and Gold Book. We are working with the BLM to develop a 
training module that will be delivered via satellite to oil and gas 
operators explaining changes and the update to the Onshore Order Number 
1.
    To implement Section 365, the Forest Service, Department of the 
Interior and other federal agencies entered into an interagency 
Memorandum of Understanding that has improved energy permit 
coordination on Federal lands and included assignment of personnel to 
pilot project offices. The Forest Service participates in four pilot 
project offices located in areas with a high volume of development and 
project proposals. Six Forest Service personnel are located in the 
Farmington, New Mexico, Buffalo, Wyoming, Vernal, Utah and Glenwood 
Springs, Colorado Pilot Offices.
    The Forest Service through the Program Assessment Rating Tool 
process developed a definition of ``backlogged'' lease applications and 
surface use plans as those pending approval at the end of FY 2003. By 
the end of FY 2007, we anticipate eliminating all of these older 
``backlogged'' lease applications and SUPOs. Beginning in FY 2008, the 
Forest Service will continue to measure program success by evaluating 
processing efficiency measured against timeframes established in 
Section 366 of the Energy Policy Act and incorporated into the revised 
Onshore Order Number 1.
    Section 390 of the Energy Policy Act directs the Secretaries of the 
Interior and Agriculture to use five new categorical exclusions (CEs) 
for approving oil and gas activities conducted pursuant to the Mineral 
Leasing Act. The Section 390 CEs are limited to oil and gas activities 
in existing areas of development with previously approved development, 
analyzed through a NEPA process. The new activities must be within 
existing areas with land use plans approved within the previous five 
years, or with surface disturbance limited to 5 acres and a previous 
project with a NEPA process decision. To date, the Forest Service has 
used the Section 390 CEs to approve about 300 projects.
    CEs are part of full compliance with the National Environmental 
Policy Act (NEPA). The Council on Environmental Quality regulations (40 
CFR 1500 et seq.) for implementing the NEPA allows agencies to include 
categorical exclusions in agency NEPA procedures. Agencies are to 
reduce excessive paperwork and delay by using categorical exclusions to 
define categories of actions which do not individually or cumulatively 
have a significant effect on the human environment and which are 
therefore exempt from requirements to prepare an environmental impact 
statement. (Sec. 1500.4(p)) and (Sec. 1500.5(k)).
    In addition to the CEs provided under Section 390, the Forest 
Service has promulgated a new CE for limited oil and gas exploration 
and development activities in newly identified fields. This CE does 
not, and is not intended to, overlap or duplicate the activities 
contained in the Section 390 CEs. It is complementary to Section 390 
and taken in concert, this CE and the five statutory CEs provide the 
authorities to analyze and approve a full range of small projects with 
non-significant environmental effects in existing and new fields or 
corridors. In approving this new CE, the Forest Service followed a 
public notice and comment process. The Forest Service reviewed the 
effects of small oil and gas exploration and development projects which 
occurred over a five year period. Based on general program experience 
and the results of this review, the Forest Service determined those 
activities with limited road-building and utility-laying do not have 
significant effects and therefore would not require documentation in an 
environmental assessment or environmental impact statement. The Council 
of Environmental Quality, upon review of this CE, found that the CE 
conformed with NEPA and it's implementing regulations. This CE is to 
approve a surface use plan of operations for oil and gas exploration 
and initial development activities, associated with or adjacent to a 
new oil and/or gas field or area, so long as the approval will not 
authorize activities in excess of any of the following: one mile of new 
road construction; one mile of road reconstruction; three miles of 
individual or co-located pipelines and/or utilities disturbance; and 
four drill sites. Since approval of this new CE on February 15, 2007, 
the category has been used two times.
FY 2007 Program
    The Forest Service will continue to expedite and facilitate energy 
mineral projects on National Forest System lands in accordance with the 
Energy Policy Act, the agency strategic plan, and Department of 
Agriculture priorities. The Forest Service will continue to process new 
lease applications and the Surface Use Plan of Operations portion of an 
APD within the established timeframes. The Forest Service will continue 
to coordinate closely with the BLM to meet the mandates of the Energy 
Policy Act and direction in the National Energy Plan.
Conclusion
    Thank you for this opportunity to discuss the Forest Service oil 
and gas program. I am happy to answer any questions that you may have.
                                 ______
                                 

   Response to questions submitted for the record by Tony L. Ferguson

Question from Congressman Raul Grijalva:
1.  How many acres of National Forest System lands has the Forest 
        Service determined to be unsuitable and therefore not available 
        for oil and gas leasing?
    Prior to identifying lands administratively available for oil and 
gas leasing to the BLM the Forest Service must conduct a broad scale 
area or forest-wide leasing analysis. At the conclusion of this 
analysis the authorized forest officer shall identify on maps those 
lands:
    1.  Open for development subject to the terms and conditions of the 
standard oil and gas lease form.
    2.  Open to development but subject to constraints that will 
require the use of lease stipulations such as those prohibiting surface 
use.
    3.  Closed to leasing, distinguishing between those areas that are 
being closed through exercise of management direction and those closed 
by law and regulation.
    All forests are required to conduct such an analysis. There are 
several factors that may influence the distribution of acres into each 
category such as oil and gas potential, resource concerns and special 
area designations. The specific information requested is not readily 
available. BLM maintains a database for all federal minerals of lands 
currently under lease and areas with pending lease applications.
    See the leasing information below for the Bridger-Teton National 
Forest as one example of acres determined to be unavailable for oil and 
gas leasing.
Questions from Congressman Mark Udall:
1.  How does the Forest Service feel about using the EPAct Section 390 
        Categorical Exclusions and the WGA Resolution?
    The Forest Service views the Energy Policy Act Section 390 
Categorical Exclusions as a useful tool in processing the surface use 
plan of operation when applicable. The Section 390 CEs are limited to 
oil and gas activities in existing areas of development with previously 
approved development analyzed through a NEPA process. The new activity 
must be within existing areas with land use plans approved within the 
last five years, or with surface disturbance limited to five acres and 
a previous project with a NEPA process decision. When it is appropriate 
to use one of the CEs the Forest must still ensure that the proposed 
project is in compliance with all other laws and regulations such as, 
the Endangered Species Act and the National Historic Preservation Act. 
To date the Forest Service has used the Section 390 CEs to approve 
about 300 projects. This tool has added to our ability to meet 
processing timelines established in Section 366 of the Energy Policy 
Act while still limiting resource disturbance.
    The Forest Service is aware of the concerns expressed by the 
Western Governors Association in their resolution. We are committed to 
working with the states and their resource agencies to ensure that 
resources are being protected in accordance with laws and regulations.
2.  What is the status of oil and gas leasing on the Wyoming Range of 
        the Bridger-Teton National Forest? How much production of oil 
        and gas is occurring?
    Here is a summary of the status of oil and gas leasing on the 
Bridger-Teton National Forest, including the Wyoming Range.
    Forest Land Management Plan (LMP) Approved March 1990
        Total National Forest Acreage - 3,465,000 acres
        Wilderness Acreage - 1,300,000 acres
        Unavailable for leasing in LMP - 223,000 acres (non-wilderness)
        Available for Leasing--1,900,000 acres
    Supplemental Information Review completed re: leasing decision 
adequacy--spring of 2004
        Determined that 1990 leasing decision adequate and still 
        current.
    Acres currently under lease - 186,770 acres (including 95,675 
suspended).
        5.4% of the National Forest acres
        5.7% of the National Forest acres if August sale acres included
        27,301 acres within producing leases (primarily Riley Ridge 
        field) (0.7% of the National Forest)
    Acres approved for lease, sent to BLM but later withdrawn - 164,553 
acres
        (4.7% of the National Forest)
        (Withdrawn at Governor's request)
    Resubmitted to BLM for sale after additional review in 2005 - 
44,720 acres
        (1.3% of the National Forest)
    Results of lease sales of 44,720 acres:


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Note: The parcels for the December and April sales have been 
issued and therefore listed as leases; the parcels for the June and 
August sale are under lease sale protest and therefore have been sold 
but not yet been issued by BLM.
    2006 lease sale results:
        Bonus Bid on April lease sale = $114.12/acre. ($2.246 million)
        Bonus Bid on June lease sale = $104.55/acre. ($1.306 million)
    The IBLA issued stays on leases on September 21, 2006. Stays have 
been issued by IBLA for the December and April Sales of 12 leases for 
20,908.75 acres. As noted above, the lease sale protests for the June 
and August sales have not been resolved yet and therefore no IBLA 
appeal rights exist until the protests are resolved. Once the protests 
are resolved by the BLM, their decision could then be appealed to the 
IBLA for consideration.
    The production and value data below was provided by the Minerals 
Management Service for 2001, the most recent data received. We would 
expect the numbers for 2005 and 2006 would be higher than 2001 based on 
additional wells being drilled with increased production and increases 
in the market values for the commodities.

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    The Bridger-Teton National Forest was scheduled to complete 
their forest plan revision in September, 2008 under the new 2005 
Planning Rule. However, a recent court order has stayed implementation 
of the 2005 Planning Rule. At this time it is unknown exactly what 
effect the litigation will have on the schedule and revision activities 
for the Bridger-Teton. Litigation activities are on-going to clarify 
and resolve the court order. The Bridger-Teton is not conducting oil 
and gas leasing analysis as part of their revision process.
                                 ______
                                 
    Mr. Grijalva. Thank you very much, sir.
    Mr. Bisson.

  STATEMENT OF HENRI BISSON, DEPUTY DIRECTOR, BUREAU OF LAND 
          MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR

    Mr. Bisson. Chairman Grijalva and members of the 
Subcommittees, thank you for inviting me to testify at this 
hearing.
    My name is Henri Bisson, and I am the BLM's deputy director 
for operations.
    Lands managed by the Department of the Interior produce 
one-third of all domestic coal, oil and natural gas. Demand for 
natural gas is expected to increase 50 percent over the next 20 
years, and oil consumption 30 percent. Much of the oil and gas 
that American consumers and businesses depend upon comes from 
foreign sources. This is a huge drain on the nation's economy. 
For this and many other reasons the Nation is looking more and 
more at domestic resources from public lands. Consider a few of 
these facts:
    Since 1970, the size of the average house increased 55 
percent while the size of the American family decreased 13 
percent. Many of us use natural gas to heat our homes and power 
our modern conveniences. Use of natural gas for power 
generation has nearly doubled over the last 10 years. Ninety 
percent of all planned electrical plants intend to use natural 
gas in some capacity. Almost all natural gas is produced 
domestically or imported from Canada.
    The Phase II study conducted under EPCA, as amended by the 
Energy Policy Act of 2005, found that Federal lands in the 11-
basin study contained 187 trillion cubic feet of natural gas, 
enough to meet the current residential consumption in this 
country for 39 years.
    The BLM manages this vast pool of energy under a multiple-
use mandate that we take seriously. Of the 700 million-acre 
Federal mineral estate we manage, only 42 million acres or 6 
percent are leased. Of that, 12.3 million acres, less than 2 
percent of the Federal mineral estate are in producing status. 
Nine major laws regulate BLM leases and development permits for 
oil and gas. Less than 1 percent of the 258 million surface 
acres managed by the BLM experience a surface impact from 
disturbance from oil and gas activity.
    Land that is leased does not always see development. 
Companies explore leases and usually end up excluding more 
lands from being developed than are included, but leasing is 
still essential to exploring for new domestic development and 
for in-filling existing fields.
    Interest in leasing is reflected in the amount of land 
nominated for lease sales over the past few years. What was 
typically nominated in a year-long period several years ago is 
now nominated for a single quarterly lease sale in many western 
states. Recently sales have been much larger than they were 
prior to this boom cycle, but the amount of land under lease is 
actually much lower than historic highs during the eighties.
    As of 2006, the BLM had just over 48,000 leases, totaling 
approximately 42 million acres. In 1984, the BLM managed over 
115,000 leases, totaling about 131 million acres. In simple 
terms, there were almost two and a half times as many leases in 
effect in the mid-eighties and three times as many acres under 
lease.
    Leasing decisions are not arbitrary, but are based upon 
land use plans where decisions are made on availability of 
areas for leasing, and consider new information, new 
circumstances before any decision is made to offer these lands. 
Where other important uses of resources exists, BLM may protect 
the resources and lease the land using a variety of tools and 
stipulations, or BLM may decide not to lease the land.
    Leasing is only the first step in this process. We require 
additional permitting, further environmental analysis if a 
company wants to explore or develop, and in these reviews we 
determine site-specific needs for mitigation measures. These 
measures may include re-vegetation, strategic placement of 
structures and machinery, colors that blend in the landscape, 
buffer zones to protect wildlife, and burying of utilities 
under or adjacent to access roads to protect wildlife and 
minimize visual impacts. These are some of what I referred to 
as best management practices in my written statement.
    With new technology and innovative management tools, 
recreation, wildlife, energy, and a variety of other uses can 
co-exist. Development has become drastically lighter on the 
land than in the past.
    This concludes my opening remarks, and I will be happy to 
answer any questions, Mr. Chairman.
    [The prepared statement of Mr. Bisson follows:]

              Statement of Henri Bisson, Deputy Director, 
       Bureau of Land Management, U.S. Department of the Interior

    Messrs. Chairmen and Members of the Subcommittees, thank you for 
the opportunity to appear here today to discuss Oil and Gas Impacts on 
the Public Lands.
Background
    The Bureau of Land Management (BLM) is the steward of 258 million 
surface acres of public lands and 700 million acres of subsurface 
mineral estate and manages them in accordance with the 1976 Federal 
Land Policy and Management Act. These public lands contain a myriad of 
important resources and provide for a variety of our Nation's needs and 
interests, such as outdoor recreation, domestic energy, wildlife 
habitat, livestock grazing, timber, and the enjoyment and protection of 
other natural, cultural, and historical resources. With the rapid 
population growth in the west--from nearly 20 million people in 1950 to 
more than 60 million today--the pressures to meet complex, and 
sometimes competing, demands for public land resources also has grown 
exponentially.
    As one of the Nation's oldest land management agencies, the BLM 
also delivers value on a daily basis to the American public. Each 
dollar spent by the taxpayer on BLM activities is an investment, not 
only in the land, but also in an ongoing revenue stream. The BLM is an 
important source of revenue to the Treasury. Royalties collected from 
energy leasing, and fees collected from other public land uses, all 
serve to benefit the taxpayer. In 2008, public lands will generate an 
estimated $4.5 billion in revenues, mostly from energy development. 
Approximately 44 percent of these receipts are provided directly to 
States and counties to support roads, schools, and other community 
needs. These activities also contribute to a more secure and reliable 
energy future for our country, providing a mix of both renewable and 
conventional energy supplies from the public lands.
    At the same time, BLM-managed public lands are being used for 
recreation by the American public in increasing numbers. We also have 
important responsibilities in managing for critical wildlife habitat, 
cultural resources, our National Monuments, and wilderness values, to 
name a few.
    The BLM is dedicated to ensuring that all Americans benefit from 
the agency's multiple-use mandate. This means ensuring that 
environmental and other recreational interests are considered when 
making decisions about renewable and conventional energy development on 
our public lands. We appreciate the opportunity to discuss our efforts 
toward this end. Our top priorities in the upcoming fiscal year are to:
      Maintain or restore the health of the land and enhance 
vital habitat;
      Provide the Nation with dependable, affordable energy 
developed in an environmentally-sound manner; and
      Improve the efficiency of the BLM's operational and 
administrative functions.
Healthy Lands Initiative
    A high priority of Secretary Kempthorne is the Healthy Lands 
Initiative, which was included in the President's FY 2008 budget 
request. As activities on public land increase, we are seeing growing 
conflicts among recreation users, energy developers, hunters, ranchers, 
and others all competing to protect, access, and use these public 
lands. Through the Healthy Lands Initiative, the BLM will join with the 
U.S. Geological Survey and the U.S. Fish and Wildlife Service to 
identify, restore, and mitigate the potential impacts of increased 
energy production in wildlife-energy interface areas and increase 
available habitat for specific species, including sage grouse.
    The Initiative represents a new concept for meeting emerging 
challenges in managing natural resources with flexible, landscape-level 
approaches for continued multiple-use. Landscapes are land areas 
composed of diverse habitat types that include winter range and 
migration corridors.
    Land health is being affected by pressures such as community 
expansion, wildfires, unprecedented demands for energy resources, ever-
expanding recreation uses, and weed invasion. These pressures often 
interact among themselves to affect large landscapes and ecosystems, 
particularly those in the growing wildlife-energy interface.
    A different management approach is urgently needed to meet these 
challenges. Taking aggressive steps now will help avoid the need for 
future restrictions on uses of public land that would directly affect 
the Nation's economy and quality of life.
    The goals of the Initiative are to:
      Continue to provide access to energy resources, thereby 
enhancing energy security;
      Manage landscapes to ensure sustainable habitat for wide-
ranging species, such as the sage grouse, and prevent future ESA 
listings; and
      Sustain public lands and wildlife habitat, and 
traditional activities on public lands.
    The BLM will begin aggressive, landscape-scale habitat enhancement 
projects in six geographic areas: southwest Wyoming; northwest and 
southeast New Mexico; south-central Idaho; southwestern Colorado; Utah; 
and the three-corner area of Idaho, Oregon, and Nevada.
    The BLM will concentrate a large number of treatments in each 
emphasis area, resulting in significant improvements to habitat in an 
entire watershed or landscape-wide area within one to three years. The 
BLM will also utilize existing budget authority, as well as leverage 
funding with other Federal agencies and our partners at the state and 
local levels.
The Green River Basin in Wyoming
    One of the six priority areas of the Healthy Lands Initiative is 
the Green River Basin in Wyoming. It is representative of areas in the 
West where landscapes and habitats are undergoing changes in response 
to pressure from multiple-use. Southwest Wyoming possesses some of the 
most diverse wildlife habitats in the Intermountain West, which 
attracts hunters, fishermen, and other outdoor enthusiasts each year. 
While these interests represent important sources of income for 
surrounding rural communities, this region, principally the Green River 
Basin (Basin), is also under pressure from natural gas development. The 
15 million-acre Basin, characterized by sagebrush (sage grouse 
habitat), mountain shrub, aspen, and riparian communities, also has an 
estimated 83 trillion cubic feet of recoverable natural gas.
    The BLM together with the U.S. Fish and Wildlife Service and U.S. 
Geological Survey, are teaming up to protect these important habitats 
while natural gas production takes place in the Basin through the 
Wyoming Landscape Conservation Initiative (WLCI). Rather than 
conducting separate and uncoordinated impact studies and mitigation 
efforts, these partners will:
      Conduct efficient, science-based species monitoring and 
habitat enhancement;
      Facilitate best reclamation and mitigation practices for 
areas affected by current natural gas development;
      Integrate existing data with new knowledge and 
technologies to forecast future development of energy resources and 
assist in habitat conservation planning; and
      Conduct habitat enhancement in all habitat types with a 
special focus on sagebrush, mountain shrub, aspen, and riparian 
communities.
    The partnership, which also includes efforts underway by the 
National Park Service, Bureau of Reclamation, Forest Service, and 
Wyoming Game and Fish, will also provide a broader understanding of the 
valuable Green River Basin ecosystem.
    By using this landscape-level approach and using the WLCI 
partnership, the BLM expects to be able to leverage funding for key 
projects that will mitigate the pressures these habitats face from a 
combination of energy, industrial, and residential development in both 
the short- and long-terms. In Wyoming, partners have already identified 
funding priorities including vegetation treatments (sagebrush, aspen 
trees), water projects such as building or restoring water sources for 
wildlife, and improving riparian areas. Funding for the WLCI will be 
long-term and include leveraging funding with other Federal agencies 
and our partners at the state and local levels.
Land Use Planning
    The BLM's land use planning process seeks to ensure that domestic 
oil and gas development on public lands is done in a way that protects 
the environment. Some of the recently developed land use plans have 
been among the most restrictive ever developed for oil and gas leasing 
on Federal lands.
    For example, the BLM recently issued an innovative Resource 
Management Plan (RMP) for limited, environmentally-sensitive oil and 
gas development on public lands in Otero and Sierra Counties in New 
Mexico. The plan will allow carefully monitored activity, leading to a 
maximum surface disturbance of only 1,589 acres from well pads, roads 
and pipelines--less than one-tenth of one percent of the total surface 
area of 2 million acres. At most, there will be 141 exploratory wells 
drilled, resulting in up to 84 producing wells. Almost 36,000 acres of 
grasslands with the highest potential as habitat for the endangered 
Aplomado falcon will be closed to leasing and permanently protected. In 
addition to these measures and overall limits on development, leasing 
will not be allowed in six existing and eight proposed Areas of 
Critical Environmental Concern and four Wilderness Study Areas--
bringing the total number of protected acres to 124,000. This new plan 
amends a 1986 RMP that would have allowed leasing with few restrictions 
on oil and gas activities, would have used standard lease terms and 
conditions for leasing, and would not have provided the protections for 
grasslands and other sensitive areas developed in the BLM's current 
plan amendment.
    The BLM continually seeks new ways to minimize, mitigate, or 
compensate for any adverse impacts from development activities. 
Innovation of the type envisioned in Energy Policy Act of 2005 (EPAct) 
is already underway at the BLM. For example, the BLM is:
      Initiating a pilot block survey in the Carlsbad Pilot 
Office to identify cultural resource properties in the area; and
      Evaluating an experimental drilling technique proposed by 
the operator in the Jonah Field in Wyoming using temporary wooden 
pallets for roads and well pads to determine if this technology reduces 
impacts to surface vegetation and soil.
Best Management Practices and Performance-Based Standards
    The BLM is employing Best Management Practices (BMPs) to enhance 
its ability to protect the environment and reduce long-term impacts on 
the land from oil and gas activity. The focus of BMPs is smart upfront 
planning and solid implementation of best practices to reduce 
environmental impacts on public and private lands and resources. The 
new policy guidelines require BLM project managers to consider 
incorporating BMPs into all Applications for Permits to Drill (APDs) 
and associated rights-of-way. Additionally, the policy encourages oil 
and gas, geothermal, and helium operators to meet with BLM field office 
staff during project planning to incorporate BMPs at the earliest 
possible stage of the permit application process.
    Typical Best Management Practices include:
      Reducing the ``footprint'' of roads and well heads by 
choosing the smallest safe standard and best location for facilities, 
and by employing interim reclamation.
      Selecting appropriate color, shape, size and/or location 
for facilities to reduce visual contrast.
      Discouraging raptor predation on sensitive species by 
installing perch-avoidance structures or burying power lines on the 
lease area.
      Reducing wildlife disturbance by centralizing or 
automating production facilities to reduce frequency of travel to each 
well head.
      Using common utility corridors or burying flowlines in a 
roadway or an adjacent right-of-way.
      Drilling multiple wells from a single location; 
centralizing production facilities or relocating them offsite.
    For example, in the Pinedale area of Wyoming, concerns about 
impacts to wildlife have resulted in reduced surface disturbance 
compared to past development by implementing such measures as the 
consolidation of infrastructure, such as roads, pipelines, and 
production facilities. As a consequence, the BLM has achieved an 
overall reduction in the footprint of development involved in winter 
drilling projects in the Pinedale Anticline relative to what would 
otherwise have resulted.
    Final reclamation of all disturbed areas, including access roads, 
to either their original contours or a contour that blends with the 
surrounding topography is a BMP that planners should consider in nearly 
all circumstances.
    The BLM has included BMPs in the 2005 update of the Gold Book of 
``Surface Operating Standards and Guidelines for O&G Exploration and 
Development'' (posted at www.blm.gov/bmp). Through three separate 
Instructional Memorandum, the BLM also has:
      Established offsite compensatory mitigation guidelines 
for oil and gas authorizations to provide additional opportunities to 
address impacts of proposed projects;
      Established oil and gas process improvement teams in BLM 
Field Offices; and
      Provided guidance on the review of bonding requirements 
for oil and gas operations.
    To encourage widespread adoption of BMPs and to recognize good 
environmental stewardship through their use, BLM has established an 
annual ``Best Management Practices'' awards program. Annual awards 
recognize industry and BLM offices that best incorporate BMPs into 
their oil and gas activities. Recipients are to be selected by a panel 
including representatives from government, industry, and environmental 
and wildlife conservation groups.
    The BLM is also using performance-based standards to challenge 
industry to reduce emissions, minimize surface disturbance, and develop 
quick and effective reclamation techniques to improve restoration of 
disturbed areas. If on-site mitigation measures do not achieve the 
desired conditions, companies have the option of undertaking off-site 
mitigation measures. For example, in March 2006, the BLM announced that 
EnCana is contributing up to $24.5 million over ten years toward an 
office dedicated to funding offsite mitigation and monitoring in the 
Jonah Field. The BLM believes that offsite mitigation can potentially 
become an increasingly useful tool for improving habitats adjacent to 
certain natural gas development areas.
Inspection and Enforcement and Monitoring
    The FY 2008 President's budget request includes an increase of $3.1 
million to support increased oil and gas inspections and monitoring to 
better ensure that oil and gas operations are conducted in an 
environmentally-sensitive manner and that leasing permit terms are 
enforced. The BLM's oversight capabilities are being increased in 
response to the pace of industry's on-the-ground operations. BLM has 
increased inspection and enforcement by more than 30 percent since 
2001. In FY 2001, the BLM completed just over fourteen thousand 
inspections, and in FY2006, the BLM completed just under twenty 
thousand inspections.
    This year, the Buffalo and Rawlins Pilot Office in Wyoming received 
funding to hire 15 additional surface environmental compliance and 
reclamation inspectors. These inspectors will allow Buffalo to exceed 
its target of approximately 3,600 inspections and will allow Rawlins to 
increase its inspections by 8 percent to 700 inspections.
    The BLM also is improving inspection and enforcement efforts 
through cooperative arrangements with the State of Wyoming. For 
example, a cooperative assistant agreement with the Wyoming Fish & Game 
Commission would establish two wildlife biologist positions in each 
Pilot Office; these individuals would monitor the effectiveness of BLM 
lease stipulations and permit conditions of approval as well as make 
adaptive management recommendations to ensure that fish and wildlife 
resources are protected. Another cooperative assistant agreement, in 
the process of being developed with the Wyoming State Historical 
Preservation Officer, would establish a position to support the 
electronic data capture of the large volume of cultural survey reports 
and site information. The BLM also is collaborating with the Governor 
of Wyoming's Energy Permit Strengthening and Streamlining Initiative. 
The working groups have addressed such issues as split estate, 
coordinated reclamation bonding, watershed-based permitting and impacts 
to local communities, supporting interagency electronic permitting 
information technology. We look forward to continuing these cooperative 
efforts, and hope to expand these efforts in other states.
Onshore Order #1
    The BLM's Onshore Order #1 will be updated effective May 7, 2007. 
The Order is a set of rules that direct the conduct of operations, 
applications to drill on a lease, subsequent well operations, other 
miscellaneous lease operations, environmental and safety obligations, 
and abandonment on all Federal and Indian onshore oil and gas leases 
nationwide (except for those on lands of the Osage Tribe). The previous 
Order was over 20 years old, and conditions, regulations, policies, 
procedures and requirements have changed a great deal since that time.
    The Final Rule clarifies regulations and procedures to be used when 
operating in split estate situations. Under the revised final order, 
operators are required to make good faith efforts to reach surface 
access agreements with private surface owners. Private surface owners 
are also being provided with opportunities to participate in onsite 
inspection meetings between the BLM and the operator. The Final Rule 
also states that on split estate lands, the BLM will comply with 
cultural and endangered species regulations in essentially the same way 
it does when the surface is Federally-owned.
Conclusion
    The BLM manages 13 percent of the total land surface of the United 
States. These lands contain a wide variety of incredible resources, and 
the public has a wide range of interests in those resources. Our 
testimony today has outlined the ways in which the BLM is working to 
provide the Nation with dependable, affordable energy that is developed 
in an environmentally-sound manner. The BLM will continue its efforts 
to ensure that all Americans benefit from the agency's multiple-use 
management of our public lands.
    Mr. Chairman, thank you for the opportunity to testify today. I 
will be pleased to answer any questions you may have.
                                 ______
                                 

     Response to questions submitted for the record by Henri Bisson

1.  In response to a question from Mr. Pearce, you stated that out of 
        more than 19,000 wells, only 20 were ``bonded on.'' To clarify, 
        is that 20 wells, or 20 surface owners? If 20 surface owners, 
        how many wells? What time period does that figure cover? (For 
        example, last year, or since enactment of EP Act, or other?) 
        Please list the location of those cases.
    At your request, the BLM completed a detailed review to further 
clarify and quantify bonding statistics:
      To date, the BLM holds a total of 42 surface loss and 
damage bonds, covering 19 surface owners. The nature of a surface loss 
and damage bond is that it is a tool to ensure compensation of loss and 
surface damages in the absence of a surface use agreement.
      During calendar year 2006, the BLM accepted 25 surface 
owner loss and damage bonds from operators/lessees. Each bond is linked 
to a specific well. A total of 15 surface owners are covered by these 
bonds for loss and damages (some surface owners have more than one bond 
allocated to them.) The bonds accepted in calendar year 2006 are held 
in the following States: CA--17 bonds, MT--6 bonds, UT--1 bond, and 
WY--1 bond.
      After an APD is approved, operators typically continue 
their negotiation efforts with surface owners to reach a surface use 
agreement. Once an agreement has been reached, the bonds are released. 
This explains the small amount of surface bonds the BLM holds today. A 
summary of the location of the 42 existing bonds is as follows: CA--17 
bonds, MT--12 bonds, NM--1 bond, UT--1 bond, WY--11 bonds.
2.  In your oral remarks, you stated that many more acres were under 
        lease in 1984 (131 million acres) than currently (42 million 
        acres). Isn't that because oil and gas companies have a much 
        better idea now of where they want to explore, and do not 
        nominate, or bid on, lands that they don't consider to be good 
        prospects?
    That is not the primary reason for the significant reduction in 
leased acres. The Federal Onshore Oil and Gas Leasing Reform Act of 
1987 (Act of 1987) changed the way the BLM offered onshore oil and gas 
leases to the public, and this reduced the speculative demand for 
leases. Prior to the Act of 1987 it was the BLM's policy to offer for 
lease as much acreage as was available for leasing. Much of this 
acreage was offered in a lottery format. The BLM would send out a list 
of parcels to be leased and for $75 dollars members of the public could 
have their name put into a pool of potential lessees. The BLM would 
then randomly select one to be the lessee. The Act of 1987 was passed 
to change the leasing program. Now only parcels that are nominated by 
the public are considered for lease and if offered, it is done through 
an oral auction. Areas of interest continue to change for oil and gas 
companies as technology and new discoveries of oil and gas occur.
3.  Where has BLM NOT required Best Management Practices--and why--in 
        the past three years.
    The BLM did not require the use of Best Management Practices (BMPs) 
until June 2004, when BLM issued a directive to All Field Offices, 
directing them to use BMPs after an appropriate environmental analysis 
for not only oil and gas resources but for energy development related 
lands and realty actions, i.e. power lines or pipelines to an oil and 
gas well (see attached policy). Since that time the BLM has 
increasingly incorporated appropriate BMPs into new Applications for 
Permit to Drill, energy related rights-of-way, and other related 
permits.
    BLM has always required Lease Stipulations and Conditions of 
Approval on drilling permits to mitigate potential impacts to surface 
disturbing activities on the ground. However, older oil and gas fields 
have the least application of best management practices. Examples would 
include older fields in the Uintah Basin of Utah and the Permian Basin 
of New Mexico. Many oil and gas operators have voluntarily adopted Best 
Management Practices and have included them in their permit 
applications.
4.  You noted in your oral remarks that the footprint of oil and gas 
        development is quite small, because not all lands that are 
        leased are developed. In terms of gauging the footprint, to 
        what degree is the BLM using landscape fragmentation metrics 
        that take into account roads and other infrastructure to gauge 
        the footprint of development?
    There are multiple ways of gauging the ``footprint'' of 
development, and all provide useful information. It is the BLM's intent 
to reduce the footprint of energy development and thereby reduce 
environmental impacts including loss of vegetation, soils, visual 
quality, air quality, habitat, or others. When measuring an 
environmental impact, such as vegetation loss, it is appropriate to 
measure the direct footprint of vegetation disturbance. When measuring 
habitat loss, it may be important to measure not only direct vegetation 
loss, but also the indirect effect of noise, dust, and traffic on a 
wider area. In either case, the BLM has identified environmental Best 
Management Practices (www.blm.gov/bmp) that are effective in reducing 
the direct and indirect footprints of energy development.
5.  Abandoned and Inactive Sites/Wells
 How many sites have been abandoned each year in the past 10 years? For 
        each, what is the location, the operator, the type and amount 
        of financial assurance, the number of wells, and the projected 
        reclamation cost?
    The BLM defines an abandoned well as one in which the well has been 
properly plugged to the surface but the reclamation has not yet been 
inspected and accepted as final.
    The total numbers of Federal wells plugged (abandoned) for the last 
10 years are:

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


    The detailed listing of each well and operator is provided in a 
table contained in Appendix A. BLM does not track the projected 
reclamation cost for abandoned wells. The operators, not the BLM, are 
responsible for their reclamation.
6.  What was the total number of abandoned and inactive wells in each 
        of the past 10 years? For each year, what is the number of new 
        abandoned and inactive wells, the number of abandoned and 
        inactive wells reclaimed, the number of abandoned and inactive 
        wells brought back into production, the production from each of 
        those wells, and the total projected reclamation cost from 
        those wells?
    This question, as well as questions 7 and 9, requests comprehensive 
data which is not accessible through our standard records systems. We 
will acquire the data through a physical review of records located at 
multiple BLM field offices in several States. A request to our field 
offices to initiate this data collection was sent out during the week 
of June 4, 2007. We expect to be able to respond to questions 6, 7, and 
9 in October.
7.  What expenses were incurred in each of the past 10 years due to 
        inadequate financial assurance amounts? For each, what is the 
        location, the operator, the number of wells, and the type and 
        amount of financial assurance?
    Please see answer to question 6, above.
8.  How many sites achieved final reclamation, final inspection, and 
        final bond release each year in the past 10 years? For each, 
        what is the location, the operator, and the number of wells?
    Summary:

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    

    The detailed listing of each well and operator is provided in a 
table contained in Appendix B.
9.  For how many operators, projects and wells has BLM increased 
        financial assurance amounts in each of the past 10 years? For 
        each, what is the location the operator, the number of wells, 
        the type and amount of financial assurance (both before and 
        after the increase), and the projected reclamation cost?
    Please see answer to question 6, above.
Cultural Resources
10.  In response to a question about Nine Mile Canyon in Utah, you 
        stated an expectation that the management plan area would 
        address cultural resources concerns. However, the problem may 
        be that oil and gas leasing simply isn't compatible with the 
        historic and sacred resources in that canyon. Many of the 
        leases which Bill Barrett Corporation now seeks to develop in 
        Nine Mile Canyon and on the plateau above were issued or 
        renewed in the late-1980s and early 1990s. Now, with respect to 
        the proposed 750-plus well development, BLM seems to believe 
        that it has limited alternatives available to prevent the 
        proposed development or to minimize the impacts because it 
        issued the leases many years ago. Does the agency believe that 
        it cannot revisit the terms of old leases when renewing them, 
        and if so, why? In the past five years, has BLM identified 
        areas that, for cultural or habitat reasons, should not be open 
        to leasing at all? If so, please specify. How can BLM prevent 
        the future occurrence of a situation like that of Nine Mile 
        Canyon?
    The BLM has several options available for mitigating oil and gas 
development-related impacts to cultural and habitat resources. 
Mitigation developed through the consultation and environmental review 
processes could result in the relocation of development or the 
mandatory application of site-specific mitigation and best management 
practices to individual drilling permits. Regardless of the age of oil 
and gas leases, the BLM must comply with applicable statutes, such as 
the consultation requirements of Section 106 of the National Historic 
Preservation Act. The BLM must also comply with the National 
Environmental Policy Act, Endangered Species Act, Migratory Bird Treaty 
Act, the Clean Water Act, Clean Air Act, and many other Federal 
statutes. Lease operations are also subject to regulations, such as the 
oil and gas ``Environmental obligations'' regulatory provisions found 
in 43 CFR 3162.5-1. In addition, the Price Field Office is currently 
revising their Resource Management Plan and will address leasing and 
other land use planning considerations related to cultural and habitat 
resources in Nine Mile Canyon and the West Tavaputs Plateau areas.
    Specific to Nine Mile Canyon, very little oil and gas development 
is being permitted in the canyon where the most important cultural 
resources are found. The BLM is restricting drilling locations in the 
canyon and the majority of the oil and gas resources within the canyon 
will be developed by directional drilling from centralized locations. 
Currently, there are four wells and one large compressor station in the 
bottom of Nine Mile Canyon. Three of these wells are located on private 
surface (two of the private surface wells have private mineral 
ownership and one has minerals owned by the State), and one well is 
located on Federal surface (BLM). That well was approved and drilled in 
July 1962. All of the other wells associated with oil and gas 
production in the area are located outside of Nine Mile Canyon proper 
and most are located on the benches to the south. The one large 
compressor station is located on private land.
    The following chart contains examples of lands that have been 
deferred or closed to leasing in land use plans during the past five 
years primarily to protect cultural or habitat resources. More 
commonly, in practice, the BLM makes land with habitat and cultural 
resource values available for leasing, but may include major or 
moderate resource protection lease stipulations in the oil and gas 
lease. When an actual request for a drilling permit is received, the 
BLM conducts an environmental review and may move the well and road 
location to protect cultural and habitat values and will typically 
attach additional resource protection constraints to the approved 
permit.

Chart: Examples of BLM-managed lands that have been deferred or closed 
to leasing in land use plans during the past five years primarily to 
protect cultural or habitat resources. The figures are approximate.


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

11.  How often-in what percent of APDs-does the BLM attach a 
        cultural resource stipulation to leases? Can the stipulation 
        resolve potential conflicts between oil and gas development and 
        the protection of significant cultural and historic resources? 
        How often does BLM later deny an APD or activities within a 
        lease due to a cultural resource stipulation and eventual 
        finding that there is a threat to cultural resources?
    Section 6 of the standard oil and gas lease form includes 
requirements for the protection of cultural resources. Regardless of 
the lease terms and conditions, the BLM is required under Section 106 
of the National Historic Preservation Act to complete consultation with 
the State Historic Preservation Officer (SHPO) for all subsequent 
permitting actions that affect cultural resources eligible or 
potentially eligible for the National Register of Historic Places. As a 
result of the consultation process, the proposed activity may be 
relocated or mitigation requirements may be attached to the permit. 
This process has been very effective in mitigating conflicts between 
oil and gas development and protection of important cultural resources. 
It is extremely rare that impacts cannot be mitigated or the site 
avoided altogether. In consultation, the BLM works with the oil and gas 
operator and the State Historic Preservation Officer to develop an 
alternative that allows some form of the action to proceed (even if it 
must be relocated) with little or no impact to cultural resources. 
Subsequent to consultation, denial of an APD is rare.
Follow up commitments
    During the hearing, Mr. Bisson stated for the record that BLM would 
supply information on the following:
 Issue 1: Where BLM is using Section 390 categorical exclusions, and 
        where that information is made readily available to the public.
    The following information reflects BLM Field Offices that have used 
categorical exclusions (CXs) during Fiscal Year 2006 (10/1/05 to 9/30/
06).


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

 Issue 2: Where the agency is considering the cumulative impacts of 
        the use of CXs on wide-ranging species and wildlife corridors?
    The Section 390 CXs essentially tier to existing NEPA analysis 
which includes a cumulative impact analysis.
    The BLM analyzes the cumulative impacts of oil and gas exploration, 
development, production, and abandonment on resources, including 
wildlife and its habitat, either at: (a) the land use planning stage 
through the Environmental Impact Statements (EIS) associated with BLM's 
Resource Management Plans; or (b) the development stage through 
geographic area NEPA analysis that looks at all or a portion of an oil 
and gas field.
a.  Cumulative Impact Analysis at the Land Use Planning Stage:
    At the land use planning stage, the BLM determines where and under 
what conditions oil and gas exploration, and development activities 
will be permitted. Before these determinations are made, the impacts 
associated with these determinations must be analyzed in the EIS 
prepared with the RMP. To support the cumulative impact analysis 
associated with the RMP, a reasonable foreseeable development scenario 
(RFDS) for oil and gas development is generated. The RFDS projects 
management activities and actions likely to occur in the planning area 
over the life of the RMP (typically 15 to 20 years).
    Information within an RFDS includes:
      Number of wells expected to be drilled over the life of 
the RMP;
      typical surface and subsurface activities that are likely 
to take place if these wells are drilled;
      average amount of acres typically disturbed to drill, 
complete, and produce a well (includes well pads, access roads, and 
pipelines);
      waste disposal needs - produced water, H2S, 
CO2 venting, and flaring; and
      sequence, timing and duration requirements needed for 
exploration, drilling, and production phases.
    An interdisciplinary team uses the RFDS as a guide to analyze what 
the cumulative impacts of oil and gas development would be to other 
resources (i.e., ecological, aesthetic, historic, cultural, economic, 
social, and/or health) so as to develop mitigation measures to avoid or 
reduce adverse impacts.
b.  Cumulative Impact Analysis at the Development Stage:
    The subsequent method for analyzing cumulative effects is through a 
geographic area NEPA analysis, which is an activity-level analysis of 
an entire oil and gas field or a logical portion of a field where 
proposed multiple wells, access routes, production facilities, 
utilities, etc. have been identified. These types of analyses take a 
broad scale, yet site-specific look at a defined area and known or 
likely development proposal. The primary advantage is the ability to 
look at a broad area in a site-specific manner and analyze the 
cumulative effects of oil and gas development in relation to other 
resource uses in one public process rather than individual development 
proposals.
 Issue 3: Examples of areas where BLM is ensuring that mitigation 
        occurs on the site of former oil and gas facilities (versus 
        habitat enhancement elsewhere).
    Jonah Field of Pinedale, Wyoming: New discoveries have been made in 
different formations and at greater depths of an existing field. New 
mitigation the operators have applied to the existing older field 
include:
      Reducing the physical footprint of well pads by 
centralizing operations. Centralization eliminates the need to disturb 
a large amount of surface area at each well pad location to support 
equipment.
      After wells are drilled and completed, all facilities 
associated with the production of these wells are strategically placed 
at centralized locations to reduce vehicle traffic and needed roads.
      Producing wells are monitored electronically through 
remote telemetry, which eliminates the need for field visits to well 
site locations on a continuous basis. This decreases vehicle traffic 
and associated wildlife disturbance.
      Operators are experimenting and developing improved 
reclamation techniques that would ensure not only the reclamation, but 
the restoration of disturbed areas. These practices are also being 
implemented at the production phase of operations through interim 
reclamation of disturbed areas not needed for the production phase of a 
well.
      Furthermore, operators within the Jonah Field have 
contributed funds to a centralized organization (Jonah Interagency 
Mitigation and Reclamation Office) that provides overall management of 
field monitoring and on-and off-site mitigation of oil and gas 
development. For further information please refer to the following 
website: http://www.wy.blm.gov/jonah_office/index.htm.
    Carlsbad, New Mexico: The BLM has identified areas (well pads and 
access roads) within old oil and gas fields where past reclamation 
efforts were unsuccessful due to obsolete practices or lack of 
stringent environmental standards that didn't exist at the time. These 
abandoned locations are being reclaimed and reseeded with native 
vegetation to stabilize severely eroded soils and reduce the amount of 
habitat fragmentation that has already occurred. These efforts are part 
of a statewide effort by the New Mexico BLM to restore its lands at a 
landscape level. For further information associated with this project 
please refer to the following website: http://www.nm.blm.gov/
restore_nm.
 Issue 4: Examples of successful adaptive management efforts.
    Pecos District Office, New Mexico: The BLM is in the process of 
amending the current Carlsbad and Roswell Resource Management Plans 
(RMP) in response to changing resource conditions and new issues in the 
context of habitat management for the lesser prairie-chicken and sand 
dune lizard while at the same time providing for energy production. New 
monitoring information from the local BLM Field Offices and cooperating 
agencies revealed that these two species are on the brink of being 
listed as threatened or endangered under the Endangered Species Act 
(ESA). This plan amendment was designed to establish new conditions and 
prescriptions that would protect and enhance lesser prairie-chicken and 
sand dune lizard habitats while allowing other uses to continue.
    Anticline of Pinedale, Wyoming: The BLM Field Office is revising 
its current land use plan in response to concerns of declining wildlife 
populations. The revised plan calls for additional mitigation 
including:
      reducing the number of pads through multi-well pad 
development;
      requiring directional drilling and simultaneous 
completion operations;
      requiring operators to develop the oil and gas field in a 
``phased approach'' by dividing it into core areas where the location 
and intensity of drilling activities could occur at only one core area 
at any given time;
      reducing residual wildlife impacts and air quality 
impacts by:
        use of liquids gathering systems, centralized facilities, 
and centralized production tanks where feasible to reduce truck 
traffic;
        increased use of remote telemetry further reducing trips 
and traffic during production;
        management of traffic through busing and scheduling during 
seasonal stipulation periods; and
      reducing rig moves on and off pads.
    These efforts are anticipated to reduce impacts to wildlife 
populations by decreasing the expected period for development in core 
areas under seasonal restrictions.
 Issue 5: The number of leases the NPS has requested that BLM withdraw, 
        and the number which were subsequently withdrawn.
    The BLM does not lease National Park Service lands for oil and gas 
development. Occasionally the National Park Service will request that 
the BLM not lease a parcel near Park lands. On other occasions, the BLM 
will proactively notify the National Park Service that parcel 
nominations have been received for parcels near Park lands. The BLM 
typically discusses impacts, mitigation, and seeks the opinion of the 
National Park Service prior to leasing the lands.

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


A.  In previous hearings, there has been criticism that oil and gas 
        production in Wyoming is threatening to sportsmen's activities. 
        Has BLM performed any analysis to determine to big game trends 
        in that area? Have the numbers been increasing or decreasing 
        and by how much? Have the hunter numbers been increasing or 
        decreasing? Has the hunter success rate been increasing or 
        decreasing?
    Major oil and gas development activity began in the Jonah/Anticline 
fields in Sublette County, Wyoming in calendar year 2000. We have 
reviewed Wyoming Game and Fish Department (WG&F) trend data from 1996 
to 2005 to determine if impacts may be occurring in Sublette County in 
addition to those occurring on a statewide basis. The following data 
from WG&F shows that overall big game populations and hunting 
opportunities in Sublette County generally mimic statewide results.

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


*Over the past ten years, the difference between population 
estimates and population objectives for deer has ranged statewide from 
23% below to 3% below objective and for antelope has ranged from 15% 
below objective to 10% above objective.

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]


B.  In previous hearings, there has been criticism that the 
        Department has a ``lease at all costs'' approach to managing 
        Federal lands. Is this true or false? And can you explain why?
    We disagree with this assertion. The BLM is a multiple-use agency, 
and domestic energy production is only one of the many uses for which 
we manage the Federal lands under the multiple-use mandate. However, 
the numbers show that leasing is not the predominant use of the lands 
under BLM management. The BLM manages a subsurface mineral estate of 
700 million acres. Approximately 42 million acres of that total, or 6 
percent, are under lease for oil and gas. Of the leased acreage, 
approximately 12.3 million acres are in producing status. This 
represents approximately 1.8 percent of the 700 million acres of 
Federal mineral estate.
    Furthermore, approximately 25 million acres of the 258 million 
surface acres the BLM manages are effectively closed to leasing because 
of special designations such as National Monuments, Wilderness and 
Wilderness Study Areas. In comparison, only 12.3 million acres, or less 
than half the protected number, are under lease and in producing 
status; and of the lease acreage that is in producing status, only 
about 240,000 surface acres have direct surface disturbance from 
activity associated with energy production.

                UNITED STATES DEPARTMENT OF THE INTERIOR

                       BUREAU OF LAND MANAGEMENT

                         WASHINGTON, D.C. 20240

                             June 22, 2004

In Reply Refer To:
3100 (310) P
2800 (350)

EMS TRANSMISSION 06/22/2004
Instruction Memorandum No. 2004-194
Expires: 09/30/2005

To: All Field Officials

From: Director

Subject: Integration of Best Management Practices into Application for 
Permit to Drill Approvals and Associated Rights-of-Way

    Program Areas: Oil & Gas Operations; Geothermal Operations; Helium 
Operations; Lands & Realty.
    Purpose: The purpose for issuing this Instruction Memorandum (IM) 
is to establish a policy that Field Offices consider Best Management 
Practices (BMPs) in National Environmental Policy Act (NEPA) documents 
to mitigate anticipated impacts to surface and subsurface resources, 
and also to encourage operators to actively consider BMPs during the 
application process.
    Background: BMPs are innovative, dynamic, and economically feasible 
mitigation measures applied on a site-specific basis to reduce, 
prevent, or avoid adverse environmental or social impacts. BMPs are 
applied to management actions to aid in achieving desired outcomes for 
safe, environmentally sound resource development, by preventing, 
minimizing, or mitigating adverse impacts and reducing conflicts. The 
early incorporation of BMPs into Application for Permit to Drill (APDs) 
by the oil and gas operator helps to ensure an efficient and timely APD 
process.
    Policy/Action: All Field Offices shall incorporate appropriate BMPs 
into proposed APDs and associated on and off-lease rights-of-way 
approvals after appropriate NEPA evaluation.
    BMPs to be considered in nearly all circumstances include the 
following:
      Interim reclamation of well locations and access roads 
soon after the well is put into production;
      Painting of all new facilities a color which best allows 
the facility to blend with the background, typically a vegetated 
background;
      Design and construction of all new roads to a safe and 
appropriate standard, ``no higher than necessary'' to accommodate their 
intended use; and
      Final reclamation recontouring of all disturbed areas, 
including access roads, to the original contour or a contour which 
blends with the surrounding topography.
    Other BMPs are more suitable for Field Office consideration on a 
case-by-case basis depending on their effectiveness, the balancing of 
increased operating costs vs. the benefit to the public and resource 
values, the availability of less restrictive mitigation alternatives, 
and other site specific factors. Examples of typical case-by-case BMPs 
include, but are not limited to the following:
      Installation of raptor perch avoidance;
      Burying of distribution power lines and/or flow lines in 
or adjacent to access roads;
      Centralizing production facilities;
      Submersible pumps;
      Belowground wellheads;
      Drilling multiple wells from a single pad;
      Noise reduction techniques and designs;
      Wildlife monitoring;
      Seasonal restriction of public vehicular access;
      Avoiding placement of production facilities on hilltops 
and ridgelines;
      Screening facilities from view;
      Bioremediation of oil field wastes and spills; and
      Use of common utility or right-of-way corridors.
    A menu of typical BMPs can be found on the BLM Washington Office 
Fluid Minerals website. The website is updated frequently and 
submission of new BMPs and photos is encouraged. http://www.blm.gov/bmp
    BMPs have been developed and utilized by numerous oil and gas 
operators throughout the nation. When implementing new BMPs, Field 
Offices are encouraged to work with affected operators early, to 
explain how BMPs may fit into their development proposals and how BMPs 
can be implemented with the least economic impact. Discuss potential 
resource impacts with the operators and seek their recommended 
solutions while encouraging operators to incorporate necessary and 
effective BMPs into their proposals. BMPs not incorporated into the 
permit application by the operator may be considered and evaluated 
through the NEPA process and incorporated into the permit as APD 
Conditions of Approval or right-of-way stipulations.
    Field Offices must be cautious to avoid the ``one size fits all'' 
approach to the application of BMPs. BMPs, by their very nature, are 
dynamic innovations and must be flexible enough to respond to new data, 
field research, technological advances, and market conditions. 
Following implementation, Field Offices should monitor, evaluate, and 
modify BMPs as necessary for use in future permit approvals.
    The overall goal of the Bureau is to promote the best examples of 
responsible oil and gas development. Public lands should be showcases 
of good stewardship while providing for responsible, sustainable, and 
efficient development of the nation's oil and gas resources. BLM will 
use the Quality Assurance Team (QAT) and General Management Evaluation 
(GME) processes in order to review our progress. To recognize good 
environmental stewardship work through the use of BMPs, BLM is 
establishing an annual ``Best Management Practice'' awards program with 
annual awards for industry and BLM offices, the details of which will 
be available subsequently.
    Timeframe: Immediately.
    Budget Impacts: Minimal.
    Manual and Handbook Sections Affected: None.
    Coordination: AD-200.
    Contact: Please direct policy questions to Tom Lonnie, Assistant 
Director, Minerals, Realty, and Resource Protection (AD-300) at (202) 
208-4201; or by E-mail at [email protected]; and technical 
questions to Jim Perry, Washington Office Fluid Minerals Group (WO-
310), at (202) 452-5063; or by E-mail at [email protected]; or to Tom 
Hare, Washington Office Fluid Minerals Group (WO310), at (202) 452-
5182, or by E-mail at [email protected].

Signed by:

Francis R. Cherry, Jr., Acting Director

Authenticated by:

Barbara J. Brown, Policy & Records Group, WO-560
                                 ______
                                 
    Mr. Grijalva. Thank you very much. I want to thank the 
witnesses, and if I may, Mr. Bisson, request that the statement 
that you presented to us orally, if you could submit that also 
for the record because it is somewhat different than the 
statement that we have.
    Mr. Bisson. I will do that, sir.
    Mr. Grijalva. Thank you. Or a lot different. Let me begin 
with some questions. Mr. Bisson, and it was mentioned as part 
of Mr. Ferguson's testimony, let me begin with that area. You 
know, Section 390 of the Energy Policy Act allows BLM to 
categorically exclude certain wells and other sites from the 
project level environmental analysis. My questions is, is your 
agency tracking and mapping where the Section 390 categorical 
exclusions are being used? And the second part of that question 
is, is that information readily available to the public?
    Mr. Bisson. I don't have that information with me today. We 
can certainly supply it, but we know exactly where those 
decisions are being made using categorical exclusions. We can 
provide that information, sir.
    Mr. Grijalva. And the second part of the question is, is 
that readily available to the--the information that you are 
going to provide this committee on the mapping and tracking, 
that is readily available to the public is the other part of 
the question.
    Mr. Bisson. I can't answer that question. I think each 
state probably handles it a little bit differently, but I 
believe that the notices, you know, the activity that is going 
to occur, that an APD is going to be approved are published and 
are a matter of record. But I do not believe that there is a 
public involvement process on the actual CXes because the CXes 
are intended to simplify the process where we have already done 
extensive NEPA analysis in former documents that looked at the 
very same area.
    Mr. Grijalva. OK. And your agency, Mr. Bisson, are you 
incorporating the recommendations of your wildlife biologists 
in the decisions as to whether to use or not use categorical 
exclusion?
    Mr. Bisson. I believe that we are.
    Mr. Grijalva. And in that process of the cumulative effects 
of those exclusions, especially in the wide-ranging issue of 
species and wildlife quarters, is that being collected in a 
cumulative way as well in the agency?
    Mr. Bisson. We can provide that information.
    Mr. Chair, if I might.
    Mr. Grijalva. Please.
    Mr. Bisson. The use of these categorical exclusions does 
not exclude the application of other environmental laws or 
regulations, environmental best management practices, 
endangered species consultation or mitigation, protection of 
sensitive wildlife species such as sage grouse, all of these 
protection measures are still utilized and supplement the 
decisions that we make when we use the CX, and we provide a 
specific guidance to the field that requires our managers to 
consult with the game and fish agencies, as appropriate.
    Mr. Grijalva. Let me follow that. So how much mitigation is 
done on a site of former oil and gas facilities in the form of 
enhancement of habitat elsewhere? What is your agency doing to 
assure that this mitigation has taken place? What are the 
requirements or the stipulations in place to assure that 
enhancement takes place?
    Mr. Bisson. First of all, when facilities are removed, and 
these are the permits of development that we are approving now, 
we will require reclamation of the areas that were disturbed. 
In many cases, we are requiring interim reclamation where 
disturbance has occurred even before a field is taken down. But 
there are so many new fields that we are years away from 
actually carrying out those activities. We are monitoring the 
activities that are happening on the ground, and fully intend 
to require the companies to restore their lands when they 
leave.
    Mr. Grijalva. For additional submittal to the committee, I, 
and I think the members of the committee would be curious if 
you could provide information to the examples of successful 
adaptive management efforts that have gone on.
    Mr. Bisson. Yes, sir.
    Mr. Grijalva. OK. One more and then turn it over to my 
colleague. How many leases has the National Park Service 
requested that BLM withdraw?
    Mr. Bisson. I can't answer that question. I don't have that 
information with me, but I can tell you that as an example last 
year when I was acting state director in Utah, a Utah-specific 
case. We had a lease sale in August. We had requests from the 
Park Service to not consider leasing nine lease tracts adjacent 
to Arches National Park, and we consulted with the Park 
Service. We set a standard of four miles distance that might 
impact the park, and we removed lease tracts within that four-
mile distance from the lease sale.
    Mr. Grijalva. And my time is up, but also if you could 
submit to the committee how many have been requested, and you 
gave an example of nine by the Park Service, and how many of 
these--of the requests, how many of them were subsequently 
withdrawn.
    Mr. Bisson. We will provide that information for you, sir.
    Mr. Grijalva. Thank you. With that, let me turn to Ranking 
Member Pearce for any questions he might have.
    Mr. Pearce. Thank you, Mr. Chairman. Thank you, Mr. Bisson, 
again appreciate your service, and I would apologize in public 
for the one of our members who submitted that request that took 
you through a year-long investigation for doing your job. That 
was uncalled for. Thank you.
    We have heard characterizations of the Bush Administration 
is just an oil friendly leasing, they are going to lease every 
ounce of land up, and that they are out there destroying the 
environment, and you as an agency are not checking them up. 
Give me a progression, if I can, for the last five or six years 
of the number of inspections, number of inspections for 
remediation, number of inspections for compliance.
    Mr. Bisson. Yes, sir. In 1988, the BLM completed 11,500 
inspections of oil and gas.
    Mr. Pearce. That was how many?
    Mr. Bisson. Eleven thousand four hundred and eight-six to 
be exact.
    Mr. Pearce. OK.
    Mr. Bisson. In 2006, we completed 16,967 inspections. That 
is a 47 percent increase. In addition----
    Mr. Pearce. Yes. So what you are saying that under the Bush 
Administration we are up almost 5,000, which is almost a 50 
percent increase over the Clinton Administration. I am not 
pointing fingers at the Clinton Administration, but if anybody 
was guilty of not checking, it would be actually the 
administration before this one because my understanding you 
have gone up by almost 6,000, 5,500 inspections.
    Mr. Bisson. It will actually be more this year as well. We 
are going up to 21,000.
    Mr. Pearce. So we are even going to have another 3,000 
increase.
    We have also heard testimony that the Bush Administration 
is a ``lease at all cost'', lease everything you can get, lease 
it, lease it, lease it, lease it. We hear that testimony in 
front of this committee. Can you give me any impression of what 
is happening under leases because I know, I am from the oil and 
gas business, I am from that section of the country, I know the 
problems that we are having leasing, so can you tell me what 
has happened to leases since the eighties to the present?
    Mr. Bisson. Well, in my testimony a few minutes ago, I 
talked about the fact that in the eighties we actually had 
three times as many acres leased as we do now.
    Mr. Pearce. So you are actually decreasing leasing?
    Mr. Bisson. We have much fewer acres leased now than we did 
back then.
    Mr. Pearce. But what were the numbers?
    Mr. Bisson. It was 131 million acres were leased in 1984, 
and we are down to about 42 million acres right now.
    Mr. Pearce. So from 131 down to 42. If our income had 
decreased from 131 to 42, we would think our income had 
dramatically fallen, yet I continue to hear testimony in here 
that says the Bush Administration is trying to lease up the 
whole world, and sometimes the facts get in the way, I know 
that, but appreciate that information.
    Mr. Ferguson, you had--again we are hearing the categorical 
exclusions are the problem. The categorical exclusions actually 
were worked out in this committee, the Resources Committee down 
in the other room that we meet in. It was actually Mr. Peterson 
who testified, and myself, who were sitting, he was on the 
upper dais, I was here, Mr. Miller, Mr. Abercrombie, and we got 
into a discussion late in the day, it was about a seven-hour 
markup when we were amending the bill, and we actually worked 
that section out word by word, the five categorical exclusions, 
because we saw that the language was actually being used as a 
tool to bludgeon companies.
    So what we did, and these gentlemen on the minority at that 
time, the majority now, they came to the conclusion that no, we 
think the bill--that the Environmental Protection Act had been 
used to reach too far. The Endangered Species Act was being 
used as a tool, and so they were trying to reach some business 
compromise.
    Can you tell me how it is actually working out because we 
are going to hear testimony today, and we have previously heard 
it, that you need to get rid of those evil categorical 
exclusions?
    Mr. Ferguson. Well, as I mentioned in the testimony, Mr. 
Pearce, we have records that indicate that we have used that 
Section 390 categorical exclusion on about 300 projects, but I 
think Mr. Bisson made a very good point. Those are not just 
what sometimes is called a rubber stamp. When a project comes 
in, we have requirements to make sure they are in compliance 
with all other environmental laws, and we actually have 
situations where we add additional conditions of approval for 
operations to occur when we use that categorical exclusion.
    So we have had some pretty good success with it, and we 
feel like we are taking the right approach to how we are 
processing those. We are not just--it is not a factory output 
type thing, it is a case-by-case situation.
    Mr. Pearce. Sure.
    Mr. Ferguson. On the ground.
    Mr. Pearce. We are trying to do the best we can.
    Mr. Chairman, my time has lapsed, but I have questions for 
a second round if you get them.
    Mr. Grijalva. Thank you. Mr. Udall.
    Mr. Udall. Thank you, Mr. Chairman. I would like to welcome 
the panel. Thank you for taking your time to come up to the 
Hill. Mr. Bisson, if I could start with you, and direct some 
questions your way, and particularly focused on Colorado, of 
course my home state.
    There have been some instances when the BLM has leased 
lands in the areas the communities depend on for their water 
supplies, and my understanding is that some of those 
communities have asked the BLM not to lease in those areas, but 
those requests have been denied. My question is a two-part 
question. Is that true, and if so, why? And I think you 
probably are aware of at least the situation in Palisade and 
Grand Junction.
    Mr. Bisson. I am aware of it. I have not been briefed on 
it, sir, but I am aware that a decision was made in Colorado to 
proceed with leasing those several tracts that you are speaking 
about.
    Mr. Udall. Could you tell me why you would ever deny such a 
request when water is so crucial, particularly in the West 
where we have limited supplies?
    Mr. Bisson. I can speculate. I would speculate that the 
state director decided that the mitigation measures they put in 
place should be sufficient, and that at the time that any 
drilling or development would occur, that they could add 
additional requirements that would protect the water.
    Mr. Udall. I can understand the approach to be taken. I 
would just for the record point out that there was a broad 
swatch of communities, of groups within those communities who 
said, please give us a little bit more time. This is so 
important to us.
    Can you provide a complete answer for the record?
    Mr. Bisson. Yes, sir, I will.
    Mr. Udall. Appreciate that. If I could, let me move to 
``split estate'' situations. How much advanced notice does the 
BLM give to surface owners before offering minerals under those 
lands for leasing?
    Mr. Bisson. I can't answer that question, but if I could 
take a second, what I would like to do is explain that last 
year as a result of the Energy Policy Act BLM was required to 
do a split estate analysis, and we went through a five-month-
long process where we held nine listening meetings across the 
West. We accepted more than 3,000 public comments about this 
issue, and one of those issues was that public notice that 
lessees are provided, and we have instructed our field offices 
to take every step possible to make sure there is advance 
notice to landowners about pending lease sales.
    Mr. Udall. Are there any specific requirements for 
consultations with the surface owners?
    Mr. Bisson. Prior to the lease sale?
    Mr. Udall. Prior and after, yes, sir.
    Mr. Bisson. Yes. I can't answer that. I do know that the 
first place where decisions are made about leasing is in the 
land use plans, and we have instructed our field offices again 
to pay for ads in the papers, to do whatever they have to do to 
get the word out about the land use plans that are underway, 
and the decisions that are going to be made about where leasing 
may or may not occur.
    Mr. Udall. At least one conclusion I could draw is because 
you don't have any specifics, you don't have any requirements, 
but I would certainly like you to respond fully for the record, 
if you would.
    Mr. Bisson. I absolutely will, sir.
    Mr. Udall. If I could direct a question at you, Mr. Bisson, 
and also Mr. Ferguson. Another witness, Mr. Emmerich, will 
testify on behalf of the WGA, the Western Governors' 
Association. Have you had a chance to review his testimony?
    Mr. Bisson. Yes, I have.
    Mr. Udall. Mr. Ferguson?
    Mr. Ferguson. I have not.
    Mr. Udall. If so, what do you think about the Governors' 
proposal to amend the categorical exclusion provision of the 
2005 energy act?
    Mr. Bisson. We feel that the use of the categorical 
exclusion is a very important tool for us in terms of 
completing our permitting activities. We use it judiciously. We 
have instructed our field offices to consult with the game and 
fish departments. We require interdisciplinary review. We don't 
shortcut the process. What we are doing is taking advantage of 
existing NEPA work that has been, and that is where the savings 
in time comes from. We think we need the tool.
    Mr. Udall. Mr. Ferguson, if you would like to reply for the 
record later, that would be great, once you have had a chance 
to look at the testimony.
    Mr. Ferguson. I can do that. Thank you.
    Mr. Udall. Is the BLM giving special consideration as to 
whether or not to use a CE where BLM-sensitive species and/or 
candidates for ESA listings are present, specifically sage 
grouse?
    Mr. Bisson. Absolutely.
    Mr. Udall. So you are considering it?
    Mr. Bisson. We absolutely consider all the resource values 
on a site where a CX is proposed to be used, and in some cases 
we determine that a CX is not appropriate.
    Mr. Udall. Actually, I maybe have--you are not considering 
using a CE for these situations with sage grouse?
    Mr. Bisson. Again, I don't want to emphatically say yes or 
no because I don't know, but if we had a BLM-sensitive species 
that could be affected by a project, that would likely elevate 
the NEPA requirement.
    Mr. Udall. Thank you again. Thanks, Mr. Chairman.
    Mr. Grijalva. Thank you, Mr. Udall.
    We are going to do one more round of questions. Mr. 
Ferguson, if I understand your testimony, the Forest Service 
conducts broad-scale leasing analysis to determine which lands 
are suitable for leasing, and then informs the BLM about those 
lands that are available. So can the committee infer that the 
agency, your agency has the authority of determining some lands 
to be unsuitable for development? Would that be a correct 
inference?
    Mr. Ferguson. I think that could be an inference that could 
be made. We go through--our planning process at the Forest 
Service is a little different from the process that is followed 
at the Bureau of Land Management. The leasing analysis is 
specifically targeted toward the oil and gas resources when I 
referenced the leasing analysis. So it is identifying lands 
that our specialist and through the public process have 
identified as being available or suitable, and that is again at 
a very broad level. Once that parcel, if there is an interest 
expressed on a Forest Service parcel, then we have another 
opportunity to look at that parcel and make sure it is in 
compliance with our plans, and conditions haven't changed.
    Mr. Grijalva. Thank you. Let me just follow up on that 
point. So can you answer now or submit for the record for the 
committee how many acres based on that analysis have been 
withheld from leasing because the Forest Service determined 
that that oil and gas development would be inappropriate? How 
many acres, and if you can give us an example of where?
    Mr. Ferguson. I will have to submit that for the record. I 
am not sure that we have that available right now. We will have 
to do some research with our regional offices and get that 
information for you.
    Mr. Grijalva. Thank you very much.
    One last question, Mr. Bisson. In the Nine Mile Canyon, BLM 
seem to take the position that the agency was very limited in 
its ability to say no to proposed development because the 
leases had been issued even though the development will 
substantially affect the historical, cultural, archeological 
resources, the valuable rock art panels and the landscape 
within the canyon will be affected.
    What can you suggest to this committee that BLM can do to 
prevent a recurrence of a situation similar to the Nine Mile 
Canyon?
    Mr. Bisson. Mr. Chairman, we are doing all we can to 
prevent unnecessary impacts on archeological resources and 
other sensitive resources in Nine Mile Canyon and elsewhere. 
The BLM right now is going through a revision of its land use 
plan in both the Vernal and the Price field offices. There will 
be measures included in the final outcome of that process, I 
believe, that will provide additional protection for those 
areas.
    Mr. Grijalva. I have no other questions. Mr. Pearce.
    Mr. Pearce. Thank you, Mr. Chairman. I would like to follow 
up a couple of the questions that have been asked.
    Mr. Bisson, you know, we get the question of split estate, 
and the next panel really goes into that, or the panel after 
really goes into that in great detail, and it is referred to my 
good friend from Colorado. If you consider all the well that 
have been drilled on the lands that are subject to the split 
estate, how many problem wells do you actually have? How many 
contentious situations? How many failed to get an application?
    Mr. Bisson. Mr. Pearce, right now we have about 19,500 
wells on split estate, Federal minerals private surface. Of 
that amount I have been told that it is less than 20 wells that 
have been--you know, where there has not been a surface use 
agreement able to be negotiated, and where companies chose to 
bond up instead of going through the surface use agreement 
process. That is a pretty small number.
    Mr. Pearce. You have 19,000 something wells.
    Mr. Bisson. Twenty.
    Mr. Pearce. And you have 20, so if I put 20, divide that by 
19,000, I get a couple of zeros, a decimal and a couple of 
zeros, and one-tenth of 1 percent.
    Mr. Bisson. That sounds about right, sir.
    Mr. Pearce. And yet the testimony that we are going to hear 
today leads us to believe that it is catastrophic out there. Do 
you see the catastrophic nature of the split estate occurring?
    Mr. Bisson. We feel that the great majority of operators 
want to be good neighbors. They need to live in those 
communities. They need to work. They want to work with the 
private surface owners to reach satisfactory conclusions to the 
process, and we think that is the attitude that most of the 
operators take into their discussions.
    Mr. Pearce. You are saying most of the operators. 
Occasionally there are operators like anybody who are bad 
neighbors. Do you have tools to----
    Mr. Bisson. I would have to believe that there are, sir.
    Mr. Pearce. You what?
    Mr. Bisson. I have to believe that there are people like 
that, but we----
    Mr. Pearce. Do you have tools to deal with them is my 
question.
    Mr. Bisson. Yes, we do. Yes, we do.
    Mr. Pearce. So you can make them be reasonable even if they 
don't want to be reasonable?
    Mr. Bisson. We work hard to get the parties to try to work 
things out.
    Mr. Pearce. Are there ever any people on the other side of 
the equation, the people with the lands that get unreasonable?
    Mr. Bisson. Having not been personally involved in it----
    Mr. Pearce. Let me tell you about a situation I was 
personally involved in. My company, we did oil wells, but we 
did work down the hole. So we were called down to around Taos, 
New Mexico. We were out on this lease, and we were on the pad. 
Then one of the trucks, not ours, but one of the other trucks 
on location, you always have a lot of equipment moving in, so 
maybe five or six big 18-wheelers dropping equipment off to do 
the work down hole. One wheel got off on the grass, and the 
rancher was sitting there, and he cocked his gun, had his 
rifle, and he said, ``Everything shuts down here, my friends.'' 
Our trucks were trapped out there for hours.
    These kind of things do need balance. I am very familiar.
    You had a question earlier about habitat. You did not know 
specifics, but I do because again I have worked in the 
industry. I have watched while the big companies--Texaco, 
Chevron--the big companies began to build quail habitat because 
quail can't exist without water, and they need a little 
watering troughs around a lot of the locations, little watering 
troughs, automatic things, just pump water out there. So we 
have seen actually quite a lot of interest in this.
    Now, I grew up in this area of New Mexico, and we hunted 
arrowheads all the time just growing up, so we were always 
wandering around through the sand hills. Not once, not one time 
earlier than my twenties did I ever see a deer. Now, I am not 
saying that the oil and gas exploration has caused the deer, 
but I can tell you that the biggest deer that are being killed 
right now are about five or six, seven, ten miles from my 
house, and we never used to see them. So what I am saying is 
that oil and gas production is not exclusive. It does not force 
the game away.
    Also, on the habitat restoration, the highest land point in 
Lea County, the highest point in my home county is actually 
where they are cleaning up something because my dad was from a 
different generation. I used to go with him when I was eight-
nine years old. We would go to the oil fields and they were 
different. The people my age are saying we are not going to 
mess up the environment. We are going to get the oil and gas, 
but we are not going to mess it up, and the highest point in 
Lea County is from an excavation, one of those sites from the 
twenties, and they are actually doing the right thing, and that 
is the thing I see.
    Mr. Bisson, do you ever see that kind of thing play out?
    Mr. Bisson. In fact, much of the clean up that we are doing 
right now are wells that are a remnant of that time period. We 
don't see hardly any--in fact, I am not aware of any operators 
who have walked away from leases right now without carrying out 
the reclamation responsibilities.
    Mr. Pearce. The walk-awayers were a different generation.
    Mr. Bisson. It was a different time.
    Mr. Pearce. And it was not excusable then.
    Mr. Bisson. And we won't let them.
    Mr. Pearce. All right. Thank you, Mr. Chairman.
    Mr. Grijalva. Thank you. You got me there, Mr. Pearce. My 
daddy never took me to the oil fields to have fun.
    [Laughter.]
    Mr. Pearce. That was bonding that was occurring.
    Mr. Udall. Thank you, Mr. Chairman.
    I wondered if the gentleman from New Mexico is now in favor 
of some greater form of gun control given the way his ranchers 
are behaving.
    [Laughter.]
    Mr. Udall. To turn more whimsical here. Mr. Bisson, what is 
the status of the leasing in the Wyoming Range? I am sorry. Mr. 
Ferguson. I don't want to just pick on Mr. Bisson today, my 
Forest Service friend. What is the status of the leasing in the 
Wyoming Range or the Bridger-Teton? And a couple of question 
that follow on there. How many acres are currently in 
production or under lease, and how many more acres are slated, 
being considered for leasing, and what is the status of 
planning on those lease sales?
    Mr. Ferguson. Let me get to my information here. The 
current status, as I understand it right now, is that we are in 
a holding pattern and there is work being processed--the plan 
is being evaluated and an EIS is being conducted.
    In terms of some of the information, there have been 
several lease sales over the last couple of years, and there 
are about 20,000 acres that are currently involved in a stay by 
the Interior Land Board of Appeals, and those are just in a 
stay position, and there is another 23,000 plus that have been 
appealed, and there is no action being taken on those right now 
pending this action with the environmental impact statement, 
and making sure that the planning document is up to date, and 
accurate.
    That is the basic information that I have right now in 
terms of those parcels. I can provide you some more detailed 
information if you would like, but I do know that there is a 
very concerted effort going on right now with getting that plan 
up to date, and the plan revision is scheduled for completion 
in September of 2008.
    Mr. Udall. And you will submit additional information for 
the record?
    Mr. Ferguson. I can do that. Sure can.
    Mr. Udall. Thank you. Mr. Bisson, if I could turn to 
another Wyoming question.
    Mr. Bisson. Sure.
    Mr. Udall. When do you anticipate completion of the final 
EIS on the year-round expanded drilling situation in the 
Pinedale Anticline?
    Mr. Bisson. The Pinedale Anticline.
    Mr. Udall. And particularly what provisions have been 
proposed to protect the migration corridor for the prong horn 
and other animals?
    Mr. Bisson. Well, we have just concluded the public comment 
process on the draft EIS, and we are in the process right now 
of moving toward a final. We got more than 40,000 comments 
which we are analyzing. We have made no final decisions as to 
which alternative we would propose or exactly what measures 
would be involved.
    We have 14 different cooperating agencies that we are 
working with before we make those decisions. We will be sitting 
down with them and discussing it, but we are looking at 
strategies that involve companies agreeing to defer their 
development on the flanks of the Anticline. We have stage 
development that is being proposed where parts of the Anticline 
would not be developed, and be available for migration 
corridors while other parts are developed. We are looking at 
directional drilling. We are looking at lots of different 
strategies to try to do it in the most sensitive way that we 
can.
    Mr. Udall. If I could editorialize for 30 seconds perhaps 
on that particular area, I have great respect for my colleagues 
from New Mexico, Mr. Pearce. He and I have worked together on 
some legislative initiatives, and I do take him at his word, 
particularly in the drier area of New Mexico that some of the 
larger wildlife are not as present as they are in other areas, 
but certainly this area is remarkable in its wildlife 
abundance, and many of us, all of us, I think, want to get this 
right, whether it is on the industry side, the BLM side, the 
Congress, and I just urge you to everything possible here and 
to go slow.
    As a follow on, at last week's hearing a witness, Mr. 
Simpson, who testified for the NWF, National Wildlife 
Federation, said that while the BLM has the best management 
practices requirement, those requirements are seldom 
implemented--or if it is included in permit stipulations, if 
the measures cost too much, the companies will demand that the 
stipulation be scrapped. Would you respond to that statement?
    Mr. Bisson. Yes, sir. Best management practices are a tool 
that we instruct our field managers to utilize at the time that 
they are making decision to approve permits to drill, and we 
require them to look at them and made decisions about which 
ones ought to included as conditions of approval. Simply 
because a company doesn't want to do something is not a reason 
not to require them to take protective steps that we feel are 
necessary.
    Mr. Udall. Good.
    Mr. Bisson. Thank you.
    Mr. Udall. Thank you, Mr. Chairman.
    Mr. Grijalva. Thank you, and let me thank both our agency 
witnesses, appreciate it very much. If the committee has 
further questions, we will be submitting those to you, and the 
information that you indicated you would submit for the record, 
we would like to request that that be within the next two weeks 
insofar as the full committee will be drafting an energy bill 
in May, and as soon as we can have that information and 
incorporate it into the deliberations.
    Mr. Bisson. Yes, sir, Mr. Chairman.
    Mr. Grijalva. Thank you so much.
    Mr. Bisson. Thank you.
    Mr. Grijalva. Let me call the next panel up, please, if I 
may.
    Thank you very much, gentlemen, and as I indicated to the 
previous panel, your full statements will be made part of the 
record, and if at all possible to limit the oral remarks to 
five minutes, and let me begin with Mr. Emmerich. Sir.

         STATEMENT OF JOHN EMMERICH, DEPUTY DIRECTOR, 
                WYOMING GAME AND FISH DEPARTMENT

    Mr. Emmerich. Chairman Grijalva, I am John Emmerich. I am 
the Deputy Director with the Wyoming Game and Fish Department, 
and I thank you for the opportunity to address the 
Subcommittees regarding Section 390, subpart [b][3] of the 
Energy Policy Act of 2005 on behalf of the Western Governors' 
Association and the Association of Fish and Wildlife Agencies.
    The West, including Wyoming, is a national focus for energy 
development. The current scale and the intensity of energy 
development is unprecedented in many western states and experts 
predict this development will continue for several decades. The 
Western Governors are strong advocates for environmental 
responsible energy development as demonstrated by the 
development and implementation of the Western Governors' 
Association Clean and Diversified Energy Initiative.
    Much of the West also has world-class wildlife resources 
and a wildlife-oriented culture that the state and the Nation 
value very highly. From the current projected levels of energy 
development in Wyoming, it is estimated that roughly 25 percent 
of the state will experience direct surface disturbance or the 
effects of indirect wildlife disturbance caused by increased 
human, vehicular, and development activities associated with 
this level of development. Specific wildlife impacts are 
documented and are contained in the written statement.
    Energy development and fish and wildlife conservation are 
mutually achievable goals if development decisions are based on 
sound information and early continual engagement between the 
Federal land management agencies, state fish and wildlife 
agencies, and the energy development industry. The level of 
analysis, disclosure and recommended mitigation as appropriate 
for sensitive wildlife corridors and crucial habitat is not 
provided in programmatic land use plans such as RMPs or forest 
plans. This can only be achieved to the more in depth analysis 
provided by an EA or in most cases an EIS developed with full 
state participation.
    Subpart [b][3] of the Section 309 of the 2005 Energy Policy 
Act is worded in such a manner that oil and gas wells could be 
drilled under a categorical exclusion with no additional 
analysis if, and I quote, ``in an approved land use 
plan...prepared pursuant to NEPA analyzed drilling as a 
reasonably foreseeable activity...'' That could include an RMP.
    Of the 10 BLM field offices in Wyoming as an example, five 
are currently revising their resource management plans, and 
four of these are scheduled for completion by the end of 2007. 
The geographic area managed by these field offices contain very 
significant oil and gas resources, including the Continental 
Creston-Divide area that covers by itself over 1 million acres.
    The Governors believe that the categorical exclusions 
authorized broadly under paragraph [b] of the Energy Policy Act 
may often be appropriate. However, with specific regard to 
subpart [b][3], the Governors did not want their ability to 
require adequate mitigation in areas that the states have 
identified as sensitive wildlife corridors and crucial habitats 
to be diminished or eliminated.
    The Department of the Interior has worked fairly and 
inclusively with the states to date. However, the categorical 
exclusion provision in subpart [b][3] of the 2005 Energy Act 
appears to provide a legal option to deny state fish and 
wildlife agencies the opportunity to protect and adequately 
manage fish and wildlife resources on BLM lands by authorizing 
oil and gas development without adequate analysis, disclosure 
and state agency involvement.
    In February 2007, the Western Governors' Association 
adopted Policy Resolution 0701, protecting wildlife migration 
corridors and crucial wildlife habitat in the West. The 
resolution urges Congress to amend Section 390, subpart [b][3] 
of the Act to remove the categorical exclusion for NEPA review 
for expiration or development of oil and gas in wildlife 
corridors and crucial wildlife habitat on Federal lands.
    By removing the categorical exclusion, appropriate 
environmental site analysis will be completed as necessary to 
protect these crucial habitats. The Wyoming Governors or the 
Western Governors' Association and the Association of Fish and 
Wildlife Agencies would be happy to work with the committee 
staff on these proposed amendments.
    A second possible solution, especially as an interim step, 
would be to have the BLM develop a memorandum of understanding 
or policy document requiring a companion process with subpart 
[b][3] that would provide the opportunity for state fish and 
wildlife agencies to review those permits that could be 
excluded from a formal NEPA analysis in these sensitive 
wildlife corridors and crucial habitats. It will also provide 
BLM with an informal assessment of impacts and mitigation 
responses.
    Mr. Chairman, the Western Governors' Association and 
Association of Fish and Wildlife Agencies believe that more 
informed decisions that provide for both conservation of a 
fish, wildlife, and their habitats and efficient delivery of 
energy, and this can be achieved through early and meaningful 
coordination and information sharing among all involved.
    A second part of their resolution deals with the efforts to 
try to collect more information on migration coordinators, 
crucial habitats to facilitate the analysis and decision-making 
process.
    In conclusion, Governors and state fish and wildlife 
directors are solution-oriented. These landscape level 
activities are complex and cut across several governmental 
jurisdictions and private interests. However, we believe that 
solutions are available if all parties rely on the best 
available information, coordinate often at the earliest stage 
and throughout the process, and develop relationships of trust, 
integrity, and mutual commitment to meeting both fish and 
wildlife conservation objectives and the delivery of energy for 
our citizens.
    Thank you for this opportunity to share our perspectives, 
and I am glad to take any questions.
    [The prepared statement of Mr. Emmerich follows:]

   Statement of John Emmerich, Deputy Director, Wyoming Game & Fish 
   Department, on Behalf of The Western Governors' Association & The 
                Association of Fish & Wildlife Agencies

    Chairman Grijalva, Chairman Costa, and members of the 
Subcommittees, my name is John Emmerich, I am the Deputy Director of 
the Wyoming Game and Fish Department. Thank you for the opportunity to 
address the Subcommittees regarding Section 390 subpart B(3) of the 
Energy Policy Act of 2005, on behalf of the Western Governors' 
Association (WGA) and Association of Fish and Wildlife Agencies (AFWA). 
The Western Governors' Association is an independent, nonprofit 
organization representing the governors of 19 Western States, American 
Samoa, Guam and the Northern Mariana Islands. Through their 
Association, the Western governors identify and address key policy and 
governance issues in natural resources, the environment, human 
services, economic development, international relations and public 
management. AFWA represents all 50 State Fish and Wildlife Agencies.
    The West, including Wyoming, is a national focus for energy 
development. Several western states contain large domestic reserves of 
coal and uranium, world-class natural gas and wind resources, as well 
as significant oil production. There is also potential for oil shale 
development. These base energy sources are being tapped, and plans are 
underway for power plants, synfuel plants, pipelines and power grids to 
process and ship that energy across the west. The current scale and 
intensity of energy development is unprecedented in many Western 
states, and experts predict this development will continue for several 
decades. The Western Governors are strong advocates for environmentally 
responsible energy development, as demonstrated by the development and 
implementation of the WGA Clean and Diversified Energy Initiative.
    While many Western states truly have a world-class energy resource, 
much of the West also has a world-class wildlife resource and a 
wildlife-oriented culture that the state and the nation value very 
highly. For example, about half of Wyoming's residents hunt and/or 
fish, 75% enjoy non-consumptive wildlife watching activities, and many 
thousands of nonresidents also spend time in Wyoming each year 
specifically to take part in those activities. This participation in 
wildlife-associated activities is far higher than most other states. 
According to the U.S. Fish & Wildlife Service, $21 billion was spent in 
2001 on renewable hunting, fishing and wildlife watching activities in 
the 19 Western States. At this point in time, energy development is 
Wyoming's chief economic resource, but wildlife-associated activities 
have long been and will continue to be a very significant part of the 
State's second leading economic source, tourism and recreation. 
Economic support from tourism and recreation will need to be maintained 
to provide economic diversity and continue as a stable and vital part 
of the State's economy when development of energy sources inevitably 
slows.
    The Western Governors' Association and the Association of Fish and 
Wildlife Agencies recognize the national energy need and the West's 
contribution towards fulfilling that need. They also recognize the 
statutory obligations of our State Fish and Wildlife Agencies to 
conserve and manage the fish and wildlife resources, which are so 
important to the economy, culture and heritage of our citizens. A key 
aspect of this obligation is ensuring the sustainability of the 
habitats on which these species depend.
    Habitat impacts in many Western States have recently occurred as a 
result of the unprecedented energy development. In seven major oil and 
gas fields in Wyoming, there have been approximately 44,000 wells 
developed over several decades with the majority in the last ten years, 
and 55,000 additional wells are planned over the next 20 years. From 
this activity, it is estimated that roughly 25% of Wyoming will 
experience direct surface disturbance or the effects of indirect 
wildlife disturbance caused by increased human, vehicular and 
development impacts associated with energy development.
    Many species associated with the sagebrush/grassland steppe, 
including mule deer, pronghorn, sage-grouse, green-tailed towhee, and 
Brewers sparrow to mention a few, have experienced long term declines 
in productivity and numbers over the last thirty years, despite 
periodic, short term increases. Causative factors are many but change 
in habitat conditions is certainly one of the major factors. The 
unprecedented level and pace of energy development in the West is an 
additional impact on already struggling wildlife.
    In Wyoming sage grouse numbers have declined by approximately 60% 
and their numbers have declined even more so across their entire range 
over the last thirty years. Recent research and monitoring information 
on sage grouse and mule deer in the Pinedale anticline area of 
southwest Wyoming and the Powder River Basin of northeast Wyoming have 
clearly documented some of the impacts associated with intensive oil 
and gas development. Mule deer use on the crucial mesa winter range 
south of Pinedale has experienced a 27% decline since development 
started. Wyoming has seen a statewide increase of 68% in sage grouse 
numbers across Wyoming from 2004 to 2006, and a 44% increase in 
undeveloped areas adjacent to the Pinedale Anticline in this same 
timeframe. However, within the gas field there was no increase in 
grouse numbers associated with 37 leks and at least four of the leks 
were abandoned.
    Energy development and fish and wildlife conservation are mutually 
achievable goals if development decisions are based on sound 
information and early, continual engagement between the Federal land 
management agencies, State Fish and Wildlife Agencies and the energy 
development industry. With the current pace, scale and intensity of 
energy development in many Western States, it is vital that State Fish 
and Wildlife agencies have opportunity to be engaged throughout the 
NEPA process to ensure accurate information on the location of crucial 
wildlife habitat and key migration corridors is identified and 
recognized and there is adequate analysis, disclosure and mitigation 
provided to minimize impacts and offset unavoidable impacts. It is our 
expectation that the BLM, particularly given its multiple use mandate, 
would likewise routinely address these issues in RMPs and again at the 
leasing and permitting stages.
    The level of analysis, disclosure and recommended mitigation that 
is appropriate for sensitive wildlife corridors and crucial habitat is 
not provided in programmatic land use plans such as RMPs or Forest 
Plans. This can only be achieved through the more in depth analysis 
provided by an EA or in most cases an EIS developed with full state 
participation.
    Subpart (b)(3) of section 309 of the 2005 Energy Policy Act is 
worded in such a manner that oil or gas wells could be drilled under a 
categorical exclusion, with no additional analysis, if ``an approved 
land use plan...prepared pursuant to NEPA analyzed drilling as a 
reasonably foreseeable activity....'' We are concerned that completion 
of an RMP after the five-year period that an EA or EIS covers a 
reasonably foreseeable development scenario, or before an EIS is 
completed for a developing field, would allow authorization of drilling 
under a categorical exclusion (Cat Ex), including in sensitive wildlife 
corridors and crucial habitat, with general provisions provided only by 
the RMP.
    Of the ten BLM Field Offices in Wyoming, five are currently 
revising their RMPs, and four of these are scheduled for completion by 
the end of 2007. The geographic area managed by these Field Offices 
contain very significant oil and gas fields, including Moxa Arch, South 
Piney, Jonah, Pinedale Anticline, Atlantic Rim, and the huge 
Continental Divide-Creston area that alone covers over 1 million acres.
    The Governors believe that the Categorical Exclusions authorized 
broadly under paragraph (b) of the Energy Policy Act may often be 
appropriate. However, with specific regard to subpart (b)(3), the 
Governors do not want their ability to require adequate mitigation in 
areas the States have identified as sensitive wildlife corridors and 
crucial habitat to be diminished or eliminated. Development of these 
sensitive areas obviously needs detailed disclosure and analysis of 
impacts to other resources, and the permits need to include avoidance 
and mitigation measures to protect those resources.
    Although the Department of the Interior has worked fairly and 
inclusively with the states to date, the categorical exclusion 
provision in subpart (b)(3) of the 2005 Energy Act appears to provide a 
legal option to deny state fish and wildlife agencies the opportunity 
to protect and adequately manage fish and wildlife resources on BLM 
lands by authorizing oil and gas development without adequate analysis, 
disclosure and state agency involvement. Unless the problematic 
language in Subpart (b)(3) is amended or removed, or an additional 
administrative process implemented to allow state fish and wildlife 
agencies an opportunity to recommend appropriate protection and 
conservation conditions to accompany permits to drill in sensitive 
wildlife corridors and crucial habitat, significant wildlife impacts 
could occur.
    In February 2007, the Western Governors' Association adopted Policy 
Resolution 07-01, ``Protecting Wildlife Migration Corridors and Crucial 
Wildlife Habitat in the West'' (attached). The resolution urges 
Congress ``to amend Section 390. Subpart (b)(3) of the Energy Policy 
Act of 2005 to remove the categorical exclusion for NEPA reviews for 
exploration or development of oil and gas in wildlife corridors and 
crucial wildlife habitat on federal lands. By removing the categorical 
exclusion, appropriate environmental site analysis will be completed as 
necessary to protect crucial wildlife habitat and significant migration 
corridors located in the field of development.''
    The WGA and AFWA would be happy to work with Committee Staff on 
this proposed amendment.
    A second possible solution, which would not involve legislation, 
would be to have the BLM develop a memorandum of understanding or 
policy document requiring a companion process with Subpart (b)(3) that 
would provide the opportunity for state fish and wildlife agencies to 
review those permits that could be excluded from a formal NEPA analysis 
in these sensitive wildlife corridors and crucial habitat, and still 
provide BLM with an informal assessment of impacts and mitigation 
responses. These would then result in conditions of approval that BLM 
could attach to drilling permits. If this option is pursued, WGA and 
AFWA would be happy to work with the federal land management agencies 
to that end.
    In some manner, whether by these proposed solutions or others, we 
strongly recommend that the unintended result of Subpart (b)(3) in 
potentially excluding States from discharging their mandated resource 
management responsibilities on BLM land be addressed.
    Mr. Chairman, WGA and AFWA believe that more informed decisions 
that provide for both conservation of fish, wildlife and their habitats 
and efficient delivery of energy to our citizens can be achieved 
through early and meaningful coordination and information sharing among 
all involved. In addition to ensuring language in the 2005 Energy Act 
facilitates this sharing it is important to also facilitate the 
identification of sensitive wildlife migration corridors and crucial 
habitats and make that information readily available to ensure that 
significant landscape altering activities, including energy 
development, can be done while meeting the State's obligation to 
sustain healthy fish and wildlife populations.
    The WGA resolution calls for the gathering, assimilation and 
mapping of this important fish and wildlife information on an ambitious 
schedule. Much of this information already exists in State Fish and 
Wildlife Agencies, State Natural Heritage Inventories and other places. 
It is the intent of the WGA to first compile the location of existing 
information and facilitate its availability across state and agency 
lines while initiating inventory and monitoring work to address current 
gaps in information. This information, beginning with Federal lands, 
will then be used to enable informed decision making regarding energy 
development, and other associated development including transmission 
corridors, transportation corridors, etc. The interagency, 
interdisciplinary Wyoming Landscape Conservation Initiative is using a 
very similar process to determine the best places to assess and enhance 
wildlife habitats on a landscape scale in southwest Wyoming in a manner 
compatible with the unprecedented development occurring on the same 
landscape.
    Governors and State Fish and Wildlife Directors are solution 
oriented. These landscape level activities are complex and cut across 
several governmental jurisdictions and private interests. However, we 
believe solutions are available if all parties rely on the best 
available information, coordinate often at the earliest stage and 
throughout, and develop relationships of trust, integrity and mutual 
commitment to meeting both fish and wildlife conservation objectives 
and the delivery of energy for our citizens.
    Thank you for the opportunity to share our perspectives. I would be 
glad to answer any questions.
                                 ______
                                 
    Mr. Grijalva. Thank you, sir.
    Mr. James.

        STATEMENT OF JEWELL JAMES, MEMBER, LUMMI NATION

    Mr. James. Thank you, Mr. Chairman. We appreciate the 
opportunity to appear here to testify at this oversight 
hearing. I am Jewell James of the Lummi Indian Nation, 
representing the Office of the Chairwoman.
    The Lummi Nation is just one of 525 or more Indian Nations 
throughout the United States. The Energy Policy Act of 2005 
provided under Sections 501 to 502 Indian participation in the 
development of oil, gas, and alternative energies. Under 503, 
we see that there are new laws added where there would be an 
Indian Energy Development and Self-Determination Office, and we 
know that the intent is to provide tribes the opportunity to 
participate through loans and grants, but also under 504, we 
witness that there is an opportunity for tribal governments to 
come forward and be consulted on some of those applications 
that will have direct impacts either on the reservations or 
within their traditional territories.
    The Lummi Tribe is one of the original self-governing 
Indian Nations under the Title III amendments to the Indians 
Self-Determination and Education Assistance Acts of 1975 that 
came out in the 1980s. Since then it has been amended to 
include Title IV, and now we are going into Title V.
    The idea is that tribes not only are self-determining, but 
are self-governing. This required us to begin to develop the 
infrastructure, the professional staff that would help us co-
manage not only our government but our own natural resources. 
This is one of the questions that is being presented to the 
Congress on what we call the Section 139 tribes and the 
appropriations process where tribes want to have the authority 
to govern their own natural resources.
    We know that with regards to government-to-government 
consultation the House Concurrent Resolution 331 of 1988 
actually defined it, that it is based on the United States 
Constitution where it is stated that Article 1, Section 2, 
Clause 3 of the U.S. Constitution provided the words 
``excluding Indians not taxed.''
    We are tribal Indians, not counted amongst the ``We the 
people of the United States.'' Article 1, Section 8, Clause 3 
provided Congress the power to regulate commerce with Indian 
Nations. Article 1, Section 10, Clause 1 limited states' powers 
and/or treaties, and Article 2, Section 2, Clause 2 authorized 
the President and the Senate to enter treaty relationships with 
Indian Nations.
    Article 3, Section 2, Clause 1 authorized the Supreme Court 
to address treaty questions, and Article 3, Clause 2 made 
treaties one of the supreme laws of the land.
    Now, just like constitutions, treaties also have reserved 
rights doctrines that apply to them. Treaties are usually 
interpreted as the Indians would have understood as one of the 
doctrines of the Court for interpreting treaty relationships.
    Our understanding as Indian Nations and what we believe as 
a part of our retained inherent sovereignty is that we have the 
right to protect sacred sites and places that may be impacted 
within our traditional territories. However, in order to do 
that, this would require a better definition under subsection 
2602[a] where the Secretary is authorized to give grants to 
help develop databases. If that grant goes to an inter-tribal 
organization, the Lummi Nation recognizes that the National 
Tribal Environmental Council would probably be the best entity 
for those funds to go to. However, there is not a specific 
amount that is earmarked for it. We are hoping though, because 
of the inter-tribal organizations, and because of the various 
specialties that we witness amongst the inter-tribal 
organizations, that the National Tribal Environmental Council 
would be the best fit for organizing the inter-tribal 
participation as well as gathering input from all tribes.
    The 2005 Act is a national policy and we need to have the 
assistance of the Congress and the Subcommittees to develop a 
national position of Indian Tribes based on not only pro-
development oil, gas, and energy, but also on organizing our 
concerns as pertains to the sacred sites and places. This is 
something that we don't have funding for within tribal 
governments.
    We know that most people believe that Indian tribes are 
very wealthy as a result of gaming, but most of that gaming 
revenue goes to a few tribes that are located next to major 
metropolitan areas. The Lummi Tribe, for example, is one tribe 
that is gaming and all of our revenues go back into health and 
education because of funding shortfalls on the Federal 
appropriations side.
    So we see those funds re-invested back into the community, 
and we know that most of the tribes are really isolated, don't 
have the technology, and cannot access the professional staff 
and legal expertise that they would need in order to analyze 
the impacts, the applications for energy development, we will 
have a part in them with regards to the environment as well as 
the sacred sites and places.
    We believe that if the tribes are authorized to work with 
the National Tribal Environmental Council and the National 
Tribal Environmental Council secures funding through the 
Secretary's office a mandate, that we would be able to help 
develop our recommendations for management regimes that would 
incorporate our concerns associated with sacred sites and 
places.
    Thank you.
    [The prepared statement of Mr. James follows:]

              Statement of Jewell James, Policy Analyst, 
                          Lummi Indian Nation

    The Lummi Indian Nation is located in the Pacific Northwest part of 
the United States, northwest Washington State. Lummi is 
anthropologically, geographically, and linguistically identified as 
belonging to the Coast Salish Culture by academicians. Lummi is a 
federally recognized Indian Nation. We have a government-to-government 
relationship established by the 1855 ``Peace Treaty'' (12 Stat. 927) 
with the United States. The treaty was ratified by the Senate & 
proclaimed by President in 1859. Lummi is one of the original ``Self-
governing Compact'' Indian Nations, as authorized by Congress per 
amendments to the Self-Determination Act of 1975, under Title III. We 
have never disbanded or terminated our tribal relationships. We, as a 
native community, maintain our tribal status the same as was recognized 
in the Supreme Court decision of Elk v. Wilkins (112 U.S. 94 (1884)). 
We lead and represent our nation based on the idea that popular 
sovereignty is an inherent trait of our domestic relations. We are a 
tribal constitutional government (non-IRA) that provides and protects 
the essential governmental functions and services needed by our 
populace. In this light, we appear before the Congress to testify on 
behalf of our people. While we do not have the authority to testify on 
behalf of other Indian Nations, we do recognize and realize that our 
nation shares common concerns over the protection of sacred sites and 
places and the prevention of the destruction or contamination of such 
places by modern development; which include the impacts of oil & gas 
drilling, mining development, and other fuel industry or energy 
industry activity & operations.
Historical Politics of American Religious Wars Against the Natives:
    The Lummi People would be classified as practicing a variant of the 
``Mother Earth Religion'' that can be found practiced by indigenous 
peoples (of all four races) located all around the world. This 
religious classification would be placed on the opposite end of a 
religious continuum in reference to the ``Father/Son God'' Religions-- 
otherwise known as Catholicism, Christianity, Judaism, and Islam/
Muslim. Such native practices and observances would be considered by 
the latter religions as ``pagan, heathen and uncivilized practices of 
the infidels.'' This historical ethno-religious prejudice has normally 
dominated their relationships and opinions about and with the 
respective indigenous communities they encounter--in our case, the 
Native Americans.
    However, the Catholic Church came to dominate the Lummi Indian 
Reservation at and about the same time as the treaty negotiations 
between the Lummi and the United States. This religious denomination 
has had a predominant claim upon the Lummi Populace ever since. When 
President U.S. Grant authorized the Christian Churches to assume 
control and management over the Indian Reservations, due to BIA 
corruptions & fraud in the 1870's, the Catholic Church kept control of 
the Lummi Reserve. At one time, the Lummi were supervised by a 
federally appointed ``Agent-in-charge'' or ``Farmer-in-charge'' and 
after 1872 it became the ``Priest-in-charge,'' until that changed to 
the ``Teacher-in-charge.'' These ``Priests-in-charge'' came to dominate 
the Indian reservations and tribal societies all across the continent, 
as well as help color the views & opinions of neighboring societies 
about the need to ``civilize'' the unlearned Indians.
    The story of Christian influences upon the traditional & ceremonial 
practices of the Indian Peoples is as dated as ``Discovery'' by 
Christopher Columbus (1492). In the beginning, Columbus described the 
Natives as ``Una gente in dios'' or ``One People in God.'' This was 
reworded to become ``indios'' people rather than the reference ``in 
dios'' or ``in god.'' Although he characterized the natives as 
Christian by any other name, this did not theologically or legally 
allow for the anticipated ``Conquest.'' (See: Privileges and 
Prerogatives Granted to Columbus, April 30, 1492) needed to recover the 
costs of the venture. Thus, the natives were turned into ``heathens, 
atheists, agnostics, pagans, savages, infidels, and other convenient 
classifications that made them legally and religiously conquerable as a 
non-Christian people. In fact, the first classifications, shortly after 
discovery, proclaimed the natives to not even be human but 
monstrosities. At this time, the Vatican issued Papal Bulls (e.g., 
Papal Bull Inter Cartera of May 4, 1493) that further rationalized the 
conquering of the native nations and the pillaging of their 
territories, societies, and the destruction of their ``heathen'' ways 
and archives of knowledge. The Vatican, per Papal Bulls, authorized the 
discovery and conquest of heathen lands by Christian Kingdoms. It 
became a ``first come then first served'' campaign. This, eventually, 
became enshrined in U.S. Federal Law as the ``Discovery Doctrine'' of 
Johnson v. McIntosh (21 U.S. (8 Wheat) 543, 5 L.Ed. 681, (U.S. Sup.Ct. 
1823)).
    While Father La Casas (who arrived on the third sailing of Columbus 
to the New World as a Conquistador and then converted) argued before 
the Spanish Crown (from 1530 to 1566) that the rights of the Indians 
should be respected and written into the Laws of the Indies for their 
protection not conquest and enslavement. It was Francisco de Victoria 
(the father of International law) arguing the rights of Indian 
possession of their lands & territories that had the major influence on 
the development of what latter became U.S. Federal Indian law (as noted 
in Felix Cohen's Handbook on Federal Indian Law, at 55-100). This 
influence of Spanish jurisprudence held that Indian lands could only be 
acquired via treaties that Indians held some form of transferable title 
to the land, and that acquisition could only be made by the government. 
However, before this jurisprudence could become established in 
international law, the conquest bloodied the relationships with the 
native nations and people throughout the western hemisphere.
    In time, the United States, after the 1776 Revolution and the 
ratification of the 1787 Constitution, laid claim to inheriting the 
rights of ``Discovery'' in lieu of the repelled King of England (and 
all other foreign monarchy claims). Basically, Supreme Court Chief 
Justice Marshall said that the claims to the continent were based on a 
lie but to acknowledge it as a lie would require the nation to give the 
land back, and this it could not do, so it had to act as if the lie was 
true. This, then, became the foundation cornerstone to the U.S. claims 
to ``Discovery'' of the Indian lands & territories.
    This legal fiction, then, was eventually followed by the 
institutionalization of ``Manifest Destiny.'' The idea being that the 
non-Indians was destined to own the whole continent from the Atlantic 
to the Pacific Ocean. This, then, required the taking of Indian lands & 
territory by discovery, conquest, or via peace treaties. Congress would 
authorize appropriations for the President & the Senate to negotiate 
and ratify Indian Treaties (per Article II, Sec. 2, Cl. 2 U.S. Const.). 
Over 700 treaties were negotiated (between 1787 and 1871). These 
negotiations were in accordance to the proclaimed congressional 
regulation for the establishment of new territories (and eventually the 
admission of new states, per Article IV, U.S. Const.) under the N.W. 
Ordinance (1 Stat. 51, July 13, 1787). A little over half of the 
negotiated treaties (370) were ratified by the Senate and proclaimed by 
the President; but, while half of the negotiated treaties were not 
ratified, the U.S. acted upon all the treaties as if each and everyone 
was ratified--in that it used the treaty concessions to completely lay 
claim to more than 3.8 million square miles of Indian lands and natural 
resources across the continent.
    Generally, ``treaties are to be interpreted as the Indians would 
have understood them, and not in the way of learned lawyers'' (Winans, 
198 U.S. at 380, 25 S.Ct. 664). This has been a basic guiding light for 
Supreme Court decisions on treaty rights questions. While the 
President/Senate had constitutional powers to enter treaties with the 
Indians, the Supreme Court has jurisdiction over legal questions of 
interpretations and obligations of the treaties (Article III, Sec. 2, 
Cl.1). These treaties, then, would become a part of the ``supreme law 
of the land,'' along with the constitution and national legislation 
(Art. VI, Cl. 2). It was more convenient for the United States to enter 
peace treaties with the numerous Indian Nations than to enter a state 
of constant war with the multitude of Indian Nations existing west of 
the Mississippi & Missouri Rivers. Conquest by War was not logical or 
economical. Still, treaty negotiations had to be authorized first by 
the congress and then respective appropriations instituted to implement 
the negotiations and commitments made in exchange for the vast 
territorial concessions of the tribes.
    However, the House of Representatives had control over the 
introduction of appropriations/revenue measures (Article I, Sec. 7) and 
abused this power in 1871 by attaching an ``Appropriation Rider'' (now, 
25 U.S.C. 71, Act of March 3, 1871) that (by the power of political 
psychology and not proper constitutional amendment) limited the 
President's/Senate's treaty-making powers under Article II. While the 
whole Congress had constitutional authority to ``Regulate 
Commerce...with the Indian Tribes'' (Article I, Sec. 8, Cl.3), this 
Appropriation Rider began a near-complete congressional take over of 
Indian Affairs by statutory authority rather than constitutional 
delegation & treaties-made. But, the limitation did not have complete 
immediate effect, since the various presidents following then 
instituted a series of ``Executive Agreements'' with the Indian Nations 
or composed various ``Executive Orders'' that created additional Indian 
reserves, with associated federal obligations and expenses.
    Being as it may, treaties and the constitutions (states and the 
national) have a commonality in that there exists the ``Reserved 
Rights'' doctrine (which was enshrined in the U.S. Constitution by the 
Tenth Amendment, in response to state attempts to limit federal 
encroachments upon state jurisdiction). A part of the ``peace 
treaties'' then is the reserved rights of the Indians Nations. If a 
right or ownership is not given by specific treaty to the United States 
then the language should be interpreted to hold that such right or 
ownership is reserved to the Indian Nation. As Indian Nations, we would 
argue that there were residue or reserved rights associated with the 
treaty land concessions. However, in the case of Tee-Hit-Ton Indians 
(348 U.S. 272 (1955)), during the Terminationist Era (See: HJR 108 of 
1953, effective from 1948 to 1975) the Supreme Court turned the Peace 
Treaties into ``Conquest'' by the United States. The Supreme Court 
retroactively conquered every Indian Nation in North America by a 
simple decision dealing with a small band of federally unrecognized 
Indians in Alaska. For the Peace Treaty Nations, this retroactive 
conquest did not abrogate the U.S. treaty obligations or nullify their 
reserved rights. The Terminationist-minded court simply rewrote the 
history of US/Indian relations into a new fiction.
    In addition, keep in mind that when a lesser nation enters a treaty 
relationship with a greater nation there exists a legal relationship by 
which the ``Greater Nation'' has a duty and responsibility to the 
lesser nation; i.e., a ``sacred trust of civilization'' is created. 
This concept means that the greater nation must assure that the lesser 
nation has the same opportunity to move forward and progress socially, 
economically, politically, and legally as the greater nation and its 
populace does. Nor does the lesser nation divest itself of its inherent 
rights to self-determination and self-government (See: Worcester v. 
Georgia, 31 U.S. (6 Pet.) 515 (1832)). But, working with ``church 
dogma'' and institutionalized racism over time, the Indian nations have 
become classified as ``dependent domestic nations'' (Cherokee Nation v. 
Georgia, 30 U.S. (5 Pet.) at 17 (1831)) under U.S. law and policy. The 
congress, by ending treating making, has assumed ``plenary power'' over 
the dependent Indian communities/nations via acts of legislature, 
without constitutional foundation or in reference to specific treaty 
agreement. The ``Greater Nation'' (the US) in fact has taken advantage 
of the changed conditions of the Indian Nations and has instead 
marginalized their tribal societies, and deprived their membership of 
human dignity.
    In 1872, President U.S. Grant did turn Indian Affairs over to the 
established Christian Churches, under the belief they had a higher 
morality and strong values that would induce them to treaty the Indians 
humanely and not rob them of their wealth, resources, and dignity. But, 
the Church leadership, over the next ten years, in compliance with 
racist opinions of the Indians, then had the Department of the Interior 
institute the Indian Religious Crimes Code (DOI Circular #1665) in 1883 
(See: Comm'r Ind. Aff. Ann. Rep., H.R. Exec. Doc. No.1, 49th Cong., 1st 
Sess. 21.23 (1885)), and latter enlarged it to incorporate more fines 
and imprisonment in 1921 (See: K. PHILIP, JOHN COLLIER'S CRUSADE FOR 
INDIAN REFORM 1920-1954, at 56-57 (Tucson: University of Arizona Press, 
1977)). In 1924, the general Indian Citizenship (per congressional 
authority under Article I, Sec.8, Cl. 4) was authorized for all tribal 
Indians that were not otherwise U.S. Citizens (See: 43 Stat. 253). Even 
though this ``blanket naturalization'' was contrary to the intent of 
the 14th Amendment (Sec. 1 and Sec. 2) per the 39th & 40th Congresses 
(See: Reconstruction Debates), the enactment claimed to have not 
deprived the said Indians of their rights or property as tribal 
Indians.
    Even though the original movement to secure First Amendment 
Religious Freedom, via making Indian U.S. Citizens with constitutional 
rights, as proposed by Ida May Adams (a Southern California Women's 
Suffrage Rights Lawyer), was attained, this citizenship did not provide 
Native Americans with First Amendment religious freedom. As a 
consequence, the American Indian Religious Freedom Act (August 11, 
1978) was enacted by Congress and signed by President Carter. In 
Section 2, the President directed the ``various Federal departments, 
and agencies, and other instrumentalities whose duties impact Native 
American religious practices to evaluate their policies and procedures 
in consultation with Native religious leaders in order to determine and 
implement changes which may be necessary to protect and preserve Native 
American religious cultural rights and practices'' (92 St. 469 (1978)).
    Ten years later, the Supreme Court, in review of the G.O. Road Case 
from northern California, gutted the AIRFA and concluded that ``the 
Constitution simply does not provide a principle that could justify 
upholding respondent'' (Indians, et al.) legal claims in that the First 
Amendment's Free Exercise Clause had been written ``in terms of what 
the government cannot do to the individual, not in terms of what the 
individual can exact from the government'' (Lyng, 485 U.S. 439, 451 
(1988)). In a separate legal attack via Oregon v. Smith, the Supreme 
Court would deprive the Native American Church of its sacrament--
Peyote, in 1990 (See: Smith II as 494 U.S. 872). This sacrament was in 
use for more than 10,000 years according to radio-active carbon dating 
of associated artifacts--a spiritual practice that predated ``Jesus'' 
by 8,000 years.
    In response to the Supreme Court anti-Indian religious freedom 
decisions, the American Indian Religious Freedom Coalition (AIRFC) 
formed and sought to amend the weak AIRFA. Senator Inouye introduced 
(S.2269) on July 1, 1994, a bill entitled the ``Native American 
Cultural Protection and Free Exercise of Religions Act, to over come 
the damages done by Lyng and Smith. While this bill failed to pass, 
H.R. 4230, which focused solely on Peyote, was enacted into law on 
October 6, 1994 (108 St. 3125).
    In 1993, broad legislation to reconstruct the ``compelling 
interests'' test (called the Religious Freedom Reformation Act of 1993 
(107 St. 1488) was enacted on November 16th, 1993. Concurrent to this 
period, debates were held as to why there was need for different or 
greater protection for Native American religious practices, Senator 
Wellstone stated:
        ``Throughout the series of hearings held around the country on 
        NAFERA [Native American Free Exercise Religions Act] one theme 
        repeated itself over and over again: our traditional 
        understanding of how to protect religious freedom, based on a 
        European understanding of religion, is insufficient to protect 
        the rights of the first Americans...The question is not, should 
        we protect Indian religious freedoms? Instead, we must ask, how 
        can we best live up to our obligations to protect that freedom? 
        This is an important question, because one might legitimately 
        want to ask why we need a bill to address specifically the 
        religious freedom of Native Americans, instead of a bill that 
        addresses all religions at one time. There is, of course, such 
        a bill, the Religious Freedom Restoration Act (RFRA), which has 
        recently been introduced by my colleagues from Massachusetts, 
        Senator Kennedy, and which I am an original co-sponsor. I 
        believe that there is a strong argument to be made that both of 
        these bills ought to be made into law. RFRA is designed to 
        respond in a very general way to judicial decisions that have 
        been made in recent years restricting the right to free 
        practice of religion...But leaving the definition of such 
        standards up to the judiciary has not proven very effective for 
        Native American religions. In NAFERA, on the other hand, we 
        provide language that makes clear the particulars of Native 
        religious practices we intend to address.'' (U.S. Congressional 
        Record (May 25, 1993), 56456).
    The Congress was not able to pass a complete reform of Native 
American Religions Freedom but has worked to authorize the return of 
the Peyote Sacrament to the Native American Church, restored the rights 
of native prisoners to access rituals, and restored native rights to 
the use of eagle feathers and other animal parts. In addition, the 
Native American Graves Protection and Repatriation Act of 1990 (104 St. 
3048) was enacted to return the unearthed bodies of Native American 
ancestors, stored in government facilities/institutions or 
universities, to their respective tribal peoples for reburial. The fact 
is, though, the original Indian Citizenship of 1924 did not provide 
Native Americans with First Amendment Religious Freedom. The original 
1978 AIRFA, according to it's author Morris Udall (D., Arizona), said 
that the bill conferred no ``special religious rights on Indians; 
changes no existing state or federal law, and has no teeth in it.'' 
(U.S. Congressional Record (1978), 2144). And, in consequence, the 
Supreme Court rendered their anti-Indian religious freedom decisions 
(e.g., Lyng, Smith) and prompted years of political battles to secure 
Indian religious freedom via piece-meal congressional enactments.
    In all of this history, it has generally been forgotten that the 
United States, as a role model to over 160 Nation/States member to the 
United Nations, has been living the ``sacred vision'' of the Iroquois 
Confederacy. The Prophet of the Iroquois, between five hundred to one 
thousand years before the 1787 Constitution, proclaimed that the 
``Great Tree of Peace'' shall spread its sacred four roots (colored 
red, black, white, and yellow) in the sacred four directions. The U.S. 
experience of this actually began when the new arrivals colonialized 
the east coast of the North American Continent (original 13 colonies), 
and lived side by side with the First Americans (i.e., the Natives). 
Over time, this social encounter led the colonists to became 
``Americanized'' (See: Exemplars of Liberty, by B. Johannson, and 
Indian Givers by Jack Weatherford). The vision of the confederacy 
(Iroquois and that of the Choctaw) became the ideal vision of a united, 
democratic republic founded upon the sovereignty of the People (SCR #76 
of 1987 and HCR #331 of 1988). This ``Union'' (of ``We the People of 
the United States...'') became the immediate role model for the 
revolutionary constitutional liberation of France. The idea of this 
``vision'' spread further in the form of the proposed League of Nations 
of President Woodrow Wilson (after WWI), who acknowledged that the idea 
of the League began with the Indians. While this Wilsonian Proposal 
failed, the idea became the originating model for the United Nations 
(after WWII). It is with this model in mind that we believe the U.S. 
Congress should not disregard the ``Gift of Indian Religious Freedom'' 
and its importance to humanity.
    The battle for individual rights and freedoms, politically and 
religiously, has caused millions upon millions of deaths throughout the 
``Old World'' over the millenniums. The new world exemplified the 
individual freedoms and the concept that government is to be held 
accountable to the people, that men and women were equal participants 
in government. Included in this the individual Indian had a right to 
the spiritual experience and belief. This was foundational to what 
could be referenced as making up a main part of individual sovereignty. 
In this idea, each person adds to the collective sovereign powers of 
the others. People then compacted to live together and to govern over 
each other. This compact becomes the foundation to what is known as 
popular sovereignty today. This understanding has been exemplified by 
the famous May Flower Compact (Nov. 11, 1620) in the history books of 
modern America. Such ideas found greater support and value as the 
colonists began to experience the First Americans beliefs--living a 
form of freedom that could not readily be understood by a people living 
under a monarchy. This is a part of the Indian gifts shared with the 
vision of popular sovereignty & union (Iroquois Vision). Each 
individual had a right to access the spiritual, just as Jesus did by 
entering the wilderness and resisting the temptations according to 
biblical folklore. It was not a fluke that the revolutionary colonists 
chose to model themselves as ``Mohawks'' at the Boston Tea Party. They 
(as the Sons of Liberty) simply demanded the freedoms of belief that 
the natives already enjoyed.
    In 1987, the leadership from nine Christian denominations in the 
Pacific Northwest, released an ``Apology'' to the Native Americans for 
having either helped institutionalized racism against native religious 
freedom or having passively sat back and allowed it to happen. This 
statement was released to 1800 northwest congregations. Over time, even 
the National Catholic Churches issued a similar statement, as did the 
Anglican Church of Canada per the plight of the aboriginals. While such 
apologies can be ``google searched'' over the ``www,'' debates have 
been held as to whether or not the ``Apologies'' are real and intended 
to truly help unravel the web of institutionalized racism against 
Native American Religious Freedom. Even the International Council of 
Churches on Religion and the Environment had become sensitized to the 
religious/spiritual rights and interests of the native communities 
before Earth Summit (1992). It has become apparent, today, that many 
religious denominations are willing to come forward and to work with 
their national organizations to help move for changes in the laws of 
the land that shall improve the status of Indian religions amongst a 
``Nation'' that considers itself to be predominantly Christian (See: 
President Bush's statements justifying the early actions of war in the 
middle east).
    While modern day corporate and state interests continue to be at 
odds with the rights and interests of the Indian Nations and Peoples, 
it is the question of Indian rights of access to sacred sites and 
places within the natural environment that shall be tested over and 
over again as the local economic drive for more profit and development 
places the interests of the private person or state/private 
corporations against that of the native communities' interests in 
sacred sites and places that have cultural, ceremonial, biodiverse, and 
environmental integrity in tact. Neither the corporate profit mentality 
or that of Euro-American religious dogma allows for the free exercise 
of religion by Native Americans--if it is at odds with private property 
rights and interests of their constituents or congregational 
membership. The Native American Indians, however, believe that they 
have a reserved right of access to such sites located inside and 
outside the established Indian reservations. They believe that the U.S. 
has a mandated ``sacred trust of civilization'' duty to assure this 
access. And, that they have an inherent sovereign right to help co-
manage such sites beyond initial consultation between governments and 
private interests. However, such sites must have their environmental, 
biodiverse integrity in tact in order to have real values so relevant 
to Native American traditional culture teachings and ceremonial/
spiritual practices. This testimony seeks to help clarify such concerns 
of Indian Country in association with prevention of impacts to the 
environment and sacred sites & places that have significance in native 
spiritual & cultural practices & beliefs.
Native American Religious Practices and Cultural Continuity:
    It has been a stereotypical dilemma for the Non-Indians to 
classify, on a continuous basis, the multitude of Indian (treaty) 
Nations, and peoples, that exist all across the United States, under a 
definition that constantly works over time. Words or names that we 
attach to the ``other'' usually carry connotations that are negative 
and impacting upon the psychic comfort of the targeted other. The world 
vibrates with sounds and the movement of energy. These sounds are 
recognized by different societies as having a vibrational pattern. In 
time, the parts of the vibrations are given an alphabetical name for 
that sound bit. These parts are joined to form words. The words are 
formed to make sentences. The sentences are formed to make paragraphs. 
The process continues until the collective can communicate, objectively 
and subjectively, their experiences of the perceived reality of the 
surrounding social & natural environment. The use of language is highly 
subjective and bias to the culture that lives it. The idea of the 
sacred is expressed by those collective experiences and descriptions. 
Those expressions are limited in time and place, and continue to exist 
due to the value the collective places upon it for their socio-
religious survival. Native Americans, all to often, state that it is 
difficult to translate their concepts of the sacred into the American-
English language that has come to dominate their societies. The 
individual sounds of the foreign language(s) do not translate into the 
same understandings that their native languages had associated with 
their immediate socio-religious natural environment, pre-contact. 
Likewise, we have names that identify the sacred for us, in time, in 
space, in place, and in our comprehension of reality. Stereotypical 
names do not identify the sacred aspects of our living with the natural 
world, and depreciate or devalue the meaning of our existence.
    There are over 525 Indian Nations that exist throughout the 
``territory'' of the United States. Most live on federally-established 
reservations. A few live on state-established reservations. Many live, 
as individuals or as individual families, in urbanite America--due to 
the massive attempts to relocate tribal Indians into the cities in 
order to disconnect them from their lands, territories, natural 
resources, and the tribal collective that taught them to be ``tribal 
people.'' The many fluctuating federal Indian policies, over time, have 
failed to destroy or completely disseminate the Native Americans. They 
have failed to disconnect them from their ancestral territories, from 
their multi-generational teachings of the combined collective knowledge 
of the sacred. Tribalism is alive and well in the continental United 
States.
    Over time, over the millenniums, the tribal peoples have continued 
to recognize that song, dance, ceremony, sacred knowledge, and the 
collective is absolutely important to each individual member of the 
tribal community, and to the constant reestablishment of the sacred 
contract they have with nature, creation, and the Great Spirit. The 
power of the spiritual is located in sacred places, at sacred times, 
and must be accessed during each generation to maintain the 
relationship with creation, and this happens via the transmittal of 
sacred knowledge to the lone or the multiple initiates taking part in 
the ceremonial reenactment of original teachings given to the 
collective by a sacred force or being.
    The modern world of the traditionalist is plagued by the damages 
caused by assimilationist mentalities. The modern Indian leaders are 
convinced that economic development is essential to the preservation of 
the social/tribal community. The traditionalist, however, place their 
faith in the ancestral teachings that taught each generation to not 
over-harvest, to not over-use or abuse the abundance or limitations of 
nature. The Hopi Traditionalists hold that the Black Mesa is essential 
to their spiritual practices, while modern tribal leadership meet at 
the negotiation tables of Peabody Coal. The San Francisco Peaks are the 
originating homes of the Kachinas, and yet the area is under the 
control of Coconino National Forest.
    The National Navajo is confronted with competing interests in their 
four sacred mountain regions (Mt. Taylor, Blanca Peak, Hesperus Peak, 
and Huerfano Mountain lands. Their ancestors arose there. Their 
mountain chant came from there. The Navajo had traditionally divided 
all of creation up into 27 chapters of sacred creation in specific 
timing or order, each chapter governing over certain aspects of 
creation, each chapter corresponding to healing of the human mind, 
body, and soul. Each chapter has an influence over the governance of 
Navajo socio-religious life ways. Each chapter had its complex of 
sacred chants that must be preserved in perfect order so as to preserve 
the sacredness of creation and life. A medicine person or chanter may 
only train one apprentice in his life time and two if he is truly 
phenomenal. Impacts to Navajo topography, geology, territory, society, 
and practices of the sacred has driven some of the ``chants'' (or 
chapters of creation knowledge) into extinction.
    Today, the Hopi and the Navajo are living under the mutational 
influences of uranium mining. The pilings of discarded uranium 
trailings are the playgrounds of the goats and sheep, and even native 
children. The flocks become contaminated and the meat and milk is 
consumed by the families. The radio-active contaminated wools are woven 
into their clothes. Cancers plague the living and babies are born with 
deformities. The Hopi and Navajo are a mirror of the ill-health of the 
American Society. They are classified as living in the ``National 
Sacrifice Zone'' for the enrichment of corporations and the creation of 
cheap energy for the rest of society, in addition to the power to bomb 
those that do not believe as ``we'' do.
    While the Forest Service proposed to construct parking near the 
sacred Medicine Wheel near Powell, Wyoming, which is sacred to tribes 
of Montana, the Dakotas, and Wyoming, the Badger Two Medicine area of 
Montana (sacred to the Blackfeet) has been the subject of oil drilling 
and exploitation. Accessing the Black Hills, for energy development, 
has caused constant renewal of the historical trauma suffered by the 
Sioux Nations by the illegal confiscation of their sacred Black Hills.
    The Cochiti Pueblo need access and control over 24,000 acres in the 
Bandelier National Monument, in order to continue their sacred 
practices. The San Juan Pueblo have been trying to get lands back for 
their religious purposes. As have the Santa Clara Pueblo, before the 
Claims Commission, as regards 30,000 acres of sacred lands and sites 
under the control of the National Forest Service and the Atomic Energy 
Commission.
    These example tribes and communities can pinpoint their places of 
sacred emergence. Their songs, their dances, their regalia, their 
sacred instruments, their preparatory herbs & medicines, their rituals, 
their communal gatherings of celebration and renewal of the bonds with 
creation, as well as the sacrifices of the individuals in questing, all 
bind them to their traditional territories that have been confiscated 
under the doctrines of discovery and the fallacy of Indian incompetency 
as non-Christian peoples. Their sacred words and chants reawaken their 
commitment to the natural world that surrounds them. Their 
identification with the ``sounds'' of the chants, the songs, or the 
words derive from the time, the place, the energy (spirit) of the place 
of origin. Displacing them completely and divorcing them from the 
``sacred creation place'' forces their knowledge and practices into the 
realm of folklore rather than sacred cosmology.
    Symbols are directly attached to and associated with the reality of 
the ritualistic aspects of native life. The mountains, the rivers, the 
rain, the elements, the animals, the plants, the birds, the mineral, 
the aspects of the celestial (sun, moon, stars, constellations), the 
concepts of time and space are all tied to the ceremonial observances 
and ritualistic reenactments. All parts of creation vibrate with 
energy, with sounds of the earth. These sounds help form the basic 
parts of the songs of creation. All parts of creation, sooner or 
latter, is depicted in the traditional practices of tribal peoples of 
all four races. These images are carved in many shrines and churches 
worldwide, in celebration and remembrance of the Garden of Eden and the 
time that their ``God'' talked with humanity. This is not a foreign 
concept that is too difficult for the non-Native to comprehend. 
However, for the former (the Native Americans) the symbology is alive 
and contributive to maintenance of the sacred. We hear and experience 
their songs, their vibrates as a part of the collective whole. To the 
latter (the non-Natives), the stone and concrete carving symbology is 
more within the realm of the folktale of Genesis.
    To the Native American, the symbol binds them back to the time of 
the original contract with the Great Spirit, or the spiritual 
emissaries, to keep creation sacred, to keep alive our acknowledge that 
the material world is manifest with the spiritual, and this is a force 
that binds the tribal individual to the tribal collective. The symbol 
brings them back to the sacred place where sacred knowledge emerged and 
emerges. To understand it in terms of physics, then light is composed 
of the smallest quantum--the particle or the photon. This makes light 
an individual (I). But, it is not alone. It is multiple and forms waves 
(we). It is both an individual and a wave in theory. Light does not 
``not exist.'' It exists in different places, and exposes the colors as 
if they were a part of the material itself, when it fact matter only 
has density not color. And, this is an example of the sacred 
transmittal of knowledge, it exists some time, some place, and in the 
right moment we become aware. It is permanent, continuous, and waiting 
to be reflected upon. The particle/wave example same holds for mankind. 
We are individuals and a society. Together we create the energetic 
forces of sacred belief and practices. But, under the law, the 
``individual'' Indian person has a right to (ritualistic) religious 
freedom under the First Amendment, but the collective does not due to 
its direct ceremonial attachment to large tracks of land or territory.
    The Kachinas of the Pueblo are alive. They live and exist with 
creation, as an extension of it. The Buffaloo Head dress of the Sioux 
is alive with the spiritual forces and teachings that reinforce it from 
generation to generation. The Bear or Wolf or Thunderbird or Eagle 
masks of the Tribal Nations living along the Pacific Coast of the North 
American Continent give meaning to those that participate, that 
practice, that live the life-way required to wear such masks in 
ceremonial observances. As examples, those that participate in such 
rituals and ceremonials must live a life that is model to those that 
dependent upon them for keeping the sacred alive. They must access 
sacred sites, sacred places, in proper times and under proper elemental 
conditions to assure that they are living and reenacting the teachings 
that make the sacred a real aspect of daily lives of their community 
membership. What they symbolize and how they live becomes the role-
models to the young observers that seek, in their own time, to be 
chosen to express these aspects of the sacred for future generations.
    The Grandmother that brought Peyote to the People was guided to the 
sacred mountain, to the sacred plant, by a deer guide. White Buffaloo 
Calf Woman brought the Prayer Pipe and the other essential rituals to 
the Plains Indians. Salmon Woman brought the salmon children to the 
tribes of the Pacific Northwest. The Hummingbird brought power to the 
Navajo. The Butterfly Dance of the Hopi Elders brings forth the 
potential harmonic balance that is sought by the community. The 
Warriors suffering at the Sun Dance bring hope of peace and balance to 
the world by their suffering, no less than was intended by the 
suffering of Jesus on the Cross. These few role models that have been 
mentioned here are of high importance to the tribal communities that 
believe in them. Those that believe in the power of the Kachinas do so 
with as much faith, belief, and commitment as does the Christian in 
light of Jesus the Role-model (``Christos'').
    The Native Americans turn their faith inward, in search of the 
sacred that exists inside them. The non-Native, as Christians, turn 
their faith outward. They search to find that which is not within them. 
The Native Americans accesses the sacred by means of millennium proven 
methods of transmittal of knowledge and sacred practices that awaken 
the desire, if not the demand, for a balanced life-way. The teachings 
that go hand in hand with the ritualistic preparation is no less 
important than the teachings contained in the Bible, the Judaic Old 
Testament, the Koran, the Toran, the teachings of Buddha. The former 
may see the Sun, the Moon, and the Earth. The latter may say the 
Father, the Mother, the Son. Or, they may all recognize mind, body, and 
soul as the governing, symbolic triad. The Christian Cross is the 
sacred four directions of the Native Americans. The teachings, when 
translated and transmitted in the forms of symbols, are readily 
acknowledged as having validity in the minds and spiritual practices of 
the Natives.
    As Carl Jung put it, there is a ``collective unconsciousness'' that 
all societies tap into at one time or another. This collective 
knowledge is universally accessed by those that seek it. Jung may say 
that the individual can access the sacred knowledge via their anima or 
animus. To the Native, we access knowledge in ritualistic prayer to the 
Grandmother or the Grandfather of Creation. In dreams and visions, the 
symbols of the collective unconsciousness speaks to us. These force us 
inward on to the path to self-discovery, to enlightenment, to seeking 
the constant path to balance all conflicting forces inside and outside 
of us. Guided by the knowledge of the tribal collective, the individual 
can ritualistically and mentally access these sacred inner paths that 
shall structure their journey in life outward as well. Access to sacred 
sites and places stimulates the reality of the teachings, helping 
manifest the experience of the sacred. It is this experience that 
allows the individual to incorporate what was learned into their 
relationships with all others. They are a part of and no longer 
separate from society or creation or the sacred. In fact, they have 
assumed a duty to protect the sacred aspects of life, society, and 
creation.
Essentialness of Qualified Practices in Natural Environments:
    Human disturbance and destructiveness is the same by many names. We 
can call it progress, or development or construction. We can call it 
profit. We can call it the conquering of the wilderness. We can call it 
a greater benefit to humanity or society. What it is not is the power 
of God, or the Great Spirit. It is the power of mankind working and 
rationalizing his dominance over nature and others. The Northwest Coast 
Salish traditionalists have stated that there must exist a quadrant of 
essentials for the sacred place to have meaning during access. There 
must be continuity. There must be purity. There must be privacy. There 
must be isolation. The presence of these four help assure the initiate, 
the questing community member that there is integrity tied to the 
location. The general understanding is that locations that are natural 
have their own undisturbed vibrational patterns, sounds, songs, or 
energy that originated with its moment of creation.
    Continuity means that it was created that way. It had always 
existed that way. That mankind did not disturb the original patterns. 
Purity means that it is not contaminated by negative forces, power, or 
meaning, or actions of mankind. Privacy assures that the initiate can 
focus upon the ritualistic aspects of the sacrifice, the vision quest, 
the meditation undisturbed by casual or purposeful disturbance by 
others--i.e., humans. Isolation is an essential characteristic of 
sacred sites and places that have meaning to the initiate and the 
undisturbed journey inward to locate the sacred that shall bind them 
with creative power. It is a site that is surrounded by the biodiverse, 
geologically intact topography undisturbed by modern development, 
sounds, and contaminants.
    The initiates that seek access to such sites are guided by sacred 
knowledge associated with preparation for the experience. Such a person 
must begin their journey to understand the laws of balance (harmonic 
living). They begin to seek knowledge and teachings tied with Physical 
Balance. They clean their bodies inside (fasting) and outside (bathing 
at in natural, sacred pools). They do not contaminate it with poisons 
(drugs, alcohol, unnatural foods). They had to begin this journey by 
seeking Mental Balance. They are taught to think good of themselves, of 
others, and creation. They learn to control their emotions and let love 
dominate over fear. They have to practice Social Balance. In this 
practice, they have ``love their neighbor as them love themselves.'' 
They have to not hurt or threaten others in society and undo any 
damages or hurt feelings them may have caused. They are not to be 
individualistic. They must learn to share with all others, especially 
those that are more needy then themselves. They have to practice 
Spiritual Balance. On this path to balance, they must believe in the 
power of prayer, meditation, and the spiritual powers that give life 
meaning. They begin to understand, study, or appreciate the value of 
Environmental Balance. That means that they appreciate keeping creation 
as it was created, to not contaminate their habitat, to not over 
harvest the natural environment. To not be selfish, greedy or 
materialistic. Time Balance is another aspect of their teachings. They 
is a time for play and a time for work. There is a time for the sacred 
as well. They must dedicate the right amount of time to each endeavor. 
Sacred practices require a dedication of the time to accomplish the 
complete ceremonial observance. Time is infinite as should be their 
belief. Space Balance is another law. We all occupy our space, our 
location wherever we are. There are sacred places and spaces that have 
not been disturbed and in need of protection for future 
traditionalists. Space is infinite. But, humanity is quickly destroying 
the sacred that was once attached to specific places or spaces. We are 
a dot in the massive universe or even omniverse. And, yet, our 
protection of our place (as sacred places are a part of the 
comprehensive whole) is essential to ourselves and future generations. 
All places are created by the power that generated life itself. It is 
not our privilege to destroy. We are only temporary keepers or 
protectors.
    John Dourley (The Illness That We Are, p. 58, 1984) stated, ``The 
final goal, then, for both the individual and for mankind, would be 
patterns of incredibly wealthy harmonies. And the basis of this, the 
unitive powers of the Self, Jung locates not beyond but within the 
individual psyche.'' The teachings of the laws of balance (or 
harmonies) is a life quest that has been sought after by mankind 
worldwide. It is not uniquely Native American. But, it is alive in 
Native American practices. For Jung, the West places God (Creative 
Spirit by different cultural names) outside of themselves, they are 
alienated from their creative power. For Native Americans the spirit is 
located inside and is a part of them, and always was accessible. This 
awareness, then, forces them to deal with what they are ultimately 
responsible for or ultimately contribute to the strife or balance of 
society.
    The power attached to sacred sites and places that are known have 
been made visible or understandable to the knowledge keepers (usually 
elders) by intergenerational transmittal of knowledge. The powers of 
such sites help to transform the individual practitioner in a whole 
(unified in mind, body, and spirit), rather than fractionated (as in 
neurosis). Once discovered then the sacredness of the site demands the 
greatest protection of those that the knowledge or power of the site/
place has been exposed for or to. In this light, the elders teach the 
initiates the requirements of holding themselves accountable to a code 
of Respect that is passed to the initiates. They are to learn to 
respect all aspects of life, creation, and society. Respect starts with 
themselves and is extended to all those outside of the self (human and 
non-human). They have to be humble in their accomplishments, actions, 
and conversations. They have to have humble pride in doing things right 
as positive examples to the young and old alike. They have to learn to 
be unselfish, non-materialistic. They have to not take more than is 
needed to survive. This is what Buddha would call the ``Middle way.'' 
They have to be considerate of the feelings and rights of others, and 
the sensitivity of the balance of nature. They have to be dedicated to 
practicing and living the life-way that keeps them on a permanent path 
of enlightenment and self-discovery. They have to be tribally social. 
This means that they have to understand and appreciate that they are a 
part of the tribal collective which only loaned the knowledge to them. 
They are, now, only the temporary keepers of knowledge and obligated to 
share it with the next generation. They have to be honest. Their breath 
is the source of all words. Their breath is sacred. So, they must use 
their words to speak the truth. Native American traditionalists teach 
as individuals and as tribal collectives and require that the initiate 
keep alive these valued traits and practicing of sacred knowledge. The 
means by which they do this, in accordance to the ancestral teachings, 
then distinguishes the individual as having matured into a wise elder, 
rather than simply growing older and constantly making the same 
mistakes in life.
    The practitioner becomes a part of the naturalness of the 
environment. Their knowledge, their life ways, their preparations, 
their ceremonial observances, their songs, their dances, their 
thoughts, their emotions, their prayers, their conduct adds to or takes 
away from the qualify of the environment. They either enter the sacred 
placed prepared, observant, and dedicated or they take away from the 
sacredness of the place. The initiate can disturb the sacredness of a 
site. The site is that sensitive. Thus, the development of such sites 
for modern demands (oil, gas, mineral extraction, etc) is, then, 
massive in destructive impacts. It is not something that can readily be 
described in native languages. The indigenous knowledge of human 
destructive forces acting upon the environment goes back into ancestral 
time of the natives. Many native myths are handed down over the 
generations about the relationships with nature and the repercussions 
when humans are destructive. We know that once we too were destructive. 
But, our teachings hold that we learned in the ancient past and have 
dedicated our life-ways or social constructs so as to spiritually 
institutionalize the prevention of such destruction. We learned to live 
with Mother Earth and limit our impacts as much as possible.
    John Dourley (The Illness That We Are, p. 58-61, 1984) addressed 
Jung's appreciation of the Catholic Marian doctrinal declaration 
(Assumption of Mary into Heaven, 1950). It was Jung's view that this 
placed the Catholic Church far ahead of the other dominant religions, 
in that it was a movement to recognize the feminine principle--which 
was missing from the Christian Trinity. The feminine has been a threat, 
throughout the history of the male-dominated church, and church 
hostility motivated the barbarism and brutality of the witch-hunters 
and inquisitors. Native Americans practice ``Mother Earth 
Spirituality'' and recognition of the validity of their religious 
experiences and beliefs would run counter to church dogma. Any that may 
lend support could be considered heretics. Even in light of the debates 
of Vatican II (mid-1960's), the Church has not repelled repressive 
declarations that forbid liberalism (See: Syllabus of Errors, and the 
encyclical Humani Generis, 1950).
Consultation with the Indian Nations on Energy Development Impacts:
    In 1987 (via SCR #76), the U.S. Senate recognized that the Native 
American Confederacies (Iroquois and Choctaws) were contributors to the 
form of constitutional democracy existing in the United States. This 
same statement was enacted by the House of Representatives in 1988 (HCR 
#331). This was at the 200th Birthday celebration of the United States. 
Over the terms of the recent Presidents, since President Johnson's 
statement of the ``Forgotten Americans,'' Indian Country has witnessed 
and benefited from the enactment of the 1975 Indian Self-determination 
and Education Assistance Act (as since amended to incorporate Indian 
Self-government, see: Titles III, IV, and V). Over time, the Presidents 
have continued to use their chief executive powers to require or 
encourage the ``Cabinet'' members, and their various departments, to 
issue Indian Policy Statements in alignment with the promises for 
``Consultation'' with the tribes.
    Consultation requirements with the Indian tribes usually are not 
written to be obligatory but discretionary within the departmental 
reviews. With the refinement of Indian lobbying efforts, and improved 
national coordination, tribes have been slowly securing improvements on 
``consultation.'' As tribes become self-determining and self-governing 
there is an escalation of tribal demands for access to the programs and 
services provided by the respective federal departments and agencies. 
While tribal efforts to secure legislative language that guarantees 
their access and rights to participate in various projects and 
programs, the gray area is in light of ``consultation on traditional 
culture impacts.'' Modern tribal leadership is encouraged to look at 
development as a positive thing for tribal communities and membership. 
But, the more traditional sector sees rapid development as insensitive 
and in disregard to the cultural influences and concerns. Thus, 
traditionalists are put against the power of the tribal government. It 
almost appears that the tribal governments become the buffer zone 
between the traditionalists and the federally authorized and encouraged 
developments.
    By preference, traditionalists would rather stop development and 
construction of projects that destroy the natural environmental quality 
and integrity so integral to their traditional practices. Their primary 
concern is associated with cultural practices and ceremonials 
associated with a known environment that is threatened. These cultural 
practices could be exercised in the way of hunting, fishing, gathering, 
or vision questing at sacred sites and places (in caves, on mountains, 
on plateaus, in streams, etc.). Consultation, in those circumstances 
that it is required, is readily recognized as going to the negotiation 
table--which translates as compromising by the parties involved. The 
historically traumatized traditional communities quickly recognize that 
consultation will result in more lost of a limited natural environment. 
It is the natural environment, not impacted by human activity, that is 
becoming more and more rare in modern America. These are the places 
Native Americans seek the sacred in general, no less valuable than when 
``Jesus went into the wilderness.'' The sacred sites that have already 
been identified, and acknowledged via ancestral teachings, are even 
more valuable due to their transgenerational recognition of their 
legitimate sacredness and place of power.
    Both state and federal government agencies have moved toward 
undefined ``consultation.'' The problem is the scope of consultation 
and the amount of knowledge that the traditionalists must transmit to 
be considered as having legitimate interests. Tribal governments have 
began to structure and control the choice of traditionalists that are 
allowed to represent the tribal collective during these ``government-
to-government'' consultations. This is a necessity since it is the 
collective that is the storehouse of the cumulative traditional 
knowledge. Federal and state entities must recognize that there are 
multitudes of urbanized, individual Indians that are practitioners of 
traditional ceremonials; but, they are not representative of the tribal 
collectives living on the reservations. In fact, most were relocated 
into urban American, by government action and policy, in order to 
destroy their tribal knowledge and relationships. Tribal governments 
must allowed to choose who represents them at the consultation tables, 
with the premise that they realistically choose representatives that 
truly are concerned about traditional practices and not chosen because 
they support economic development first.
    What is to be consulted about? We have attached, herewith, a 
proposal by the Lummi Nation that seeks to develop an intertribal 
protocol on the protection of Native Children's rights to secure and 
learn their traditional culture. But, such guarantees are useless when 
the natural environments, the sacred sites and places, essential to 
exercising such practices are rapidly being destroyed--outside the 
reservation or even inside the reservation. The ``Protocol'' is an 
outline of what needs to be protected in order for traditional 
practices to continue into time. For those native communities that have 
retained a lot of traditional culture then it is a statement of the 
minimal that needs protection; but, for those that have lost a lot, 
then it becomes an outline for the minimal that needs to be recovered 
for manifestation of the traditional, cultural, tribal collective.
    In consultation, the non-native parties demand more and more 
information in order to justify or rationalize their willingness to 
even consider the native concerns. If the law does not mandate that the 
Indian views be considered, if it is completely discretionary, then the 
information is ``filed away.'' Thus, the natives believe their voices 
are not given much credibility. And, the non-native demands more 
intimate information about cultural practices, meanings, intent, 
locations, and timings but is not willing to prevent disclosure of the 
information under the freedom of information obligations. Thus, 
traditionalists are hesitant to disclose details because of the history 
of their sacred information becoming the main themes of new 
publications.
    Native Americans, in various regional intertribal organizations, 
have considered forming intertribal commissions to address the best 
means and processes for structuring ``consultation'' on traditional 
culture with non-Indian society (corporations) and government (local, 
state, federal). But there has never been the financial means to bring 
the parties together, to conduct the necessary dialogues, to conduct 
the necessary interviews, to document the concerns, opinions, and 
advice. The number of opportunities to be consulted with, with state 
and federal agencies, are numerous but the governmental agencies limit 
participation to tribes that are being impacted in their traditional, 
ancestral territories. The state and federal governments have access to 
revenues to cover the costs and expenses of participating in 
consultation; but, for the tribes the limited revenues require that 
funds are taken for the more needy parts of the tribal community (e.g., 
women, children, elders) to cover on-going consultation dialogues. A 
part of the financial burdens for consultation with the tribes will 
have to be picked by the departments or agencies that are required to 
consult with the tribes. Failure to finance those costs makes 
consultation a farce, as regards meaningful tribal participation.
    It would benefit both the state and federal governments, as a 
service to their departments and agencies that are required to conduct 
consultation, to jointly finance the formation of intertribal cultural 
consultation teams. Any activities that will impact the natural 
environment will impact the Indian traditional communities. Much of the 
work can be cooperatively worked out in advance and detailed beyond the 
idea of the Protocols, to help streamline the consultation processes. 
On-reservation the tribes would need federal grants to help develop 
this capacity. And, their success would improve their ability to work 
with the off-reservation projects that are outside their jurisdiction 
but within their traditional territories. Under self-determination and 
self-government management of their natural resource bases, Indian 
tribes (e.g., NWIFC tribes, CERT Tribes, NTEC Tribes) have become 
experts on environment questions and the science of management of 
natural resources and the environment; this same idea could apply in 
regards to the collaboration of how to improve their traditionalists 
participation in the consultation process and translate those into 
recommended cultural management regimes. This would reflect and be 
composed of what Dr. Gregory Cajete called ``Native Science.''
    As tribes move into control of Indian Self-determination and Self-
governance they begin to assume more and more control over the delivery 
of essential government functions and services to the tribal community 
and membership. It is well known that Native Americans are constantly 
under-funded in congressional appropriations for health and education, 
laws enforcement and court services, and all of the other programs that 
they qualify for. Most of the available funding goes to administrative 
structure with few dollars for providing direct services to the 
community. Economic development (as in the success of gaming for half 
of the federally recognized tribes) provides tribal governments with an 
opportunity to supplement the financial shortfalls in federal funding. 
But, very few dollars are available to invest in the time and staff 
needed to participate in extensive and time consuming consultation on 
impacts to traditional culture. Marginalized tribal communities live 
day to day, plagued with challenges to make daily survival. Tribal 
leadership is torn apart trying to balance the demands--save culture or 
save a life today!
    There is a tremendous need to secure congressional authorization 
and funds to develop the intertribal cultural consultation teams. These 
would work with or could work with the National Congress of American 
Indians, the National Tribal Environmental Council, and the Council of 
Energy Resource Tribes, as well as the other regionalized intertribal 
organizations (e.g., Affiliated Tribes of N.W. Indians, United South 
and East Tribes, N.W. Indian Fish Commission, Great Lakes Indian Fish & 
Wildlife Commission). In addition, there is the Native American Indian 
Graves Protection and Repatriation Act that is being implemented 
nationally as pertains to sacred sites and places associated with 
ancestral burial sites and cemeteries. Their involvement would add to 
the library of knowledge as well. Core funding is needed to coordinate, 
plan, structure, and professionalize the discussions and negotiations 
to assure that the traditional native voices are heard in a 
constructive way. This is a necessity if the traditional values and 
culture is to ever have influence over the natural resource harvest 
management regimes or those that address oil, gas, ore, or mineral 
extractions.
    Regardless of which federal department, agency, or commission is 
required to consult with the Indian tribes, before impacts or after the 
fact, the truth is that unless the tribes have a right to sue and the 
burden of proof is carried by the industrial sector or the department 
or agency, then there will be constant efforts to disregard the native 
consultation rights (or privilege when it has not legal strength) and 
recommendations. Several years ago a gas pipeline had leaked 277,000 
gallons of fuel into Whatcom Creek (Bellingham, Washington). Not only 
did it destroy the creek habitat extensively but it incinerated three 
youth that were present in the creek (Liam Wood, 18; Wade King and 
Stephen Tsiorva, both 10 years old). It has caused not only extreme 
grief but millions of dollars in restoration efforts. Today, the 
pipeline companies refuse to disclose information about their lines and 
crossings of streams/rivers under the pretense of potential threats if 
the information is known. The public has a right to expect the 
government to require safety. But, instead, public interests have to 
sue to attempt to get the information released. The companies should be 
required to bear the burden of proof after a lapse of time, and failure 
to make honest efforts to disclose should result in triple damages, 
fines, and penalties. Currently, a test case reveals that the gas 
companies can continuously stall off public inquiries almost 
indefinitely. One of the boys was an adopted out Alaskan Native Indian, 
with extended-family located on the Lummi Reservation. We are concerned 
for human life and habitat protection, especially for those streams/
creeks that have ceremonial bathing sites located within them. The idea 
though is that without penalties and the threat of lawsuits, the energy 
companies can afford lawyers to stall the proceedings longer than the 
volunteer public interest groups impacted can afford.
    The Exxon Valdez oil spill is still the focus of major lawsuits by 
the impacted public interests and the company lawyers that have 
specialized in stalling the case and judgments/awards are well paid. In 
the meanwhile, 1300 miles of shoreline remains destroyed. That same 
year the Exxon Philadelphia drifted, without any control due to 
mechanical failure, along the Washington coast with 23 million gallons 
posing a risk to the environment. A similar threat transpired with the 
Cloudsdale, carrying 28 million gallons of oil. The late Senator 
Magnuson worked diligently to get double hauled tankers authorized as 
the only ones allowed to pass through Washington waters, just in case 
hauls were breached. This type of championship is still needed in order 
to prevent a Valdez crisis in Washington. The N.W. Indian Fish 
Commission and member tribes are very concerned. Not only do the tribes 
have a subsistence dependency upon the fish and shell fish that 
populate these waters, but there are sacred sites in the waters as 
well. Chief Seattle received his Thunderbird Powers from the waters of 
Puget Sound. The late Lummi Medicine Man Isadore Tom received his 
healing powers from the waters of Bellingham Bay. Tribes have a right 
to be consulted on what passes in and through their ancestral, 
territorial waters (``Usual and Accustomed Fishing Grounds and 
Stations'' of U.S. v. Washington, 1974).
    The Gwichan have been demanding, constantly, the right to be 
consulted before there are any congressional authorizations associated 
with the development, construction, and maintenance of the pipe lines 
through their Alaskan territories. Their dependence upon the salmon, 
the sea life, and the Porcupine Caribou Heads have been well stated and 
voiced time and again within the Houses of Congress. While pipelines 
are being constructed, there is on going oil/gas exploration, drilling, 
and with phenomenal rates of water contamination throughout Alaska and 
the North Slope. The polar ice capes are melting due to global warming 
and still the voices of the native peoples are being ignored. Tribal 
peoples want meaningful consultation, meaningful mediation, meaningful 
negotiation over how to avoid damages to the environment in general and 
sacred sites and places in specific. As mentioned above, without 
authorization to hold a cause of action against the developing party, 
the tribes are powerless. The 1978 American Indian Religious Freedom 
Act lacked legal teeth for the tribes; there was no power to sue and 
power to hold the corporations accountable.
    In the 2005 Energy Policy Act, under section 504 ``Consultation 
with Indian Tribes'' is provided. Consultation, however, should not 
only address activity that impacts on reservation energy development 
projects, as regards renewable or non-renewable resources; but off-
reservation activities should be subjected to the consultation 
requirement as well, if it is within traditional tribal territories and 
could impact tribes rights and sacred sites and places especially.
    George Waters, working with Indian Tribes, stated that ``The 
Interior energy program section is encouraging not only because it 
requires the Secretary to provide grants to tribes for a number of 
different purposes, but also because it envisions the creation of a 
database of environmental best practices under subsection 
2602(a)(2)(D). Theoretically, tribes and federal agencies could use the 
best management practices as references to encourage environmentally 
sound resource development and coordinate efforts across federal, 
state, and tribal lines.
Technological and Scientific Divide Hinders Progress in Consultation:
    The age of the computer has greatly enhanced instant communication 
between points in the world, and especially the more developed 
countries such as the United States. However, even with the rapid 
economic development of those tribes participating in the gaming 
industry and located next to major urban centers, most of the tribal 
communities are still struggling to connect to the new communication 
infrastructure that has become standard daily operations for all levels 
of government (local, state, federal, international), society, and 
industry. Most of the drilling for oil, gas, or mineral exploration is 
not taking place inside of urban centers or next door to major 
metropolitan areas. Impacts are felt though by the rurally isolated 
communities that have to address potential developments, construction 
of developments, or in the aftermath of developments in the energy 
industry.
    Indian Country has continued to develop their various intertribal 
organizations that have become ``special focus'' entities. We have 
intertribal organizations that address health (National Indian Health 
Board), education (National Indian Education Association of the 
American Indian Higher Education Consortium), housing, tribal courts, 
and general concerns (as in the National Congress of American Indians). 
We have regional organizations that address intertribal regional 
concerns (Affiliated Tribes of N.W. Indians, United South and Eastern 
Tribes). We have intertribal organizations that specialize in areas 
(N.W. Indian Fish Commission, Great Lakes Indian Fish & Wildlife 
Commission, Council of Energy Resource Tribes, Intertribal Timber 
Council). One of the more recent entities to come into existence is the 
National Tribal Environmental Council (NTEC), which began with 8 tribes 
and has expanded to nearly two hundred member tribes.
    It is more difficult for a tribe that is rurally isolated to 
participate in consultation associated with impacts to the natural 
environment and culture when they are not able to get the expert advice 
that may be addressed in association with their traditionalists 
concerns about management regime development. NTEC could be the conduit 
that can be geared up to provide the professional staff and research to 
advice the ``traditionalists'' and tribal governments when they lack 
the same within their tribal systems. It could work with tribes to 
organize an intertribal traditionalists advisory team to help structure 
the process of consultation associated with impacts to sacred sites and 
places. But, NTEC would need additional staff, additional research 
funds, access to providing technological assistance and computer 
equipment and hardware &software to isolated tribes confronted with 
these issues. It would need the funds to help organize, coordinate, and 
implement regional planning processes to streamline the consultation 
network. Without this then the individual tribes have to re-invent the 
wheel each and every time.
    In recognition of the national concerns on energy development, it 
would be a good decision to use the oversight hearing process to 
rationalize, justify increased authorizations and appropriations for a 
specific entity (such as NTEC) to coordinate and organize a national 
assistance center for tribes confronted with energy development. The 
Lummi Nation would recommend that NTEC be authorized and charged with 
the task. Funding would be needed annually for the first ten years and 
then expanded as needed. It should rationalized as an extension of 
tribal self-determination and self-governance rights. Impacted tribes 
would join NTEC in order to access the services and benefits. NTEC 
would network with the individual tribes and the various intertribal 
organizations to assure that the whole system is transparent and 
accountable to tribal economic interests as well as tribal traditional 
concerns. Tribes that are directly involved in potential or current 
impacts by energy development projects would be priority for 
technological updates and coordination assistance. The original funding 
should start at one million for each of the first three years, and then 
increased to two million for the fourth and fifth years, then report to 
congress on the progress and participation success, with options to 
expand the project indefinitely--provided there are benefits to all 
sides of the equation.
    While tribes that are impacted directly, on and off-reservation, by 
energy development projects, may want to directly access the funding 
from the respective ``Secretary's'' office, this funding advocated for 
NTEC would require their membership in NTEC--to assess the assistance. 
The overall goal is professional coordination services by NTEC to 
tribes willing to partake of their services. NTEC, then, would be in 
the position to assess the specific member tribe's capacity to respond 
to the consultation process and determine where NTEC can provide 
professional services. In the experience of Lummi, the N.W. Indian Fish 
Commission has become almost indispensable to coordination of the 
intertribal projects and voice of concerns--legally, politically, 
technically, scientifically, managerially, as well as in the realm of 
positive public relations. This is the same opportunity advocated for 
the development of such a division within NTEC.
                                 ______
                                 
    Mr. Grijalva. Thank you, Mr. James.
    Mr. Jurrius, we will hear your testimony, and then we are 
going to recess because I think votes are going to or have been 
called already, or are they going to be called? They will be 
called shortly, so Mr. Jurrius.

 STATEMENT OF JOHN JURRIUS, FINANCIAL ADVISOR TO THE UTE TRIBE 
              OF THE UINTAH AND OURAY RESERVATION

    Mr. Jurrius. Yes, thank you, Mr. Chairman.
    Before I start, I have a letter from the Tribal Chairman, 
Maxine Natchees, I would like to submit.
    Mr. Grijalva. Without objection.
    [The Natchees letter submitted for the record follows:]


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    

Mr. Jurrius. Good morning. My name is John Jurrius. I 
am appearing before you today at the request of Maxine 
Natchees, the Chairman of the Ute Indian Tribe and the Business 
Committee, the Ute Indian Tribe of the Uintah and Ouray 
Reservation.
    I thank the Subcommittee for the opportunity to appear 
before you this morning to talk about the experience that the 
Ute Tribe and the interdependence between the tribe's land 
base, associated natural resources, tribal membership, and the 
tribe's goals of self-determination, and financial 
independence.
    The tribe's reservation is located in northeastern Utah. 
Exterior boundaries of the reservation represent approximately 
4.5 million acres. That represents approximately 8 percent of 
the surface of Utah, making the Ute Tribe, the second largest 
land-based tribe in the country.
    The reservation consists of a matrix of tribal and allottee 
surface and mineral estate, intermixed with Federal, state and 
private surface and mineral ownership, making the Ute 
reservation one of the more complex jurisdictional tribal land 
bases in the country.
    Even though the reservation overlays four counties in Utah 
and falls within the jurisdiction of the BLM Vernal and Price 
offices. There are approximately 3,200 members of the tribe 
with over 85 percent of the members living on the reservation. 
As mentored by the Federal government, the tribe, like most 
tribes, has built a central government, but unlike the Federal 
and state governments the tribe does not have a tax base and 
therefore must rely on resource development to provide for the 
organization and tribal membership.
    The tribe's annual governmental budget is approximately 62 
million, with approximately 85 percent of that budget being 
provided directly from energy resource development on the 
reservation. In 2000, the tribe decided that in order to 
provide a long-term economic stability to its membership they 
could no longer afford to play a passive role in resource 
development, nor could it depend on the Federal government to 
provide vision, leadership, or strategic decision-making, let 
alone wherewithal for the well being of its citizenry.
    To better serve its members, the tribe decided it must 
become proactive in dealing with resource development and the 
maximization of its financial resources. The tribe therefore 
developed a comprehensive plan to manage all aspects of its 
operations of sovereign from providing the basic government 
services to engage in revenue-generation activities. The 
tribe's leaders knew that it needed a comprehensive structure 
necessary to effect these changes would require buy-in from the 
members, so the financial plan was subject to tribal 
referendum. The membership approved this financial plan by a 
factor of ten to one.
    The financial plan called for the aggressive deployment of 
the tribe's energy resource estate and financial resources. 
Similarly, the plan authorized aggressively using the tribe's 
financial assets beyond their historic role of simply 
subsidizing tribal government operations to that of building 
sufficient financial corpus to provide long-term economic 
stability, thus enabling the tribe to provide core government 
services in perpetuity while providing greater well being for 
tribal members.
    Since adopting the plan, the tribe has leased over 400,000 
acres that had never before been leased acreage, partnering 
with companies like Bill Barrett Corporation, Quest, Arberry 
Petroleum, Newfield Exploration, Anadarko, Dominion, EOG, to 
name a few. The tribe has also participated in administering 
the assets, gas-gathering plants, and is currently involved in 
a refining project.
    The tribe's natural evolution was enhanced by Title V of 
the Energy Policy Act, which included in Title V the Indian 
Tribal Energy Development and Self-Determination Act. In 
addition to that, the evolution seems to be moving forward 
under Title V, authorizing Indian tribes and Secretary of the 
Interior to negotiate and execute tribal energy resource 
agreements. An Indian tribe may enter into leases agreements 
right away and other business deals for energy development in 
accord on its own land without having the Secretary of the 
Interior review and approve them.
    However, we have our challenges. We have challenges that 
were mentioned here earlier today, split estate issues. We have 
EPA issues. We have refining issues. I will say that the tribe 
has over 300,000 split estate acres. With the exception of 
about 75,000 of those acres, the tribe has worked very 
diligently with industry and has resolved all split estate 
issues in regards to its deployed assets.
    The only remaining split estate issue has to deal with an 
exchange with the School and Institutional Trust Lands 
Administration of Utah, and by doing this exchange the tribe 
will set aside over 150,000 acres of lands in Desolation 
Canyon.
    We also have environmental challenges such as the tribe 
currently doesn't have a minor source permitting program with 
the EPA, and therefore must rely on more onerous permitting 
than adjacent lands regulated by the state and other agencies.
    Mr. Grijalva. Mr. Jurrius, I apologize, but I am going to 
have to ask you to wrap up so that we can go vote.
    Mr. Jurrius. Yes, sir.
    Mr. Grijalva. And then we will come back to this panel for 
questions.
    Mr. Jurrius. Yes, sir. Thank you.
    The point and conclusion as this committee and other 
committees look at issues surrounding the nation's energy 
policy, those decisions have a great impact to Indian country 
and their ability to become self-determined by using their 
resource base.
    Thank you.
    [The prepared statement of Mr. Jurrius follows:]

             Statement of John Jurrius, Financial Advisor 
          to the Ute Tribe of the Uintah and Ouray Reservation

INTRODUCTION
    Good morning Chairman Grijalva, Chairman Costa, Ranking Members 
Bishop and Pearce, and distinguished members of the Subcommittees. My 
name is John Jurrius and I appear before you today at the request of 
The Honorable Maxine Natchees, the Chairwoman of the Ute Indian Tribe 
of the Uintah and Ouray Reservation. Mr. Chairman, I am the financial 
advisor to the Ute Tribe and I am accompanied today by Cameron Cuch, a 
tribal member and an energy analyst with Ute Energy LLC, an integrated 
energy company formed and owned by the Ute Tribe.
    I thank the Subcommittees for the opportunity to appear before you 
this morning to talk about the experience of the Ute Tribe and how we 
believe other Indian Tribes can take advantage of the resources they 
are blessed with and new opportunities under the recently enacted 
energy law to develop and implement their own paths to economic 
development.
THE PROMISE AND POTENTIAL OF INDIAN TRIBAL ENERGY
    In early 2001, the U.S. Department of Interior estimated that 
Indian Tribes own an enormous reserve of non-renewable energy resources 
such as natural gas, oil and oil shale, tar sands, and coal, as well as 
enormous potential to harness renewable energy resources such as solar, 
wind, and hydropower. Using then-prevailing market prices, the 
department estimated that the development of these resources would 
result in some $895 billion in revenues to their tribal owners.
    As we all know, the tragic events of ``9-11'' and the ongoing war 
in the Middle East have caused the prices of oil, gas, and other energy 
commodities to skyrocket. For example, in 2001 the department valued 
Indian-owned oil at $35 per barrel. Light sweet crude oil is now priced 
at $65 dollars on the New York Mercantile Exchange. That's a $30 per 
barrel difference and suffice it to say that if the department revised 
its earlier analysis, the value of tribal resources would be in the 
trillions.
    Because of their geographical remoteness, most Indian reservations 
were once seen as undeveloped--indeed incapable of development. Today 
the Ute Tribe is one of dozens, perhaps hundreds, of Indian Tribes with 
both a natural abundance of energy resources and the determination to 
maximize those resources for the benefit of their members.
    Combined with the sheer volume of energy resources, there are 
regulatory and policy reasons to be excited about the prospects of 
tribal energy development. In August 2005 President Bush signed into 
law the Energy Policy Act of 2005 (Pub. L. 109-58) which included as 
Title V the Indian Tribal Energy Development and Self Determination 
Act. Title V is designed to assist Indian Tribes promote the 
development of their energy resources in ways that encourage tribal 
planning and decision-making, protect the physical environment, and 
result in increased employment and revenues to Indian Tribes, their 
members, and surrounding communities.
    Title V authorizes Indian Tribes and the Secretary of the Interior 
to negotiate and execute ``Tribal Energy Resource Agreements'' (TERAs). 
With an approved TERA in hand, an Indian Tribe may enter into leases, 
agreements, rights-of-way and other business deals for energy 
development on its accord and on its own land without having the 
Secretary of the Interior review and approve them.
    The TERA mechanism reinforces the policy of Indian self 
determination and acknowledges in the law what we already know out in 
Indian country: armed with accurate information, tribal leaders make 
better and timely decisions than the Federal government when it comes 
to energy matters.
    The Department of Interior's Office of Indian Energy and Economic 
Development (OIEED) is taking seriously its responsibilities under the 
new energy law and is preparing to publish the final regulation to 
implement the TERA provisions. Final publication is due to occur in 
June, 2007.
PROFILE OF THE UTE TRIBE OF THE UINTAH AND OURAY RESERVATION
    The Uintah & Ouray Reservation (U & O Reservation) is located in 
northeastern Utah in the middle of the Uintah oil and gas basin. The U 
& O Reservation comprises some 8% of the entire State of Utah and 
ranges 120 miles north and south, east and west, and 150 miles 
diagonally. The Ute Tribe has become an aggressive energy producer and 
has leased tribal land for oil and gas resources for many years. In 
fact the Ute Tribe recently opened up an additional 400,000 acres of 
tribal land that had never before been developed.
    Simply put Mr. Chairman, energy resource development is the 
backbone of the Ute Tribe's economy. Thanks to the vision and 
leadership of Chairwoman Maxine Natchees and the Tribe's Council, the 
Ute Tribe has taken steps from being a passive royalty collector to 
vigorously participating in the development of its natural bounty. So 
instead of simply leasing its lands to outside companies, the Tribe has 
begun to partner with the private sector to take an active position in 
the exploration and development of its resources.
THE TRIBE'S GOAL: FINANCIAL SELF DETERMINATION
    Before I discuss the Tribe's specific energy projects and plans, it 
is important that I share with you the fundamental decision made by the 
Tribe's leaders and members several years ago. In 2001, the Tribe 
decided that it could no longer afford to play a passive role in 
resource development nor could it depend on the Federal government to 
provide vision, leadership or strategic decision--making, let alone 
wherewithal, for the well-being of its citizenry. To better serve its 
members, the Tribe decided it must become pro-active in dealing with 
resource development and the maximization of its financial assets.
    The Tribe therefore developed a comprehensive plan to manage all 
aspects of its operations as a sovereign from providing basic 
government services to engaging in revenue generating activities. The 
Tribe's leaders knew that accomplishing the kind of restructuring 
necessary to effect these changes would require ``buy-in'' from the 
members, and so the financial plan was subjected to a tribal 
referendum. The membership approved the financial plan by a factor of 
10 to 1, giving it the highest status under the Tribe's constitutional 
authority.
    The financial plan called for an aggressive deployment of the 
Tribe's energy resource estate. Similarly, the plan authorized 
aggressively using the Tribe's financial assets beyond their historic 
role of simply subsidizing tribal government operations.
    The financial plan's success required a sophisticated land data 
system that would enable the Tribe to identify (1) what it owned, 
whether surface or mineral estate; 2) whether those lands or minerals 
were leased or un-leased; and (3) whether the underlying agreements 
were complied with by the Tribe's private sector partners. In essence, 
the Tribe built a tool to allow us to manage our energy resource estate 
in real time.
    The new land system helped the Tribe to determine that it had not 
received the market rate for most of its transactions; that nearly 50% 
of the rights-of-way holders were in trespass; and that a large number 
of exploration agreements were not in compliance.
    The new system now enables the Tribe to show all tribal surface and 
mineral ownership, as well as other ownerships, e.g. Forest Service, 
Bureau of Land Management, State of Utah, and Fee Lands. The Tribe can 
also discern production by producer, by simply ``clicking on'' a well 
on an electronic map and reviewing the relevant agreement and 
resolution.
    The Tribe can now drill down into any particular production field 
or well and determine when each well was drilled, determine what 
formations were completed, and calculate annual production.
    Additionally, the new land system has helped the Tribe demonstrate 
to governmental officials and potential business partners that the Ute 
Tribe is a sophisticated operator with business savvy that cannot and 
will not be exploited.
CURRENT CHALLENGES TO TRIBAL ENERGY DEVELOPMENT
    One challenge common in the west and one which Indian Tribes often 
face are the so-called ``split estate'' issues involving different 
ownership of surface and mineral estates. In these cases access to the 
subsurface minerals is an issue that must be resolved.
    Mineral ownership is dominant under ``Onshore Order Number One'' 
which benefits the mineral owner. However, the Ute Tribe has identified 
situations where access to non-tribal minerals underlying tribal 
surface lands presents a major problem as it may involve access to 
sacred sites and areas of cultural and environmental importance to the 
tribe that the Tribe may seek to protect from development. As some on 
the Subcommittees know, the Ute Tribe is proposing a land exchange with 
the School and Institutional Trust Lands Administration (SITLA) of Utah 
to rectify a class split-estate problem. The proposal is currently 
pending before the Bureau of Land Management.
    The SITLA holds some 20,000 acres of mineral lands in the 
southernmost portion of the Hill Creek Extension of the U & O 
Reservation. The Ute Tribe holds the surface rights to these lands. 
These SITLA mineral lands lie in an area of great cultural significance 
to the Tribe. In addition, the Ute Tribe maintains these lands as a 
wildlife conservation area. Thus, it would be difficult for SITLA to 
lease these lands for mineral development. The proposed relinquishment 
would protect sacred tribal lands, consolidate tribal ownership, and 
reduce potential use of these sensitive lands by third parties. It 
would also assure a revenue stream to the SITLA by developing mineral 
resources which are not currently being developed.
    If the proposed land exchange is not approved, the split estate 
problem will prevent the development of mineral resources, wilderness 
and culturally significant areas will not receive the certain 
protection they would under the terms of the agreement.
LACK OF REFINING CAPACITY HINDERS ENERGY DEVELOPMENT
    Another current challenge to developing tribal resources is 
inadequate refining capacity to process production from tribal oil 
assets. A large volume of the crude oil produced on the reservation is 
what is called ``black wax'' crude oil. Black wax crude is a unique 
form of crude and is desirable for its low sulfur content and potential 
for the creation of high value wax and lube products. Current black wax 
crude production and drilling activities within the Uintah basin have 
been curtailed due to reductions in what Salt Lake City refiners are 
willing to accept for processing. These refiners have instead turned to 
imported Canadian crude oil which is fast displacing production from 
the Uintah basin and deprives regional refineries of any economic 
incentive to make capital investment necessary to process greater 
portions of local basin black wax crude.
    The importation of Canadian oil, along with the fact that black wax 
crude congeals quickly and therefore cannot be transported long 
distances by way of pipeline, means that in large part local black wax 
crude is ``stranded'' with no refinery to process it.
    The intersection of these factors could result in a shut down of 
production for the Tribe at a time when the nation needs a boost in 
domestic oil production. The only way to prevent stranding this major 
energy source is to build new refining capacity in the Uintah basin 
that is capable of processing black wax crude oil. As it has done with 
other mattes, the Ute Tribe is taking the initiative to build a new 
refinery in the Uintah basin.
    Last month, the Tribe signed a Memorandum of Understanding (MOU) 
with Calumet Specialty Products to explore potential refining solutions 
for the Tribe's black wax crude production. As many Members know, 
Calumet is a leading independent producer of high-quality, specialty 
hydrocarbon products in North America and the Tribe is excited about 
the potential for this new collaboration.
    On a related note, the Tribe is keenly aware that there is great 
interest in the potential of oil shale and tar sands to reduce our 
national dependence on foreign oil. There are significant reserves of 
oil shale and tar sands on the Ute Tribe's reservation and in the 
Uintah basin in general. The Tribe is perplexed as to how we as a 
nation can move forward with unconventional hydrocarbon resources such 
as these when it does not have the refining capacity to refine its own 
domestic energy resources existing resources and continues to depend on 
foreign resources.
    Nonetheless, the Tribe's refinery blueprint takes the long view and 
includes plans to construct oil shale and tar sand processing and 
refining facilities at a later date.
ENERGY DEVELOPMENT AND ENVIRONMENTAL PROTECTION
    The Ute Tribe and all of its activities are inherently tied to its 
land. In a very real sense, the Tribe cannot be distinguished from its 
land. These lands are the sole resource for the Tribe, and the sole 
source of its economic future. The Tribe protects and cherishes its 
land and has set aside a portion of its reservation as a pristine, 
untouchable area, preserved for its members alone.
    As part of its energy plan, the Ute Tribe is engaged in ongoing 
discussions with the U.S. Environmental Protection Agency (EPA) on a 
number of issues affecting the Tribe. Because the Tribe is entirely 
dependent on revenues from oil and gas operations on Tribal lands to 
fund its government, a decrease in those revenues would prevent the 
Tribe from providing fundamental governmental services--health care, 
education, housing, and law enforcement--to its members.
    EPA has requested that the Bureau of Indian Affairs prepare an 
environmental impact statement (EIS) addressing additional oil and gas 
development on the U & Ouray Reservation. The Tribe is taking an active 
role in that process and is designing an approach that assures 
development can continue while the review process is underway.
    The Tribe is also working to resolve air emissions issues affecting 
the U & O Reservation. EPA has been slow to promulgate a minor source 
rule governing air emissions for Indian country and, as a result, 
operators on tribal lands must comply with overly complex and onerous 
air permitting requirements.
    As the Members would guess, these operators can avoid the harsh and 
untenable air regulations simply by relocating their operations across 
the border of the reservation to state-regulated lands. The Ute Tribe 
does not want to see the double standards in air standards drive energy 
development from its reservation. The Tribe has been actively engaged 
with EPA, operators, and other regulators to address this anomaly. To 
its credit the EPA has thus far been open to assisting the Tribe in 
developing creative approaches to resolving this issue.
    Along these lines, the Tribe has reviewed the recently proposed 
``Indian Country Minor Source Rule'' and has provided comments on it. 
The Proposed Rule is flawed because it fails to recognize the 
comparative disadvantage Indian Tribes are burdened with when it comes 
to air emissions. Nonetheless, the Tribe remains hopeful that EPA will 
promulgate an equitable and meaningful rule that results in a minor air 
source permit for Indian country.
CONCLUSION
    In conclusion I want to thank you for the opportunity to appear 
before you and discuss the great things that the Ute Tribe is doing in 
northeastern Utah.
    At this point, I would be happy to answer any questions you might 
have.
                                 ______
                                 

                              May 16, 2007

Dear Chairman Costa and Chairman Grijalva:
    In response to the question from Minority Members:
 ``Would the commercial potential for oil shale development on the 
        Reservation be improved by encouraging commercial leasing of 
        oil shale on the considerable public lands where oil shale 
        formations are found out in the West?''
    Yes, leasing for projects on public lands would drive the potential 
for development on Indian Reservations. The leasing of public lands 
would help Indian Tribes to 1. Learn more about oil shale development, 
and 2. To understand the technologies involved as well as determine 
which one is best is best suited for Indian country.
    The leasing of public lands would also help the Ute Tribe learn 
more about the potential of oil shale located in Utah and learn about 
the two technologies namely the In-Situ Process and Surface Process or 
Mining.
    The Ute Tribe is interested in the In-Situ process and feels that 
the leasing of public land here in Utah is important in finding out the 
result of this technology. Concerns about damaging the earth make it 
important that the right technology is perfected otherwise the Tribe 
will not be interested in developing its resource. Therefore the pilot 
projects help the Tribe quantify the prospective ness of the Tribe's 
resource and helps identify the right technology.
    Finally, as the federal government continues to cut back on federal 
funding to Indian Tribes. Western Tribes in particular, are dependent 
on natural resource development to fund core tribal government and to 
ultimately reach tribal self-determination.
The Uintah and Ouray Indian Reservation, Utah
    The Uintah and Ouray Indian Reservation, located in northeastern 
Utah, lies within the Uintah Basin, a structural and depositional basin 
of Tertiary age. During Eocene time a thick sequence of kerogen-rich 
sediments accumulated along he trough of a lake that occupied the basin 
area. Those endurated sediments comprise the oil-shale zones of the 
Green River Formation and much of the reservation is underlain by one 
or more of the zones. The richest of the oil ``shale zones, the 
Mahogany zone, is deeply buried where it best developed within the 
reservation (northern part) and crops out where the oil shale grade is 
much lower, in the southern part of the reservation. Total oil-shale 
resources of the Mahogany zone within the reservation cannot be 
accurately determined due to the scarcity of core hole data, however, 
assay data from core holes adjacent to the eastern part of the 
reservation allow an estimate of the inferred resources of the Mahogany 
zone in a part of the Mahogany zone that yields 25 gallons of oil per 
ton, is a least 25 ft (7.6) thick, and is overlain by less than 3,000 
ft (914) of overburden.
    The 1970's and 1980's were characterized by exceedingly high 
petroleum prices similar to what is experienced today. At that time, 
several efforts began to make both tar sands and oil shale into 
commercial ventures that would have contributed to the nation's crude 
oil supply. Despite those historic efforts, ventures failed as world 
oil prices declined and Federal policies failed to support continued 
research and development of the resources. In Utah, the use of the 
resources reverted back to satisfying historical objectives. Tar sands 
were used once again for paving roads in the Uintah Basin and oil shale 
reverted to be the object of grand research projects and to fuel the 
plans of future developers. Not surprisingly, the optimism and dreams 
of today are every bit as directed and intense as those wishes and 
attitudes of yesteryear. Even though oil shale has been historically 
referred to as ``the resource of the future that always will be'', we 
feel that there is more future at this time for both of these key 
resources than there ever has been. Prices for competing fuels and the 
availability of those fuels are reaching critical stages in 
international markets, as are the unsettled geo-political situations in 
countries where conventional fuels are obtained.
Oil Shale and Tar Sands Resource Quantities:
    The following tables depict current estimates for national reserve 
quantities of oil shale and tar sands.

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

Utah Resources
    Utah contains about 321 billion barrels of kerogen in its oil 
shale, kerogen being an immature form of crude oil that requires 
treatment prior to refining. This amount is a small part of the total 
resource in the Western U.S. (UT, CO, and WY), which totals about 1.5 
trillion barrels of kerogen. The vast majority of the oil shale 
resource is part of the Federal expanse of land referred to as Public 
Domain. There are significant parts of the oil shale resource, about 
20% on an acreage basis, which are held in fee (privately owned) and 
owned by the School and Institutional Trust Lands Administration 
(SITLA). The latter category of resource is held in trust for the 
Institutions and school children of the State. SITLA owns about 186,000 
Acres and has about 100,000 Acres leased at this time.
    As noted, tar sands in Utah contain 11 billion measured barrels of 
oil, about 1/5th of the US's 58 billion barrels of tar sands oil. Many 
recovery estimates vary as well. In the same way as oil shale, 
ownership is a mixed bag among Federal, State, and private interests 
with approximate splits being 80%, 10%, and 10%, respectively. 
Overburden, or the non-ore material covering the ore, is generally 
shallower than in oil shale deposits.
Federal Leasing:
    The Bureau of Land Management (BLM) plans to lease and encourage 
development of the Federal portion of Utah's oil shale and plans are 
now under way to achieve this goal. Maximum lease size under the new 
oil shale leasing program to any one individual or company would be 
5,120 acres. A per-lessee prototype 5,120 Acre leases which would be 
mined by underground methods (in Utah) and have the ore retorted 
(baked) to extract about 1/2 of the kerogen from a 48 foot seam would 
yield about 250 million barrels of kerogen over 14 years at about 
50,000 barrels per day (bpd). As a comparison to today's conventional 
oil production, the Utah Division of Oil, Gas, and Mining (UDOGM) 
statistics indicate that Utah's crude oil production for 2005 was about 
46,600 bpd.
    Prior to offering the prototype leases, BLM is planning on leasing 
Resource Development and Demonstration (RD&D) Leases to ``jump-start'' 
the oil shale development process. 1 Utah has one RD&D lease 
in its future. It is a 160-acre lease on the same tracts leased in the 
1970's as prototypes for oil shale development in Uintah County. An 
environmental assessment (EA) has been prepared for issuance of this 
lease to Oil Shale Exploration Company (OSEC). Comments on the EA are 
now being considered by BLM. The release for the Utah lease is
---------------------------------------------------------------------------
    \1\ Lease for the RD&D projects in Colorado were released on 12-15-
06.
---------------------------------------------------------------------------
    A Programmatic Environmental Impact Statement (PEIS) is being 
prepared by BLM on the long term leasing program. As a program to 
address large scale future leasing, it is planned to take more time in 
preparation and a draft is scheduled to be available by summer 2007. 
Since Utah is a cooperating agency, we expect a maximum amount of input 
to the process. The PEIS will evaluate the environmental effects of 
BLM's plan for the commercial leasing of oil shale.
Refinery capacity
    Capacity to refine crude oil in the State is currently about 
160,000 barrels per day. This limit is currently stretched because of 
Canadian syncrude coming into the State by way of the Express Pipeline 
and by the need to refine heavier black wax crude oil from the Uintah 
Basin. In fact, there is a substantial amount of produced oil, which is 
not being produced because of this capacity limit. The Ute Indian Tribe 
has established an initiative to build a new refinery in the Uintah 
Basin to handle Heavy crude namely ``Black wax'' with plans to 
establish a foot print for expansion into tar sand and oil shale 
refinement when technology to develop oil shale and tar sand becomes 
economic.
    In conclusion, I hope that I have provided some insight into your 
question. Once again, thank you for inviting me on behalf of the Ute 
Indian Tribe to testify at your joint hearings.

Sincerely,

John P. Jurrius
Financial Advisor/Energy Expert for the Ute Indian Tribe
                                 ______
                                 
    Mr. Grijalva. I thank the panel, and we are going to recess 
for 45 minutes to an hour, and then we will return to this 
panel for questions, and the panel that follows. Thank you very 
much.
    [Recess.]
    Mr. Grijalva. Thank you very much and again let me thank 
the witnesses, and I want to begin with some questions to Mr. 
Emmerich, and when I am done with my allotted time, Mr. Pearce 
will have some questions.
    You mentioned the Western Governors' Association compiling 
a multi-state inventory of information on sensitive wildlife, 
migration corridors, critical habitat. That would be tremendous 
information. When do you estimate that that inventory will be 
if not completed, at least usable by a state or Federal 
agencies?
    Mr. Emmerich. Mr. Chairman, that portion of the resolution 
as you stated is encouraging gathering that information on an 
accelerated pace. I don't have a real good time line, but just 
based on our own experience in Wyoming where we have collected 
a lot of that information, I suspect within a year it will take 
to compile that information. A lot of places migration 
corridor, crucial ranges are already identified in various 
state databases or other types of databases. It is a matter of 
just pulling that together, but there are other areas where we 
have to do more, the baseline information, the marking animals 
or whatever it takes to really define those migration routes.
    But I think some initial information we could probably pull 
together within at least six months, a year max, but in these 
areas where we don't have specific information it is going to 
take several years because you have to mark animals, follow 
them, and delineate those areas.
    Mr. Grijalva. Thank you. One follow up, if I may. The U.S. 
Fish and Wildlife Service and the states have spent a 
tremendous amount of time and money crafting a plan intended to 
help the sage grouse and preventing formal ESA listing for that 
particular bird.
    My question, is BLM undermining those efforts by not doing 
enough to protect the habitat, and are we at this point, if 
that isn't protected, heading for a listing?
    Mr. Emmerich. Mr. Chairman, there has been a lot of energy 
and resources dedicated to completing the conservation strategy 
for the western greater sage grouse, and I think all agencies, 
and the BLM is certainly a player within that conservation 
strategy and working to achieve those results. Currently, one 
of the huge challenges is funding. They have identified, I am 
not sure of the exact total, but it is like--it is a lot of 
millions of dollars to actually implement this strategy.
    I believe the BLM recognizes the importance of making sure 
we engage in all practices possible to improve conditions for 
sage grouse because if we don't and trends continue to decline, 
the long-term trends are negative. We actually have seen, at 
least in Wyoming, the last three or four years we have seen 
some increases in sage grouse number, at least outside of the 
intensive development areas, but long term you have 
fluctuations, but long term the trends have been negative. And 
if we continue to see that, I am sure there will be continued 
interest in listing the species.
    Mr. Grijalva. Thank you very much.
    Let me turn to Mr. Jurrius. The land system that you 
described in your testimony, was it developed by the tribe or 
the Department of Interior? That is the first part of the 
question.
    What you described seems like something that could benefit 
other nations, other tribes, and are other tribes using a 
similar system?
    Mr. Jurrius. Mr. Chairman, thank you for the question. No, 
their financial plans, so to speak, was generated by a business 
consultants. Actually, the Southern Ute Indian Tribe, the 
Northern Ute sister tribe started this process back in the 
early 1990s, and as the three Ute tribes get together, the Ute 
Mountain Tribe, Ute Tribe, and the Southern Ute, they share 
that discipline, and that expertise. It is not something that 
the BIA or is not a canned project, but it certainly has 
received a lot of notice by other western tribes.
    Mr. Grijalva. Thank you very much.
    Mr. James, and thank you for being here, Indian tribes have 
raised similar concerns regarding the siting of cell phone 
towers, their effect on sacred sites that have been raised as 
well regarding energy development. To address the concerns 
raised, tribes have entered into negotiated programmatic 
agreement with the FCC and private industry that requires cell 
phone companies to notify and work with Indian tribes before 
cell phone towers may be built in areas that may have sacred 
sites.
    Have the Indian tribes used or considering using a similar 
programmatic agreement dealing with energy development areas 
that may have sacred sites?
    Mr. James. I can't really answer conclusively for all 
tribes, but I know that it is something that we try to 
encourage--to develop a system that would be available to those 
tribes that are concerned for sacred sites. Even though tribes 
are different in regards to time and location and membership, 
and the ceremonial practices, a lot of the core values that 
they have associated with sacred sites is fairly common in 
their traditional culture.
    So if we can develop a system that become a role model 
compact, if you may, for dealing with the industries that come 
either within the reservation or is developing within 
traditional territories of the Indian tribes, then that would 
help those tribes that are least developed, move further along 
more rapidly, but it has to be developed as a prototype.
    Mr. Grijalva. Thank you, and the last question, Mr. James. 
In your testimony you made the point that tribes often cannot 
afford to participate in the consultation procedures and 
decisions that may affect their culture, sacred sites, and you 
mention that in your testimony but I want to get specific in 
that. Do you think that additional funding for the National 
Tribal Environmental Council, a committed revenue stream will 
alleviate that problem that we are talking about being there 
for there for the consultation and having the expertise 
necessary?
    Mr. James. We witnessed in our experience where tribes come 
together within the inter-tribal organizations where they begin 
to share information and database and technology, that they 
move rapidly forward. That is why I was saying that. In the 
beginning, NTEC, with only eight tribes, now it is about 190 
tribes, and so they are dealing with both the science of 
environmental management, but they would need to not only be 
able to be considered for the grant or the funds available for 
providing the gathering of environmental database and making 
available to Indian tribes, but also to help coordinate those 
tribes' contributions to a database associated with cultural 
practices and sacred sites protection.
    Mr. Grijalva. Thank you very much.
    Mr. Pearce.
    Mr. Pearce. Thank you, Mr. Chairman.
    Thanks, Mr. James, for your testimony. We have a couple of 
tribes in our district that struggle for economic development 
the same way, and so I am very familiar with what you are 
experiencing.
    Mr. Emmerich, on page 2, you have testimony about the 
declining numbers of wildlife and things. Would you have this 
panel to conclude that the wildlife and the production of 
energy on the lands that you have jurisdiction over they are 
mutually compatible or incompatible?
    Mr. Emmerich. Mr. Pearce, Mr. Chairman, I think energy 
development and managing wildlife resources are compatible, as 
I stated in the testimony, if we work with the best information 
and early on in the development of these resources, we share 
that information, and identify the impacts that are occurring.
    Intensive development, especially in crucial habitats or 
these sensitive migration corridors, do have a negative impact 
on wildlife.
    Mr. Pearce. So you mentioned the decline of the deer herd, 
for instance. Do you think that that is due to oil and gas or 
to intense development? Let us use that phrase.
    Mr. Emmerich. Mr. Chairman, there is several factors that 
cause declines in wildlife. We are doing a specific research 
that, by the way, is funded by industry in the Anticline area 
south of Pinedale. We have been monitoring closely the mule 
deer population that winters there on what we call the Mesa 
winter range where the Anticline development is occurring. We 
also have a control area just east of there. During the winter 
of 2002, which was about the third year of development, there 
was about a 49 percent decline in deer numbers throughout that 
basin because of weather.
    Mr. Pearce. Because of what?
    Mr. Emmerich. On the Mesa itself, there was a 49 percent 
decline. In the rest of the herd unit, there was about a 23 
percent decline or 22 percent.
    Mr. Pearce. And you said because what, what did you 
speculate was the reason?
    Mr. Emmerich. That was weather, but as I pointed out, if 
you look at the control area compared to the Mesa area, there 
was a 27 percent additional decline in the Mesa area where the 
intensive development is occurring.
    Mr. Pearce. What was the----
    Mr. Emmerich. The only thing that we can attribute that 
to----
    Mr. Pearce. If you don't mind, what was happening to the 
elk population at that time?
    Mr. Emmerich. Elk populations don't winter in this area. 
The elk populations are stable.
    Mr. Pearce. What was happening to the antelope population?
    Mr. Emmerich. The antelope populations have been fairly 
stable in the same area. They migrate through this area, and do 
winter in a portion of what we call the Jonah Field.
    Mr. Pearce. So you have a decline in deer but you don't 
have a decline in antelope?
    Mr. Emmerich. That is correct.
    Mr. Pearce. You are in the agency that would decrease the 
number of hunting permits during that decline. Did you all 
decrease the number of hunting permits?
    Mr. Emmerich. If you look at the trends over the last few 
years----
    Mr. Pearce. I am running out of time. Just a yes or no.
    Mr. Emmerich. Yes.
    Mr. Pearce. Yes, OK. How much, just roughly? We are just 
talking in general terms.
    Mr. Emmerich. From 2002, there was--I don't have that 
information specifically. I think it is in the range of 20 
percent.
    Mr. Pearce. So you had a reduction in 20 percent in the 
hunting permits, the actual takes?
    Mr. Emmerich. In that particular area. I can provide 
specific information.
    Mr. Pearce. Mr. Jurrius, do you all do hunting? Most of our 
tribes have hunting is the reason I am asking. Do you all do 
hunting, give hunting tours, and elk permits and all that?
    Mr. Jurrius. Yes, sir.
    Mr. Pearce. Have you noticed--you all are pretty 
aggressive--by the way, your tribe has gone from pretty low 
income levels to pretty high income levels, and so I commend 
you for that because a lot of tribes are trying to figure out 
the--so you do oil and gas exploration as well as hunting. Have 
you noticed your animal population is decreasing the way that 
Wyoming has?
    Mr. Jurrius. First of all, I might say that those energy 
revenues that go into the governmental budget, about a third of 
it, $62 million budget, is for environmental and mitigation 
type projects.
    Mr. Pearce. Can you pull the microphone just a little bit 
closer?
    Mr. Jurrius. Sorry.
    Mr. Jurrius. About a third of that governmental budget that 
I mentioned earlier, $62 million that is funded by way of 
energy revenues would fall into a category of environmental 
expense for the government, mitigation of habitat, and so we 
have very strong--whether it is bison herds, elk herds, rams in 
the Bouk Lifts, sage grouse or mule deer, very strong----
    Mr. Pearce. My question is are you seeing declines in 
population as you go up on oil and gas, decline over here?
    Mr. Jurrius. No, sir.
    Mr. Pearce. You don't see the correlation that they are 
finding there in Wyoming?
    Mr. Jurrius. No, sir, not at all.
    Mr. Pearce. You all have expressed some openness to--I see 
my time--I will just wait until the second round, Mr. Chairman, 
if you don't mind.
    Mr. Grijalva. I don't have any further questions, so if you 
want to----
    Mr. Pearce. Sure, I only have a couple more so we will just 
ease through it.
    You have expressed as a tribe some interest in developing a 
refinery, which is even one layer, more level of complexity in 
the development phase of oil and gas. Are you thinking that 
that is going to detract from your leased hunting revenues, the 
revenues you get from leasing your property to the hunters?
    Mr. Jurrius. No, sir. The tribe has done a great job of 
partitioning off lands that it considered to have cultural 
value or historic value for habitat versus those lands that it 
intends to develop.
    Mr. Pearce. So do you use the categorical exclusions that 
are available to the Federal government in the Energy Policy 
Act? Do you use those same types of things?
    Mr. Jurrius. Everything on the tribe, of course, is subject 
to NEPA and those same processes.
    Mr. Pearce. Do you use those categorical exclusions?
    Mr. Jurrius. No, sir.
    Mr. Pearce. OK. Mr. Emmerich, you had mentioned that you 
feel uncomfortable. You stopped short of saying it is a bad 
deal, but you were worried about categorical exclusion. Did you 
bring language to us?
    Mr. Emmerich. Mr. Chairman, yes, there is language in the 
testimony in terms of the type of changes that the Western 
Governors' Association would like to see. It pertains 
specifically----
    Mr. Pearce. If you could just provide that in writing, that 
is the question. If you have it, then we will take it and wring 
it through the mill there.
    Mr. Emmerich. You have it in writing.
    Mr. Pearce. If you will provide it to our staffs, I am sure 
both sides would appreciate having that.
    Mr. Jurrius, on the split estate question, do you all run 
into that question?
    Mr. Jurrius. We run into split estate issues with over 
300,000 acres of split estate where the tribe has the surface 
and, of course, as you know, other than Onshore Oil and Gas No. 
1, tribes not subject to condemnation via imminent domain, and 
has seen massive development on its lands, but working with 
industry we have been able to--for all deployed lands and all 
deployed assets--resolve all split estate issues.
    Mr. Pearce. How much of your 300,000 acres is in the split 
estate category?
    Mr. Jurrius. No. Actually, 1.5 million acre surface estate, 
300,000 is in the split estate category.
    Mr. Pearce. And you have been able to work some sort of a 
compromise on every single thing?
    Mr. Jurrius. Yes, sir. It has been a five-year process.
    Mr. Pearce. Which would match with our testimony from the 
BLM that they have 20,000 wells and only 20 have fallen into a 
category where they couldn't come to some agreement.
    Well, that pretty well does it for me, Mr. Chairman. I 
appreciate this panel here. They have done a great job.
    Mr. Emmerich. Mr. Chairman, if I may, I do have those 
figures on another sheet. The sublette herd, which is the one 
directly affected by impacts on the winter range, in 2000, 
which is about the time the development started, we were 
issuing about 8,300 licenses, and in 2005, we dropped to 5,415, 
which is approximately a 36 percent decline.
    But if you compare that to the same time period in other 
populations where we don't have energy development, there was 
also roughly a 10 percent decline in hunter numbers and 
licenses issued, so there was some decline elsewhere, but not 
as large as in the sublette herd.
    Mr. Pearce. OK. Thank you very much.
    Mr. Grijalva. Thank you very much, and I appreciate all of 
the testimony. I want to note Mr. Jurrius's comment that the 
Nation that you represent is spending a third of its revenue 
from those leased lands on habitat, wildlife protection, and 
one can wonder if a third was being dedicated by BLM to those 
same endeavors, maybe some of the decline that we are debating 
about wildlife would be moot, but that is for another time.
    Thank you very much, and I will call the next panel. Thank 
you very much and welcome, ladies and gentlemen. This is our 
last panel, and as you heard, your full statements will be made 
part of the record, and we ask you for your oral testimony, if 
you could limit that to five minutes and we will proceed 
alphabetically. Let me begin with Mr. Adami. Did I say that 
correctly?
    Mr. Adami. Adami, Mr. Chairman.
    Mr. Grijalva. Thank you, sir.

                 STATEMENT OF STEVEN M. ADAMI, 
              POWDER RIVER BASIN RESOURCE COUNCIL

    Mr. Adami. Mr. Chairman and Subcommittee Members, on behalf 
of myself and the Powder river Basin Resource Council, I would 
like to thank you for the opportunity to speak to you today.
    My name is Steve Adami. I am a rancher and CPA in Buffalo, 
Wyoming. I am a life-long resident of Wyoming, and I am here to 
address the problems with development of oil and gas minerals 
when a split estate exists.
    The Stock Raising Homestead Act of 1916 governs the 
consideration for the surface.
    Mr. Grijalva. If I may, let me interrupt you for just a 
second. Could you pull the microphone closer?
    Mr. Adami. Is that better, Mr. Chairman.
    Mr. Grijalva. Is it on?
    Mr. Adami. I think I can hear it. Is that better if I speak 
here? OK.
    The Stock Raising Homestead Act of 1916 governs the 
consideration for the surface which is growing crops and 
tangible improvements. This law is 91 years old. Surface uses 
and values have changed since 1916. Wyoming's Split Estate Act 
in 2005, that Act has proven to be inadequate primarily due to 
ineffective default provisions on the bonding requirements. 
Furthermore, the BLM has refused to recognize Wyoming's Split 
Estate Act where the split estate exists over Federal minerals.
    Our ranch was bonded onto where we had fee surface over 
Federal minerals, and earlier today Mr. Bisson made a statement 
that I hadn't heard before, which is that in the United States 
there are only 20 wells where the surface owner and the Federal 
government can come to an agreement, and on our ranch we have 
12 of those wells. So I represent to you here today 60 percent 
of the bonded on split estate Federal minerals in America.
    While we were waiting to have our appeal heard, we appealed 
that process to the Interior Land Board of Appeals. While we 
were waiting, the developer completely drilled and developed 
every mineral at issue. There was no additional bond 
requirement during that period or any other protection for our 
land during that process.
    This is not about stopping or slowing oil and gas 
development. It is about being fair and responsible with regard 
to the treatment of the surface estate.
    We have sold our ranch, and left many of our oil and gas 
problems behind. However, I have decided to remain involved in 
this process so that other landowners don't have to go through 
what we did.
    The problems are easy to identify. The solutions are 
generally much harder. However, I do believe there are a number 
of things that can be done to help that will mitigate the 
impacts of development of the mineral estate while preserving 
the viability of the oil and gas industry.
    I urge you to pass Congressman Udall's H.R. 1180 that would 
require surface owner notification and input, reasonable use of 
the site, accommodation of the surface owner, reclamation to 
support the same use as before the development, and 
compensation for damages. Personally I would like you to 
consider including something in that bill that would put a stay 
on development during an Interior Land Board of Appeal or 
increasing the bond amount so that would not be preferred 
alternative, and would help keep the mineral company at the 
negotiating table.
    In summary, the oil and gas industry should not be allowed 
to off-load their cost, primarily reclamation, onto the surface 
owner through their dominant negotiating position. The coal 
mining industry not only survived but it has thrived since 
legislation require them to act responsibly was enacted. I 
believe oil and gas can also. I urge you to pass legislation to 
bring our antiquated laws up to date with the realities of our 
modern society.
    Thank you very much.
    [The prepared statement of Mr. Adami follows:]

                Statement of Steven M. Adami, Rancher, 
         Powder River Basin Resource Council, Sheridan, Wyoming

    Chairman Costa, Chairman Grijalva and members of the subcommittees, 
on behalf of myself and the Powder River Basin Resource Council I would 
like to thank you for the opportunity to speak to you today. My name is 
Steve Adami. I am a rancher and CPA in Buffalo, Wyoming, and a lifelong 
resident of Wyoming. I am here to address problems with the development 
of oil and gas minerals when a split estate exists between what has 
been the dominant mineral estate and the subservient surface estate.
    The idea that the mineral estate is dominant over the surface or 
land is the cause of many conflicts. An example of this attitude of 
dominance over the land and the landowner was testified to in a recent 
court case in our area when the landowner, Mary Brannaman, testified 
that an oil and gas company representative told her, ``Mary, it's just 
like you and I are married. I can do whatever I want, whenever I want, 
and however I want.''
    For me, the split estate relationship felt more like that between a 
slave and a slave owner, but the result was the same: the developer 
felt free to do whatever he wanted, whenever and however he wanted to 
do it. This situation, which surface owners are encountering more and 
more throughout the Rocky Mountain West, is leading to the passage of 
split estate laws in Wyoming, New Mexico and possibly this year, in 
Colorado.
    Because of the oil and gas industry's political influence in 
Wyoming, the split estate law that was passed did not provide adequate 
protection for the surface estate. Our ranch in Johnson County was the 
first test of Wyoming's Split Estate Law. Since our ranch's initial 
test, the CBM industry has found Wyoming's Split Estate Law a safe 
haven for inexpensive access to their mineral estate and continued 
domination over the surface owner. Furthermore, the BLM refuses to 
recognize Wyoming's law, despite its weaknesses and shortcomings (see 
attachment.)
    State and federal split estate law are based around ``good faith 
negotiations'', but in our experience, no good faith negotiations were 
required, regardless of state and federal law. The company that leased 
the federal minerals beneath our ranch did not want to negotiate and 
found the BLM an accommodating and cooperative partner in their effort 
to ``bond on.'' BLM's message to landowners in our area is this: 
``You'd better take whatever the operator is offering, because if they 
``bond on'' you will get nothing.'' This is not good faith negotiating.
    In our case, what the operator offered was a one size fits all, 
non-negotiable surface use agreement. When we asked for some changes in 
the language ensuring proper reclamation, restrictions on water 
disposal, and $1.37 per day more money than was offered for the use and 
damage of our land, what we received was nothing. The initial offer was 
withdrawn and the operator ``bonded on''.
    The BLM and CBM operator sat down and made decisions on how my land 
was to be developed. Although I was invited to the meetings between the 
operator and the BLM, my attendance was simply symbolic. As the owner 
of the surface, my input was given only a token consideration--and it 
was completely ignored if it conflicted with the operator's wishes. The 
ultimate Plan of Development that was approved did not minimize 
damages, did not compensate me for those damages, and did not ensure 
there would be enough money set aside to reclaim my land when the 
developer is finished.
    The ``bond'' BLM required for industry to come onto my ranch was 
$2,176. This money was not and will not be paid to me or any other 
landowner who is forced into this position. The landowner must sue the 
BLM for damages and the legal fees would be several multiples of the 
bond. Two thousand dollars is not adequate compensation for my losses 
or cover the damages caused by drilling 11 wells, bulldozing miles of 
roads, installing miles of ``utility corridors'', and constructing five 
off-channel water disposal pits of approximately 3 acres each. An 
engineer I retained estimated reclamation costs to be in excess of 3 to 
4 million dollars, particularly given the overall lack of development 
control built into the Plan of Development (POD) approved by the BLM's 
Buffalo Field Office. The BLM's response to my protests that they 
allowed industry to post a $2,176 bond against a reasonable reclamation 
estimate of three million dollars or more, was that they were only 
required to collect a bond for loss of grazing value.
    The developer had D6 Caterpillars working on our ranch within 48 
hours after the approval of their POD and drilling permits by the 
Buffalo Field Office. I appealed the BLM approval of the POD and 
drilling permits to the Interior Board of Land Appeals. There are no 
protections afforded to the surface estate or any additional bond 
required of the mineral developer during the time of appeal.
    I tried every step of the way to get protection for our land and 
water. I lost that battle, and our ranch looks nothing like it did 
under our stewardship. What was once open pristine ranch land is 
covered with roads, pits, pads, and constant traffic. Our ranch became 
an industrial park for the production of CBM gas. Our private deeded 
ranch land was sacrificed by BLM for the development of federal 
minerals.
    We no longer own the ranch I've been talking about today. For a 
variety of reasons, we were bought out by one of the CBM companies in 
the area. The decision to sell was a very difficult one for our family 
to make, but in the end was the only logical solution for us. We were 
able to leave most of these troubles behind, but the fight took a 
tremendous toll emotionally, physically, and financially for my family 
and me. The abuses continue today for my friends and neighbors, because 
nothing has changed in the way industry and the Bureau of Land 
Management conduct business. You cannot mandate ``good faith 
negotiations''. What is needed is a leveling of the playing field 
between the dominant mineral estate and the subservient surface estate.
    Problems are easy to identify. The hard part is to find solutions, 
particularly when the solutions may require an industry with enormous 
political and economic influence to make concessions in the way it does 
business. However, there are solutions to many of the problems that 
will not unduly slow down or add unreasonable costs to development. 
This is not about slowing development or making it more expensive, it 
is about fairness to landowners and making sure that development is 
done in a manner that protects the surface resource.
    The Stock Raising Homestead Act of 1916 declares that the surface 
estate is entitled to reimbursement for damages to crops (not including 
native grassland) and tangible improvements. That 91-year-old law still 
rules what protections compensation surface owners receive today when 
oil and gas is leased (though surface owners were given greater 
protections when coal and hard rock minerals are being developed, 
thanks to laws passed in 1977 and 1993.) It is time to revisit the true 
value of the surface estate and to provide protections for those who 
own the surface over federal oil and gas. The so-called dominant estate 
lends itself too easily to the actions of a slave owner or an abusive 
spouse, and the federal government should not be a party to it.
    A new federal Split Estate Law would clearly have jurisdiction over 
federal minerals and provide protection for the landowner where the 
local and state governments are unable to provide such protection.
    Mr. Chairmen, I urge you to pass Representative Udall's H.R. 1180 
that would require:
      Notification to the surface owner and opportunities to 
comment and participate at key points in the leasing, permitting, 
development and reclamation processes.
      Reasonable use of the site.
      Accommodation of the surface owner.
      Reclamation of the site so that the land is capable of 
supporting the same uses it was capable of supporting prior to 
development.
      Compensation for damages.
    And I urge you to go further:
      A federal law should require adequate compensation for 
the use of the land and the mineral development impacts. Requiring a 
fixed production percentage, which would be non-severable, to the 
surface estate would entitle the surface owner to some reasonable 
compensation for the use of their estate.
      A stay on development during an appeal to the ILBA would 
both provide protection against improper development and discourage 
companies from using the ``bonding on'' method of gaining access to 
their mineral estate except in a case of last resort.
      The best way to defuse the controversies surrounding this 
industry are to reconnect the minerals with the surface estate, perhaps 
by requiring that minerals not leased or produced over a number of 
years, 15 for example, revert back to the surface owner.
    It is time to pass legislation to rein in the ``dominant'' position 
of the mineral estate which has cultivated the arrogance of the 
operators who are running roughshod over surface owners and address the 
inequity that exists between the land and the oil and gas beneath it. 
We addressed this issue during the boom in coal mining in the 1970s and 
it is time to require it of the oil and gas industry. In the 30 years 
since the passage of our federal coal law, the Surface Mining Control 
and Reclamation Act, which requires surface owner consent before 
federal coal is leased, the coal industry has evolved into a prosperous 
and relatively non-controversial industry. We believe the oil and gas 
industry can succeed and thrive from a similar approach.
    Thank you.
                                 ______
                                 

                            Steven M. Adami

                             P.O. Drawer G

                         820 North Main Street

                         Buffalo, Wyoming 82834

                              307-684-5557

                              May 5, 2007

Representative Raul Grijalva
Subcommittee on National Parks, Forests and Public Lands
House Natural Resources Committee
1626 Longworth House Office Building
Washington, DC 20515

RE:  Additional Statements for The Record for the April 26, 2007 
Hearing on ``Land-use Issues Associated with Onshore Oil and Gas 
Leasing Development''

Delivered VIA email to [email protected] and Fax 202-225-
5225

Dear Chairman Grijalva:

    My understanding is that we are able to make additional statements 
or clarification for the record. Additionally, the Committee had a 
specific question.
    A point of clarification to my written testimony is with regard to 
the issue of reattaching the mineral ownership to the surface ownership 
after an extended period of inactivity. This statement was only 
intended to be for fee minerals and not federal minerals.
    Additionally, I wanted to address the statements by Mr. Bisson 
(Deputy Director of BLM) with regard to there only being 20 wells (or 
perhaps 20 landowners) in the nation where an agreement was not reached 
with mineral developers. I cannot verify whether this statistic is 
accurate or not. Instead, I would like to explain why this statistic 
should not be used to rationalize that the current system is working 
for landowners. What this statistic is really saying (or shouting) is 
that the playing field is so lopsided that there are virtually no 
challenges. This is a case where the surface owner has so few rights 
that any offer is considered better than the alternative, which is 
essentially nothing.
    A statistic that would be very helpful, but not available, is the 
percent of landowners that have had federal minerals developed under 
their property who were happy or satisfied with the agreement they 
signed. Among the people that I have had contact with, that percent is 
not very large. Operators are currently using the leverage they have 
under the Stock Raising Homestead Act to coerce landowners into 
agreements that do not adequately protect, or compensate for the use 
of, the surface.
    BLM's Onshore Order No. 1 requires that an operator makes a ``good 
faith'' effort to reach an agreement with the surface owner, but in any 
negotiations where one side has absolutely no leverage, it is virtually 
impossible for ``good faith'' negotiations to exist. Regardless, 
exactly what are ``good faith'' negotiations? BLM does not define the 
term. Leaving that determination up to a civil action does a great 
disservice to the surface owner.
    In my case, the mineral developer's initial offer was withdrawn 
when I did not initially accept it and it was never offered again 
despite my efforts to restart negotiations. There was no pressure by 
the BLM to continue negotiations beyond a few patronizing statements to 
the effect, ``we would like to see you guys work something out''. If 
the BLM believes they have the tools and procedures in place that 
encourage continued negotiations, as Mr. Bisson stated, those 
procedures were not apparent in my case.
    A specific question from the Energy and Minerals Subcommittee, 
House Natural Resource Committee that I received as an email is as 
follows:
        You have suggested the adoption of a federal law to govern 
        split estate relationships in regards to oil and gas 
        production. As you know the needs and requests of a ranch in 
        Wyoming, Texas and any other state are not the same. How is a 
        uniform approach to split estate likely to succeed in answering 
        the specific needs of ranchers when they each have their own 
        scenario?
    My answer to the above question is:
    Every ranch is different, regardless of where it is located. My 
neighbors directly across the fence have entirely different management 
issues than our ranch. Each ranch has to adapt to the ``cards they are 
dealt'' which are size, terrain, water, soil, climate, and many other 
variables associated with any particular ranch.
    That is one the reasons one ranch may be more receptive to mineral 
development than another ranch. Some ranches may be in a greater need 
of some of the development that accompanies mineral development.
    The adoption of federal split estate legislation that recognizes 
that the surface and its uses are unique (accommodation) will not 
create a ``uniform approach'' but will facilitate an environment where 
the unique attributes of each ranch will have an opportunity to be 
recognized. Federal legislation that mandates broader considerations be 
given to the surface, over the current ``growing crops and tangible 
improvements'' to which they are currently entitled, is critical and 
necessary.
    Federal split estate legislation would create a more level playing 
field on which real negotiations between landowners and mineral 
developers are possible, by establishing a procedure for negotiation, 
and by offering greater protections for landowners than merely 
requiring compensation for growing crops or other tangible 
improvements.
    Until federal legislation is passed, the vast majority of split 
estate landowners will continue to be forced to take whatever mineral 
developers are willing to offer. Surface use agreements that fail to 
adequately protect surface owners' interests, including reclamation, 
may ultimately become a taxpayer liability. Please draft and pass 
meaningful and responsible legislation to protect the surface owner in 
split estate situations.

                            Sincerely yours,

                              Steve Adami

                                 ______
                                 
    Mr. Grijalva. Thank you, sir.
    The next witness, Ms. Korenblat.
    Ms. Korenblat. Korenblat.
    Mr. Grijalva. Korenblat, did I get it?
    Ms. Korenblat. Yes.
    Mr. Grijalva. Oh, good.

                STATEMENT OF ASHLEY KORENBLAT, 
                  OWNER, WESTER SPIRIT CYCLING

    Ms. Korenblat. My name is Ashley Korenblat. Thank you for 
having me. I live in Moab, Utah, with my husband and two-year-
old son. I grew up in Arkansas, went to school at Dartmouth, 
got an MBA at the tech school, worked on Wall Street. Then I 
made the entrepreneurial leap and ran a bicycle factory that 
used aerospace materials to make bikes.
    I am not an outfitter on the public lands. I operate guided 
bicycle tours in 17 states. I am a former president of the 
International Mountain Bicycling Association, IMBA. I am 
currently serving my second term on the Utah BLM Resource 
Advisory Council, and I am also on a task force for the 
Governor of Utah that is exploring outdoor recreation economic 
systems--not a good acronym.
    I have spent the last 10 years traveling through the public 
lands developing bike trips. My company, Western Spirit 
Cycling, holds permits from the BLM, the Forest Service and the 
Park Service. Our guests join us for week-long trips throughout 
the backcountry, and on those trips they need not just a bike 
and a helmet, but they need a tent and a sleeping bag and a 
good raincoat, making us one of the links in the $730 billion 
outdoor industry.
    Some of our trips are truly challenging, five days above 
10,000 feet on the Colorado Trail, and some are very mellow 
like the Grand Staircase, which my mother-in-law did for her 
seventieth birthday.
    What if every American had the opportunity to spend a week 
a year traveling through our public lands under their own 
steam, sleeping under the stars? I think that would go a long 
way toward solving a lot of problems.
    Our public lands are an incredible resource that belong to 
all of us, and there are 10,000 companies like mine who take 
people into the public lands, and our businesses all depend on 
access to land in its natural form.
    The restorative powers of a trip to the backcountry are 
well known. Companies such as the National Outdoor Leadership 
School and Outward Bound run trips in the backcountry 18-day, 
21-day trips. Everyone in this room would be a better person if 
they did those trips. The outdoors really has the power to heal 
and make us stronger people. Being outside in the vast 
landscape of our public lands is integral to the human 
condition.
    Now, many of these lands, of course, were set aside 
originally for resource extraction, and the idea of managing 
them for recreation is a relatively new idea. In many places 
recreation and resource extraction can co-exist, but 
increasingly we are being forced to choose. You think what we 
could do is just a simple cost/benefit analysis. Well, the 
challenge is that by definition an oil well has a projected 
life span, but land in its pristine form can provide revenues 
to the outdoor industry forever.
    So the question is what do we do to make sure that the two 
things can co-exist? And you as leaders of our society, one of 
the questions I am wondering about is, is it absolutely 
necessary to find every last drop of oil on our public lands 
when we know that oil is by definition an non-renewable 
resource? It is finite. And if this is the curve, aren't we on 
the downward slope? Aren't we past the peak?
    I don't think my grandchildren are going to be burning oil 
to travel, and I also think there is as much money to be made 
on alternative sources of fuel as there was in the oil 
industry.
    Ultimately, it is a long-term versus a short-term question. 
Our public lands are the backbone of the $730 billion outdoor 
industry which created 6.5 million jobs and brought 88 billion 
in tax revenues, and it is going nothing but up. In the last 25 
years, we have seen nothing but growth. There are two factors 
contributing to the growth: population increase and the fact 
that more people want to be outside. But as demands continues 
to increase, supply is dwindling, and so at some point we are 
going to be in the situation where only the wealthiest 
Americans are going to be able to travel to our pristine 
landscapes on our public lands.
    So despite my plea here today you might look at the map and 
say, well, there are millions of acres out there, and an oil 
well only takes up a quarter acre. But it is not just the 
footprint, it is the roads, it is the gases, it is what it does 
to the views. I have a trip where we ride by a giant sign that 
says ``Beware of poisonous gases'' as we ride by the oil well, 
and I tell my guests if you get a flat tire here, just keep 
peddling.
    So my real worry is that I am going to have a group call me 
from the Kokopelli Trail and say, you know, we are at camp on 
night three of the Kokopelli Trail and there is a bunch of 
trucks here and they are digging a big hole. So then all of a 
sudden I am losing a camp which I may not be able to replace, 
so I may lose that whole trip from my product line.
    And while I am focusing mostly on permit holders, we 
represent only 40 percent of the recreation that is taking 
place, and Americans of all types recreate on the public lands, 
and while not every land manager has exact data on who is 
recreating, they definitely know what the patterns are. So, I 
am urging you to include language in the bill that requires the 
BLM and the Forest Service to consider the recreation economy 
before issuing leases.
    [The prepared statement of Ms. Korenblat follows:]

   Statement of Ashley Korenblat, President Western Spirit Cycling, 
                      Outdoor Industry Association

Background
    Thank you for inviting me. My name is Ashley Korenblat and I live 
in Moab, Utah with my husband and two year old son. I am originally 
from Arkansas, went to college at Dartmouth and received an MBA from 
the Tuck School there. After a stint on Wall Street I was hired to run 
a bicycle factory in Massachusetts called Merlin Metalworks. We used 
aerospace materials to produce what at that time many felt was the best 
bicycle in the world. We sold that company and now I am an outfitter on 
the public lands. I own a bicycle touring company which operates in 17 
states. I am a former President of the International Mountain Bicycling 
Association (IMBA) and am currently serving on the Utah BLM Resource 
Advisory Council and on a task force formed by the Governor of Utah to 
study Outdoor Recreation Economic Ecosystems.
    I have spent the last 10 years traveling through our public lands 
developing bike trips. My company, Western Spirit Cycling, holds 
permits on all types of public lands: BLM, Forest Service, and both 
State and National Parks.
    We operate under special use permits, incidental business permits, 
and commercial use permits from:

        The USDA Forest Service in the following National Forests:
        Boise, Coronado, Dixie, Grand Mesa, Gunnison, Kaibab, Manti La 
        Sal, San Juan, Sawtooth, Sierra Vista, Uncompahgre, Challis, 
        Clearwater, Beaverhead-Deerlodge, Caribou-Targhee, Black Hills, 
        Mount Hood, Umpqua, Nantahala, White Mountain, Monongahela, and 
        Pisgah National Forests and the Dakota Prairie Grasslands.

        The Bureau of Land Management in the following resource areas:
        San Juan Resource Area; Henry Mountain Field Station; Moab, 
        Arizona Strip and Grand Junction Field Offices; Grand Staircase 
        National Monument

        The National Park Service in the following National Parks:
        Bryce, Zion, Capitol Reef, Grand Canyon, Crater Lake and Blue 
        Ridge Parkway National Parks. Western Spirit is a 
        concessionaire in Canyonlands National Park.
    Our guests join us for weeklong trips into the backcountry by 
bicycle. And on these trips, they need rain coats and pants. They need 
tents and sleeping bags. They need bicycles and helmets. Our guests 
stay in nearby hotels and eat in local restaurants before and after 
their trips, making us just one of the links in the value chain that 
makes up the $730 billion outdoor industry.
    Some of our trips are for the truly hearty and involve five days 
above 10,000 feet on the Colorado Trail, while others are quite gentle. 
In fact, my mother-in-law did our trip in the Grand Staircase Escalante 
National Monument for her 70th birthday. She had not been on a bike in 
years. We got her a good rain coat and a warm sleeping bag and she had 
a wonderful time.
The Power of the Backcountry
    What if every person in our country had the opportunity to spend 
one week a year traveling under his or her own steam through our public 
lands camping under the stars? I believe such a development would lead 
to progress on some serious problems from rising health care costs to 
global warming. Our public lands are an incredible resource that belong 
to all of us.
    There are over 10,000 companies, like mine, who provide 
recreational opportunities on our public lands. From Barb and Harlan 
Opdahl at Triple O Outfitters who take people elk hunting on the Lewis 
and Clark trail to large river companies, like OARS, who run white 
water river trips on many of the major rivers throughout the US. What 
do all of these outfitters have in common, besides the fact that we all 
make people buy raincoats and pants? Our businesses, and the companies 
that make the rain gear, depend on land in its natural form.
    The restorative powers of a trip to the backcountry are well known. 
As Theodore Roosevelt once said,
        ``It is an incalculable added pleasure to anyone's sum of 
        happiness if he or she grows to know, even slightly and 
        imperfectly, how to read and enjoy the wonder-book of nature.''
    Companies such as the National Outdoor Leadership School and 
Outward Bound continue to grow and thrive because the trips these 
organizations provide make you a better person. There you are, a three 
day walk from a paved road. The wind is howling and the storm is 
bearing down upon you. You are nervous and unsure, because you are out 
here for 18 more days. But you put on your raincoat and your rain pants 
and you keep moving. You dig into your suitcase of courage and you make 
it over the pass to camp. There, you set up your tent and make a cup of 
tea, and then the storm blows away and you are left with a beautiful 
sunset.
    I have seen it myself many times, people arrive for their bike 
trips, clean, a little pale, and nervous. There is a bit of panic 
associated with leaving the grid. Their cell phones will not work out 
there, and that worries them. Then they come back after having lived 
through the storm, having climbed over the pass, having swooped down 
the other side, having really seen the stars--and they actually look 
different. They are dirty, but they are no longer nervous. They have 
reconnected with themselves and the earth and they have a kind of glow. 
More than 65% of our customers come back every year.
    The proliferation of wilderness therapy programs for at-risk youth 
is further testimony to the power of the backcountry. The out-of-doors 
has the power to heal and make us stronger. Being outside in the vast 
landscape of our public lands is integral to the human experience.
Making a Living on our Public Lands
    Many of these lands were originally set aside for resource 
extraction, and the idea of managing them for recreational purposes is 
relatively new. There are many places where resource extraction and 
recreation co-exist. Yet in more and more cases a choice must be made 
and a simple cost benefit analysis is difficult to perform. Most 
resource extraction has a lifespan, defined by the productive life of 
the mine or well, while revenues from recreation can continue and 
increase in perpetuity.
    In addition, many long-time Westerners deeply resent the federal 
lands in their states. How can they make a living if 87% of their 
county is public land? Well, one way is to open the lands to oil and 
gas exploration. The county government will receive a portion of the 
revenues, and in some areas, where the locals have the necessary 
skills, they will be employed. In my direct experience, it is more 
likely that you will begin to see trucks with out-of-state license 
plates and all the hotels will be full just for those few months that 
the wells are being tapped. And if the boom continues, some of the 
local high school kids will become oil drilling experts and about the 
time you think your son is going to settle down, he gets a call to head 
to Alaska or maybe the Middle East to make some serious money, and the 
bust has begun.
    Meanwhile, Grand County, Utah where I live, is 94% public land and 
that is exactly why I can make a living there. If my son chooses both 
he and his children could also make a living there. Our company started 
with bicycle trips on nearby BLM lands and in Canyonlands National 
Park. I have been in many meetings with county commissioners who 
express great interest in how our company works. Many of them have 
begun to see the business opportunities which recreation on our public 
lands can provide. The bottom line here is that land in its pristine 
form has long term economic value.
The Maah Daah Hey Trail in North Dakota
    In 1999 a 96 mile multi-use trail was built to link both districts 
of Theodore Roosevelt National Park through the Little Missouri 
National Grasslands which are managed by the U.S. Forest Service. The 
Forest Service issued a competitive prospectus for permits on the 
trail, and my company, Western Spirit Cycling, was awarded a permit. 
The state of North Dakota began a marketing campaign to promote the 
trail. Advertisements showing the trail snaking through the grass in 
and out of the badlands geology appeared in all the outdoor magazines. 
The International Mountain Bicycling Association gave the trail the 
coveted ``Epic'' designation. Everything was on track to put North 
Dakota on the map as a world class mountain bike destination.
    There was only one problem, this area of the National Grasslands is 
an oil field with more than 250 active wells. The trail was put in 
around these wells, and while there are many pristine vistas, there are 
not many places to camp that are not in sight of the wells. In fact, 
there is one section of trail that goes right along a fence next to a 
well which bears a giant sign that says beware of poisonous gases. So 
my guides tell my guests that if they get a flat tire in this area, or 
have any other problems, do keep moving--and perhaps hold your breath 
until you get safely away from the area.
    On top of these challenges, the current federal energy policy has 
resulted in a five-fold increase in applications to drill in the 
region. And since none of the land management agencies have any 
obligation to inform recreational permit holders about changes in 
resource extraction, we could roll into camp next week with a group of 
paying guests and find big trucks, big lights and a big hole in the 
ground. It is beginning to look like North Dakota made a bad 
investment. What steps need to be taken to insure that recreation and 
resource extraction can coexist?
The Outdoor Industry and Resource Extraction
    To answer this question, we must first ask ourselves as a society, 
and you must ask yourselves as leaders of our society, is it absolutely 
necessary to recover every last drop of oil in the US? We know that oil 
is a finite resource. So since we must begin to transition to 
alternative fuels, shouldn't you, the long term stewards of our nation 
initiate that transition? One way to do that would be to require that 
outdoor recreation be considered before oil leases are awarded.
    Ultimately, this is a long term versus short term question. Our 
public lands are the backbone of the $730 billion dollar outdoor 
industry, which contributes 6.5 million jobs and more than $88 billion 
in annual state and federal tax revenues. This includes bicycling, 
camping, fishing, hunting, paddling, snowsports, wildlife viewing, and 
trail running, hiking, and climbing. And there is nowhere to go but up, 
the outdoor industry has seen consistent growth over the past 25 years.
    There are two factors contributing to this growth: increased 
population and increased awareness that outdoor exercise greatly 
contributes to both health and happiness So, while demand is 
increasing, supply is dwindling. A microcosm of what the future might 
hold can be seen in the Grand Canyon. Demand for permits to float the 
Colorado River through the Grand Canyon has skyrocketed. Land managers 
rightly control access to the canyon to avoid damage to the fragile 
environment. Commercial outfitters often book all their trips for the 
year in a single day. Private parties have been known to wait over 10 
years to receive a permit. Recently a lottery has been instituted to 
provide better access, but the reality is that right now, only wealthy 
people with flexible schedules get to float the Grand Canyon.
    If we insist on extracting every drop of oil from our public lands 
there will be fewer and fewer places that are truly in their natural 
state. And the law of supply and demand will result in a situation 
where only the wealthiest Americans will be able to visit those spots.
Opportunities for Outdoor Recreation for all Americans
    Despite my plea here today, you may look at the maps and the 
millions and millions of acres managed by our federal agencies and 
think how can a oil well, which often occupies less than a quarter acre 
be such a big problem. The consequences of digging the well spread well 
beyond its mere footprint. There are the roads that must be put in to 
reach it and there is the noise and there is its particular location. 
It is getting harder and harder to find contiguous sections of the 
backcountry to run an 18 day trip, or in some cases, even a 5 day trip. 
When people are traveling under their own steam, you can't simply 
change the route or just keep going to get away from the well. On an 
introductory bike trip, we really don't want to ride much further than 
20 to 30 miles in a day. So, if a well pops up in one of our camps, we 
will have to change the entire route of the trip, which often is not 
possible. And suddenly one of the trips in my product line is gone.

        USDA Forest Service
        While we have long standing relationships with many of the 
        rangers with whom we work, they have no official obligation to 
        contact us should a lease be sold on one of our trip routes.

        Bureau of Land Management
        The BLM is legally required to consider wildlife, paleontology, 
        and archaeology in both the planning and development stages of 
        oil and gas leasing, but there is no such requirement regarding 
        recreation.

        National Park Service
        While the Parks themselves are protected from actual drilling, 
        to provide a true backcountry experience we must protect the 
        viewshed from the park and avoid the noise.
    While my testimony here has focused on permit holders on our public 
lands, we probably represent less than 40% of the recreation that is 
taking place. Americans of all types recreate on our public lands in 
thousands of ways. While not every land manager has perfect data 
regarding visitation, they are all aware of use and visitation patterns 
that would be interrupted by drilling.
    If we continue to pursue aggressive resource extraction on the 
public lands without regard to increased recreational demands we will 
sacrifice the long term for the short term. By definition an oil well 
is a short term economic engine, whereas land in its pristine form can 
provide a living for guides and outfitters and those that make tents, 
and raincoats and bicycles and boats forever. So I urge you to add 
language to your bill requiring all land management agencies to 
consider long term recreational patterns, visitation, economic 
benefits, and social impacts before leases are awarded.
                                 ______
                                 

   Response to questions submitted for the record by Ashley Korenblat

1.  Our federal lands are precious resources to be utilized to the 
        benefit of all Americans. At the same time, these resources are 
        needed to provide fuel for the American public. Do you believe 
        there is a balance in which we can maintain the federal lands, 
        but also provide fuel for the economy and sustainability of the 
        American public?
    Yes, and one step towards maintaining that balance would be to add 
language to the Energy Bill which would require land managers to 
consider the recreation economy before lands are leased for oil and gas 
activities. Since oil and gas are non-renewable resources, an oil or 
gas well is a short term economic engine, whereas land in its pristine 
form can fuel the outdoor industry indefinitely. In most cases, 
recreation considerations would result in reducing leased acreage by 
less than 3%.
    Some members of the committee may feel that sacrificing even as 
little as 3% is not possible given the intense and growing demand for 
energy worldwide. Yet we all agree that oil and gas are finite 
resources. Prices will go up as supply dwindles. As a business person, 
I ask you to have more faith in the scientists and entrepreneurs of our 
country. Necessity will lead to invention and the necessity is upon us. 
We will find a cheaper cleaner source of energy and clinging hopelessly 
to the oil and gas establishment is only delaying that transition.
    The small percentage which the Outdoor Industry requires will not 
solve the energy crisis or delay the need to begin the transition. I 
have been warned that you may see the consideration of recreational 
needs as micromanagement within the Energy Bill, but if those lands are 
all leased, you will do permanent damage to the $730 billion outdoor 
industry.
    You speak of sustaining the American public, how can we sustain 
them if we do not sustain the earth? In my business, I have already 
noticed distinct changes in weather patterns all over the US. Global 
warming and its dramatic effect on weather patterns will ultimately do 
more damage to the U.S. economy than the very predictable rise in fuel 
prices. Businesses can plan for increased fuel prices, they cannot plan 
for unpredictable natural disasters.
    As leaders of our nation, you have the opportunity to make one of 
the most important decisions in the history of mankind. Initiate the 
transition away from oil and gas dependency before we have done 
irreversible damage to the earth and its ability to sustain the 
American public. Including language to protect the recreation economy 
in the Energy Bill is a step you can take in the right direction.
                                 ______
                                 
    Mr. Grijalva. Thank you very much.
    Ms. Moseley.

                STATEMENT OF CLAIRE M. MOSELEY, 
           EXECUTIVE DIRECTOR, PUBLIC LANDS ADVOCACY

    Ms. Moseley. Thank you, Mr. Chairman and Mr. Pearce for 
inviting me to testify here today.
    I am Claire Moseley. I am Executive Director of Public 
Lands Advocacy in Denver, Colorado. At the risk of divulging my 
age, I have been working on public lands issues for 29 years, 
since 1978. Since that time I have seen oil and gas come under 
increasing criticism for turning to the last frontier left in 
the United States, public lands for domestic energy supplies, 
and it has become a partisan issue, which is unfortunate.
    Yes, energy is a large, even huge, industry, but it 
wouldn't exist if there weren't a huge demand for the goods and 
services it provides. We currently import 60 percent of our 
oil. We import 15 percent of our natural gas, but we shouldn't 
have to import gas. We have adequate natural gas resources in 
the U.S. to avoid the same problem we have with oil.
    A fact that appears to be consistently ignored is that 
consumer demands are not diminishing. They are increasing at a 
rate where demand is projected to outstrip supply by 2025 
unless something is done to avoid it.
    According to the USGS, an estimated 69 percent of oil and 
51 percent of natural gas lie beneath public lands. However, we 
are locked out of most of these areas since 51 percent of the 
oil and 27 percent of the gas is entirely withdrawn from 
leasing. The lands not withdrawn are subjected to high-level 
lease stipulations, restrictions, and conditions of approval to 
the point where in many areas we are subject to no surface 
occupancy.
    This could hardly be construed as leasing being the 
dominant use of the public lands. In fact, as you hear earlier 
this morning, the operations on public lands, my figure is less 
than 1 percent, BLM said less than 2 percent. Regardless of 
what it is, it is still very minimal. There is grumbling that 
industry doesn't deal fairly with surface landowners who bought 
land underlain by Federal minerals. Yet industry follows the 
law and the regulations, and makes a good faith effort to reach 
agreements with the landowners for surface damages. BLM found 
in recent studies that were discussed this morning under EPCA 
that of the thousands of wells drilled on split estate lands 
fewer than 20 cases exist where they have had to bond off, so 
to speak, onto those properties.
    It must also be noted that BLM determines the amount of the 
bonds. It is not a function of the industry. Nevertheless, 
industry has taken many steps, as you all know in my written 
testimony, to try to improve the relationships with the 
landowners. States have also passed legislation that have 
addressed at a local level issues that address their specific 
needs. There is no need for a one-size-fits-all approach to 
this issue.
    Recently, the statutory categorical exclusions for oil and 
gas activities have come under fire. There are concerns that 
the CXes will bypass the NEPA process, but that is not the 
case. Categorical exclusions are actually part of the NEPA 
process. They are only available for use in cases where 
adequate NEPA analysis has already been done and no good reason 
exists to go through a new costly analysis.
    I would also like to point out that just because an action 
is excluded from additional review that the lease stipulations, 
the permit conditions of approval and site-specific inspections 
to determine resource conflicts are still required, including 
evaluation of wildlife concerns. Elimination of these 
categorical exclusions will slow down critically needed 
development of new resources for no good reason.
    Produced water from the Powder River Basin has also come 
under fire. Companies who produce coalbed natural gas are 
allowed by state and Federal law to discharge excess water into 
the Tongue River and its tributaries because it meets the water 
quality standards that have been set by the Federal government 
and by the state departments of environmental quality. No 
impairment has been found as a result of the several studies. 
Nevertheless, it has been found that certain vegetation, 
irrigation and farming practices may need to be changed because 
of the naturally occurring sodium content of the river water.
    In conclusion, PLA urges the members of these Subcommittees 
to recognize that the issues I have discussed this morning do 
not require Federal action, except for one. We need to allow 
the processes established in the Energy Policy Act to remain in 
force. It took many years to determine what would work best to 
ensure the U.S. can meet its energy needs in the future by 
improving its domestic supplies and while protecting the 
environment. We need to make sure we avoid an embargo-like 
situation such as we had in the seventies.
    I appreciate this opportunity, and welcome any questions.
    [The prepared statement of Ms. Moseley follows:]

           Statement of Claire Moseley, Executive Director, 
                         Public Lands Advocacy

    Mr. Chairman Grijalva and Mr. Chairman Costa and members of the 
Subcommittees, my name is Claire Moseley, Executive Director of Public 
Lands Advocacy (PLA) based in Denver, Colorado. PLA is a nonprofit 
trade association whose members include independent and major oil and 
gas producers as well as nonprofit trade and professional organizations 
that have joined together to foster environmentally sound exploration 
and production on public lands. I would like to thank the Subcommittee 
on Parks, Forests and Public Lands and the Subcommittee on Energy and 
Mineral Resources for the opportunity to testify at this Oversight 
Hearing on ``Land-Use Issues Associated with Onshore Oil and Gas 
Leasing and Development.''
    Natural gas is extremely important to the nation, not just to the 
petroleum industry or the states where the resources are produced. 
According to Energy Information Administration (EIA), the highest 
demand states for natural gas are: Texas, California, Louisiana, New 
York, Illinois, Michigan, Ohio, Florida, Pennsylvania, and New Jersey. 
Conversely, the Rocky Mountain States (or Public Land States) produce 
much of the natural gas required to keep the standard of living and 
economies of the rest of the nation at the levels they expect. Meeting 
American consumer demands for energy, which is expected to increase 23 
percent by 2025, requires a tremendous investment by both industry and 
the Federal government to find and produce oil and gas, refine and 
distribute them and market the wide variety of products derived from 
them.
    It should be noted that the energy we consume today is possible 
only through investments made years ago, which includes energy research 
and development, acquisition of 3D geophysical surveys, and development 
of new drilling, completion and production technologies; all of which 
have has resulted in a smaller, less obtrusive footprint and improved 
environmental and reclamation practices. Our industry continues to 
pioneer the development of alternative energy and to expand the use of 
existing sources of energy. According to the American Petroleum 
Institute, from 2000 to 2005, the U.S. oil and natural gas industry 
invested an estimated $98 billion in emerging energy technologies, 
including renewables, frontier hydrocarbons such as oil shale, tar 
sands, and gas-to-liquids. This represents almost 75 percent of the 
total $135 billion spent on emerging technologies by all U.S. companies 
and the federal government. Industry is also actively investing in 
second generation biofuels research and research to find better ways to 
reduce greenhouse gases.
    According to the United States Geological Survey (USGS) an 
estimated 69 percent of the nation's undiscovered oil and 51 percent of 
its natural gas resources lie beneath Federal public lands. However, 
for much of the last century, most of the oil and gas was produced from 
state and private lands. As these resources have become depleted, 
industry has been forced to seek out new sources on public lands to 
meet growing demand for energy supplies. It is important to our 
discussion today to put industry's activities on the public lands into 
proper context. Industry does not seek out new resources from withdrawn 
lands such as Wilderness Areas, National Parks, National Monuments, 
Wilderness Study Areas, Wild and Scenic Rivers or National Wildlife 
Refuges, which comprise nearly 50 percent of Federal land, but rather 
on those lands found compatible with oil and gas leasing and 
development through the federal land use planning process.
    BLM is responsible for carrying out a variety of programs for the 
management and conservation of resources on 261.8 million surface 
acres, as well as 700 million acres of subsurface mineral estate, These 
public lands make up about 13 percent of the total land surface of the 
United States and more than 40 percent of all land managed by the 
Federal government. In FY 2005, the Federal Treasury collected over 
$2.3 billion from mineral royalties, rents and bonuses, half of which 
went back to the States.
    Onshore public lands, particularly those in the Rocky Mountain 
West, are vitally important to the energy future of the United States. 
According to the EIA, the Rocky Mountain region is on the verge of 
surpassing the Gulf Coast as the largest supplier of natural gas to the 
nation. The National Petroleum Council in its 2003 study, Balancing 
Natural Gas Policy--Fueling the Demands of a Growing Economy, found 
that ``abundant natural gas resources exist in North America'' and 
identified the Rockies region as the most prospective area for 
development of new natural gas supplies. The study cautions, however, 
that ``the recent tightening of the natural gas supply/demand balance 
places greater urgency on addressing the future of this important 
energy source and resolving conflicting policies that favor natural gas 
usage, but hinder its supply'' and points out that new and continued 
development of this vital resource can occur only if the importance of 
allowing reasonable access to natural gas reserves is recognized.
    The Nation is in desperate need of reasonable energy policies that 
provide access to conventional energy supplies, encourage energy 
efficiency, and promote continued development of new energy 
technologies and to expand the use of existing sources of energy. 
Clearly, there is a great need for reasonable access to public lands 
and minerals.
OIL AND GAS LEASING
    The Mineral Leasing Act of 1920, as amended, and the Mineral 
Leasing Act for Acquired Lands of 1947, as amended, give the Bureau of 
Land Management (BLM) responsibility for oil and gas leasing on public 
lands administered by BLM, National Forest, and other Federal lands, as 
well as private lands where mineral rights are retained by the Federal 
Government. Public lands are available for oil and gas leasing only 
after they have been evaluated through the BLM's multiple-use planning 
process. That is not, however, the only analysis that is conducted 
before a lease is issued and drilling activities are permitted.
      Before a lease can actually be issued, BLM conducts a 
Determination of NEPA Adequacy (DNA) to ensure resource conditions have 
not changed since the Resource Management Plan (RMP) was completed and 
that leasing is still an appropriate use of the area.
      After a lease has been issued and a company seeks to 
access its lease for exploration or development, a project level 
Environmental Assessment (EA) or Environmental Impact Statement (EIS) 
is prepared which analyzes and discloses the impacts of the proposed 
undertaking.
      When a specific well location is identified by an oil and 
gas operator, a subsequent site-specific NEPA analysis and onsite 
inspection is conducted before the drilling permit is approved.
    As can be seen, before surface disturbance activities for oil and 
gas related activities can occur several levels of NEPA analysis have 
taken place, all of which are subject to public involvement. It must 
also be noted that during each level of analysis, new mitigation 
requirements to protect sensitive resource values are often identified 
and imposed by the land management agency.
    Recently, disingenuous claims have been raised that BLM's 
predominant focus is on leasing for oil and gas. The oil and gas 
program is one of many priorities for BLM, ranging from cultural 
resources to water and wildlife, so it is simply untrue that oil and 
gas dominates over other programs despite the revenue it generates for 
the Federal Treasury. Moreover the BLM works with states with respect 
to air and water quality issues. According to BLM figures, of the $3.2 
billion collected in revenue from BLM programs in FY 04, $2.4 billion 
were received in mineral royalties, lease rentals and bonus bids. The 
remaining revenue of $778,411,189 was received from grazing, 
recreation, timber, rights-of-way and other BLM programs.
    Despite the huge revenue generated from oil and gas activities, 
producing oil and gas leases cover less than 1/2 of 1 percent of the 
261.8 million acres of public lands and the additional 700 million 
acres of federal mineral estate. Oil and gas operations on these leases 
are subject to varying levels of restrictions imposed through the land 
use planning process to protect other resources associated with these 
leased lands. In addition, proposed activities are required to conform 
to with BLM supervised environmental analyses, either through an EA or 
an EIS, both of which are driven by public involvement.
    In late 2006, the Departments of Interior, Agriculture and Energy, 
through their respective agencies, completed a study required by 
Congress through the Energy Policy Act of 2005, which expanded upon on 
an earlier report published in 2003 pursuant to the Energy Policy and 
Conservation Act of 2000, or EPCA. In the 2003 report, the agencies 
were only required to analyze actual stipulations placed on leases. 
However, the agencies were directed by the Energy Policy Act of 2005 to 
also consider conditions of approval on specific projects or permits 
that are not included as lease stipulations. The eleven areas 
inventoried in the 2006 study included six new oil and gas basins in 
Alaska, the Rocky Mountain West and the East, in addition to the five 
basins studied in 2003. The newly inventoried area is estimated to 
contain 187 trillion cubic feet of natural gas and 21 billion barrels 
of oil, which represents 76 percent of onshore Federal oil and gas 
resources.
    Within the 99 million acres inventoried, the 2006 study found that 
just 3 percent of onshore Federal oil and 13 percent of onshore Federal 
gas are accessible under standard lease terms, while 46 percent of 
onshore Federal oil and 60 percent of onshore Federal gas are subject 
to additional restrictions, including timing limitations for wildlife 
concerns, controlled surface use for cultural or other sensitive 
resources, as well as no surface occupancy which often renders the 
lease essentially useless. The study found that in the inventory areas, 
51 percent of the oil and 27 percent of the natural gas reserves on 
federal lands are presently closed to leasing. These figures clearly 
demonstrate that while the oil and gas program is, indeed, a priority 
program for the agencies, the program is administered with overriding 
protection of other values.
    Conclusion: PLA urges that a balance between oil and gas 
exploration and development and the protection of the environment and 
other uses be maintained. Despite certain claims, in reality this has 
not yet occurred because only 3 percent of onshore Federal oil and 13 
percent of onshore Federal gas are accessible under standard lease 
terms, while 46 percent of onshore Federal oil and 60 percent of 
onshore Federal gas are subject to additional restrictions, including 
timing limitations for wildlife concerns, controlled surface use for 
cultural or other sensitive resources, as well as no surface occupancy. 
Of greatest concern and according to BLM's own figures, 51 percent of 
the estimated oil and 27 percent of the gas on Federal lands are 
presently closed to leasing.
    We acknowledge that the Federal government is following its 
multiple-use mandate from the Federal Land Policy and Management Act 
(FLPMA) by allowing oil and gas activities to occur. We strongly urge, 
however, that production of new oil and gas supplies, along with 
protection of the environment and the interests of private landowners 
be better balanced for the sake of the country's future.
SPLIT ESTATE
    Surface owners and mineral owners are neighbors. Like many 
neighbors, they don't always agree. However, it must be recognized that 
multiple state and federal agencies regulate the oil and gas industry. 
As such, laws and rules are in place to protect land, water, air, 
humans and wildlife. Suggestions that federal minerals are developed 
without this oversight are patently false. Implications that problems 
exist between all surface and mineral owners are equally false. Where 
conflicts do exist, they constitute a very small percentage of the 
overall activity. Legislators and regulators should analyze the true 
magnitude of a perceived problem before reacting.
    Existing federal mineral / private surface reclamation bonding 
requirements:
      43 CFR 3104--``Prior to commencement of surface 
disturbing activities...an operator shall submit a surety or personal 
bond...to ensure compliance with the act, including complete and timely 
plugging of the well(s), and the restoration of any lands or surface 
waters adversely affected by lease operations after the abandonment or 
cessation of oil and gas operations on the lease(s)...''
      43 CFR 3104.2--``A lease bond may be posted...in the 
amount of not less than $10,000 for each lease conditioned with all of 
the terms of the lease...''
      43 CFR 3104.3(a)--``In lieu of lease bonds...operators 
may furnish a bond in an amount of not less than $25,000 covering all 
leases and operations in any one State.''
      43 CFR 3104.3(b)--``In lieu of lease bonds or statewide 
bonds...operators may furnish a bond in an amount of not less than 
$150,000 covering all leases and operations nationwide...''
    In addition to posting a reclamation bond, the oil and gas industry 
is also required by regulation to make good faith efforts to gain 
consent from all surface owners who obtained their property in 
accordance with the Stock Raising Homestead Act before BLM will approve 
an APD. If permission cannot be obtained, operators must comply with 
certain bonding requirements before it can proceed with development, as 
required by 43 CFR 3814.
    The Department of Interior recently revised its Onshore Order No. 1 
(OO#1) which clarifies the policy, procedures, and conditions for 
approving oil and gas operations on split estate lands.
    OO#1 directs that BLM will not consider an APD (Application for 
Permit to Drill) or SN (Sundry Notice) administratively or technically 
complete until the federal lessee or its operator certifies that an 
agreement with the surface owner exists, or until the lessee or its 
operator complies with bonding requirements under the Order. Compliance 
with the Order requires the Federal mineral lessee or its operator to 
enter into good-faith negotiations with the private surface owner to 
reach an agreement for the protection of surface resources and 
reclamation of the disturbed areas, or payment in lieu thereof, to 
compensate the surface owner for loss of crops and damages to tangible 
improvements, if any.
    Under the Stock Raising Homestead Act, there is a bonding 
requirement that has a $1,000 minimum at the discretion of the BLM 
officer to cover surface damages to tangible improvements or crops 
above and beyond the reclamation bond that is already in place. [43 CFR 
3814] With this bonding mechanism and policy guidance in place, the 
process encourages landowners to negotiate with operators for 
acceptable surface damage payments verses the minimum bond.
    Oil and gas operators are required to work through an exhaustive 
process that includes surface owners and multi-agency consultations or 
approvals before development may occur. Additionally, the federal 
permitting process provides the private landowner with the opportunity 
to participate in an on site inspection of the well location in order 
to accommodate the landowner's needs in conjunction with the federal 
decision to approve the well permit.
    BLM has a statutory obligation to maximize the recovery of federal 
minerals, avoid waste and prevent drainage from occurring while 
providing protection for other resources.
Wyoming Split Estate Initiative
    The Wyoming Split Estate Initiative was established in the summer 
of 2002 with the purpose of developing protocols that both oil and gas 
operators and surface owners could use to minimize or alleviate 
conflicts, while fostering cooperation between the parties. The 
Initiative recognizes that Surface Use Agreements are a private 
contract between the landowner and the operator.
    The partners involved in the initial organization of the Wyoming 
Split Estate Initiative include: Petroleum Association of Wyoming, 
Wyoming Wool Growers Association, Wyoming Stock Growers Association, 
and the Wyoming Farm Bureau Federation. The United States Department of 
Agriculture Natural Resources Conservation Service (NRCS), Wyoming 
Association of Conservation Districts (WACD), and the Wyoming Oil and 
Gas Conservation Commission (WOGCC) instrumental in developing this 
Protocol. The Wyoming Department of Agriculture Natural Resource and 
Mediation Board also participated. The overriding goals of this effort 
include:
      Minimizing or preventing conflict between landowners and 
operators while maximizing cooperation where oil and gas development 
occurs in areas of split ownership;
      Enhancing and encouraging responsible development of 
minerals and continued agricultural productivity while maintaining and 
promoting land, water, air, and wildlife resources;
      Providing a forum for conflict resolution.
    The Wyoming Split Estate Initiative is quite comprehensive and 
provides for public education and information regarding split estates 
where oil and gas development occurs; an advisory (technical review), 
mediation (if necessary), and binding/non-binding arbitration process 
(if necessary); suggestions for improved communication between the 
landowner and operator; and options/alternatives to be considered by 
both parties during the Surface Use Agreement negotiations.
    The final Wyoming Split Estate Initiative and implementation of 
educational programs and presentations were set in place July 7, 2003. 
The Initiative has been very successful in assisting parties to reach a 
successful negotiation. The Wyoming Department of Agriculture and 
Natural Resources Mediation Program, which was the basis of the Wyoming 
Split Estate Initiative, was also included in the Wyoming Surface 
Owners Accommodation law that was recently passed. The legislature saw 
that program as being very beneficial to the parties to resolve 
conflict and has had an 80 percent success ratio.
New Mexico ``Good Neighbor'' Initiatives
    The New Mexico Oil and Gas Association and its members, working 
with the Petroleum Recovery Research Center at New Mexico Tech, 
established the Good Neighbor Initiatives which demonstrates their 
dedication to responsible development of New Mexico's oil and gas 
resources. The Initiative acknowledges that responsible development 
includes good relationships with their neighbors and a commitment to 
environmental and human protection. NMOGA and member companies have 
pledged to be a ``Good Neighbor'' in the areas where they operate.
    This policy describes specific areas where industry actions as 
``good neighbors'' are especially important, i.e., companies will 
listen to the landowner, lessee permittee, and/or resident concerns and 
respond appropriately; personnel (company employees and contractors) 
must respect rights-of-way; protect livestock/wildlife; drive safely; 
report damages to public/private property to the appropriate parties; 
assure mechanical integrity of production systems; and ensure that 
personnel know and understand the rules and regulations applicable to 
our operations.
    In order to achieve industry's goals, a host of measures have been 
adopted:
      Companies will strive to increase communication with the 
landowner, lessee, permittee and/or residents
      Companies and company contractors will respect the 
property and the rights of others
      Companies will promote public safety
      Companies will promote the responsible maintenance and 
use of roads
      Companies will protect the environment
      Companies will emphasize education by educating our 
personnel about being a good neighbor
      Companies will communicate with appropriate government 
officials, including city and county officials
      The oil and gas industry will be proactive in building 
relationships with city, county, state and federal officials
    Adoption of these principles has significantly improved the working 
relationship between New Mexico oil and gas operators, land owners, and 
State and Federal government officials.
    It is important to note that other industry trade groups are 
working to adopt similar initiatives in their states as well as at the 
national level. Clearly, industry has taken the issue of working 
closely with its neighbors, landowners, and government officials very 
seriously, thereby advancing good relationships. To that end, industry 
is committed to ensuring private landowners are treated with respect 
and given opportunities to work with oil and gas operators in a 
meaningful way in order to eliminate possible conflicts.
    Conclusion: BLM has done a good job of soliciting feedback from 
landowners and industry alike in order to determine how best to address 
the split estate issue. Split-Estate Open Houses were held throughout 
the country in order to comply with directives contained in the Energy 
Policy Act of 2005 that required studies to be conducted on Split 
Estate Rights and Responsibilities under Existing Mineral and Land Laws 
and Surface Owner Consent Provisions under SMCRA. Through the open 
houses and comments received BLM found that very few actual conflicts 
existed and that the current process has proven to work reasonably 
well. This is supported by the fact that out of the thousands of wells 
drilled on split-estate lands, there are fewer than 25 cases, according 
to BLM, where surface use agreements could not be reached and operators 
were required to post a bond in accordance with the provisions of the 
Stock Raising Homestead Act.
    As you can see, the energy industry has implemented several new 
programs whereby codes of conduct have been established to ensure 
improved relationships with private landowners. To date, these have 
proven successful. Moreover, some western states have passed (Wyoming 
and New Mexico) or are considering legislation to address perceived 
problems between surface owners and mineral operators. Therefore, PLA 
recommends that Congress let this issue be handled at the state level 
in accordance with the specific needs identified locally.
CATEGORICAL EXCLUSIONS
    Categorical Exclusions represent one of three possible avenues for 
fulfilling the requirements of the National Environmental Policy Act, 
the other two being Environmental Assessments (EAs) and Environmental 
Impact Statements (EISs). Categorical Exclusions (CX) have been in use 
for many years and are defined at 40 CFR Sec. 1508.4:
        ``'Categorical exclusion' means a category of actions which do 
        not individually or cumulatively have a significant effect on 
        the human environment and which have been found to have no such 
        effect in procedures adopted by a Federal agency in 
        implementation of these regulations (Sec. 1507.3) and for 
        which, therefore, neither an environmental assessment nor an 
        environmental impact statement is required....Any procedures 
        under this section shall provide for extraordinary 
        circumstances in which a normally excluded action may have a 
        significant environmental effect.'' [Emphasis Added]
    Congress decided in the Energy Policy Act of 2005 to establish 
three statutory CXs associated with drilling of wells. Following is a 
discussion of these CXs and why they are appropriate.
    1.  Individual surface disturbances of less than 5 acres so long as 
the total surface disturbance on the lease is not greater than 150 
acres and site-specific analysis in a document prepared pursuant to 
NEPA has been previously completed.
    Before a lease can be issued, a land use plan specifying what 
stipulations are required to protect sensitive resource values will 
have been completed. The drilling permit would have to conform to these 
requirements and abide by any other conditions imposed by the agency to 
protect additional resource values. This provision would expedite minor 
drilling and permitting in areas outside an existing field. If a well 
is within an existing field, it would have to conform to the field 
development analysis.
    2.  Drilling an oil or gas well at a location or well pad site at 
which drilling has occurred previously within 5 years prior to the date 
of spudding the well.
    A site-specific analysis of a well location/site will have already 
been completed and approved and conditions already implemented. 
Therefore, it is wasteful and duplicative to conduct another analysis 
simply because the operator wants to drill another well from same pad, 
reenter the well bore or move the bore a few feet on the same pad. Even 
if additional wells would require a minor expansion (less than an acre) 
of the original pad, it will still result in much less disturbance than 
a brand new well pad.
    3.  Drilling an oil or gas well within a developed field for which 
an approved land use plan or any environmental document prepared 
pursuant to NEPA analyzed such drilling as a reasonably foreseeable 
activity, so long as such plan or document was approved within 5 years 
prior to the date of spudding the well.
    A cumulative impacts analysis in association with a field 
development NEPA document would have already been completed and as long 
as the well(s) is in conformance with the development analysis and the 
operating requirements prescribed therein there is no need for further 
analysis.
    The Western Governors' Association (WGA) passed a resolution urging 
Congress to amend Section 390 of the Act to ``remove [the 3rd] 
categorical exclusion for NEPA reviews for exploration or development 
of oil and gas in wildlife corridors and crucial wildlife habitat on 
federal lands. By removing the categorical exclusion, appropriate 
environmental site analysis will be completed as necessary to protect 
crucial wildlife habitat and significant migration corridors in the 
field of development.''
    In addition, the WGA has asked the ``Secretaries of Interior and 
Agriculture to consider placing a moratorium on such categorical 
exclusions in crucial habitat or migration corridors and to work 
collaboratively with the states to ensure that states' concerns in 
preserving wildlife migration corridors and crucial wildlife habitats 
are met.''
    The criticism that this statutory CX bypasses adequate NEPA 
analyses in favor of oil and gas exploration and development at the 
expense of other resources is unfounded. Depending upon the CX that is 
applicable for a specific action, there must have been a NEPA analysis 
that addressed such an action as part of its reasonably foreseeable 
development scenario or full field development analysis. Moreover, 
multiple wells could be developed from a location that had already been 
approved through a NEPA review.
    Conclusion: PLA believes the concern of the WGA may be eased by an 
understanding of the process used by BLM to grant CXs. It is not, by 
any stretch, a tool that can be used to elevate oil and gas uses over 
and above other uses or a policy that well permits will be approved 
without proper consideration of surface resource values. No CX can be 
approved unless the action meets the test of NEPA adequacy. It must 
also be recognized that all lease stipulations, conditions of approval, 
and operating standards are still in force. Furthermore, most of the 
CXs that have been approved were based upon project level environmental 
documentation rather than resource management plans. Nevertheless, even 
in situations where the RMPs are the basis for granting an exclusion, 
careful, site-specific consideration of all resources, including 
wildlife, is given before the exclusion is granted.
MONTANA/WYOMING WATER ISSUES
    My testimony this morning will focus on CBNG produced water in the 
Powder River Basin of Wyoming and Montana. Please do not infer my 
comments as being applicable to all oil and gas, especially CBNG 
produced water. CBNG produced water quality varies greatly throughout 
the producing basins in the United States.
    The quality of groundwater produced by coalbed natural gas 
operations has become a hotly debated issue among the public, State and 
Federal agencies, special interest groups and industry. As background, 
methane natural gas can be recovered from wells when groundwater 
contained in coal seams is pumped to the surface to reduce pressure 
allowing the gas to be recovered. Coalbed natural gas (CBNG) water is 
naturally-occurring groundwater; no chemicals or sodium are added to 
the water by drilling or production activities.
    According to studies conducted by independent researcher Schafer 
Limited LLC, using data supplied by the United States Geological Survey 
(USGS) and other agencies, the quality of Powder River Basin CBNG water 
is suitable for drinking, livestock, wildlife and crop irrigation uses. 
For example, water from coal seams is often used as drinking water 
because it is often of higher quality than other available water 
sources and meets primary Federal Safe Drinking Water Act and Montana 
Water Quality Act standards. Primary standards have been established 
for chemicals that may be harmful to public health. These standards 
consider the health effects of the chemicals as well as the feasibility 
of removing the harmful chemicals through treatment. There are other 
standards that apply to the esthetic value of water, i.e., taste, which 
does not mean the water isn't suitable for domestic uses; one just may 
not enjoy drinking it.
    CBNG water, because of its low to moderate level of salinity, is 
either the same or better than many local water sources used for 
livestock operations. According to studies conducted by the National 
Academy of Sciences (NAS), CBNG water is appropriate for livestock use. 
In fact, in parts of southeast Montana, many surface waters contain 
such high concentrations of salt, that CBNG water is placed in storage 
ponds to provide a source of stock water for use by livestock 
operations.
    The quality of irrigation water presents a more complex situation 
because water suitability rests with the types of crops being grown, 
the soil type and irrigation methods. Crops differ in their ability to 
tolerate salinity levels and soils differ in their ability to tolerate 
sodicity levels. Most of the forage crops (alfalfa) grown in the Powder 
River Basin are tolerant to the salinity (1500ppm TDS) of 
CBNG produced water The main factor when using CBNG produced water for 
irrigation is the permeability of the soil to be irrigated. 
Permeability must be high enough so the soil can be revitalized by 
using flood or sprinkler irrigation methods. Due to the sodicity of 
CBNG water, there is a high permeability hazard which limits its use on 
many soils. However, several managed irrigation sites using soils 
amendments such as gypsum (a form of calcium) are demonstrating that 
CBNG-produced water can be used for irrigation while protecting soil 
quality.
    With respect to protection of aquatic life, management 
opportunities exist where CBNG water is discharged into surface water. 
It must be noted that any such discharge must meet the requirements of 
the Federal Clean Water Act and the standards implemented by the 
Wyoming and Montana Departments of Environmental Quality, which require 
non-degradation of water in order to preserve it at its current levels. 
As such, concentrations of metals in produced water discharged into 
other waters are typically kept at levels that are lower than for 
personal drinking water. It is acknowledged that concern was raised by 
some researchers regarding the potential toxicity of bicarbonate ions 
in CBNG water that may be discharged into rivers. However, toxicity 
testing over time using CBNG water showed a much lower toxicity than 
was predicted by research models, indicating that discharge of CBNG 
water into Montana and Wyoming Rivers appears not to be harmful aquatic 
organisms.
Tongue River
    There have been recent claims that CBNG discharge into the Tongue 
River has had a detrimental impact on the river's water quality. This 
charge is unfounded. The USGS has been collecting daily streamflow data 
and periodic water quality samples at 12 monitoring sites, ranging from 
Monarch, WY (just north of Sheridan, WY) all the way up to Miles City, 
MT along the Tongue River since the early 1970s. These monitoring 
stations cover 7 mainstem sampling sites and 5 tributary sampling 
sites. The State of Montana and EPA have also conducted a major 
investigation of the Tongue, Powder and Rosebud Creek watershed as part 
of their Total Maximum Daily Load (TMDL) assessment program. As part of 
the assessment, a basin-wide predictive water quality model was 
developed for the Tongue River. The model uses climate data, land use 
and the quality and quantity of discharged water, including CBNG water.
    Results of these studies have found that the Tongue River above the 
T&Y Irrigation Diversion Dam where the CBNG development takes place is 
currently meeting water quality standards. In fact, it was found that 
even if all permitted discharges operated at their maximum allowable 
level (which rarely occurs) the River would continue to meet water 
quality standards established by both Federal and State laws.
    However, it has also been revealed that below the T&Y Irrigation 
Diversion Dam water quality standards are often exceeded during the 
irrigation season when nearly all the water in the Tongue River is 
diverted into the T&Y Canal. During this time, the water in the lower 
Tongue River is limited that that which is accumulated from localized 
groundwater inflows and irrigation return flow, which does not derive 
from CBNG water that was discharged above the T&Y Diversion Dam.
    Clearly this information demonstrates that the water quality of the 
Tongue River above the T&Y Diversion Dam was found unimpaired by CBNG 
development or any other use, while below the T&Y Diversion Dam 
impairment due to salinity and/or sodium exists and is caused by 
irrigation water uses.
    Additional data generated by the USGS Montana Water Science Center 
along the Tongue River Surface-Water-Quality Monitoring Network has 
also been collected through the Tongue River Agronomic Monitoring and 
Protection Program (AMPP) The AMPP study involved the identification of 
soil characteristics and the monitoring of soil quality and crop 
yields. The Study's finding indicated that soils physical and chemical 
characteristics did not change as a result of CBNG development but 
rather, differences in crop yields were the result of farming 
practices.
    Conclusion: All water produced from CBNG must meet specific 
narrative and numeric standards. According to data and studies 
conducted by independent researchers as well as USGS Montana Water 
Science Center and EPA it has been shown unequivocally that CBNG water 
discharged into the Tongue River and its tributaries has had no impact 
on the water quality of the River. Rather, it appears water quality 
problems associated with the Tongue River are caused by farming and 
irrigation practices. In addition, many landowners in the Powder River 
Basin have found that CBNG water provides many beneficial uses, 
including drinking water, livestock water and irrigation when it is 
coupled with various treatments. Consequently, there is no need for 
Congress to consider legislative measures to fix a problem that does 
not exist.
    Thank you for this opportunity to provide you with testimony this 
morning. I will be happy to answer any questions.
                                 ______
                                 

                         PUBLIC LANDS ADVOCACY

         10200 East Girard Avenue, Suite C-141, Denver CO 80231

   Phone (303) 303-750-3333 * Cell 303-506-1153 * Fax (866) 718-2692

                  Email [email protected]

                              May 24, 2007

The Honorable Jim Costa
Chairman, Energy and Mineral Resources Subcommittee
The Honorable Raul M. Grijalva
Chairman, National Parks, Forests and Public Lands Subcommittee
Committee on Natural Resources
The Honorable Stevan Pearce
Ranking Member of the Energy and Minerals Subcommittee
US House of Representatives
Washington, DC 20515

Re:  Response to Questions from April 26 Hearing, House Resources Joint 
Subcommittee on Parks, Forests and Public Lands and the Subcommittee on 
Energy and Mineral Resources Oversight Hearing on ``Land-Use Issues 
Associated with Onshore Oil and Gas Leasing and Development''

Dear Sirs:

    Public Lands Advocacy (PLA) appreciated the opportunity to provide 
testimony before the Joint Subcommittee oversight hearing on ``Land-Use 
Issues Associated with Onshore Oil and Gas Leasing and Development.'' 
Following are answers to your post-hearing questions.
1.  What, in your opinion and previous experience, would be the effect 
        of repealing Sec. 366 of EPAct 05 that require BLM be 
        accountable to a timeframe for the processing of Applications 
        of Permit to Drill?
    The 30-day approval time frame for Applications for Permit to Drill 
(APD) was part of a strategy by Congress to establish BLM 
accountability in the Federal oil and gas permitting process. Over the 
past decade, permit processing time frames slipped to a point where it 
would sometimes take the agency as long as 2 years to process a single 
APD, which led to a backlog of thousands of applications. Of note, many 
of these APDs were for in-fill development, i.e., new wells in existing 
fields for which the requirements of NEPA had already been met. As a 
result of the new time frame established in EPAct 2005, BLM has taken 
steps to monitor permit approvals to ensure they are acted upon in a 
timely manner.
    If Section 366 were repealed, it would mean domestic production of 
natural gas is not important to the Nation. Severe gas supply shortages 
would result, creating an even greater rift between supply and demand 
of the resource and higher prices for consumers.
    Production from traditional U.S. and Canadian basins is declining 
because these supplies are produced from mature fields. Therefore, it 
is crucial that new conventional and non-conventional sources of 
natural gas be developed, such as coalbed natural gas, tar sands and 
oil shale, on public lands. There are abundant North American natural 
gas resources in the Rocky Mountain region outside designated 
wilderness and national park-type lands that are presently closed to 
leasing which could play a key role in providing future natural gas 
supplies if Federal leasing and permitting processes are responsive to 
the need. Outside of leasing and development of new conventional and 
non-conventional resources, a key factor in meeting demand is to ensure 
permits are approved within a 30-day time frame, provided they meet the 
criteria of a complete APD and meet the environmental protection 
requirements established through land use and project level planning.
2.  As you know, oil and gas are a much sought after global commodity. 
        With state-owned companies and the OPEC in control of a 
        majority of the global market, do you feel the success of the 
        federal leasing program at the BLM has national security 
        implications?
    Yes. Although some new oil and gas fields have been discovered here 
in the US, energy demand has grown at a much higher rate than supply, 
which has caused us to become even more dependent on foreign imports of 
oil and natural gas. Also, there has been a shift from oil to gas 
because as a clean burning fuel, gas can replace oil in many of its 
traditional uses, such as home heating fuel, power generation, 
industrial use and, to limited extent, as a transportation fuel. 
However, the importance of bringing more natural gas to the North 
American market is crucial because in so doing future market volatility 
and fuel shortages can be diminished.
    Although the Rocky Mountain region is projected to contain nearly 
double the reserves of natural gas than both coasts and the Gulf of 
Mexico combined, many of these areas are off-limits to leasing. Since 
most sources of energy on private lands have already been discovered, 
it is crucial that we expand the search for new energy to Federal land. 
That is why the success of the BLM leasing program is of vital 
importance to the nation as a whole. For the U.S. to secure energy for 
our economy, government policies must create a level playing field for 
U.S. companies to ensure international competitiveness. The net effect 
of current U.S. policy serving to inhibit U.S. oil and gas production 
and to increase our reliance on imports is, in fact, a matter of 
national security.
Questions from Minority Members
1.  Why do we have federal split estates? In a split estate situation, 
        what is the dominant estate? Why? When one buys federal split 
        estate lands, is that land conditioned?
    The United States government encouraged settlement and economic 
development of the West by reserving the mineral estate in land patents 
granted to homesteaders and others. This approach opened western lands 
for immediate agricultural and ranching development and reserved the 
mineral rights for later development. Split estate occurs when there 
are different owners of the mineral rights and surface rights. There 
may be federal mineral ownership with private surface or private 
mineral ownership with federal surface.
    The split-estate lands in question are those where the surface 
rights and mineral rights were severed under the terms of the Nation's 
homesteading laws. These and other Federal laws give BLM explicit 
authority and direction for administering the development of Federal 
oil and natural gas resources beneath privately owned surface:
      Coal Lands Acts of 1909 and 1910
      Agricultural Entry Act of 1914
      Stock Raising Homestead Act of 1916
      Mineral Leasing Act of 1920 and amendments
      Federal Land Policy and Management Act of 1976
    It is important to remember that split estate owners obtained their 
surface lands subject to development of the mineral estate. Established 
legal doctrine preserves the ``dominance'' of the mineral estate 
reflecting the fact that the mineral estate would have no value if the 
mineral owner did not enjoy access to the minerals through reasonable 
terms. This dominance extends to federal minerals where the revenue 
generated to the Federal Treasury exceeds billions of dollars annually. 
In fact, it is the policy of the Federal government to retain mineral 
rights only when it is determined that mineral potential exists. When 
private landowners purchase their land, they are notified of the split 
estate situation as required by law.
    While in some states disclosure to buyers of severed surface rights 
is required, disclosure of the severed mineral estate may not have been 
common practice by realtors or sellers in areas where such requirements 
do not exist. Therefore, situations have arisen where surface owners 
are unaware that the Federal government has retained the mineral rights 
and that reasonable access to explore for and develop those minerals is 
required by Federal law.
    Thousands of leases have been issued on America's public lands for 
the purpose of providing clean burning natural gas supplies for the 
nation. Any efforts by the federal government to change existing split 
estate practices will impact the nation's domestic natural gas supply 
by imposing unreasonable burdens on lessees of the mineral estate.
2.  Other witnesses in their testimony advocate for Mr. Udall's H.R. 
        1180 because it would ``require reclamation of the site to 
        support the same uses it was capable of supporting prior to 
        development.'' Isn't is true that under BLM law, BLM requires 
        ``returning disturbed land as near to its pre-disturbed 
        condition as is reasonable practical or as specified in the 
        APD? Are these really different standards?
    According to Chapter 6 of the BLM's Gold Book, Surface Operating 
Standards and Guidelines for Oil and Gas Exploration and Development, 
Fourth Edition, 2006, it is required that ``at final abandonment, well 
locations, production facilities, and access roads must undergo 
``final'' reclamation so that the character and productivity of the 
land and water are restored. Planning for reclamation prior to 
construction is critical to achieving successful reclamation in the 
future--The long-term objective of final reclamation is to set the 
course for eventual ecosystem restoration, including the restoration of 
the natural vegetation community, hydrology, and wildlife habitats. In 
most cases, this means returning the land to a condition approximating 
or equal to that which existed prior to the disturbance.'' In order to 
ensure satisfactory reclamation, the Gold Book provides direction on 
the specific requirements that must be met, including a detailed 
Reclamation Plan that must accompany an APD that addresses:


                 ,--                                   ,

 Plugging the Well             Road Reclamation
 Pit Reclamation               Reclamation of Associated
 Site Preparation and Re-      Facilities
 vegetation                            Water well conversion
 Pipeline and Flowline         Final Reclamation
 Reclamation
 Well Site Reclamation
    BLM ensures these requirements are met by conducting a thorough 
inspection before granting final abandonment approval. In the event 
agency requirements are not met, BLM will not release the liability 
bond for the project until established standards are met.
    Clearly, BLM's enforcement authority to ensure reclamation is 
accomplished efficiently and appropriately is effective. No new 
legislative requirements are needed because extensive reclamation 
procedures and conditions are already in place.
    Thank you for affording PLA this opportunity to provide Congress 
with additional information and answers to your important questions. 
Please do not hesitate to contact me should you have additional 
questions or require further clarification.

                               Sincerely,

                             Claire Moseley

                                 ______
                                 
    Mr. Grijalva. Thank you for your testimony.
    Mr. Muggli.

                  STATEMENT OF ROGER MUGGLI, 
                NORTHERN PLAINS RESOURCE COUNCIL

    Mr. Muggli. Mr. Chairman, Members of the Subcommittee, 
thank you for the opportunity to testify here today.
    My name is Roger Muggli, and I am here to represent the 
Tongue and Yellowstone Irrigation District and it is located in 
Mile City, and in our district there is 9,400 acres of 
irrigated land and its water supply is from the Tongue River 12 
miles south of Mile City, and it has been in existence since 
1886.
    I am also representing my family farm, Muggli Brothers, 
Incorporated. I have been the chairman of this operation for 
the last 12 years, and we have 1,700 acres of irrigated land in 
this district.
    We have also built a feed processing plant to process the 
hay produced on our farm, and mixed with grain we make a 
pelletized livestock feed, and we sell 14,000 tons of this feed 
in the local area in any given winter.
    I am also here representing Northern Plains Resource 
Council, a family agricultural group that organizes Montana 
citizens to protect water quality, family farms, and ranches, 
and the unique quality of life we love here in Montana.
    My grandfather came here to this valley in 1925 and bought 
his first farm, and he was also manager and secretary of the 
Tongue and Yellowstone Irrigation District, and sometime later 
bought a few more farms, and so did my father when he came on 
line, and he became manager and secretary of the Tongue and 
Yellowstone Irrigation District as well in about 1957, and I 
was elected to the position in 1987, and the family has been 
actively involved in it for all of these years.
    I also recognized another problem we had was fish going 
into the canal, and I worked hard to come up with a plan to 
divert the fish from our irrigation canal back into the river. 
The 1987 date is when I started, and it came on line in 1999.
    I guess I am here today to talk about coalbed methane gas 
and its production, and how it is done. The first process is 
there is a main. The main thing about that is the pressure has 
to be released, and to release that pressure you have to pump 
the water out of the ground in great volumes. In the Powder 
River Basin, there is basically--the water is very good for 
people and animals to drink, but it is fatal for plants and 
aquatic life, and there are three major problems associated 
with the loss of groundwater.
    The first one is the loss of groundwater, and the 
groundwater, first of all, when you take that much out it 
amounts to about--in the Tongue River drainage, it is about 
38,000 acre feet, which is enough for a population of 345,000 
people, or 2.2 million head of cattle, and there is about 2.6 
million head of cattle in the entire State of Montana. Also by 
pumping this water out, we don't know how much water is in the 
aquifer, how it got there, and how long it has been there, and 
the draw down can go anywhere from 200 to 600 feet, and it may 
take as long as 100 to 1,000 years for this water to recharge.
    The second major problem that is associated with this is 
for the ecosystem. The main constituents of this water are 
harmful to aquatic life, and sodium, magnesium, and calcium is 
the problem, and the fish population can--the reproductive part 
of it--the fish population is--will reduce it by 94 to 96 
percent in some cases, and there are some endangered species in 
the river.
    One of them is the famed pallid sturgeon that is barely 
hanging on, and it is not even sure where they spawn in the 
Yellowstone River, but it is likely they do move up the Tongue 
River, and hopefully they will be able to use the bypass I am 
currently working on and hope in the next year will come on 
line that will allow the fish to move around the end of the 12-
mile dam, and it is sort of unprecedented. You don't see 
irrigators involved in fish-saving processes, but I have worked 
with this for 20 years, to try to make this a reality, and 
within the next year it will be, and I hope it isn't for want 
because of quality of water.
    The third problem relative to water is soil and crops. The 
USDA, associated with the salinity lab in California, came and 
got a quarter ton sample of our dirt, and took it to 
California, and raised alfalfa in it, and the conclusion was 
after a two-year study that it was an SAR of two to four would 
significantly reduce the ability of the water to travel into 
the soil because of the clay content of the soil and the 
dispersion of the surface soil affected by sodium bicarbonate.
    And as the pictures show what has happened on my farm in 
the last few years since this process has come into practice, 
we are now this last winter, I am just finishing up with a 
year-end of our pelleting season as winter is over and there 
isn't the demand for our feed, so it tapers off and we are just 
finished, about a third of my hay production is now gone, and 
CBM is the only factor that I can attribute it to. The 
fertilizer program is still the same, the rotation is still the 
same. We are still managing to do everything that we have the 
same except we have this clay soil and you can see from the 
pictures that the big spot in the foreground of that picture is 
mountain clay, and usually before this kind of a thing has 
happened was that we can raise 100-bushel barley on there, and 
we are about a 7 ton average on our alfalfa, so it is declining 
at a very rapid rate, and there is no other explanation, and 
scientific world views that at the rates that we are exposed to 
CBM water in the Tongue River, that we are going to take 
damages and I hope that something can be done to at least re-
inject this water and put it back into the system so we are not 
affected by it, and just stop, simply stop wasting the water, 
and put the water back into the river.
    And Representatives Udall's H.R. 1180 will require that oil 
and gas operators to replace damaged wells and require them to 
submit plans stating how they will protect the water quality 
and the quantity, and other resources. The Northern Plains----
    Mr. Grijalva. Mr. Muggli, your whole statement will be part 
of the record, and so can we get onto the questions I am going 
to ask you to wrap it up as quickly as you can, and then I can 
move on to the last witness.
    Mr. Muggli. The Northern Plains Resource Council has been 
in existence and helped us with this situation, and they have 
been here for 30 years, and they intend to be here longer than 
CBM is going to be here, and I hope my family farm and 
irrigation can exist and still survive, but it is getting very 
doubtful.
    Thank you very much.
    [The prepared statement of Mr. Muggli follows:]

            Statement of Roger Muggli, Manager, Tongue and 
       Yellowstone River Irrigation District, Miles City, Montana

    Mr. Chairmen and Members of the Subcommittees, thank you for the 
opportunity to testify today. My name is Roger Muggli. I am here today 
representing the Tongue and Yellowstone River Irrigation District, 
located in and around Miles City, Montana. This district consists of 
9,400 acres of land that is irrigated with water diverted from the 
Tongue River, twelve miles south of Miles City.
    I am also representing my family farm, Muggli Brothers Inc. I have 
been chairman of this operation for the past 12 years. The farm has 
1,700 acres irrigated from the T&Y canal. We have also built a 
livestock feed plant that processes 14,000 tons of pellet type feed 
from alfalfa, barley, wheat, field peas, and corn for horse and cattle 
winter feed.
    I am also representing Northern Plains Resource Council, a 
conservation and family agriculture group that organizes Montana 
citizens to protect water quality, family farms and ranches, and the 
unique quality of life we love in Montana.
    I have lived in the Yellowstone River Valley near Miles City all my 
life. My grandfather, Joseph Muggli, came here in 1925 and bought a 
120-acre farm. In 1930, he bought another farm that consists of 400 
acres. In 1932, he became active in the T&Y Irrigation District and was 
elected to the secretary/manager position. He was also one of the 
authors of the 1950 Yellowstone River Compact, which defines the 
percentage of water from the Yellowstone's tributaries that will go to 
North Dakota, Wyoming, and Montana. This document was hard fought. In 
15 years, two commissions failed to reach the goal that was finally 
achieved when the compact was signed in 1950.
    My father, Don Muggli, was elected secretary/manager in 1957 and 
served for many years as in this position. My father and grandfather 
had great engineering minds and built and rebuilt many structures on 
the canal system, such as flumes, siphons, and canal checks (water 
stops).
    Many discussions I listened to as a kid between my father and 
grandfather centered around water quality and the effects of salts on 
crops and soil. They worried me so much that I wondered if the farm 
could survive until I was old enough to have a shot at managing it and 
the Irrigation District. I am much older now and have a better 
understanding of soils and water related salts and some of the 
terminology that goes with all of this. I have come to realize that my 
father and grandfather were right about the threat of salts and the 
impacts they have on the soils. Everyone who's lived in the Powder 
River Basin for long knows not to water their lawn with groundwater, 
much less use it on their crops.
    At the age of five I was lucky enough to go with my grandfather 
some eighteen miles south of our farm to the diversion dam up on the 
Tongue River and check on all the related structures along the way. 
From then on, whether I was with my dad or grandpa, it was a learning 
experience. I had the privilege of going to the many fields on our farm 
that were flood irrigated from the big canal. I could run around and 
gather up the fish that entered the canal at the diversion dam and make 
a dash on my bicycle for the Yellowstone River to release them, sparing 
them from death in the field. As I got older, I tried to come up with 
several plans to somehow save the fish. The only plan I came with was 
to screen them from the canal in the first place.
    As time passed, I came to have a burning need to do something 
positive for the fish that ended up in our fields. Actually doing 
something was difficult, as my father did not think saving the fish was 
worth the cost. In fact, nobody in the irrigation district really 
supported this idea. Everyone was afraid of the additional expense.
    In 1987, I was elected manager of the T&Y. By then I had concept 
plans in hand and talked to every agency and organization I could find. 
From time to time, I would take a bucket with a few catfish or 
smallmouth bass, sauger or whatever the catch of the day was to the 
Fish and Game office and show them. Finally, they agreed there was a 
problem.
    More time went by, months turned into years, and in 1999 we had 
completed a new inlet structure complete with a 90-foot fish louver, a 
fish bypass flume that will let the fish back into the river below the 
dam. The final stage of the project will be completed this year.
    After all of this blood, sweat, and tears, after all the efforts we 
have made to make irrigation and the fish conservation compatible, we 
could lose both to decreased water quality from the discharge of 
wastewater from coal bed methane development in the Powder River Basin.
    All for a short-term industry that is projected to be around for 
20-30 years.
    Coal bed methane is a gas trapped under water in coal seams. In 
order to extract this resource, developers must release the pressure 
from the coal seam by pumping massive quantities of water to the 
surface. In the Powder River Basin, the water from this process is safe 
for consumption by livestock and as drinking water, but creates a 
disaster for plants and aquatic life. The three problems associated 
with pumping this volume of water are the loss of the groundwater, the 
damage to the aquatic life and the damage to irrigated soils and crops.
    Mr. Chairmen, in each of these areas, scientists independent of the 
CBM industry and the BLM have predicted that damages from produced 
water will be more widespread and more extreme than either the industry 
or the BLM will acknowledge. And, in each of these areas, the 
predictions of these independent scientists are being borne out.
    First, groundwater. To put the quantity of water that we are 
addressing in perspective, the amount of groundwater currently 
discharged in the Powder River Basin from coal bed methane extraction 
is 38,339 acre-feet of water/year. This is enough water to sustain 
345,000 people or more than 2.2 million head of cattle. This is well 
over a third of the population in Montana or 60% of the population of 
Washington, DC. And there are 2.6 million head of cattle in the entire 
state of Montana.
    Pumping this quantity of water will drain aquifers used for 
drinking and stock water by 240 to 600 feet, with recharge taking over 
100 years and possibly as long as1000 years. We really don't know how 
long it will take, but we do know that it will dry up valuable springs 
and wells. This water could be reinjected, but instead most of it is 
being dumped on the land or sent down the river never to be used again.
    The second major problem with CBM produced water is the impact it 
can have on aquatic ecosystems. The main constituents of the wastewater 
that are harmful to aquatic life are sodium, magnesium and calcium. 
Studies have shown that an increase of these constituents our rivers 
will reduce reproductive rates of fish by as much as 94 to 96%. A 
recently released U.S. Fish and Wildlife Service study found that 
excessive levels of these contaminants in water and tissue samples 
taken from fish and birds in the Powder River--levels associated with 
increases in deformities and reproductive damage. The fish cannot 
sustain this level of contamination. Entire species could be wiped out 
by this change in water chemistry.
    The third major problem associated with CBM produced water is its 
impacts on soil and crops. The majority of the soils on my farm and in 
the T & Y Irrigation District are largely made up of clay. Last June, a 
study sponsored by the EPA and conducted by the USDA's Salinity Lab of 
soil samples from our farm concluded that increased sodium, magnesium, 
and calcium imbalance would drastically lower the infiltration rate of 
water and air to the soil, limiting soil productivity and plant growth. 
In other words, discharges of CBM water into the Tongue River will ruin 
much of the soil located in my irrigation district, making our farms 
less productive.
    Once again, we are seeing on the ground what independent scientists 
have predicted would occur. Last August, I irrigated 320 acres of my 
farm with water from the Tongue River. In September, there were several 
rain events which created an imbalance of sodium, calcium and magnesium 
in the soil and caused a dispersion of the clay particles. The rain was 
the trigger for a chemical reaction that caused the alfalfa on my field 
to turn yellow in some areas and killed the crop in others--the exact 
situation predicted in the Salinity Lab Report. In last year's growing 
season, production from our farm was off by one-third. Increased 
discharges of CBM water is the only factor that could have caused this 
loss. You can see why farmers in our region feel that agriculture is 
threatened by this industry.
    There is hope, however, especially in Montana, where development is 
still just beginning. How big these problems become will depend on how 
rapidly coal bed methane production occurs and how the produced water 
is managed. There's hope if they will slow down and do it right.
    What we're asking for is relatively straightforward--stop wasting 
water and every single one of the problems I've talked about will be 
minimized.
    Treat it and reinject it. If that truly cannot be done, put it to a 
true beneficial use. The industry is doing this in New Mexico and we've 
shown that this approach is technically and financially feasible in the 
Powder River Basin.
    Mr. Chairmen, your subcommittees can help protect the livelihoods 
of those who farm, ranch, and irrigate in Southeastern Montana by 
ensuring that necessary safeguards are put into place before more 
development occurs. You can help by passing Representative Udall's H.R. 
1180. Require oil and gas operators to replace damaged wells. Require 
them to submit plans stating how they will protect water quality and 
quantity, and other resources.
    I urge you to go further. Require the industry to treat and 
reinject produced water and, if they can't, require them to put the 
water to a true beneficial use--not try to irrigate with it and not 
discharge it onto our land or into our rivers.
    Finally, it's time to replace the self-recording and self-reporting 
with more government monitoring and enforcement. Last summer, samples 
from the Tongue River concluded that the discharges from coal bed 
methane increased the salinity of the river and exceeded Montana's new 
water quality standards for three months. This was brought to the 
attention of the Montana Department of Environmental Quality, but 
little was done to enforce the violation that had taken place. As a 
taxpayer and Montanan, I demand more from my government agencies to 
protect my interests. This industry self monitoring and reporting is 
blatantly irresponsible and is an indication of a broken system.
    Mr. Chairmen, the Northern Plains Resource Council has been in 
existence for over 30 years, and has every intention of being here long 
after the CBM industry is gone. I'd like my family to be here too, 
farming and managing the T&Y Irrigation District. And, I'd like the 
fish I've spent all of my life trying to restore to the Tongue River to 
be here too. We have never been opposed to coal bed methane 
development, but they must do it right.
    Thank you again for the opportunity to testify.
                                 ______
                                 
    Mr. Grijalva. Thank you. Thank you for traveling this far. 
Appreciate your testimony very much.
    Ms. Utesch. Did I get that right?
    Ms. Utesch. Yes, you did.
    Mr. Grijalva. Oh, good.

  STATEMENT OF PEGGY UTESCH, WESTERN ORGANIZATION OF RESOURCE 
              COUNCILS & WESTERN COLORADO CONGRESS

    Ms. Utesch. Thank you for the opportunity to testify today.
    My name is Peggy Utesch, and I have lived with natural gas 
drilling at my front door for four years, during which time I 
have worked hard on a number of projects aimed at systems 
improvements. I am here today representing the Western 
Organization of Resource Councils and Western Colorado 
Congress.
    Before I begin my remarks, I would like to make a couple of 
unplanned comments. So many times and a lot of the testimony 
that we have heard here today tries to paint people like myself 
and the other panelists that we have heard testify today are 
having problems with the gas industry as obstructionists. They 
try to make this issue black and white, and it is not black and 
white.
    I am a landowner who lost my livelihood and my home to gas 
drilling. Am I against energy development? No. I am for energy 
development. I understand that it is an important thing for 
this country. I understand that it is an important concept that 
we are embracing in terms of national security. I am not 
against energy development.
    The statement was made early on today that the natural 
resources of the West belong to the nation. I would agree with 
that statement. What does not belong to the Nation is the 
ability of ranchers and farmers to make a living on their land 
from people who own the surface to co-exist, and that is what I 
am here talking about today.
    The Rocky Mountain West is experiencing an unprecedented 
scale of natural gas development, facilitated by Federal tax 
breaks, reduced regulation, and BLM directives to issue more 
permits faster. Mr. Chairman, I am here today to tell you that 
that production has come at a great cost. Two specific issues 
come to mind that I would like to discuss--reclamation bonding 
and inspection oversight.
    The state and Federal bonding and reclamation system has 
not changed since 1960, yet the industry has changed 
dramatically. During the last 10 years, well pad spacing in 
Colorado where I live has gone from one pad per square mile, 
one pad per 640 acres, down to one pad per 10 acres. That is a 
huge change.
    The current bonding system allows operators to post state 
and national blanket bonds, whether they drill three wells or 
3,000 wells. Unlike bonds for coal and hard rock mining 
industry, the BLM does not require oil and gas operators to 
cover the true cost of reclamation.
    In 2005, a professional engineering firm, Kuipers and 
Associates, which does reclamation work with the hard rock 
mining industry, invented the bonding system that is in place 
for natural gas. In Colorado, in 2005, EnCana Oil and Gas had 
3,652 wells under a blanket bond of $235,000. That works out to 
$64 per well. In Montana, Fidelity Exploration and Production 
had a bond that totaled $473 per well, and in Wyoming seven 
operators had bonds that provided only $75 per well. How can we 
believe that reclamation can be accomplished with these 
insignificant amounts?
    In 2004, the BLM and the State of Wyoming estimated that it 
will cost $4 million to reclaim 120 abandoned well sites, and I 
want to point out to you those are sites that were drilled 
within the last four years. We are not talking about historic 
wells that were drilled in the twenties and thirties.
    The state's blanket bond of $125,000 was insufficient, so 
the Wyoming Conservation Fund had to contribute $2.6 million. 
That leaves $1.4 million in clean up costs with only a $25,000 
Federal blanket bond to cover the work.
    We are looking at the tip of an iceberg called taxpayer 
liability if this problem is not addressed. Here is what the 
Western Organization of Resource Councils recommends:
    Require site-specific reclamation plans; improve the 
performance standards for oil and gas operators to be 
consistent with the coal and hard rock mining industries; and 
base bond amounts on professional engineering estimates; 
abolish or update the blanket bond system; require that 
reclamation plans and bond amounts be reviewed and updated 
annually; and I would urge this Subcommittee and the committee 
as a whole to work hard to pass Representative Udall's bill, 
H.R. 1180.
    Also in need of updating is the inspection and enforcement 
system. The Western Organization of Resource Councils did a 
2005 report that looked into this particular system titled 
``Law and Order in the Gas Fields.'' These were the findings:
    The Bureau of Land Management inspection system 
improvements targeted production, not environmental compliance. 
The number of inspectors has not increased to reflect almost a 
yearly doubling of drilling activities in many states. In 2003, 
environmental compliance inspectors only spent 15 percent of 
their time doing environmental inspections. Of the six BLM 
offices that were studied, they oversaw 79 percent of the 
active gas wells but they only employed 26 percent of the 
inspection staff. And based on 2003 staffing levels, 
environmental compliance inspections were only completed every 
four to 49 years.
    The pictures that you see scrolling are pictures that were 
taken within a five-mile radius of my home, and I can tell you 
that there are incidents and violations on every well pad that 
you see in those pictures. We need environmental inspections on 
a more regular basis, at least once a year, not once every 50 
years.
    While the number of inspectors and inspection activities 
has increased significantly since 2003, the BLM has not 
provided the hard data that the Western Organization of 
Resource Councils has requested under FOIA. We do not yet know, 
for example, how many environmental inspections are being 
conducted. We have been given a number of inspections as a 
whole, but we don't know the percentage of environmental versus 
production.
    What can we do to make the system better? Increase 
environmental inspection staff, fill all newly created 
positions, develop standardized compliance check lists, repeal 
the 30-day permitting time frame that was set in Section 366 of 
the Energy Policy Act, and don't rely on industry self-
reporting as an enforcement strategy.
    Consumers are being hit hard by rising energy prices. 
Please don't make us pay a second time with a broken regulatory 
system.
    Thank you for your time, and I appreciate the opportunity 
to testify.
    [The prepared statement of Ms. Utesch follows:]

          Statement of Peggy Utesch, Western Organization of 
            Resource Councils and Western Colorado Congress

    My name is Peggy Utesch. I am a Colorado landowner who lived for 
four years in and around natural gas drilling in the Piceance Basin. 
During that time, I worked hard to expose illegal and unethical 
industry practices, with the intention of improving the system. In 
2005, I spearheaded a collaborative project that brought a drilling 
company together with a rural community. The resulting agreement--
called the Rifle, Silt, New Castle Community Development Plan--has been 
endorsed by Senator Ken Salazar as a new model for how industry and 
communities can work together.
    I am here today representing the Western Organization of Resource 
Councils (WORC) and the Western Colorado Congress, two non-profit 
organizations that have worked proactively for responsible energy 
development in the West for nearly 30 years. WORC is a network of 
grassroots organizations from seven western states that include 9,700 
members and 44 local community groups. About a third of WORC's members 
are family farmers and ranchers, many of whom are directly impacted by 
oil and gas development. Western Colorado Congress is an alliance for 
community action made up of eight chapters and over 3,200 members on 
the Western Slope of Colorado.
    The Rocky Mountain West has become the nation's new center for 
natural gas production. The scale of development is unprecedented, with 
the number of wells being drilled doubling annually in some areas. This 
energy boom affects public and private lands; water, soil and air 
quality; agriculture, quality of life; property values; wildlife 
habitat; local economies and health.
    Congress and the Bush Administration have facilitated this boom by 
offering energy companies tax breaks, easing regulations and directing 
the Bureau of Land Management (BLM) to issue more permits at a faster 
pace. Although industry complained a few years ago that the permitting 
process was too slow, they now sit on more leases than they can drill 
with a year's time.
    Mr. Chairmen, I'm here to tell you that this emphasis on production 
has come at a great cost. It undermines the BLM's inspection and 
enforcement responsibilities and sends the message that drilling should 
not be slowed for any reason and human beings are simply collateral 
damage. Taking the time to listen to substantive public concerns, 
mitigate drilling impacts and ensure that we have enough inspectors and 
an adequate bonding system are viewed by the current system as 
unacceptable delays.
    In this climate, the industry has no incentive to operate 
responsibly and, to no one's surprise, it is not doing so. I know. In 
Garfield County, where I life, there are over 50 drilling rigs 
operating full-time. Over 18,000 wells were permitted in 2006 alone. 
Within three years, more than 30 natural gas wells were drilled within 
a mile of my home, and I lived with the consequences of an oversight 
system that is inadequate. The single largest accident in Colorado 
history, happened three miles from my home. Due to faulty well-bore 
cementing, 115 million cubic feet of gas were released underground. The 
gas leaked to the surface and sickened ranch families and livestock, as 
well as contaminating water wells and West Divide Creek. The accident 
could have been prevented.
    Today I'm here to outline specific problems and propose solutions 
in two areas:
    1)  reclamation bonding; and
    2)  oversight inspections.
    The state and federal bonding and reclamation systems have not 
changed since 1960, even though gas production has changed 
significantly. During the last 45 years, well pad spacing has been 
reduced from one well pad per 640 acres to one per ten acres in some 
areas, and the rise of coal bed methane development has brought impacts 
on a scale that was previously unimaginable. Twelve to fifteen years 
ago, some of the technologies that are making this boom possible didn't 
even exist.
    The current bonding system allows operators to post state or 
national blanket bonds that cover their operations whether they drill 
30 wells or 3,000. The minimum federal bond amounts are $10,000 per 
lease, $25,000 covering all of a company's leases statewide, or 
$150,000 covering all of a company's leases nationwide. Although the 
BLM has the authority to require higher bonds, they rarely do, and 
still in those cases, the amounts fall far short of the what is 
necessary to repair the unprecedented level of disturbance we are 
seeing on the ground today. Unlike coal and hard rock mining industry 
bonds, the BLM does not require bonding at the true cost of reclamation 
for oil and gas operators.
    In 2005 WORC asked the professional engineering firm of Kuipers and 
Associates to investigate the adequacy of the bonding and reclamation 
system. The findings are contained in a report called ``Filling the 
Gaps.'' In general, it was found that land management agencies are not 
balancing booming energy development with protecting taxpayers, 
landowners, local economies and natural resources:
    1.  In Colorado in 2005, EnCana Oil and Gas had 3,652 wells covered 
by federal bonds of $300,000 and a state bond of $235,000, or $146 per 
well.
    2.  In Montana, Fidelity Exploration and Production Company 
operated 571 wells under a federal blanket bond of $220,000 or $736 per 
well.
    How can we believe that removal of equipment, re-vegetation of 
drilling sites and reclamation of roads and pipeline corridors can be 
accomplished for these insignificant amounts? Environmental engineers 
have estimated the bond shortfalls for these projects and others amount 
to hundreds of thousands at each site, and in some cases several 
million.
    The BLM and the State of Wyoming estimated in 2004 that it will 
cost $4 million dollars to reclaim 120 well sites that were abandoned 
by Emerald Restoration and Production in 2001. The state's blanket bond 
of $125,000 didn't begin to touch the actual cost. The Wyoming 
Conservation Fund contributed $2.6 million dollars to fund the state of 
Wyoming's share of this reclamation effort. For the 64 wells on federal 
land that will cost an estimated $1.4 million to clean up, the only 
funding available is the $25,000 federal bond. The rest will be paid by 
taxpayers or the cleanup will not happen.
    We are looking at the tip of an iceberg called taxpayer liability 
if this problem is not addressed. Under the current administration, the 
Department of Interior has refused to finalize a rulemaking effort 
begun during the Clinton Administration that would have raised the 
minimum bond amounts and have also rejected a rulemaking initiative 
proposed by WORC.
    If the federal oil and gas bonding program is going to be fixed in 
the next few years, Congress will have to do it. Here is what WORC 
recommends:
      Require site-specific reclamation plans;
      Improve the reclamation performance standards for the oil 
and gas industry to be consistent with other extractive industries, 
such as coal;
      Abolish or substantively update the blanket bond system;
      Base financial assurance on estimates from professional 
engineers and cover the full cost of reclamation; and
      Require that reclamation plans and bond amounts be 
reviewed and updated annually.
Passing Representative Udall's bill, H.R. 1180, would be a great first 
step toward meeting these goals.
    Also in need of updating is the inspection and enforcement system, 
which is under-staffed and outdated, as documented by WORC's 2005 
report called ``Law and Order in the Oil and Gas Fields.'' The report 
finds that:
    1.  The BLM has made improvements to its Inspection and Enforcement 
program since 1998, but those improvements have targeted production 
rather than environmental compliance inspections;
    2.  The number of BLM inspections had not significantly increased 
while drilling activities have exploded--more than doubling in some 
states each year from FY2000 to FY2003;
    3.  In 2003, environmental compliance inspectors spend an average 
of only 15% of their time completing inspection and enforcement 
activities, in large part because they were being diverted to 
permitting activities;
    4.  The 6 BLM Offices studied were responsible for 79% of active 
oil and gas wells on BLM lands nationwide in 2003, yet they only 
employed 26% of all inspection staff; and
    5.  Based on 2003 staffing and inspection levels, BLM inspectors 
inspect active wells only once every 2-10 years on average. 
Environmental compliance inspections are only completed every 4-49 
years on average.
    While the number of inspectors and inspection activities has 
increased significantly since 2003, the BLM has not provided the hard 
data requested by WORC under the Freedom of Information Act on this 
issue. We do not yet know, for example, whether the inspections being 
conducted are environmental compliance inspections or production 
inspections, and we have not verified whether they are keeping up with 
the continuing explosive increases in the number of wells. In Colorado 
where I live, several of the BLM's newly created environmental 
inspection positions remain unfilled, while additional staff positions 
to facilitate permitting were hired immediately.
    What can we do to make it better? For starters, I urge members of 
these Subcommittees, in particular, to closely watch what BLM is doing 
on inspections and enforcement and ensure that environmental compliance 
is getting the long-overdue resources and attention that are so greatly 
needed. We also recommend:
    1.  Increasing inspection staff to keep pace with the rapid growth 
of the industry;
    2.  Filling newly created positions;
    3.  Don't rely on industry self-reporting as a compliance strategy;
    4.  Requiring regular reviews of environmental inspection programs 
for accuracy and adequacy;
    5.  Developing standardized compliance checklists; and
    6.  Repealing the 30-day permitting timeframe in Section 366 of the 
Energy Policy Act.
    In closing, consumers are getting hit hard by rising energy prices. 
Don't make them pay again as taxpayers for the failures of an outdated 
regulatory system.
    Throughout its history, Colorado has been through resource booms 
that have left us with a legacy of scarred landscapes, polluted streams 
and a tax burden for future generations to clean up the mess. If we are 
to avoid repeating this history, the federal government must play an 
active role in protecting our environment while permitting the 
extraction of resources that are so vital to our nation. The choice you 
are making is not for a safe and clean environment or energy 
extraction. We can and should have both.
    Thank you for your time and the opportunity to testify.
                                 ______
                                 
    Mr. Grijalva. Thank you very much. Let me at the outset 
thank all the panelists. Your comments and testimony are very 
much appreciated.
    Let me begin my round of questioning with Ms. Moseley. 
There is a reference to the 1977 Surface Mining Control and 
Reclamation Act. Under that Act, surface owners over Federal 
coal deposits must give written consent to surface mining 
operations before that Federal coal can be leased, and no harm 
has been done.
    On the contrary, I think that the coal industry in the West 
has thrived and there has been no harm as a consequence of this 
provision, in my estimation, despite the predictions to the 
contrary at the time from representatives of the western coal 
industry.
    Having said that, do you think surface owners over Federal 
oil and gas deposits deserve that same consent right that 
surface owners over coal deposits now have under the 1977 law?
    Ms. Moseley. Thanks for that question.
    No, I do not believe that they deserve the same rights. The 
difference between a coal mine and an oil or gas well are so 
magnificently different. The impacts are completely different. 
They are shorter in term. I don't think that it is necessary 
for surface owner consent to be applied to oil and gas.
    Mr. Grijalva. As we go through this process in the full 
committee, that is a contradiction in process that is going to 
have to be looked at. In one hand there is a consent required; 
on the other hand there isn't. I think at the very minimum that 
needs to be well debated.
    Ms. Moseley. Mr. Chairman, I know that BLM has taken a look 
at that, and they provided a report to Congress on that 
specific issue.
    Mr. Grijalva. OK.
    Ms. Moseley. It was one of the split estate reports that 
they did.
    Mr. Grijalva. Let me follow up with one more, then I have a 
couple for some of the other witnesses.
    Ms. Utesch, in her testimony, talked about the cost to 
reclaim a gas well, and then the example I am going to use is 
Delta County, Colorado, where that energy corporation has 
posted a $25,000 bond to cover all the wells in the state, and 
I think it is between 400 and 500 wells on Federal land.
    Do you think a bond of at the most $63 per well is 
adequate?
    Ms. Moseley. I don't think that is the purpose of the bond, 
Mr. Chairman. The purpose of a bond is to make a company aware 
that it has legal responsibilities to reclaim its property. It 
is sort of an insurance policy. It is not intended to cover the 
actual amount of the reclamation procedure. Just like with car 
insurance, you don't pay to have your car fixed, you know, 
every month that you pay.
    Mr. Grijalva. I know that----
    Ms. Moseley. Go ahead.
    Mr. Grijalva. I know, but using the analogy of an insurance 
company, it is a heck of a deductible for the taxpayer, isn't 
it?
    Ms. Moseley. I don't believe so, Mr. Chairman. I think that 
the companies are held to those bonds. They cannot have their 
bond released until they have met the criteria established by 
BLM for reclamation procedures.
    Mr. Grijalva. Thank you.
    Mr. Muggli, thank you again for your testimony. We have 
heard from several Montana ranchers who are using produced 
water for their livestock, and want to continue to do so. Can 
you talk a little bit about that?
    Mr. Muggli. Mr. Chairman, Members of the Committee, yes, I 
can address that.
    We have never felt that they should not be able to use the 
water for reasonable watering of livestock and human 
consumption, and that is what the water is there for, and that 
is why I want the water to remain there, not pumping out 
thousands of times more water than what ranch communities or 
ranch households and their livestock can use, and that it is 
the real problem to pump out that much extra water, and it 
would not be a problem for us if that is what they were using. 
That is what that water is there intended for is stock water. 
We have never limited that because that is the type of water, 
the same water that I have in my well at my house is that same 
type of water. It has got sodium bicarbonate in it, but you 
just flat can't irrigate with it.
    Mr. Grijalva. Thank you.
    Mr. Pearce.
    Mr. Pearce. Thank you, Mr. Chairman.
    Ms. Moseley, if we were going to consider--we heard from 
Mr. Muggli that there were three conditions that really were 
problematic and those made sense to me, but where he was making 
the observation that the only thing he could attribute the loss 
of crop to was coalbed methane water.
    You seem to be familiar. Are you familiar with any of the 
USGS studies, or who else might be doing studies?
    In other words, I know in New Mexico they measure the water 
at different increments, and we have measuring points to see 
where problems occur. Tell me a little bit about that, if you 
would.
    Ms. Moseley. It is my understanding that the USGS has been 
monitoring the water quality in the Tongue River since the 
early 1970s. They have several points in which they monitor, 
and as a result of the coalbed natural gas development, they 
have found no change in the water composition. That is what I 
found on their website.
    Mr. Pearce. So they have points at which they measure. Is 
there a point at which they do begin to find problems?
    Ms. Moseley. Well, it is my understanding that once the 
water has been drained out of the river through the T&Y 
Diversion Dam, that the water that comes back out into the 
river has problems with water quality. But the water that goes 
into the diversion dam does not have the problem. When the 
water comes out, it does.
    Mr. Pearce. And that is what I understand also. That both 
EPA, which I have not found to be a pushover in water quality 
issues, we deal with them a lot in New Mexico, and in fact we 
have a couple of cities that re-inject their sewage back in, 
and the EPA is checking them, and they have to be at zero parts 
per million TDS.
    So I tend to believe that if they say they have checked the 
water along a run and it is clear until it gets to the 
diversion for irrigation, then it might be that this water is 
picking up things in the irrigation process, because I know in 
New Mexico we have a lot of water that is just pulled off of 
the Rio Grande, and then it is pushed back into the Rio Grande, 
and it simply percolates down through the soil, so I see that 
as being a possibility.
    Now, you are somewhat familiar with the split estate 
question. The idea that we would--I think you heard from Mr. 
Adami that we would want to let split estate lapse, maybe after 
15 years, that the mineral estate would go back to the 
landowner. How much would that cost the Federal government? A 
lot or a little?
    Ms. Moseley. Well, let us put it this way. When the lands 
were homesteaded back in the 1800s, the Federal government 
reserved the mineral rights for those lands because it was a 
significant source of revenue for the Federal government, and 
as it states today mineral development is second only to the 
IRS in revenue generation.
    So from their standpoint, they did the right thing by 
withholding the minerals from the surface owner. They were able 
to get the lands homesteaded and had crops put on them at the 
expense of--not at the expense, but in a hurry, and then they 
reserved the mineral rights for later use.
    Mr. Pearce. So it was economic to the IRS, so we wouldn't 
need to pay go for this provision, we would need a pay went.
    Ms. Moseley. I think it would be a problem, sir.
    Mr. Pearce. OK. On the whole idea of the split estate, what 
production do people like Mr. Adami have? In other words, he is 
going to buy a ranch, and is it just kind of slid under the 
table that it is a split estate? What notification, what right 
does he have to understand that there minerals aren't attached 
to that land?
    Ms. Moseley. You know, it is interesting that you ask that 
because I have bought three houses and every time I have bought 
a house I have looked to see who owns the minerals. Now, maybe 
it is because I work for the mineral industry, but even before 
I did I always looked, and I think that it is part of the 
record that is involved, and I would recommend that people take 
a look at that to see if----
    Mr. Pearce. So you are saying it is on the deed or whatever 
piece of legal----
    Ms. Moseley. Yes. Yes.
    Mr. Pearce. So it is not like people wake up one day and 
there is a knock at the door, hey, we own your mineral rights. 
It is in fact right there on a piece of paper.
    Ms. Moseley. Well, it is made public.
    Mr. Pearce. But it is on the deed also.
    Ms. Moseley. Whether people look at it or not is another 
story.
    Mr. Pearce. I have a couple more rounds of questions, but I 
will yield back.
    Mr. Grijalva. Thank you, and let me wrap up my turn. To 
begin with let me ask you, Mr. Muggli, how do you respond to 
the comments that Ms. Moseley just made about water quality 
data that she says was posted on the USGS website?
    Mr. Muggli. Water quality data posted on that website is 
rounded numbers, and if you go to the true side, it is a very 
long process to do so, it is rounded off to the nearest one 
percentage point. And if you go to some different location on 
there and get the numbers, we have taken a 44 percent increase 
in sodium adsorption ratio numbers on the lower Tongue, and 
that is what the salinity lab claims that we are over that 
limit of two, between two and four, that we are going to start 
seeing collapses that you were seeing on the pictures.
    Insofar as the river return, between the 12 Mile Dam, if 
you can feature the Tongue River runs north, dumps into the 
Yellowstone. Our diversion dam, and we have five flumes that 
cross five major creeks that drain 850 square miles of land 
that dump into the Tongue River below the 12 Mile Diversion, 
and this water mostly comes out of badlands country that is 
influenced by coal seams and heavy clay soils, and that is 
where the increase is coming.
    The land that T&Y irrigates is less than half of one 
percent in that reach. Seventy-six percent of our land drains 
back is below Mile City on the banks of the Yellowstone.
    Mr. Grijalva. Thank you, and let me wrap up my turn of 
questioning, for that matter the questions in general from my 
perspective.
    I am going to ask Ms. Utesch, in your testimony I know you 
have experience the impacts of oil and gas drilling in a very 
personal level, and if you could elaborate on that for the 
committee.
    Ms. Utesch. In 2001, my husband and I purchased four acres 
of land fives miles south of the Town of Silt. At that time in 
Colorado--I am sorry, we purchased the land in 2000. At that 
time in Colorado mandatory disclosure of mineral or split 
estate was not required in Colorado, so we did not know that we 
didn't own our minerals.
    We also never had mineral development on our small four 
acres because there was a wetlands that ran through it, and 
when you have an average well pad that is four acres, there was 
nowhere on our property they could put a well pad.
    However, within four years I had more than 30 gas wells 
drilled within a mile of my home. The mile long road that I 
used to live on that was a dead end, and some, maybe 15 to 17 
cars a day became a thoroughfare that saw over 100 semi-trucks 
every day. I ate the dust of those trucks. I watched the 
magnesium chloride that was used to try to mitigate the dust 
drain into my wetlands, and kill grass and kill the plant life 
that was in the wetlands.
    Also, because our area was low lying area, many of the 
fumes that came off of the wells settled down. They are heavier 
than air, and the ozone and all the production chemicals 
settled down over the area where we lived.
    In 2005, I sold my home. I had lung problems. I had an all-
over-body rash. I had extreme fatigue and I had headaches. My 
doctor said that the most likely cause of all of those, 
particularly the unusual skin rash that I suffered, was 
exposure to industry chemicals.
    I lost my home, I lost my way of life to the gas industry, 
and during that time I was working hard to try to get the 
industry to understand I didn't want them to go away. I just 
wanted them to consider that I had a right to be there too.
    Mr. Grijalva. Thank you.
    Mr. Adami, if you could share your personal perspective and 
your experience.
    Mr. Adami. With the split estate, Mr. Chairman?
    When we bought our ranch, I was aware that we didn't have 
the mineral rights, and there had been no mineral development, 
and as the coalbed methane moved from the eastern part of the 
Powder River Basin to the western edge where we were located, I 
visited with a number of clients and friends that had 
negotiated with the mineral companies, and asked them what 
problems did you have, what areas did you wish you had done 
different in your agreements, and so I had a fairly long list 
of things that I wanted to address when the mineral company 
arrived.
    What they offered was a one-size-fits-all, take-it-or-
leave-it surface agreement. And in the case where I was bonded 
on, they offered that agreement, withdrew it. It was never 
offered again, and they just simply proceeded to bond on.
    The local BLM office made no effort beyond a token effort 
to require them to negotiate. They were a relatively 
accommodating partner in that process.
    Mr. Grijalva. Thank you very much. I have no further 
questions.
    Mr. Pearce.
    Mr. Pearce. Thank you, Mr. Chairman.
    I would request unanimous consent, one of our witnesses 
stated that North Dakota made a serious mistake in accepting 
oil and gas exploration, and I just would like to ask unanimous 
consent to submit for the record from the Governor of North 
Dakota saying that actually it has been very positive for North 
Dakota.
    Mr. Grijalva. Without objection.
    [The letter from the Governor of North Dakota follows:]

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Pearce. Ms. Moseley, would you want to--again you 
kind of got into this already. We are talking about the 
abysmally low bonds that are required now. That bond 
requirement is not a total economic requirement for that 
company. That is not all the companies do. Again, it is not $63 
per well that they are going to pay to keep them up. It is that 
they are taking out this bond that says I am responsible for 
every single well that I drill, and this $25,000 is the 
beginning point.
    Have you ever found a company that would only pay $63 to 
clean up a site?
    Ms. Moseley. No, absolutely not. In fact, in some cases, 
depending on where the well location is, it can cost hundreds 
of thousands of dollars.
    Mr. Pearce. And because they only had the $25,000 bond, 
because they only had the $63 per well, did they walk away from 
their investment? Did they walk away from their responsibility?
    Ms. Moseley. No.
    Mr. Pearce. So they paid the 100,000?
    Ms. Moseley. They are required to follow the law. They are 
required to follow the guidelines----
    Mr. Pearce. OK.
    Ms. Moseley.--that have been established by the government.
    Mr. Pearce. Ms. Korenblat, you look like you have a comment 
to make here.
    Ms. Korenblat. I am sorry. You should finish that line.
    Mr. Pearce. I mean it is fine, yes.
    Ms. Korenblat. I think that was misinterpreted. I think you 
are referring to my comment about North Dakota.
    Mr. Pearce. Oh, yes. Excuse me.
    Ms. Korenblat. Sorry. And my point was that the mistake was 
made in building the trail and spending lots of money to market 
it after the oil wells had been put in, after the oil fields 
have been established.
    Mr. Pearce. Fair enough. Yes, fair enough.
    Ms. Korenblat. Thank you.
    Mr. Pearce. I appreciate that clarification.
    Ms. Adami, when did you buy your ranch?
    Mr. Adami. In 1993.
    Mr. Pearce. 1993?
    Mr. Adami. Yes, sir.
    Mr. Pearce. And you were aware of the split estate 
question?
    Mr. Adami. Actually, I was not.
    Mr. Pearce. But it was on the deed.
    Mr. Adami. No, it was not. It is not disclosed in any 
fashion. Your warranty deed makes no reference whatsoever to 
the minerals in Wyoming.
    Mr. Pearce. So would you recommend that we pass a law that 
would say stamp on the face of a piece of property ``This 
property is split estate''?
    Mr. Adami. That to me----
    Mr. Pearce. That would seem reasonable.
    Mr. Adami. I think that would be reasonable, and maybe a 
small disclosure about----
    Mr. Pearce. What do you think that would do to property 
values of those pieces of property?
    Mr. Adami. I am not sure that it would have much of an 
effect. Colorado could probably answer that where they have 
done that, but I am not sure.
    Mr. Pearce. I think that is probably the push-back that we 
would get, that people don't want their property value 
diminished by full disclosure.
    Ms. Utesch. Colorado does have mandatory disclosure and 
that disclosure has not affected property values. That was 
established in a study that was done in 2004.
    Mr. Pearce. OK. Now, you sold your ranch?
    Mr. Adami. Yes, sir.
    Mr. Pearce. Who did you sell that to?
    Mr. Adami. To Yates Petroleum for New Mexico.
    Mr. Pearce. Were they the ones who were drilling close by 
on the land?
    Mr. Adami. No. Yates was the third developer to come, and 
it was in the negotiation process that they made the offer to 
purchase, but at that point they had not developed any of their 
minerals.
    Mr. Pearce. Are they in the process now?
    Mr. Adami. You know, I haven't been back in the last three-
four months.
    Mr. Pearce. What did you get per acre for the land?
    Mr. Adami. The terms of the agreement were confidential, 
Congressman. I guess I would have to refrain from answering 
that.
    Mr. Pearce. Above market or below market?
    Mr. Adami. I am afraid I shouldn't answer that, sir.
    Mr. Pearce. OK. I suspect, I suspect I could guess.
    Mr. Muggli, you had some contentious response, you didn't 
think that I was accurate in what I was saying about the EPA. 
Do you think the EPA is allowing the oil and gas to put that 
coalbed methane water into the river and contaminate it?
    Mr. Muggli. Yes.
    Mr. Pearce. Mr. Chairman, I would at this point ask that we 
have a hearing, because I think Mr. Muggli is really sincere, 
and I believe he is here with the best of intentions, and if 
the EPA is not doing its job, I think that we should hold them 
to task and we should take a look at that because I have found 
them to be pretty strict in New Mexico. In fact, we are always 
having to work to clear up problems, and this is a pretty 
serious allegation because that is--EPA is one of the key 
guardians of our fresh water, so I would take that as a pretty 
serious problem, and would request--would you join me in the 
request that we would have an open hearing about the 
standards----
    Mr. Muggli. Yes.
    Mr. Pearce.--that EPA is enforcing on that particular 
coalbed methane project?
    Mr. Muggli. Yes.
    Mr. Pearce. OK, appreciate that.
    Ms. Moseley, let us say that we take the recommendations 
that you have heard here to drive the price up per well, put a 
well bond on, who will be impacted by that kind of a--Mr. 
Chairman, I would yield back if you want me to. I have another 
round of questions----
    Mr. Grijalva. Yes, please continue.
    Mr. Pearce. You bet. I saw that red light. You know, it 
scares me.
    Let us say that we do put that bond in. Who is going to be 
affected among the producers?
    Ms. Moseley. If it increases the amount that a company has 
to spend.
    Mr. Pearce. Yes.
    Ms. Moseley. Is that your question?
    Mr. Pearce. Yes.
    Ms. Moseley. I would guess that it would make energy prices 
more expensive.
    Mr. Pearce. It would make energy prices more expenses. What 
about the size of companies? In other words, in New Mexico, we 
are almost down to just the mom and pops. We are down to the 
independents. Exxon has moved out a long time ago. Those fields 
are wearing out, people are not much interested. There is a 
little excitement right now with $70 oil, but when it drops 
back down to 50, they are all going to disappear again.
    So what is going to be the effect on the small operator?
    Ms. Moseley. Well, the small operators, the one who is most 
affected by these kind of increases in costs of drilling a 
well. As you heard earlier this morning, 90 percent of the 
discovery wells are drilled by independents. If they can't 
afford to go out and drill, then they probably will never be 
drilled, and maybe some people feel that that is a good thing. 
I don't believe that. I think that our country is based upon 
energy for its economy and for its standard of living, and I 
would recommend that we have a chance to work together to come 
up with the best solutions instead of being attacked for 
providing the service that we absolutely have to have.
    Mr. Pearce. You heard the testimony by Ms. Korenblat about 
the problems with the oil and gas industry. Tell me a little 
bit about the positive relationship between say the biking 
industry and oil and gas. Where do they intersect?
    Ms. Moseley. Well, I would guess that without the oil and 
gas industry and the mining industry you wouldn't have your 
bikes.
    Mr. Pearce. Yes, I was hoping we would get a little 
response here. Ms. Korenblat, obviously, we are into the 
engaging piece of this, but really you get carbon fibers, you 
get your tires, you get the people traveling in, not in a black 
reference I made in my opening statement, and you can take this 
opportunity to dig into that if you would like with full vigor 
too, if you would like.
    Ms. Korenblat. If I am going to go out of business, does it 
really matter whether I lose my customers first or the supply 
first?
    As you said in your opening statement, my customers fly in 
airplanes to get to the trips, and if the prices of their 
airplane tickets go up, I am going to have less customers. But 
if we continue to drill without regard to recreation planning 
and without any effort to co-exist, then I am losing supply 
because I am going to be losing trips. So it is sort of a 
chicken and egg problem really.
    Mr. Pearce. Yes, and that really is a problem that we all 
have here is that with every single problem that we have, we do 
need to reach a balance point because, to be honest with you, 
as a backpacker I have probably been as many miles as anybody 
in Congress just with a pack, a really heavy pack too. I don't 
much anymore, but I have been. So as a backpacker, I will tell 
you that the bikes and the motorcycles and those things I 
consider to be--I mean, you made the statement that we should 
be naturalists, we should have natural space or something. I am 
not trying to put words----
    Ms. Korenblat. Operate under our own power.
    Mr. Pearce. No. But you were saying that we should have 
nature, that that should be it, and to be honest, there are 
people who would say that really your bikes are invasive, that 
they are not natural, and I am not that sort of purist. I was 
the one who said, you know, we ought to have a place in our 
parks that we can use motorized stuff, not every place in the 
parks. That was Mr. Watkins' language, and I felt like always 
that was the balance. Not every place for everything, but some 
way we have to get the balance here.
    We have to get the protection for these landowners, and I 
am sympathetic to Mr. Adami that has got 12 of the 20. This is 
like a golf game. High score is not very good in those 
problems. Still, we can overreact, overrespond, and suddenly we 
begin to squeeze off this little golden goose that really 
provides a lot of jobs, and I am talking about the oil and gas 
industry, provides accessible, affordable energy.
    Ms. Korenblat. But----
    Mr. Pearce. Go ahead.
    Ms. Korenblat. Well, my question though is aren't we on the 
downhill side? In 300 years, are we going to be burning oil? I 
don't think so. Right? We know it is going to last 20, but is 
it going to last 300? It is somewhere between 20 and 300, 
right?
    Mr. Pearce. So how would you feel about wind and solar on 
Federal lands?
    Ms. Korenblat. It totally depends on how it is put in, and 
you talk about balance, and I agree with that, but I think one 
of the points needs to be looking at the longer term. So many 
people are so focused on the current situation that we are so 
dependent on oil, but don't we have the opportunity--we are 
going to make a transition. I don't think my grandchildren are 
going to be using oil. They are going to have to use 
alternative fuels.
    So my question is do we really want to damage--I mean, land 
in its pristine form is shrinking from the earth. They are not 
making any more of it. You can't re-create it. Sure, you can 
mitigate, and you can try to clean up the mess, but land that 
hasn't ever been touched is very--it is in very short supply.
    So when we look, we talked about 39 years worth of natural 
gas. I mean, that is--in the big picture that is a very short 
time frame. So what I am adding to the equation is not just 
looking at balance, but looking at balance over the really long 
term because my son can make a living the same way I am, and my 
grandchildren can make a living the same way I am, but an oil 
well has a life span, but the damage is relatively permanent.
    Ms. Moseley. I don't agree with that, and I don't know 
whether I am allowed to speak or not.
    Mr. Pearce. OK, OK, the Chairman is about to--let me make a 
couple more comments, Mr. Chairman, and we will be wrapped up, 
but these are the kind of conversations that we need to be in. 
I think everyone of us realizes that--I mean, my great fear is 
that we are going to run out of oil quicker than what we think, 
but the truth is we don't have anything that even comes close 
to replacing it--maybe nuclear, but wind is 1 percent, solar is 
1 percent, hydro-thermal, maybe 10.
    Ms. Korenblat. Necessity is the mother of invention.
    Mr. Pearce. Yes, well, the mothers of invention are a 
little asleep at the wheel because we haven't got any way to 
get those inventions to the market. I mean, we really have 
slept through the last 30 years when we should be converting 
and we have not converted and tremendous dislocation awaits us 
if we just move wholeheartedly.
    Mr. Chairman, with your indulgence Ms. Utesch tried to log 
in a couple of times, and we just haven't gotten to her. She 
wants to make closing comments. I don't have any. You have had 
comments to things that I have said so I am going to turn the 
floor over to her, and when she wraps it up, my time is way 
past gone, and you have been more than congenial, Mr. Chairman.
    Mr. Grijalva. No, just 29 minutes. No problem.
    Mr. Pearce. No sweat. No problem.
    [Laugher.]
    Mr. Pearce. Thanks.
    Ms. Utesch. Thank you for the opportunity to speak again. I 
just wanted to offer a couple of clarifications.
    When it comes to the issue of bonding or any regulation of 
the industry, when consumers are--if the government puts 
additional regulation on industry often the argument is made 
that if the gas industry has to pay more, if their cost of 
business goes up, that that will get passed directly to the 
consumer, and I want to clarify for the record that that is not 
true.
    The natural gas in this country is traded just like corn 
and soybeans, and any rancher can tell you that it doesn't 
matter how much it costs him, it is the market value at which 
that commodity is traded that sets the price, and natural gas 
is the same way.
    I also wanted the opportunity to also one more time look at 
the issue of small operators. Ms. Moseley had testified that if 
small companies that come in and want to do drilling have to 
post high bonds, they won't be able to do the work, and so that 
it would create a hardship on them in not being able to drill.
    That may be true, but let us look at the other side of what 
happens, and this does happen and we have seen cases of it in 
New Mexico where small operators can't afford to post--they 
post a small bond, and they go into an area, and when they are 
done operating their choice is to pay the $100,000 in 
reclamation costs that Ms. Moseley cited, or to forfeit their 
$25,000 bond. It is a hell of a lot cheaper for them to walk 
that bond and it has happened.
    So you know, there are two sides to that question. There 
are two ways to look at it. It is not black and white, and I 
would just welcome the opportunity for both sides to sit down 
at the table and proactively look at the needs on both sides, 
and address a system that is outdated to come up with something 
that works better for everyone.
    Mr. Pearce. Thank you very much.
    Ms. Utesch. Thank you.
    Mr. Grijalva. Thank you, Mr. Pearce.
    Now let me thank all of our witnesses today, and 
particularly this last panel.
    In closing, I think I can comfortably say that I am not 
aware of a single member of this committee and the full 
committee who does not support responsible oil and gas 
development in the appropriate public places, and public lands, 
and as we go through this process the search for a balance, the 
search for responsibility and accountability on the part of 
agencies and businesses doing gas and oil on public lands, that 
process sometimes is going to be viewed as an attack, and I 
would venture to say that it will be described as an attack.
    On the contrary. The search for balance many times is a 
difficult process. I wish we would have had this healthy debate 
as we were going through the Energy Act of 2005, and we will 
have this debate as we go through what we need to put together 
in May in terms of an energy policy.
    Today's hearing and other hearings this month before this 
committee and all the various subcommittees have been held to 
find out what is not working with that energy policy, and what 
we need to do to fix it. I don't believe that any of the energy 
laws that have been enacted in the last five years are sacred 
or sacrosanct. We need to look at them. We need to dig for that 
balance, that accountability, that transparency, and the 
appropriate responsibility.
    I want to thank all of you for coming today, and with that 
this meeting is adjourned. Thank you.
    [Whereupon, at 2:05 p.m., the Subcommittees were 
adjourned.]

                                 
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