[Senate Hearing 110-1114]
[From the U.S. Government Publishing Office]
S. Hrg. 110-1114
A PERSPECTIVE ON THE ENDANGERED SPECIES ACT'S IMPACTS ON THE OIL AND
GAS INDUSTRY
=======================================================================
FIELD HEARING
before the
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
AUGUST 23, 2007--TULSA, OK
__________
Printed for the use of the Committee on Environment and Public Works
Available via the World Wide Web: http://www.access.gpo.gov/
congress.senate
__________
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut JOHN W. WARNER, Virginia
THOMAS R. CARPER, Delaware GEORGE V. VOINOVICH, Ohio
HILLARY RODHAM CLINTON, New York JOHNNY ISAKSON, Georgia
FRANK R. LAUTENBERG, New Jersey DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland JOHN BARRASSO, Wyoming1
BERNARD SANDERS, Vermont LARRY E. CRAIG, Idaho
AMY KLOBUCHAR, Minnesota LAMAR ALEXANDER, Tennessee
SHELDON WHITEHOUSE, Rhode Island CHRISTOPHER S. BOND, Missouri
Bettina Poirier, Majority Staff Director and Chief Counsel
Andrew Wheeler, Minority Staff Director
------
1Note: During the 110th Congress, Senator Craig
Thomas, of Wyoming, passed away on June 4, 2007. Senator John
Barrasso, of Wyoming, joined the committee on July 10, 2007.
C O N T E N T S
----------
Page
August 23, 2007
OPENING STATEMENTS
Boxer, Hon. Barbara, U.S. Senator from the State of California... 1
WITNESSES
Tuggle, Benjamin, Regional Director, U.S. Fish and Wildlife
Service........................................................ 5
Prepared statement........................................... 8
Buchanan, Tom, on behalf of Oklahoma Farm Bureau................. 13
Prepared statement........................................... 15
Sullivan, Robert J. Jr., Sullivan and Company, LLC, On behalf of
Oklahoma Independent Petroleum Association..................... 16
Prepared statement........................................... 18
Bower-Moore, Dru, Regulatory Advisor, Western Division Devon
Energy
Corporation.................................................... 20
Prepared statement........................................... 22
Haught, Jim, Manager, Environmental Services ONEOK, Incorporation 27
Prepared statement........................................... 29
ADDITIONAL MATERIAL
Statements:
United States Department of the Interior, Office of the
Solicitor, The Meaning of ``In Danger of Extinction
Throughout all or a Significant Portion of its Range''..... 41
Environmental Assessment Division, Argonne National
Laboratory,
Environmental Policy and Regulatory Constraints to Natural
Gas
Production................................................. 77
Energy Bar Association, Energy and the Environment: The
Future of Natural Gas in America, Energy Law Journal....... 201
A PERSPECTIVE ON THE ENDANGERED SPECIES ACT'S IMPACTS ON THE OIL AND
GAS INDUSTRY
----------
Thursday, August 23, 2007
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee met, pursuant to notice, at 10 o'clock a.m.
in Courtroom 1, U.S. District Court, 333 West 4th Street,
Tulsa, OK, Hon. Barbara Boxer (chairman of the committee)
presiding.
Present: Senator Boxer.
OPENING STATEMENT OF HON. BARBARA BOXER,
U.S. SENATOR FROM THE STATE OF CALIFORNIA
Senator Inhofe. The hearing will come to order. And first
of all, today's hearing is about the oil and gas industry, an
industry that's absolutely essential to Oklahoma.
The oil and gas industry represents 10 percent of our gross
State product and employs more than 55,000 Oklahomans. For the
past 15 years, Oklahoma's oil and gas producers have paid
production taxes in excess of $400 million annually. This money
funds schools and roads and health services and other services.
So a healthy oil and gas industry is critical, not only to the
livelihood of Oklahomans, but to the Nation's overall energy
security. For example, 10 percent of the Nation's natural gas
reserves are in Oklahoma, and for the past 2 years, the
industry has produced energy valued in excess of $10 billion.
Now some of our witnesses may not be aware of this, but I
actually started out in the business, I think, Mr. Sullivan,
you're aware of this. Since I'm older than everybody in this
room, some of you won't know what I'm talking about when I tell
you that I was a tool dresser on a cable tool rig, and that is
in the Osage field up there, so I drilled an awful lot of that
shallow stuff up there, and that's hard work, but it's
certainly essential to our economy, and you can see some
rebound taking place right now.
It's more important than ever to foster the domestic
development of oil and gas resources. Today we'll hear from
witnesses about how the Endangered Species Act has impacted
that production.
Enacted in 1973, the ESA, Endangered Species Act, remains
one of our most celebrated environmental laws despite the fact
that it has not reached many of its stated objectives and has
cost the country billions in the process.
For example, a 2004 Department of Energy report on natural
gas, and without objection, that will be a part of the record,
stated that ``Critical habitat designations and section 7
consultations under ESA have caused enormous delays to natural
gas projects with an estimated cost to the economy of $261 to
$979 million over the past 30 years.'' And that's a lot. In
Oklahoma, the ESA protection of the American Burying Beetle has
proven a formidable barrier to oil and gas exploration,
production and distribution. The American Burying Beetle was
listed in 1989 based on museum collectors' data. Nearly 20
years later, actual field data showed that the populations of
the beetle were and are very extensive.
According to the Fish and Wildlife Ecological Service,
there may be more than 72,000 beetles in Oklahoma alone. And
this doesn't sound like they're endangered of extinction to me.
But the lack of robust science in the listing process is
not the only issue. The conservation policies have also taken
their toll on the energy industry. As we will hear from one of
our producers today, a long-standing policy for winter oil and
gas construction activities in Oklahoma was suddenly changed
without notice to the industry, costing millions of dollars,
and unfortunately, changing the rules in the middle of the
game; it's become more of a rule than an exception.
Earlier this year we got a bit of good news. The Service
announced it would begin a status review of the American
Burying Beetle, something the ESA requires the Service do every
5 years. The beetle has been waiting for 13 years. And I hope
the Service will have some answers for us today about what they
have learned and when we can expect some decisions.
The problem goes beyond the oil and gas industry to the
consumer, who ultimately pays the price. For example, over
regulation drives up natural gas prices for farmers and
ranchers, another industry critical to Oklahoma.
Natural gas accounts for 90 percent of the total--actual
total costs of manufacturing fertilizer, an obviously important
component for farming. And we'll hear today from the Farm
Bureau. We've discussed this many times, that people are not
aware of the connection between natural gas and our Ag
community.
Since 2000, 24 nitrogen fertilizer plants have shut down,
and that leaves only six remaining. Some people are not aware
of this, but two of those six are located here in Oklahoma.
Oklahoma's farmers get hit more than once. They not only
face increasing natural gas prices, but have ESA issues of
their own.
In an attempt to be good stewards and to avoid the
burdensome designation of the critical habitat of the Arkansas
River Shiner, the Oklahoma Farm Bureau created a voluntary
species management plan. Today we'll hear how that project is
going.
You know, I always remember, when we were talking about
that, we had--the Ag leadership happened to come in the room
and hear what we're up against there in Washington, I say to
you Tom, and so I want you not to be shy in your testimony
today.
Sadly the ESA is just one of a host of laws, although well
intended, frustrate domestic energy production in this country.
After decades of activist judges and lawsuits by anti--
energy special interests, environmental laws are not used to
ensure that human actions do not harm the environment, but are
used to stop human activity altogether.
These interests don't believe what all Oklahomans know to
be true, and that is that we can develop our energy resources
without sacrificing the environment.
I'm proud that Oklahoma leads the rest of the country in so
many ways when it comes to energy exploration, production, and
research as well as the protection of the environment. The
Oklahoma Energy Research Board, for example, is a model for
many other States.
The fact of the matter is that this engine we call
``America needs energy to run.'' If our domestic oil and gas
producers are prevented from producing that energy, then
businesses are hurt and people lose their jobs.
Here are just a couple of examples: According to the
American Chemistry Council, one out of every ten chemical--
related jobs has vanished in the last 5 years.
The first--the America forest and paper industry has lost
more than 120,000 high paying manufacturing jobs and closed
more than 220 plants.
In fact, the Pacific Northwest timber industry was
essentially shut down some 10 to 15 years ago to protect the
Northern Spotted Owl. And it's now thought that many of the
spotted owl's problems were not from logging, but due to
competition for food and habitat from other owls.
The obstacles to efficient development of our natural
resources are many. Most of them have nothing to do with
scarcity of resources, but are created by those in Washington
DC who say they dislike relying on foreign oil but do
everything to prevent domestic production.
You know, that's one of the greatest frustrations I have
coming from an oil State, to be there serving with some of the
people in Congress, listening to individuals talk about how bad
it is to be relying on foreign resources, then turn around and
do everything they can to keep us from producing. And this is
something that we face every day.
When Congress resumes in September, we'll have a conference
committee to reconcile the differences between the Senate and
the House energy bills.
And I say ``energy bills,'' even though they're not energy
bills. The House Energy Bill is a lousy bill, the Senate Energy
Bill is a lousy bill, and I don't know how we can expect
anything out of conference because of the rules that we have.
They can't go beyond the purview of the House and the Senate,
but we're going to try to do better in the years to come.
And I want to welcome all the witnesses and look forward to
sharing your wisdom with my colleagues and Congress on both
sides of the aisle.
As I said to you before we started, the value of these
hearings is, we are able to get testimony and get it into the
record and heighten the visibility of this problem that we have
right now.
We have a number of great witnesses today. We start off
with Dr. Ben Tuggle who's the Regional Director of the U.S.
Fish and Wildlife, took the place of Dale Hall, who's been a
good friend of ours for many times.
We have Tom Buchanan on behalf of the Farm Bureau. Bob
Sullivan, a very good friend with the independent producers.
Dru Bower-Moore, the Regulatory Advisor, Western Division of
Devon. And as I told Dru, I was in Devon on Monday and enjoyed
visiting with probably 200 or 300 of their employees. And Jim
Haught, the manager of ONEOK.
Well, let's start off--and what I'd like to do is have each
person, if you would, take one panel at a time starting with
Dr. Tuggle. If you'd try to restrict your opening remarks to 5
minutes, and we'll have a timer up here, that would probably
help us.
Your entire opening remarks will be made a part of the
record. And we'll recognize you at this time, Dr. Tuggle.
[The prepared statement of Senator Boxer follows:]
Statement of Hon. Barbara Boxer, U.S. Senator from
the State of California
Good morning. Today's hearing is about the oil and gas
industry, an industry that is absolutely critical to Oklahoma.
The oil and gas industry represents 10 percent of our gross
State product and employs more than 55,000 Oklahomans. For the
past 15 years, Oklahoma's oil and gas producers paid production
taxes in excess of $400 million annually. This money funds
schools, roads, health care and other services. A healthy oil
and gas industry is critical not only to the livelihood of
Oklahomans but to the Nation's overall energy security. For
example, 10 percent of the Nation's natural gas reserves are in
Oklahoma and for the past 2 years, the industry has produced
energy valued in excess of $10 billion.
It is more important than ever to foster the domestic
development of oil and gas resources. Today, we will hear from
witnesses about how the Endangered Species Act has impacted
that production.
Enacted in 1973, the Endangered Species Act remains one of
our most celebrated environmental laws despite the fact that it
has not reached many of its stated objectives and has cost the
country billions in the process. For example, a 2004 Department
of Energy report on natural gas (insert into the record),
stated that critical habitat designations and section 7
consultations under ESA have caused enormous delays to natural
gas projects with an estimated cost to the economy of $261 to
$979 million over the past 30 years.
In Oklahoma, the ESA protection of the American Burying
Beetle has proven a formidable barrier to oil and gas
exploration, production and distribution. The American Burying
Beetle was listed in 1989 based on museum collector's data.
Nearly 20 years later, actual field data show that the
populations of the beetle were and are very extensive.
According to the Fish and Wildlife Ecological Service, there
may be more than 72,000 beetles in Oklahoma alone. This doesn't
sound like a species that is ``in danger of extinction.''
But the lack of robust science in the listing process is
not the only issue. The conservation policies have also taken
their toll on the energy industry. As we will hear from one of
our producers today, the long-standing policy for winter oil
and gas construction activities in Oklahoma was suddenly
changed without notice to the industry, costing millions of
dollars. Unfortunately, changing the rules in the middle of the
game is the rule rather than the exception when implementing
ESA.
Earlier this year, we got a bit of good news. The Service
announced it would begin a status review of the American
Burying Beetle; something the ESA requires the Service to do
every 5 years. The beetle has been waiting for 13 years. I hope
the Service will have some answers for us today about what they
have learned and when we can expect some decisions.
The problem goes beyond the oil and gas industry to the
consumer, who ultimately pays the price. For example,
overregulation drives up natural gas prices for farmers and
ranchers, another industry critical to Oklahoma. Natural gas
accounts for up to 90 percent of the total costs of
manufacturing fertilizer, an obviously important component of
farming. Since 2000, 24 nitrogen fertilizer plants have shut
down. Only 6 U.S. plants remain, three of which are in
Oklahoma.
And Oklahoma's farmers get hit more than once. They not
only face increased natural gas prices but have ESA issues of
their own. In an attempt to be good stewards and to avoid the
burdensome designation of critical habitat for the Arkansas
River Shiner, the Oklahoma Farm Bureau created a voluntary
species management plan. Today we will hear how this project is
going.
Sadly, the ESA is just one of a host of laws that, although
well intended, frustrate domestic energy production in this
country. After decades of activist judges and lawsuits by anti-
energy special interests, environmental laws are not used to
ensure that human actions do not harm the environment but are
used to stop human activity all together. These interests don't
believe what all Oklahomans know to be true--that we can
develop our energy resources without sacrificing the
environment. I am proud that Oklahoma leads the rest of the
country in so many ways when it comes to energy exploration,
production, and research, as well as protection of the
environment. The Oklahoma Energy Research Board, for example,
is a model for many other States.
The fact of the matter is that this engine we call America
needs energy to run. If our domestic oil and gas producers are
prevented from obtaining that energy, then businesses are hurt
and people lose their jobs. Here are just a couple of examples.
According to the American Chemistry Council, ``one in every 10
chemical-related jobs has vanished in the past 5 years.'' The
American Forest & Paper Industry ``has lost more than 120,000
high paying manufacturing jobs and closed more than 220
plants.'' In fact, the Pacific Northwest timber industry was
essentially shut down 10--15 years ago to protect the Northern
Spotted Owl. It is now thought that many of the spotted owl's
problems were not from logging but due to competition for food
and habitat from other owls.
The obstacles to efficient development of our natural
resources are many. Most of them have nothing to do with
scarcity of resources, but are created by those in Washington
DC who say they dislike ``relying on foreign oil'' but do
everything they can to prevent domestic production. When
Congress resumes in September, we will have a conference
committee to reconcile differences between the Senate and House
energy bills. If the goal is to actually improve U.S. energy
security, these bills not only fail to meet the mark but they
also put in place a new set of roadblocks. I had hoped we could
do better. I want to welcome all the witnesses and I look
forward to sharing your wisdom with my colleagues in Congress
on both sides of the aisle.
OPENING STATEMENT OF BENJAMIN TUGGLE, REGIONAL DIRECTOR, U.S.
FISH AND WILDLIFE SERVICE
Dr. Tuggle. Thank you, Senator. I certainly appreciate the
opportunity to be here.
Senator Inhofe. Now can you move your microphone up close
because we want to make sure we get an accurate record of this
proceeding.
Dr. Tuggle. OK. How is that?
Senator Inhofe. That's better.
Dr. Tuggle. I'm often told I have a soft voice by everybody
except my staff.
Senator Inhofe. But carry a big stick, is that it?
Dr. Tuggle. That's the idea. Good morning. I am Dr.
Benjamin Tuggle. I'm the Regional Director for the U.S. Fish
and Wildlife Service in the Southwest Region, which includes
the great State of Oklahoma, Texas, New Mexico, Arizona.
Before providing my testimony, Senator, I'd like to thank
you for allowing me the opportunity to appear before you today
for this field hearing.
As a regional director, I oversee the Service's role in the
administration of the Endangered Species Act, as well as a
number of other Federal responsibilities related to the Act in
this region.
My formal testimony, which has been provided for the
record, discusses the history, biology, and extensive
conservation efforts that have been taken on the part of the
Service for the American Burying Beetle and the Arkansas River
Shiner. However, I would like to focus my oral remarks today on
the efforts being taken by the Service to work with industries
inherently involved in the conservation of these species
through their compliance with the Endangered Species Act. And I
refer specifically to the industries that are associated with
oil and gas and agriculture.
The cooperative activities I will mention today represent
but a snapshot of the extent of our extensive efforts to
streamline endangered species compliance while also ensuring
protection and conservation of endangered species.
As you know, Senator, the mission of the Fish and Wildlife
Service is to work with others to conserve, protect and enhance
fish and wildlife and plants and their habitats for the
continued enjoyment of the American people.
Our role regarding energy development is multifaceted. For
example, the Service facilitates the environmentally sound
exploration and production of privately held minerals on the
national wildlife refuge system lands in order to minimize
impacts to other resources.
We work in partnership with the oil and gas operators to
streamline this process so that the financial and operational
needs of the operators are met while fulfilling our role and
responsibility to protect species and environment for the
American people.
We also work closely with other entities such as the BLM,
Environment Protection Agency, and the Corps of Engineers in
the assessment of potential impacts to natural resources where
the requirement of the National Environmental Policy Act, or
NEPA applies. And we consult with States and local agencies to
ensure their regulatory requirements are also met.
The Service participates in the necessary clearances for
protecting resources, such as the Endangered Species Act
consultation for threatening endangered species, monitoring,
and compliance activities and establishing mitigation and
reclamation standards for individual species.
It's important to note that neither the American Burying
Beetle nor the Arkansas River Shiner consultations have ever
stopped a project from going forward. This is not to say that
some of the projects haven't experienced delays in the past due
to the compliance with the ESA. However when operators
coordinate with us early and frequently in projects, they are
much more likely to experience no delays in ESA consultation as
we move forward with their schedule.
When endangered species consultation is required of the
Service on a particular activity, the Service works to expedite
these actions as quickly as possible and to identify steps that
would be taken to minimize the impacts, not only to the
schedule, but also to the species.
Furthermore, the Service has taken proactive steps to
ensure the mission priorities are met while also streamlining
the consultation process so that the financial and operational
needs of oil and gas and agriculture operations are met.
I will spend the remainder of my time to just identify some
of the examples of these proactive means that I've been
speaking about earlier.
In 2004, the Service worked on and completed a Memorandum
of Understanding with five major oil and gas companies in
Eastern Oklahoma, operating within the range of the American
Burying Beetle. By signing the MOU, the oil and gas operators
voluntarily agreed to implement agreed upon Best Management
Practices to proactively conserve the beetle.
As a result, the Service does not anticipate their
operations negatively impacting the beetle or its habitat.
Similarly, we have also finalized an MOU with a seismic
exploration company operating within the range of the American
Burying Beetle in Eastern Oklahoma.
Furthermore, we have worked with the Oklahoma Corporation
Commission to assist operators and the Commission in
operating--in addressing rather, the American Burying Beetle
during the seismic operation permit application process.
The Service is working with the Oklahoma Department of
Transportation and the Federal Highway Administration on a
programmatic biological opinion for the American Burying
Beetle.
This programmatic opinion will facilitate implementation of
Federal, State and county projects funded by the Federal
Highway Administration by----
Senator Inhofe. Let me interrupt you just a moment. This is
a little awkward for me because I can't see the timing here. In
Washington we have the timing where everyone can see it. How
are we doing there?
Senator Clerk. We're out of time.
Senator Inhofe. We're out of time. Try to wrap up if you
would, Dr. Tuggle.
Dr. Tuggle. I will and I apologize for taking much longer.
Senator Inhofe. That's fine.
Dr. Tuggle. I would like to highlight in summary just the
fact that we have used virtually every tool at our disposal to
be able to streamline this process.
One of the things that I would like to highlight before my
time is through, is, we've used nonprograms, such as the
Partners for Fish and Wildlife to work with landowners to try
to provide funds to be able to work with those landowners so
they can put conservation measures in place. And we also want
to thank you for spearheading the legislation that gave us
organic legislation in that regard.
Senator Inhofe. That was very successful. In fact, we had a
hearing with some of the--I think, one of the same witnesses on
that legislation.
Dr. Tuggle. In closing, the Service remains committed to
successfully conserving and recovering endangered species while
working with the industry that's impacted by these regulatory
activities.
We recognize the species conservation must not come at the
cost of diminishing the ability of the United States to ensure
its energy future. And only by working together can we achieve
our goals.
I want to also thank you for showing the leadership to
bring this meeting, this field hearing today. And also I'd like
to answer any questions that you have for me.
[The prepared statement of Dr. Tuggle follows:]
Statement of Benjamin Tuggle, Regional Director,
U.S. Fish and Wildlife Service
Good afternoon, I am Dr. Benjamin Tuggle, Regional Director
of the U.S. Fish and Wildlife Service's (Service) Southwest
Region, which includes the States of Texas, New Mexico, Arizona
and Oklahoma. Before presenting my testimony, I would like to
thank Senator Inhofe for the opportunity to appear here today
and participate in this oversight hearing. As Regional
Director, I oversee the Service's role in the administration of
the Endangered Species Act, as well as a number of our other
Federal responsibilities related to the Act, in the region.
My statement today will focus on the Southwest Region's
role in the conservation and recovery of two Governmentally
listed species: the American burying beetle and Arkansas River
shiner, as well as the Service's efforts to streamline
Endangered Species Act compliance for these two species in
Oklahoma.
american burying beetle
The American burying beetle was listed as endangered under
the Endangered Species Act in 1989 and the Final Recovery Plan
was signed in 1991. Once found throughout the eastern United
States, the American burying beetle is now only found in nine
States: South Dakota, Nebraska, Michigan, Ohio, Oklahoma,
Texas, Arkansas, Rhode Island, and Massachusetts. The beetle's
current range represents a 95 percent reduction from its
estimated historic range. Within Oklahoma, the species is known
or believed to occur in 34 counties in the eastern part of the
State.
Numerous American burying beetle surveys have been
conducted by private and Governmental entities within the
eastern third of Oklahoma over the past several years,
including a large number of surveys conducted by the oil and
gas industry. These surveys vary annually with regard to where
they are conducted and during what time of year, but indicate,
on average, relative population stability from 1992 to 2006. In
contrast, survey population data from other States within the
species' historic range vary widely.
In late 2003 and early 2004, the Service worked on and
completed a Memorandum of Understanding (MOU) with five major
oil and gas companies in eastern Oklahoma operating within the
range of the American burying beetle. The MOU provided best
management practices for avoiding or minimizing adverse impacts
to the beetle from oil and gas-related activities. By signing
the MOU, the oil and gas operators voluntarily agreed to
implement the best management practices to proactively conserve
the beetle.
As a result, the Service does not anticipate their
operations will result in take, which is prohibited under
section 9 of the Endangered Species Act.
Similarly, we are also finalizing an MOU with a seismic
exploration company operating within the range of the American
burying beetle in eastern Oklahoma. This MOU provides best
management practices for avoiding or minimizing adverse impacts
to American burying beetles from non-Federal oil and gas
seismic activities. Furthermore, we are working with the
Oklahoma Corporation Commission to assist operators and the
Commission in addressing the American burying beetle during the
seismic operations permit application process.
In May 2005, the Service completed a Programmatic
Biological Opinion for the American burying beetle with the
Environmental Protection Agency (EPA) concerning oil and gas-
related activities in eastern Oklahoma that required a Clean
Water Act storm water construction permit. The Service's
Biological Opinion streamlined the consultation process so that
the permits could be issued to oil and gas operators in only 7
days. The Energy Policy Act of 2005, however, negated the need
for permitting of most oil and gas activities. Consequently,
the Biological Opinion is no longer applicable and consultation
with the Service in regard to storm water permits for oil and
gas activities is rare.
In September 2005, the St. Louis Zoo hosted an American
burying beetle conservation conference in St. Louis, Missouri.
The conferees identified a need for a species-specific working
group, along with a 5-year status review for the species and an
updated and revised recovery plan. In May 2007, the Service
hosted a follow-up conference in Tahlequah, OK to present new
research on the American burying beetle and similar species.
The event was open to the public and staff from the U.S. Senate
Environment and Public Works Committee attended. The 5-year
review of the status of the American burying beetle should be
finalized in early 2008. After the 5-year review is completed
the Service will begin working on the revised recovery plan for
the beetle.
The Service is also working with Northeastern State
University, the University of Oklahoma, the Oklahoma Department
of Wildlife Conservation, and Camp Gruber National Guard
Training Center to determine the reproductive habitat
preferences of the American burying beetle. The results from
this research have the potential to identify specific
geographic areas of suitable habitat for American burying
beetle reproduction. The Oklahoma Department of Wildlife
Conservation plans on using roughly $30,000 of the Cooperative
Endangered Species Fund dollars in fiscal year for an American
burying beetle microhabitat reproductive study.
The Service is in the preliminary stages of discussing
development of an umbrella Habitat Conservation Plan (HCP) for
the American burying beetle within the State of Oklahoma. The
goal of this umbrella HCP is to authorize incidental take under
the Endangered Species Act and allow both State and private
entities to continue their otherwise legal activities while
also providing for conservation of the species and its habitat.
We will keep Congress apprised of our progress.
Last, the Service is also currently working with the
Oklahoma Department of Transportation and the Federal Highway
Administration on a programmatic Biological Opinion for the
American burying beetle in eastern Oklahoma. This programmatic
opinion will facilitate implementation of Federal, State and
county projects, funded by the Federal Highway Administration,
by streamlining traditional individual section 7 consultation
requirements related to the American burying beetle by
condensing it into one consultation. We expect this streamlined
process to simplify project scheduling.
arkansas river shiner
The Arkansas River shiner has disappeared from more than 80
percent of its estimated historical range and is now almost
entirely restricted to about 508 miles of the Canadian River in
Oklahoma, Texas, and New Mexico. An extremely small population
may also exist in the Cimarron River in Oklahoma and Kansas,
based on the collection of 16 individuals from 1985 to 1992.
The Arkansas River Basin population of the Arkansas River
shiner was listed as a threatened species in 1998 due to
habitat loss. A final decision on critical habitat designation
was promulgated on April 4, 2001. On April 25, 2002, the New
Mexico Cattle Growers Association and 16 other plaintiffs
challenged the designation in court. A memorandum opinion from
the U.S. District Court for the District of New Mexico was
issued in that case. In accordance with the court's opinion,
the Service completed a new final rule designating critical
habitat for the Arkansas River shiner on October 13, 2005.
The Service has conducted surveys for Arkansas River shiner
populations since 2004 and recently implemented a more
intensive sampling effort to gather additional information on
the status of the species in both the Canadian and Cimarron
rivers. Further research on the species is necessary before a
number of recovery actions can be designed and implemented. We
are currently developing proposals to fill these research gaps,
which will likely include additional monitoring, research on
competition with other species, effects on the species from
changing water quality, and habitat assessments.
Despite these data gaps, the Service continues to conduct
proactive species recovery efforts. For example, we are working
with the Service's Partners for Fish and Wildlife Program and
are implementing a salt cedar task force to address the
encroachment of non-native, invasive species which negatively
impacts the Arkansas River Shiner by reducing the amount of
water for the species to thrive.
In Fiscal Year 2006, the Service awarded a private
stewardship grant to the Oklahoma Farm Bureau for over $160,000
for landowners to control invasive salt cedar along portions of
the South Canadian River in Oklahoma. The Nature Conservancy
also received a grant of $195,000 to benefit the Arkansas River
shiner and its habitat, as well as other listed and candidate
species.
In addition, we are working with the Oklahoma Farm Bureau
to develop a conservation plan for the Arkansas River shiner in
Oklahoma, based on a plan developed in 2004 by the Canadian
River Municipal Water Authority in the Texas panhandle. The
plan identifies conservation actions that landowners may
voluntarily complete for the benefit of the shiner and its
habitat. The development and implementation of these two plans
will provide an excellent mechanism for landowner involvement
in our efforts to conserve the Arkansas River shiner and its
habitat.
The Service is also conducting a formal consultation with
the Federal Highway Administration and the Oklahoma Department
of Transportation on a proposed bridge replacement over the
Canadian River. Reasonable and prudent measures to minimize
impacts to the Arkansas River shiner, while not significantly
impacting bridge construction activities, have been discussed
with the Federal Highway Administration and the Oklahoma
Department of Transportation. These include re-vegetating
impacted areas with native grasses, maintaining flows by using
multiple work roads, working outside of the Arkansas River
shiner's spawning season, and limiting work within the actual
river.
Consultations on oil and gas operations with potential
impacts to the Arkansas River shiner have been limited.
Typically, the Service recommends directional drilling for
pipelines crossing within occupied Arkansas River shiner
habitat, as well as implementation of best management practices
for spill prevention on new oil and gas operations. As
mentioned above, most oil and gas-related activities are now
excluded from the need to obtain storm water construction
permits. Therefore, we anticipate that the number of informal
consultations with the Service related to the Arkansas River
shiner and oil and gas-related activities will be lower than in
the past.
conclusion
In closing, the Service remains committed to successfully
conserving and recovering endangered and listed species, such
as the American burying beetle and Arkansas River shiner. We
also remain strongly committed to working cooperatively with
our partners and other stakeholders.
Thank you again for the opportunity to participate in the
hearing today. This concludes my statement and I would be happy
to answer any questions you may have.
Senator Inhofe. Thank you, Dr. Tuggle. I wasn't going to
say anything about the Partnership Act, but it was very, very
successful. What I like about that is, it lets the Government
work with the people, with the property owners. And if left to
manage their own resources in a very environmentally sound way,
conservation way, they will do it. So I think that's been a
very successful program. We're glad to get it expanded.
You said something just a minute ago that I had not picked
up before. You said that these consultations had never--or I
guess section 7 never stopped a project, had delay, but not
stopped; is that accurate?
Dr. Tuggle. Yes, sir.
Senator Inhofe. Let me ask you this question also: Will
your schedule allow to you stay for the remainder of it, for
the second panel, so that you would be here?
Dr. Tuggle. Yes, sir.
Senator Inhofe. That would be very helpful. Now, Dr.
Tuggle, you heard me in my opening remarks, I talked about the
5-year status review of the American Burying Beetle. I'd like
to know when you think that would be completed and what kind of
conclusions do you think we might anticipate from that, and
what kind of actions do you think the Service may be taking?
Dr. Tuggle. Well, that 5-year review is due for completion
sometime within the next couple of months. The lead region for
that is our northeast region. And we've had several
conversations with them on the content of that 5-year review.
But the 5-year review will focus on surveying techniques, will
focus on the latest information, scientific information that we
have regarding the status of those populations. And we
anticipate after that 5-year review will give us enough
information to not only talk about the recovery plan, but
whether that species is in better shape than we thought it was
in when we originally had it listed.
Senator Inhofe. You said it's a different region is going
to be the lead. What does the lead do that you would not be
involved in? How does that change----
Dr. Tuggle. Well, there's a cooperation that would take
place. The difference, when we say a ``lead,'' they're
responsible for actually writing the document, but we have a
great deal of input in terms of the content of that document.
Senator Inhofe. Because we're addressing the beetle right
now, and I don't know whether that's as prevalent in that
region as it is here.
Dr. Tuggle. Right. Exactly.
Senator Inhofe. March 16 of 2007, the Solicitor with the
U.S. Department of Interior issued a memorandum on the meaning
of--and I'm quoting now, ``In danger of extinction throughout
all or a significant portion of its range,'' the statutory
threshold of an endangered species. And I want to make that a
part of the record also without objection.
Now as I mentioned in my opening statement, the population
of the American Burying Beetle have been found to be very wide
spread, and would suggest to me that the beetle is not in
danger of extinction in Oklahoma.
I ask you, how is this memorandum going to be incorporated
into the 5-year review, or will it be considered as part of the
evidence to be entered into the record?.
Dr. Tuggle. Well, I think in the 5-year review, when we get
the census in terms of the monitoring information, we will be
able to use the significant portion of the range as we talk
about downlisting and de-listing a species. And, therefore, if
we talk about it from a standpoint of a significant portion of
the range in Oklahoma, and we have a robust population, then we
would be able to apply that principle in terms of how that
species, the burying beetle, would be affected in Oklahoma.
Senator Inhofe. I see. Dr. Tuggle, the recovery plan for
the American Burying Beetle was finalized in 1991, and based on
little data as I understand it, and millions of dollars have
been spent on research, beetle surveys, conservations and
species protection.
Do you think the recovery plan, a 16-year old document
based on 20-year old data should be updated at the end of this
five-year review?
Dr. Tuggle. Absolutely, sir. In fact, the essence of the 5-
year review will give us a great deal of information in terms
of how that recovery plan should look, and also whether we've
reached a point with the population standards if we would
should downlist or delist the species.
Senator Inhofe. That's good. On May 18 of 2001, the
President issued Executive Order No. 13211 that requires
agencies to prepare statements of energy effects for any
regulation that significantly affects energy supply or its
distribution and its use.
In proposing to list the polar bear, the Fish and Wildlife
Service did not prepare such a statement but rather issued a
blanket statement that--and I'm quoting now--``This rule does
not expect to significantly affect energy supplies,
distribution and use.''
Twenty-five percent of the U.S. domestic supply of oil
comes from Alaska. If the polar bear is listed, every permit or
other action taken by the companies in that region will have to
go through a section 7 consultation, just--it will be a
necessary requirement, in my opinion. And, you know, how can
the Service justify not preparing this statement?
You know, I was there when they came out with that
statement on the polar bear when, in fact, of the 15
populations of the polar bear, with the exception of the West
Hudson Bay area, you're actually getting either sustained or
increased populations in those areas.
And it's my understanding that the reason for the depleted
population in the West Hudson Bay area was due primarily to
hunting regulations.
But anyway, I can't see that they could say that this rule
is not expected to significantly affect energy supplies,
distribution or use under these circumstances.
What do you think about that?
Dr. Tuggle. Well, I've had the benefit of working with the
Interior group when I was still in Washington on the
construction--of a potential construction of the natural gas
pipeline coming off the north slope and whether it was going to
go through Alaska or into Canada. And the benefit of that has
been the fact that we've been able to sit down ahead of time to
start to get some idea about how that pipeline might affect
sensitive species.
In my opinion, strictly my opinion, I think that when that
statement was issued, it may have been from a standpoint of not
really knowing the impact potentially. And then trying to give
it enough time so that we can get the scientific information
from USGS that we would need to see about distribution,
population size, and the other things that are associated with
how the population is distributed.
But I also want to add that there are mechanisms such as
programmatic biological opinions that can streamline the
consultation process. The more that we know about the
population size, the more we know about particular routes that
may be taken, we get a better idea about how that might impact
the species.
Senator Inhofe. You know, I remember, and were you around
when they were discussing that, as far as the pipeline is
concerned, its effect on the caribou?
Dr. Tuggle. Yes, sir.
Senator Inhofe. And have you been up there and seen during
the summer months how the caribou, the only shade they can find
up there is the pipeline?
Dr. Tuggle. Yes, sir.
Senator Inhofe. All right. In the final regulation
designating the critical habitat of the Arkansas River Shiner,
the Service stated that it would review the need for critical
habitat in certain areas once the Oklahoma Farm Bureau Plan had
been implemented.
I'd ask, does the Service plan to propose excluding these
areas in the future?
Dr. Tuggle. I think that, you know--and I apologize, I
can't give you a straight answer because I'm at a disadvantage
in terms of my knowledge on where we might modify the critical
habitat, but I think at this point we're pretty satisfied with
the way the critical habitat looks. That does not mean we would
not be flexible in the future if we found that it might be more
prudent to exclude areas.
We're trying to focus our attention on the conservation
measures that would make the habitat better. I think that if we
have good quality habitat, then that diminishes our need for
critical habitat.
Senator Inhofe. Dr. Tuggle, I appreciate it very much.
We'll go ahead now and conclude this first panel if you don't
mind staying around.
Dr. Tuggle. Absolutely.
Senator Inhofe. I would ask the other four witnesses that
we've already introduced, if you'd please come forward to the
table.
Dr. Tuggle. Thank you.
Senator Inhofe. I've asked the timer to give me a little
sign when the 5-minutes comes up, because as I say, your entire
statement will be made part of the record and we want to get to
our questions here.
We'll probably take them in order starting with you, Tom,
and working across, if that's all right.
Mr. Buchanan. That would be fine, sir.
Senator Inhofe. You're recognized, Mr. Buchanan, for your
opening statement.
STATEMENT OF TOM BUCHANAN, ON BEHALF OF
OKLAHOMA FARM BUREAU
Mr. Buchanan. Thank you, Senator. First, I want to let you
know that I, on behalf of Ag producers in Oklahoma, am very
appreciative of the opportunity to be before you and the ladies
and gentlemen here. We appreciate the opportunity. Thank you.
I am Tom Buchanan. I'm from Jackson County, Oklahoma, in
the southwestern part of the State. I have farmed for 27 years
and manage currently the Lugert-Altus Irrigation District.
The Lugert-Altus Lake was constructed by the Bureau of
Reclamation during World War II. It first provided water to the
farmers in the district in 1946 and has continually supplied an
irrigation source.
The district covers 48,000 acres of farmland with about 330
different landowners. Our primary crop is cotton. The gross
receipts from the district are approximately $48 million
annually. A giant boost to the local economy.
Today I would like to address how the Endangered Species
Act affects the oil and gas industry, which then directly
impacts farming.
Farmers appreciate God's creatures as much as anyone.
However, the ESA impacts our operations by increasing input
costs and threatening our water supplies.
Oklahoma ranks second in the Nation for production of
natural gas; fourth in the Nation of wheat and cattle; and
fifth in the Nation for peanuts.
Our State has been called ``the State of soil and oil.''
However, high prices for oil and gas have negative impacts on
productive agriculture. Natural gas is the most costly
component used in manufacturing nitrogen fertilizer. Fertilizer
prices have more than doubled over the past 15 years with no
reprieve in sight.
A recent Energy Information Administration outlook
forecasts natural gas prices rising by 9.2 percent in 1907, and
increasing another 3.7 percent in 1908.
World demand for fertilizer grew by 13 percent between 1901
and 2005 According to the Fertilizer Institute. Next year,
Oklahoma farmers will face even steeper bills to fertilize
crops.
The ESA is yet another factor contributing to the high cost
of fertilizer by slowing down natural gas production. The
American Burying Beetle, listed as endangered under the ESA,
has delayed and impeded oil and gas production in Oklahoma.
Another species of concern in Oklahoma is the Arkansas
River Shiner, a threatened minnow found in two of our largest
rivers. The Oklahoma Farm Bureau Legal Foundation, along with
20 other organizations, worked with the U.S. Fish and Wildlife
Service to refine critical habitat for the shiner.
The Canadian River Municipal Authority had a 154 mile
section of its management plan excluded for critical habitat.
The OFB Legal Foundation is working to finalize a voluntary
conservation management plan for the shiner in order to remove
sections of the Cimarron and Canadian rivers from critical
habitat also. These organizations have been proactive about
preserving the shiner to protect their own water supplies.
After the Klamath Basin crisis, many fear the needs of
endangered species trump the needs of the humans.
To illustrate the extensive impact of ESA, Oklahoma's
essential industries could be adversely impacted by the listing
of a species that lives thousands of miles from here. The Fish
and Wildlife Service has proposed listing polar bears as a
threatened species based solely on projected impacts of global
warming.
Under the ESA, any activity authorized, funded or carried
out by a Federal agency that might contribute to global
warming, such as permits for livestock or oil and gas
production, would be subject to consultation with the Fish and
Wildlife Service to make sure that the proposed activity would
not jeopardize the continued existence of polar bears.
Consultations can take from 90 to 120 days to complete and
result in permanent delays. Because the Service is required to
consider the cumulative effects of all actions, even those
activities with little impacts, such as, one Oklahoma livestock
facility could be denied a permit or have its terms
substantially altered because of supposed impacts to polar
bears.
Under the ESA, taking does not have to be direct, but can
also constitute indirect impacts to species that might affect
their breeding, feeding or sheltering. Livestock and oil and
gas producers could conceivably be liable for taking polar
bears, if they contribute to global warming.
Another concern to agriculture is the Federal regulatory
reach of the Clean Water Act or CWA. Water is essential to
agriculture production. The scope of Federal jurisdiction is
important to farmers and ranchers because jurisdictional
determinations directly impacting agriculture activities, have
the potential to interfere with the use of private land, and if
applied too broadly, impede our ability to produce food and
fiber.
As currently drafted, S. 1870 and H.R. 2421 not only expand
the geographic scope of CWA jurisdiction, but sweep many
current agricultural activities into the regulatory reach of
CWA simply because such activities may be conducted near some
ditch, swale, wash, erosion feature or an ephemeral stream that
would be deemed a water of the United States.
Is the time up, ma'am?
Senator Inhofe. Yes, you're getting close there. You can
wrap it up real quickly, if you would.
Mr. Buchanan. America's agricultural productive capacity is
unprecedented in world's history. It allows our farmers and
ranchers to meet the demands of our Nation's growing population
while maintaining the most affordable and safest food supply in
the world.
Farmers have made great strides in improving our
environment, which is in better condition than any other time
in our lives. The ESA continues to be a problem, while at the
same time Congress is considering CWA legislation that would
further burden productive agriculture with unprecedented
regulation.
Thank you, sir.
[The prepared statement of Mr. Buchanan follows:]
Statement of Tom Buchanan, on behalf of Oklahoma Farm Bureau
I'm Tom Buchanan from Jackson County, Oklahoma, in the
southwestern part of the State. I have farmed for twenty-seven
years and manage the Lugert-Altus Irrigation District.
The Lugert-Altus Lake was constructed by the Bureau of
Reclamation during World War II. It first provided water to
farmers in 1946. The District covers 48,000 acres of farmland
with about 330 landowners. Our biggest crop is cotton. The
gross receipts from the District are approximately 48 million
dollars annually.
Today I would like to address how the Endangered Species
Act affects the oil and gas industry, which then affects
farming. Farmers appreciate God's creatures as much as anyone.
However, the ESA impacts our operations by increasing input
costs and threatening our water supplies.
Oklahoma ranks second in the Nation for production of
natural gas, fourth in the Nation in wheat and cattle
production, and fifth in the Nation for pecan production. Our
State has been called the State of ``soil and oil.'' However,
high prices for oil and gas have negative impacts on production
agriculture. Natural gas is the most costly component used in
manufacturing nitrogen fertilizer. Fertilizer prices have more
than doubled over the past 15 years, with no reprieve in sight.
A recent Energy Information Administration outlook forecasts
benchmark natural gas prices rising by 9.2 percent in 2007 and
increasing another 3.7 percent in 2008. World demand for
fertilizer grew by 13 percent between 2001 and 2005, according
to The Fertilizer Institute. Next year, Oklahoma farmers will
face even steeper bills to fertilize crops.
The ESA is yet another factor attributing to the high cost
of fertilizer by slowing down natural gas production. The
American Burying Beetle, listed as endangered under the ESA has
delayed and impeded oil and gas production in Oklahoma.
Another species of concern in Oklahoma is the Arkansas
River shiner, a ``threatened'' minnow found in two of our
largest rivers. The Oklahoma Farm Bureau Legal Foundation,
along with 20 other organizations, worked with the U.S. Fish
and Wildlife Service to refine critical habitat for the shiner.
The Canadian River Municipal Water Authority had a 154 mile
section of the Canadian River excluded from critical habitat
based upon its management plan. The OFB Legal Foundation is
working to finalize a voluntary conservation management plan
for the shiner, in order to remove sections of the Cimarron and
Canadian Rivers from critical habitat. These organizations have
been proactive about preserving the shiner to protect their own
water supplies. After the Klamath Basin crisis, many fear the
needs of endangered species trump the needs of the humans.
To illustrate the extensive impact of the ESA, Oklahoma's
essential industries could be adversely impacted by the listing
of a species that lives thousands of miles from here. The Fish
and Wildlife Service has proposed listing polar bears as a
threatened species, based solely on projected impacts of global
warming.
Under the ESA, any activity ``authorized, funded or carried
out'' by a Federal agency that might contribute to global
warming (such as permits for livestock or oil and gas
production) would be subject to consultation with the Fish and
Wildlife Service to make sure that the proposed activity would
not jeopardize the continued existence of polar bears.
Consultations can take 90--120 days to complete and result in
permit delays. Because the Service is required to consider the
``cumulative effects'' of all actions, even those activities
with little impacts, such as one Oklahoma livestock facility,
could be denied a permit or have its terms substantially
altered because of possible impacts to polar bears.
genif
Under the ESA, taking does not have to be direct, but can
also constitute indirect impacts to species that might affect
their breeding, feeding and sheltering. Livestock and oil and
gas producers could conceivably be liable for ``taking'' polar
bears, if they contribute to global warming.
Another concern to agriculture is the Federal regulatory
reach of the Clean Water Act or CWA. Water is essential to
agriculture production. The scope of Federal jurisdiction is
important to farmers and ranchers because jurisdictional
determinations directly impact agricultural activities, have
the potential to interfere with the use of private land and, if
applied too broadly, impede our ability to produce food and
fiber. As currently drafted, S. 1870 and H.R. 2421 not only
expand the geographic scope of CWA jurisdiction but sweep many
agricultural activities into the regulatory reach of CWA simply
because such activities maybe conducted near some ditch, swale,
wash, erosion feature or ephemeral stream that would be deemed
a ``water of the United States.''
The 1972 conference report of the CWA states ``Congress
intends the term `navigable waters' be given its broadest
possible constitutional interpretation unencumbered by agency
determinations which have been made or may be made for
administrative purposes.'' It is one thing to give a term like
``navigable waters'' broad meaning and quite another to
statutorily eliminate it or give it no meaning what so ever.
Deleting ``navigable waters'' from the CWA significantly
changes--rather than clarifies--original congressional intent.
America's agricultural productive capacity is unprecedented
in the world's history. It allows our farmers and ranchers to
meet the demands of our Nation's growing population while
maintaining the most affordable, safest food supply in the
world. Farmers have made great strides in improving our
environment, which is in better condition than any other time
in our lives. The ESA continues to be a problem, while at the
same time Congress is considering CWA legislation that would
burden production agriculture further with unprecedented
regulation.
Senator Inhofe. Thank you, Mr. Buchanan. Mr. Sullivan.
STATEMENT OF ROBERT J. SULLIVAN JR., SULLIVAN AND COMPANY, LLC,
ON BEHALF OF OKLAHOMA INDEPENDENT PETROLEUM ASSOCIATION
Mr. Sullivan. Thank you, Senator, and good morning. My name
is Bob Sullivan. For 32 years I've been an independent oil and
gas producer. Eighteen of those years have been either sideways
or negative financial experiences for me and my family.
Fourteen have been positive. Needless to say, exploring for
domestic oil and gas reserves is a high risk and volatile, and
it's a very personal thing to me. The health of our industry
indeed, directly impacts me and my family.
I appreciate the opportunity to appear here today, and I
offer my remarks on behalf of the Oklahoma Independent
Petroleum Association, or OIPA which is an association of
approximately 1,700 independent oil and gas producers who have
similar concerns.
In Oklahoma, independent producers make up the majority of
the energy industry producing 96 percent of our State's crude
oil and 88 percent of our natural gas.
In the minds of you and your fellow legislators, we
independent producers should not be confused with major oil
companies who are fully integrated with transportation,
refining, marketing, and research and development capabilities.
We independents live or die with production revenues at the
wellhead and their associated costs. Part of these costs
include providing gross production taxes to the State that
account for over $1 billion of our $7 billion State budget.
As an independent producer, as an Oklahoman, and as an
American, I am very concerned about the trend of environmental
regulations in this country in general and the Endangered
Species Act in particular.
The ESA is in dire need of significant reforms to ensure
protection and recovery of endangered species while allowing
for economic natural resource development. Only 20 out of over
1,300 species have been recovered, equating to a success rate
of about one and a half percent. Let me offer some examples of
the negative impact of the Act on the oil and gas industry.
The American Burying Beetle located in the eastern part of
Oklahoma was listed as an endangered species in 1989 based upon
museum and collectors' data--not on actual comprehensive field
or survey data.
Since its listing, the beetle has been found in many areas
and is more widespread than originally thought which raises
questions of its listing.
In Oklahoma, the Fish and Wildlife Service policy was to
allow oil and gas construction activities to occur only in
winter months when the American Burying Beetle was thought to
hibernate.
In 2002, the Fish and Wildlife Service Tulsa office changed
its policy relating to the wintertime oil and gas construction
activity without notification to the public and without new
data to support such a change.
This change in policy came to light when the USFWS Tulsa
office determined that a wintertime pipeline construction
project to connect a natural gas well would adversely affect
the American Burying Beetle. The project was unnecessarily
delayed costing the operator, royalty owners, the State of
Oklahoma, and other various parties millions of dollars.
There is no data that indicates the American Burying Beetle
population has been affected in any manner by oil and gas
activities in wintertime or in summertime. However, the oil and
gas industry is implementing the Wildlife Service requirements
such as baiting away to protect the beetle.
Baiting away as I'm sure you know is putting dead chickens
on the ground to see if the beetles want to eat. And it occurs
to me, Senator, that in addition to the oil and gas operators,
there are at least two more parties that would find that
distasteful, one would be the taxpayers, and the other would be
the chickens.
Independent producers take their environmental
responsibilities very seriously. But the rare exception of an
occasional rogue independent producer, the people I work with
and compete against in the search for oil and gas are very
responsible citizens. We spend far more time, effort and money
on environmental precautions and safeguards that exceed State
and Federal regulations than most, if not all, other
industries.
Whatever environmental regulations apply to our operations,
we voluntarily exceed them, first, because we're simply good
citizens who want to do the right thing, and second, because we
know the painful consequences of environmental mishaps in our
field operations.
Furthermore, some 14 years ago Oklahoma's producers and
royalty owners formed the Oklahoma Energy Resources Board,
OERB, for the purpose of cleaning up unsightly land scars
across our State that were caused by our industry prior to the
establishment of both State and Federal environmental
regulations. OERB also provided the general public and our
schools with extensive education programs about the industry.
To fund this environmental initiative, OERB collects self-
imposed levies on oil and gas production from producers and
royalty owners, and annually spends approximately $12 million
to clean up sites and to honor these education programs.
Since inception, almost 8,000 sites across Oklahoma have
been cleaned up at no cost to the landowner or the taxpayers.
As a responsible operator in the field, my experience has
been that most environmental initiatives coming from the
Federal Government are based on emotion and not on solid,
convincing, unbiased, scientific facts.
Sensible environmental regulations to protect the
environment and public and private property owners are not only
needed, but embraced by independent producers.
Senator Inhofe. Mr. Sullivan, try to wrap it up if you
would, please.
Mr. Sullivan. OK. I had a comment about global warming I'll
pass on.
Senator Inhofe. No, I want to hear that.
Mr. Sullivan. I thought that would get you. Kind of a
baiting, you know. . . As an example of overreaching the
current--is the current global climate debate. Any climate
change policy established by our Federal Government must ensure
that all major greenhouse gas emitting countries must be
included without ignoring developing countries that are
accelerating the carbon dioxide emissions.
Although I'm personally not yet convinced that human
activities are causing harmful global climate change, I do
agree there are some common sense steps we can take while that
debate is being resolved.
Clean burning natural gas must be recognized as a viable
solution to greenhouse emissions and the sequestration of
CO2 is very apt in this case.
I'll finish up here by just saying in summary, the
independent producers willingly and enthusiastically embrace
our role as responsible stewards of the environment. Our daily
performance in the field and our demonstrated success through
OERB conclusively support the seriousness with which we take
our role.
Senator, I do thank you in taking leadership in the Senate
for common sense environmental regulations. That's what we need
here is common sense.
[The prepared statement of Mr. Sullivan follows:]
Statement of Robert J. Sullivan Jr., Sullivan and Company, LLC on
behalf of Oklahoma Independent Petroleum Association
Good morning Senator Inhofe, my name is Bob Sullivan.
For 32 years I have been an independent oil and gas
producer. Eighteen of those years have been either sideways or
negative financial experiences for me and my family. Fourteen
years have been positive. Needless to say, exploring for
domestic oil and gas reserves is a high risk, volatile
business. As a point of interest, I pay for the food, clothing,
shelter, and education for my wife and six children out of the
same checking account that I pay for drilling exploratory
wells. The health of our industry is a very personal matter to
me.
I appreciate the opportunity to appear here today, and I
offer my remarks on behalf of the Oklahoma Independent
Petroleum Association, which is an association of approximately
1,700 Oklahoma independent oil and gas producers who have
similar concerns. In Oklahoma, independent producers make up
the majority of the energy industry producing 96 percent of our
State's crude oil and 88 percent of our natural gas. In the
minds of you and your fellow legislators, we independent
producers should not be confused with major oil companies who
are fully integrated with transportation, refining, marketing,
and research and development capabilities. We independents live
or die with production revenues at the wellhead and the
associated costs. Part of these costs includes providing gross
production tax to the State that accounts for over $1 billion
of the State's $7 billion budget.
As an independent producer, as an Oklahoman, and as an
American, I am very concerned about the problems our industry
faces regarding the Endangered Species Act (ESA).
The ESA is in dire need of significant reforms to ensure
protection and recovery of threatened and endangered species
while allowing for economic natural resource development. Since
its inception, only 20 species have been recovered, equating to
a success rate of less than 1.5 percent. The following
information provides examples of why ESA reform is needed.
1. Improved Data
The U.S. Fish and Wildlife Service (USFWS) uses limited
or incomplete data, deemed ``best available'' data, to make
listing, policy and critical habitat decisions. For example,
the American Burying Beetle, located in the eastern part of
Oklahoma, was listed as an endangered species in 1989. This
listing was based on museum and collector's data--not actual
comprehensive field or survey data. Since its listing, the
beetle has been found in many areas and is more widespread than
originally thought which raises questions regarding its initial
listing.
Oil and gas exploration and production activities have
been conducted in eastern Oklahoma for well over 50 years.
There is no evidence or data that indicates the American
Burying Beetle population has been affected in any manner by
oil and gas exploration and production activities in wintertime
or summertime, yet our industry is implementing various
requirements to avoid a ``taking''. There is no scientific data
showing that the USFWS's ``baiting away'' requirements are
effective in protecting the American Burying Beetle. For all we
know, this technique draws them to our sites.
For many years in Oklahoma, the USFWS's policy was to
allow oil and gas construction activities to occur in the
winter months when the American Burying Beetle was thought to
hibernate. In 2002, the USFWS Tulsa Field Office changed its
policy related to winter time oil and gas construction activity
without any notification to the public and without new data to
support such a change. This change in policy came to light when
the USFWS Tulsa Field Office determined that a winter pipeline
construction project to connect a natural gas well would
adversely affect the American Burying Beetle. The project was
unnecessarily delayed costing the operator, royalty owners, the
State of Oklahoma, and other various parties millions of
dollars.
2. Scheduled Recovery Plan Updates. The ESA requires that
the USFWS conduct a status review of each listed species every
5 years. The 1991 Recovery Plan for the American Burying Beetle
is being reviewed and updated this year for the first time. New
information needs to be considered and incorporated into these
plans on a timely basis. For example, the American Burying
Beetle is thriving in Oklahoma, and it is apparent that
industry's activities are not harming the species; however, our
industry continues to implement requirements to protect it.
3. Management Action Plans. There are no requirements for
the USFWS to clearly identify, prioritize and fund specific
data or research needs to determine the true threats to a
listed species. In addition, there are no specific management
actions or goals to remediate those threats, or to monitor the
progress of those actions to determine if they are effective.
Species like the American Burying Beetle have been studied for
years with little knowledge gained about the species that can
be used to promote its recovery.
4. Consistent Protection Requirements. In many instances,
species cross USFWS regional jurisdictions. The various USFWS
regions do not have consistent protection requirements. For
example, in Oklahoma, the requirement for oil and gas operators
to avoid ``taking'' an American Burying Beetle is different
from the requirements in Arkansas and Texas.
5. Listing and Critical Habitat. Listing requirements
should be better defined and critical habitat should be
eliminated or more narrowly defined and designated only if
alternative options do not exist or do not work. Other options
to avoid listing and critical habitat designations should
include voluntary pre-listing activities and voluntary
conservation efforts by industry, associations, and private
citizens.
6. Economic Impacts. The USFWS does not consider the
economic impacts to industries such as the oil and gas industry
during listing decisions or internal policy decisions to
protect a species. The impacts to the oil and gas industry
operators, especially small operators, can be costly. These
costs cannot be transferred to a customer as compared to other
industries.
7. Timing of Protection. In some instances, the USFWS
begins protection of a species before it is formally listed.
These USFWS's pre-listing requirements are passed on to other
Federal agencies like the Bureau of Land Management where they
are incorporated into their permit to drill requirements.
8. Unnecessary & Unproductive Litigation. Many
environmental groups file lawsuits to force the USFWS to list a
species or to designate critical habitat. A large portion of
the USFWS's budget over the past few years has gone to fighting
these types of lawsuits instead of protecting the species.
Changes should be made to the ESA to limit the number of
lawsuits and utilize available funds where it is most needed--
protecting the listed species.
Finally, on a related issue, legislation is being
considered that will greatly expand the jurisdiction of the
Clean Water Act by changing the waters that are Governmently
regulated from ``navigable waters'' to ``waters of the U.S.''
If this occurs, it will increase the number of Corps of
Engineers' Section 404 permits our industry would have to
obtain resulting in more endangered species consultations with
the USFWS.
We can do better than this, and I am confident that you can
lead us to a better regulatory climate. Independent producers
stand ready to assist with sensible regulatory improvements.
Thank you for the opportunity to present this opinion
today.
Senator Inhofe. I thank you, Mr. Sullivan.
Ms. Bower-Moore.
STATEMENT OF DRU BOWER-MOORE, REGULATORY ADVISOR, WESTERN
DIVISION, DEVON ENERGY CORPORATION
Ms. Bower-Moore. Thank you Mr. Chairman. My name is Dru
Bower-Moore and I'm a regulatory specialist in Wyoming for
Devon Energy Corporation where I specialize in public land
issues. I have dealt extensively with issues affecting
industries' ability to access and develop public lands of which
the Endangered Species Act plays a significant role.
We would like to thank the committee for the opportunity to
testify at the field hearing and for the opportunity to offer
you new ways to improve the law.
Devon supports the original purpose of the Endangered
Species Act, which was to provide protection for species that
have been proven, through peer-reviewed science, to be
threatened with extinction. However, the Endangered Species
Act, as currently utilized, is not achieving its purpose.
Congress needs to act to reform and improve the listing and de-
listing components of the law and prevent its abuse by special
interest groups.
The Endangered Species Act, during its 30-year history, has
produced minimal success for recovery of a species once
designated as threatened or endangered. Yet, the Fish and
Wildlife Service is inundated with petitions to list a species.
Citizen nominations for proposed additions to list a
species under the Endangered Species Act pose substantial
problems not only to the Fish and Wildlife Service, which must
respond to the petitions, but also for other Federal agencies,
States, lessees, and private landowners.
To be clear, the problem is not protection of truly
endangered--threatened or endangered species, rather, it is the
fact that anyone can submit a petition to list a species and
the law currently contains no requirement that such a petition
be supported by the use of best scientific and commercial data.
Regardless of the science supporting the petition, or lack
thereof, the Service has 90 days to respond.
Furthermore, if the Fish and Wildlife Service issues a
positive finding on a petition, it negatively impacts States,
landowners and resource users because a species is elevated to
a new level of protection even though it has not been formally
designated and despite the fact that the petition may not be
supported by sound, scientific evidence demonstrating the need
to list.
Once a petition has been filed, State and Federal agencies
have internal policies that elevate the animal or plant to a
sensitive or special status species worthy of additional
protection. This standard is then applied in the NEPA process
with the potential result of additional mitigation measures to
protect the species which are imposed.
Once a petition is filed, the species is treated as a de
facto endangered species before the Fish and Wildlife has even
completed its analysis. While this action results in a
heightened level of protection to prevent listing under ESA,
such protection and its attendant costs may not be warranted if
the 90-day finding is not supported by sound, scientific
evidence.
The Fish and Wildlife Service should not be required to
spend precious staff time on petitions lacking scientific
merit.
The Endangered Species Act must provide a threshold
requirement regarding the information filed in support of a
petition to list. Unless and until the threshold is met, the
Service would not be required to act on the petition.
We urge Congress to amend ESA to provide a threshold level
for information required to support a petition.
Congress must make the Fish and Wildlife Service
accountable for the timely implementation of a recovery plan
once a species is listed. One way to achieve this is to mandate
that the recovery plan be developed concurrently with the
Service's decision to list the species. Presently, the agency
decides to list a species and then later determines the
recovery levels for that species.
The Service can often take years after the listing before
issuing a recovery plan. It is far more logical to require the
recovery plan to be formulated at the same time the species is
listed. The recovery plan should also be required to identify
population goals for the species' recovery in addition to its
protection of critical habitat.
Therefore, we urge Congress to revise ESA to require the
formulation of a recovery plan concurrently with a decision to
list and to require that once the objective in the recovery
plan has been met, hard release language would provide that the
species be automatically de-listed.
While ESA issues play a significant role in our ability to
access and develop Federal lands, there are other factors that
impact our ability to produce energy in a timely manner. The
National Environmental Policy Act process on public lands is
exhaustive and is becoming more cumbersome over time.
The NEPA documents are taking longer to complete due to the
added and multiple layers of analysis to determine impacts.
Some EISs are taking six to 7 years for approval, meanwhile
development of oil and gas activity is put on hold until that
analysis is completed. That's affecting our ability to get
natural gas to the consumer.
This delay in issuing APDs is significantly impacting our
ability to provide energy to consumers in a timely manner. The
process needs to be more efficient and the provisions in the
Energy Policy Act of 2005 worked to achieve that.
Devon Energy and other companies in the large independent
sector have a record of investing more than we earn, and 100
percent or more of our total cash-flow is reinvested to find
and produce more energy.
Senator Inhofe. OK, try to wrap up, Ms. Bower-Moore.
Ms. Bower-Moore. I'm just about done, Senator. But we
cannot risk making multibillion dollar decisions only to have
royalty, tax or regulatory policies change, pulling project
economics from underneath us. The U.S. Senate must maintain the
Energy Policy Act of 2005 provisions to prevent a decrease in
energy supplies and an increase in costs to the consumer.
In conclusion, Mr. Chairman, we thank you again for the
opportunity to share Devon's thoughts on this important issue.
[The prepared statement of Ms. Bower-Moore follows:]
Statement of Dru Bower-Moore, Regulatory Advisor, Western Division,
Devon Energy Corporation
Mr. Chairman and members of the Committee, my name is Dru
Bower-Moore and I am a regulatory specialist in Wyoming for
Devon Energy Corporation where I specialize in public land
issues. I have worked in the public lands field for over 18
years and previously held the position of Vice President for
the Petroleum Association of Wyoming. In these positions, I
have dealt extensively with issues affecting industries ability
to access and develop public lands of which the Endangered
Species Act plays a significant role. We would like to thank
the Committee on Environment and Public Works for the
opportunity to testify at this field hearing regarding ``A
Perspective on the Endangered Species Act's Impacts on the Oil
and Gas Industry'' and for the opportunity to offer ideas for
improving the current law.
Devon Energy is a leading U.S.-based independent oil and
gas exploration and production company with significant
operations in the Intermountain West, offshore, the Gulf of
Mexico and in the mid-continent region. Although we do have
international operations, 90 percent of our production is
focused on North America.
defining the endangered species act problem
Devon supports the original purpose of the Endangered
Species Act (ESA), which was to provide protection for species
that have been proven through peer-reviewed science to be
threatened with extinction. However, the Endangered Species
Act, as currently implemented by the U.S. Fish and Wildlife
Service (FWS) is not achieving this purpose. Congress needs to
act to reform and improve the listing and de-listing components
of the law and prevent its abuse by special interest groups.
In order to operate on Federal lands, both the lessee and
the applicable Federal agency must comply with a myriad of laws
designed to protect the environment. Devon works closely with
Federal agencies to comply with requirements of the Federal
Land Policy and Management Act (FLPMA), the National
Environmental Policy Act (NEPA), and ESA, among others, before
beginning any operations on Federal lands. Under Section 7 of
ESA, Federal agencies are required to consult with the FWS if
candidate, proposed, threatened, or endangered species and
their habitat have been identified in the area within which a
project is proposed. The environmental analysis for a proposed
project (and required impact mitigation) can become complex and
costly given the number of issues that Bureau of Land
Management (BLM) is required to address. Add in the analysis of
the project area for the occurrence of species of concern or
its habitat [currently 138 candidate, 4 proposed, and 607
threatened endangered species (figures as of August 2007 from
the U.S. Fish and Wildlife Service website)], and the project
costs escalate as do the mitigation requirements. Species do
not need to occur in the project area to be covered by the
analysis if suitable habitat exists; therefore, additional
conservation measures are most often required by the agency.
The consultation process between the land managing agencies
and the FWS, which can include the development of a biological
assessment, biological opinion, or both, determines whether
such a project may affect a candidate, proposed, threatened, or
endangered species and, if necessary, includes recommendations
for the protection of the identified species and its habitat.
Although there have been improvements in the last several
years, in some States this integral step has become a
bottleneck preventing the timely processing of permits. Because
of the vast number of lawsuits filed against FWS, the very
funds FWS needs to carry out these critical duties are being
diverted to defend litigation. Without consultation and the
necessary documentation from FWS, BLM and other Federal
agencies are prevented from acting in a timely fashion on a
proposed project, leading to unnecessary delays. We urge
Congress to enact reforms to prevent such frivolous lawsuits;
thereby, freeing FWS to carry out those duties that will truly
serve the purposes of the ESA.
endangered species act effects on landowners
The Endangered Species Act, unlike some other Federal laws,
applies generally to both private and Federal lands. However,
ESA does not provide Federal agencies with the authority to
inventory private lands for the potential existence of
threatened or endangered plant or animal species. Despite this
lack of authority, Federal agencies have been able, in the case
of split eState situations (Federal mineral/private surface),
to require a Federal lessee to inventory the private surface
and provide such information to the Federal agency. In the
absence of such information, the land managing agency assumes a
``worst case scenario'' and devises additional protection
measures and stipulations to be placed on the oil and gas
project based on this assumption. This places unfair burdens on
both the private surface owner and the Federal lessee.
Moreover, it creates unnecessary conflict between the Federal
mineral lessee and the private surface owner. The ESA should be
revised to clearly State that no Federal agency has the
authority to require an inventory of private surface merely
because a proposed project is covering the underlying Federal
minerals. In the absence of such a reform, a Federal mineral
lessee is placed in the position of having to obtain
information, oftentimes against the wishes of the applicable
private surface owner, that the Federal agency has no right to
obtain.
If the law were revised to prohibit a Federal agency from
requiring an inventory of private surface before being able to
act on an application to develop the underlying Federal
minerals, this would also serve to alleviate the concerns of
the private surface owners regarding misuse of this information
by other private parties and organizations. Even if Congress
does not prevent the collections of such information, it should
protect such information from misuse. Private parties should
not be able to submit a Freedom of Information Act (FOIA)
request to a Federal agency to obtain ESA survey information
gathered on private lands as that documentation should be held
in confidence unless the landowner agrees to release the
information. Congress has already established this precedent in
other laws, and it should enact a similar provision here to
protect private property rights.
Congress could provide further relief to both a Federal
mineral lessee and an affected private surface owner by
providing incentives to the private surface owner to allow
access to its property. A reform of this nature would have a
twofold benefit. First, it would encourage the recovery of
potentially threatened and endangered species by providing the
information necessary to truly assess the status of a species.
Second, it would remove one of the conflicts between private
surface owners and Federal mineral lessees.
incentives for voluntary programs
Any reform of ESA should also include incentives for
landowners and other public resource users to implement
conservation measures on public lands. Notwithstanding the fact
that the proposal to list the Mountain Plover was withdrawn in
September 2003, several companies, including Devon, chose to be
proactive with respect to protection of the species and its
habitat. This group of companies approached FWS and began to
negotiate a Memorandum of Understanding (MOU) to cooperate in
``good faith'' and in a timely manner to develop a Candidate
Conservation Agreement with Assurances (CCAA) for the Mountain
Plover and the White-tailed Prairie Dog in Wyoming and
Colorado. The CCAA would have provided assurances that if the
Mountain Plover or White-tailed Prairie Dog were eventually
listed as threatened or endangered, the FWS would not impose
conservation measures on the agreement participants that were
more stringent than those already agreed to by the parties.
Because of the nature of landownership in the area to be
covered by the CCAA, it would have been applicable to both
Federal and private lands since sixty-six percent (66 percent)
of the mineral and forty-nine percent (49 percent) of the
surface eState is managed by Federal agencies in Wyoming.
As the MOU was being finalized, the FWS published in the
Federal Register a final rule (Safe Harbor Agreements and
Candidate Conservation Agreements with Assurances; 69 Fed. Reg.
24084, 24092--24094 (May 3, 2004) (codified at 50 C.F.R. parts
13, 17) that virtually eliminated the ability we had to be
proactive, and removed any incentive to protect a candidate
species through the development of a CCAA. The final rule
stated that Candidate Conservation Agreements with Assurances
could only be developed on private lands.
Congress must provide leadership in promoting voluntary
efforts to conserve species and its habitat regardless of
landownership. When 49 percent of the surface and 66 percent of
the mineral eState in Wyoming are managed by Federal agencies
who then lease these resources to others for development, the
law must provide conservation opportunities to those who have
leases to use either the surface or the mineral estate. If
voluntary efforts to conserve a species are limited to solely
privately owned lands, a valuable conservation tool will be
needlessly removed. Although FWS is moving toward the recovery
success of a few species under ESA, Congress should take all
possible steps to provide avenues of conservation. Assurances
and incentives to private entities, both landowners and energy
companies, implementing voluntary conservation measures must be
a part of ESA as this provides an essential tool to prevent the
potential loss of a species and its habitat through a
collaborative effort of private and public entities.
petitions to list a species
The Endangered Species Act, during its 30-year history, has
produced minimal success for recovery of a species once
designated as threatened or endangered. Yet, FWS is inundated
with Petitions to list species. Citizen nominations for
proposed additions to the list of species protected under ESA
pose substantial problems not only for FWS, which must respond
to the
Petitions, but also for other Federal agencies, states,
lessees and private landowners. To be clear, the problem is not
protection of truly threatened or endangered species, rather,
it is the fact that anyone can submit a Petition to list a
species, and the law currently contains no requirement that
such a Petition be supported by use of the best scientific and
commercial data. Regardless of the science, or lack thereof,
supporting a Petition, the FWS has 90-days to respond.
In the absence of specific information, agencies typically
give equal consideration to proposed and candidate species even
though ESA's specific requirements regarding species status,
distribution and habitat information are incomplete. The
protective measures of ESA do not apply to the proposed species
and its habitat. The protections of ESA are limited to those
species actually listed as either threatened or endangered.
However, in practice, the Federal land management agencies
actually impose ESA protections to candidate and proposed
species in addition to those truly threatened or endangered.
The FWS should not be required to spend precious staff time
on Petitions lacking scientific merit. We urge Congress to
amend ESA to provide a threshold requirement regarding the
information filed in support of a Petition to list. Unless and
until that threshold is met, FWS would not be required to act
on a Petition. This approach would have a twofold benefit.
First, it would ensure that the information required to begin
the listing process would be at least as stringent as the
information required to de-list a species. Second, it would
potentially free FWS from some of the frivolous lawsuits with
which it is currently bombarded; thereby, allowing funds that
would have otherwise been expended to defend the lawsuits to be
used to carry out those activities that would truly serve the
purposes of ESA.
Recent petitions to list the Greater Sage Grouse and the
White-tailed Prairie Dog are prime examples of Petitions filed
without adequate supporting scientific information. Industry
trade organizations, of which Devon is a member, submitted
detailed, scientific comments challenging both petitions. In
both instances, industry after a careful review of the
petitions by qualified experts, found that the petitions
contained numerous flaws, errors, inaccuracies, contradictions,
misstatements, misrepresentations, unsubstantiated positions
and biased opinions. Petitions of this nature do not rise to
the level of scientific sufficiency to warrant any action by
the FWS, much less a positive 90-day finding. The standards for
filing a Petition and granting a positive 90-day finding must
be raised to require adequate, peer-reviewed science.
Furthermore if the FWS issues a ``positive finding'' it
negatively impacts States, landowners and resource users
because a species is elevated to a new level of protection even
though it has not been formally listed as candidate, proposed,
threatened, or endangered, and despite the fact that the
Petition may not be supported by sound, scientific evidence
demonstrating the need to list. Once a Petition has been filed,
State and Federal agencies have internal policies that elevate
the animal or plant to a ``Sensitive or Special Status
Species'' worthy of additional protection. This standard is
then applied during the NEPA process with the potential result
that mitigation measures to protect the species may be imposed.
Once a Petition is filed, the species is treated as de facto
endangered before FWS has completed its analysis. While this
action results in a heightened level of protection to prevent
listing under ESA, such protection and its attendant costs may
not be warranted if the 90-day finding is not supported by
sound, scientific evidence.
In addition, special interest groups are not only filing
Petitions with the FWS to list a particular species with
meager, if any, supporting scientific data, such groups are
also seeking to have Federal agencies manage species habitat
(whether the species is proposed for listing or not) as an Area
of Critical Environmental Concern (ACEC). An ACEC designation
usually carries additional restrictions on mineral development.
The standards for filing a Petition to list and for issuing
a 90-day finding must be more stringent, and FWS must be forced
to undertake an analysis of the actual scientific data
provided. Before a petition to list is granted a positive
finding decision, it must be based upon the most current,
viable, reliable, and accurate scientific data available. We
urge Congress to amend ESA to provide a threshold level for
information required to support a Petition to list; thereby the
decision to list a species would be based on the same stringent
standards as a decision to remove a species from the list.
recovery of species
Congress must make FWS accountable for the timely
implementation of a recovery plan once a species is listed. One
way to achieve this is to mandate that a recovery plan be
developed concurrently with FWS' decision to list a species.
Presently, the agency decides to list a species, and then it
determines the recovery levels for the species. FWS can often
take years after the listing before issuing a recovery plan. It
is far more logical to require the recovery plan to be
formulated at the same time the species is listed. The recovery
plan should also be required to identify population goals for a
species' recovery and protection of its critical habitat.
Currently, species are being listed for which there is little
or no information about their populations or required habitats.
If FWS does not have the information upon which to base a
recovery plan how can it validly determine that a species is
threatened? Therefore, we urge Congress to revise ESA to
require the formulation of a recovery plan concurrently with a
decision to list and to require that once the population
objective in the recovery plan has been met, ``hard release''
language would provide that the species be automatically de-
listed.
The ESA should also be reformed to allow consideration of
isolated, but thriving species' populations. While we agree the
FWS should be required to analyze a species throughout its
entire range, it may not be necessary to list and protect a
species as threatened or endangered range-wide. Not all
populations may warrant the same level of protection in all
areas, and ESA must provide flexibility in the management level
for the species in different geographic locations.
frivolous environmental litigation
Another important ESA reform issue to consider is
litigation by ``special interest groups'' whose sole purpose is
to delay or prevent development of natural resources. In
Wyoming, virtually all lease sales, and most all of the project
level EA's or EIS's, including geophysical projects, have been
protested, appealed, or challenged at the agency level and in
Federal court based on asserted violations of ESA and habitat
destruction issues. The same is true for the other Rocky
Mountain States.
Clearly, ESA has become the ``tool'' of choice to prevent
oil and gas development on Federal lands without regard for the
increased costs and delays in decisionmaking by land management
agencies and the resultant impacts on the United States
taxpayers and others who use the public lands. The cost of
``ESA abuse'' is high and litigation is abundant. Because
Federal oil and gas lessees have contractual rights and
obligations to develop Federal minerals, lessees are often
required, or elect to intervene in these lawsuits to defend
their rights. Intervention in these lawsuits obviously costs
additional time and financial resources that could be put to
better use developing domestic energy sources. If Congress
enacts some of those reforms Devon has advocated here today, in
particular requiring a threshold level for filing a petition to
list and a 90-day finding, we believe such reforms will be a
step in the right direction to preventing such abuses of ESA.
related issues
While ESA issues play a significant role in our ability to
access and develop Federal lands, there are other factors that
impact our ability to produce energy in a timely manner. The
National Environmental Policy Act (NEPA) process on public
lands is exhaustive and is becoming more cumbersome over time.
From the Resource Management Plan (RMP) stage to the
Application for Permit to Drill (APD) issuance, there are at
least four separate levels of NEPA analysis conducted, which
includes consultation with several other cooperating agencies
along the way. These NEPA documents (whether at the RMP or full
field development phase) are taking longer to complete due to
the added, and sometimes redundant, layers of analysis to
determine impacts. Some EISs have taken 6 to 7 years for
approval meanwhile development is put on hold until the
analysis is completed. This delay in issuing APDs while
extensive NEPA is conducted is significantly impacting our
ability to provide energy to consumers in a timely manner. The
process needs to be more efficient and the provisions in the
Energy Policy Act of 2005 worked to achieve this purpose for
example statutory categorical exclusions [See the section
labeled ``Energy Policy Legislation].
In addition we are seeing more requirements in the RMP and
full field development EIS Records of Decision for monitoring
and adaptive management prescriptions through ``performance
based'' standards. While in theory it may make sense to monitor
the impacts oil and gas activity has on other resources and
adapt as necessary, in reality the land managing agencies do
not have the funding or the staffing to comply with their
obligations; thereby, leaving all of us vulnerable to
litigation. Congress must consider appropriating additional
funds for the land management agencies to comply with these
requirements and prevent unnecessary legal challenges.
energy policy legislation
Many Members of Congress did their part in passing the
Energy Policy Act of 2005 to address the natural gas supply
challenge by giving agencies a number of tools to allow them to
process drilling permit requests in a more streamlined manner.
Importantly, no environmental standard was waived nor was any
step in the review process eliminated. Rather, Congress created
several tools to allow agencies to process permits more
efficiently.
The Intermountain West currently supplies over 25 percent
of the Nation's natural gas. The National Petroleum Council
estimates that this region has 284 trillion cubic feet (Tcf) of
technically recoverable natural gas, enough to supply all of
Americas current household energy needs for 60 years. Tools
such as categorical exclusions allow for more efficient use of
these resources in the Intermountain West.
Devon Energy and other companies in the large independent
sector have a record of investing more than we earn, and 100
percent or more of our total cash-flow is reinvested to find
and produce more energy. But we cannot risk making multibillion
dollar decisions only to have royalty, tax or regulatory
policies change--pulling project economics out from under us.
Instead of supporting laws that would assist industry in
our ability to provide affordable energy to the citizens of
this country and encourage less dependence on foreign energy,
the House of Representatives recently passed the ``Energy
Policy Reform and Revitalization Act'' (HR 3221). This
legislation will effectively reduce funding and eliminate
proactive steps to develop much needed energy resources, which
in turn will slow the process and reduce supply. Congress
should support laws that assume a good stable investment regime
and smooth Government processes, which will promote continued
investment in the development of this country's onshore and
offshore oil and gas reserves. The U.S. Senate must maintain
the ``Energy Policy Act of 2005'' provisions to prevent a
decrease in energy supplies and an increase in costs to the
consumer.
recommendations
In conclusion, Devon Energy appreciates Congress's
recognition of the important role the Endangered Species Act
plays in allowing oil and gas exploration and development of
Federal lands to meet the growing energy needs of this Nation.
Devon recommends that Congress consider the following points:
Provide adequate funding to FWS in order to prevent
bottlenecks on consultations and to promote the timely
processing of permits to provide the country with energy to
meet increasing demands.
Reform ESA to provide incentives for private property
owners to allow access to their property for the limited
purpose of evaluating the potential impacts of a proposed
Federal action.
Reform ESA to promote voluntary efforts to conserve
species and its habitat on Federal lands by entities / lessees
with contractual natural resource management responsibilities.
Strengthen scientific justification criteria for listing
Petitions to be as stringent as the scientific justification
criteria required for the recovery and de-listing processes.
Require recovery plans to be developed at the time the
species is listed and include population goals in the listing
proposal for species recovery and its critical habitat.
Institute ``hard release'' language, which must be
required by law, that would provide the species be
automatically de-listed once population goals have been met.
Appropriate adequate funds for implementation of recovery
programs to avoid placing unnecessary monetary burdens on
private entities.
Reform ESA to provide flexibility in managing isolated
populations in certain geographic areas to eliminate the ``one-
size-fits-all'' requirements.
Congress must consider appropriating additional funds for
the land management agencies to comply with these requirements
and prevent unnecessary legal challenges.
The U.S. Senate must maintain the ``Energy Policy Act of
2005'' provisions to prevent a decrease in energy supplies and
an increase in costs to the consumer.
Mr. Chairman and members of the Committee, thank you again
for the opportunity to share with you Devon's thoughts
regarding ``A Perspective on the Endangered Species Act's
Impacts on the Oil and Gas Industry'' along with an examination
on ways to improve the current law.
Senator Inhofe. Well, thank you very much for coming down
to testify today.
Mr. Haught.
STATEMENT OF JIM HAUGHT, MANAGER, ENVIRONMENTAL SERVICES ONEOK,
INCORPORATION
Mr. Haught. Thank you, Senator. And I want to thank you for
the opportunity to provide testimony to the Committee from the
pipeline perspective.
The pipeline segment of the oil and gas industry is the
critical link required to get energy from areas of production
to the supply chain.
My name is Jim Haught. I'm manager of Environmental
Services at ONEOK, Inc. here in Tulsa where I have more than 15
years of experience in environmental permitting for energy
projects.
The focus of this hearing, the endangered species and its
impact on the oil and gas industry, is an extremely important
and timely topic for our business and the people who depend on
our industry.
In ONEOK's more than 100 years in the industry, we've never
had as many miles of pipeline scheduled for construction as we
do today.
ONEOK is the parent of three local distribution companies
serving more than two million end-use customers, primarily
homeowners and small businesses. ONEOK is also the general
partner of a master limited partnership whose primary focus is
the gathering, processing and transportation of natural gas and
natural gas liquids, which include ethane, propane, and butane.
Underground pipelines have proven to be the safest and most
efficient method to transport these products. Altogether, we
are currently involved in one and a half billion dollars worth
of pipeline construction and related infrastructure projects
nationwide. These projects will be instrumental in supplying
the energy and raw products required to sustain the economy and
the quality of life enjoyed by Americans.
The topic of infrastructure development brings me to the
subject of this hearing and the points I want to make today
about the impacts the Endangered Species Act and environmental
regulations in general on the development of these energy
projects.
First, I want to make it abundantly clear that ONEOK's core
values include the protection of the country's environmental
and cultural resources. We work hand-in-hand with regulatory
agencies to conduct extensive wildlife and other environmental
surveys and are extremely sensitive to environmental issues
before, during, and after construction.
We believe, however, that there are opportunities to
improve the regulatory processes. Many of the current
regulatory practices add to the permitting timeline and burden
without producing significant environmental benefits.
The balance between environmental preservation and economic
health can best be achieved through regulatory processes that
utilize a flexible and measured approach.
A major point I want to make today is that pipeline
construction projects are inherently different from many of the
other construction projects subject to environmental
regulations. Pipelines by nature are very narrow, they're
linear, and they're buried. They pass through areas and have
few above-ground facilities.
Once construction is complete and the pipeline is covered,
restoration is initiated to repair these disturbed areas and
return them to normal contour and encourage revegetation. Local
animal and plant species will return in time.
Like all such construction projects, there are disturbances
from pipeline construction. It should be noted, however, that
following installation of a pipeline, there are often benefits
to wildlife and plant species.
The impact of the Endangered Species Act to the pipeline
segment of the oil and gas industry varies with the locale and
species of concerns we've heard. There is no doubt that the
Endangered Species Act has had some successes as the foundation
of maintaining and re-establishing populations of a number of
threatened species. However, some of the processes through
which the Act is implemented have negative impacts on the oil
and gas industry and private landowners.
Landowner concerns that result in delays completing
endangered species requirements can threaten a project's
schedule and potentially its viability.
In areas of rapid energy development, some landowners have
resisted granting access for wildlife surveys that are required
beyond the boundary of the proposed project. These landowners
report they consider it an intrusion on their private property
rights for Federal agencies to require project applicants to
conduct sometimes repeated investigations on their property
outside of the project footprint.
Although additional agency consultation or other means may
be available to determine potential impacts if access is not
granted, these options could result in unanticipated delays of
months.
Minor delays and permit issuance can sometimes
significantly increase costs and/or cause major delays in
project completion. Projects are often planned so that
construction will occur during the time of the year that will
minimize environmental impacts.
Regulatory approved delays can push construction back to
less desirable timeframes. For example, in much of the country
construction pushed to winter is often slowed by poor weather
conditions and shortened day lengths. This causes a longer
construction period overall and a resulting increased potential
for environmental impacts.
In an effort to expedite the installation of energy
pipelines, we recommend that agencies respond to the inherent
difference between energy pipeline and other project types by
continuing to implement processes to allow the permitting
effort to be proportionate to the potential risks.
In closing, we believe that practices can be developed that
would allow energy-project permitting to be expedited while
still ensuring adequate protection of the environment.
The foundation for these changes would be that the
magnitude of the permitting process would be proportional to
the potential impacts of the project. This measured approach
would lesson the burden on limited agency resources and promote
efficiency.
Expedited energy project approvals would be consistent with
the current Executive and congressional guidance that already
exists.
What is the impact of the Endangered Species Act and other
environmental protection programs on the oil and gas industry?
In most cases, the impacts are reasonable. However, the impact
of unnecessarily prolonged permitting periods and restrictions
can be detrimental to the promotion of energy production.
We ask that regulatory agencies be guided to develop
creative opportunities to continue to protect the environment
while promoting energy independence.
Senator Inhofe. Try to wrap up now if you would, please.
Mr. Haught. Thank you for your time.
[The prepared statement of Mr. Haught follows:]
Statement of Jim Haught, Manager, Environmental Services
ONEOK, Incorporation
The Endangered Species Act's Impacts on the Oil & Gas
Industry Thank you, Senator Inhofe. And thank you for the
opportunity to testify before the Committee on Environment and
Public Works.
My name is Jim Haught. I am Manager of Environmental
Services at ONEOK, Inc. (ONEOK) here in Tulsa where I have more
than 15 years experience in environmental permitting for energy
projects. The focus of this hearing--the Endangered Species Act
and its impact on the oil and gas industry--is an extremely
important and timely topic for our business and the people who
depend on our industry. As America's population and economy
continue to grow, so does the need for energy and related raw
products. We at ONEOK are working hard to satisfy that need. In
ONEOK's more than 100 years in the industry, we have never had
as many miles of pipeline scheduled for construction as we do
today.
ONEOK is the parent of three local distribution companies
serving more than two million end-use customers, primarily
homeowners and small businesses. ONEOK is also the general
partner of a master limited partnership whose primary focus is
the gathering, processing and transportation of natural gas and
natural gas liquids, which includes ethane, propane and butane.
Underground pipelines have proven to be the safest and most
efficient method to transport these products. Altogether, we
are involved in $1.5 billion worth of pipeline construction and
related infrastructure projects nationwide. These projects will
be instrumental in supplying the energy and raw products
required to sustain the economy and the quality of life enjoyed
by Americans.
The topic of infrastructure development brings me to the
subject of this hearing and the points I want to make today
about the impacts that the Endangered Species Act and
environmental regulations in general have on the development of
these projects.
First, I want to make it abundantly clear that ONEOK's core
values include the protection of the country's environmental
and cultural resources. We work hand-in-hand with regulatory
agencies to conduct extensive wildlife and other environmental
surveys and are extremely sensitive to the environment before,
during and after construction. We believe, however, that there
are opportunities to improve regulatory processes. Many of the
current regulatory practices add to the permitting timeline and
burden without producing significant environmental benefits.
The balance between environmental preservation and economic
health can best be achieved through regulatory processes that
utilize a flexible and measured approach.
A major point I want to make today is that pipeline
construction projects are inherently different from the many
other construction projects subject to environmental
regulation. Pipelines are narrow, linear and buried. They pass
through areas and have few above-ground facilities. Once
construction is complete and the pipeline is covered,
restoration is initiated in the disturbed areas to return them
to normal contour and encourage re-vegetation. Local animal and
plant species typically return in time.
Like all such construction projects, there are disturbances
from pipeline construction. It should be noted, however, that
following installation of a pipeline there are often benefits
to wildlife and plant species. Just recently, a wildlife
manager told me that a previous pipeline project through the
wildlife management area resulted in positive outcome from the
corridor of mixed vegetation that attracted concentrations of
large game and has helped promote an increase in the previously
declining grouse population.
The impacts of the Endangered Species Act to the pipeline
segment of the oil and gas industry vary with the locale and
species of concern. There is no doubt that the Endangered
Species Act has been successful as the foundation for re-
establishing healthy populations of a number of previously
threatened species. However, some of the processes through
which the Act is implemented have negative impacts on the oil
and gas industry and private landowners.
Landowner concerns that result in delays completing
endangered species requirements can threaten a project's
schedule and potentially its viability. In areas of rapid
energy development, some landowners have resisted granting
access for wildlife surveys that are required beyond the
boundary of the proposed project. These landowners report they
consider it an intrusion on their private property rights for
Federal agencies to require project applicants to conduct
sometimes repeated investigations on their property outside of
the proposed project footprint. Although additional agency
consultation or other means may be available to determine
potential impacts if access is not granted, these options could
result in unanticipated delays of several months.
Minor delays in permit issuance can sometimes significantly
increase costs and/or cause major delays in project completion.
Projects are often planned so that construction will occur
during the time of year that will minimize environmental
impacts. Regulatory approval delays can push construction back
to a less desirable timeframe. For example, in much of the
country construction pushed to winter is often slowed by poor
weather and shortened day length. This causes a longer
construction period overall and a resulting increased potential
for environmental impacts.
In an effort to expedite the installation of energy
pipelines, we recommend that agencies respond to the inherent
difference between pipeline and other project types by
continuing to implement processes that allow the permitting
effort to be proportionate to the potential risks. An example
of a significant change would be the development of standard
permits, similar to the U.S. Army Corps of Engineers'
nationwide Permits, for pipeline construction. These permits
would direct the applicant toward pre-approved guidelines to
identify environmental impacts and then allow use of
appropriate, approved mitigation measures.
In closing, we believe that practices can be developed that
would allow energy-project permitting to be expedited while
still ensuring adequate protection of the environment. The
foundation for these changes would be that the magnitude of the
permitting process would be proportional to the potential
impacts of the project. This measured approach would lessen the
burden on limited agency resources and promote efficiency.
Expedited energy project approvals would be consistent with the
Executive and congressional guidance that already exists.
What is the impact of the Endangered Species Act and other
environmental protection programs on the oil and gas industry?
In most cases, the impacts are reasonable and warranted.
However, the impact of unnecessarily prolonged permitting
periods and restrictions can be detrimental to the promotion of
energy production.
We ask that the regulatory agencies be guided to develop
creative opportunities to continue protecting the environment
while promoting energy independence. Thank you for the
opportunity to testify today.
Senator Inhofe. Thank you. And I do have a number of
questions so what I'm going to do is ask questions and try to
get brief answers. But Dr. Tuggle made a statement that I think
is accurate in this region. I suspect it may not be accurate in
other regions in terms of a project has not been stopped as a
result of this--am I accurately quoting you Dr. Tuggle--has not
been stopped as a result of these section 7 discussions.
Do you folks agree with that? Any of the four of you
disagree with it?
I think the problem--and see if I've got this message
right--may well be that while delays make it much less
profitable, that perhaps some of the projects, while they were
completed did not--were not profitable projects; is that
accurate, or is that inaccurate?
Mr. Sullivan. Accurate. I think that's correct.
Senator Inhofe. Let's start with you, Mr. Buchanan. You
made some comments. Would you like to elaborate any on the
voluntary management plan for the Arkansas River Shiner?
Mr. Buchanan. Certainly I would. I appreciate the
opportunity because I would be very remiss if I did not take
the opportunity to address that, and tell you, sir, that that's
an opportunity that has existed amongst interested parties.
It's allowed groups to come together and identify local
problems and then certainly look at local ways to solve them to
come up with a doable situation that does what needs to be
done.
With that said, the OFB legal foundation has worked
cooperatively with the Tulsa Fish and Wildlife very
progressively I would say, and I want you to know that we're
very happy with that working relationship and are proud to say
that we are partners with Tulsa in that effort.
The voluntary management plan is more complicated that is
being undertaken for the Canadian River municipal water simply
because of the amount of miles that are being included in the
river. So it will be a little more difficult and there will be
more conversation involved, but it is ongoing, it is being
progressive. It is coming up with the desired results. And the
Canadian River Municipal Water Authority will hold a progress
report and status meeting on November 1, and the Foundation
will be on the program to further explain this.
Senator Inhofe. Thank you very much.
Mr. Sullivan, at a recent Senate Energy Committee, two of
the Deutsche Bank energy experts stated that--and I'm going to
quote this--``Anyone who blames record high U.S. gas prices on
gouging at the pump, simply reveals their total ignorance of
global supply and demand fundamentalists.''
Mr. Sullivan, how can a politician be in favor of
increasing our domestic production and yet be so punitive in
their actions? Do you have any thoughts about that? With the
exception of me.
Mr. Sullivan. With your notable exception, and I appreciate
it. But you cannot--you simply cannot have energy security
while punishing the very people that can get you out of that
security box.
I don't know why it is in this country that we can't return
to the National resolve that we had in World War II where we
turned to industry to solve these problems. We turned to
science to get us to the moon. Why can't we turn to the energy
industry to get us off of this dependence on oil? We rather
choose to bash and to punitively address the industry, the very
people that can solve the problem. So you can't have it both
ways.
Senator Inhofe. Well, I understand that. I live with that
on a daily basis. It is difficult, but I would like to have you
specifically address the part--the reference that was made on
gouging, because--and how that relates to the global supply and
demand fundamentalists that he refers to.
Mr. Sullivan. First of all, I would reiterate that we, as
independents, we live or die at the wellhead with that price,
and that price is set on a global--for oil I'm talking about
and natural gas.
Senator Inhofe. I think that's a good point.
Mr. Sullivan. As an independent, we don't even have a
chance to gouge. But having said that, I am convinced that
there is enough of a pure market for oil worldwide and enough
in the pure market for gas, at least continentally, that it
would be very difficult to gouge.
Senator Inhofe. Well thank you. That's good.
Ms. Bower-Moore, according to a 2004 Department of Energy
report--which I am going, without objection, to make that part
of the record--on natural gas, critical habitat designations
and section 7 consultations were estimated to have caused
delays to a natural gas projection for 6 months to 2 years with
an estimated cost over a 30-year period to the economy of 261
to $979 million.
The question would be, what has been your experience with
delays of your company's projects due to the ESA?
Ms. Bower-Moore. Unfortunately, Mr. Chairman, special
interest groups are using the Endangered Species Act for
political reasons most often and not biological reasons.
So while ESA listings of a species are significant, it's
the entire listing and de-listing process that has a
significant impact on our ability to do business on public
lands.
Once a petition is filed, it is internally elevated by the
land managers such as the Bureau of Land Management or the
Forest Service that increase our mitigation costs, our
protection costs and delays in the process. So once the
petition is filed, the burden of proof changes for us as in
innocent until proven, to guilty until proven innocent.
Senator Inhofe. And of course those costs are passed on.
That's the hardest thing for people to understand that nothing
happens in a vacuum.
And I'd ask you further, the Clinton administration issued
50 percent more oil and gas leases. You know, you hear so much
about this Administration and some of these special interest
groups will have us believe that the Bush administration has
issued the oil and gas leases at an unprecedented pace, and yet
it's my understanding that the Clinton administration issued 50
percent more oil and gas leases and less than one-tenth of
these were challenged.
I think it was Secretary Norton testified in 2005. Do you
have any thoughts about that?
Ms. Bower-Moore. Well, unfortunately, once again we see
that environmental groups are using the Endangered Species Act
to benefit themselves, and it does have an impact on our
ability to do business on public lands. We think there are some
things in the law that we could change that would help that.
In addition, however, we would like to see Congress
encourage incentives to the private sector for habitat
enhancement projects and conservation measures established on
Federal lands, not just private lands.
And what we mean is, if a company such as Devon were
willing to implement voluntarily habitat enhancement measures
on areas that were not developing, we feel that we should be
able to get some assurances from the Federal land management
agencies that we can get something back in return for our
efforts for that.
Senator Inhofe. Well, let me suggest you put that down.
This is something--a proposal that I think could be considered,
we could be of some help to you in this. So why don't you do
that for the record for this meeting.
Mr. Haught, in your testimony you discussed how delays in
the permitting process can actually pose a detriment to the
wildlife environment by pushing construction into less
desirable seasons of the year.
Can you give us some examples of how this can actually
hurt, as opposed to help the environment?
Mr. Haught. Typically construction periods that are
beneficial from a logistic standpoint for construction fall
during the same times of year that have the fewest
environmental impacts. They tend to be in the late spring,
summer and early fall times. These times avoid, from an
endangered species standpoint, most of the breeding season,
nesting season for raptors and critical large game habitat
times.
By trying to consider both the environmental impacts of
construction timing and the construction standpoint, we can
back into a time to allow reasonable permitting periods to be
able to accomplish this. When those permitting periods are
extended, it will push those projects into the times of the
year that--and the winter may encroach on critical habitat
range for large game, and in the springtime will get into those
breeding and nesting periods where you have more detrimental
impacts that you would have had the project been allowed to
occur on time.
Senator Inhofe. In currently obtaining a 404--a section 404
permit under the Clean Water Act, often triggers a section 7
consultation under the ESA.
Now if the Federal jurisdiction under the Clean Water Act
were expanded, and you know what we're talking about here, to
include isolated non-navigable waters, could that result in
additional ESA consultations for your projects?
Mr. Haught. Very timely question, Senator, and the answer
to that is, yes, it would result in additional consultations
required. Many times the Clean Water Act is the only trigger of
Federal involvement for small distribution projects,
In these instances we're talking about usually extensions
of distribution systems, a very small diameter pipe that
happened very rapidly, and this Federal trigger then pulls in--
from the Water Act--pulls in the endangered species'
obligations.
Senator Inhofe. That's right.
How about you, Mr. Buchanan, in the Ag world?
Mr. Buchanan. I would add that it's an extremely timely
topic. In fact, sir, I came up yesterday to Tulsa to meet with
the Corp on this exact issue. We have a problem in the Lugert-
Altus irrigation district with trying to conserve and be more
efficient with our use of waters.
And one of our proposed activities has triggered the
potential of what we were just talking about. And it's an
ephemeral stream at best. We feel that it is not navigable at
all. It does not fall under the jurisdictions. And it creates a
major problem whenever we're trying to achieve those
efficiencies and conservation that the rest of the world wants
us to do.
Senator Inhofe. Give us an example of, under this ruling
that we're talking about here, what could be considered
navigable?
Mr. Buchanan. Well, you're asking for my definition, I
assume, and that's if I could put a boat on it and float it,
that's navigable to me.
Senator Inhofe. OK.
Mr. Buchanan. And when we're in Western Oklahoma, you've
got to have a very shallow-drafting boat to make that happen.
Senator Inhofe. Yes, I understand that.
Mr. Sullivan, or Ms. Bower-Moore, do you have any comments
to make about that?
Mr. Sullivan. Yes. When you start including culverts,
ditches, arroyos in navigable waters and bring in all the
regulations that go with that, trigger the ESA, you're taking a
break and putting it right on the oil and gas industry and
saying slow down.
Senator Inhofe. Do you agree?
Ms. Bower-Moore. I think it's been well said, Mr. Chairman.
Senator Inhofe. Ms. Bower-Moore, according to the American
Gas Association, ``America is not running out of natural gas
and is not running out of places to look for natural gas.
America is running out of places where we are allowed to look
for gas.'' And that's a quote.
Could you provide some examples from your experiences as to
the truth of this statement?
Ms. Bower-Moore. Mr. Chairman, one of my favorite sayings,
as I speak in Wyoming, is minerals are where they are, and the
reason we produce them at the levels and rates we produce them,
is because the consumers' demand continues to increase.
And so not only is the Endangered Species Act delaying or
impeding our ability to access those resources, also the need
for process as a whole is having that impact.
One of the other things that we're seeing, Mr. Chairman, is
that staffing for Federal land management agencies is becoming
increasingly problematic. It is the same people within those
agencies that are looking at all of the different projects on a
larger level down to the APD level. And with the lack of
manpower, the consistent turnover in the field office, and
multiple analyses, they are all having a significant impact in
our ability to meet the energy needs of this Nation in a timely
manner.
Senator Inhofe. Sometime it might be worth quantifying that
as to how that's going to affect the ultimate cost.
Mr. Sullivan, it's my understanding that the Fish and
Wildlife Service sometimes creates the Best Management
Practices for certain exploration activities during the course
of a section 7 consultation.
Does this pose problems for the independent operators?
Mr. Sullivan. It certainly does. As I stated in my
testimony, there's really no evidence the oil and gas
activities have impacted the burying beetle at all. However,
the Best Management Practices were developed for our business,
and--including the baiting I referred to. And I just feel that
we are environmental stewards who can figure out--when a
serious problem is presented to us, we can figure out a way to
protect the environment and still get up the reserves that this
country needs.
Senator Inhofe. Mr. Haught, you've been concerned with this
private property rights. This happens to be one of my favorite
subjects. In fact, way back--oh, gosh, 40 years ago or so it
was, when I was--the first thing I did--first trip I took to
Washington after being elected to the State
Legislature was to--in fact, I was--being in this courtroom
reminds me, I was with Ralph Thompson, at that time he was a
first term, and David Boren, the three of us went to Washington
to protest Lady Bird's Highway Beautification Act of 1965. And
that was all about property rights. And we were protesting it
in front of the committee called the Environment and Public
Works Committee, the same committee I ended up chairing. It's
kind of poetic justice.
You're the second person today to voice concerns about
private landowners and property rights. And they're very
important to me.
How can we minimize the effect of the environmental
regulations on private landowners and at the same time speed
energy resource development?
Mr. Haught. It appears that most of the issues we have with
landowners' concern with the ESA itself, comes in those areas
of high energy development.
The landowners tend not to object as much to the pipelines
and activity that is going on as they do to the multiple
attempts with the Government agencies to require these
companies to conduct surveys on their private property.
We think that this is an opportunity, one of the
opportunities to follow the recommendations we made and look at
the projects that are being presented on it on an individual
basis and try to make those requirements proportionate to the
potential impact.
The pipeline issues, pipeline right-of-ways tend to be very
narrow, and therefore, the surveys and the requirements there
should be narrowed also.
Senator Inhofe. Mr. Sullivan, what role do you see that the
independent oil and gas operators play in securing American's
energy future?
Mr. Sullivan. I see it as an essential role, Senator. If we
are going to, in the long term, get onto renewables or some
alternative fuels, that's fine and I'm in favor of it, and am
actually spending some of my time working on those things.
But in the meantime, the short intermediate term, we are
hooked on oil and natural gas. And it's the independent
producer, and only the independent producer, who can help
mitigate that problem. So we need to allow the independent
producer the freedom of regulation and stifling rules and laws
so we can do our thing and help this country while we're
transitioning to long term--
Senator Inhofe. A lot of people don't realize the role of
that in marginal wells for example, and the very small--I heard
a statistic not too long ago that apparently was true, that if
we had everything flowing today that's been plugged up from the
margin of wells, it would exceed what we're having to import
from Saudi Arabia. Does that sound reasonable?
Mr. Sullivan. I can't verify that number, but I can say
that right here in the State of Oklahoma, for example, there
are more reserves of oil and gas in the ground than we have
produced since inception 100 years ago.
Senator Inhofe. That's a good one to use.
Mr. Sullivan. What's required to get them out is the
economic incentive to do so. And everybody cusses the high
prices, but it is causing us independents to go take those
risks. And we're getting oil out of shale and out of places you
wouldn't imagine because of these high prices. So we know where
the reserves are. It's a matter of economics and the lack of
discouragement from the Government to get--
Senator Inhofe. You mentioned shale. That's a huge
potential that we have out there.
Mr. Sullivan. It is; it's huge. And, Senator, my little
company, we, today, are spending virtually all of our resources
going after reserves in your old stomping ground in Osage
County, an old producing area that everybody knew was there but
was heretofore uneconomic to get out. And now we've developed
through technology, and through, yes, higher prices, we are
incentivized to go get them.
Senator Inhofe. Well, that's ironic, because many, many
years ago, and the story I told you about, a tool dresser on a
cable tool rig, we were actually going after the stuff that had
been left by the big guys. Now you're doing this again in the
same area.
Mr. Sullivan. Exactly.
Senator Inhofe. Mr. Buchanan, I wrote an article for the
Energy Law Journal in 2005. And by the way, I'll insert that,
without objection, into the record also. I refer to the fact
that some environmental regulations derive natural gas demand
while others simultaneously restrict natural gas supply.
What effect does this have on farmers? You know, a lot of
people don't know that relationship with the Ag community.
Mr. Buchanan. Well, certainly. It's a very short answer,
which is that regulations slow down production. And when demand
is high, prices increase. That's how our markets work. High oil
and gas prices negatively impact production agriculture since
natural gas is the most common component in manufacturing
nitrogen fertilizer.
Senator Inhofe. Did you agree with my statistic in my
opening statement, that it's 90 percent?
Mr. Buchanan. Yes, sir. And it's becoming a burden that we
cannot continue to carry, the cost of that nitrogen fertilizer.
Senator Inhofe. Mr. Haught, one of the pipeline projects
that ONEOK is currently working on--will go from
Wyoming to Oklahoma, one of the pipelines. That pipeline
will cross the boundaries of three Environmental Protection
Agency regions; two Fish and Wildlife Service regions. And it's
my understanding that the interpretations of ESA and other
environmental laws can vary widely between the EPA and the Fish
and Wildlife; and then from region to region, from State to
State.
What has been your experience working within this framework
of regions in these States, and how has inconsistency between
these States and agency regulations affected you?
Mr. Haught. Senator, those variations in implementing the
same requirements, the same acts are such that from a practical
standpoint we have to treat each of those different, States
different--different regions and even different districts
within the same agency. Each of their processes are different
enough that we tend to treat those as a different permitting
process.
Sometimes the variations may be as minor as a different
form to accomplish the same thing, to as much as programmatic
differences, wherein one agency, if there's a requirement, will
put the onus on the project applicant to do the consultations
and you can have a little more control of your timing destiny
that way, whereas other agencies implement the same regulation
may require that all contacts, all consultations, be agency to
agency only.
In this case the applicant doesn't have an opportunity to
provide resources to that process and you're dependent upon
staffing at the agencies who are--tend to be burdened with
heavy workloads as it is. And many times it negatively impacts
those projects.
Senator Inhofe. Well, let me thank all of you. I've
completed my checklist, but what I'd like to do at this time is
kind of start over here maybe again with you, Mr. Buchanan, on
anything you don't feel you were able to cover in your opening
statement or any thoughts that have not been discussed that
relate to this--today's discussion. Would you like to make any
further comments, take 5 minutes or so?
Mr. Buchanan. Certainly it won't be that long, sir. What I
would like to add though to try to tie up--from an Ag
viewpoint--it's been referred to, I believe Mr. Sullivan talked
about the dependence, our foreign dependence on energy for this
Nation, how you developed that taste and that thirst, and
that's where we are satisfying that.
From Ag viewpoint, what we see happening because of
regulatory activities that are coming down to us, is that this
Nation is on the road to becoming foreign dependent for their
production of food and fiber.
And when we consider safety issues, not only of National
safety, but just on your dinner plate, safety of what you're
eating, that is something we do not, cannot, and should not
pursue. We have to maintain a healthy Ag economy in this
Nation.
Senator Inhofe. I think it's very important to have this as
a part of this record.
Mr. Buchanan. I would agree. Thank you, sir.
Senator Inhofe. Mr. Sullivan, it's you that brought up the
global warming, not me. But I would like to make an observation
that in this recess, we've been in recess for 3 weeks now, and
there have been more changes in scientific evidence having to
do with anthropogenic gases affecting climate change than there
has been in probably in the 6 months before that. And so it's
kind of interesting that that's going on right now.
It's also interesting that while we were all concerned
about the Wharton Econometrics Survey, it talked about the
expense of what it would cost to have some of these cap-and-
trade policies, in effect what it would cost a family of four.
The MIT came out with another study saying that they are
far too conservative, and that the current bills that are being
considered would cost each family of four some $4,500 a year in
what I would refer to as direct taxes.
You know, that would be actually 12 times larger than the
largest tax increase in recent history, and that was the 1993
tax increase for America.
I don't have a question that goes with that, other than do
you agree, and is there anything else you'd like to elaborate
on?
Mr. Sullivan. I agree. And just in my closing remarks,
Senator, I think--I remember in 1974, President Ford with some
ballyhoo, came out with what he called ``Project
Independence.'' And he was very concerned, as were others,
about our country's dependence on foreign oil. We were
importing 26 percent of our oil. We wore little lapel pins that
said ``Project Independence.'' We're now importing 60 percent
of our oil, and no one seems to care.
So, Senator, to get up to 50,000 feet in one of your
airplanes and look down on it, I think the big picture is
simply as follows: We must, as a country, have the National
resolve to focus on this very serious issue and solve it. We
are in danger of--we are putting our destiny in the hands of
other people, and they don't like us. We've got to change that.
So the independents in this country, and especially in this
State, are one of the key elements, as I said, in at least the
short and intermediate term helping us solve that problem.
We've got to get over onto renewals. And I'm a big fan of
that.
But this whole business about regulation and endangered
species, it must take a different priority to that very
important issue of getting this country off the dependence of
foreign oil.
Senator Inhofe. Thank you very much. Excellent statement.
Ms. Bower-Moore.
Ms. Bower-Moore. Mr. Chairman, the only one thing that I
did want to quickly address that I didn't address in my oral
testimony was regarding private landowners. And in the State of
Wyoming we have a significant amount of split estate, Federal
and mineral and private surface.
In order to access that surface, it's a requirement that we
do surveys for any proposed, threatened or endangered species.
And it is a real thorn of contention with our landowners.
If there is no way to change the law to prevent those
surveys from being conducted regarding oil and gas projects,
then we need to find a way that information would be--would not
be available to be FOIA'd in the public arena because
landowners have a fear that information will be used by special
interest groups against them on their private property.
Having said that, Mr. Chairman, thank you for letting us
attend. And Devon is committed to protecting the environment
and developing the resources this country desperately needs.
Senator Inhofe. I know that's true.
Mr. Haught.
Mr. Haught. Thank you, Senator. I would just like to
reiterate the concept that we wanted to express here, in that
we're not--and I don't think anyone on this panel is probably
totally against regulation--but I think we are for fair and
balanced regulation that's proportionate to the potential
impact so that we can have a risk benefit outcome that's--will
help promote, not only our economy, but the energy industry
also.
We believe that mechanisms do exist or the authorizations
do exist for agencies to be more creative and flexible in their
permitting issues.
We think that some direction to those agencies to consider
those alternatives as they are presented would be something
that we'd like to see.
Senator Inhofe. That's good.
Dr. Tuggle, I appreciate very much your remaining for the
rest of it. If there's any last comment you'd like to make or
any response to anything that's been said, you feel free to
come forward. And I'm sure Mr. Sullivan will give you his chair
for a minute or so.
Dr. Tuggle. Senator, I certainly appreciate the comments
that have been made, and I've taken a couple of notes here. And
I think that one of the things that I would like to emphasize
is the fact that, as you are aware, you've been briefed by our
director on the proposed regulatory changes from a policy
standpoint on how we administer the Endangered Species Act
internally. And we are working on some of these common sense
approaches.
One of the things that I think is really incredible is the
fact that, as we have talked about the development of Best
Management Practices, we have reached out to industry.
The Service does not perceive the industry as the bad
players. We think that conservation is a part of the American
fabric, and we certainly appreciate the fact that industry has
stepped up and played a significant role in terms of protecting
and conserving species.
I think the thing that we're talking about here is, is a
minimization of some of the inconsistencies as it relates to
how we administer the Act.
We think that some of the recommendations that we're going
to be making with our reg changes may address some of these
issues. And it boils down to what someone said early about
common sense.
But the fundamental premise is, is that the Service
continues to reach out to industry or anybody that's affected
by how we administer the Endangered Species Act with very
proactive programs such as programmatic biological opinions,
such as Best Management Practices and such as habitat
conservation plans so that we can minimize these impacts from a
regulatory standpoint and maximize the impacts from a
conservation standpoint.
Senator Inhofe. I appreciate that. And I hope that you will
take some of this evidence back with you and share it with the
Director and perhaps we can address some of these problems.
I look forward to visiting with all of you in the future
about how we're doing that. And I appreciate so much all five
of you being here to testify today. And we are adjourned.
[Whereupon, the committee was adjourned.]
[Additional statements submitted for the record follow:]