[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
CHALLENGES FACING DOMESTIC OIL AND GAS DEVELOPMENT: REVIEW OF BUREAU
OF LAND MANAGEMENT/U.S. FOREST SERVICE BAN ON HORIZONTAL DRILLING ON
FEDERAL LANDS
=======================================================================
JOINT OVERSIGHT HEARING
before the
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
of the
COMMITTEE ON NATURAL RESOURCES
joint with the
SUBCOMMITTEE ON CONSERVATION, ENERGY,
AND FORESTRY
of the
COMMITTEE ON AGRICULTURE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
Friday, July 8, 2011
__________
Committee on Natural Resources Serial No. 112-90
Committee on Agriculture Serial No. 112-21
__________
Printed for the use of the Committees on Natural Resources and
Agriculture
Available via the World Wide Web: http://www.fdsys.gov
or
Committee address: http://naturalresources.house.gov
----------
U.S. GOVERNMENT PRINTING OFFICE
72-151 PDF WASHINGTON : 2011
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
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Washington, DC 20402-0001
COMMITTEE ON NATURAL RESOURCES
DOC HASTINGS, WA, Chairman
EDWARD J. MARKEY, MA, Ranking Democrat Member
Don Young, AK Dale E. Kildee, MI
John J. Duncan, Jr., TN Peter A. DeFazio, OR
Louie Gohmert, TX Eni F.H. Faleomavaega, AS
Rob Bishop, UT Frank Pallone, Jr., NJ
Doug Lamborn, CO Grace F. Napolitano, CA
Robert J. Wittman, VA Rush D. Holt, NJ
Paul C. Broun, GA Raul M. Grijalva, AZ
John Fleming, LA Madeleine Z. Bordallo, GU
Mike Coffman, CO Jim Costa, CA
Tom McClintock, CA Dan Boren, OK
Glenn Thompson, PA Gregorio Kilili Camacho Sablan,
Jeff Denham, CA CNMI
Dan Benishek, MI Martin Heinrich, NM
David Rivera, FL Ben Ray Lujan, NM
Jeff Duncan, SC John P. Sarbanes, MD
Scott R. Tipton, CO Betty Sutton, OH
Paul A. Gosar, AZ Niki Tsongas, MA
Raul R. Labrador, ID Pedro R. Pierluisi, PR
Kristi L. Noem, SD John Garamendi, CA
Steve Southerland II, FL Colleen W. Hanabusa, HI
Bill Flores, TX Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Charles J. ``Chuck'' Fleischmann,
TN
Jon Runyan, NJ
Bill Johnson, OH
Todd Young, Chief of Staff
Lisa Pittman, Chief Counsel
Jeffrey Duncan, Democrat Staff Director
David Watkins, Democrat Chief Counsel
------
SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
DOUG LAMBORN, CO, Chairman
RUSH D. HOLT, NJ, Ranking Democrat Member
Louie Gohmert, TX Peter A. DeFazio, OR
Paul C. Broun, GA Madeleine Z. Bordallo, GU
John Fleming, LA Jim Costa, CA
Mike Coffman, CO Dan Boren, OK
Glenn Thompson, PA Gregorio Kilili Camacho Sablan,
Dan Benishek, MI CNMI
David Rivera, FL Martin Heinrich, NM
Jeff Duncan, SC John P. Sarbanes, MD
Paul A. Gosar, AZ Betty Sutton, OH
Bill Flores, TX Niki Tsongas, MA
Jeffrey M. Landry, LA Vacancy
Charles J. ``Chuck'' Fleischmann, Edward J. Markey, MA, ex officio
TN
Bill Johnson, OH
Doc Hastings, WA, ex officio
------
COMMITTEE ON AGRICULTURE
FRANK D. LUCAS, Oklahoma, Chairman
BOB GOODLATTE, Virginia, COLLIN C. PETERSON, Minnesota,
Vice Chairman Ranking Minority Member
TIMOTHY V. JOHNSON, Illinois TIM HOLDEN, Pennsylvania
STEVE KING, Iowa MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas LEONARD L. BOSWELL, Iowa
K. MICHAEL CONAWAY, Texas JOE BACA, California
JEFF FORTENBERRY, Nebraska DENNIS A. CARDOZA, California
JEAN SCHMIDT, Ohio DAVID SCOTT, Georgia
GLENN THOMPSON, Pennsylvania HENRY CUELLAR, Texas
THOMAS J. ROONEY, Florida JIM COSTA, California
MARLIN A. STUTZMAN, Indiana TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio KURT SCHRADER, Oregon
AUSTIN SCOTT, Georgia LARRY KISSELL, North Carolina
SCOTT R. TIPTON, Colorado WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida CHELLIE PINGREE, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas JOE COURTNEY, Connecticut
MARTHA ROBY, Alabama PETER WELCH, Vermont
TIM HUELSKAMP, Kansas MARCIA L. FUDGE, Ohio
SCOTT DesJARLAIS, Tennessee GREGORIO KILILI CAMACHO SABLAN,
RENEE L. ELLMERS, North Carolina Northern Mariana Islands
CHRISTOPHER P. GIBSON, New York TERRI A. SEWELL, Alabama
RANDY HULTGREN, Illinois JAMES P. McGOVERN, Massachusetts
VICKY HARTZLER, Missouri
ROBERT T. SCHILLING, Illinois
REID J. RIBBLE, Wisconsin
KRISTI L. NOEM, South Dakota
------
Professional Staff
Nicole Scott, Staff Director
Kevin J. Kramp, Chief Counsel
Tamara Hinton, Communications Director
Robert L. Larew, Minority Staff Director
------
Subcommittee on Conservation, Energy, and Forestry
GLENN THOMPSON, Pennsylvania, Chairman
BOB GOODLATTE, Virginia TIM HOLDEN, Pennsylvania,
MARLIN A. STUTZMAN, Indiana Ranking Minority Member
BOB GIBBS, Ohio KURT SCHRADER, Oregon
SCOTT R. TIPTON, Colorado WILLIAM L. OWENS, New York
STEVE SOUTHERLAND II, Florida MIKE McINTYRE, North Carolina
MARTHA ROBY, Alabama JIM COSTA, California
TIM HUELSKAMP, Kansas TIMOTHY J. WALZ, Minnesota
RANDY HULTGREN, Illinois CHELLIE PINGREE, Maine
REID J. RIBBLE, Wisconsin MARCIA L. FUDGE, Ohio
KRISTI L. NOEM, South Dakota GREGORIO KILILI CAMACHO SABLAN,
Northern Mariana Islands
Brent Blevins, Subcommittee Staff Director
------
CONTENTS
----------
Page
Hearing held on Friday, July 8, 2011............................. 1
Statement of Members:
Holden, Hon. Tim, a Representative in Congress from the
Commonwealth of Pennsylvania............................... 9
Prepared statement of.................................... 10
Holt, Hon. Rush D., a Representative in Congress from the
State of New Jersey........................................ 3
Prepared statement of.................................... 5
Lamborn, Hon. Doug, a Representative in Congress from the
State of Colorado.......................................... 2
Prepared statement of.................................... 3
Markey, Hon. Edward J., a Representative in Congress from the
State of Massachusetts..................................... 10
Prepared statement of.................................... 12
Thompson, Hon. Glenn T., a Representative in Congress from
the Commonwealth of Pennsylvania........................... 6
Prepared statement of.................................... 7
Statement of Witnesses:
Abbey, Hon. Robert, Director, Bureau of Land Management, U.S.
Department of the Interior................................. 13
Prepared statement of.................................... 14
Fuller, Lee, Vice President of Government Relations,
Independent Petroleum Association of America............... 43
Prepared statement of.................................... 45
Holtrop, Hon. Joel, Deputy Chief, National Forest System,
Forest Service, U.S. Department of Agriculture............. 17
Prepared statement of.................................... 19
Mall, Amy, Senior Policy Analyst, Natural Resources Defense
Council.................................................... 59
Prepared statement of.................................... 61
Matsen, Maureen, Deputy Director of Natural Resources and
Senior Advisor on Energy, Commonwealth of Virginia......... 38
Prepared statement of.................................... 39
Mayer, Craig L., General Counsel, Pennsylvania General Energy
Company L.L.C.............................................. 48
Prepared statement of.................................... 50
Miller, David, P.E.., Standards Director, American Petroleum
Institute.................................................. 41
Prepared statement of.................................... 42
Wofford, Kate Giese, Executive Director, Shenandoah Valley
Network.................................................... 56
Prepared statement of.................................... 57
Additional materials supplied:
Pittsburgh Tribune-Review article, ``Public water safe from
radioactivity throughout region'' by Timothy Puko, dated
June 21, 2011,............................................. 24
New York Times article ``Drilling Down: Insiders Sound an
Alarm Amid a Natural Gas Rush'' by Ian Urbina, dated June
25, 2011, submitted for the record......................... 77
New York Times article ``Behind Veneer, Doubt on Future of
Natural Gas'' by Ian Urbina, dated June 26, 2011, submitted
for the record............................................. 78
Walton, Peter C., Rockingham County, Virginia................ 81
JOINT OVERSIGHT HEARING ON THE ``CHALLENGES FACING DOMESTIC OIL AND GAS
DEVELOPMENT: REVIEW OF BUREAU OF LAND MANAGEMENT/U.S. FOREST SERVICE
BAN ON HORIZONTAL DRILLING ON FEDERAL LANDS.''
----------
Friday, July 8, 2011
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources,
Committee on Natural Resources, joint with the
Subcommittee on Conservation, Energy, and Forestry, Committee on
Agriculture
Washington, D.C.
----------
The Subcommittees met, pursuant to call, at 10:03 a.m. in
Room 1324, Longworth House Office Building, Hon. Doug Lamborn
[Chairman of the Subcommittee on Energy and Mineral Resources]
presiding.
Present from Subcommittee on Energy and Mineral Resources:
Representatives Lamborn, Fleming, Thompson, Rivera, Duncan,
Flores, Fleischmann, Holt, Sarbanes and Markey (ex officio).
Present from Subcommittee on Conservation, Energy, and
Forestry: Representatives Thompson, Goodlatte, Stutzman,
Tipton, Southerland, Hultgren, Holden, Costa and Pingree.
Mr. Lamborn. The Subcommittee hearing will come to order.
The Chairman notes the presence of a quorum, which under
Natural Resources Committee Rule 3(e) is two Members.
The Natural Resources Subcommittee on Energy and Mineral
Resources and the Agriculture Subcommittee on Conservation,
Energy, and Forestry are meeting today for a joint oversight
hearing to hear testimony on ``Challenges Facing Domestic Oil
and Gas Development: Review of Bureau of Land Management/U.S.
Forest Service Ban on Horizontal Drilling on Federal Lands.''
Under Natural Resources Committee Rule 4(f), opening
statements are limited to the Chairman and Ranking Member of
the Subcommittee. In addition, opening statements will be
offered today by the Chairman and Ranking Member of the
Agriculture Subcommittee and, should they wish to participate,
the full committee Chairmen and Ranking Members of both
committees.
In addition, I ask unanimous consent to include any other
Members' opening statements in the hearing record if submitted
to the clerk by close of business today. Hearing no objection,
so ordered.
I now recognize myself for five minutes for an opening
statement.
STATEMENT OF THE HONORABLE DOUG LAMBORN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Mr. Lamborn. Today the Subcommittee is meeting to review
the future of oil and gas development on Federal lands in light
of Administration proposals to enact complete bans on
horizontal drilling on Federal lands.
Earlier this year, the U.S. Forest Service of George
Washington National Forest released a forest plan that had the
Administration's preferred alternative as a ban on horizontal
drilling on more than one million acres of Federal mineral
estate. This plan as proposed by the Administration would
essentially close the entire resource to energy development,
eliminate a key priority in the multiple-use mission of Forest
Service lands, and further erode our efforts to generate
domestic energy security.
While efforts are proposed by the Forest Service to close
these acres to domestic development of our own natural gas, the
Cove Point LNG terminal operated by Dominion purchased nearly
nine million cubic feet of Norwegian natural gas just this
year. Let me repeat that. While our Forest Service is working
to close our American lands to all drilling, we are importing
natural gas from Norway to meet the domestic needs of Virginia
and Maryland.
While the Forest Service is pursuing this ban on fracturing
and horizontal drilling, BLM is in the process of holding
hearings in the West to review the policies for the use of
fracturing on Federal lands. Hydraulic fracturing. BLM Director
Abbey was quoted earlier this year saying, ``We have not seen
evidence of any adverse effects as a result of the use of the
chemicals that are part of that fracking technology.''
This is important because a 2009 BLM instruction memorandum
says that, ``Application of directional/horizontal drilling
technology is increasing. The BLM strongly supports this
environmental best management practice as a means of providing
substantial reductions in surface disturbance and overall
impacts from oil and gas development.''
BLM says horizontal drilling is an environmental best
management practice and there is no evidence of any adverse
effects, and yet the policy of this Administration now appears
to be an outright ban starting with 1.1 million acres in
Virginia.
The key questions for the committee today are: How did this
policy proposal from the Forest Service reach this point? How
did our land managers determine that the best policy is an
outright ban on development, and what does this portend for the
future?
Americans are desperate for new jobs, and today's jobs
report says that our economy continues to struggle with only
18,000 new jobs created in June. That is why it makes so little
sense to ban domestic development here while we continue a
dependence in the case of Virginia and Maryland on Norwegian
natural gas.
The Forest Service, as a custodian of our lands, has an
obligation to work with a multiple-use mission to serve the
people of Virginia and the United States by promoting the
conservation of our resources, which undeniably should include
the development of appropriate oil and gas resources on Federal
lands.
I look forward to hearing from our witnesses today.
[The prepared statement of Mr. Lamborn follows:]
Statement of The Honorable Doug Lamborn, Chairman,
Subcommittee on Energy and Mineral Resources
Today the Subcommittee is meeting to review the future of oil and
gas development on federal lands in light of Administration proposals
to enact complete bans on horizontal drilling on federal lands.
Earlier this year, the U.S. Forest Service George Washington
National Forest released a forest plan that had the Administration's
preferred alternative as a ban horizontal drilling on more than 1
million acres of federal mineral estate. This plan as proposed by the
Administration would essentially close the entire resource to energy
development, eliminate a key priority in the multiple-use mission of
Forest Service lands, and further erode our efforts to generate
domestic energy security.
While efforts are proposed by the Forest Service to close these
acres to domestic development of our own natural gas, the Cove Point
LNG terminal operated by Dominion purchased nearly 9 million cubic feet
of Norwegian natural gas THIS YEAR. Let me repeat that, while our
Forest Service is working to close our lands to all drilling, we are
importing natural gas from Norway to meet the domestic needs of
Virginia and Maryland.
While the Forest Service is pursuing a ban on fracturing and
horizontal drilling, BLM is in the process of holding hearings in the
West to review the policies for the use of fracturing on federal lands.
BLM Director Abbey was quoted earlier this year saying, ``''We have not
seen evidence of any adverse effects as a result of the use of the
chemicals that are a part of that fracking technology.''
This is important because a 2009 BLM instruction memorandum says:
the ``Application of directional/horizontal drilling technology is
increasing. The BLM strongly supports this environmental Best
Management Practice as a means of providing substantial reductions in
surface disturbance and overall impacts from oil and gas development.''
BLM says horizontal drilling is an ``environmental Best Management
Practice'' and there is ``no evidence of any adverse effects'', and yet
the policy of this Administration now appears to be an outright ban
starting with 1.1 million acres in Virginia.
The key questions for the Committee today is how did this policy
proposal from the Forest Service reach this point? How did our land
managers determine that the best policy is an outright ban on
development and what does this portend for the future?
Americans are desperate for new jobs and it makes little sense to
ban domestic development here, while we continue a dependence on
Norwegian natural gas. The Forest Service as a custodian of our lands
has an obligation to work with a multiple-use mission, to serve the
people of Virginia and the United States by promoting the conservation
of our resources, which undeniably includes the development of
appropriate oil and gas resources on Forest Lands.
I look forward to hearing from our witnesses today.
______
Mr. Lamborn. And I now recognize the Ranking Member,
Representative Holt of New Jersey, for five minutes for his
opening statement.
Mr. Holt. Thank you. And will the Chair and Ranking Member
of the Agriculture Subcommittee also get comments?
Mr. Lamborn. Absolutely. Absolutely.
Mr. Holt. Good. Thank you.
STATEMENT OF THE HONORABLE RUSH D. HOLT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Holt. Thank you, Mr. Chairman. According to the title
of today's hearing, there is a ban on horizontal drilling on
Federal lands imposed by this Administration. Not true.
Unfortunately, once again this is a hearing title which amounts
to a broad and misleading generalization, another case of
blowing an issue far out of proportion to score what seem to be
political or ideological points.
In fact, the so-called ban in question is actually one of
seven possible alternatives of a draft environmental impact
statement issued as part of a required update of the land
resource management plan for the George Washington National
Forest. So let me reiterate. No decisions have been made on
whether or not to allow horizontal drilling in the George
Washington National Forest.
Now, it is appropriate that we have a hearing on it. All
that has happened, though, is that the Forest Service is
evaluating the environmental impacts of a number of
alternatives as required by law, and they should be looking at
these alternatives and we should be looking at them too.
None of the alternatives discussed in the EIS would change
the existing practice of allowing traditional vertical oil and
gas drilling in George Washington Forest for the--I forget how
many--acres that are already under lease. Twelve thousand acres
are already under lease. Furthermore, none of the alternatives,
it appears, are going to--well, we will look at those
alternatives.
Horizontal drilling is commonly used in association with
hydraulic fracturing, and recent investigations have raised
questions about potential water quality hazards associated with
fracking. There is currently a study of potential effects being
conducted by the Environmental Protection Agency.
The Counties of Rockingham, Augusta and Shenandoah,
Virginia, three of the largest agricultural counties in the
State, have expressed their opposition to allowing horizontal
drilling in the National Forest because of concerns about water
quality. The Cities of Harrisonburg and Staunton, those cities
have passed similar resolutions of opposition.
To underscore the importance of being cautious about moving
forward with hydraulic fracturing in this area, the George
Washington National Forest protects a number of river basins,
including the Potomac River, that provides drinking water for
us, you here in Washington, D.C.
Given the local concerns and the unanswered questions, the
Forest Service I believe is acting responsibly with their
proposed EIS and the procedure associated with it while we wait
for the facts to be assembled, which is the point I want to
make. I mean, even if the Forest Service were eventually to
decide to prohibit horizontal drilling in the George Washington
Forest, it should be based on facts, and we know it would not
be a permanent ban.
The Forest Service has made it clear that if natural gas
can be accessed in nearby areas on private lands without
adverse impacts to water quality the Forest Service should
consider and reconsider the issue. But banned or permitted, the
decision should be based on evidence. The distortion in the
title of today's hearing makes me wonder how grounded in
evidence this discussion will be.
Now, in the last 20 years natural gas development on
Federal lands has more than doubled, from 1.2 trillion cubic
feet 20 years ago to about 3 trillion cubic feet last year.
Moreover, according to the Bureau of Land Management, 90
percent of the new natural gas wells on public lands employ
hydraulic fracturing. So overall, U.S. natural gas production
is at its highest level ever.
You know, the plans for terminals to import liquified
natural gas are being turned around because it is likely that
there will be for as far as we can see export of natural gas.
So those are the facts as I see them. I hope that we will
restrict this hearing to, wherever possible, evidence and
facts.
I thank the Chairman.
[The prepared statement of Mr. Holt follows:]
Statement of The Honorable Rush D. Holt, Ranking Member,
Subcommittee on Energy and Mineral Resources
Thank you Mr. Chairman.
According to the title of today's hearing, there is a ban on
horizontal drilling on federal lands imposed by the Administration.
Unfortunately, once again, this is a hearing title which amounts to a
broad and misleading generalization.
In fact, the ``ban'' in question is actually only one of seven
possible alternatives in a draft Environmental Impact Statement (EIS)
issued as part of a required update to the Land and Resource Management
Plan for the George Washington National Forest. Let me just reiterate
that--No decisions have yet been made on whether or not to allow
horizontal drilling in the George Washington National Forest. All that
has happened is that the Forest Service is evaluating the environmental
impacts of a number of alternatives as required by law. Furthermore,
none of the alternatives discussed in the EIS would change the existing
practice of allowing traditional, vertical oil and gas drilling in the
George Washington Forest. It appears though, that the oil and gas
industry is not seeing the forest for the trees.
Horizontal drilling is commonly used in association with hydraulic
fracturing. Recent investigations have raised questions about potential
water quality hazards associated with fracking, and there currently is
a study of potential effects being conducted by the Environmental
Protection Agency. The Counties of Rockingham, Augusta, and Shenandoah,
Virginia--three of the largest agricultural counties in the state--have
expressed their opposition to allowing horizontal drilling in the
National Forest because of concerns about harm to water quality. The
City of Harrisonburg and Staunton have also passed similar resolutions
of opposition.
And to underscore the importance of being cautious about moving
forward with hydraulic fracturing in this area, the George Washington
National Forest protects a number of river basins, including the
Potomac River that provides the drinking water supply for Washington,
D.C. Given the local concerns and the unanswered questions, the Forest
Service is acting responsibly with their proposed EIS while we wait for
the facts to come in.
Even if the Forest Service were eventually to decide to prohibit
horizontal drilling in the George Washington Forest, it would not be a
permanent ban. The Forest Service has made it clear that if natural gas
can be accessed in nearby areas on private lands without adverse
impacts to water quality, the Service could reconsider the issue.
George Washington is famously quoted as saying, ``I cannot tell a
lie.'' I cannot let stand the accusation that the Obama Administration
is somehow banning horizontal drilling on public lands based on what is
happening in the George Washington National Forest. That could not be
further from the truth.
In the last 20 years, natural gas development on federal lands has
more than doubled, from 1.2 trillion cubic feet in 1991 to nearly 3
trillion cubic feet in 2010. Moreover, according to the Bureau of Land
Management, 90 percent of new natural gas wells on public lands employ
hydraulic fracturing. Overall, U.S. natural gas production is at its
highest level ever. Those are the facts. And that is the truth.
I yield back.
______
Mr. Lamborn. Thank you.
I now recognize the gentleman from Pennsylvania, a Member
of this Subcommittee and also Chairman of the Subcommittee on
Conservation, Energy, and Forestry on the Agriculture
Committee, Mr. Thompson, for five minutes for his opening
statement.
STATEMENT OF THE HONORABLE GLENN THOMPSON, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Thompson. Thank you, Chairman Lamborn, Ranking Members
Holt and Holden. I appreciate your help and interest in holding
this important hearing.
Since its inception, the National Forest System has been
intended for multiple uses. This includes timber harvesting,
recreation tourism and, yes, mineral extraction such as oil,
gas and coal. For an example, I don't have to look any further
than the Allegheny National Forest, which is in the 5th
District of Pennsylvania, which I am privileged to represent.
The world's oil industry was born there 151 years ago with
Drake Well and since its founding 64 years later in 1923, oil
and gas production has continued in the nearby Allegheny
National Forest. Some will have you believe that natural
resource production, whether it is oil, gas, coal or timber,
and environmental stewardship are mutually exclusive. Nothing
could be farther from the truth.
And for those who think otherwise, I certainly invite them
to Pennsylvania and the Allegheny National Forest to see for
themselves. Through effective management practices, we have
successfully produced oil, gas and timber for decades in the
ANF while protecting our environment. In fact, we boast of
having the finest hardwoods in the world, and because of their
value I believe that the ANF is one of the few--perhaps the
only--National Forest which actually makes money for the Forest
Service.
Because we are blessed with abundant natural resources,
Pennsylvania is again returning to its energy roots with the
production of natural gas from the Marcellus shale field, which
many experts feel was one of the largest gas plays in the
world. The Allegheny National Forest is part of that play.
Through modern technology, especially horizontal drilling
and hydraulic fracturing, production of oil and natural gas
from our many shale formations are now possible. In plain
English, no fracturing and no horizontal drilling means no
natural gas or oil from shale and no energy security.
The Marcellus has brought us upwards of 100,000 new jobs to
Pennsylvania alone, significant new tax revenues to the state,
over $200 million to build new roads, none of that with
taxpayer dollars, and an unimaginable amount of natural gas to
the country. After only four years of production and being less
than 10 percent developed, the Marcellus is already providing
the entire Northeast United States with over 10 percent of its
natural gas.
Aside from the jobs, both direct and indirect, and the
public and private revenue it creates, the shale boom is
helping to stabilize the natural gas market in the United
States. Access to affordable natural gas directly impacts
consumers. Because of the production of shale gas brought by
the horizontal drilling, our citizens can afford to heat their
homes this winter, and the price of many goods produced from
natural gas saw no increase in cost because of gas prices.
Natural gas, which sold four years ago for a record price
of over $13 per thousand cubic feet, has been stabilized to
around $4.50. Dow Chemical and other petrochemical companies
were set to move offshore just a few years ago because of high
and unsustainable natural gas prices in the United States.
Fortunately, because of our ability to produce shale gas
through horizontal drilling and hydrofracturing, instead of
moving offshore, Dow is now planning to expand its operations
in the United States. Jobs.
Make no mistake. Our affordable and predictable natural gas
prices are a direct result of our ability to produce it through
horizontal drilling and hydrofracturing. Without a doubt,
development will have its challenges, but I am convinced that
we can meet these challenges and do it effectively as we have
for decades.
Knowing of our need for affordable and reliable energy,
which we are blessed with in this country, I am extremely
concerned about the Forest Service placing a moratorium on
applications for permits to drill any ``horizontal well and
associated hydraulic fracturing.'' Not only does this undermine
the Service's mission of multiple use, but it also comes at a
time when we are becoming more dependent on foreign sources and
when world energy consumption continues to increase while the
Federal Government continues to stymie development of our own
natural resources.
Let us not forget that oil, gas, coal and all minerals and
timber on Federal lands are not owned by the Forest Service,
but by the citizens of our country, who would greatly benefit
from their production. Any action to prevent their development
should be based on sound science and fact, not philosophy and
not political agendas.
The basic question I have regarding the decision by the
Department of Agriculture and the Forest Service to place or
propose a moratorium on even processing a permit to drill
utilizing hydraulic drilling and hydraulic fracturing is when
and why did they come to the conclusion that these processes
should be banned in the forest? Did they perform environmental
and economic analyses? Do they have any evidence that
horizontal drilling and hydraulic fracturing are inherent
threats to the forest, human health or our water supply?
It appears to me the Forest Service has no credible reason
for moving in this direction. Now, I assume the Forest Service
witnesses think otherwise and they will present logical,
science-based facts for their proposed moratorium. I do want to
thank our witnesses on this first panel, Director Abbey, Deputy
Director Holtrop, Director Ferguson and Supervisor Hyzer. We
look forward to your testimonies and the opportunity to have a
productive dialogue.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Thompson follows:]
Statement of The Honorable GT Thompson, Chairman, Subcommittee on
Conservation, Energy, and Forestry, Committee on Agriculture
Chairman Lamborn, Ranking Members Holt and Holden, I appreciate
your help and interest in holding this important hearing.
Since its inception, the National Forest system has been intended
for multiple-use. This includes timber harvesting, recreation,
tourism--and yes, mineral extraction, such as oil, gas and coal.
For an example, I don't have to look any further than the Allegheny
National Forest (ANF) which is in the Fifth District of Pennsylvania,
which I am privileged to represent.
The world's oil industry was born there in 152 years ago with Drake
well. And since its founding 64 years later in 1923, oil and gas
production has continued in the nearby Allegheny National Forest.
Some will have you believe that natural resource production--
whether it is oil, gas, coal or timber--and environmental stewardship
are mutually exclusive. Nothing could be farther from the truth and for
those who think otherwise, I invite them to Pennsylvania and the
Allegheny National Forest to see for themselves.
Through effective management practices, we have successfully
produced oil, gas, and timber for decades on the ANF, while protecting
our environment. In fact, we boast of having the finest hardwoods in
the world and because of their value; and I believe that the ANF is one
of few, perhaps the only National Forest which actually makes money for
the Forest Service.
Because we are blessed with abundant natural resources,
Pennsylvania is again returning to its energy roots with the production
of natural gas from the Marcellus shale field which many experts feel
is one of the largest gas plays in the world.
The Allegheny National Forest is part of that play.
Through modern technology, especially horizontal drilling and
hydraulic fracturing, production of oil and natural gas from our many
shale formations are now possible.
In plain English, no fracturing and horizontal drilling means no
natural gas or oil from shale and no energy security.
The Marcellus has brought upwards of 100,000 new jobs to
Pennsylvania alone, significant new tax revenues to the state, over
$200 million to build new roads, and an unimaginable amount of natural
gas to the country.
After only four years of production and being less than 10%
developed, the Marcellus is already providing the entire northeast U.S.
with over of ten percent of its natural gas.
Aside from the jobs--both direct and indirect--and the public and
private revenue it creates, the shale gas boom is helping to stabilize
the natural gas market in the United States
Access to affordable natural gas directly impacts consumers.
Because of the production of shale gas brought about by horizontal
drilling our citizens could afford to heat their homes this winter and
the price of many goods produced from natural gas saw no increase in
cost because of gas prices.
Natural gas which sold four years ago for record prices of over $13
per thousand cubic feet has been stabilized to around $4.50.
Dow Chemical and other petrochemical companies were set to move
offshore just a few years ago because of high and unstable natural gas
prices in the Unites States.
Fortunately, because of our ability to produce shale gas through
horizontal drilling and hydro fracturing instead of moving off shore
Dow is now planning to expand its operations in the U.S.
Make no mistake: our affordable and predictable natural gas prices
are a direct result of our ability to produce it though horizontal
drilling and hydro fracturing.
Without a doubt, development will have its challenges--but I am
convinced that we can meet these challenges and do it effectively as we
have for decades.
Knowing of our need for affordable and reliable energy which we are
blessed with in this country, I am extremely concerned about the Forest
Service placing a moratorium on applications for permits to Drill any
``horizontal well and associated hydraulic fracturing.''
Not only does this undermine the Service's mission of multiple-use
but it also comes at a time when we are becoming more dependent on
foreign sources and when world energy consumption continues to
increase, while the Federal government continues to stymie development
of our own natural resources.
Let's not forget that oil, gas, coal, all minerals and timber on
federal lands are not owned by the Forest Service but by the citizens
of our country who would greatly benefit from their production.
Any action to prevent that development should be based on sound
science and fact--not philosophy or political agendas.
The basic question I have regarding the decision by the Department
of Agriculture and Forest Service to place a moratorium on even
processing a permit to drill utilizing horizontal drilling and
hydraulic fracturing is when and why did they come to the conclusion
that these processes should be banned in the forest?
Did they perform environmental and economic analyses? Do they have
any evidence that horizontal drilling and hydraulic fracturing are
inherent threats to the forests, human health or our water supply?
It appears to me that the Forest Service has no credible reason for
moving in this direction.
I assume the Forest Service witnesses think otherwise and they will
present logical, science based facts for their moratorium.
I want to thank our witnesses--Director Abbey, Deputy Chief
Holtrop, Director Ferguson and Supervisor Hyzer. We look forward to
your testimonies and the opportunity to have a productive dialogue.
______
Mr. Lamborn. Thank you.
I now recognize the gentleman from Pennsylvania and the
Ranking Member of the Subcommittee on Conservation, Energy, and
Forestry, Mr. Holden, for five minutes for his opening
statement.
STATEMENT OF THE HONORABLE TIM HOLDEN, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Holden. Thank you, Mr. Chairman. I would like to thank
our witnesses and guests for being here this morning.
In times of global economic instability, it is important
that the United States continue to move toward a secure energy
future that will have long-lasting economic benefits. This must
include safe and responsible domestic oil and natural gas
production as part of a broad energy portfolio.
While there is currently no ban or moratorium on horizontal
drilling on Federal lands, a draft management plan by the
Forest Service proposes to not allow drilling on a parcel of
land in the George Washington National Forest in Virginia and
West Virginia. Following normal process for issuance of any
forest management plan, this draft proposal is currently
available for public comment and still open for revision.
Drilling occurs on public lands every day, and over five
million acres of National Forest lands are currently leased for
oil, gas, coal and phosphate mining. Both the Forest Service
and the Bureau of Land Management have responsibilities related
to the approval of oil and gas leases.
Though the Forest Service has the option to object and veto
a plan for a forest plan, more than 7,200 applications for
permits to drill on public lands and Indian lands are expected
to be processed this year by BLM, up from approximately 5,000
in 2010. America's public lands and their resources contributed
more than $112 billion to the U.S. economy and supported more
than a half million jobs in 2010, the bulk of which came from
the management of mineral resources and recreation.
The public lands managed by the BLM and the Forest Service
are some of the nation's greatest assets, both environmentally
and economically. I am hopeful that these agencies realize the
economic importance of U.S. energy production.
The natural gas industry has safely and responsibly been
operating on taxpayer owned lands for years. This responsible
production of domestic fuel creates tens of thousands of jobs,
raises more revenue each year for American taxpayers than it
spends and helps stimulate investment and innovation by
businesses.
I look forward to today's expert testimony and the
opportunity to listen, learn and question those on the
forefront of this important issue.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Holden follows:]
Statement of The Honorable Tim Holden, Ranking Member,
Subcommittee on Conservation, Energy, and Forestry, Committee on
Agriculture
I would like to thank our witnesses and guests for coming today. In
times of global economic instability, it is important that the United
States continues to move toward a secure energy future that will have
long-lasting economic benefits. This must include safe and responsible
domestic oil and natural gas production as part of a broad energy
portfolio.
While there is currently no ban or moratorium of horizontal
drilling on federal lands, a draft management plan by the Forest
Service proposes to not allow drilling on a parcel of land in the
George Washington National Forest in Virginia and West Virginia.
Following normal process for issuance of any forest management plan,
this draft proposal is currently available for public comment and still
open for revision.
Drilling occurs on public lands every day and over 5 million acres
of National Forest Lands are currently leased for oil, gas, coal, and
phosphate mining.
Both the Forest Service and the Bureau of Land Management have
responsibilities related to the approval of oil and gas leases. Though
the Forest Service has the option to object and veto a plan for
forestland, more than 7,200 applications for permit to drill on public
lands and Indian lands are expected to be processed this year by BLM--
up from approximately 5,000 in 2010.
America's public lands and their resources contributed more than
$112 billion to the U.S. economy and supported more than a half-million
American jobs in 2010, the bulk of which came from the management of
mineral resources and recreation. The public lands managed by BLM and
the Forest Service are some of the nation's greatest assets both
environmentally and economically.
I am hopeful that these agencies realize the economic importance of
U.S. energy production. The natural gas industry has safely and
responsibly been operating on taxpayer-owned lands for years. This
responsible production of domestic fuel has created tens of thousands
of jobs, raises more revenue each year for American taxpayers than it
spends and helps stimulate investment and innovation by businesses.
I look forward to today's expert testimony and the opportunity to
listen, learn and question those on the forefront of this important
issue.
______
Mr. Lamborn. Thank you.
As each of the Chairmen and Ranking Members of the full
committees appear, they will be given an opportunity to make an
opening statement.
I would now recognize the gentleman from Massachusetts, the
Ranking Member of the Committee on Natural Resources, Mr.
Markey, for five minutes for an opening statement.
STATEMENT OF THE HONORABLE EDWARD J. MARKEY, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF MASSACHUSETTS
Mr. Markey. Thank you, Mr. Chairman, very much. Recent
advancements in natural gas drilling technologies have unlocked
natural gas supplies in shale and other unconventional
formations across the country, leading to a significant
expansion of natural gas production, including on BLM-managed
public lands. Currently 90 percent of all new wells on public
lands are hydraulically fractured.
To explain the hydraulic fracturing process, the Talisman
Energy Corporation came up with a cartoon coloring book that
follows the friendly Frackasaurus named Talisman Terry through
the natural gas drilling process. The lovable dinosaur
playfully promotes the benefits of natural gas and paints a
picture of a magical world filled with smiling rocks and
grinning animals. The problem is that unless you are a
Frackasaurus named Talisman Terry, this world does not exist.
In fact, the word talisman means lucky charm, which is what
everyone else will need if you listen to Talisman Terry,
because in the absence of real safety procedures put in place,
everyone will need a talisman, a lucky charm, an object with
magical powers. I understand why you would name your
corporation that, but I don't think we should base our public
health and safety laws upon that premise.
For communities around this country, the expansion of
natural gas drilling and hydraulic fracturing has meant
contamination of water supplies, loss of property value,
deteriorating health conditions, dead livestock and destruction
of pristine forests and agricultural lands.
A recent series of investigative reports in The New York
Times have highlighted some of the potential risks of natural
gas drilling and inconsistent efforts to regulate this booming
industry. For example, The Times reported that wastewater from
hydraulic fractured wells is often contaminated with toxic
heavy metals, highly corrosive salts, cancer causing chemicals,
such as benzine and radioactive elements.
A large amount of this wastewater is disposed in municipal
sewerage treatment plants that are not capable of removing the
contaminants. This wastewater discharge can also enter into
local waterways, and the equipment failure can cause tens of
thousands of gallons of chemical wastewater to spew out of the
well and into nearby creeks.
These fluids are so toxic that a study by Forest Service
researchers published earlier this week found that when
fracturing fluids were spilled in the forest they killed all
plants and trees in the area. Without proper oversight, the
disposal of drilling wastewater poses threats to agricultural
lands, aquatic life and human health, particularly when public
drinking water systems rely on waterways where waste is being
discharged.
To further cloud the problem, the oil and gas industry
enjoy exemptions or exclusions from key parts of at least seven
of the 15 major Federal environmental laws designed to protect
public health, air and water, including the Safe Drinking Water
Act and the Clean Water Act. Many of these companies have also
refused to disclose the contents of their fracturing fluids.
A century ago when Congressman Weeks of Massachusetts
guided into law the landmark legislation that allowed the lands
that make up the George Washington National Forest to be
purchased from private individuals, this protected forestland
and habitat for hundreds of animals, which drives tourism for
the local economy and provides a safe source of drinking water
to almost 300,000 local residents. Even more so, although this
forest is located in Virginia, it protects the source of water
that feeds our faucets right here in Washington, D.C.
While horizontal drilling has never occurred in the George
Washington National Forest, expansion of these technologies
without adequate safety and oversight could threaten natural
resources and has the potential to turn stretches of forest
into lifeless dunes, an environment that would only support the
imaginary Terry the Frackasaurus.
While the discovery of new gas resources creates a domestic
energy and economic opportunity and we should try to capture
that economic opportunity, we must also ensure that this
exploration and production of natural gas is done safely and
responsibly and leaves us with a forest full of trees for
another century and not a chemical wasteland.
I thank you, Mr. Chairman.
[The prepared statement of Mr. Markey follows:]
Statement of The Honorable Edward J. Markey, Ranking Member,
Committee on Natural Resources
Thank you Chairman Hastings.
Recent advancements in natural gas drilling technologies have
unlocked natural gas supplies in shale and other unconventional
formations across the country leading to a significant expansion of
natural gas production, including on BLM-managed public lands.
Currently 90% of all new wells on public lands are hydraulically
fractured.
To explain the hydraulic fracturing process, Talisman Energy
Corporation came up with a cartoon coloring book that follows the
friendly FRACK-A-SAURUS named ``Talisman Terry'' through the natural
gas drilling process. The loveable dinosaur playfully promotes the
benefits of natural gas and paints a picture of a magical world filled
with smiling rocks and grinning animals. The problem is that unless you
are a ``FRACK-A-SAURUS'' named ``Talisman Terry,'' this world doesn't
exist. For communities around this country the expansion of natural gas
drilling and hydraulic fracturing has meant contamination of water
supplies, loss of property value, deteriorating health conditions, dead
livestock, and destruction of pristine forest and agricultural lands.
A recent series of investigative reports in The New York Times have
highlighted some of the potential risks of natural gas drilling and
inconsistent efforts to regulate this booming industry.
For example, The Times reported that wastewater from hydraulic
fractured wells is often contaminated with toxic heavy metals, highly
corrosive salts, cancer causing chemicals such as benzene, and
radioactive elements. A large amount of this wastewater is disposed in
municipal sewage treatment plants that are not capable of removing the
contaminants. This wastewater discharge can also enter into local
waterways as was the case in Pennsylvania, 3 months ago, when equipment
failure caused tens of thousands of gallons of chemical-laced water to
spew out of the well and into a nearby creek.
These fluids are so toxic that a study by Forest Service
researchers, published earlier this week, found that when fracturing
fluids were spilled in the forest they killed all plants and trees in
the area.
Without proper oversight, the disposal of drilling wastewater poses
threats to agricultural lands, aquatic life and human health,
particularly when public drinking water systems rely on waterways where
waste is being discharged.
To further cloud the problem, the oil and gas industry enjoy
exemptions or exclusions from key parts of at least 7 of the 15 major
federal environmental laws designed to protect public health, air and
water, including the Safe Drinking Water Act and the Clean Water Act.
Many of these companies have also refused to disclose the contents of
their fracturing fluids.
A century ago, Rep. Weeks of Massachusetts guided into law the
landmark legislation that allowed the lands that make up the George
Washington National Forest to be purchased from private individuals.
This protected forestland is habitat for hundreds of animals, drives
tourism for the local economy, and provides a safe source of drinking
water to almost 300,000 local residents. Even more so, although this
forest is located in Virginia, it protects the source of water that
feeds our faucets right here in Washington, DC.
While horizontal drilling has never occurred in the George
Washington National Forest expansion of these technologies without
adequate safety and oversight could threaten natural resources and has
the potential to turn stretches of forest into lifeless dunes--An
environment that would only support the imaginary Terry the FRACK-A-
SAURUS.
While the discovery of new gas resources creates a domestic energy
and economic opportunity, we must ensure that this exploration and
production for natural gas is done safely and responsibly and leaves us
with a forest full of trees for another century and not a chemical
wasteland.
______
Mr. Lamborn. OK. Thank you.
We will now hear from our witnesses. I would like to invite
forward The Honorable Bob Abbey, Director of the Bureau of Land
Management; The Honorable Joel Holtrop, Deputy Chief of the
U.S. Forest Service, accompanied by Mr. Tony Ferguson, Director
of Minerals and Geology Management, USDA Forest Service, and
Ms. Maureen Hyzer, Forest Supervisor of the George Washington
and Jefferson National Forests.
Thank you all for being here. Like all our witnesses, your
written testimony will appear in full in the hearing record, so
I ask that you keep your oral statements to five minutes as
outlined in our invitation letter to you and under Committee
Rule 4(a). Our microphones are not automatic, so you need to
turn them on when you are ready to begin talking.
I also want to explain how the timing lights work. When you
begin, the clerk will start the clock and a green light will
appear. After four minutes a yellow light will appear, and
after five minutes the red light comes on. At that point I
would ask you to conclude.
Mr. Abbey, you may begin. Thank you all for being here.
STATEMENT OF THE HONORABLE BOB ABBEY, DIRECTOR, BUREAU OF LAND
MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR
Mr. Abbey. Thank you. Chairman and Members of the
Subcommittee, once again it is my honor to appear before the
Members here to talk about the BLM's role in the responsible
development of oil and gas resources from our public lands and
the Federal onshore mineral estate.
Because there is no BLM ban on directional drilling, my
testimony today is intended to provide an overview of our oil
and gas leasing program and policies, which include
implementing leasing reforms, planning for development in the
National Petroleum Reserve in Alaska, continuing timely
processing of drilling permits, improving inspection,
enforcement and production accountability and reviewing
hydraulic fracturing policies and practices.
Secretary of the Interior Salazar has emphasized that as we
move toward the new energy frontier, conventional energy
resources from BLM-managed public lands will continue to play a
critical role in leading the nation's energy needs.
Facilitating the efficient, responsible development of domestic
oil and gas resources is part of this Administration's broad
energy strategy that will protect consumers, help reduce our
dependence on foreign oil, create well paying jobs and provide
revenues and economic activity to communities.
In Fiscal Year 2010, more than 114 million barrels of oil
were produced from the BLM-managed mineral estate, the most
since 1997. Also in 2010, the nearly three trillion cubic feet
of natural gas produced from public lands made it the second
most productive year on record. Federal oil and gas royalties
in 2010 exceeded $2.5 billion, half of which were paid directly
to the states where the development occurred.
Leasing reforms that the Bureau of Land Management put in
place in May of 2010 established an orderly, open and
environmentally sound process for developing oil and gas
resources on public lands. These reforms focused on making oil
and gas leasing more predictable, increasing certainty for
stakeholders, including the industry, and restoring needed
balance with comprehensive, up-front analysis added to the
process.
In the 23 million acre National Petroleum Reserve in
Alaska, the BLM has an active leasing program underway. Over
1.6 million acres are currently under lease in that area. The
BLM has offered six lease sales in the NPRA over the last 12
years. We plan to hold a lease sale in December of 2011 and
each year thereafter.
Through careful planning, the BLM's leasing program in the
National Petroleum Reserve in Alaska ensures that exploration
and development of its oil and natural gas resource is done in
a manner that protects wildlife and habitat and honors the
subsistence values of Alaskan natives and rural residents. The
BLM continues processing applications from industry for permits
to drill on Federal and Indian lands. So far this year, the BLM
received over 2,600 applications for permits to drill and
processed over 2,800.
We recognize that oil and gas development is a market
driven activity. It is industry's choice as to when or even
whether to start drilling a well within the two-year period
after an application for drilling has been approved. As of June
1, industry has not yet started drilling on nearly 7,100
applications for permits to drill that have already been
approved by the Bureau of Land Management.
To improve inspection, enforcement and production
accountability, we have developed a strong technical
certification program for all of our oil and gas field
inspectors. Our personnel completed over 31,000 inspections in
Fiscal Year 2010. These inspections ensure that lessees meet
environmental and safety requirements and that the reported oil
and gas volumes match the actual production on the ground.
Recently we have seen increasing interest in the use of
hydraulic fracturing techniques to stimulate natural gas
production. The BLM is proactively engaging the public, states
and industry on this issue. In April of 2011, the BLM held a
series of regional public forums on the use of hydraulic
fracturing. Over 600 members of the public participated in
these forums.
Consistent with the framework presented by the President's
Blueprint for a Secure Energy Future, the BLM is working to
ensure that the potential oil and natural gas development on
our public lands is realized.
Mr. Chairman, again it is a pleasure for me to be here, and
I would be happy to answer any questions that the Members might
have.
[The prepared statement of Mr. Abbey follows:]
Statement of Robert Abbey, Director, Bureau of Land Management,
U.S. Department of the Interior
Mr. Chairmen and Members of the Subcommittees, thank you for the
opportunity to appear here today to discuss the Bureau of Land
Management's (BLM) role in the Administration's efforts to facilitate
the responsible development of oil and gas resources from our public
lands and Federal onshore mineral estate. With respect to the title of
this oversight hearing, I note for the record that the BLM has no ban
on directional drilling and, as a matter of policy, the Bureau
generally encourages its use where appropriate to protect sensitive
surface resources. Because there is no BLM ban on directional drilling,
my testimony will provide an overview of the BLM's oil and gas program
and policies.
The BLM, an agency of the U.S. Department of the Interior
(Department), is responsible for protecting the resources and managing
the uses of our nation's public lands, which are located primarily in
12 western states, including Alaska. The BLM administers more land--
over 245 million surface acres--than any other Federal agency. The BLM
manages approximately 700 million acres of onshore subsurface mineral
estate throughout the Nation, and provides Indian fiduciary services.
We work closely with surface management agencies in the management of
this subsurface mineral estate.
Background
Secretary Salazar has emphasized that as we move toward the new
energy frontier, the development of conventional energy resources from
BLM-managed public lands will continue to play a critical role in
meeting the Nation's energy needs. The BLM strives to achieve a balance
between oil and gas production and protection of the environment.
Facilitating the efficient, responsible development of domestic oil and
gas resources is part of the Administration's broad energy strategy
that will protect consumers and help reduce our dependence on foreign
oil. Well-paying jobs are often associated with oil and gas exploration
and development, and provide needed revenues and economic activity to
communities. In Fiscal Year (FY) 2010, onshore Federal oil and gas
royalties exceeded $2.5 billion, approximately half of which was paid
directly to the states in which the development occurred.
The BLM is working diligently to fulfill its part in securing
America's energy future. In addition to actively supporting the
development of renewable energy resources, the BLM currently manages
more than 40 million acres of onshore oil and gas leases. In FY 2010,
onshore oil production from public lands increased by 5 million barrels
from the previous fiscal year as more than 114 million barrels of oil
were produced from the BLM-managed mineral estate--the most since FY
1997. Meanwhile, the nearly 3 trillion cubic feet of natural gas
produced from public lands made 2010 the second-most productive year of
natural gas production on record. In 2010, conventional energy
development from public lands produced 14.1 percent of the Nation's
natural gas, and 5.7 percent of its domestically produced oil.
In achieving these production milestones, the BLM is working on a
variety of fronts to ensure that development is done efficiently and
responsibly--including implementing leasing reforms; carefully planning
for development in the National Petroleum Reserve in Alaska (NPR-A);
continuing to process drilling permits in a timely fashion; improving
inspection, enforcement, and production accountability; pursuing
royalty reforms; and reviewing hydraulic fracturing policies and
practices.
Leasing Reforms
Current and future lease sales are benefitting from much-needed
reforms that the BLM put in place in May of 2010. In the decade between
1998 and 2009, the percentage of leases protested jumped from 1 percent
to 49 percent. The BLM was investing vast amounts of staff time and
attention in defending time-consuming and costly lawsuits, and
revisiting the leasing process after receiving direction from the
courts. The result of these challenges was judicial restraints on
development, job loss, and diminished access to energy resources.
In our leasing reforms, the BLM decided to take a front-loaded
approach, offering an increased opportunity for public participation
and a more thorough environmental review process and documentation. The
reforms enhance the BLM's ability to resolve protests prior to lease
sales. Using these methodologies in Wyoming, the BLM in the first
quarter of FY 2011 was able to resolve many protested leases and
released monies held in escrow due to the protests.
The BLM reforms established a more orderly, open, and
environmentally sound process for developing oil and gas resources on
public lands. They focus on making oil and gas leasing more
predictable, increasing certainty for stakeholders including industry,
and restoring needed balance with comprehensive up front analysis added
to the development process. These reforms require adequate planning and
analysis to identify potential areas where the leasing would not
compromise the BLM's multiple-use land management mission, and include:
Engaging the public in the development of Master
Leasing Plans prior to leasing in certain areas where resource
conflicts are known to exist and where significant new oil and
gas development is anticipated. The intent is to fully consider
other important natural resource values before making a
decision on leasing and development in an area;
Ensuring potential lease sales are fully coordinated
both internally and externally, including public participation,
and interdisciplinary review of available information, as well
as on-site visits to parcels prior to leasing when necessary to
supplement or validate existing data; and
Requiring an ``extraordinary circumstances'' review
screen before applying the categorical exclusions in the Energy
Policy Act of 2005 to oil and gas drilling activities on BLM
lands. This, as well as the other reforms identified above, are
helping to provide increased rigor on the front end of the
leasing process so that leases will be better able to withstand
outside scrutiny--ultimately making the development process
more efficient.
National Petroleum Reserve in Alaska (NPR-A)
Through a careful public planning process, the BLM has in place an
active leasing program in the National Petroleum Reserve in Alaska
(NPR-A)--a nearly 23 million-acre area on the north slope of Alaska. In
2010, the U.S. Geological Survey estimated that 896 million barrels of
conventional, undiscovered oil and 53 trillion cubic feet of
conventional, undiscovered gas were within NPR-A and adjacent State
waters. The BLM has offered lease sales in the NPR-A in 1999, 2002,
2004, 2006, 2008, and 2010, and over 1.6 million acres are currently
under lease in the area. In December 2011, the BLM plans to conduct a
lease sale of additional tracts, and expects to hold a lease sale in
2012 and each year thereafter. The BLM's leasing program in the NPR-A
ensures that safe and responsible exploration and development of
domestic oil and natural gas resources can be done in a manner that
also protects wildlife and habitat, and honors the subsistence values
of Alaska Natives and rural residents. Further, the Bureau is engaged
in a planning process for the entire NPRA that should help identify
long-term leasing and infrastructure goals (to support both onshore and
offshore oil and gas development) as well as resource conservation
goals.
Permitting
Prior to the drilling of a well, BLM is required to process
applications for permit to drill (APDs). The BLM processed over 5,200
such permits in Fiscal Year 2010. As of June 1, 2011, the BLM has
received 2,688 APDs (Federal and Indian lands), and has processed 2,885
APDs (Federal and Indian lands). About 7,080 APDs on BLM and Indian
lands have been approved by BLM, but not yet drilled by industry.
Historically, BLM's experience has been that that demand for drilling
permits is a function of market conditions and national energy
consumption, and we expect the numbers of APDs received to increase as
the economy continues to improve.
Inspection, Enforcement, & Production Accountability
Of paramount importance, the BLM is committed to ensuring oil and
gas production is carried out in a responsible manner. We continue to
work to strengthen our oil and gas inspection, enforcement, and
production accountability program. As part of this effort, the BLM has
developed a strong technical certification program for all of our oil
and gas field inspectors, who completed over 31,000 inspections in FY
2010. These inspections ensure that lessees meet important
environmental and safety requirements, and that the reported oil and
gas volumes match the actual production on-the-ground. The BLM also has
begun using a risk-based inspection strategy for production
inspections, inspecting first those leases that present the highest
risk according to the strategy. The BLM plans to expand this risk-based
strategy to the other types of inspections it performs with the goal of
maximizing the efficient use of inspection staff to meet inspection
goals and requirements.
Royalty Reform
The Administration believes that American taxpayers should receive
a fair return on the development of energy resources on their public
lands. A 2008 Government Accountability Office (GAO) report suggests
that taxpayers could be receiving a better return from Federal oil and
gas resources in some areas. Subsequent GAO reports have reiterated
this conclusion. The BLM and the Bureau of Ocean Energy Management,
Regulation, and Enforcement are cooperating to pursue an international
study of approaches to oil and gas revenue collection. The study should
be completed and published later this year.
Hydraulic Fracturing
The use of hydraulic fracturing techniques to stimulate natural gas
production on Federal lands has been the subject of increasing interest
in the past few years. The Department has been monitoring the
developments around hydraulic fracturing and proactively engaging the
public, states, and industry on this important topic.
As part of the Department's proactive efforts to ensure that oil
and gas development is taking place on public lands in a responsible
and environmentally sustainable manner, the BLM held a series of
regional public forums in April 2011 to discuss the use of hydraulic
fracturing. The sessions were held in North Dakota, Colorado, and
Arkansas--states that have experienced significant increases in natural
gas development on Federal lands or on leases issued by the BLM.
The forums provided attendees with an introduction to the hydraulic
fracturing process and the relevant BLM regulatory authorities.
Attendees also heard presentations from state oil and gas regulators,
state water regulators, oil and gas industry representatives,
environmental organizations, sportsmen's groups, landowner groups,
tribal representatives, and academics. Over 600 members of the public
attended and participated in the forums. Issues raised by members of
the public and panel members included best management practices,
disclosure of the chemicals used in hydraulic fracturing fluids, well
construction and integrity, production wastewater management, and other
techniques for protecting drinking water resources.
As you may know, other agencies are also actively engaged on this
issue. Earlier this year, the Environmental Protection Agency (EPA)
commenced a four-year Congressionally-mandated study of hydraulic
fracturing. In addition, the Secretary of Energy's Advisory Board
Subcommittee on Hydraulic Fracturing is currently developing initial
recommendations on hydraulic fracturing, and the BLM looks forward to
reviewing its recommendations.
Conclusion
Consistent with the framework presented by the President's
Blueprint for a Secure Energy Future, the BLM is working to secure our
energy future by ensuring the potential oil and natural gas development
on our public lands is realized. We are pursuing the safe, responsible,
and efficient development of these energy resources here at home.
The BLM is committed to encouraging responsible energy development
on the public lands and to ensuring that the American people receive a
fair return for the public's resources. We are mindful of our
responsibility for stewardship of natural resources and public assets
that generate substantial revenue from Federal onshore oil and gas
royalties directed to the U.S. Treasury and to the states. Mr.
Chairmen, thank you for the opportunity to testify on the BLM's oil and
gas program policies and activities. I will be pleased to answer any
questions you may have.
______
Mr. Lamborn. Thank you for your testimony. We would like to
now hear from the next witness, Mr. Holtrop.
STATEMENT OF THE HONORABLE JOEL HOLTROP, DEPUTY CHIEF, U.S.
FOREST SERVICE; ACCOMPANIED BY TONY FERGUSON, DIRECTOR,
MINERALS AND GEOLOGY MANAGEMENT, USDA FOREST SERVICE, AND
MAUREEN HYZER, SUPERVISOR, GEORGE WASHINGTON AND JEFFERSON
NATIONAL FORESTS
Mr. Holtrop. Thank you for the opportunity to provide
testimony today on challenges facing domestic oil and gas
development. Accompanying me today are Tony Ferguson, our
Director of Minerals and Geology Management, and Maureen Hyzer,
Supervisor of the George Washington and Jefferson National
Forests.
To begin, I want to be clear. The U.S. Forest Service has
no policy, nor do we have any plans to develop any policy, to
ban horizontal drilling and the associated hydraulic
fracturing. I also want to emphasize that forest plans are
place-based plans based on local community concerns which we
take very seriously.
The Forest Service is committed to doing our part to
contribute to the nation's energy goals, while at the same time
protecting the landscapes and watersheds that are precious to
so many. The Forest Service and the BLM work closely in
managing and delivering the mineral and energy programs in the
United States. The agencies follow congressionally authorized
mandates that allow for the responsible development of domestic
energy and mineral resources.
Generally speaking, the Forest Service manages the surface
National Forest System lands while the BLM manages the
subsurface. The BLM issues leases for exploration and
development of energy minerals after receiving consent from the
Forest Service for leasing those National Forest System lands.
The Forest Service bases its decision on whether to consent
to leasing on guidance provided in our forest plans. Forest
plans guide the management of National Forest System lands and
are developed in an open process gathering input from local and
state government, interest groups and private citizens. In the
forest planning process, the agency strives to balance resource
development with protecting the landscapes and watersheds that
communities depend upon.
The current oil and gas production on National Forest
System lands is sizable. 16.7 million barrels of oil and 194
million cubic feet of natural gas were produced in 2010 from
almost 3,200 Federal wells on National Forest System lands. In
addition, there are almost 12,800 additional wells located on
National Forest System lands where the subsurface is privately
owned, the majority of which are located on the Allegheny
National Forest in Pennsylvania.
In Fiscal Year 2010, production from Federal wells alone
generated an estimated $361 million in payments to the U.S.
Treasury. A large portion of this revenue is returned to states
and counties. The Forest Service is committed to providing
these energy resources and their benefits to the American
people in a way that is consistent with our mission to
safeguard the health, diversity and productivity of our
nation's forests and grasslands.
We understand that some Members of the Subcommittees are
concerned about the Draft Forest Plan for the George Washington
National Forest in Northern Virginia and West Virginia that
proposes several options for public comment. The preferred
option provides for oil and gas leasing, but would prohibit
horizontal drilling and associated hydraulic fracturing in
certain areas of the forest. This draft plan includes several
alternatives which would allow for horizontal drilling.
We will carefully consider all public comments prior to the
regional forester making a final decision in the George
Washington National Forest plan. The Forest Service is
accepting comments on the draft Forest Plan through September
1. As with all our forest plans, this plan is place specific
based on the particular circumstances of the George Washington
National Forest and does not represent a broader policy with
regard to hydraulic fracturing.
There are no Forest Service discussions or efforts underway
to develop a national policy to ban horizontal drilling. On the
contrary, the Administration believes that the recent
technological advances that have allowed industry to access
abundant reserves of natural gas, particularly from shale
formations, provides enormous potential benefits to the country
as long as it is done in a way that protects public health and
the environment.
The Environmental Protection Agency is currently studying
potential impacts to water resources from hydraulic fracturing,
and a subcommittee of the Secretary of Energy Advisory Board is
developing recommendations on practices and steps that can be
taken to improve the safety and environmental performance of
shale extraction. The Forest Service will move forward to allow
the safe and responsible development of domestic oil and gas
resources consistent with the expert recommendations from these
and other efforts.
Thank you for the opportunity to provide information about
the oil and gas program on the National Forests and clarify the
situation related to horizontal drilling and associated
hydraulic fracturing. I look forward to answering any questions
you may have.
[The prepared statement of Mr. Holtrop follows:]
Statement of Joel Holtrop, Deputy Chief, National Forest System,
U.S. Forest Service, U.S. Department of Agriculture
Chairman Lamborn, Chairman Thompson, Ranking Member Holden, Ranking
Member Holt and members of the Subcommittees, thank you for the
opportunity to provide testimony today on ``Challenges Facing Domestic
Oil and Gas Development: A Review of Bureau of Land Management/U.S.
Forest Service Ban on Horizontal Drilling on Federal Lands.'' I am Joel
Holtrop, Deputy Chief of the National Forest System. Accompanying me
today is Tony Ferguson, Director of Minerals and Geology Management and
Maureen Hyzer, Supervisor of the George Washington and Jefferson
National Forests.
To begin, I want to be clear, the U.S. Forest has no policy nor do
we have any plans to develop any policy to ban horizontal drilling and
the associated hydraulic fracturing. I also want to emphasize that
Forest Plans are place based plans, based on local community concerns
which we take very seriously.
We would like to first describe the role of the U.S. Forest Service
in oil and gas leasing and operations on National Forest System (NFS)
Lands, then provide the committees with an overall scope of the oil and
gas program on the NFS lands, and finally directly address concerns
regarding horizontal drilling which have prompted this hearing. The
Forest Service is committed to doing our part to contribute to the
nation's energy goals while at the same time protecting the landscapes
and watersheds that are precious to so many.
The Forest Service and the Bureau of Land Management (BLM) work
closely in managing and delivering the mineral and energy program in
the United States. The agencies follow Congressionally authorized
mandates that allow for the responsible development of domestic energy
and mineral resources. Generally speaking, the Forest Service manages
the surface of National Forest System lands while the BLM manages the
subsurface. The BLM issues leases for exploration and development of
energy minerals after receiving consent from the Forest Service for
leasing those NFS lands. The Forest Service bases its decision on
whether to consent to leasing on guidance provided in our Forest Plans.
Forest Plans guide the management of NFS lands and are developed in an
open process, gathering input from local and state government, interest
groups and private citizens. In the Forest Planning process, the agency
strives to balance resource development with protecting the landscapes
and watersheds that communities depend upon. Subsequently, when a
request for an oil and gas drilling permit is received by BLM on NFS
lands where leasing has been approved, the Forest Service and BLM
coordinate the development of the conditions for issuing the permit,
using their separate authorities for surface and subsurface management.
The current oil and gas production on NFS lands is sizeable. 16.7
million barrels of oil and 194 million cubic feet of natural gas were
produced in 2010 from almost 3,200 ``federal'' wells on NFS lands
(lands where the subsurface is part of the federal estate). In
addition, there are almost 12,800 additional wells located on NFS lands
where the subsurface is privately owned, the majority of which are
located on the Allegheny National Forest in Pennsylvania. In fiscal
year (FY) 2010, production from ``federal wells'' generated an
estimated $361 million in bonus and royalty payments to the U.S.
Treasury. A large portion of this revenue will be returned to states
and counties, specifically 25% of the revenue from Acquired Lands, 25%
of the revenue from National Grasslands, and 50% of the revenue from
Public Domain Lands will be returned to the states and counties. The
Forest Service is committed to providing these energy resources and
their benefits to the American people in a way that is consistent with
our mission to safeguard the health, diversity and productivity of our
nation's forests and grasslands.
We understand that some members of the Subcommittees are concerned
about direction in the draft Forest Plan for the George Washington
National Forest (GWNF) in western Virginia that proposes several
options for public comment, one of which is a preferred option that
provides for oil and gas leasing but would prohibit horizontal drilling
and associated hydraulic fracturing in certain areas of the forest.
Specifically, we understand that members of the Subcommittee have
concerns regarding agency jurisdiction, potential impacts of drilling
to resources such as groundwater, and decisions which would restrict
the ability of the Forest Service to contribute to meeting the nation's
energy demands.
This draft plan was developed through an open and collaborative
process with a diversity of stakeholders, including local governments
and private citizens. It includes several alternatives besides the
draft plan, several of which would allow for horizontal drilling. We
are currently working to clarify the roles of our respective agencies
in oil and gas development and will carefully consider all public
comments prior to making a final decision in the George Washington
National Forest Plan. The Forest Service is accepting comments on the
Draft Forest Plan through September 1, 2011. As I noted earlier, this
plan is place-specific based on the particular circumstances of the
GWNF, and does not represent a broader policy with regard to hydraulic
fracturing. There are no Forest Service discussions or efforts underway
to develop a national policy to ban horizontal drilling. On the
contrary, the Administration believes that the recent technological
advancements that have allowed industry to access abundant reserves of
natural gas, particularly from shale formations, provides enormous
potential benefits to the country, as long as it is done in a way that
protects public health and the environment. The Environmental
Protection Agency is currently studying potential impacts to water
resources from hydraulic fracturing, and a subcommittee of the
Secretary of Energy Advisory Board is developing recommendations on
practices and steps that can be taken to improve the safety and
environmental performance of shale extraction. The Forest Service will
move forward to allow the safe and responsible development of domestic
oil and gas resources consistent with the expert recommendations from
these and other efforts.
Thank you for the opportunity to provide information about the oil
and gas program on the National Forests and clarify the situation
related to horizontal drilling and associated hydraulic fracturing. I
look forward to answering any questions you may have.
______
Mr. Lamborn. All right. Thank you both for your testimony.
A housekeeping note. We will soon be going to the Floor as
they call votes, and it will be a lengthy series of votes. So
when that time happens, I will remind everyone that we will
have to leave and I will set a time for us to come back,
hopefully giving some certainty for everyone's schedule who are
here today, especially those of you who are witnesses.
In fact, they have just called votes. I think we have time
to do the first couple sets of questions for approximately 10
minutes, two sets of five-minute questions. Then we are going
to recess the Subcommittee and we will set a time for coming
back. So thank you for your patience. I wish this didn't
happen, but we don't have any control over that part of our
schedule.
Ms. Hyzer, as we have all read this morning--by the way,
each Member will be recognized for five minutes for questions,
and I will open up.
Ms. Hyzer, as we have read this morning, our national
unemployment, unfortunately, has risen to 9.2 percent in June
with only 18,000 jobs generated nationwide last month. When you
decided to include a horizontal drilling ban in your draft
Forest Plan, did you consult with the Commonwealth of Virginia,
or anyone else for that matter, on the impact that that would
have on existing and future job growth in the energy
development sector?
Ms. Hyzer. Congressman, first of all I would like to thank
you for asking me to this hearing and giving me the opportunity
to answer questions about the Forest Plan. We are in a draft
comment period, and I want to let you know that the testimony
and statements that are made today, the transcript will be
taken into consideration as part of the planning record.
In answer to your question, early on we understood and
believed that energy development was very important in
Virginia, and that is why we decided to go ahead and address
the need to make lands available for oil and gas leasing, so
that was a very important consideration for us.
Mr. Lamborn. Specifically, I asked did job growth or job
creation factor in at all to your decision-making process thus
far?
Ms. Hyzer. We understood the relationship of energy
development and jobs in Virginia, yes.
Mr. Lamborn. So you are saying you did take that into
account?
Ms. Hyzer. We will continue to take that into account, and
we welcome additional information on that subject through the
comment period that we can take into account in the final
decision.
Mr. Lamborn. OK. Did you seek to find out if there was any
horizontal drilling or hydraulic fracturing in any nearby
public lands that may have been done in a safe and proper
manner?
Ms. Hyzer. In Virginia, there has yet to be any hydraulic
fracturing done in the Marcellus shale in Virginia, so we did
not have information available to us as to what the impacts
would be.
Mr. Lamborn. And anywhere else in the country, even farther
distances away? Did you look at----
Ms. Hyzer. This was a local base.
Mr. Lamborn.--what I think is a good safety record of
hydraulic fracturing and horizontal drilling?
Ms. Hyzer. This was a local base plan and so we focused our
analysis and our information gathering on Virginia. That is
what our focus was, a local base. It is a community-based plan.
Mr. Lamborn. OK. Thank you.
Chief Holtrop, a recent study estimated that development of
the Marcellus shale added over 44,000 new jobs in Pennsylvania,
$389 million in state and local tax revenue, over $1 billion in
Federal tax revenue and nearly $4 billion in value added to the
state's economy.
Similarly, in West Virginia it created over 13,000 new jobs
and contributed over $220 million in Federal, state and local
tax revenue and almost $1 billion added to the state's economy.
When proposing possible job-killing regulations or
administrative actions, do you do a cost/benefit analysis on
the outcomes of local job growth and revenues?
Mr. Holtrop. We do take into account the economic impacts
and the implications of decisions that we make. Again, I would
like to stress there have been no decisions made in the George
Washington National Forest plan. It is a draft that is open for
public comment at this time.
But in the analysis of that or any other forest plan
process that we go through, yes, one of the things that we take
into account are the economic opportunities that are presented
by the opportunities to do resource extraction or recreational
opportunities. That is one of the things that we take into
account, just as we take into account the environmental
consequences or the concerns over the use of water or the
concerns with water, et cetera.
I think another demonstration of the importance of the jobs
and economics is in the draft Forest Plan for the George
Washington. The proposal is to open nearly a million acres of
the George Washington National Forest to oil and gas leasing.
Mr. Lamborn. OK. Thank you.
At this point I will yield back the remaining time and I
will recognize the Ranking Member for any questions he may have
for five minutes.
Mr. Holt. Thank you, Mr. Chairman.
Mr. Abbey, let me begin with you. Much of the concern about
hydraulic fracturing fluids have related to the types of
chemicals that are pumped into the ground and then come back
out of the ground sometimes with added contaminants, including
naturally occurring radioactive materials.
It has been reported that wastewater from hydraulically
fractured wells in Pennsylvania and West Virginia have been
sent to sewage plants that were not able to remove the
radioactive contaminants--even though the levels were as high
as 2,000 times EPA's drinking water standards and the
radioactive water was released into waterways as it was
reported.
As a requirement for drilling permits on Federal lands,
does the BLM require assurance that radioactive wastewater will
not be dumped into rivers or onto public lands?
Mr. Abbey. Congressman Holt, certainly water management is
a big concern for all of us when we are addressing----
Mr. Holt. But specifically radioactivity as we are talking
about here.
Mr. Abbey. The Bureau of Land Management issues our
authorizations based upon the applicant being able to produce a
permit from the authorizing local community or the authorizing
officials within----
Mr. Holt. So it goes to the state or local officials?
Mr. Abbey. We defer to the state.
Mr. Holt. This is not a BLM criteria?
Mr. Abbey. Exactly. Exactly.
Mr. Holt. As a requirement for drilling permits on Federal
lands, does the Bureau require any radiological monitoring of
drilling wastes for protection of either the public or the
workers?
Mr. Abbey. Again, we would defer back to the state or local
government officials who have that responsibility.
Mr. Holt. OK. In light of recent developments, do you plan
to revise your regulations to ensure that drilling wastes are
handled in a manner that doesn't lead to public or worker
exposures to radioactivity?
Mr. Abbey. Our current regulations addressing hydraulic
fracturing on public lands and Federal minerals are 30 years
old. We are currently reviewing those regulations to determine
what, if any, changes we would like to make and pursue any new
rulemaking that may be required.
Mr. Holt. Yes. I hope you pursue that aggressively because,
yes, fracturing has been used for decades on a very small
scale, but on this scale this is new and so I hope you will
pursue that.
Mr. Holtrop, NEPA. One of the best features of the
environmental protection law is it provides for American
citizens to have input into the planning process, which was
something that was lacking in previous decades. How did the
Forest Service engage local stakeholders in the planning
process?
In particular I am interested in the consideration. You
were talking about economic considerations. I am particularly
interested in the consideration of agricultural jobs. Are you
getting good input on that aspect?
Let me interrupt you for just a moment. In my opening
statement I commented that several agriculturally intensive
counties had issued public objections.
Mr. Holtrop. The process that the George Washington
National Forest has gone through, as well as the process that
occurs across the country during these forest planning
processes, is very much, as you indicated, a public process,
and we consider that one of the real positive benefits of the
approach that we take to get that type of input.
In the case of the George Washington National Forest, we
did have public meetings through the area, the communities
affected and interested in the George Washington. There are
letters that we have received from three of the counties in the
George Washington and two of the cities associated with the
George Washington all requesting that the Forest Service take a
hard look at, or in some cases, ask us to not allow horizontal
drilling or hydraulic fracturing, et cetera.
So taking those into account is one of those. Not the only
consideration, but certainly one of the considerations that we
would expect our local managers to do as they are determining
what is the right course of action on a forest planning
process.
Mr. Holt. OK. And just a quick question, Mr. Abbey. Under
the Mineral Leasing Act, isn't it correct that no gas deposit
shall be leased except with the consent of the surface managing
agency?
Mr. Abbey. That is true.
Mr. Holt. And that would be who?
Mr. Abbey. In the case of the George Washington it would be
the U.S. Forest Service.
Mr. Holt. Thank you very much.
Mr. Lamborn. OK. Thank you, Mr. Ranking member. We now will
be in recess until 12:30. I don't have a crystal ball to know
exactly when our vote series will finish. It is a lengthy vote
series. The good news? It is the only one of the day.
But to give certainty for all of you who came here, and we
appreciate it, to give your testimony, as well as any other
concerned citizens, we thought it would be good to give a time
certain for reconvening so that you will know we won't be here
any time before that.
So we will reconvene at 12:30, and the Subcommittee will
now be in recess.
[Recess.]
Mr. Lamborn. The Subcommittee will please come back to
order. Thank you all for your patience. We did finish that
lengthy vote series, and we are ready to get back into this
important topic.
The first panel is still seated. We appreciate your being
here. We will get to the second panel as soon as we can. The
next set of questions for up to five minutes is with
Representative Thompson of Pennsylvania.
Mr. Thompson. Thank you, Chairman Lamborn. I appreciate
your assistance in coordinating this hearing.
First of all, I want to ask permission to submit for the
record and peace of mind for the Ranking Member of the Natural
Resource Committee, who made some remarks regarding the
radioactivity in the region regarding Marcellus shale and
horizontal drilling.
This is an article, June 21, 2011, that reports on a March
study that was done by the Department of Environmental
Protection in Pennsylvania that showed no radioactive
contaminants in water used and produced in western Pennsylvania
where we do a lot of horizontal drilling, so with your
permission I would like to submit that for the record.
Mr. Lamborn. Without objection. So ordered.
[The June 21, 2011, Pittsburgh Tribune-Review article
follows:]
Public water safe from radioactivity throughout region
By Timothy Puko,
PITTSBURGH TRIBUNE-REVIEW
Tuesday, June 21, 2011
A battery of tests has showed no radioactive contaminants in the
water used and produced at 12 of 14 drinking water suppliers in Western
Pennsylvania, according to state environmental regulators.
Wastewater treatment plants and drinking water suppliers performed
extra tests throughout March, reacting to media reports that questioned
whether an increase in Marcellus shale drilling had led to the
introduction of radioactive chemicals into public water.
Industry spokesmen said the negative tests are further proof this
isn't happening and that water is safe.
Of the 12 drinking water suppliers, only The Tri-County Joint
Municipal Authority in Fredericktown reported any traces of radium-228
at all, and it was 80 percent below the maximum amount allowed, said
Katy Gresh, spokeswoman at the Pennsylvania Department of Environmental
Protection.
The department is still pursuing test results from two other
suppliers, the Carmichaels and Newell municipal authorities, she added.
``These test results are confirmation that safe, clean drinking
water and responsible shale gas development can and do coexist,'' said
Patrick Creighton, spokesman at the Marcellus Shale Coalition.
Only six of the 14 drinking water plants submitted test results on
dissolved solids and other secondary contaminants. Levels did meet
pollution standards, Gresh said, noting the department still is
pursuing the other results. The state also has asked 25 wastewater
treatment plants for results, which weren't immediately available.
______
Mr. Thompson. I want to first of all thank the panel for
being here and for your testimony. I want to start with Mr.
Holtrop with Forest Service.
Mr. Holtrop, on page 1 of your testimony you state that,
and I am quoting, ``U.S. Forest Service has no policy, nor do
we have any plans to develop any policy, to ban horizontal
drilling and the associated hydraulic fracturing.''
I am looking for a yes or no answer to the following
question. Does the Forest Service have a draft EIS dated April
2011 that states, ``The surface management agency (USDA-Forest
Service) has a moratorium on processing surface use plan of
operations of an application for permit to drill for any
horizontal well and associated hydraulic fracturing. The
moratorium will end May 1, 2013.'' Is that correct that that
exists?
Mr. Holtrop. Could you tell me what the title of that EIS
is? I am not familiar with it by date.
Mr. Thompson. I sure can. I am reading it from the Federal
Oil and Gas Leasing Stipulations, Appendix 1, Draft EIS, George
Washington National Forest, April 2011, Section 1. My quote
comes from Section 1. It is very prominent in the document.
Horizontal Drilling Moratorium Stipulation.
Mr. Holtrop. So is this the George Washington Forest Plan
document that you are referring to?
Mr. Thompson. George Washington is noted on here in the
heading.
Mr. Holtrop. OK. So what that is, it is an alternative in
our draft Forest Plan amongst several alternatives that we are
considering.
Mr. Thompson. I am trying to just figure out in my own mind
then. So this wasn't an internal exercise? It was something
that was a proposal being considered? And yet in your testimony
you said, ``nor do we have any plans to develop any policy.''
Mr. Holtrop. Correct. What I am referring to, there is no
policy. The title of the hearing had to do with a policy on a
Forest Service ban on horizontal drilling on Federal lands.
My statement was intended to assure you that there is no
intent for us to develop a policy nationwide, broadly. What we
are talking about on the George Washington is a very site
specific, locally driven analysis, and there are a range of
alternatives that we are looking for on the George Washington.
Mr. Thompson. It still sounds contradicting. I did take
from your opening testimony and Mr. Abbey's that, frankly,
horizontal drilling and hydraulic fracturing is something that
is embraced, and I just find this--you know, I assume that even
the consideration of this, which really is developing a policy.
You know, you are developing alternatives for a policy you are
in the process of developing, which really contradicts your
testimony.
The potential for a moratorium was prompted by a specific
occurrence in the National Forests of environmental degradation
or damage from horizontal drilling and hydraulic fracturing.
That is what I am assuming. Were environmental and economic
assessments conducted by the Forest Service prompting the
proposed moratorium proposal or options or whatever we want to
call it?
Mr. Holtrop. Yes. There is environmental analysis. There
has been public input. We looked at all the available science
that we had available to us that led to the range of
alternatives that we are looking at.
Mr. Thompson. So based on the science then there was
actually evidence of environmental degradation and damage from
horizontal drilling and hydraulic fracturing?
Mr. Holtrop. The concerns had to do with both the
potential, whether there would possibly be potential effects on
both surface water and groundwater resources, and there was
concern over what might be the chemical makeup of the material
following the use for hydrofracturing.
There is a great deal of public input from a lot of
interests asking us to take a good, hard look at this issue and
so we are trying to be responsive to the public's request for
us to do so.
Mr. Thompson. I understand public input and I appreciate
the Forest Service takes that option, but my question was what
does the data show? I mean, the Forest Service is involved in
providing resources and so obviously oil and natural gas, I
know there is a lot of it pumped out of the Allegheny National
Forest.
Is there data? Is there a track record? Is there
established environmental damage and degradation that you had
in documentation, or were these concerns of what may happen?
Mr. Holtrop. I think probably the best way of answering
that is as we are looking at the full range of resources values
that we have, that we are responsible for, that there were
concerns that were raised that we felt it was important for us
to consider a full range of alternatives that we ought to look
at.
We have every intention of using whatever data is available
to us in that data. If that science tells us that this can
operate safely with public health and resource values accounted
for, that is the determination that we intend to make.
I think what we have with National Forests across the
United States, we have a recognition that there are great
energy values on our National Forest System. There are great
other values as well, and there is not going to be one solution
in each one of those situations that is going to be the right
solution. We are going to continue to look at all of the
resource values and all of the opportunities that come
associated with those.
Mr. Thompson. I am just asking. I would ask actually if you
would forward to my office--you know, I am looking for the
facts in terms of on forestlands whether there has been
environmental degradation versus speculation. Yes.
Mr. Holtrop. We will provide that information. We will
extract much of that from the environmental impact statement,
and we will look for other things as well to forward to you.
Mr. Thompson. Thank you, Mr. Chairman.
Mr. Lamborn. OK. The gentleman from Colorado is recognized
for up to five minutes.
Mr. Tipton. Thank you, Mr. Chairman. I appreciate you
holding this hearing. Gentlemen, lady, thank you so much for
being here as well.
I am a westerner and so there are a few things that are
very important to us--our public lands, access to energy and
truly to jobs. Just as an aside, Mr. Holtrop, when I read
through your testimony you noted about the importance and just
spoke to it again of public input coming in. I really want to
encourage you when you are looking at closing off some of our
forestlands that you do listen to that public testimony,
particularly in Colorado.
But to the points that we are dealing with in this
particular hearing, we have some real confusion. Mr. Abbey and
Mr. Holtrop, if you could maybe answer this? We recently had
Secretary Salazar before the Natural Resources Committee. I had
been traveling in Colorado and met with BLM officials. They
said that when the now defunct wildlands policy was going to be
in place that they were not going to allow lateral drilling.
When we spoke to the state officers they didn't know what the
policy was going to be. Then the Secretary indicated that no,
lateral drilling was going to be allowed.
Can you clear this up? It seems to me that we have no basis
to make any kind of a determination, and you haven't decided.
Mr. Abbey. Thank you for the question. First and foremost,
we do not have a wildlands policy at this point in time. We are
not pursuing such a policy.
Mr. Tipton. We appreciate that.
Mr. Abbey. The Bureau of Land Management certainly
recognizes the importance of horizontal drilling on public
lands. It does lessen the footprint of drilling on these lands.
It allows more wells to be drilled from a single location than
individual wells being drilled vertically down. So I think both
the U.S. Forest Service, as well as the Bureau of Land
Management, recognizes the advantage of horizontal drilling.
At this point in time as it relates to the public lands, we
will continue to look at all opportunities that we have in
responding to requests for applications to drill to see how
best we can lessen that surface disturbance, and we will look
at those requests on a case-by-case basis. But, as we indicated
earlier, there is no ban on horizontal drilling.
Mr. Tipton. When we are talking about the depth, and maybe
you can illustrate this for us, how far below the water table
does fracking take place? How deep are those wells below the
water table typically?
Mr. Abbey. It could vary from proposal to proposal.
Mr. Tipton. Just typically.
Mr. Abbey. Most drilling that is being done using fracking
technology is below the groundwater level.
Mr. Tipton. Well below?
Mr. Abbey. In many cases well below.
Mr. Tipton. Well below.
Mr. Abbey. In the East that might not be the case.
Mr. Tipton. Sir, have we ever had any evidence of
contamination of the water table from fracking?
Mr. Abbey. The Bureau of Land Management has never seen any
evidence of impacts to groundwater from fracking technology,
from the use of fracking technology on wells that have been
approved by the Bureau of Land Management.
Mr. Tipton. So it appears to be safe?
Mr. Abbey. Well, we have been using that technology for a
number of years. As long as we are diligent relative to
reviewing the proposals to ensure well casing integrity, to
ensure that the design of the well borings are appropriate, to
do the monitoring and work with the states and EPA to ensure
that all the necessary permits are required and adhered to,
again we believe that, based upon the track record so far, that
it is safe.
Mr. Tipton. Very good.
Mr. Abbey. But that doesn't take away the need to continue
to be diligent in reviewing each of the proposals and making
sure that appropriate monitoring takes place.
Mr. Tipton. Great. I really appreciate that to hear the
endorsement that it is a safe process. We do have to have the
policies in place to make sure that we meet those safety and
environmental standards, but it is safe to be able to proceed,
so I do appreciate that, Director Abbey.
Gentlemen, I have listened to several questions so far, and
I don't believe I have actually heard the answer. Have you done
a cost/benefit analysis?
Ms. Hyzer. An economic analysis is part of the EIS.
Mr. Tipton. It has not been done?
Ms. Hyzer. Pardon me?
Mr. Tipton. It has not been done?
Ms. Hyzer. There is a draft EIS available for public
comment, and it includes a chapter on the economic analysis.
Mr. Tipton. OK. And so that is in progress?
Ms. Hyzer. It is available for public review right now.
Mr. Tipton. OK. Great. You know, as we were going through
you are establishing policy, and I think part of the concern is
obviously going to be precedent that comes into some
consideration here.
Both the Forest Service and the BLM are moving under the
authority that has actually been granted by the Congress of the
United States in terms of the developing of these policies.
Would you gentlemen be agreeable to coming back for this
committee, the Agricultural Committee, the Natural Resources
Committee, before going active with your proposed regulations
to get them back to the authoritative body of Congress for
their review before you go active?
Mr. Abbey. Which regulations are you referring to?
Mr. Tipton. Any regulation.
Mr. Abbey. We believe that we have the administrative
authority to pursue our own regulations and policies.
Mr. Tipton. Was that granted by Congress, sir?
Mr. Abbey. It would be consistent with the laws that have
been granted by Congress.
Mr. Tipton. So would it be appropriate to bring that back
to Congress for approval?
Mr. Abbey. We would be happy to report back to you on our
plans. I am not sure we would be seeking approval.
Mr. Tipton. I think that is curious. This body has been
elected to represent the people of the United States, and you
are acting under the authority of Congress. I think you might
want to maybe actually consider allowing Congress to have some
actual input as well ultimately when we get down to some of the
regulations.
As I think probably every Member has heard, we are spending
$1.75 trillion a year right now in regulatory costs in this
country. All regulations are not bad, but I think it would be
very appropriate for your consideration to come back to the
body that authorized your agencies to be able to review those
regulations rather than assuming that you have absolute
authority.
I yield back the balance of my time, sir.
Mr. Lamborn. OK. Thank you.
The next person in the order of questions is Mr. Fleming of
Louisiana.
Mr. Fleming. Thank you, Mr. Chairman.
Panel, I am from the 4th District of Louisiana--Shreveport,
Bossier City, DeSoto Parish. That is where the Haynesville
shale is. Only three short years ago we had no idea really what
the Haynesville shale is, was or would be in the future, and it
has turned out that it has had a tremendous impact on our
economy.
$11 billion so far entering the economy, jobs, poor
parishes that are now doing tremendously well economically. We
see police departments, sheriff departments, infrastructure,
all of these things being improved, local government. As I say,
high paying jobs with good income. And we are beginning to meet
the country's needs in terms of natural gas which, as you know,
is the cleanest form of hydrocarbon that is now available.
I can tell you that we have not seen any significant
problems and so it really is beyond me to wonder now with a 9.2
percent unemployment rate, with energy costs as high as it has
ever been and the country in such a desperate economic
situation and a technology which is 50, 60 years old and is
proven safe and even the EPA in 2004 said was perfectly safe,
why in the world would we even be thinking about banning this
type of technology, which is so essential not just for gas, but
probably for the future of oil as well domestically?
So my question. For instance, Ms. Hyzer, what is the
typical depth of drilling in the horizontal drilling process?
Ms. Hyzer. I am not aware of that. We have no wells that
have been drilled on the George Washington and Jefferson or the
George Washington.
Mr. Fleming. But I mean in a typical gas well, gas shale?
Ms. Hyzer. I am not familiar with that.
Mr. Fleming. Anyone else?
Mr. Ferguson. I think it depends on what part of the
country you are in. It is a real specific, geologic formation
specific.
As a general rule of thumb, most of the shale gas
development that I have read about and not necessarily
witnessed firsthand, there is usually a vertical well that is
drilled anywhere from 4,000 to 5,000--
Mr. Fleming. Just real quickly.
Mr. Ferguson. Four to five thousand feet.
Mr. Fleming. Four to five thousand feet. OK.
Mr. Ferguson. And then they----
Mr. Fleming. And where is the water table?
Mr. Ferguson. Again, that varies from different parts of
the country. It can be in the first couple of hundred feet, or
it could be down as low as maybe a thousand feet.
Mr. Fleming. All right.
Mr. Ferguson. But near surface.
Mr. Fleming. So the horizontal drilling--in fact usually--
is five times the depth.
Ms. Hyzer, how many layers of casing is there as you bore
down in the ground to get down to the horizontal level?
Ms. Hyzer. I am not familiar with that information.
Mr. Fleming. OK. Anyone else?
Mr. Ferguson. It can be a number of layers, depending on
the depth.
Mr. Fleming. Typical.
Mr. Ferguson. Three to four with cement. I describe it as
the old collapsible cup concept where you start with the larger
surface and as you go down there is more and more.
Mr. Fleming. All right. I would say in our shale formation
typical is six. And how many episodes are you aware where
hydrofracking fluid has leaked into the water table through the
casing?
Mr. Ferguson. I am not aware of any----
Mr. Fleming. Anybody?
Mr. Ferguson.--that I can point to.
Mr. Fleming. Anybody?
[No response.]
Mr. Fleming. Can anybody specify a single incidence of
death as a result of a hydrofracking process and the
hydrofracking fluid somehow contaminating the water supply?
Anyone?
Mr. Ferguson. I am not aware of that.
Mr. Fleming. Serious injury?
Mr. Ferguson. I am not aware of any.
Mr. Fleming. So if we are talking about billions of dollars
of impact and the possibility of transforming our energy from
an oil-based system that we have today to at least in part
natural gas--and, by the way, we in the United States have more
natural gas than any place in the world as it turns out, and
this is a fact we only found out just in the last few years.
If we have all of this potential available to us and no
harm to anyone, why in the world would we be considering
banning this process? Anyone on the panel willing to answer
that question?
Mr. Holtrop. The purpose of us looking at the restrictions
on the use of horizontal drilling on the George Washington
National Forest have to do with issues around water use, the
volumes of water that are associated with that, what would be
the potential effects on surface water resources.
Mr. Fleming. But we have been doing it for 60 years, sir,
and we have no evidence that there is a problem. Why do we want
to ban it first and then ask questions later when we have 60
years of experience?
Mr. Holtrop. One of the things that I think are the input
that we are getting through this draft environmental impact
process is going to allow us to have additional information,
helpful information for us to make that decision.
Mr. Fleming. You have 60 years, sir. How much do you need?
Mr. Holtrop. I believe the horizontal drilling technology
is more recent than 60 years, but----
Mr. Fleming. Hydrofracking is.
Mr. Holtrop. Hydrofracking has been around for 60 years.
Mr. Fleming. Well, that is what we are talking about here.
Mr. Holtrop. Well, actually we are talking----
Mr. Fleming. And 90 percent of wells today require
hydrofracking. We have 60 years of experience, not one single
death, no injuries even that I know of, and yet we are going to
ban or potentially ban the use of hydrofracking and/or
horizontal drilling.
Mr. Holtrop. The preferred alternative in the plan that we
are talking about allows hydrofracking with vertical wells. It
is the horizontal drilling is what was----
Mr. Fleming. It is no good without horizontal drilling,
sir.
Mr. Holtrop. It has been used for 60 or 70 years.
Mr. Fleming. Well, yes, but the type of shale formations
that we have today you are going to get very little yield out
of vertical wells. We have to go horizontal, and we are
horizontal at two miles down so you are already below the water
table. You hit that through the vertical drill, so if anything
it would be safer at the horizontal level.
Thank you. I yield back.
Mr. Lamborn. Mr. Flores of Texas?
Mr. Flores. Thank you, Mr. Chairman. I thank the panel for
being here today.
The jobs report that we got today confirms the impact of a
couple of things. One is an out-of-control fiscal situation in
our Federal Government and also very importantly, and I think
taking more precedence over the economy today, is the
regulatory overreach of our administrative agencies.
In that regard, there seems to be a process here that is
out of control, and I want to dig into that a little bit more,
but before I go there I would like to ask the three witnesses
from the Forest Service. What was the target? Was it fracking
or was it horizontal drilling or was it both? What was it you
were trying to shoot?
Ms. Hyzer. We were trying to address the local government
and community concerns with horizontal drilling and the
excessive amount of water used in hydrofracking and the
totality of the impacts of that--where the water comes from,
what water comes back out again, what do you do with that
water, the effect on the infrastructure, potential impacts on
the infrastructure.
Mr. Flores. OK.
Ms. Hyzer. So we looked at a full range of seven different
alternatives with the full range so that we could explore
different possibilities on how to address the issue, and that
is what we are asking comment on.
Mr. Flores. What sort of facts and science did you use in
coming up with that option? I mean, so you heard the local
community say we are worried about it.
You have people like The New York Times writing about
fracking, and I guarantee you they don't know anything about
fracking. You have close to two million wells worldwide that
have been fracked successfully without any problems, yet we are
trying to go after a problem when I am not sure there is a
problem. What were the facts and science that you used?
Mr. Holtrop. If I could, I think that some of the science
that was used was the recognition that we had different
geologic features on the George Washington than places where
hydrofracking has already been successfully used with
horizontal drilling, so we have a different geological
situation in terms of the configuration of the shale and so
that was part of what went into the analysis.
Also what went into the analysis is there has been very
little demand for this activity in that area because there
seems to be more limited opportunities there, and as we are
looking for ways that we can be responsive to the full range of
public desires--which included no leasing, which included no
oil and gas development from some of the local governments--
what the Forest came up with was a range of alternatives that
looked at that full range so that we would have this type of a
dialogue that we would be able to make a final decision from.
Mr. Flores. Was there going to be a dialogue? What I have
seen from a lot of the rulemaking today is they will get
substantial numbers of substantive comments back, and those are
all ignored and the rules become final without change. I mean,
are you different than the other agencies we are seeing these
days?
Mr. Holtrop. I will not say that we are different from the
other agencies. I suspect many of the agencies are like us in
that we pay a great deal of attention to the public input that
we get. We analyze the input. I would be happy to show you the
type of analysis that we do when we do that type of public
input.
I can also tell you every time that we do a draft Forest
Plan when we come out with a final Forest Plan it is different
than what was in the draft based largely on that public
comment.
Mr. Flores. OK. So as I understand the option for the ban
of horizontal drilling, vertical drilling is still an
acceptable option. Is that correct?
Mr. Holtrop. In the alternative, yes.
Mr. Flores. But you do understand that the surface
footprint of vertical drilling is much, much more invasive by a
factor of anywhere from two to 10 times more invasive than
horizontal?
Mr. Holtrop. Or more. We are aware of that. That is one of
the reasons why we do recognize the values of horizontal
drilling when the situation calls for it, and if that is the
right situation here we will continue to consider that.
Mr. Flores. And as I understand it, your primary mission is
to protect the surface, right? I mean, BLM is responsible for
subsurface. Am I correct?
Mr. Holtrop. Both. Well, the BLM has authority subsurface.
We have authority for the surface. But our shared
responsibility and our shared desire is to protect water
resources, both surface and subsurface, as well as all the
other resource values.
Mr. Flores. OK. I hope that you pay lots of attention to
the comments you get because I assume that you are going to
receive a lot of comments.
This ban, if it is the direction you would like to go, is
the wrong thing to do for this economic--it is wrong for the
country from an economic standpoint, from a job standpoint and
from an energy standpoint. Thank you.
Mr. Holtrop. Thanks for the input.
Mr. Flores. I yield back.
Mr. Lamborn. Thank you.
I recognize the gentleman from Maryland for up to five
minutes.
Mr. Sarbanes. I appreciate it, Mr. Chairman. Thank you all
for your patience and also for your testimony today. I
appreciate your efforts to explain that moving with some
prudence and careful thought with respect to this hydraulic
fracturing and horizontal drilling does not constitute a ban de
facto or any other kind of ban. I think that you have described
very well the broad activity that continues to happen on
Federal lands with respect to development and production of our
natural resources in terms of oil, in terms of gas and so
forth.
I don't want any audience that is watching or listening to
this hearing to go away with the impression that your caution,
your willingness or your desire to move in a kind of deliberate
way in considering the potential harm from this doesn't have
any support in reality out there and so I am aware, because I
am bringing particular attention to this as a representative
who cares very deeply about the Chesapeake Bay and the
Chesapeake Bay watershed, that there have been incidents and
recent incidents that point to the potential harm that can come
from the fracking process.
Not too long ago, there was a blowout in Pennsylvania of
one of these hydrofracking wells that resulted in a discharge
of thousands of gallons of fracking fluids, which--I think the
record ought to at this point stipulate--can contain a lot of
toxic material. My understanding is that even in those areas of
the country that are cited as having 60 years of experience and
it was pointed out that you have to distinguish where this
experience has happened because you have different geology
implicated in places like the Chesapeake watershed than you do
in places like Oklahoma and Texas and so forth.
So we shouldn't borrow lock, stock and barrel the lessons
from one part of the country and try to impose them on others,
but even in those parts of the country my understanding is that
there was a discharge line installed in connection with a
fracking process operated by Chesapeake operating in Oklahoma
and Texas that resulted in discharge fluid into the Washita
River.
Can you speak to the fact that there are instances out
there that you are taking note of that suggest that there is
potential harm that can come from the process, from the
beginning to the end process, that is a good reason for you to
want to step carefully in terms of whether you open these kinds
of public lands to horizontal drilling? Mr. Abbey and then any
others who want to speak to it.
Mr. Abbey. Well again, I think that is an excellent
question and comments that you raise. The increased use of
hydraulic fracturing on both public and private lands has
certainly generated concern among the public regarding its
potential effects on water quality and availability. As I
mentioned before, as far as the Bureau of Land Management, in
our experience we have not seen impacts to groundwater as a
result of using the fracking technology on wells that we have
approved. That does not take away the need to be diligent, as I
mentioned before.
You know, that is why we focus on the integrity of the well
and also to make sure that the well itself is well engineered
and designed because if there is going to be a leak, it would
be as part of that drilling process, and there is potential for
the fracking chemicals to get into groundwater. That is why we
put most of our focus on the casings and again the well bore,
the integrity of that.
At the same time, it behooves all of us to maintain
diligence on the monitoring so that we are cognizant of any
potential impact that might be occurring so that we could take
immediate steps to rectify those impacts. I have read about
some of the impacts that have been associated with fracking in
the eastern United States. I am not familiar with those
particular cases, but it does again raise our awareness that we
need to be very, very careful as we review these proposals.
Mr. Holtrop. If I could just add to that? The part of your
question thinking from the very beginning of the process to the
end of the process, those are things that we are also
continuing to pay attention to and think about; not only the
source of the water and where the water is coming from in order
to provide the material for the fracking and what would be the
implications of the water coming from that source, but then the
material afterwards.
There are ways, and there is a lot of success, in
successfully disposing of that material, but it has to be--as
Mr. Abbey has been saying, we have to be diligent in paying
attention to how we dispose of the material following the
hydrofracturing as well.
Mr. Sarbanes. Thank you.
Mr. Lamborn. OK. Now the gentleman from Virginia, Mr.
Goodlatte?
Mr. Goodlatte. Thank you, Mr. Chairman. I want to thank you
and Chairman Thompson for holding this hearing. My
congressional district in the beautiful Shenandoah Valley of
Virginia seems to be the focal point of it, so I appreciate the
attention brought to the matter.
I have long been, as I think most people here have been, a
supporter of the use of natural gas. For those who are
concerned about greenhouse gas emissions, it has fewer
emissions than some other carbon-based sources of energy. I am
also a big advocate of local input into decisions made by the
Federal Government, particularly in the case of the management
of the George Washington and Jefferson National Forests, which
are both primarily located in my congressional district.
I commend them for doing that. They have heard from some of
my local governments on the issue. I think that is important,
but my understanding is that the Forest Service would have
other ways to stop horizontal drilling in the National Forest
should a permit be requested, and I don't know that that has
been received at this point in time, but should one be filed in
the George Washington National Forest would there be other ways
of stopping horizontal drilling from taking place if you found
that there were not the correct procedures or precautions being
taken?
Mr. Sarbanes and Mr. Abbey talked about the necessity,
which I think is absolutely true, that you have to deploy good,
safe technology to do this. On the other hand, the preferred
plan of the Forest Service for the George Washington imposes a
15 year ban as the preferential way to address the concerns.
So what I would ask you, Mr. Holtrop, is why did the Forest
Service feel that a 15 year ban was the appropriate way to go
in their preferred plan, as opposed to looking at the science,
looking at the technology that Mr. Abbey referred to, making
sure that the drilling goes well below the groundwater?
You are right. Geological formations are different
everywhere, but it is my understanding that there is horizontal
drilling that takes place right now in the Jefferson National
Forest to the south of the George Washington National Forest.
Why a 15 year ban, as opposed to taking other measures that
would assure my constituents that this is being done in a safe
way that will not disturb the drinking water that my local
governments are concerned about or other degradation of the
land that certainly some of my constituents are also concerned
about?
Mr. Holtrop. Thank you for that question and thank you for
your continuing interest and help in the management of the
George Washington National Forest.
I believe the best way to answer that direct question, and
I would just like to add a little bit, is that I think as the
Forest weighed the variety of information that they had in
terms of the local input, in terms of the recognition of the
high values of the water resources from the George Washington
National Forest for millions of people, that as they weighed
all of those in order to generate the kind of input and the
kind of interest in the topic that that was the right,
preferred alternative.
But again, not a decision. It was to make sure that there
was the appropriate type of continuing public input into the
decision-making process, which is----
Mr. Goodlatte. Was there a safety or scientific reason for
the Forest Service to place the ban, to propose placing the
ban?
Mr. Holtrop. Again, the science. We used the best science
that is available to us at this time. I would like to express
again there has not been a decision made, so there is not a
ban. There is a proposed preferred alternative that considers
that.
Mr. Goodlatte. Let me ask you. I understand that. Let me
ask you another question. Is there a difference in the shale
formation in the George Washington Forest different than the
Jefferson National Forest that would require such an absolute
difference in approach?
Mr. Holtrop. Maybe somebody else can answer and I can fill
in.
Ms. Hyzer. OK. The Marcellus shale formation under the
George Washington is very folded and fractured, and over the
last 30 years there have been hundreds of thousands of acres
there leased, but only five wells have been drilled,
conventional wells, and they were not successful.
On the Jefferson it is a different kind of formation. It is
more accessible. There are a number of wells there now, active
wells that have been leased over many years.
Mr. Goodlatte. So that makes it more attractive maybe. I
mean, that might also provide more assurance to my constituents
that there may not be the activity that they are concerned
about because the formation may be different for that reason.
But is there a safety difference between the two? That I
think should be the basis on which you would make a decision on
whether to impose different regulations for drilling there as
opposed to an outright ban there.
Ms. Hyzer. That is a point that we need to look into and
consider.
Mr. Goodlatte. I also understand that public input is
important. It is important to us as Representatives. It is
certainly important for government agencies to take that into
account, so I commend you for doing that.
Yet some of the same localities that came out in opposition
to wilderness, which is included in the plan, they came out in
opposition to wilderness and yet you have included wilderness
in those same jurisdictions. Do you have a comment on why you
responded to the localities on one issue, but not the other?
Ms. Hyzer. We have been working with the counties on that
issue also, and we have looked at what the potential is for
wilderness in there and what is most suitable.
We did not recommend a great deal of wilderness at this
point. Again, we were concerned that we needed to have a real
balance of uses and development activities on the National
Forest. We were concerned about jobs. We were concerned about
energy development. So we looked at the broad range, and we
have continued to work with the counties and will continue to
work with them on that issue.
Mr. Goodlatte. Good. Well, we appreciate that. Could I
just----
Mr. Holtrop. Could I just add to that one question if I
might, Mr. Chairman? I am sorry.
Mr. Goodlatte. Mr. Holtrop?
Mr. Holtrop. Thank you. If I could just very briefly just
add the range of public input in those communities of interest
that were providing input, some of them requested no leasing.
Some of them requested no hydrofracturing whatsoever. The
preferred alternative that was selected does allow, does open
up 900,000 plus acres of the forest to leasing that was not
previously available. It does allow hydrofracturing for
vertical wells.
Again, there was a consideration of all those inputs, so I
would say that what we have come up with in the preferred
doesn't totally meet the----
Mr. Goodlatte. Sure. I think one of my colleagues made the
point that with vertical wells if you are going to go ahead
that route it first of all requires more drilling, more surface
disturbance than horizontal drilling.
But also if you allow hydrofracking with a vertical well
the issue there is even greater in terms of groundwater
contamination, so I am not sure your position is consistent in
that regard.
Mr. Holtrop. I agree with what you just said. If the
concern was the impact, the surface impact, that would drive
the decision more when the concern is the water quality. That
is the determination we are making.
Mr. Goodlatte. Mr. Chairman, if I might have permission to
ask one more question?
Prior to proposing this ban in your preferred plan, had any
companies approached the Forest Service about the possibility
of obtaining permits for horizontal drilling?
Ms. Hyzer. Not to my knowledge. BLM? Any?
Mr. Goodlatte. My recommendation would be that you
anticipate that that could happen and that you have good
regulations that put in place the kind of protections that Mr.
Abbey referred to because this is a very common practice that
takes place all over the country. Millions of wells have been
drilled, and it is by far the most efficient way to extract a
very important source of energy.
I would hope that you would take into account that a simple
15 year ban doesn't address. It just simply punts. It doesn't
take into account the need to have good technology deployed if
you were to receive applications and that that might be the
better route to go. Thank you.
Mr. Lamborn. OK. Thank you. I want to thank the panel for
their testimony. That concludes our questions. Sorry for the
delay earlier. Thank you for your patience on that as well.
I now invite the second panel to come forward. On that
panel will be Maureen Matsen, Deputy Director of Natural
Resources and Senior Advisor on Energy for the Commonwealth of
Virginia, accompanied by David Spears, the State Geologist of
Virginia; Mr. David Miller, Director of Standards for the
American Petroleum Institute;
Mr. Lee Fuller, Vice President of Government Relations for
the Independent Petroleum Association of America; Mr. Craig
Mayer, General Counsel for Pennsylvania General Energy, LLC;
Ms. Kate Wofford, Executive Director of Shenandoah Valley
Network; and Ms. Amy Mall, Senior Policy Analyst for the
Natural Resources Defense Council.
[Pause.]
Mr. Lamborn. Now, before we seat this panel I want to
clarify an issue. Under Committee Rule 4(a) and House Rule
12.2(g)(5), witnesses appearing in a nongovernmental capacity
are required to file with their testimony a completed
disclosure form describing their education, employment and
experience and provide other background information pertinent
to their testimony. The purpose of this information is to help
the Members of the committee judge the testimony in context.
Rule 4(a) of the committee indicates that failure to comply
with these requirements may result in the exclusion of the
written testimony from the hearing record and/or the barring of
an oral presentation of the testimony.
Ms. Mall, recognizing that your invitation was extended
late your disclosure statement indicates a statement where you
admit that it remains incomplete and that the information will
be forthcoming. So before the committee seats you on this
panel, will you orally commit to us that you will provide a
completed disclosure form to this committee no later than close
of business Tuesday, July 12 of this year?
Ms. Mall. We absolutely will commit to providing the
disclosure form. I would not be providing the information
myself--it would be our legal and financial staff--so I am
assuming they can do it by that time on the 12th.
Mr. Lamborn. Thank you so much.
Ms. Mall. Thank you.
Mr. Lamborn. Like all our witnesses, your written testimony
will appear in full in the hearing record, so I ask you to keep
your oral statements to five minutes as outlined in our
invitation letter.
Our microphones are not automatic, so you have to press the
button to begin. The green light comes on with five minutes, a
yellow light will come on with one minute, and a red light at
the conclusion of five minutes.
We will just jump right in. Ms. Matsen, you may begin.
STATEMENT OF MAUREEN MATSEN, DEPUTY DIRECTOR OF NATURAL
RESOURCES AND SENIOR ADVISOR ON ENERGY, COMMONWEALTH OF
VIRGINIA; ACCOMPANIED BY DAVID SPEARS, VIRGINIA STATE GEOLOGIST
Ms. Matsen. Thank you, Mr. Chairman, Members of the
Subcommittee. It really is a pleasure to be here.
Since taking office 18 months ago, Governor Bob McDonnell
has had a singular focus on rebuilding Virginia's economy. The
citizens of Virginia, like the citizens of every state around
the country, need jobs first and foremost.
To make certain that we grow our economy and create jobs in
ways that are safe and environmentally responsible, we have
made our state environmental regulators an integral part of our
economic development teams so that we can successfully allow
the development and use of Virginia's natural resources without
sacrificing our clean air and our clean water.
The focus on bringing new jobs to Virginia goes hand in
hand with the Governor's determination to make Virginia the
energy capital of the East Coast. We are working every day to
make Virginia's valuable energy resources, both onshore and
offshore, available to meet growing energy needs and to secure
high paying jobs in energy development and in the supply chains
that support that development.
Since adoption of the 1990 version of Virginia's Gas and
Oil Act, natural gas production has meant more than $2 billion
in capital investment in Virginia, over $630 million in
royalties, over $150 million in severance taxes paid, and all
of that is in addition to mineral, payroll and sales taxes paid
to Virginia. Most important of all, the industry has created
more than 3,000 jobs.
Virginia has been effectively balancing our economy and our
environment for decades. Hydrofracturing has been used in
approximately 1,800 wells, producing natural gas from shale,
sandstone and limestone formations in Southwest Virginia since
the 1950s. We are today, as it has been noted, drilling wells
in the Jefferson National Forest.
Natural gas wells in Virginia are permitted through the
Division of Oil and Gas of Virginia's Department of Mines,
Minerals and Energy. This group works closely in all well
permitting with the Virginia Department of Environmental
Quality to ensure that water withdrawals and disposal of
produced fluids do not harm surface or groundwater.
I have with me today in fact a technical expert, Mr. David
Spears, who is our State Geologist and a former Director of the
Oil and Gas Division, to answer any questions you might have
about our regulatory model and its enforcement, but I will
share with you a few of its important attributes.
Our permit review process begins at the very beginning with
research concerning the specific proposed well site. Our
regulations do not allow any offsite impacts or discharges to
surface waters. Our inspectors are on-site for every critical
operation leading to production and for reclamation. Our
comprehensive regulatory scheme has protected Virginians and
Virginia's environment for decades. Over those years there have
been no documented instances of surface water or groundwater
degradation from fracking in Virginia.
In short, Virginia has long experience with effectively
regulating hydrofracturing. We are doing it safely, and we are
protecting the environment and the health of our citizens.
Virginia appreciates and values its spectacular National
Forests. Indeed, no one cares more for the preservation of
Virginia's magnificent landscapes and the quality of Virginia's
waters than Virginians do. Our regulators protect the water
that they, their families and their neighbors enjoy and depend
on every day.
The proposed ban on horizontal drilling included in the
draft revised land and resource management plan for the George
Washington National Forest, if adopted, would represent an
unprecedented interference with development of underground
resources on Federal lands. Restricting drilling in an area the
same size as the current Virginia producing area will limit
jobs and economic growth.
We know of no justification, scientific or otherwise, for
ending the effective collaboration between Virginia and the
Bureau of Land Management and other Federal agencies to provide
access to those resources. In fact, horizontal drilling would
allow access to the important energy resource under the forest
with fewer wells and far less construction and disruption above
ground than comes with the traditional vertical wells that have
historically been allowed in the forest.
Virginia is home to a valuable natural gas resource that
ought not be put on the shelf and off limits. The proposed ban
would harm Virginia and Virginians by burdening business and
preventing job growth. It would undermine the nation's energy
security by placing domestic resources out of reach at a time
when global competition for energy resources is rapidly
increasing, and it would do so without justification and
without any identifiable or tangible benefit beyond the
protections already accomplished by Virginia's well-established
regulation of natural gas development.
I thank you for this opportunity to be with you today, and
I am happy to respond to your questions.
[The prepared statement of Ms. Matsen follows:]
Statement of Maureen Matsen, Deputy Director of Natural Resources
and Senior Advisor on Energy, Commonwealth of Virginia
Since taking office 18 months ago, Governor Bob McDonnell has had a
singular focus on rebuilding Virginia's economy. The citizens of
Virginia, like the citizens of every state around the country need
jobs, first and foremost.
For Governor McDonnell that means that his most important job is
recruiting new businesses to locate in Virginia, and facilitating the
expansion of our existing businesses.
And to make certain that we grow our economy and create jobs in
ways that are safe and environmentally responsible, we have made sure
that our state environmental regulators are an integral part of our
economic development teams, so that we can successfully allow the
development and use of Virginia's natural resources, without
sacrificing our clean air or our clean water.
The focus on bringing new jobs to Virginia goes hand in hand with
the Governor's determination to make Virginia the Energy Capital of the
East Coast.
We are working every day to make Virginia's valuable energy
resources--on shore and offshore--available to support Virginia's
energy needs, to the nation, and to the world.
The development of Virginia's coal, offshore and onshore wind,
biomass, nuclear, solar, oil and natural gas resources, offers secure,
high paying jobs both in development and in the supply chains that
support that development.
Virginia businesses depend on access to our natural resources, and
our citizens depend on the jobs those businesses provide, as well as
the direct and indirect revenues that flow from them.
Indeed, since adoption of Virginia's Gas and Oil Act, natural gas
production has meant more that $2 billion in capital investment, $630
million in royalties, $150 million in severance taxes paid, in addition
to mineral, payroll and sales taxes, to Virginia. And the industry has
created more than 3000 jobs.
Specifically with regard to natural gas development in Virginia, we
have been effectively balancing our economy and our environment for
decades.
Fracing has been used in approximately 1800 wells, producing
natural gas from shale, sandstone and limestone formation drilled in
Southwest Virginia since the 1950s.
We are--today--drilling wells in the Jefferson National Forest.
There have been wells drilled in the George Washington National Forest,
though none of them are active any longer.
Natural gas wells are permitted through our Division of Oil and
Gas, of our Department of Mines Minerals and Energy. This group works
closely, in all well permitting, with the Virginia Department of
Environmental Quality to ensure that water withdrawals and disposal of
produced fluids do not harm surface or ground waters.
Our permit review process includes: research concerning the
specific proposed well site; water used during the drilling process is
required to meet state water quality standards by region; Virginia's
well casing/cementing program is a multi-casing and cementing program
designed to prevent contamination of groundwater; our regulations do
not allow off-site impacts or discharges to surface waters; independent
lab tests of water wells and springs within 500 feet of a proposed well
are required before drilling can begin; waste water can only be land
applied if the fluids meet water quality standards, if not, it must be
transported to an approved Class II EPA waste disposal well or other
properly permitted facility. Our inspectors are on site for every
critical operation leading to production, and for reclamation. And
those are just the highlights of a comprehensive regulatory scheme that
has protected Virginians, and Virginia's environment for fifty years.
There have been no documented instances of surface water or groundwater
degradation from fracing in Virginia.
In short, Virginia has long experience with effectively regulating
hydro fracturing, and in working with the U.S. Forest Service and the
Bureau of Land Management to safely develop the resources available
under federal lands, including our national forests.
We are doing it safely, and we are protecting the environment--our
water and our air--at the same time.
Virginia appreciates and values its spectacular national forests.
Indeed, no one cares more for the preservation of Virginia's
magnificent landscapes and the quality of Virginia's waters, than
Virginians do.
Our regulators protect what they, and their neighbors, enjoy and
depend on every day.
The Draft Revised Land & Resource Management Plan for the George
Washington National Forest--by virtue of its proposed ban on horizontal
drilling -
If adopted, would represent an unprecedented interference with
development of underground resources on federal lands, that ought to be
available to meet the nation's growing energy needs.
Restricting drilling in an area the same size as the current
Virginia producing area limits jobs and economic growth.
We know of no justification, scientific or otherwise, for ending
the effective collaboration between Virginia and the Bureau of Land
Management and other federal agencies to provide access to those
resources.
In fact, horizontal drilling would allow access to the important
energy resource under the forest with few wells, and far less
construction and disruption above ground than comes with the
traditional vertical wells that have historically been permitted in the
forest.
Virginia is home to a valuable natural gas resource that ought not
be put on the shelf, and off limits.
The proposed ban would harm Virginia, and Virginians by burdening
business and preventing job growth;
It would undermine the nation's energy security by placing domestic
resources out of reach at a time when the global competition for energy
resources is rapidly increasing.
And it would do so without justification, and without any
identifiable and tangible benefit that we can see, beyond what is
already accomplished by our well established regulation of natural gas
development.
______
Mr. Thompson [presiding]. Thank you for your testimony.
Mr. Miller, if you will proceed with your testimony,
please?
STATEMENT OF DAVID MILLER, P.E., F.A.S.C.E.,
STANDARDS DIRECTOR, AMERICAN PETROLEUM INSTITUTE
Mr. Miller. Good afternoon, Chairman Lamborn and Chairman
Thompson, Ranking Members and Members of the Subcommittee.
Thank you for the opportunity to address challenges facing
domestic oil and gas development.
My name is David Miller. I am the Standards Director for
the American Petroleum Institute. You may know that API has
more than 470 member companies that represent all sectors of
America's oil and natural gas industry and that our industry
supports 9.2 million American jobs and provides most of the
energy America needs.
What you may not know is that API has been the leader for
nearly nine decades in developing voluntary industry standards
that promote reliability and safety through proven engineering
practices. Our industry's top priority is to provide energy in
a safe, technologically sound and environmentally responsible
manner. We therefore take seriously our responsibility to work
in cooperation with government to develop practices and
equipment that improve the operational and regulatory process
across the board.
The API standards program is accredited by the American
National Standards Institute, ANSI, the authority on U.S.
standards and the same organization that accredits programs in
several national laboratories. API undergoes regular third
party program audits to ensure compliance with ANSI's essential
requirements for standards development.
API standards are developed through a collaborative effort
with industry experts, as well as the best and brightest
technical experts from government, academia and other relevant
stakeholders. For that reason, API standards are widely cited
by both Federal and state regulators.
The committees that develop and maintain these standards
represent API's largest program, with over 4,800 volunteers
working on 380 committees and task groups. API standards are
normally reviewed every five years to ensure that they remain
current, but some are reviewed more frequently based on need.
Overall, API maintains some 600 standards, recommended
practices, specifications, codes, technical publications,
reports and studies that cover all aspects of the industry,
including five guidance documents focused on hydraulic
fracturing operations. These documents provide the blueprint
for the environmentally sound development of natural gas.
We have shared these documents with nongovernmental
organizations, state regulators, the Bureau of Land Management
and the Department of Energy. In particular, API has presented
an overview of these documents to the Public Health, Safety and
Environmental Protection Work Group of the Pennsylvania
Governor's Marcellus Shale Advisory Commission.
API has also given presentations to industry conferences
and provided training on these documents to staff members of
the Pennsylvania Department of Environmental Protection. We are
available to provide similar educational opportunities to other
interested stakeholders, and the documents are publicly
available on our website at www.api.org under the Hydraulic
Fracturing page.
Well construction practices covered in these documents are
standard in the industry and enforced by virtually all states
to effectively protect underground sources of drinking water
from potential impacts related to oil and gas exploration of
production activities, including hydraulic fracturing.
The great majority of hydraulic fracturing activities take
place at depths far below existing groundwater sources that
could reasonably be considered underground sources of drinking
water. Contemporary well design practices--still pipes cemented
to the rock through which the well is drilled--ensure multiple
levels of protection between any sources of drinking water and
the production zone of an oil and gas well.
We look forward to providing constructive input as the
Subcommittees, the Congress and the Administration consider the
challenges facing domestic oil and gas development.
That concludes my statement. I welcome questions from you
and your colleagues. Thank you.
[The prepared statement of Mr. Miller follows:]
Statement of David Miller, Standards Director,
American Petroleum Institute
Good morning, Chairman Lamborn and Chairman Thompson, Ranking
Member Holt and Ranking Member Holden, and members of the
subcommittees. Thank you for the opportunity to address challenges
facing Domestic Oil and Gas Development.
My name is David Miller. I am the standards director for the
American Petroleum Institute. You may know that API has more than 470
member companies that represent all sectors of America's oil and
natural gas industry, and that our industry supports 9.2 million
American jobs and provides most of the energy America needs. What you
may not know is that API has been the leader for nearly nine decades in
developing voluntary industry standards that promote reliability and
safety through proven engineering practices.
Our industry's top priority is to provide energy in a safe,
technologically sound and environmentally responsible manner. We
therefore take seriously our responsibility to work in cooperation with
government to develop practices and equipment that improve the
operational and regulatory process across the board.
API's standards program is accredited by the American National
Standards Institute, ANSI, the authority on U.S. standards, and the
same organization that accredits programs at several national
laboratories. API undergoes regular third-party program audits to
ensure compliance with ANSI's Essential Requirements for standards
development.
API's standards are developed through a collaborative effort with
industry experts, as well as the best and brightest technical experts
from government, academia and other relevant stakeholders. For this
reason API standards are widely cited by both Federal and State
regulators.
The committees that develop and maintain these standards represent
API's largest program, with 4,800 volunteers working on 380 committees
and task groups. API standards are normally reviewed every five years
to ensure they remain current, but some are reviewed more frequently,
based on need.
Overall, API maintains more than 600 standards--recommended
practices, specifications, codes, technical publications, reports and
studies--that cover all aspects of the industry, including five
guidance documents focused on hydraulic fracturing operations. These
documents provide the blueprint for the environmentally sound
development of natural gas. We have shared these documents with Non-
Governmental Organizations, State Regulators, the Bureau of Land
Management and the Department of Energy.
In particular, API has presented an overview of these documents to
the Public Health, Safety, and Environmental Protection Work Group of
the Pennsylvania Governor's Marcellus Shale Advisory Commission. API
has also given presentations to industry conferences and provided
training on the documents to staff members of the Pennsylvania
Department of Environmental Protection. We are available to provide
similar educational opportunities to other interested stakeholders, and
the documents are publically available on our website at www.api.org
under the ``Hydraulic Fracturing'' page.
Well construction practices covered in these documents are standard
in the industry and are enforced by virtually all states to effectively
protect underground sources of drinking water from potential impacts
related to oil and gas exploration and production activities, including
hydraulic fracturing. The great majority of hydraulic fracturing
activities take place at depths far below existing groundwater sources
that could reasonably be considered underground sources of drinking
water. And contemporary well design practices--steel pipe cemented to
the rock through which a well is drilled--ensure multiple levels of
protection between any sources of drinking water and the production
zone of an oil and gas well.
We look forward to providing constructive input as the
Subcommittees; the Congress and the Administration consider the
challenges facing Domestic Oil and Gas Development.
This concludes my statement, Messrs. Chairman. I welcome questions
from you and your colleagues. Thank you.
______
Mr. Thompson. Thank you, Mr. Miller.
Mr. Fuller, go ahead and proceed with your testimony,
please.
STATEMENT OF LEE FULLER, VICE PRESIDENT OF GOVERNMENT
RELATIONS, INDEPENDENT PETROLEUM ASSOCIATION OF AMERICA (IPAA)
Mr. Fuller. Mr. Chairman and Members of the Committee on
Natural Resources and the Committee on Agriculture, while
today's hearing has been triggered by the draft environmental
impact statement related to the George Washington National
Forest, IPAA believes that the draft EIS presents broader
issues.
First, it reflects an inconsistency within the
Administration. While publicly emphasizing the importance of
American natural gas, its regulatory positions in this draft
EIS and other venues seek to limit the access and production of
these resources.
In the draft EIS, the Forest Service seeks to limit the use
of the horizontal drilling technology. It rationalizes these
limitations based on surface disruption and water issues.
Horizontal drilling technology is recognized as an option that
reduces the surface footprint. The water issues are couched in
the context of comparing the impacts of one horizontally
drilled well to one vertical well rather than one horizontally
drilled well to the several vertical wells it replaces.
The draft EIS clearly anticipates that a portion of the
resource play underlying the forest is shale gas. Development
of shale gas hinges on the use of two pivotal technologies,
horizontal drilling and hydraulic fracturing. The draft EIS
proposes a horizontal drilling ban that would prevent the
economic development of this shale gas resource. If this type
of rationale is applied to Federal lands nationally, it will
clearly limit America's access to its resource base. It is
completely unjustified.
Second, the draft EIS follows a path of targeting
longstanding, well-regarded technologies as the basis for
limiting development. Over the past several years, there has
been a national effort to thwart the development of American
resources by attacking various technologies, principally
hydraulic fracturing, to create anxieties in communities and to
shift the decision-making process from managing environmental
risks to prohibitions of technologies.
Developing American resources is not easy. Drilling natural
gas and oil wells is a capital intensive process that involves
sophisticated equipment. Equally important, it is a regulated
action. Oil and natural gas drilling regulations have been
developed since before horizontal drilling or hydraulic
fracturing existed.
Drinking water protections that require the use of steel
casing cemented in place when the well bore passes through
water supplies were developed to protect these resources from
exposure to oil and hence produced water. Those protections
remain in place and are regularly revised. They are the
fundamental protections that apply to the use of hydraulic
fracturing with or without horizontal drilling.
Other environmental risks must also be managed. Produced
water, water that is present in natural gas and oil formations,
can be a significant environmental hazard generally because it
is extremely salty. State regulatory programs have been created
to manage this risk, and both the Federal Clean Water Act and
Safe Drinking Water Act regulate produced water management.
If decisions on development of American natural gas and oil
are based on managing the environmental risk, history
demonstrates that regulatory systems effectively address the
risks associated with oil and natural gas production.
Consequently, the tactics of those opposing development have
shifted.
First, the technologies used to produce natural gas and oil
are distorted. Second, the regulatory process and the
regulators are demeaned. Third, Federalization of the
regulatory process or expanded Federal regulations demand it.
Hydraulic fracturing is an illustrative example. Recurring
studies have included that fracturing is safe as currently
regulated, but since it is a linchpin to developing America's
large shale gas and shale oil formations, fracturing has been
mischaracterized, distorted and demonized.
Because the regulatory systems create a barrier to movement
of fracturing fluids from the well bore to drinking water, the
environment is protected from the fracturing fluids that are
used, mixtures that are 99.5 percent water and sand.
Consequently, rather than address the management of the
fracturing process, production opponents have focused on the
chemicals used in the one-half percent of the fluids.
Producers do not oppose disclosing the chemicals used in
the fracturing process, but because confidential business
information is involved the execution of disclosure is not
straightforward. Weaving through these complexities, the state
regulators have developed a national registry, Frac Focus, that
producers strongly endorse. It will provide well-by-well
information on chemicals, but production opponents will not
endorse it. They demand Federalization.
This disagreement will continue with the key point that the
regulatory process protects groundwater resources since
chemicals will always be a part of the production of oil and
natural gas, a casualty to the antiproduction rhetoric. Equally
clear, production opponents regularly attribute any produced
water problem to hydraulic fracturing. In recent years,
produced waters are characterized as fracturing fluids. They
are not.
If a rational debate on production is to take place, it
must be based on a fair characterization of the issue instead
of the distorted rhetoric that has become so prevalent. Thank
you very much. I will be happy to answer any questions.
[The prepared statement of Mr. Fuller follows:]
Statement of The Independent Petroleum Association of America
This testimony is submitted by the Independent Petroleum
Association of America (IPAA). IPAA represents the thousands of
independent natural gas and oil explorers and producers, as well as the
service and supply industries that support their efforts. Independent
producers drill about 95 percent of American oil and natural gas wells,
produce over 56 percent of American oil and more than 85 percent of
American natural gas.
This hearing examines issues associated with the development of
American oil and natural gas resources, principally with respect to
access to federal lands. In part, the hearing addresses a proposed plan
for the development of the George Washington National Forest. But, IPAA
believes that this proposed plan presents a far larger issue--the
reluctance of the cut-rent Administration to support the development of
the full spectrum of American resources. More specifically, the issues
that seem to represent the Administration's positions related to its
approach to technologies that are essential to develop these American
resources--technologies that have been proven safe over years of
operation but are now, without evidence, called into question. This
tactic has been regularly used by various environmental groups that
oppose the development of all fossil fuels as part of a strategy to
create community anxiety over oil and natural gas development, demean
the regulatory process and agencies that manage the environmental risk
associated with these technologies, and demand a federalization of the
regulatory process to inhibit resource development.
Most of this effort has been directed at the use of advanced
hydraulic fracturing. In the George Washington National Forest
proposal, the tactic has expanded to include the use of horizontal
drilling. This testimony will address both technologies.
The Draft Environmental Impact Statement for the Revised Land and
Resource Management Plan for the George Washington National Forest
(DEIS) includes as its preferred alternative the prohibition of
horizontal drilling for oil and natural gas. Astonishingly, it
justifies this preference on the basis of limiting surface disruption
and water demand. A fundamental benefit of horizontal drilling is its
reduction of the surface footprint of oil and natural gas development.
During the debates over the Arctic National Wildlife Refuge, it was the
use of horizontal drilling to tap distant reservoirs that reduced the
surface impact of oil development. Horizontal drilling technology
allows the well bore to turn from its vertical orientation in order to
develop resources that are inaccessible from the well's surface site or
that are deposited in horizontal formations such as shale gas and shale
oil. Horizontal drilling rapidly increased in the mid-1970s to become a
mainstay of drilling options to access a variety of different resource
plays. Highlighted in the Department of Energy 1999 document,
``ENVIRONMENTAL BENEFITS of ADVANCED OIL and GAS EXPLORATION and
PRODUCTION TECHNOLOGY'', horizontal drilling provides both more
efficient drilling and less surface disruption.
IPAA believes that the DE1S follows a common pattern of overstating
implications of oil and natural gas development on water demand. This
pattern builds on two perceptions--the demand for water in oil and
natural gas development is high and the demand for its use in
fracturing in the context of horizontal drilling is particularly large.
Significantly, the DEIS use of the water demand issue demonstrates that
the real issue relates to hydraulic fracturing. But, by examining the
issue in context, the perceived impact is overstated. Numerous
assessments of the demand for water in oil and natural gas development
demonstrate that it falls well below other water demands. For example,
the FracFocus website, developed by the Ground Water Protection Council
(GWPC) and the Interstate Oil and Gas Compact Commission (IOGCC),
provides a breakdown of water demand demonstrating that oil and natural
gas development falls in the mining category--approximately one percent
of the total (http://fracfocus.org/water-protection/hydraulic-
fracturing-usage). Certainly, specific areas will differ in the mix of
demand, but clearly water use for oil and natural gas development is
manageable. Similarly, the DEIS proposes to prohibit horizontal drilled
wells while allowing vertical wells that would be hydraulically
fractured. In part, it rationalizes this distinction by stating:
Some level of hydrofracturing is used in nearly all gas well
drilling. Conventional drilling has occurred on the Jefferson
NF for many years without incident. It is the unconventional
drilling technique of horizontal drilling and its
unconventional use of hvdrofracturing that has raised concerns.
Horizontal drilling uses repeated hvdrofracturing at intervals
throughout the horizontal shaft over long distances, and so,
requires very large amounts of water and has the potential for
affecting water quality that goes far beyond hydrofracturing
associated with conventional (vertical) drilling. Rather than
restricting all hvdrofracturing, the Forest decided to prohibit
horizontal drilling and its associated hydrofracturing.
Setting aside that neither horizontal drilling nor hydraulic
fracturing is an unconventional technology, the statement fails to
recognize that horizontal drilling allows for the development of the
same amount of resource that would require far more vertical wells. The
2009 Department of Energy document, Modern Shale Gas Development in the
United States: A Primer, sets out the impact well:
Modern shale gas development is a technologically driven
process for the production of natural gas resources. Currently,
the drilling and completion of shale gas wells includes both
vertical and horizontal wells. In both kinds of wells, casing
and cement are installed to protect fresh and treatable water
aquifers. The emerging shale gas basins are expected to follow
a trend similar to the Barnett Shale play with increasing
numbers of horizontal wells as the plays mature. Shale gas
operators are increasingly relying on horizontal well
completions to optimize recovery and well economics. Horizontal
drilling provides more exposure to a formation than does a
vertical well. This increase in reservoir exposure creates a
number of advantages over vertical wells drilling. Six to eight
horizontal wells drilled from only one well pad can access the
same reservoir volume as sixteen vertical wells. Using multi-
well pads can also significantly reduce the overall number of
well pads, access roads, pipeline routes, and production
facilities required, thus minimizing habitat disturbance,
impacts to the public, and the overall environmental footprint.
The Primer explains the issue more precisely:
Analysis performed in 2008 for the U.S. Department of the
Interior estimated that a shallow vertical gas well completed
in the Fayetteville Shale in Arkansas would have a 2.0-acre
well pad, 0.10 miles of road and 0.55 miles of utility
corridor, resulting in a total of 4.8 acres of disturbance per
well. The same source identified a horizontal well pad in
Arkansas as occupying, approximately 3.5 acres plus roads and
utilities, resulting in a total of 6.9 acres. If multiple
horizontal wells are completed from a single well pad it may
require the pad to be enlarged slightly. Estimating that this
enlargement will result in a 0.5-acre increase, the 4-well
horizontal pad with roads and utilities would disturb an
estimated total of 7.4 acres, while the 16 vertical wells would
disturb approximately 77 acres. In this example, 16 vertical
wells would disturb more than 10 times the area of 4 horizontal
wells to produce the same resource volume. This difference in
development footprint when considered in terms of both rural
and urban development scenarios highlights the desire for
operators to move towards horizontal development of gas shale
plays.
From an environmental standpoint, the advantages are obvious. The
surface impact is one-tenth or less than its historic impact. The
amount of land used to manage drilling fluids and produced water is
dramatically reduced. The environmental risks are more directly and
easily managed. Moreover, as the use of advanced techniques like
horizontal drilling technology increases, fewer wells will be needed to
generate the same amount of production. For example, prior to 2008,
more than 31,000 annual new gas wells were required to sustain 58 BCF/d
of gas production; now it is possible to produce almost 63 BCF/d with
the drilling of only 19,000 new gas wells per year.
As described above, the DEIS justifications suggest that the
underlying issue associated with the preferred alternative of no
horizontal drilling is the use of hydraulic fracturing. Clearly, the
development of shale gas and shale oil resources hinges on the use of
horizontal drilling and hydraulic fracturing. The DEIS supporting
documents demonstrate that there are no indications that hydraulic
fracturing has caused any issues of environmental harm, that its
regulated use protects against its environmental risk. Consequently, it
turns the other linchpin of shale gas development--horizontal drilling.
In reality, these technologies and the attendant regulatory structures
or their use are proven, effective controls. In reality, the
environmental groups opposing the development of American fossil fuels
are the driving force in creating anxieties about both technologies and
the regulatory programs managing their use.
The history of the hydraulic fracturing issue is illustrative.
Hydraulic fracturing is a technique used to allow natural gas and oil
to move more freely from the rock pores where they are trapped to a
producing well that can bring them to the surface. The technology was
developed in the late 1940s and has been continuously improved and
applied since that time. In a hydraulic fracturing job, the fluid
pumped into the well contains a proppant (usually sand) to keep the
fracture open. This proppant collects inside the created fracture, so
when the fracture tries to close, it cannot. The proppant holds it
open.
State ground water regulation was developed long before hydraulic
fracturing began. These regulations established well construction
standards including steel casing and cementing requirements. They were
designed to protect ground water from contamination by oil and its
produced water. The environmental risks from oil and produced water are
far more significant than those from a hydraulic fracturing solution
that is 99.5 percent water and sand. These regulations created a
control svstem that has effectively prevented contamination of drinking
water, effective in the more than a million times that hydraulic
fracturing has been used.
Years after state regulations protecting ground water were
implemented, Congress enacted the Safe Drinking Water Act (SDWA) in
1974. By then, hydraulic fracturing had been used for 25 years with no
environmental problems. Under the SDWA, states developed extensive
Underground Injection Control (UIC) programs to manage liquid wastes
and the reinjection of produced waters. These programs addressed
liquids intended to be injected--and to remain--in underground geologic
formations. By 1980 Congress--recognizing the need for further state
flexibility--modified the SDWA to give states federal ``primacy'' based
on comparable state oil and gas UIC programs.
At no time during these debates was there any suggestion of
including hydraulic fracturing in the UIC waste management
requirements. In the mid-1990s the Legal Environmental Assistance
Foundation (LEAF), after years of failing to make an environmental case
against coalbed methane development, petitioned the Environmental
Protection Agency (EPA) to require Alabama to regulate hydraulic
fracturing under the UIC program. EPA rejected LEAF, arguing that
Congress never intended UIC to cover hydraulic fracturing. LEAF
appealed to the 11th Circuit Court of Appeals.
In 1997, the 11th Circuit Court decided the LEAF v EPA case. The
Court never addressed the environmental risks of hydraulic fracturing;
it merely decided that the plain language of the statute included
hydraulic fracturing as underground injection.
Not an issue at the time the SDWA passed, Congress did not
specifically exclude hydraulic fracturing. Two decades later, a court
ignored the facts of the issue and changed the scope of the law on a
technicality.
However, in response to public concerns, EPA initiated a study of
coalbed methane hydraulic fracturing environmental risks because these
formations are situated closest to ground water. EPA released the
competed study in June 2004. No environmental risks of proper hydraulic
fracturing were identified.
Analysis of the environmental risks of the technology showed it to
be safe, but the nation's ability to develop its critical oil and
natural gas was at risk because of the LEAF cases. Recognizing the need
to provide legislative clarity and that the existing state regulatory
system provided effective environmental protection, Congress addressed
the issue of hydraulic fracturing under the SDWA in the Energy Policy
Act of 2005.
The Energy Policy Act preserved the state regulatory system that
has worked so effectively for the past half century. It clarified that
the SDWA was not the appropriate regulatory law for hydraulic
fracturing with one exception. During the analysis of environmental
risk from hydraulic fracturing, EPA hypothesized that the use of diesel
fuel as a solvent in the fracturing process of coalbeds might pose a
risk. While no incidents of damage have occurred, Congress preserved
the option for the application of the SDWA for regulation if diesel
fuel was utilized. For five years following the 2005 SDWA amendments,
EPA took no action under this new authority. Then, in 2010, without
notice and comment, EPA posted on its website an interpretation that
wells fractured using diesel fuel would he considered as Class II UIC
wells-a position it had argued against in the LEAF cases. IPAA and
others have challenged EPA's website rulemaking and court action is
pending.
Meanwhile, in 2009, the Ground Water Protection Council reviewed
state regulations designed to protect water resources. It again
concluded that these regulations were adequately designed to protect
water resources. Yet, later that year, Congress requested another EPA
study of hydraulic fracturing; it is underway.
Emerging from the 2005 debate, a number of environmental groups
initiated efforts throughout the country to create opposition to the
use of hydraulic fracturing. Since no incidents of drinking water
contamination have occurred from the use of hydraulic fracturing, these
efforts could not credibly raise arguments of unmanaged environmental
risk. Instead, the focus became an aggressive three pronged strategy.
First, communities were inundated with allegations about the chemicals
in the fracturing solutions--not that exposure had occurred, just that
chemicals were used. Second, the existing regulatory process and the
regulators were demeaned. Third, federalization is presented as the
only acceptable solution.
The most visible aspect of this strategy is the recurring focus on
disclosure of the chemicals used in the fracturing process. Natural gas
and oil producers do not oppose the disclosure of the chemicals used in
fracturing. However, because the chemical mixtures involve confidential
business information, the execution of disclosure is not
straightforward. Several states have initiated disclosure requirements.
Recently, the GWPC and IOGCC started FracFocus--a website that will
provide detailed information on the chemicals used in the fracturing
process on a well by well basis. IPAA and other national oil and
natural gas production trade associations have strongly endorsed
FracFocus as the best approach to deal with a national registry on
fracturing chemical disclosure. The primary issue, however, continues
to be whether the regulatory process protects ground water resources
since chemicals will always be a part of the production of oil and
natural gas. With about one million operating oil and natural gas wells
in the United States, tens of thousands of wells being drilled annually
and only a small number of problem incidents, it is clear that the
process is sound and effective.
Equally clear, the drumbeat of opposition to developing American
oil and natural is taking a toll. Faced with a history of effective
regulation, the opposition's principal strategy remains distorting the
risks, demeaning the regulators and demanding federalization. Despite a
record of supporting the development of both horizontal drilling and
hydraulic fracturing through the Department of Energy over the past
several decades, the current Administration now sends mixed and
uncertain signals regarding the development of these American
resources. Having primarily supported green energy paths that cannot
grow fast enough to meet America's energy demand, it cannot now decide
if it is willing to embrace the opportunities presented by American
natural gas as a clean, abundant and affordable resource and the
potential of expanding American oil production for the first time in
decades. The George Washington National Forest Draft Environmental
Impact Statement for the Revised Land and Resource Management Plan
reflects this underlying Administration indecision.
______
Mr. Lamborn [presiding]. All right. Thank you.
Mr. Mayer?
STATEMENT OF CRAIG L. MAYER, ESQ., GENERAL COUNSEL,
PENNSYLVANIA GENERAL ENERGY, LLC
Mr. Mayer. Chairman Thompson, Chairman Lamborn, thank you
for inviting me to appear. By way of background, the Allegheny
National Forest is located in Northwest Pennsylvania, and it
shares 93 percent of its 513,000 acres with owners of private
oil, gas and mineral estates and has done so since the
forestlands were first acquired in the 1920s and 1930s.
The mineral development on this acreage is competently and
rigorously regulated by the Pennsylvania Department of
Environmental Protection. When the Forest Service acquired
these acres, as well as most of the 20 million acres of Weeks
Act lands now found in 42 states, it purposely did not purchase
the oil, gas and mineral estates.
At the very heart of the matter is Section 9 of the 1911
Weeks Act. It, along with other safeguards in the Act, severely
restricts or precludes the Forest Service from controlling the
exercise of mineral rights or any other property rights that it
did not acquire when it bought the surface lands from private
citizens. Because it now desires to control and even extinguish
these rights, the Forest Service wants to effectively repeal
and reverse the effect of Section 9 and has been attempting
through various administrative maneuvers and artifices to do
so.
With respect to the Allegheny National Forest, this began
in early 2007. To date, its actions have spawned seven
lawsuits, one administrative appeal of a Forest Plan, threats
by armed Forest Service personnel to prosecute and arrest
producers, one wholly baseless criminal charge, unwarranted and
increasing delays in reviewing drilling notifications,
decreased oil and gas production and economic hardship for
hundreds of individuals, families and small businesses.
Forest Service efforts to impede development activities
have been persistent and hostile. The string of actions even
include, and I am not making this up, the Regional Forester for
the Eastern Region organizing and appointing an Allegheny Oil
and Gas Strike Team.
In March 2007, in a Forest Plan revision, Forest Service
officers secretly crafted and then imposed a regulatory regime
on private mineral estates. Only costly administrative appeals
forced the Forest Service to acknowledge it had acted illegally
in concealing this and not providing for public notice and
comment and then to suspend application of its rules.
In March 2008, to stop mineral owners from quarrying road
surfacing the Forest Supervisor, noting remarkably that the
laws, regulations and policies had simply been misapplied for
the previous 85 years, asserted United States ownership of all
sandstone and shale rock found on the forest.
In December 2008, specifically in support of then pending
litigation--by this point in time three cases had been filed--
the national office initiated a rulemaking to impose a Federal
regulatory regime on private oil and gas estates.
In April 2009, incredibly at the height of the most severe
economic recession since the 1930s and again behind closed
doors, it entered into an agreement with activist
environmentalist groups to shut down new drilling across the
entire forest. This was done in a sweetheart settlement
agreement that included a very unusual clause, noting that the
Forest Service just happened to possess unrestricted regulatory
authority over private mineral estates.
Fortunately, a Federal Judge finding that the Forest
Service did not possess such authority issued a preliminary
injunction on December 15, 2009, blocking any further
implementation of the agreement and lifting the drilling ban.
In early 2011, the Forest Service renewed its 2008
rulemaking effort. Again behind closed doors, it is once again
taking action to grant itself regulatory authority along with
drafting rules aimed at evading the December 2009 injunction by
imposing costly and interminably lengthy NEPA requirements on
wholly private development activities.
In closing, I believe that all stakeholders can use our
natural resources in a way that effectively provides for jobs,
energy security and environmental protection. Your
Subcommittees are in the perfect place to help us achieve that.
This is not the time for the Forest Service to continue its
efforts and to increase the regulatory burdens on our citizens
and small businesses.
Thank you very much for taking your interest in these
issues, and I am prepared to respond to any questions.
[The prepared statement of Mr. Mayer follows:]
Statement of Craig L. Mayer, General Counsel,
Pennsylvania General Energy Company L.L.C.
I. Background and Introduction
1. Since 2004, I have been the chief legal counsel for Pennsylvania
General Energy Company L.L.C (``PGE''), which is headquartered in
Warren, Pennsylvania. I also serve as a Secretary of the Pennsylvania
Independent Oil and Gas Association (``PIOGA''). PGE is a member of
PIOGA. PGE has approximately 150 employees and is engaged in oil and
gas exploration and production, primarily in Pennsylvania, and it
currently produces oil and gas from over 850 wells in the Allegheny
National Forest (``ANF'') that have been developed over the past 25
years in an oil and gas field that was first discovered shortly after
the Civil War. PGE owns approximately 40,000 acres of oil and gas lands
in the ANF, and substantial oil and gas acreage elsewhere.
2. By way of personal background, I obtained a Juris Doctor degree
from Duquesne University Law School in 1974, and am a graduate of the
Pennsylvania State University (1968). From 1968 to 1992, I served in
the U.S. Marine Corps in various command and staff postings, and I was
honorably discharged with the rank of Lt. Colonel. As a civilian from
2000 to 2002, I served in association with seconded State Department
personnel in Egypt and Israel as an International Observer and Team
Leader with the U.S. Observer Unit of the Multi-National Force and
Observers (``MFO''). The MFO monitors Egyptian and Israeli compliance
with the Camp David Peace Treaty Accords.
3. The ANF encompasses approximately 513,000 acres which cover
major parts of four counties in northwestern Pennsylvania, i.e., Elk,
Forest, Warren and McKean Counties. Notably, 93% of the ANF lands are
underlain by private severed oil and gas mineral estates. When the ANF
lands were acquired by the federal government in the 1920s and 1930s,
the Forest Service purposely did not acquire the private oil and gas
estates. In fact, under Section 9 of the 1911 Weeks Act, 16 U.S.C.
Sec. 518, before the United States could even purchase surface lands
that had been severed from oil and gas estates before the time of the
United States purchase, both the Secretary of Agriculture and the
National Forest Reservation Commission had to find that such estates
``from their nature'' would ``in no manner interfere'' with the use of
the land for the purposes of the Act. The Forest Service viewed oil and
gas production as not in conflict with forestry management purposes,
and that view continued until recently.
4. The ANF region is the birthplace of the oil and gas industry in
Pennsylvania, the United States, and the world. The first oil well in
the world, the Drake Well, was drilled in 1859, about 15 miles from the
current southwestern ANF boundary. Oil and gas production has occurred
in this region for well over a century, including on the ANF lands. It
is a vital part of the culture of the communities in the region and our
economic base. For example, PIOGA estimates that annually approximately
25% of the oil produced in Pennsylvania comes from estates within the
ANF. There are approximately 60 producers and, at least, an equal
number of supporting businesses who rely on natural resource
development within the ANF, these groups being composed almost
exclusively of individuals, families, and small companies.
Traditionally, the U.S. Forest Service respected multiple use of the
ANF and cooperated with oil and gas producers. This all changed
beginning in 2007 and particularly so in early 2009, as I will
describe. For the past few years, the people, municipalities and small
businesses of northwestern Pennsylvania have been in a battle with the
U.S. Forest Service for their livelihoods and economic survival. That
battle is unfortunately ongoing.
II. The U.S. Forest Service's 2009 Effort to Shut-Down Drilling and
Economic Activity in the ANF
5. At the height of the most severe national recession since the
1930s, the U.S. Forest Service incredibly agreed behind closed doors in
a ``sweetheart'' Settlement Agreement with the Sierra Club and other
activist groups to shut-down new drilling across the entire 513,000-
acre ANF. I am keenly familiar with the 2009 Settlement Agreement
between the U.S. Forest Service and the Sierra Club, filed on April 9,
2009 in the case of Forest Service Employees for Environmental Ethics
(``FSEEE'') and the Sierra Club et al. v. U.S. Forest Service, No.
1:08-cv-323-SJM (W.D. Pa.). PIOGA's predecessor association and the
Allegheny Forest Alliance (``AFA''), a group of municipalities and
school districts, were intervenors in the case, but had no knowledge of
the terms of this harmful Settlement Agreement until the day it was
filed in court, despite our prior requests made through our legal
counsel to participate in settlement discussions. A Statement by ANF
Supervisor Leanne Marten on April 10, 2009 (``Marten Statement'')
implemented the Settlement Agreement. Fortunately, as I explain later,
on December 15, 2009, a federal judge granted a preliminary injunction
to block the Settlement Agreement, and save our region from economic
ruin.
6. The 2009 Settlement Agreement adopted without any public input,
particularly from elected officials of the ANF region, radically
changed the legal regime applicable to oil and gas exploration and
development activities in the ANF, by subjecting the Forest Service's
issuances of ``Notices to Proceed'' for oil and gas wells to burdensome
compliance with the National Environmental Policy Act of 1969, 42
U.S.C. Sec. 4332 (``NEPA''). Section 102(2)(C) of NEPA requires federal
agencies to prepare an Environmental Impact Statement before carrying
out ``major Federal actions significantly affecting the quality of the
human environment.'' Under the Settlement Agreement, the Forest Service
sought to bind itself to apply NEPA to each individual Notice to
Proceed, which had previously been a mere notice of the conclusion of a
60-day consultation process, not a federal permit document.
3. A 1991 U.S. Congressional hearing fortunately documented the
past cooperative practices of the U.S. Forest Service regarding oil and
gas activities in the ANF, which viewed NEPA as inapplicable to the
exercise of private mineral estates. In the 1991 House Oversight
Hearing, Subcommittee Chairman Kostmayer reviewed the Forest Service's
practices regarding ANF mineral development. See Oil and Gas Operations
in the Allegheny National Forest, Northwestern Pennsylvania, Oversight
Hearing Before the Subcomm. on Energy of the House Comm. on Interior
and Insular Affairs, 102d Cong., 1st Sess. (1991), at 1-6 (``1991
Oversight Hearing''). At the hearing, the Forest Service stressed its
limited legal authority as a matter of property law, agency practice,
and a 1980 federal court ruling in United States v. Minard Run Oil Co.,
No. 80-129, 1980 LEXIS 9570 (W.D.Pa. Dec. 16, 1980). 1991 Oversight
Hearing at 50-128, 138-255. For example, former ANF Forest Supervisor
Wright's written statement said that:
Our land management decisions cannot preclude the ability of
private mineral owners to make reasonable use of the surface
for mineral exploration and development activities, since such
rights are defined by the private mineral deed and public law.
Our challenge is to protect the rights of the Federal
Government, while respecting private mineral rights, and
ensuring that private mineral owners and operators take
reasonable and prudent measures to prevent unnecessary
disturbance to the surface....
1991 Oversight Hearing at 54-55 (emphasis added). He added: ``We do not
give people permission to drill. That is their right. It is not a
Federal action. . .. We review the plan and negotiate a plan with them.
We do not approve a plan.... 1991 Oversight Hearing at 75-79, 113
(emphasis added).
4. The 1991 Oversight Hearing record on the ANF provided an
official summary of a U.S. Agriculture Department Office of General
Counsel opinion, dated October 1991, concluding that NEPA does not
apply to exercise of ``outstanding'' mineral rights:
[W]e do not find that exercise of such rights on National
Forest land in Pennsylvania to be a federal action for NEPA
purposes. This is so, in part, because Forest Service approval
is not a legal condition precedent to the exercise of such
rights under either state law, current federal law or
regulation, or Forest Service Policy. See for example FSM 2832.
***
The question of whether the right can be exercised, and the
ability to deny that right, is simply not left to the surface
owner under Pennsylvania law! A ``reasonable use'' standard
does govern the exercise of such rights, but it also recognizes
the limited role of the surface owner in the process. In other
words, if the exercise of such rights extends beyond what is
reasonable, as was the situation some years ago in the instance
of Minard Run, then your recourse is to move to protect your
rights as surface owner, to reach a reasonable accommodation so
that each may enjoy their respective rights.... That practice
does not elevate your involvement to a federal action for NEPA
purposes.''
1991 Oversight Hearing at 192-93 (emphasis added). This was the way
things worked for decades on a cooperative basis in the ANF, and on the
other 22 million acres of land of National Forests with private mineral
estates acquired under the 1911 Weeks Act, 16 U.S.C. Sec. 518.
5. The 2009 Settlement Agreement sought to change entirely the
governing legal regime and practices without any corresponding change
in the applicable law and regulations. This is confirmed by the
Statement from Forest Supervisor Leanne Marten, dated April 10, 2009,
which declares that ``All remaining pending, and all future, oil and
gas proposals on the Allegheny National Forest will be processed after
the appropriate level of environmental analysis has been conducted
under NEPA.'' Forest Service officials publicly confirmed that new oil
and gas drilling activities could not be carried out until a full
Forest-wide EIS under NEPA is completed and a Notice to Proceed is
issued. Of course, we understood that a forest-wide EIS would be a
multi-year process, likely taking at least four to five years, and more
before appeals were resolved.
6. Accordingly, the Settlement Agreement imposed a de facto
drilling ban in 2009 on future oil and gas exploration and development
across the entire 513,000-acre ANF for years into the future. The U.S.
Forest Service sought to enforce the drilling ban with a heavy hand.
Within two weeks of announcing the Settlement Agreement, it created
what was called an ``Allegheny Oil and Gas Strike Team'' and issued
unlawful ``requests'' for information from oil and gas operators and
imposed processing delays if they did not respond. In early 2009,
shortly after the FSEEE case was commenced, the Forest Service charged
at least one individual officer of an oil and gas company with a
misdemeanor, a case the government never ultimately pursued. As a
former military and federal prosecutor, and being well versed in the
applicable law, this misdemeanor matter appeared to me to be a
deliberate abuse of Forest Service petty offense enforcement authority.
It was perfectly clear from the fact situation that there was no basis
upon which to allege a criminal offense. To protect PIOGA members from
the abuse of the criminal process, I took the measure of preparing a
legal memorandum strongly objecting to this behavior and sent it to
both the U.S. Attorney's Office and the Pennsylvania Attorney General's
Office. Sadly, in the past four years, employees and owners of oil and
gas businesses have been threatened by the Forest Service with criminal
prosecution if they proceeded with their ordinary business activities
in the ANF. To my knowledge, the Forest Service threatened at least
four individuals. It was particularly troubling for me to learn of
Armed Forest Service personnel confronting citizens, prominent leaders
in our communities, engaged in lawful oil and gas development
activities and directing them to cease, or face arrest.
7. Notably, the April 10, 2009 Statement by Forest Supervisor
Marten admitted the severe adverse economic impact which the Settlement
Agreement would have on the local communities surrounding the ANF. The
Marten Statement (at p. 1) stated in part as follows: ``we acknowledge
the impact this will have on families and businesses, especially at a
time when our nation is facing such a difficult economic downturn.''
The Marten Statement (at p. 1) makes the following additional points:
``There is no easy explanation of why this is occurring....For some,
this impact may be short-term and for others it may be a lifetime.''
8. I firmly believe the 2009 Settlement Agreement was punitive,
even retaliatory, in nature. If it remained in force, it would have had
an irrevocable, profound, massive, and devastating adverse impact on
oil and gas production activity in the ANF and upon the economy,
communities, and people of the surrounding region dependant on this
development activity. Fortunately, a federal court intervened in late
2009 and blocked the unlawful drilling ban, as I will now explain.
III. The December 15, 2009 Judicial Relief Granted by Federal Judge
Sean McLaughlin
9. On December 15, 2009, a federal judge in western Pennsylvania,
the Honorable Sean J. McLaughlin, granted a preliminary injunction
against the U.S. Forest Service and the Sierra Club, barring the
implementation of the 2009 Settlement Agreement. See Minard Run Oil Co.
and Pennsylvania Oil and Gas Association. v. U.S. Forest Service, et
al., 2009 WL 4937785 (W.D. Pa. 2009). Judge McLaughlin wrote a detailed
opinion finding that the Settlement Agreement was likely contrary to
law, contrary to the Forest Service's past practices, and causing
irreparable harm to oil and gas businesses in the ANF region. He issued
his ruling following a three-day evidentiary hearing where he heard
testimony from approximately 15 witnesses, including PGE's President
Douglas Kuntz, all subject to cross-examination.
10. Judge McLaughlin's opinion concluded that the ``Forest Service
does not possess the regulatory authority that it asserts relative to
the processing of oil and gas drilling proposals.'' He added that
consequently, ``its involvement in the approval process does not
constitute a major federal action requiring NEPA compliance.'' Judge
McLaughlin found that the ``continued denial of access to privately
held property rights and the irreparable harm flowing therefrom if the
injunction is denied, imposes a far more significant hardship on...[the
oil and gas companies] than would a return to the status quo on the
Forest Service.'' Judge McLaughlin also stated that there was a ``clear
public interest in preventing unreasonable interference with private
property rights.'' Accordingly, he granted a preliminary injunction,
barring implementation of the Settlement Agreement and directed an
immediate return to prior practices which had been the status quo.
11. We are very grateful for the judicial relief provided by Judge
McLaughlin, but the U.S. Forest Service still resisted and moved for
reconsideration of his ruling, which he denied on March 9, 2010,
following an additional hearing in his court. Not content with adhering
to the Judge's preliminary injunction ruling, both the U.S. Forest
Service and the Sierra Club appealed the preliminary injunction order
to the U.S. Court of Appeals for the Third Circuit, which heard
argument on the appeal sitting in Philadelphia in late January, 2011.
Fortunately, the judicial relief provided by Judge McLaughlin has
remained in force while that appeal is pending, and we expect a ruling
any time now.
IV. Forest Service Actions in 2007 and 2008 Leading up to the
Settlement Agreement
12. Sometime between publication of ANF's draft revised Forest Plan
in 2006 and approval of the final plan in March 2007 the Forest Service
attempted to insert a regulatory scheme into its Forest Plan. This was
done under the guise of modifying planning ``standards'' and
``guidelines,'' that included, among other things, a new and
unprecedented federal permit requirement for regulating the conduct of
privately owned and state regulated oil and gas development. PIOGA and
many of its individual members promptly appealed this action through
administrative channels. As the regulatory scheme was clearly added to
the Plan secretly and concealed from the public the Forest Service was
forced to acknowledge that it had acted illegally. To remedy its
failings it issued an Appeal decision in February 2008 that suspended
application of the scheme until public notice and comment requirements
were satisfied and the Forest Service's authority for imposing a new
layer of regulations in the first place was ``clarified.'' As the PIOGA
objected to approval and imposition of a federal regulatory scheme in
the first instance, and the Forest Service appeal decision formally
approved the regulatory scheme, it was no comfort to learn that all the
Forest Service's was going to do was paper-over its illegal conduct by
providing a meaningless public comment period and giving itself the
opportunity to clean-up (i.e., ``clarify'') language found in the Plan
that was inconsistent with its new found regulatory authority. PIOGA
challenged this conduct in the case of Pennsylvania Oil and Gas
Association v. U.S. Forest Service, No. 1:08-cv-162-SJM (W.D. Pa.).
That case has been stayed pending issuance of the Third Circuit
decision noted above.
13. While directing itself to suspend application of its regulatory
scheme on the ANF the Forest Service was still committed to impeding
private oil and gas development. On March 28, 2008, and within six
weeks of the Appeal decision Forest Supervisor Marten, repudiating over
85 years of practice and legal precedent, issued a letter decision
prohibiting oil, gas, and mineral owners from using certain ``mineral
materials'' found on their private mineral estates. Remarkable in its
denouncement it proclaimed that ``It has come to my attention that the
application of the laws, regulations, and policies governing the
disposal of mineral materials off of National Forest System lands have
not been appropriately applied on the Allegheny National Forest.'' It
then proceeded, by reference to a long-existent Forest Service
regulation that applies only to a certain category of federally owned
minerals, to claim ownership of all minerals in that same category that
were, as well, found on privately owned mineral estates. This was done
regardless of what deeds or state property laws prescribed to the
contrary. Effectively, the Forest Service attempted to confiscate as
many as 483,000 acres of certain privately owned minerals with nothing
more than a bureaucratic edict. The purpose of the edict was to prevent
mineral owners from using stone for the surfacing of oil and gas roads
and well pads.
14. In the fall of 2008 When PGE advised Forest Supervisor Marten
that it was going to explore for and take sandstone and shale on lands
for those purposes and where PGE had been conveyed the named minerals
PGE was invited to file a ``claim'' under the federal Quiet Title Act.
In 2008, when one mineral owner indeed did file an action under the
Quiet Title Act regarding stone ownership, the Forest Service promptly
invoked the twelve year (12) statute of limitations that accompanies
the Act and asserted that it had somehow managed to have notified the
owner of its claim to the stone over 12 years before the mineral owner
filed suit. As a consequence, certainly not lost on the Forest Service,
if the District Court concludes that the statute of limitations applies
and has run, the mineral owner could not maintain a claim and would
forfeit his mineral rights. This would be so even if it was perfectly
clear from the deeds and Pennsylvania law that the mineral owner owned
the stone. I am confident that this legal ruse was not one of the
methods of land acquisition to which the state of Pennsylvania
consented when it authorized the United States to acquire private lands
from its citizens. The case I referred to is PAPCO v. U.S. Forest
Service, No. 1:08-cv-253-MBC (W.D. Pa). The District Court decision in
that case is pending.
15. While the ANF was adjusting to the suspension of its regulatory
scheme the processing time for Forest Service responses to drilling
notifications was showing little improvement from what producers had
experienced in 2007. Following the approval of the Forest Plan in March
2007 processing response times had quickly expanded from 60 days or
less to five and six months. In short, even with the suspension, there
was continued resistance and opposition to accommodating oil and gas
development. In the lead-up to the filing of the FSEEE case this found
expression in an internal Forest Service e-mail dated October 8, 2008
where Forest Service Officers were considering, among other things,
notifying ``recreational stakeholders'' of oil and gas developments
that the ANF objected to such that it might result in a suit against
the Forest Service ``based upon a failure to perform NEPA analysis.''
Within six weeks, such a suit just happened to materialize when the
FSEEE filed against the Forest Service on November 20, 2008.
V. Continued and Increasing U.S. Forest Service Slow-Down of Processing
Drilling Proposals and new Obstructions
16. Judge McLaughlin's opinion of December 15, 2009 found that 60
days was the traditional timeframe allowed for the Forest Service to
process well drilling proposals and consult with operators about
desired surface mitigation measures. Since shortly after the entering
of the Court's preliminary injunction in December 2009, the Forest
Service has provided me (in response to FOIA requests) with bi-weekly
or monthly reports showing statistics related to the processing of
private oil and gas development (``OGD'') notifications on the ANF. We
have tabulated the data to calculate the time it is taking for the ANF
to process the OGD notifications that the ANF has received since the
issuance of the court's injunction on December 15, 2009. The statistics
show that on average it is now taking over seven months for the ANF to
process or deal with notifications before it issues a ``Notice to
Proceed,'' and that since July 15, 2010 the processing time has
expanded from four months to the current seven months.
17. Simply put, these continuing and increasing delays by the U.S.
Forest Service are excessive and not consistent with past procedures
and the 60-day timeframe that was previously adhered to by the ANF.
Apparently, the timely processing of drilling proposals to enable job
creating activity is not a priority with this U.S. Forest Service, even
when a federal court order directs that this be done.
VI. The U.S. Forest Service Rulemaking Effort
18. Beyond this, the Forest Service has been seeking ways through a
rulemaking process to evade the Judge McLaughlin's ruling which granted
critically needed relief to us. Specifically, they have initiated a
rulemaking process which would seek to grant themselves regulatory
authority which the Judge has found they lacked. The Forest Service
first started this process back in December 2008 with the initiation of
an Advance Notice of Proposed Rulemaking in the Federal Register. See
73 Fed. Reg. 79,424 (Dec. 29, 2008) (re ``Management of National Forest
System Surface Resources with Privately Held Mineral Estates''). That
notice and comment rulemaking would specifically address the ANF, and
other National Forests. Any such rulemaking would have to comply with
the Administrative Procedure Act, 5 U.S.C. Sec. 551 et seq., and other
procedural and substantive requirements, such as the Regulatory
Flexibility Act, 5 U.S.C. Sec. 601 et seq., which requires federal
agencies to assess the adverse economic impacts of their actions on
small businesses, and the Paperwork Reduction Act, 44 U.S.C. Sec. 3501,
et seq., which aims to minimize paperwork burdens on those who must
respond to federal government requests for information. By seeking to
adopt a new command and control regulatory approval process and impose
burdensome NEPA review requirements, the Forest Service is effectively
seeking to evade the ruling of the federal court.
19. By way of a FOIA request we obtained a copy of the Forest
Service's internal Regulatory Review Workplan that was used as
justification for issuance of the ``Non-Significant'' designation that
accompanied the December 29, 2008 Advance Notice of Proposed
Rulemaking. The entire Workplan consists of a five page form with fill-
in the blank and check the box styled entries or statements. It has no
supporting documentation. After a careful review, on January 5, 2011,
PIOGA requested the USDA Office of Inspector General to investigate the
preparation of this document as it appeared to contain false
statements. I understand that that investigation is now in progress.
20. As recently as the fall of 2010 in the Unified Agenda of
Federal Regulatory Actions, the Forest Service identified this private
mineral estate rulemaking as still proceeding, and incredibly claimed
that it would not cause adverse economic impacts on small business
entities. We have obtained through FOIA requests a copy of a Forest
Service summary of the rulemaking that was underway as of early 2011
when the Forest Service was consulting with hundreds of Native American
tribes about the rulemaking. A copy of that U.S. Forest Service
summary, dated February 9, 2011, along with U.S. Forest Service letters
dated January 27, 2011 and March 21, 2011, are attached to this
testimony and establish that draft proposed rules have been in
existence since at least January 27, 2011. Yet, the Forest Service has
not consulted with the Congress, the Commonwealth of Pennsylvania, and
PIOGA, about the rulemaking.
21. At the April 5, 2011 hearing of the House Sub-committee on
Energy and Natural Resources Congressman Thompson asked a testifying
Forest Service Official, the Director of Minerals and Geology
Management, the status of the regulation that the Forest Service was
drafting about private mineral estates. Remarkably and dishearteningly,
the witness denied that there was a draft of the proposed rules.
22. As the Forest Service summary dated February 9, 2011, reveals,
the draft rulemaking would seek to impose the NEPA process on the
exercise of private mineral estates in National Forest lands, something
which the federal court has declared unlawful. Furthermore, this
rulemaking would apply to mineral estates nationwide, not merely in
Pennsylvania, and would impose widespread multi-year prohibitions on
oil and gas activity while costly NEPA studies were prepared. This
would include National Forests with prospective oil and gas interest in
the States of Pennsylvania, Ohio, West Virginia, Virginia, Kentucky,
Tennessee, Louisiana, Texas, Indiana, Michigan, and North Dakota, among
others.
23. The Governor of Pennsylvania, Tom Corbett, has recently
expressed his strong concerns about this U.S. Forest Service rulemaking
in a letter dated June 14, 2011 to the Chief of the U.S. Forest
Service, and a copy of that letter is attached to my testimony. In
addition, Pennsylvania State Senator Mary Jo White, who is Chair of the
Pennsylvania Senate Environmental Resources and Energy Committee, has
expressed her strong concern about this rulemaking to Secretary of
Agriculture Vilsack and Forest Service Chief Tidwell in a letter dated
March 31, 2011, a copy of which is attached to this testimony as well.
24. Finally, in closing, I would be remiss if I didn't refer the
Sub-committees to language penned 100 years ago that speaks loudly and
clearly to us today. On April 15, 1910 in what would be the last in a
decade-long line of proposed forest reserve bills and Congressional
reports leading up to the passage of the Weeks Act the House Committee
on Agriculture issued a warning and as we know now--a prophecy.
Following brief descriptions of each of the 15 sections of the act the
Committee noted: ``It will be observed from this review of the
provisions of the bill that the interests of the people are carefully
safeguarded at every point beyond any possibility of invasion, except
by collusion of highest officials of the legislative, executive, and
administrative branches of the Government.'' House Report # 1036,
Committee on Agriculture, April 15, 1910, to accompany H.R. 11798, at
page 2.
On behalf of PGE and PIOGA and in furtherance of seeing that the
interests of the people of Pennsylvania are not further invaded, I
thank the members of the subcommittees here today for your interest and
help on these issues which are of vital importance to northwestern
Pennsylvania, and many other regions of our nation.
Attachments:
1. Forest Service Proposed Rulemaking Summary, dated February
9, 2011.
2. Pennsylvania Governor Tom Corbett Letter to U.S. Forest
Service Chief Tidwell, dated June 14, 2011.
3. Pennsylvania Senator Mary Jo White Letter to USDA Secretary
Vilsack and U.S. Forest Service Chief Tidwell, dated March 31,
2011.
______
[NOTE: Attachments have been retained in the Committee's official
files.]
Mr. Lamborn. Thank you.
Ms. Wofford?
STATEMENT OF KATE GIESE WOFFORD,
EXECUTIVE DIRECTOR, SHENANDOAH VALLEY NETWORK
Ms. Wofford. Thank you for the opportunity to comment. It
is truly an honor for me to have the chance to be a witness
this afternoon.
My name is Kate Wofford, and I serve as Director of the
Shenandoah Valley Network. We work with local citizens groups
to preserve rural lands and communities in the Shenandoah
Valley. The Network is a very small nonprofit. I am the only
full-time staff member.
I hope today to provide the Valley's unique perspective on
natural gas drilling, particularly the strong support among
elected officials and area residents for a ban on horizontal
drilling in the George Washington National Forest.
Public lands on the George Washington make up a quarter of
the land in three Valley counties and serve as a source of
local drinking water for a quarter of a million people in and
around the Valley. The forest provides many benefits to the
region and to the country, traditional uses like hunting,
fishing and hiking, as well as wildlife habitat and timber
resources.
Since 2007, long before natural gas drilling emerged as a
possibility, the Valley's elected officials and residents
started asking forest planners to formally identify and protect
the public drinking water source on the forest. Seven counties,
plus numerous towns, cities and civic groups, adopted formal
resolutions urging the Forest Service to carefully manage
drinking water quality and supply.
Later, in 2010 when the Valley was faced with its first
proposal for a Marcellus shale natural gas well, the local
leaders took a conservative and cautious approach. Rockingham
County officials drove five hours each way to visit Wetzel
County, West Virginia, where this type of gas drilling is in
full swing. They took along one of the citizen leaders I work
with, Kim Sandum.
Not one person on the trip came back to Rockingham County
and said this is an industry we would like to develop here. In
fact, local governments in the farm community have concerns
that horizontal drilling may be incompatible with the
investments of our region's traditional rural sectors and could
actually do more harm than good.
The Rockingham County Farm Bureau adopted a resolution this
spring supporting natural gas development, but opposing high
volume hydraulic fracturing. Not surprisingly, when the
opportunity to influence management of the public forestlands
came up again last fall, localities in the Valley asked the
Forest Service to limit or ban hydraulic fracturing.
Rockingham, Augusta and Shenandoah Counties, as well as
city councils in Harrisonburg and Staunton, all wrote letters
or passed resolutions. Numerous local citizens expressed
similar concerns. Thankfully, the forest planners carefully
studied the issue and responded with a proposal that reflects
local concerns, a prohibition on horizontal drilling on Federal
lands, oil and gas leases.
We have a landowner at the hearing here this morning in the
audience, Mr. Everett May, Jr., from Rockingham County. His
family has farmed land next to the George Washington for
several generations. Mr. May signed a lease for gas drilling in
2006 thinking it would be a simple vertical well. Then he found
out about the potential impacts of Marcellus shale gas
drilling, and he told me that he would give that lease back if
he could. But he can't.
So Mr. May and many of his neighbors asked the county
supervisors to see that a conservative approach is taken on
private lands, and they asked the Forest Service to make sure
that this kind of gas drilling didn't happen on the George
Washington.
I believe that the local government and the landowner
messages from the Valley on horizontal drilling were not
intended to be political statements on oil and gas production
on public lands elsewhere. They were directed to the George
Washington, and they ought to be taken at face value. Citizens
in the Shenandoah Valley have observed the impacts of Marcellus
shale gas development in other communities and have decided
that a cautious approach is warranted.
That concludes my statement, and I welcome questions.
Again, thank you for the opportunity to be here.
[The prepared statement of Ms. Wofford follows:]
Statement of Kate Wofford, Executive Director,
Shenandoah Valley Network
Thank you for the opportunity to comment. It is an honor to be here
this morning.
My name is Kate Giese Wofford and I serve as executive director of
the Shenandoah Valley Network of citizens groups in the Valley's six
northern counties. I work with residents and their elected officials to
preserve rural lands and communities, and to strengthen the Valley's
rural economy. The Network is a non-profit group and I am the only
staff member.
I am here today to provide the Valley's unique perspective on
natural gas drilling; particularly the strong support among elected
officials and area residents in Rockingham, Shenandoah and Augusta
Counties and the cities of Harrisonburg and Staunton for a ban on
horizontal drilling in the George Washington National Forest.
I'd like to cover several points:
The northern Shenandoah Valley is conservative,
cautious and, at times, skeptical. I find that residents and
local elected officials take their time and do their homework
before they come to a decision or embrace anything new.
The George Washington National Forest represents 29
percent of all the land in Augusta County and 24 percent in
Rockingham and Shenandoah County and provides public drinking
water to 260,000 residents in and around the Shenandoah Valley.
Therefore the Forest Management Plan will have a major impact
on local land use and water supplies for at least 15 years.
Since 2007, long before natural gas drilling emerged
as a possibility, the Valley's elected officials and residents
started asking forest planners to formally identify and protect
the public drinking water sources on the George Washington
National Forest. In total, 40 local governments and civic
organizations adopted formal resolutions urging the Forest
Service to specifically manage public drinking water quality
and supply. Supervisors in seven Shenandoah Valley counties and
council members in four town and two cities, representing over
340,000 citizens, submitted such resolutions. These requests
were heard, and drinking water resource identification and some
new protections are included in the draft forest plan.
The northern Shenandoah Valley has not sought to
embrace and has no history of intensive energy development on
its rural lands. In fact, local governments have long-supported
rural economic development based on productive working farm and
forest lands and robust tourism and recreation sectors.
Last fall, elected officials in the three northern
Shenandoah Valley counties and on the two city councils
specifically asked the U.S. Forest Service to ban or place a
moratorium on horizontal natural gas drilling to protect both
public drinking water and/or rural lands. This spring,
Rockingham County Farm Bureau adopted a resolution supporting
natural gas development, but opposing high volume hydraulic
fracturing until its impacts on agriculture are well
understood. Many local citizens groups and conservation
organizations have expressed similar concerns.
The draft George Washington National Forest
Management Plan, with the ban on horizontal natural gas
drilling, reflects both the careful analysis conducted by the
forest and the policies and priorities of local governments and
residents in these counties. It is not a precedent for other
parts of our nation.
The Shenandoah Valley has a strong base of traditional rural
businesses like farming, timber, tourism and recreation. Small-scale
natural gas production has been minimal, with conventional vertical
wells that had little impact on local farms or forests.
Therefore, in 2010, when the Valley was faced with its first
proposal for a Marcellus Shale natural gas well, the local officials
took a thoughtful and cautious approach. Rockingham County officials
drove five hours each way to visit Wetzel County, WVA where this type
of gas drilling is in full swing. They took along one of the citizen
leaders I work with, Kim Sandum.
In Wetzel County, they saw farm land bulldozed for wastewater
holding ponds and drilling pads, narrow rural roads chewed up by heavy
truck traffic, extensive pipeline development on farm and forest land,
compressors that run all night and mountain streams sucked dry to
provide millions of gallons of water used for drilling.
Rockingham officials talked to landowners and emergency response
crews. Not one person on the trip came back from to Rockingham County
and said ``This is an industry we'd like to develop in the Shenandoah
Valley.'' Later, when the possibility for shale gas drilling on public
lands came up, local officials remained skeptical.
I've brought with me the letters sent to the U.S. Forest Service
last fall, requesting a moratorium or ban on horizontal drilling by the
three counties and two cities. To quote from a Sept, 16, 2010 letter
from the county:
``Rockingham County is supportive of the development of
alternative energy resources located at a site that is
appropriate for its use, with appropriate levels of regulation
and oversight, and on private lands. The Board does not support
the commercialization of natural resources in the National
Forest or National Park lands, other than the limited timber
sales program, through mining, extraction and other industrial
means.''
As I said earlier, the Valley's local governments and private
sector have been investing for generations in traditional rural land
uses based on its extraordinary natural, historic and cultural
resources: farming, forestry, tourism and recreation. They have no
history of, or strategy for, economic development based on heavy energy
development on rural lands.
In fact, local governments and the farm community have concerns
that horizontal drilling is incompatible with the investments made in
our region's traditional rural sectors and could actually do more harm
than good. The Rockingham County Farm Bureau adopted a resolution in
the spring supporting natural gas development, but opposing high-volume
hydraulic fracturing. Our tourism folks are looking to fill local
restaurants and hotels with visitors enjoying the national forest,
Shenandoah National Park and our world-famous rivers and Civil War
battlefields.
Thankfully, the Forest planners carefully studied the issue and
responded with a proposal that respects local concerns--a prohibition
on horizontal drilling on federal lands oil and gas leases. This
restriction is viewed in the Valley as a middle-of-the-road proposal.
It does not impact the potential for vertical gas drilling on
almost 1 million acres of the Forest, nor does it affect the potential
for natural gas drilling on private lands or privately held mineral
rights on the forest. And the ban would not be permanent. It's part of
a 10-15 year management plan. Forest planners have made it very clear
that if gas drilling on private land demonstrates that our local
natural gas resource is developable and can be done without impact to
water quality, the Forest would reconsider the issue.
We have a landowner at the hearing this morning, Mr. Everett May,
Jr. from Rockingham County, whose family has farmed land next to the
George Washington National Forest in Virginia and West Virginia for
several generations. Mr. May signed a lease for Marcellus shale gas
drilling in 2006, thinking it would be a simple vertical well. Then he
learned about impacts of this industry in other communities. He told me
that he would give that lease back if he could. But he can't. So he,
and many of his neighbors, asked the County Supervisors to see that a
conservative approach is taken on private lands and asked the Forest
Service to make sure that this kind of gas drilling didn't happen on
public lands.
From a personal perspective, I got to know the Shenandoah Valley
well when I went to college at Washington & Lee University in
Lexington. Before returning to the Valley three years ago, my family
and I lived in Idaho for 5 years. I worked with coalitions of
landowners, ranchers, and government officials on public lands
policies. Out west, I saw first hand the frustration among local people
and elected officials over public land managers' lack of responsiveness
to the priorities of local communities.
In this plan from the George Washington National Forest, the Forest
Service listened and, in large part, followed the requests of nearby
localities. There are new provisions to identify and monitor source
areas for public water supply, a high priority for Valley communities
and a topic that was not addressed in the 1993 Plan. And, of course,
the ban on horizontal drilling is also consistent with citizen concerns
about a new industry.
I believe that the local governments and landowner messages from
the Valley on horizontal drilling were not intended to be political
statements on oil and gas production on public lands elsewhere. They
were directed to the George Washington National Forest and ought to be
taken at face value. Citizens in the Shenandoah Valley have observed
the impacts of Marcellus shale gas development in other communities and
have decided that a cautious approach is warranted.
Again, thank you for the opportunity to provide a perspective from
the Shenandoah Valley.
Attachments for the record, submitted by email:
Rockingham County letter to Ms. Hyzer
Augusta County letter to Ms. Hyzer
Shenandoah County resolution
City of Harrisonburg letter to Ms. Hyzer
City of Staunton resolution
Rockingham County Farm Bureau resolution
[NOTE: Attachments have been retained in the Committee's official
files.]
______
Mr. Lamborn. All right. Thank you.
Ms. Mall?
STATEMENT OF AMY MALL, SENIOR POLICY ANALYST, NATURAL RESOURCES
DEFENSE COUNCIL
Ms. Mall. Thank you, Mr. Chairman and Members of the
committee. I am Amy Mall, a Senior Policy Analyst with the
Natural Resources Defense Council or NRDC.
NRDC is not opposed to natural gas as a fuel. Natural gas
is cleaner burning than other fossil fuels and can help in a
transitional role as our nation shifts to a cleaner energy
future. But the nation's use of natural gas must be efficient,
and natural gas must be produced by methods that best protect
clean water, clean air, land, the climate, human health and
sensitive ecosystems.
Cases of contaminated water, unhealthy air pollution and
scarred landscapes are too common in the rush to develop
natural gas. Some say this industry is mature and has
sufficient safety and environmental standards in place, but
today's oil and gas well is not your grandfather's oil and gas
well. Wells are deeper, drilling is more intensive and there
are growing concerns about impacts to wildlife, human health,
communities and public lands.
The George Washington National Forest is an extremely
popular location for hunting, fishing, hiking, camping and
other outdoor pursuits and, as was mentioned earlier, it is
home to the headwaters of the Potomac River, which help supply
drinking water here in Washington, D.C. It appears that the
U.S. Forest Service has correctly taken a precautionary
approach in assessing the potential impacts from natural gas
production on water and other natural resources in the George
Washington National Forest before moving forward to approve any
new drilling.
While there is growing understanding of the environmental
impacts of oil and gas development, much remains unknown. There
has been little scientific investigation into the wide range of
potential environmental impacts from this very complex
industry. Federal agencies therefore have begun conducting
their own inquiries into various aspects of oil and natural gas
operations.
For example, Forest Service research in West Virginia found
that forests suffer permanent changes from drilling operations,
including ineffective erosion controls and toxic waste disposal
methods that kill vegetation. The researchers found that
unexpected impacts could not be carefully controlled, planned
for or mitigated.
The U.S. Geological Survey (USGS) has found that the
knowledge of how horizontal drilling and hydraulic fracturing
might affect water resources has not kept pace with the
expanded use of these technologies. The USGS stated that, and
this is a quote, ``Agencies that manage and protect water
resources could benefit from a better understanding of the
impacts that drilling and stimulating Marcellus shale wells
might have on water supplies.''
Clearly many uncertainties remain, but drilling on Federal
lands continues to proceed apace across the country. The Bureau
of Land Management has been approving permits, and there are
more than 38 million acres of land onshore leased for oil and
gas by the BLM. While some places may be appropriately
protected, this is a small minority of parcels.
We are concerned that current regulations, as well as
enforcement capabilities, are insufficient. Federal
environmental laws, including the Clean Air Act, Safe Drinking
Water Act and Clean Water Act, have gaping loopholes for the
oil and gas industry that need to be closed. For example, the
Clean Water Act definition of pollutant excludes hydraulic
fracturing fluids under certain circumstances, and hydraulic
fracturing is also exempt from the Safe Drinking Water Act.
While the Department of the Interior has announced some new
procedures to improve review of parcels proposed for leasing,
something that we strongly support, the agency has not put the
strong rules we need into place to require new practices that
best minimize environmental impacts.
Drilling on Federal lands must also abide by state rules,
but state rules are also woefully inadequate in most locations.
For example, the West Virginia Secretary of Environmental
Protection recently said that the state's regulations for
Marcellus gas wells is ``inadequate'' and that the agency
hasn't fully considered drilling's aggregate effects on water,
air, roads, public health and safety.
This is not a partisan issue. A Republican candidate for
Governor in West Virginia recently stated that West Virginia
needs new regulations to protect communities, state roads and
the environment, and it is clear from blowouts during frac jobs
in Pennsylvania recently--there have been several in the last I
think two years--that the industry does not always use the
safest practices.
States and Federal agencies are also not staffed to fully
enforce the current laws on the books. Virginia had less than
10 enforcement staff in 2008 for 6,000 wells. West Virginia,
the most recent report was that there are 12 inspectors for
59,000 wells. The GAO reported earlier this year that the
Department of the Interior continues to experience problems in
hiring, training and retaining sufficient staff to provide
oversight and management of oil and gas operations on Federal
lands and waters.
In conclusion, it is clear to us that we need more science
and research, stronger rules and better enforcement to protect
the public health and our natural resources from the risks of
natural gas development. We urge the committees to work with
others in Congress and make sufficient funds available to
Federal agencies to ensure they have the resources they need
for these essential activities. Thank you.
[The prepared statement of Ms. Mall follows:]
Statement of Amy Mall, Senior Policy Analyst,
Natural Resources Defense Council
Chairmen and Members of the Committees, thank you for inviting me
to testify today. I am Amy Mall, a Senior Policy Analyst with the
Natural Resources Defense Council, or NRDC. NRDC is a non-profit
organization of scientists, lawyers, and environmental specialists
founded in 1970 and dedicated to protecting public health and the
environment, supported by more than 1.2 million members and on-line
activists.
I want to state up front that NRDC is not opposed to natural gas.
Natural gas is cleaner burning than other fossil fuels and can help in
a transitional role as our nation shills to a cleaner energy future.
But the nation's use of natural gas must be efficient, and natural gas
must be produced by methods that best protect clean water, clean air,
land, the climate, human health and sensitive ecosystems. More needs to
be done in order to approve oil and gas exploration and production.
Cases of contaminated water sources, unhealthy air pollution and
scarred landscapes are too common in the rush to develop natural gas
resources.
Oil and natural gas exploration and production have been going on
in the United States for almost 200 years. Some say that this history
means the industry is mature and has sufficient safety and
environmental standards in place. But today's oil and gas industry is
not your grandfather's oil and gas industry. Wells are deeper, drilling
is more intensive, hydraulic fracturing introduces more pressure into
wells, a lot more resources are used such as water and chemicals,
enormous amounts of toxic waste are generated and must be managed,
extensive heavy industrial machinery and equipment generates noise and
toxic air pollutants, and there are growing concerns about impacts to
wildlife, human health, communities and public lands.
As a resident of Washington, D.C., I have visited the George
Washington National Forest many times. So have millions of other
people, including many from urban areas seeking fresh air and nature;
the national forest hosts more than one million people per year, with
more than 9 million people living within 75 miles. It is an extremely
popular location for hunting, fishing, hiking, camping, and other
outdoor pursuits.
The George Washington National Forest is also home to the
headwaters of the Potomac and James Rivers, which help supply drinking
water for many communities, including Washington, D.C. and Richmond.
Virginia. The U.S. Forest Service has correctly taken a precautionary
approach in assessing potential impacts from hydraulic fracturing on
water and other natural resources in the George Washington National
Forest before moving forward to approve new drilling. The Forest
Service has also engaged in a very robust public process for the
revision of its management plan, with the first public meeting held in
2007 and six scheduled for this summer. All parties have had an
opportunity for input into this plan.
While there is growing understanding of the environmental impacts
of oil and gas development, much remains unknown. There has been very
little scientific investigation into the wide range of potential
environmental impacts from this very complex industry. That is one
reason why at least five federal agencies--the U.S. Environmental
Protection Agency, the Department of the Interior, the Department of
Energy, the U.S. Geological Survey (USGS), and the Forest Service have
begun conducting some of their own inquiries into various aspects of
oil and natural gas operations. In addition, the scientific resources
of the Health and Human Services Department and others should also be
brought to bear on these questions.
For example, Forest Service research in West Virginia has found
that forests suffer permanent changes from drilling operations,
including more than 200 trees cut down or harmed for only one wellpad,
ineffective erosion controls, and toxic waste disposal methods that
killed vegetation. The researchers found that unexpected impacts could
not be carefully controlled, planned for, or mitigated.\1\
---------------------------------------------------------------------------
\1\ Adams. Mary Beth et al.-Effects of development of a natural gas
well and associated pipeline on the natural and scientific resources of
the Fernow Experimental Forest,'' Gen. Tech. Rep. NRS-76. Newtown
Square. PA: U.S. Depannient of Agriculture. Forest Service. Northern
Research Station. 2011; and Adams, Mary Beth et a1, ``Effects of
natural gas development on forest ecosystems'' Gen. Tech. Rep. NRS-P-
78. Newtown Square. PA: U.S. Department of Agriculture. Forest Service.
Northern Research Station. 2010
---------------------------------------------------------------------------
Duke University researchers recently documented what they describe
as ``systematic evidence for methane contamination of drinking water
associated with shalegas extraction'' and called for more data and
research.\2\
---------------------------------------------------------------------------
\2\ Osborn. Stephen G. et al. ``Methane contamination of drinking
water accompanying gas-well drilling and hydraulic fracturing.''
Proceedings of the National Academy of Sciences. May 17. 2011, vol.
108, no. 20. 8172-8176.
---------------------------------------------------------------------------
The USGS found that the knowledge of how horizontal drilling and
hydraulic fracturing might affect water resources has not kept pace''
with the expanded use of these technologies. The USGS has stated that
``Agencies that manage and protect water resources could benefit from a
better understanding of the impacts that drilling and stimulating
Marcellus Shale wells might have on water supplies, and a clearer idea
of the options for wastewater disposal.'' \3\
---------------------------------------------------------------------------
\3\ Soeder- Daniel J. and William M. Kappel. ``Water
Resources and Natural Gas Production from the Marcellus Shale,'' U.S.
Geological Survey. Fact Sheet 2009-3032. May 2009.
---------------------------------------------------------------------------
Clearly, many uncertainties remain. Despite these uncertainties,
federal agencies have for years proposed oil and gas projects that do
not fully comply with our environmental laws, and continue to do so.
Many courts have overturned agency oil and gas approvals because of a
lack of compliance; these decisions have led to improved projects on
the ground, with better protection for valued resources. Drilling on
federal lands continued to proceed apace. The Bureau of Land Management
(BLM) has been approving permits and there are more than 38 million
acres of land onshore leased for oil and gas by the BLM.\4\ It has been
determined that price, not policy, is the biggest determining factor
for drilling.
---------------------------------------------------------------------------
\4\ Oil and Gas Lease Utilization--Onshore and Offshore: Report to
the President. U.S. Department of the Interior. March. 2011.
---------------------------------------------------------------------------
Not only is there limited scientific knowledge about the impacts of
oil and natural gas production, but current regulations, as well as
enforcement capabilities, are insufficient. Federal environmental laws,
including the Clean Air Act, Safe Drinking Water Act, and Clean Water
Act, have gaping loopholes for the oil and gas industry that need to be
closed. For example, the Clean Water Act definition of ``pollutant''
excludes hydraulic fracturing fluids under certain circumstances.\5\
Hydraulic fracturing is also exempt from the Safe Drinking Water
Act,\6\ emissions of toxic air pollutants by certain oil and gas
operations are exempt from National Emission Standards for Hazardous
Air Pollutants,\7\ and toxic oil and gas waste is exempt from federal
hazardous waste provisions.\8\
---------------------------------------------------------------------------
\5\ 33USC1362(6)(B)
\6\ Energy Policy Act of 2005. Section 322
\7\ 42USC7412(n)(4)
\8\ 42USC6921(b)(2)
---------------------------------------------------------------------------
While the Department of the Interior has announced new procedures
to improve review of parcels proposed for leasing, something that NRDC
strongly supports, the agency has not put strong rules in place to
require new practices to best minimize environmental impacts. State
rules are also woefully inadequate. For example, the Secretary of West
Virginia's Department of Environmental Protection (DEP) was recently
quoted in a news article as stating that ``....the DEP regulatory
process for Marcellus gas wells is inadequate.'' He also stated that
West Virginia's regulatory structure ``isn't prepared'' and that the
DEP hasn't fully considered drilling's aggregate effects on water, air,
roads, public health and safety.\9\
---------------------------------------------------------------------------
\9\ . David. ``DEP: System 'isn't prepared'.'' The Dominion Post,
June 3, 2011.
---------------------------------------------------------------------------
This fact is not a partisan issue. A Republican candidate for
Governor in West Virginia was recently quoted as stating that West
Virginia needs new regulations to protect communities, state roads and
the environment.\10\ Virginia has not seen any significant updating of
its rules in more than a decade. Inadequate state rules are a concern
in other states across the country.
---------------------------------------------------------------------------
\10\ Rivard. Ry, ``Republican Bill Maloney urges Marcellus shale
regulations.'' Charleston Daily Hail. July 4. 2011.
---------------------------------------------------------------------------
States and federal agencies are also not staffed to fully enforce
current laws on the books. It has been reported that Virginia had less
than 10 enforcement staff in 2008 to oversee approximately 6,000
wells,\11\ and that West Virginia has only 12 inspectors for 59,000
wells.\12\ And in February of this year, the GAO reported the
Department of the Interior (DOI) ``continues to experience problems in
hiring, training, and retaining sufficient staff to provide oversight
and management of oil and gas operations on federal lands and waters.''
\13\
---------------------------------------------------------------------------
\11\ ProPublica,''How Big is the Gas Drilling Regulatory Staff in
Your State?'' Available at:
http://projects.propublica.org/gas-drilling-regulatory-staffing/
\12\ Junkins. Casey. ``Drilling Fees Would Increase.' The
Intelligencer/Wheeling.News Register. February 1, 2011.
\13\ U.S. Government Accountabilty Office, ``High-Risk Series: An
Update.'' February. 2011. GAO-11-278.
---------------------------------------------------------------------------
In conclusion, we need more science and research, stronger rules,
and better enforcement to protect the public's health and our natural
resources from the risks of oil and natural gas development. We urge
the Committees to work with others in Congress and make sufficient
funds available federal agencies to ensure they have the resources
needed for these essential activities.
______
Mr. Lamborn. OK. Thank you.
Now we will have questions from the Members of the
committee. Members are limited to five minutes for their
questions. I now recognize myself for five minutes.
Ms. Wofford, you talked about wanting a ban on horizontal
drilling, and I am sure you understand that when you drill down
and then go laterally with horizontal drilling you can go great
distances. In fact, I think recently a record was set of nine
miles from the vertical well itself. But you can go at least
thousands of feet, sometimes miles.
So you can have a single pad with multiple wells on it, as
opposed to 10 or 20 or more vertical wells scattered throughout
the surrounding countryside. Wouldn't you prefer one pad, as
opposed to 10 or 20?
Ms. Wofford. Thanks for the question. I would say from the
perspective of communities in the Shenandoah Valley the concern
isn't necessarily just the single footprint of a well pad. The
concern really is the whole process that is associated with
shale gas drilling, starting from the exploration all the way
through to the wastewater treatment.
I mentioned the field trip that officials took to Wetzel
County, Pennsylvania. Some of the impacts that they saw there
go well beyond the footprint of a well pad. It is the impact on
the landscape from well pads and compressor stations, but also
the pipeline infrastructure, the heavy truck traffic carting
chemicals and sand and cement in and out of sites.
Mr. Lamborn. OK. But your objection is to the horizontal
process?
Ms. Wofford. I think the concern in the Shenandoah Valley,
sir, is really toward the entire process of shale gas drilling.
Mr. Lamborn. OK. All right. Thank you for your honesty.
Ms. Matsen, I would like to ask you a question or two. You
say that Virginia is interested in becoming the energy capital
of the East Coast, and job creation here in Congress is a huge
concern of ours, especially given the abysmal and discouraging
job report that we heard this morning.
If the proposed horizontal ban on Forest Service lands was
finalized, what would that do to future energy jobs in the
Commonwealth of Virginia?
Ms. Matsen. Thank you, Mr. Chairman, for that question. We
don't have precise numbers, of course. It is speculative to
know what would happen.
But I think we can look at the more than 3,000 jobs that
the industry is supporting in Southwest Virginia today and
understand that the area being produced in Southwest Virginia
is about the same size as the area in which production would be
banned in the forest and perhaps extrapolate from those facts
that we are looking at the missed opportunity, shall we say,
for thousands of additional jobs in Virginia.
Mr. Lamborn. OK. Thank you. And could you respond to a
statement made by one of the other witnesses that the states
playing a role in regulation have a poor record in most cases
according to one of the witnesses?
I am not sure I agree with that. Could you respond to that
in the case of the Virginia perspective?
Ms. Matsen. Absolutely, sir. I certainly can't agree with
that. We have, as I said in my remarks, no experience with
water quality degradation in Virginia through decades of
hydrofracturing and even the, perhaps, single decade of the
high volume hydrofracturing in Southwest Virginia. Not a single
experience.
Now, not to jinx our luck, and I can certainly turn to my
expert to my right, but we are diligent. There has been a lot
of discussion today about being cautious and being conservative
and being diligent. Virginia and its regulators are all of
those things, and we have a comprehensive regulatory scheme
that goes from site examination to casing plans all the way to
reclamation to make sure that the interests and resources of
Virginia and Virginians are well protected.
Mr. Lamborn. OK. Thank you.
Mr. Miller, I will conclude with you. Interestingly, and I
have a quote here from the Director of Natural Resources
Defense Council, Mr. Ralph Cavanaugh, ``If the industry could
meet high standards of environmental performance for extracting
and delivering the fuel, we are looking here at very good news
for America's economy and industrial competitiveness, the
environment and our nation's energy security.''
Can the industry meet those high standards that will lead
to the good news that Mr. Cavanaugh says in his quote?
Mr. Miller. Thank you very much for the question. We
certainly believe we can. We have a long history of developing
these industry standards and best practices. They are widely
used throughout the country. They are widely cited not only in
the state regulations, but also in the Federal regulations many
times over.
And we have a large community of experts that develop these
documents, as I mentioned in my testimony. So we feel that this
strong foundation of technical work provides the blueprint that
we are all looking for.
Mr. Lamborn. OK. Thank you very much. My time is up. I will
yield to the Ranking Member for five minutes.
Mr. Holt. Thanks, Mr. Chairman.
Ms. Matsen, what is the largest industry in the
Commonwealth of Virginia?
Ms. Matsen. Agriculture, sir.
Mr. Holt. Yes. As I understand it, about 350,000 jobs in
the Commonwealth?
Ms. Matsen. Yes, sir.
Mr. Holt. Do you know the top five agricultural counties in
the state?
Ms. Matsen. They are right there in the Valley. Yes, sir.
Of course.
Mr. Holt. Yes. Three of the top five have actually
commented on this subject. Let me mention a few things that I
have here.
The County of Shenandoah, if I may quote here, in the
revised management plan the Board of Supervisors asks that the
Forest Service act to aggressively protect drinking water
resources by prohibiting hydraulic fracturing natural gas
wells. Do you disagree with the elected officials of Shenandoah
County?
Ms. Matsen. I certainly do not disagree with their caution.
Mr. Holt. OK.
Ms. Matsen. It is understandable that they would want to
proceed carefully. However, I am not aware----
Mr. Holt. Rockingham County.
Ms. Matsen.--of any threat to their drinking water from
this practice.
Mr. Holt. OK. Rockingham County has also commented
similarly, does not support these activities. Do you disagree
with Rockingham County, the leaders?
Ms. Matsen. Well, we do, sir.
Mr. Holt. You do?
Ms. Matsen. As I say, we agree with their desire to proceed
with caution. This is an unfamiliar practice to the folks in
the county. It has been going on in Southwest Virginia for a
long time, though not in the northern part of the state.
Mr. Holt. OK.
Ms. Matsen. We look forward to engaging with our public
officials in----
Mr. Holt. Thanks. Now, Augusta County Board of Supervisors
``does not support hydrofracking'' as has been proposed. Do you
disagree with the elected officials of the County of Augusta?
Ms. Matsen. We do support hydrofracking in the forest.
Mr. Holt. You do. And the City of Harrisonburg, Virginia?
You disagree with the Council there when they say the Forest
Service should act aggressively to protect drinking water by--
--
Ms. Matsen. Again, we are not aware that this will pose any
risk.
Mr. Holt. And you support or do not support the declaration
of the Town of Staunton I believe this is--yes, the Staunton
City Council--asking the Forest Service to act aggressively to
protect the drinking water by prohibiting the horizontal
hydraulic fracturing?
Ms. Matsen. If acting aggressively means a ban, sir, we
would not support.
Mr. Holt. I see. All right. Thank you. Now, these are not
what you would call politically liberal bastions. We are not
talking about Berkeley, California, or Cambridge,
Massachusetts, are we here?
Ms. Matsen. No, sir.
Mr. Holt. No? OK. All right. Thank you.
Ms. Mall, you mentioned that the USGS found that knowledge
of how horizontal drilling and hydraulic fracturing might
affect water supplies has not kept pace with the expanded use.
You go on further to say that the problems in hiring,
training, retaining sufficient staff to provide oversight and
management exist and that we need more understanding and better
enforcement in the area. So it sounds like you see some lack of
knowledge on how to proceed.
Given that, do you think the Forest Service should move
ahead with the horizontal drilling/hydraulic fracturing in the
absence of this understanding and in the absence of this kind
of enforcement?
Ms. Mall. Yes. Absolutely. We think a lot more science and
research is needed. That is why we support the EPA's
investigation into the potential risks of hydraulic fracturing
on drinking water. Also, the Department of Energy is looking
into this and, as we heard earlier, the----
Mr. Holt. But the question is do you think they should
allow these technologies to proceed in the absence of this
knowledge?
Ms. Mall. We think there are places that absolutely should
be off limits because the risk is too great and the unknowns
are great, and that would include drinking watersheds for
significant populations like the headwaters of the Potomac
River.
It sounds like the Forest Service--I have not read the
complete draft environmental impact statement. As was stated
earlier, these are place-based and they are specific to
location, but the discussion of the fractures and the faults
underground, the drinking water sources that are there and the
other important values in the forest, it sounds like they are
on the right track.
Mr. Holt. Thanks very much. My time has expired. Thank you,
Mr. Chairman.
Mr. Lamborn. OK. You are welcome. We will now take one of
the Members of the committee out of order because he has a
funeral to get to. Mr. Goodlatte of Virginia is next.
Mr. Goodlatte. Thank you, Mr. Chairman. I appreciate your
forbearance. One of my constituents from the Shenandoah Valley
who gave his life in Afghanistan is being buried at Arlington
National Cemetery later this afternoon and I do want to be
there, so I appreciate the opportunity to ask questions of the
witnesses before I depart.
Let me start with Ms. Matsen. I have heard from these
counties as well, expressing their concern about what takes
place in the National Forest. It is my understanding that not
to the same degree that we have in the Allegheny National
Forest in Pennsylvania where 97 percent of the mineral rights
are owned by private individuals and only 3 percent by the
Forest, so the forest land is owned by the government, but the
subsurface rights are primarily not owned there.
But in the George Washington National Forest it is my
understanding from the National Forest that 16 percent of the
land or about 180,000 acres are owned by private entities in
terms of the subsurface mineral rights. So if one were to
proceed in those portions of the National Forest, that land
would be subject to your regulation, would it not, and not to
the Forest Service's regulation?
Ms. Matsen. I will look to my expert to confirm, sir, but
as far as my understanding is that that would be true. Yes,
sir.
Mr. Goodlatte. OK. So you would impose the state's
requirements. And I share your concern and I share the concern
of the local governments that good standards be imposed before
any kind of drilling takes place. We haven't seen this in the
Shenandoah Valley. We have in other parts of Virginia.
And I suspect that is in part because there is a lot of
uncertainty about whether there is an economically viable
deposit in the area, but if there were determined to be one for
that 180,000 acres this process that we are talking about here
where they are banning it would not apply to those acres.
So the question I have for you is do you think that it
would make good sense for the Forest Service to work on good
technology and procedures that would be applied on their
portion of the land and to work with the state and to the
extent the Federal Government has input here on making sure
that good practices are imposed because they can't stop it on
those 180,000 acres anyway?
Ms. Matsen. Yes, sir. I absolutely agree that there is a
path short of a ban that allows us to develop those resources
carefully and cautiously that would protect the interests in
the forest.
Mr. Goodlatte. And I share the concern of those local
governments with regard to the quality of their drinking water
and making sure that any chemicals used in the hydrofracking
process wouldn't be allowed to get into the drinking water
systems of those governments.
But they have jurisdiction over the remaining private land
in their area with regard to certain zoning regulations and so
on that they can impose. Have you heard from any of those
jurisdictions that they have banned horizontal drilling or
attempted to ban it in their jurisdiction on those private
lands?
Ms. Matsen. No, sir, I have not. They have declined to act
on some interest that has been expressed, but in terms of
adopting a ban going forward, no, sir. I have not.
Mr. Goodlatte. So they have taken a case-by-case approach?
They want to be cautious. I know that, for example, there was
one application in a floodplain, and obviously that would
generate some concern with regard to how those chemicals might
get into drinking water if you had a flood or some other event
like that.
But they have not taken the position that there would be no
county-wide ban on horizontal drilling on private lands. Their
focus has been imposing this ban strictly on Federal lands. As
we have just pointed out, it wouldn't be an entire ban anyway
because there would be land where the subsurface mineral rights
are still retained by private landowners.
So again, my question to you is given the desire on the
part of some, including myself, to make sure that we are using
the newest and best technology and that we are making sure that
there is not degradation of the land or the water resources of
the counties that I represent, would it not make more sense to
have a progressive approach to looking to using those newest
technologies, as opposed to a 15 year ban which would not be
100 percent effective to begin with, but also would not allow
for the same kind of considerations that they are making on
private lands in the rest of the county on these public lands
in the National Forest?
Ms. Matsen. Yes, sir. Absolutely.
Mr. Goodlatte. Thank you. Those are the only questions I
have, Mr. Chairman.
Mr. Lamborn. Thank you. We will now revert to the regular
order of Members of the committee. Mr. Thompson of
Pennsylvania?
Mr. Thompson. Thank you, Chairman. One of the witnesses
noted that this isn't your grandfather's oil and gas industry.
I couldn't agree more.
In my congressional district I have Drake Well, 1859, and I
have been there. In fact, my district office is I won't say it
is within a walk, but it is within a hike of that. Frankly, I
have been on a lot of Marcellus well sites as well. How many of
the panels have been to a Marcellus well site?
[A show of hands.]
Mr. Thompson. Great. I encourage those of you who haven't
to do that. If you don't get that far just walk to 124 Cannon.
We will show you a picture of the Drake Well and a 2010
Pennsylvania General Energy Well as well there. It is
different. The science, the technology, the standards, the
oversight by the states. It is absolutely different.
I want to just share in terms of the EPA, Administrator
Lisa Jackson stated that there is no evidence that suggests the
process of hydrofracking contaminates water. Just some
assurance. My friend from Maryland is not here. He didn't
allude. He specifically said that I guess those of us in
Pennsylvania are contaminating the Chesapeake Bay.
I want to be very clear about that. The blowout that he was
talking about is specifically the environmental testing after
the incident found that there was ``limited and very localized
environmental impact with no adverse effects on aquatic life in
Towanda Creek.'' So I assure you if there is no adverse impact
on Towanda Creek, there is nothing in the Susquehanna River and
nothing hundreds of miles away in the Chesapeake Bay as a
result of that.
The previous panel mentioned a lot about the importance of
public input from the Forest Service, and I can't agree with
that more. Mr. Mayer, public input within the communities of
the National Forest obviously is important. What has been your
experience living and working within the Allegheny National
Forest, the ability to provide input and how they receive or
use that input?
Mr. Mayer. With respect to oil and gas development, Mr.
Chairman?
Mr. Thompson. Yes.
Mr. Mayer. Well, at this point in time, because of the
litigation and the injunction, the officers on the Allegheny
National Forest are really not inclined to engage in dialogues.
They simply participate in the course of the individual
notifications that come from the companies in order to work
through the consultation process, which has been the practice
for the last 85 years and has been so done successfully.
So on a broad scheme in terms of talking like on a program
basis, for example, with the Oil and Gas Association there
really isn't engagement, but on the individual level with
regard to a particular project there is, and it is typically
very constructive because you are working usually with
professional gas and oil administrators from the Forest Service
at that level.
Mr. Thompson. It is my understanding that the production of
shale gas is subject to eight Federal laws and 11 state laws.
Mr. Mayer, is that true from your perspective?
Mr. Mayer. I couldn't begin to count the numbers of laws,
the numbers of agencies and people with oversight frankly, Mr.
Chairman, but I would feel confident that eight is certainly a
confident number to rely on.
Mr. Thompson. Thanks. Mr. Fuller, what, in your opinion,
would be the net effect on our domestic energy supply if a ban
on horizontal drilling were carried out across the National
Forest System?
Mr. Fuller. Well, it is difficult to know without knowing
exactly the extent of resources in the National Forest System,
but in those places where shale gas or shale oil underlies
National Forest lands essentially the economics of developing
those types of resources hinges on the use of horizontal
drilling and hydraulic fracturing.
That technology has evolved particularly over the past five
to seven years to allow us to now have the prolific development
we have in the Marcellus shale and other shales around the
country, so to suggest that limiting access to vertical wells
would allow for the same type of development I think is
inconsistent with the reality that it takes the combination of
the two to really develop these new and very extensive shale
formations.
Mr. Thompson. Thank you, Mr. Chairman.
Mr. Lamborn. OK. Mr. Fleming of Louisiana?
Mr. Fleming. Thank you, Mr. Chairman.
Ms. Wofford, you are here today. I get a sense that you are
speaking for the people of Shenandoah Valley. Do you speak for
them here today?
Ms. Wofford. No, sir. I think I am here to provide a
perspective that I have observed from the Valley.
Mr. Fleming. OK. So really you are speaking for yourself?
Ms. Wofford. Yes, and I feel confident speaking for the
Shenandoah Valley Network and our member organizations that
work in the local----
Mr. Fleming. OK. But you haven't brought any surveys or
data? There have been no votes on the issue?
Ms. Wofford. I have brought with me five resolutions from
local government----
Mr. Fleming. No, no. I am talking----
Ms. Wofford.--and a resolution from the Farm Bureau.
Mr. Fleming. I am not talking about governments or
government officials. I am talking about the people. I assume
hundreds, thousands, maybe hundreds of thousands of people.
There has been no survey.
Ms. Wofford. Sir, I am comfortable--I am sorry. Go ahead.
Mr. Fleming. Has there been any survey? I mean, I would
love to have that data if you have it here today.
Ms. Wofford. I am confident that the elected officials in
the communities----
Mr. Fleming. No. I don't want to hear what you are
confident about. I want to know the data. Do you have any data?
Yes or no?
Ms. Wofford. No, sir.
Mr. Fleming. OK.
Ms. Wofford. No survey has been done.
Mr. Fleming. You have no data.
OK. Ms. Mall? I can't see your name completely from here so
I apologize. Now, you indicate that there is inadequate data on
safety. Now again, we have established that this is a
technology that has been going on 60 years. It does come under
the EPA. EPA in 2004 said it is perfectly safe.
Again, I have asked the question before. I have asked it
many times in this committee room. Not one, single person has
been injured or killed from hydrofracking or horizontal
drilling that I am aware of and nobody else, so it would seem
to me that the burden is on you to tell us what is the
technology where--I am sorry. Where is the science that it is
damaging the environment or is damaging or hurting people? Do
you have that data here today?
Ms. Mall. Congressman, I do want to mention one case in
Ohio where the state----
Mr. Fleming. Excuse me. I want to get plenty of questions
in. I don't want anecdotal information.
Ms. Mall. No. This is a state investigation that found
groundwater was contaminated due to three contributing factors,
one of which was a frac job which, what they called, went out
of zone.
There are other cases around the country where the state
regulators have clearly found that oil and gas operations
contaminated groundwater. We feel that they never asked the
right questions to answer whether or not fracking was a
contributing factor in those other cases.
Mr. Fleming. OK. Have you brought the science on that, the
study, the engineers evaluating? I mean, obviously for instance
there is this video that is going around, or I guess it is a
quasi-documentary about natural gas seeping into water
supplies. We find out when you actually apply science to it
that that is something that happens naturally in nature.
Ms. Mall. It does happen naturally in some cases, but state
agencies have found that some methane in groundwater was caused
by oil and gas operations----
Mr. Fleming. OK. I would love to have----
Ms. Mall.--in Colorado and in Pennsylvania.
Mr. Fleming. Let me throw this to the rest of the panel.
Can anyone here answer that? My understanding is there is not a
single proven case. I would love to hear your response.
Mr. Fuller. It depends on whether you are talking about
fracturing or you are talking about methane. Fracturing there
have been no cases indicating that the fracturing process has
caused a problem with contamination to drinking water or
groundwater.
Mr. Fleming. Yes.
Mr. Fuller. Methane contamination is something that can
occur as a result of the structure of a well. It is an
important factor that as you are casing and cementing the well
in place and as you are drilling through formations that you
have to isolate those zones.
That is not a static process. Wells have to be maintained.
Wells have to be carefully constructed. If there is a flaw in
the steel, if there is a flaw in the cementing, that allows a
pathway to occur that can bring methane into groundwater. It is
equally certain that methane can be there naturally and can
come from other types of formations.
So the issue at hand is always trying to determine what is
the source of the methane. If the source of the methane is from
an oil and gas operator's well, he is responsible for fixing
it, for stopping that from occurring. It does occur. It has
been investigated by state regulators. They do occasionally
find the problem, but in most of the cases that have been
publicized extensively those have generally been from non oil
and gas well sources.
Put it in this context. We have around a million oil and
gas wells operating in the country right now. We are drilling
about 20,000 to 35,000 a year. We have a few of these anecdotal
cases that show up, and they all are investigated by the state
regulators and they make a determination as to what remedy has
to be made to fix them.
Mr. Fleming. All right. And are you aware, sir, of anyone
who has been harmed or even fatally harmed as a result of
leakage of methane?
Mr. Fuller. I am not aware of anyone that has been harmed
by the leakage of methane associated with oil and gas
operations. Now, obviously methane is also natural gas, and
natural gas has been----
Mr. Fleming. Right. I mean, obviously this does happen
naturally. You know, we talk about oil spills in oceans, but
the truth of that matter is that most of the oil that is in the
ocean seeps through the ocean floor naturally so we have to
keep all of that in context.
And the last thing. Ms. Matsen, you indicate that wells are
regulated on a state level. In my state, at least in North
Louisiana we have 12 full-time regulators from DEQ who are
monitoring what is going on in all these wells. So is it
correct to say that this is an unregulated industry?
Ms. Matsen. No, sir, it is not.
Mr. Fleming. OK.
Ms. Matsen. And in fact, I would say that Louisiana does a
wonderful job of regulating their industry. I have had the
opportunity to meet with and talk with your Secretary of
Natural Resources, and we think very similarly about the
balance and the important balance between protecting our
environment, our economy and our energy resources.
Mr. Fleming. And you are subject to Federal laws in your
state----
Ms. Matsen. Yes, sir.
Mr. Fleming.--as all our states?
Ms. Matsen. Just like you are.
Mr. Fleming. Yes. Thank you. Thank you. I am done.
Mr. Lamborn. OK. I recognize the gentleman from California
for up to five minutes.
Mr. Costa. Thank you very much, Mr. Chairman. I know we are
on the second panel and a lot of the questions have been asked.
I think it is appropriate that the two committees do spend
some time, especially in light of the fact that I think we are
going to utilize more and more natural gas as a cleaner source
of energy and clearly with the abundance of the Marcellus shale
and the reserves that now seem to be proven to be over 100
years will provide a lot of benefit to this country, and it is
incumbent upon us to ensure that we do it as safely as we can.
As some of you know, I represent a significant portion of
Kern County, and if it were ranked as a state in the Nation--
people don't often think about this from California--it would
be the fourth largest producing oil production in the nation.
As a matter of fact, I know a lot of my colleagues have
various views on offshore drilling, but we have 25 platforms
offshore, and we have a lot of spent drilling in California.
And California, with 38 million people, produces 47 percent of
its own oil needs. That gets overlooked. If we didn't do that,
we would be obviously in a much more difficult situation. We
also have 20 percent of our energy as renewable, and we are
trying to by the year 2020 strive to 30 percent as renewable
energy, so we are trying to balance our portfolio.
It is my understanding that the Bureau of Land Management
earlier today and the Forest Service testified that they have
no intention of banning horizontal drilling or hydraulic
fracturing on Federal lands. Is that clear, Mr. Chairman? I
guess I will ask that question through you since that was on
the previous panel.
Mr. Chairman? I am asking a question through the Chair
since I missed the first panel. I understand that BLM testified
and the Forest Service that they have no intention on banning
horizontal drilling or hydraulic fracturing on Federal lands.
Was that testified today?
Mr. Lamborn. Well, Mr. Abbey indicated that, but
nevertheless we have this preferred alternative sitting there
right now in the George Washington Forest where that exact----
Mr. Costa. No. This Administration, like every previous
Administration, I think sometimes finds itself in contradictory
sort of positions. I have been made aware of the Washington
situation and the proposals there.
But I think as a policy we are going to have to continue
slant drilling and fracturization if we are going to take
advantage of these energy sources and use all the energy tools
in our energy toolbox as the bipartisan legislation that
Congressman Murphy and I and others have introduced.
I think that while you from time to time have problems with
wells, that is why we have regulations. That is why we need to
always be scrutinizing this process to ensure that we can
convince the public that we do this as safely as we possibly
can. That is a responsibility that I think government has at
the Federal and state level, as well as the energy companies
have to ensure that they are using state-of-the-art, best
management practices.
Mr. Fuller, would you say that is the case today?
Mr. Fuller. I think the industry--a combination of things.
One, the industry's regulatory structure that it operates in
imposes a substantial set of requirements to assure that the
protection of environment and public health are undertaken in
the course of developing processes.
Mr. Costa. As it should be.
Mr. Fuller. As it should be. Absolutely.
Mr. Costa. Right. And it has been longstanding. And we are
doing this in the shadow of the massive spill in the Gulf----
Mr. Fuller. Right.
Mr. Costa.--in which there is a lot of skepticism.
Mr. Fuller. There is skepticism. There is always going to
be some skepticism. There are always going to be questions
about any regulatory system, but it is a system that has arisen
over multiple decades, long before there was hydraulic
fracturing, long before there was----
Mr. Costa. Right.
Mr. Fuller.--horizontal drilling, that has put in place a
series of particular protections that are imposed on each
driller. In addition to that----
Mr. Costa. My time is running out though, so----
Mr. Fuller. In addition to that you have efforts like the
ones that have been undertaken by the American Petroleum
Institute for nine decades I think said that create technical
guidance documents and industry standards that the industry
also tries to adhere to.
Mr. Costa. And we need to continue to update those to
ensure that they are the best that they can possibly be in the
world.
Mr. Fuller. Absolutely. In fact, the API has just done five
of them, updated five of them.
Mr. Costa. One quick question. I don't know if the Chair
will allow me the time because mine has expired.
I don't know if it was stated in earlier testimony, but the
potential we have talked about with the discovery of the
significance of the Marcellus shale and other finds, the
potential impacts for natural gas. It is the energy de jour, as
I like to say in California these days, because we have a lot
of air quality problems in closed air basins.
But I am still at a bit of a loss as to why we won't have
greater utilization, notwithstanding the resource of natural
gas throughout the country. Could you try to explain why?
Mr. Fuller. Well, historically natural gas really grew
after World War II.
Mr. Costa. I understand that.
Mr. Fuller. And as that growth expanded you did see a huge
extension of natural gas into residential or commercial
operations. At that time there were wellhead controls on gas,
and it eventually suppressed its development. Now, those came
off during the 1980s principally, and we saw an increase in
natural gas.
At that point in time we were dealing principally with
conventional formations, to some degree unconventional
formations like tight sands and coal bed methane, and as we hit
about 2000 we started seeing a real challenge in being able to
grow the natural gas market, given the kinds of natural
depletion rates we were having in the conventional formations.
Along about 2005, we really saw the emergence, the
beginning emergence of the development of shale gas. So for now
the next five, six years we have seen the identification of
shale gas formations across the country, a wide number of
formations. We are seeing the development of those formations.
I think two things. One, as analysts are looking at those
formations they are now projecting that we have about 100 years
of potential natural gas supply in this country.
Mr. Costa. That is based upon the current use?
Mr. Fuller. Based on current use, which would also allow
increased----
Mr. Costa. So if we doubled the use then we would have a 50
year?
Mr. Fuller. We would have a 50 year supply. The second
aspect of that is I think the using industries--manufacturing,
chemicals--are now realizing that this is a real source of
supply.
After watching supply being somewhat constrained in early
2000, the price going up, you saw the chemical industry in
particular and other manufacturers being very concerned about
the reliability of the resource. I think that is changing. We
are now starting to see chemical companies looking at building
new operations in areas like West Virginia to take advantage of
the natural gases.
Mr. Costa. Thank you very much, Mr. Chairman. You have been
generous with your time. The witness obviously could be pretty
good at filibustering if he needed to be.
Mr. Fuller. I worked in the Senate at one time.
Mr. Lamborn. This is not a Senate hearing, so----
Mr. Costa. No, I don't think so, but he has obviously had
some practice.
Mr. Fuller. I did work in the Senate at one time.
Mr. Lamborn. As we start to conclude here, the gentleman
from Colorado?
Mr. Tipton. Mr. Chairman, I would like to yield my time to
Congressman Flores.
Mr. Lamborn. Mr. Flores?
Mr. Flores. Thank you, Mr. Tipton. Thank you, Mr. Chairman.
Witnesses, thank you for joining us today. I know it is not
something you would like to be doing on a Friday afternoon.
First of all, Ms. Matsen, what is the unemployment rate in
Virginia today?
Ms. Matsen. Golly. Those new numbers just came in, so if I
don't get the new number forgive me, but I know that we are
about two points under the national average, and I want to say
just about 7 percent unemployment.
Mr. Flores. And how about the Shenandoah Valley? Do you
have those metrics?
Ms. Matsen. I am afraid I do not.
Mr. Flores. OK. Thank you.
Mr. Mayer, can you tell me about the process that the
Forest Service used to develop these seven options, if you know
what it is? If you don't, just say you don't know.
Mr. Mayer. Well, they are using the forest plan process as
their planning process----
Mr. Flores. OK.
Mr. Mayer.--wherein various options are put forward for
purposes of being assessed or evaluated.
Mr. Flores. I mean, how were they developed? Did they hold
hearings or did they go to each community and say tell us what
you think about drilling in the George Washington National
Forest?
Mr. Mayer. Well, all I can speak to is my familiarity with
what they did in the Allegheny National Forest in revising the
Forest Plan there. I would assume it is the very same process.
And they simply go about seeking public input and conduct a
series of public meetings, as well as getting data and so forth
and periodically through of course the technology with the
Internet are able to update and keep people informed of what is
going on in the----
Mr. Flores. OK. I am going to move on. Ms. Wofford, did the
Forest Service come into the Shenandoah Valley to the counties
you mentioned and the communities and hold public input
meetings?
Ms. Wofford. Yes, sir. There were a series of public
meetings.
Mr. Flores. They did? OK. And did you participate in those?
Ms. Wofford. Yes, sir, I did.
Mr. Flores. And, Ms. Mall, did you participate in those as
well?
Ms. Mall. No, I did not.
Mr. Flores. OK. Did you provide testimony, Ms. Wofford?
Ms. Wofford. Yes, sir. We have commented several times on
the Forest Plan.
Mr. Flores. OK. Can this committee get copies of that
testimony?
Ms. Wofford. Certainly. I would be happy to provide it.
Mr. Flores. OK. That would be great if you could do that.
Ms. Mall, is your organization involved in any litigation
with the Forest Service on drilling?
Ms. Mall. Yes, sir.
Mr. Flores. They are? OK. One lawsuit? Several lawsuits?
How many?
Ms. Mall. I am not a lawyer. I am not involved in the
litigation myself. I would say probably several at any time.
Mr. Flores. OK. How many with respect to the George
Washington National Forest?
Ms. Mall. Actually none that I know of with the George
Washington National Forest.
Mr. Flores. OK. And, Ms. Wofford, your organization? Is it
involved in any litigation with respect to the George
Washington National Forest?
Ms. Wofford. No, sir.
Mr. Flores. OK. I am glad to hear that. The issue that was
raised by the last panel seemed to be more related toward
water. Even though one of the options was a ban on horizontal
drilling, instead of trying to address the problem they shot
another innocent bystander.
Ms. Wofford, what do you think the problem is here? Is it
water or is it something broader?
Ms. Wofford. I think it is both. I think water is certainly
part of the concern, but I think the concerns are broader.
Rockingham County, for example----
Mr. Flores. Short answers, too.
Ms. Wofford. Sure.--said that they would be open to seeing
this type of energy development on private lands if it is done
in the appropriate place with appropriate regulations, but,
please, not on our public lands, the forestlands that provide
so many other uses and benefits like water supply to the local
communities.
Mr. Flores. OK. Ms. Mall, you made several claims regarding
the USGS saying that the science wasn't there, which I
wholeheartedly disagree with. You said that there weren't
enough regulators in various states. I don't know what
scientific basis you have to make that claim.
But just hypothetically, under what circumstances would you
find drilling for oil and gas in the George Washington National
Forest to be acceptable?
Ms. Mall. Well, I think there are probably some places
where we would think it is not acceptable due to the risks.
Mr. Flores. Is that the case here?
Ms. Mall. In some locations. Now, there are many
technologies that are available to the industry that allow it
to operate in much cleaner and safer ways than it generally
does. In most cases we see----
Mr. Flores. Such as?
Ms. Mall. For example, using the most stringent well
construction standards. That is typically stronger than what
most states require and, in most cases, my understanding is the
companies tend to comply with the state rules at a minimum--and
not always go beyond what we know they can do that is safer.
Capturing air emissions during a frac job, because there
can be very toxic air emissions. That is another thing we know
companies can do, but they don't always do.
So there are a list of things, in addition to how they
manage the waste that comes out of the frac job, which can be
quite toxic. There are a list of things we know companies can
do that they don't adopt uniformly across every operation. That
would be a starting point to really know that the absolute
safest practices were in place.
Mr. Flores. So just theoretically, if a company or an
organization did do all of these things that you are talking
about, would you find it acceptable to drill in the George
Washington National Forest?
Ms. Mall. I think it would depend on location. Every spot
is different. How close it is to a water body, whether it is a
steep slope, whether it is the middle of a hunting ground.
There are lots of different criteria to take into account, but
certainly we are not opposed to all drilling every place.
Mr. Flores. I am glad to hear that. OK. I yield back.
Mr. Lamborn. Thank you. That concludes our questions. I
want to thank each of the members of the panel for being here.
Thank you for putting up with our delay earlier. Members of the
committee may have additional questions for the record, and I
would ask you to respond to these in writing.
Is there any further business before we conclude?
Mr. Holt. Mr. Chair?
Mr. Lamborn. Mr. Holt?
Mr. Holt. I would like to ask unanimous consent to include
in the record two articles written by Ian Urbina of The New
York Times about wastewater quality issues associated with
hydraulic fracturing.
Before my colleagues jump to ridicule these as not being
scientific, peer-reviewed articles, I would comment that they
appear to be well researched and well documented about, for
example, radioactivity detected in the water.
I thought it was important to include them in the record
because in response to some comments I made earlier one of my
colleagues asked to have included in the record an article from
the Pittsburgh Tribune-Review saying that in a small selection
of wells there was no radioactivity found, even though only six
of the 14 drinking water plants submitted test results, the
state had asked 25 wastewater treatment plants for results
which were not included.
So my point is this is also a newspaper article that
doesn't have----
Mr. Lamborn. OK.
Mr. Holt.--a thorough scientific basis, which only goes to
illustrate the point that Witness Mall was making that there is
a great deal to be learned yet. Thank you.
Mr. Lamborn. OK. Without any objection, so ordered.
[The two New York Times articles follow:]
Drilling Down
Insiders Sound an Alarm Amid a Natural Gas Rush
By IAN URBINA
The New York Times
Published: June 25, 2011
Natural gas companies have been placing enormous bets on the wells
they are drilling, saying they will deliver big profits and provide a
vast new source of energy for the United States.
But the gas may not be as easy and cheap to extract from shale
formations deep underground as the companies are saying, according to
hundreds of industry e-mails and internal documents and an analysis of
data from thousands of wells.
In the e-mails, energy executives, industry lawyers, state
geologists and market analysts voice skepticism about lofty forecasts
and question whether companies are intentionally, and even illegally,
overstating the productivity of their wells and the size of their
reserves. Many of these e-mails also suggest a view that is in stark
contrast to more bullish public comments made by the industry, in much
the same way that insiders have raised doubts about previous financial
bubbles.
``Money is pouring in'' from investors even though shale gas is
``inherently unprofitable,'' an analyst from PNC Wealth Management, an
investment company, wrote to a contractor in a February e-mail.
``Reminds you of dot-coms.''
``The word in the world of independents is that the shale plays are
just giant Ponzi schemes and the economics just do not work,'' an
analyst from IHS Drilling Data, an energy research company, wrote in an
e-mail on Aug. 28, 2009.
Company data for more than 10,000 wells in three major shale gas
formations raise further questions about the industry's prospects.
There is undoubtedly a vast amount of gas in the formations. The
question remains how affordably it can be extracted.
The data show that while there are some very active wells, they are
often surrounded by vast zones of less-productive wells that in some
cases cost more to drill and operate than the gas they produce is
worth. Also, the amount of gas produced by many of the successful wells
is falling much faster than initially predicted by energy companies,
making it more difficult for them to turn a profit over the long run.
If the industry does not live up to expectations, the impact will
be felt widely. Federal and state lawmakers are considering drastically
increasing subsidies for the natural gas business in the hope that it
will provide low-cost energy for decades to come.
But if natural gas ultimately proves more expensive to extract from
the ground than has been predicted, landowners, investors and lenders
could see their investments falter, while consumers will pay a price in
higher electricity and home heating bills.
There are implications for the environment, too. The technology
used to get gas flowing out of the ground--called hydraulic fracturing,
or hydrofracking--can require over a million gallons of water per well,
and some of that water must be disposed of because it becomes
contaminated by the process. If shale gas wells fade faster than
expected, energy companies will have to drill more wells or hydrofrack
them more often, resulting in more toxic waste.
The e-mails were obtained through open-records requests or provided
to The New York Times by industry consultants and analysts who say they
believe that the public perception of shale gas does not match reality;
names and identifying information were redacted to protect these
people, who were not authorized to communicate publicly. In the e-
mails, some people within the industry voice grave concerns.
``And now these corporate giants are having an Enron moment,'' a
retired geologist from a major oil and gas company wrote in a February
e-mail about other companies invested in shale gas. ``They want to bend
light to hide the truth.''
Others within the industry remain optimistic. They argue that shale
gas economics will improve as the price of gas rises, technology
evolves and demand for gas grows with help from increased federal
subsidies being considered by Congress. ``Shale gas supply is only
going to increase,'' Steven C. Dixon, executive vice president of
Chesapeake Energy, said at an energy industry conference in April in
response to skepticism about well performance.
Studying the Data
``I think we have a big problem.''
Deborah Rogers, a member of the advisory committee of the Federal
Reserve Bank of Dallas, recalled saying that in a May 2010 conversation
with a senior economist at the Reserve, Mine K. Yucel. ``We need to
take a close look at this right away,'' she added.
A former stockbroker with Merrill Lynch, Ms. Rogers said she
started studying well data from shale companies in October 2009 after
attending a speech by the chief executive of Chesapeake, Aubrey K.
McClendon. The math was not adding up, Ms. Rogers said. Her research
showed that wells were petering out faster than expected.
Robbie Brown contributed reporting from Atlanta
______
Behind Veneer, Doubt on Future of Natural Gas
By IAN URBINA
The New York Times
June 26, 2011
Energy companies have worked hard to promote the idea that natural
gas is the fossil fuel of tomorrow, and they have found reliable allies
among policy makers in Washington.
``The potential for natural gas is enormous,'' President Obama said
in a speech this year, having cited it as an issue on which Democrats
and Republicans can agree.
The Department of Energy boasts in news releases about helping
jump-start the boom in drilling by financing some research that made it
possible to tap the gas trapped in shale formations deep underground.
In its annual forecasting reports, the United States Energy
Information Administration, a division of the Energy Department, has
steadily increased its estimates of domestic supplies of natural gas,
and investors and the oil and gas industry have repeated them widely to
make their case about a prosperous future.
But not everyone in the Energy Information Administration agrees.
In scores of internal e-mails and documents, officials within the
Energy Information Administration, or E.I.A., voice skepticism about
the shale gas industry.
One official says the shale industry may be ``set up for failure.''
``It is quite likely that many of these companies will go bankrupt,'' a
senior adviser to the Energy Information Administration administrator
predicts. Several officials echo concerns raised during previous
bubbles, in housing and in technology stocks, for example, that ended
in a bust.
Energy Information Administration employees also explain in e-mails
and documents, copies of which were obtained by The New York Times,
that industry estimates might overstate the amount of gas that
companies can affordably get out of the ground.
They discuss the uncertainties about how long the wells will be
productive as well as the high prices some companies paid during the
land rush to lease mineral rights. They also raise concerns about the
unpredictability of shale gas drilling.
One senior Energy Information Administration official describes an
``irrational exuberance'' around shale gas. An internal Energy
Information Administration document says companies have exaggerated
``the appearance of shale gas well profitability,'' are highlighting
the performance of only their best wells and may be using overly
optimistic models for projecting the wells' productivity over the next
several decades.
While there are environmental and economic benefits to natural gas
compared with other fossil fuels, its widespread popularity as an
energy source is relatively new. As a result, it has not received the
same level of scrutiny, according to some environmentalists and energy
economists.
The Energy Information Administration e-mails indicate that some of
these difficult questions are being raised.
``Am I just totally crazy, or does it seem like everyone and their
mothers are endorsing shale gas without getting a really good
understanding of the economics at the business level?'' an energy
analyst at the Energy Information Administration wrote in an April 27
e-mail to a colleague.
Another e-mail expresses similar doubts. ``I agree with your
concerns regarding the euphoria for shale gas and oil,''wrote a senior
officialin the forecasting division of the Energy Information
Administration in an April 13 e-mail to a colleague at the
administration.
``We might be in a `gold rush' wherein a few folks have developed
`monster' wells,'' he wrote, ``so everyone assumes that all the wells
will be `monsters.' ''
The Energy Information Administration's annual reports are widely
followed by investors, companies and policy makers because they are
considered scientifically rigorous and independent from industry. They
also inform legislators' initiatives. Congress, for example, has been
considering major subsidies to promote vehicles fueled by natural gas
and cutting taxes for the industry.
In any organization as big as the Energy Information
Administration, with its 370 or so employees, there inevitably will be
differences of opinion, particularly in private e-mails shared among
colleagues. A spokesman for the agency said that it stands by its
reports, and that it has been clear about the uncertainties of shale
gas production.
``One guiding principle that we employ is, `look at the data,' ''
said Michael Schaal, director of the Office of Petroleum, Natural Gas
and Biofuels Analysis within the Energy Information Administration.
``It is clear the data shows that shale gas has become a significant
source of domestic natural gas supply.''
But the doubts and concerns expressed in the e-mails and
correspondence obtained by The Times are noteworthy because they are
shared by many employees, some of them in senior roles. The documents
and e-mails, which were provided to The Times by industry consultants,
federal energy officials and Congressional researchers, show skepticism
about shale gas economics, sometimes even from senior agency officials.
The e-mails were provided by several people to The Times under the
condition that the names of those sending and receiving them would not
be used.
Some of the e-mails suggest frustrations among the staff members in
their attempt to push for a more accurate discussion of shale gas. One
federal analyst, describing an Energy Information Administration
publication on shale gas, complained that the administration shared the
industry's optimism. ``It seems that science is pointing in one
direction and industry PR is pointing in another,'' wrote the analyst
about shale gas drilling in an e-mail. ``We still have to present the
middle, even if the middle neglects to point out the strengths of
scientific evidence over PR.''
The Energy Information Administration, with its mission of
providing ``independent and impartial energy information to promote
sound policymaking'' and ``efficient markets,'' was created in response
to the energy crisis of the 1970s because lawmakers believed that sound
data could help the country avoid similar crises in the future.
As a protection from industry or political pressure, the Energy
Information Administration's reports, by law, are supposed to be
independent and do not require approval by any other arm of government.
Its administrator, Richard G. Newell, who announced this month his
plans to resign to take a job at Duke University, has hailed the
prospects for shale gas, calling it a ``game changer'' in the United
States energy mix. ``The energy outlook for natural gas has changed
dramatically over the past several years,'' Mr. Newell told the Natural
Gas Roundtable, a nonprofit group tied to the American Gas Association.
``The most significant story is the transformative role played by shale
gas.''
A number of factors have also helped create more interest in shale
gas. The nuclear disaster in Japan in March has focused attention on
the promise of natural gas as a safer energy source.
And last year, as energy market analysts warned about tougher
federal regulations on oil and coal, particularly after the BP oil
spill and the Massey coal mining accident, they also pointed to natural
gas as a more attractive investment.
But a look at the Energy Information Administration's methods
raises questions about its independence from energy companies, since
the industry lends a helping hand to the government to compile those
bullish reports.
The Energy Information Administration, for example, relies on
research from outside consultants with ties to the industry. And some
of those consultants pull the data they supply to the government from
energy company news releases, according to Energy Information
Administration e-mails. Projections about future supplies of natural
gas are based not just on science but also some guesswork and modeling.
Two of the primary contractors, Intek and Advanced Resources
International, provided shale gas estimates and data for the Energy
Information Administration's major annual forecasting reports on
domestic and foreign oil and gas resources. Both of them have major
clients in the oil and gas industry, according to corporate tax records
from the contractors. The president of Advanced Resources, Vello A.
Kuuskraa, is also a stockholder and board member of Southwestern
Energy, an energy company heavily involved in drilling for gas in the
Fayetteville shale formation in Arkansas.
The contractors said they did not see any conflict of interest.
``Firstly, the report is an extremely transparent assessment,'' said
Tyler Van Leeuwen, an analyst at Advanced Resources, adding that many
experts agreed with its conclusions and that by identifying promising
areas, the report heightened competition for Southwestern.
Intek verified that it produced data for Energy Information
Administration reports but declined to comment on questions about
whether, given its ties to industry, it had a conflict of interest.
Some government watchdog groups, however, faulted the Energy
Information Administration for not maintaining more independence from
industry.
``E.I.A.'s heavy reliance on industry for their analysis
fundamentally undermines the agency's mission to provide independent
expertise,'' said Danielle Brian, the executive director of the Project
on Government Oversight, a group that investigates federal agencies and
Congress.
``The Chemical Safety Board and the National Transportation Safety
Board both show that government agencies can conduct complex, niche
analysis without being captured or heavily relying upon industry
expertise,'' Ms. Brian added, referring to two independent federal
agencies that conduct investigations of accidents.
These sorts of concerns have also led to complaints within the
administration itself.
In an April 27 e-mail, a senior petroleum geologist who works for
the Energy Information Administration wrote that upper management
relied too heavily on outside contractors and used ``incomplete/
selective and all too often unreal data,'' much of which comes from
industry news releases
``E.I.A., irrespective of what or how many `specialty' contractors
are hired, is NOT TECHNICALLY COMPETENT to estimate the undiscovered
resources of anything made by Mother Nature, period,'' he wrote.
Energy officials have also quietly criticized in internal e-mails
the department's shale gas primer, a source of information for the
public, saying it may be ``on the rosy side.''
The primer is written by the Ground Water Protection Council, a
research group that, according to tax records, is partly financed by
industry.
The Ground Water Protection Council declined to respond to
questions.
Tiffany Edwards, a spokeswoman for the Department of Energy, said
that the shale gas primer was never intended as a comprehensive review
and that further study was continuing.
Asked about the views expressed in the internal e-mails, Mr. Schaal
says his administration has been very explicit in acknowledging the
uncertainties surrounding shale gas development.
He said news reports and company presentations were included among
a range of information sources used in Energy Information
Administration studies. Though the administration depends on
contractors with specialized expertise, he added, it conforms with all
relevant federal rules.
And while production from shale gas has not slowed down and may not
any time soon, he said, a lively debate continues within the
administration about shale gas prospects.
Robbie Brown contributed reporting from Atlanta. Kitty Bennett
contributed research.
______
Mr. Lamborn. If there is no further business--Mr. Flores?
Mr. Flores. I meant to ask one more question. This may be
grossly out of order, but I was wondering if Ms. Mall could
provide her testimony that she provided to the Forest Service
when talking about drilling on the George Washington National
Forest.
Ms. Mall. That would be probably her testimony? I am sorry.
Mr. Flores. Did your organization provide testimony at
these public input----
Ms. Mall. Comments?
Mr. Flores. Yes.
Ms. Mall. No. We have not commented.
Mr. Flores. You didn't. OK.
Ms. Mall. No. Sorry.
Mr. Flores. Disregard.
Mr. Lamborn. OK. The committee will be adjourned.
[Whereupon, at 2:30 p.m., the Subcommittees were
adjourned.]
[Additional material submitted for the record follows:]
[A letter submitted for the record by Peter C. Walton
follows:]
5/5/2011
7/6/2011
To the House Committees on Agriculture & Natural Resources,
I am a citizen of Rockingham County, Virginia. My concern, along
with my fellow citizens, is hydro-fracking. Gas companies already have
leases in our county, and we are not ok with what they intend to do on
that land. We are all appalled that such a practice has ever been
allowed to take place anywhere in this country, and are incredibly
disappointed that our government could show such little concern forthe
people.
Everyone is on the same page: Fracking and other harmful mining
procedures are no longer acceptable. Oil and Coal are no longer
working. We MUST move forward immediately with new solar and wind
technologies, before we have permanently ruined thousands of people's
drinking water. We cannot wait around for studies to be conducted on
the effects of hydro-fracking; there is already enough evidence out
there that proves its harmfulness. Far too much is at stake for this to
continue. The rape of Mother Nature must end, now.
I understand Natural Gas may seem like some sort of economic
solution. However, it is not. Allowing innocent people's water to be
toxically polluted in order for temporary economic relief makes no
sense at all. These people are being exploited for profit, and have no
say in the matter. Exploitation without Representation.
It seems obvious to me; shift all those billions and billions of
dollars in the coal and gas industry into new energy sources. The
potential negative consequences of not doing this are something that no
human being wants to see. If fracking is allowed to go on in the US,
and soon the rest of the world, we will no doubt have a global war for
water on our hands. No amount of money can solve that problem.
As far as creating jobs go, this time presents an excellent
opportunity. Thousands of jobs can be created, if the money is moved
away from the harmful oil and gas industries and put into Sustainable
Housing projects. We need the unemployed portion of society more than
ever right now. Jobs can be created in which people will go into homes,
assess how energy efficient the home is, and then make it as ``green''
as it possibly can be. No need to create more mining and oil drilling
jobs, which are hazardous to the health of workers anyway.
My personal belief is that we must return to a way of life similar
to that of the Native American people. The things mentioned above are a
transition for those who are too scared to be one with nature again;
the way humans were supposed to be.
I hope you are on the same page, and I look forward to hearing what
steps you take to ensure a bright future for Virginia and the rest of
the Country.
Respectfully,
Peter C. Walton
I currently have around 150 signatures (and counting) on the
following petition:
We Citizens Agree to the Following Concerns
June 25, 2011 Bergton, VA
Over a million people are served by the purification of their
drinking water by the George Washington National Forest. Our health,
prosperity and livelihood are dependent upon the wise management of
these lands. We, the citizens, are opposed to hydraulic fracturing and
any other harmful gas drilling methods that may be allowed in the
George Washington National Forest and on both federal and private
lands.
We suggest a 15 year moratorium in VA and West VA on any drilling
permit approval until the EPA conducts its studies on fracking and the
numerous complaints about air and water contamination, other hydro-
geological studies are fully evaluated for the ecological ramifications
of such drilling, gas companies full disclose chemicals and perfect
their technologies, and that we have sufficient regulations in place
and competent regulators for oversight of drilling operations.
Whereas,
1. Horizontal drilling and hydrofracking pose an unacceptable risk to
our drinking water and the quality of wells, groundwater, aquifers,
ponds, streams, rivers. Also such activity seriously impacts our air
basin by toxic chemical emissions, and pollutants.
2. Drilling will introduce over millions of gallons of undisclosed
chemicals into our land, air and water, placing local residents,
wildlife, and critical agriculture resources and watershed areas at
risk.
3. Communities where hydrofracking has occurred have experienced
explosions, flammable drinking water, fracking fluid spills, stream
contamination, fish kills, public health problems, and more.
4. We do not have emergency services for such disasters and the cost
of having them in place would mean additional financial strain on
taxpayers.
5. Gas drilling in Virginia will involve construction of a massive
infrastructure of wellheads, pipelines, compressing stations, and
processing centers spread across much of rural Rockingham County and
Hardy County, West Virginia. Drilling on this scale will turn our
forest area into industrial wastelands.
6. Infrastructure development would likely involve extensive clearing
of forest trees, 24-hour noise and light pollution, huge increases of
truck traffic, damage to roads, and disruption to a quiet lifestyle
that attract people to live here. Also drilling and related development
are incompatible with agriculture, tourism, recreation; that will
significantly alter current economic development including severe
stresses on roadways.
7. We want to protect those citizens who own land, homes, and their
health from the potential dangers of drilling for natural gas.
8. In view of these problems Rockingham County, and Hardy County is
seriously understaffed and underfunded, and is in no position to
regulate and effectively monitor drilling in Bergton and Criders area
of Virginia.
9. Natural gas is not ``clean energy'' but rather just another
polluting, non-renewable fossil fuel contributing to atmospheric CO2
and Methane.
10. We respect the rights of property owners to exploit or lease the
mineral rights under their land so long as that use does not diminish
the value of others' property. Hyrdrofracking cannot be accomplished
without permanently injuring the rights of adjoining, nearby and
downstream landowners, in ways described above.
``We can't solve problems by using the same kind of thinking we
used when we created them.'' -Einstein
Would George Washington be proud if we destroy the forest named in
his memory? I think not.