[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
  
                 OIL AND GAS ACTIVITIES WITH-
                  IN THE NATIONAL WILDLIFE 
                  REFUGE SYSTEM AND THE 
                  FISH AND WILDLIFE SERV-
                  ICE'S INTEREST IN FURTHER 
                  REGULATING THEM

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

                           OVERSIGHT HEARING

                               BEFORE THE

                  SUBCOMMITTEE ON FISHERIES, WILDLIFE,
                       OCEANS AND INSULAR AFFAIRS

                                 OF THE

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                         Tuesday, May 20, 2014

                               __________

                           Serial No. 113-72

                               __________

       Printed for the use of the Committee on Natural Resources
       
       
       
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                    COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
            PETER A. DeFAZIO, OR, Ranking Democratic Member

Don Young, AK                        Eni F. H. Faleomavaega, AS
Louie Gohmert, TX                    Frank Pallone, Jr., NJ
Rob Bishop, UT                       Grace F. Napolitano, CA
Doug Lamborn, CO                     Rush Holt, NJ
Robert J. Wittman, VA                Rauul M. Grijalva, AZ
Paul C. Broun, GA                    Madeleine Z. Bordallo, GU
John Fleming, LA                     Jim Costa, CA
Tom McClintock, CA                   Gregorio Kilili Camacho Sablan, 
Glenn Thompson, PA                       CNMI
Cynthia M. Lummis, WY                Niki Tsongas, MA
Dan Benishek, MI                     Pedro R. Pierluisi, PR
Jeff Duncan, SC                      Colleen W. Hanabusa, HI
Scott R. Tipton, CO                  Tony Caardenas, CA
Paul A. Gosar, AZ                    Jared Huffman, CA
Rauul R. Labrador, ID                Raul Ruiz, CA
Steve Southerland, II, FL            Carol Shea-Porter, NH
Bill Flores, TX                      Alan S. Lowenthal, CA
Jon Runyan, NJ                       Joe Garcia, FL
Markwayne Mullin, OK                 Matt Cartwright, PA
Steve Daines, MT                     Katherine M. Clark, MA
Kevin Cramer, ND                     Vacancy
Doug LaMalfa, CA
Jason T. Smith, MO
Vance M. McAllister, LA
Bradley Byrne, AL

                       Todd Young, Chief of Staff
                Lisa Pittman, Chief Legislative Counsel
                 Penny Dodge, Democratic Staff Director
                David Watkins, Democratic Chief Counsel
                                 ------                                

              SUBCOMMITTEE ON FISHERIES, WILDLIFE, OCEANS
                          AND INSULAR AFFAIRS

                       JOHN FLEMING, LA, Chairman
    GREGORIO KILILI CAMACHO SABLAN, CNMI, Ranking Democratic Member

Don Young, AK                        Eni F. H. Faleomavaega, AS
Robert J. Wittman, VA                Frank Pallone, Jr., NJ
Glenn Thompson, PA                   Madeleine Z. Bordallo, GU
Jeff Duncan, SC                      Pedro R. Pierluisi, PR
Steve Southerland, II, FL            Carol Shea-Porter, NH
Bill Flores, TX                      Alan S. Lowenthal, CA
Jon Runyan, NJ                       Joe Garcia, FL
Vance M. McAllister, LA              Peter A. DeFazio, OR, ex officio
Bradley Byrne, AL
Doc Hastings, WA, ex officio
                                 ------                                
                                CONTENTS

                                ----------                              
                                                                   Page

Hearing held on Tuesday, May 20, 2014............................     1

Statement of Members:
    Fleming, Hon. John, a Representative in Congress from the 
      State of Louisiana.........................................     1
        Prepared statement of....................................     2
    Sablan, Hon. Gregorio Kilili Camacho, a Representative in 
      Congress from the Commonwealth of the Northern Mariana 
      Islands....................................................     3

Statement of Witnesses:
    Guertin, Steve, Assistant Director, U.S. Fish and Wildlife 
      Service....................................................     4
        Prepared statement of....................................     6
    Knudson, Kip, Director of State and Federal Relations, State 
      of Alaska..................................................    10
        Prepared statement of....................................    11
    Matson, Noah, Vice President, Defenders of Wildlife..........    48
        Prepared statement of....................................    50
        Additional testimony submitted for the record............    55
    Naatz, Dan, Vice President, Independent Petroleum Association 
      of America.................................................    33
        Prepared statement of....................................    35
    Powell, J. Davis, Board Member, National Association of 
      Royalty Owners, Louisiana Chapter..........................    38
        Prepared statement of....................................    39
    Schutt, Ethan, Senior Vice President, Land and Energy 
      Development, Cook Inlet Region, Incorporated...............    41
        Prepared statement of....................................    43

Additional Material Submitted for the Record:
    Artic Slope Regional Corporation, Letter submitted for the 
      record.....................................................    67
    Fleming, Hon. John, Letter to Director Daniel Ashe, U.S. Fish 
      and Wildlife Service submitted for the record..............    66
    National Wildlife Refuge, Tables submitted for the record....    80
    Questions submitted for the record to U.S. Fish and Wildlife 
      Service....................................................    70
    State of Alaska, ANILCA Implementation Program, Letter to 
      U.S. Fish and Wildlife Service submitted for the record....    76
                                     



    OVERSIGHT HEARING ON OIL AND GAS ACTIVITIES WITHIN THE NATIONAL 
WILDLIFE REFUGE SYSTEM AND THE FISH AND WILDLIFE SERVICE'S INTEREST IN 
                        FURTHER REGULATING THEM

                              ----------                              


                         Tuesday, May 20, 2014

                     U.S. House of Representatives

    Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to notice, at 2:16 p.m., in 
room 1324, Longworth House Office Building, Hon. John Fleming 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Fleming, Young, Duncan, 
McAllister; Sablan, Shea-Porter, Lowenthal, and Garcia.
    Dr. Fleming. The subcommittee will come to order. The 
Chairman notes the presence of a quorum.

    STATEMENT OF THE HON. JOHN FLEMING, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF LOUISIANA

    Dr. Fleming. Good afternoon. Today the subcommittee will 
examine the Fish and Wildlife Service's recent efforts to 
further regulate oil and gas activities within the National 
Refuge System.
    There are about 1,670 active oil and gas wells within the 
refuge system. Nearly 70 percent of those wells are located in 
the State of Louisiana, including two gas wells at the Red 
River National Wildlife Refuge, in my congressional district.
    In the vast majority of cases, these wells existed before 
the refuge was established. The Fish and Wildlife Service did 
not acquire the non-Federal mineral rights, and the owners of 
this subsurface property have every legal right to develop 
their oil and gas resources. This does not mean, however, that 
these oil and gas activities are unregulated.
    In fact, both the Fish and Wildlife Service in 43 States 
have oil and gas regulations. In every State in which the 
Service has identified active and inactive wells, regulations 
have been adopted which protect the environment and public 
safety through each stage of the extraction process.
    More than a decade ago, the Government Accountability 
Office told the Fish and Wildlife Service that it needed to 
better train its staff, improve its data collection efforts, 
and establish a comprehensive inventory of oil and gas wells 
and infrastructure on refuge lands. Although the Service has 
failed to fully implement those recommendations, the agency has 
skipped ahead to issue an advanced notice of proposed 
rulemaking that telegraphs their intention to produce a panoply 
of new Federal regulations.
    While no one should be surprised that this administration 
wants more Federal regulations on our energy industry, it is 
disappointing that the Fish and Wildlife Service didn't fully 
implement GAO's recommendations on staffing, data collection, 
and a nationwide tracking system first, before embarking on the 
latest regulatory effort.
    Nevertheless, since curbing this insatiable regulatory 
appetite is not likely, I would like to highlight several 
comments I made in my April 23 letter to Director Dan Ashe.
    First, any new Federal regulations must recognize that 
States are already regulating development, and should have 
primacy over these oil and gas wells within the refuge system.
    Second, the Service should not duplicate functions already 
conducted by the States.
    Third, the Service must not establish unreasonable new fees 
that would have the effect of denying access to non-Federal 
minerals legally owned by large and small energy companies.
    In addition, it is essential that the Service make it 
crystal clear that it will honor the private property rights of 
subsurface mineral owners. To do otherwise is to violate their 
Fifth Amendment constitutional rights.
    Finally, horizontal drilling from private lands to access 
oil and gas under a refuge should not fall under the Service's 
jurisdiction, and any future rules should not try to add a new 
duplicative layer of regulation over these activities. It, 
frankly, makes little sense to require a private land owner to 
obtain a bond, Federal permits, or to pay any fees for drilling 
on their own property. In the unlikely event of a spill, it is 
these land owners, and not the Federal Government, who will be 
required to clean up their own property and any adjacent 
affected lands.
    [The prepared statement of Dr. Fleming follows:]
Prepared Statement of the Hon. John Fleming, Chairman, Subcommittee on 
            Fisheries, Wildlife, Oceans and Insular Affairs
    Good afternoon, today, the subcommittee will examine the Fish and 
Wildlife Service's recent efforts to further regulate oil and gas 
activities within the National Wildlife Refuge System.
    There are about 1,670 active oil and gas wells within the refuge 
system. Nearly 70 percent of those wells are located in the State of 
Louisiana including two gas wells at the Red River National Wildlife 
Refuge in my Congressional District.
    In the vast majority of cases, these wells existed before the 
refuge was established, the Fish and Wildlife Service did not acquire 
the non-Federal mineral rights and the owners of this subsurface 
property have ever legal right to develop their oil and gas resources.
    This does not mean, however, that these oil and gas activities are 
unregulated. In fact, both the Fish and Wildlife Service and 43 States 
have oil and gas regulations. In every State in which the Service has 
identified active and inactive wells, regulations have been adopted 
which protect the environment and public safety through each stage of 
the extraction process.
    More than a decade ago, the Government Accountability Office (GAO) 
told the Fish and Wildlife Service that it needed to better train its 
staff, improve its data collection efforts and establish a 
comprehensive inventory of oil and gas wells and infrastructure on 
refuge lands.
    Although the Service has failed to fully implement those 
recommendations, the agency has skipped ahead to issue An Advanced 
Notice of Proposed Rulemaking that telegraphs their intention to 
produce a panoply of new Federal regulations.
    While no one should be surprised that this Administration wants 
more Federal restrictions on our energy industry, it is disappointing 
that the Fish and Wildlife Service didn't fully implement GAO's 
recommendations on staffing, data collection, and a nationwide tracking 
system first before embarking on this latest regulatory effort.
    Nevertheless, since curbing this insatiable regulatory appetite is 
not likely, I would like to highlight several comments I made in my 
April 23 letter to Director Dan Ashe. First, any new Federal 
regulations must recognize that States are already regulating 
development, and should have primacy over these oil and gas wells 
within the refuge system.
    Second, the Service should not duplicate functions already 
conducted by the States.
    Third, the Service must not establish unreasonable new fees that 
would have the effect of denying access to non-Federal minerals legally 
owned by both large and small energy companies.
    In addition, it is essential that the Service make it crystal clear 
that it will honor the private property rights of subsurface mineral 
owners. To do otherwise, is to violate their 5th Amendment 
Constitutional rights.
    Finally, horizontal drilling from private lands to access oil and 
gas under a refuge should not fall under the Service's jurisdiction and 
any future rules should not try to add a new, duplicative layer of 
regulation over those activities. It frankly makes little sense to 
require a private landowner to obtain a bond, Federal permits or to pay 
any fees for drilling on their own property. In the unlikely event of a 
spill, it is these landowners and not the Federal Government who will 
be required to clean-up their own property and any adjacent affected 
lands.

                                 ______
                                 

    Dr. Fleming. I will now recognize the Ranking Member for 
any statement he would like to make. I yield to you, Mr. 
Sablan.

    STATEMENT OF THE HON. GREGORIO KILILI CAMACHO SABLAN, A 
DELEGATE IN CONGRESS FROM THE TERRITORY OF THE NORTHERN MARIANA 
                            ISLANDS

    Mr. Sablan. Thank you very much, Mr. Chairman. And good 
afternoon, everyone.
    President George Bush created two national wildlife refuges 
in my district, the Northern Mariana Islands: the Mariana Arc 
of Fire National Wildlife Refuge and the Marianas Trench 
National Wildlife Refuge. So, naturally, I am very interested 
when we have a hearing on our Nation's refuge system.
    Of course, I am not alone. We have over 500 wildlife 
refuges, nationwide. And I think very nearly every Member of 
Congress has a refuge in their district.
    The refuges bring in some big money. They create business 
opportunities and jobs, they are great for people who like to 
hunt and fish and enjoy the outdoors. They also cost money to 
maintain. That is why I introduced legislation in the last 
Congress to authorize a semi-postal stamp to raise money for 
upkeep in our refuge. We had 52 Republicans and Democrats 
sponsor that bill, including yourself, Mr. Chairman. And you 
were kind enough to hold a hearing and get the bill reported 
out of the Natural Resources Committee, though it got hung up 
further down the line.
    So, I know that we all share a care about our refuge. And, 
frankly, I was rather shocked when I started reading through 
today's testimony, because at the same time that we are trying 
to raise a little money with efforts like the semi-postal 
stamp, and save the taxpayers the cost of keeping our refuge 
clean and beautiful, apparently we have hundreds or thousands 
of abandoned oil wells out in the refuge that are doing just 
the opposite. They are costing the taxpayers money, like this 
one in the St. Catherine Creek National Wildlife Refuge, just 
across the border from the Chairman, in Mississippi.
    It seems it was improperly plugged and abandoned in 1983 by 
the private owners. Then, when it started leaking 33 years 
later, the State of Mississippi said the Federal Government was 
responsible for the cleanup, to the tune of $260,000. That's 
$260,000, Mr. Chairman--you will have to sell a lot of semi-
postal stamps to make up that kind of money.
    So, I guess we are going to hear that St. Catherine Creek 
is not an isolated example. And so I want to say thank you, 
again, for holding today's hearing. Any time we uncover a 
situation where private interest gets the fist and Federal 
taxpayers get stuck with the bill, then this subcommittee needs 
to pay attention, and maybe take action.
    It looks as though the Fish and Wildlife Service is ahead 
of us, though. They have already solicited ideas from 47,000 
Americans about how to address this problem, when people leave 
a mess on our lands and then expect the rest of us to pay for 
the cleanup. And I understand that the Service will now be 
going ahead and drafting some proposals on how to get a handle 
on this problem that is costing taxpayers money, and soiling 
our wildlife refuge.
    I am looking forward to hearing what they have to tell us 
and all our witnesses. And I yield back the balance of my time. 
Thank you.
    Dr. Fleming. I thank the gentleman, the Ranking Member, Mr. 
Sablan.
    I will now ask our panel members to come forward, and I 
will be introducing you while you move forward.
    We will hear from Mr. Steve Guertin, Assistant Director, 
U.S. Fish and Wildlife Service, and Mr. Kip Knudson, Director 
of State and Federal Relations for the State of Alaska.
    Just a reminder, your written testimony will appear in full 
in the hearing record, so I ask that you keep your oral 
statements to 5 minutes, as outlined in our invitation letter 
to you under Committee Rule 4(a).
    Our microphones are not automatic. You will need to push 
the button and make sure the tip is close by to be heard.
    The timing lights, very simple. You will be under green 
light for 4 minutes, yellow light the last minute. And, of 
course, when the red light comes on, please conclude your 
comments as quickly as possible. And, again, your full 
testimony will be in the record.
    Mr. Guertin, you are now recognized, sir, for 5 minutes.

 STATEMENT OF STEVE GUERTIN, ASSISTANT DIRECTOR, U.S. FISH AND 
                        WILDLIFE SERVICE

    Mr. Guertin. Good afternoon, Chairman Fleming, Ranking 
Member Sablan, and members of the subcommittee. I am Steve 
Guertin, Deputy Director for the U.S. Fish and Wildlife 
Service. We appreciate the opportunity to testify before you 
today regarding oil and gas development on National Wildlife 
Refuge System lands, and the Service's interest in ensuring a 
common-sense, predictable, and consistent approach to 
regulating development to protect taxpayer investments in the 
National Wildlife Refuge System.
    The Refuge System is the world's premier network of public 
lands devoted solely to the conservation of wildlife and 
habitat. It encompasses over 150 million acres of land and 
water, and preserves a diverse array of land, wetlands, and 
ocean ecosystems. The Refuge System offers about 47 million 
visitors a year the opportunity to fish, hunt, observe, and 
photograph wildlife, as well as learn about nature through 
environmental education and interpretation. These visitors make 
refuges an important economic driver, generating nearly $2.4 
billion for local economies each year, and supporting over 
35,000 jobs. And refuges are a good investment. Each dollar 
appropriated for the refuge system returns nearly $5 to 
economic benefits.
    A large number of refuges also support varying levels of 
oil and gas development. This is because subsurface mineral 
rights of refuges are often held by private parties. The 
Service recognizes and respects that these private interests 
are fully entitled to reasonable access to explore and develop, 
for example, their oil and gas resources. In fact, oil and gas 
development can be found on over 200 of the Nation's 562 
refuges. There are over 5,000 wells and 1,300 miles of pipeline 
in the refuge system today.
    And those numbers are likely to increase. Domestic energy 
production is rapidly expanding across the country. Recent 
advances in drilling technology, the refuge system has 
experienced an unprecedented level of interest in developing 
formations such as the Marcellus in the eastern United States 
and the Bakken in North Dakota and Montana, both previously 
cost-prohibitive.
    The Service has successfully worked with oil and gas across 
the country to facilitate access and development in ways that 
minimize impacts. However, in many cases, there are instances 
of oil and gas development that has had some significant 
impacts to refuges. The impact varies because there is no 
framework for consistent permitting that minimizes effects 
through sensible best management practices.
    Some examples of impacts include habitat fragmentation from 
construction of access roads, abandoned infrastructure, oil 
leaks from wells and storage tanks, and contamination. A long-
term concern is the damage that would occur from the 
degradation of poorly capped and abandoned wells.
    To protect the taxpayers' investment and sportsmen's 
investment in the refuge system, we are considering regulations 
for the management of non-Federal oil and gas development on 
Refuge System lands. Such regulations would provide best 
practices for access, development, and including development. 
They would also provide private mineral right holders with a 
consistent and predictable framework.
    To pursue this goal, the Service recently announced an 
advance notice of proposed rulemaking and a notice of intent to 
prepare an environmental impact statement on non-Federal oil 
and gas development on Refuge System lands. Based on the volume 
of comments, request for an extension on this process, and our 
desire to continue to work with stakeholders, we plan to reopen 
this for an additional 30-day comment period next week.
    The ANPR provides an opportunity for the Service to meet 
with stakeholders, including oil and gas operators, 
conservation groups, Tribes, and States, and others, to include 
their expertise and comments early on in our rulemaking 
process. This is an optional step, but we believe that 
involving the public at every start will be critical to a more 
effective rulemaking process and product. Throughout the 
process we are committed to transparency and public engagement.
    Mr. Chairman, you submitted comments to the Service through 
the ANPR. I have read those comments and have them with me 
today, and want you to know that we will work with your staff 
to fully consider your comments, and we will meet with your 
staff in the future to discuss them as we move forward with the 
process.
    Our mission, as an agency, is working with others to 
conserve, protect, and enhance fish, wildlife, and plants, and 
their habitats for the continuing benefit of the American 
people. We look forward to working with this subcommittee and 
our stakeholders as we move forward with this process.
    Thank you for inviting the Service to testify with you 
today. We would be happy to answer your questions during the 
hearing, and we look forward to working with you and the other 
leaders in Congress and our stakeholders in the future. Thank 
you.
    [The prepared statement of Mr. Guertin follows:]
  Prepared Statement of Steve Guertin, Deputy Director, U.S. Fish and 
              Wildlife Service, Department of the Interior
    Good afternoon Chairman Fleming, Ranking Member Sablan, and members 
of the subcommittee, I am Steve Guertin, Deputy Director for the U.S. 
Fish and Wildlife Service (Service) within the Department of the 
Interior. I appreciate the opportunity to testify before you today 
regarding oil and gas activities on National Wildlife Refuge System 
(Refuge System) lands and the Service's interest in ensuring a 
predictable and consistent approach to regulating that development and 
protecting taxpayer investments in the Refuge System.
                    national wildlife refuge system
    The Refuge System is the world's premiere network of public lands 
devoted solely to the conservation of wildlife and habitat. The Refuge 
System, which encompasses over 150 million acres of land and water, 
preserves a diverse array of land, wetland, and ocean ecosystems--from 
remote Pacific islands, north to the high arctic of northern Alaska, 
east to the rugged coastline of Maine and south to the tropical U.S. 
Virgin Islands. National wildlife refuges are found in every U.S. 
State. In total, the Refuge System now contains 562 refuges.
    The Refuge System offers about 47 million visitors per year the 
opportunity to fish, hunt, observe and photograph wildlife, as well as 
learn about nature through environmental education and interpretation. 
These visitors make refuges an important economic driver, generating 
nearly $2.4 billion for local economies each year. In Fiscal Year 2011, 
the Refuge System supported over 35,000 private-sector jobs. Investing 
in the Refuge System is a sound use of taxpayer dollars as each dollar 
appropriated for the Refuge System returns nearly $5 in economic 
benefits. Refuges also provide local communities with other ecosystem 
services such as improved water quality and access to quality wildlife-
dependent recreation. With its widespread presence and history of 
working with partners, the Refuge System plays a key role in supporting 
innovative, community-level efforts to conserve outdoor spaces and 
connect people with nature.
               state of oil and gas activities on refuges
    There is a long history of private oil and gas development on 
national wildlife refuges. Service policy is to purchase the minimum 
interest necessary to accomplish its conservation mission. In many 
cases, oil and gas production is ongoing at the time of land 
acquisition making the purchase of the mineral rights prohibitively 
expensive. Often, the mineral rights have been severed prior to Federal 
acquisition of the property. In other cases, the property owner sells 
to the United States, but retains the mineral rights. Consequently, oil 
and gas development can be found on nearly half of the Nation's 562 
refuges. Federal oil and gas leasing is provided only in situations 
where adjacent non-Federal development drains resources from the 
Federal mineral estate (50 CFR 29.31).
    Over 200 refuges have existing oil and gas infrastructure (e.g., 
active and inactive wells, pipelines). Of these, 103 refuges, and four 
Wetland Management Districts have active oil and gas wells. Over 5,000 
wells occur on Refuge System lands and almost 1,300 miles of pipelines 
cross refuge fee-title lands. Of the 5,000 wells, 1,700 are active and 
the remaining are inactive or of unknown status. The Service is 
assessing the status of these wells and is finding many have been 
inactive for years and even decades. The Service is also identifying 
wells that no longer have responsible parties (i.e., orphaned wells) 
and is finding there are many of these wells on refuges.
    The Service recognizes that private oil and gas rights holders are 
fully entitled to reasonable access to explore and develop their oil 
and gas resources. The Service has had many local successes working 
with oil and gas operators to achieve appropriate resource protections. 
However, there are many more examples of unnecessary impacts on 
resources and refuge management. The cost of addressing these impacts 
is largely borne by State and Federal taxpayers. Examples of these 
impacts are described in the following two case studies.
        case study: st. catherine creek national wildlife refuge
    Due to extensive agricultural development and flood control, the 
hydrology of the Mississippi River and its floodplain was modified 
resulting in the loss of 20 million acres of bottomland hardwood 
forests along the Mississippi River. St. Catherine Creek National 
Wildlife Refuge (Refuge), established in 1990, preserves 24,931 acres 
of the Mississippi River floodplain 2 miles south of Natchez, 
Mississippi. Acquisition of the floodplain habitat included remnants of 
bottomland hardwood forest, fallow fields, cleared land, and cypress 
swamps.
    Mineral rights were excluded from the land purchased for the Refuge 
and are privately owned. Since the 1950s, numerous oil wells, 
pipelines, and oil and oilfield brine storage tanks have been located 
on lands that are now within the Refuge. While there are relatively few 
active oil and gas wells on the refuge, the Service has used best 
available data to identify over 500 inactive wells. Many of the 
inactive wells have not been properly plugged and abandoned. Since the 
establishment of the refuge, spills, and leaks from oil wells and 
pipelines have plagued the Refuge.
    A leaking oil well discovered by a Refuge law enforcement officer 
in April 2012 led to an investigation by the Mississippi State Oil and 
Gas Board and the Mississippi Department of Environmental Quality. A 
review of the well's history revealed the well was 6,000 feet in depth 
and had been plugged and abandoned in 1983. Although the well was never 
properly plugged and abandoned in 1983, the State's policy transferred 
the responsibility of re-plugging the well and site cleanup to the 
surface owner, in this case, the Service. The Refuge wildlife officer 
reported the leaking well to the National Response Center as an oil 
spill with the potential to reach the Mississippi River. The report 
initiated a response from the U.S. Coast Guard and the Environmental 
Protection Agency (EPA). Because of the severity of the leak, EPA took 
jurisdiction of the site and assumed all costs for plugging the well 
and site cleanup.
    Re-plugging the well required drilling, cementing and testing at a 
cost of approximately $95,000. Few States have bond requirements that 
adequately cover the actual costs to re-plug a well. Mississippi 
requires only a $10,000 bond for a well. Only two States have 
regulations with a bond amount sufficient to cover the costs for 
plugging a well of this size and none require posting a bond in the 
amount to properly reclaim and restore the site.
    Site restoration followed completion of the plugging. All surface 
contaminants were removed from the well site. The site was seeded and 
covered with mulch to control erosion. Plugging the well, site 
restoration and vegetation planting cost $260,000. After much work, 
trees and grasses are finally becoming re-established at the site.
         case study: lower rio grande national wildlife refuge
    What happens to long-billed curlews, one of North America's most 
threatened shorebirds, and thousands of migrating geese, ducks and 
endangered piping plover when oil and gas infrastructure are abandoned 
to rust and corrode around lakes that are roosting and nesting habitat?
    That question faced the Lower Rio Grande Valley National Wildlife 
Refuge in Texas when the operator of three wells on East Lake abandoned 
the sites in the early 1990s. The previously privately owned and 
operated wells had been drilled in 1948 and there was no liable owner 
to pay for the cost of the cleanup. Before cleanup, the abandoned 
production facilities, including storage tanks and sections of rusted 
pipe, extended into East Lake, and threatened contamination of the 
adjacent wetlands that are habitat for endangered piping plover in the 
winter. They also posed potential health risks to other native 
wildlife. Oil sheens were visible in East Lake near one of the 
abandoned wells.
    After 15 years of working with the Texas Railroad Commission 
(TRRC), the State's oil and gas regulatory agency, the TRRC began 
plugging the wells in June 2011. The cost to taxpayers was 
approximately $1.2 million to clean up the abandoned well sites and 
remove the oil and gas equipment from the refuge.
    Transport of cleanup and plugging equipment brought its own set of 
problems: track buggies, which delivered the equipment, became mired in 
the lake bed and dug ruts in the substrate. The substrate then had to 
be restored. Storage tanks, pipes, and other oil production equipment 
were removed from the three well sites. Metal that could be recycled 
was taken to a metal salvage yard. Refuge habitat was restored. 
Immediate plugging and equipment removal would have lessened the costs 
and impacts to the refuge, State regulatory agencies, and the 
taxpayers.
                need for revised oil and gas regulations
    In order to keep pace with increased development pressure, protect 
taxpayer investments in the Refuge System, and to bring needed 
consistency and predictability to the holders of mineral rights in the 
Refuge System, the Service is considering promulgating regulations for 
oil and gas operations in the Refuge System. The Service is considering 
such regulations pursuant to recommendations made by the Government 
Accountability Office (GAO). Such regulations would be similar to those 
already in place by other land management agencies.
    In 2003 and 2007, the Government Accountability Office (GAO) issued 
reports to Congress recommending the Service clarify permitting 
authority for non-Federal oil and gas operations. In the 2003 Report to 
Congress (GAO-03-517), GAO highlighted the opportunities to improve 
management and oversight of oil and gas operations on the Refuge 
System. One of the main recommendations of the report was to clarify 
the Service's permitting authority of non-Federal oil and gas 
operations through regulations. Currently, the primary regulation the 
U.S. Fish and Wildlife Service uses for management of non-Federal oil 
and gas development on Refuge System lands comes from 50 CFR 29.32. 
This regulation pertains to non-Federal mineral rights on Refuge System 
lands. The current regulation does not provide the Service with 
adequate authority to ensure the protection of refuge resources. An 
update by GAO in 2007 (GAO-07-829R) followed the 2003 report 
reasserting the recommendation that the Service take the necessary 
steps to apply a consistent and reasonable set of regulatory and 
management controls over oil and gas activities occurring on the Refuge 
System to protect the public's surface interests.
    Several other land management agencies have regulations that cover 
oil and gas development, including the Department of the Interior's 
National Park Service (NPS) and the U.S. Department of Agriculture's 
Forest Service (FS). A comprehensive and cohesive oil and gas 
management program for the Service could help achieve an appropriate 
balance between the Refuge System mission and the reasonable exercise 
of private oil and gas rights. To that end, the Service is considering 
a rulemaking for the management of non-Federal oil and gas operations 
in the Refuge System. The goal of such a regulation would be to achieve 
the necessary protections for ecosystems and wildlife on refuges while 
respecting the property rights of the holders of private mineral 
rights.
    On February 24, 2014, the Service announced an Advanced Notice of 
Proposed Rulemaking (ANPR) and notice of intent to prepare an 
environmental impact statement on Non-Federal Oil and Gas Development 
on Refuge System Lands. Through this transparent, public process, the 
Service is seeking public input at the initial stages of the process of 
considering rulemaking. The ANPR provides us with the opportunity to 
meet with stakeholders from the public, oil and gas industry, 
conservation groups, and tribes to include their expertise and comments 
as early as possible in the process of considering rulemaking. Working 
in collaboration with these stakeholders will improve the Service's 
ability to ensure landscapes are capable of supporting sustainable 
populations of fish and wildlife while also providing for the energy 
needs of local communities--now and in the future.
    A fundamental aspect of a new rule could be to improve regulatory 
consistency to the benefit of both refuge managers and oil and gas 
operators. Regulations should be standards-based as opposed to 
prescriptive. Both resource managers and project proponents should have 
the flexibility to design and conduct activities tailored to each 
refuge's unique habitats and management objectives in consideration of 
operational needs of oil and gas project proponents. Specifically, the 
new rule could help address the following impacts of oil and gas 
development on refuge resources.

     Leaks and spills of oil, brine, or other contaminants. 
            Human health and safety can be compromised without adequate 
            safeguards. In addition, soils, vegetation, water quality, 
            fish and wildlife, and air quality can all be harmed by the 
            release of contaminants.
     Alteration of Fish and Wildlife Habitat. Habitat can be 
            altered, fragmented, or eliminated through oil and gas 
            activities. These activities can also disturb and displace 
            wildlife, cause physiological stress, and even result in 
            wildlife deaths.
     Introduction of invasive species. The introduction of 
            invasive species, especially along road and pipeline 
            routes, can alter habitat. Disturbance caused by oil and 
            gas activities can result in fundamental changes in 
            ecological functions and processes, and lead to increased 
            predation of declining species, reduced reproduction, and 
            increased susceptibility to disease.
     Adverse impact to public access and use. Public uses of 
            refuge areas may be restricted or prohibited by oil and gas 
            operations. Although the areal extent of oil and gas 
            exploration and production may be limited, the cumulative 
            effects may extend to a much larger area.
     Costs to taxpayers. Poorly maintained sites or abandoned 
            wells and infrastructure can place a burden on taxpayers as 
            the cost of cleanup is borne by the Federal Government. In 
            many cases, wells and infrastructure are abandoned due to 
            inadequate finances by an operator. Having financial 
            assurance to properly reclaim a site can save taxpayers 
            from bearing the entire expense.

    State oil and gas regulatory programs provide some level of Refuge 
System resource protection, but fundamentally have different roles and 
responsibilities. The Service is focused on meeting its legal mandate 
without duplicating State oversight. Our goal is to complement State 
regulatory programs to the benefit of the surface estate and the 
resources with which we are entrusted.
    The Service has made progress in other areas to better address the 
complex challenge. We have formalized a Refuge System Energy Program 
and charged it with providing coordination and guidance to the Service 
leadership in promulgating the oil and gas regulations. Two major 
components of this coordination and guidance include: (1) improving 
consistency in oil and gas management; and (2) engaging Service staff, 
other Federal agencies and the public in revising regulations. Also, 
the Energy Program collaboratively develops and implements 
communication strategies to convey accurate information to a broad 
range of audiences and to engage the public and governmental entities 
in the rulemaking process.
    The Service has hired three regional and three national oil and gas 
experts, including an environmental contaminants specialist and a 
petroleum engineer to support this effort. They provide assistance to 
Refuge System field staff and help develop national guidance and 
training. Other ways the Service is addressing this issue is the 
development of a national database of oil and gas wells and other 
structures on refuges. We have implemented annual oil and gas 
management training for nearly 200 Service staff. We are developing 
Service policy on management practices and have issued a Service 
handbook on management of oil and gas on refuges. These actions all 
contribute toward the core mission of the Service.
                               conclusion
    The Service's mission is working with others to conserve, protect, 
and enhance fish, wildlife, plants, and their habitats for the 
continuing benefit of the American people. A strong and effective oil 
and gas management program for the Refuge System that respects private 
property rights is essential to avoid unnecessary impacts that 
undermine the Service's ability to meet its statutory mandates and its 
mission. We have made strides in this area. Promulgation of revised 
regulations could help solidify progress that the Service has already 
made, and advance protection of trust resources for decades to come.
    We believe rulemaking could support the Service in creating a 
consistent and reasonable set of regulatory management controls for 
non-Federal oil and gas activities occurring on refuges to both protect 
the public's surface interests while also providing reliable processes 
for industry.
    We look forward to working with the subcommittee, as well as 
stakeholders, as we continue the process of considering rulemaking.

                                 ______
                                 

    Dr. Fleming. Thank you, Mr. Guertin. I can always tell when 
we have members from the Services because their timing is so 
perfect for 5 minutes. I mean you guys come within 15 seconds. 
It is amazing, how you do it. I guess it is the frequency that 
we have you up here. But we thank you for that.
    Our next panelist--I may have mispronounced your name. I 
guess the K is not silent. So it is Knudson. Is that correct, 
sir?
    Mr. Knudson. Yes, Mr. Chairman, that is correct.
    Dr. Fleming. OK, thank you. Well, I would like to now 
recognize you on behalf of the State of Alaska to present your 
testimony. And I yield to you.

    STATEMENT OF KIP KNUDSON, DIRECTOR OF STATE AND FEDERAL 
                   RELATIONS, STATE OF ALASKA

    Mr. Knudson. Chairman Fleming, Ranking Member Sablan, 
members of the committee, thank you for your time today. On 
behalf of Governor Parnell, I will just add some color comments 
to my written testimony, because a lot of very smart people 
helped me write that, and that is much better than, probably, 
what I will say today. Happy to try to answer questions, as 
well. My name is Kip Knudson. I am Governor Parnell's State 
Federal Director. I am located here, in Washington, DC.
    As I am sure you have heard from Congressman Young a few 
times, Alaska is unique, under the law and in circumstance. It 
is a State of superlatives. Eighteen percent of the State's 
land is composed of refuges managed by a colleague here. That 
is 76.9 million acres of refuge lands in the State of Alaska.
    I will spend a little bit of time today talking about the 
Kenai National Wildlife Refuge. This is a relatively large 
refuge, 1.9 million acres. As a point of comparison, Delaware 
is 1.6 million acres. Kenai is the tenth largest refuge in the 
United States. It is currently the only refuge that is 
experiencing oil and gas production in the State of Alaska.
    So, besides all of the superlatives, Alaska is a world-
renowned oil province. And yet, a very large percentage of our 
population struggles to have access to affordable energy. So, 
the ability to continue to look for and develop energy deposits 
that may be found underneath refuge lands is a very important 
concept in the State of Alaska.
    So, let me just emphasize. In the written testimony we are 
asking very definitively for the U.S. Fish and Wildlife Service 
to treat Alaska as their sister Interior agencies have, and 
exempt Alaska from this rulemaking, if they persist. The two 
laws, National Interest Lands Conservation Act and the Native 
Claims Settlement Act, adequately govern all activity on refuge 
lands in the State of Alaska. There is no further need for 
additional regulation.
    But for the rest of the United States, let me make a few 
observations--I am certainly not an expert. But if the goal of 
the rule or these rules pondered is to improve oil and gas 
activity, I am going to predict failure. And if the goal of the 
rules is to slow oil and gas activity, I am going to predict 
near-perfect success.
    And let me--I learned quite a bit in this process. So, 
Interior governs oil and gas activity in a variety of ways. BLM 
is the primary manager for oil and gas activities on refuge 
lands where surface and subsurface are owned by the Federal 
Government, and where Native Americans, Indians, have 
subsurface rights. So BLM is the managing agency.
    The proposal by U.S. Fish and Wildlife is really specific 
and very narrow. It is for non-Indian, split-estate oil and gas 
potential.
    And then, finally, what is universal throughout the country 
is the States regulate almost all activity on all of these 
refuge lands, as well. And I will maintain today that the State 
is probably the expert regulator on all facets in all States. 
And I would like to emphasize as a second point that the Fish 
and Wildlife Service should save their time and effort, and 
spend more time coordinating and cooperating with the State 
regulators to see how they can crack this nut in a much more 
efficient way.
    So, the origin of the rulemaking is referenced to GAO 
reports. I have a peer petition here from 2011. But a lot of it 
is focusing on the sins of the past on refuge lands. And I want 
to urge members of the committee to not focus necessarily on 
the sins of the past, because activity that occurred 40, 50, 60 
years ago clearly was occurring in the Dark Ages. Industry 
activity these days is a totally different kettle of fish.
    Back to that GAO report, there has been a more recent one, 
specifically working with BLM's management and oversight of oil 
and gas activities. And most of the bullets--in fact, all of 
the bullets--really target ensuring that the BLM is working 
most efficiently, not creating new rules and regimes and adding 
more staff to regulate oil and gas activity. So I want to 
emphasize that they--even the GAO emphasized that the BLM 
should go and work with the States, specifically.
    And then, finally, we find a little bit of irony in this 
topic, because the only problem we have with oil and gas and 
operators in the State of Alaska is one operator, and that is 
the Federal Government. We have sites all over the State of 
Alaska, where oil and gas activity has turned out to be a 
disaster.
    This is from the Umiat Field in northern Alaska. This was 
taken when the activity was going on. I think Corps of 
Engineers was working this. This massive stuff here, these are 
all barrels full of God knows what. They were just buried and 
left. And the Department of the Interior still today is on the 
hook for many hundreds of millions of dollars of environmental 
degradation. We would urge that the Department of the Interior 
focus on cleaning up these messes first, and let the States 
worry about the private oil and gas activity.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Knudson follows:]
    Prepared Statement of Kip C. Knudson, Director of State/Federal 
      Relations, Office of Governor Sean Parnell, State of Alaska
                            i. introduction
    Chairman Fleming, Ranking Member Sablan, and members of the House 
Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs--for 
the record I am Kip C. Knudson, Director of State/Federal Relations for 
the State of Alaska (the State). On behalf of Governor Sean Parnell, I 
thank the subcommittee for this opportunity to testify and express our 
support for your work to ensure that the natural values of our National 
Wildlife Refuges continue to be preserved for the public benefit while 
allowing for the responsible development of natural resources within 
their boundaries consistent with law. We appreciate your leadership in 
striking and maintaining this balance.
    In particular, I thank you for the opportunity to bring to your 
attention the unique aspects--and successes--of oil and gas development 
in the National Wildlife Refuges in Alaska. In addition to the National 
Wildlife Refuge System Administration Act \1\ and other broadly 
applicable laws, we have a unique framework of existing Federal law--
primarily the Alaska Native Claims Settlement Act of 1971 (ANCSA) \2\ 
and the Alaska National Interest Lands Conservation Act of 1980 
(ANILCA) \3\--which provide for the management of oil and gas activity 
within refuges and maintain a workable balance in Alaska's unique 
environment.
---------------------------------------------------------------------------
    \1\ 16 U.S.C. Sec. Sec. 668dd-668ee.
    \2\ 43 U.S.C. Sec. Sec. 1601 et. seq.
    \3\ 16 U.S.C. Sec. Sec. 3101 et. seq.
---------------------------------------------------------------------------
    The State's interests in this activity are significant. For 
example, oil and gas exploration and development occurring today in the 
KNWR is essential for providing natural gas to heat and power the homes 
and businesses in much of the southcentral region of Alaska, including 
the major population centers of Anchorage, the Kenai Peninsula, and the 
Matanuska-Susitna Valley. Oil from these fields is also refined in 
Alaska to meet motor-vehicle demand throughout the State. We welcome 
Congress's oversight of the proposed U.S. Fish and Wildlife Service 
(USFWS) rulemaking--which may affect the livelihoods and energy 
security of many Alaskans.
Overview of Today's Testimony
    My primary message is that there is a robust framework of existing 
State and Federal law that rigorously regulates oil and gas development 
within the boundaries of the National Wildlife Refuges in Alaska. This 
framework is unique to Alaska and was specifically tailored by Congress 
to provide for the national interest and the economic and social needs 
of Alaskans. A cohesive and long-standing suite of Alaska laws, 
regulations and policies have been developed consistent with this 
framework and have proven, in practice, to be a testament to Congress' 
foresight. For this reason, the USFWS should provide, at a minimum, a 
categorical exemption from the proposed rulemaking for the Refuges 
located in Alaska.
    Any changes to national-level USFWS regulations must not, and under 
law cannot, avoid very explicitly acknowledging the balance Congress 
has already struck in Alaska, and should not upset or duplicate it. 
While the refuge lands in Alaska contain a huge portion--approximately 
50 percent--of the National Wildlife Refuge System's total acreage, 
Alaska is home to only 16 of the over 550 National Wildlife Refuges 
throughout the country. In this context, it could be said the USFWS 
administers 2 sets of Refuge lands--the 16 expansive Alaska Refuges and 
the other, much smaller 535 refuges. The most efficient way to 
acknowledge and respect Alaska's unique circumstances and functioning 
management structure in the context of the current proposed regulations 
is for the USFWS to include an unambiguous and categorical exemption 
for the 16 Alaska refuges.
    As I will detail below, Congress has already spoken on this issue 
in 1980 by providing clear instructions to the USFWS for managing 
Alaska's Refuge network under ANILCA and ANCSA. Ethan Schutt, Executive 
Vice President of Cook Inlet Region, Incorporated will speak in much 
greater detail on ANCSA and how it guides the Federal management of oil 
and gas activities in Alaska refuges. The State appreciates 
Congressional oversight to ensure that the USFWS understands and 
adheres to the spirit and letter of these existing laws.
    I also want to again emphasize the importance of continuing oil and 
gas exploration and development within Alaskan Refuges to the Americans 
who reside in Alaska. Gas produced in the Cook Inlet area, including 
gas from fields within the Kenai National Wildlife Refuge (KNWR), is 
the primary source of both heat and electricity for over half the 
State's population, and the reserves in the Cook Inlet area provide for 
the energy security critical to sustaining our livelihoods into the 
future. Without these stable local supplies and reserves, the high 
costs of living that Alaskans face would be dramatically exacerbated.
    Please note that the State has already submitted formal comments to 
the USFWS on the topic we are discussing today pursuant to the Federal 
Register Advanced Notice of Proposed Rulemaking (ANPR). These comments 
are consistent with the testimony I am providing and are attached to my 
written testimony, for the record.
ii. the unparalleled size and scope of national wildlife refuges within 
                                 alaska
    Alaska contains an extensive network of Federal land ownership--
approximately 222 of the 640 million acres owned by the Federal 
Government are located in Alaska. Of these 222 million acres of Federal 
land, roughly 75 million are in the 16 National Wildlife Refuges 
distributed throughout the State. This is 75 of the 150 million total 
acres managed by the USFWS nationwide--roughly 50 percent of the 
National Wildlife Refuge System. Alaska includes 14 of the 15 largest 
wildlife refuges in the country, nine of which contain more than two 
million acres each. Alaska's smallest wildlife refuge, the Izembek 
National Wildlife Refuge, is almost half the size of the State of Rhode 
Island.
    In sheer magnitude alone, Alaska's Refuge lands are in a distinct 
category within the Refuge System. Coupled with the unique land 
ownership issues associated with Alaska's Statehood entitlement and 
Alaska Native Corporation (ANC) entitlements under ANCSA, which I will 
discuss below, Alaska requires a customized approach to refuge 
management. Fortunately, Congress did exactly that through these two 
pieces of legislation that direct the management of Federal lands and 
protect private rights in Alaska's network of refuges.
  iii. a brief history of alaska's unique land ownership patterns and 
                  legal regimes applicable to refuges
    The Federal policy of retaining land in Federal ownership began in 
the early 1900s. This resulted in large swaths of public lands being 
created and maintained in the western States, as I'm sure some of the 
subcommittee members can readily attest to. This policy was well 
established when Alaska became a State in 1959, but there was still 
much that was not known about Alaska's varied and abundant natural 
resources.
    When Alaska entered the union, it was apparent that learning more 
about, and utilizing these natural resources would be critical to the 
massive State's economic future, from its abundant fish and game to its 
mineral and geologic potential. During the transition from territory to 
State, Congress agreed that a portion of the State--approximately 105 
million of 365 million acres--would be transferred to the new State 
government for management and development under the terms of the 
Statehood Compact.
    However, very serious land management issues were left unresolved 
by the Compact. First and foremost, Alaska Natives, who had lived in 
Alaska for thousands of years and, many of whom practiced a subsistence 
lifestyle, had important but unaddressed claims to lands. In 1971, 
Congress, recognizing the need for resolution of these issues, passed 
ANCSA.
    The central result of ANCSA was the creation and capitalization of 
12 ANCs. Under the act, Alaska Natives enrolled as shareholders in 
their respective ANC, and also in smaller Village Corporations 
representing the communities comprising the larger regional areas. A 
central part of the act allowed each ANC to own land, generally within 
its region and surrounding communities, via selection and conveyance. 
When the conveyance process is completed, the total land entitlement to 
be transferred to ANCs under these provisions will be approximately 44 
million acres. ANCSA provided for the ownership of surface rights, 
subsurface rights, or both in different scenarios, resulting in areas 
of split estate ownership throughout the State. ANCs have rights and, 
in fact, an obligation to develop these lands for the benefit of their 
shareholders.
    To accommodate the negotiations and ultimate resolution of ANCSA, 
the State's land selection activity was effectively paused during most 
of the 1960s and early 1970s. At this time, as more people came to 
Alaska and saw its natural beauty, and as the State's young economy was 
growing, there was a push to conserve more Federal lands in Alaska.
    Alaskans and Congress viewed ANILCA as the ``grand compromise''--to 
achieve ``proper balance'' \4\ between the use and conservation of 
Federal land in Alaska. Under the legislation, over 148 million acres 
of Federal lands were placed into Conservation System Units (CSUs). The 
CSUs, around 60 percent of the lands in Federal ownership, were placed 
off-limits to the State and ANCs for further selection, while also 
limiting the possibility of future economic development of these lands 
by Alaskans.
---------------------------------------------------------------------------
    \4\ See 16 U.S.C. Sec. 3101(d).
---------------------------------------------------------------------------
    ANILCA created, expanded, and consolidated Alaskan Refuges to 
establish the current network of 16 refuges, which collectively 
comprise over 20 percent of the State. This enormous expansion of the 
refuge system resulted in considerable State and ANC acreage (both 
surface and subsurface) suddenly located within or effectively 
surrounded by a CSU.
    This distinctive history has resulted in a very unique and diverse 
land ownership pattern in Alaska, with enormous amounts of land in 
Federal CSUs, less than 1 percent in individual private ownership, as 
well as scattered State and ANC selections and land holdings throughout 
the State.
    ANILCA also provided Alaska with an exclusive framework of 
controlling Federal law. In exchange for setting aside such a 
substantial percentage of the State in CSUs, ANILCA's ``compromise'' 
included numerous provisions to protect Alaskans' interests in access 
to the State's natural resources, especially those needed for the 
developing economy and infrastructure. ANCSA and ANILCA contain 
numerous provisions that promote and guide access to and utilization of 
Alaska's natural resources, including those resources surrounded by 
Alaska Refuges.
    Most of these provisions explicitly control activity in Alaska 
notwithstanding any other law. For example, the Refuge System 
Improvement Act of 1997 \5\ includes a specific savings clause to 
ensure that, in the event of a conflict between any provision of the 
Act and any provision of ANILCA, the provisions of ANILCA prevail. 
Because these Federal laws only affect Alaska, national policymakers 
and regulators do not always understand this important point when first 
approaching Alaska issues. To raise awareness of this framework and to 
enforce these legal rights, State experts frequently remind Federal 
officials about the statutory directives to consult with the State on 
issues affecting CSUs such as Alaska's refuges.
---------------------------------------------------------------------------
    \5\ P.L. 105-57, amending 16 U.S.C. Sec. 668dd.
---------------------------------------------------------------------------
iv. the compelling public interest in robust production in cook inlet--
                           including the knwr
    Although not the only refuge with significant oil and gas 
potential, the only refuge with oil and gas production in Alaska today 
\6\ is the KNWR, arguably one of the refuge system's most beautiful and 
frequently visited. It includes almost two million acres east and south 
of Cook Inlet on the Kenai Peninsula, with its northern boundary a mere 
10 air-miles south of Anchorage across the Cook Inlet. The refuge's 
history stretches back to the Kenai National Moose Range created in 
1941 by President Franklin D. Roosevelt.
---------------------------------------------------------------------------
    \6\ There are three producing Federal units--Swanson River, Beaver 
Creek, and Birch Hill--that are within the refuge boundaries.
---------------------------------------------------------------------------
    The entire Cook Inlet area features significant oil and gas 
potential, and many identified formations are located under the 
boundaries of the Refuge. The land within the Refuge has seen oil and 
gas activity for nearly 60 years, beginning with the development of 
Cook Inlet's first field, Swanson River, in 1956 and 1957. Some have 
said it was this major oil find that tipped the national balance in 
favor of accepting Alaska as the 49th State in 1959. Production in 
Swanson River continues today and is a critical piece of the energy 
supply for the most populous region of Alaska.
    When Alaska's oil and gas production is discussed, many people 
naturally think of the North Slope oil fields. As some of the largest 
in the western hemisphere, these fields, including the mammoth fields 
of Prudhoe Bay and Kuparuk, have produced over 16 billion barrels of 
crude oil to date. The Trans-Alaska Pipeline System, one of the 
Nation's most impressive infrastructure projects, transports this 
Arctic oil from the North Slope to Gulf of Alaska tidewater in Valdez 
and is the backbone of our State's resource economy. But it is Alaska's 
original oil discoveries in southcentral Alaska, and the access to the 
region's abundant natural gas resources that oil production made 
possible, which continue to be the most important source of domestic 
energy supplies for a majority of Alaskans.
    Extensive oil and gas exploration followed the development of 
Swanson River in the 1960s, and activity quickly moved to the east and 
west sides of Cook Inlet as well as off-shore. The natural gas supplies 
that have been produced from these areas have long been used to 
generate electricity and provide heat for Alaskans living in the 
southcentral region. Today, a majority of Alaska's population is 
located in this area--due in part to the stable cost of energy Cook 
Inlet has provided for half of a century. Cook Inlet natural gas has 
also been used for industrial purposes to support Alaska's economy, as 
well as for pioneering liquefied natural gas (LNG) exports from the 
United States' oldest, and for decades, only LNG export facility in 
Nikiski, Alaska. To date, approximately 11 trillion cubic feet of 
natural gas have been produced from the Inlet.
    Cook Inlet producers continue to provide natural gas to meet 
southcentral Alaska's demand for approximately 80 to 90 billion cubic 
feet per year. Thanks to its significant untapped resource potential 
and the competitive investment climate fostered by Governor Parnell and 
the Alaska Legislature, the basin, after over 50 years of sustained 
activity, is now even experiencing a welcome boom. We call it the Cook 
Inlet Renaissance. Motivated companies are moving into the Inlet to 
explore new fields and revitalize existing ones, and residents are 
benefiting from new reserves being brought online. This includes work-
overs in the Federal lease areas operating within the KNWR that are 
facilitated by the extensive existing oil and gas delivery 
infrastructure which partially lies within the Refuge's boundaries. 
Industry has also been engaged in USFWS-permitted resource exploration 
of private lands within Refuge boundaries, which will hopefully 
contribute to future Cook Inlet production and additional energy 
security for Alaskans.
    While we strongly believe Cook Inlet's available supplies are 
adequate to meet demand in the near term, it is important to understand 
the compelling State interest in ensuring robust production from all 
the resource-rich lands, including Refuge lands, in Cook Inlet. In the 
past when some entities predicted a downturn in Cook Inlet activity, 
one of primary proposals to meet the southcentral region's energy needs 
involved foreign LNG imports. The energy supplies that come from Cook 
Inlet, including natural gas being supplied from lands within and 
adjacent to the Kenai Refuge, cannot be immediately replaced if 
burdened or impeded by excessive regulation.
    Pursuant to ANCSA and ANILCA, non-Federal surface and subsurface 
estates also are to be found within the boundaries of other refuges in 
Alaska. These estates tend to be located in regions of the State where 
energy costs are orders of magnitude higher than those in southcentral 
Alaska. It is imperative that the State and Federal Government work in 
the smartest, most responsible manner to ensure that those resource-
rich lands are not effectively put off limits due to poorly crafted 
regulation. To sustain the Cook Inlet renaissance, and to allow a 
similar renaissance to occur in other regions by attracting diligent, 
responsible companies eager to deploy state-of-the-art, low-impact 
technologies, Alaska needs to ensure consistent application of rights 
in ANILCA and ANCSA that support this activity. Federal and State 
managers, as well as industry leaders, already work within this 
specifically tailored framework to make responsible decisions regarding 
Alaska's unique environment.
v. the role of federal oil and gas development within national wildlife 
                           refuges to alaska
    Before continuing with the substance of my testimony, I would like 
to make a brief note about the scope of the proposed rulemaking under 
review by the subcommittee today.
    As the State understands the USFWS's February 24th Advanced Notice 
of Proposed Rulemaking (ANPR), the USFWS is gathering information 
related to non-Federal oil and gas development within the boundaries of 
our National Wildlife Refuge System. The ANPR describes such 
development as including--``those activities associated with any 
private, State, or tribally owned mineral interest where the surface 
estate is administered by the Service as part of the Refuge system.'' 
The State interprets this to mean the regulations would not impact 
Federal oil and gas activities within the Refuge System. There are 
currently three producing leases within the Kenai Refuge on Federal 
surface and subsurface estate--Beaver Creek, Swanson River, and Birch 
Hill--that would be considered Federal oil and gas developments. These 
fields are critical to providing natural gas supplies to many Alaskans, 
as discussed above.
    This would mean that the regulations would not change Federal oil 
and gas development, but instead would affect activity related to non-
Federal surface and subsurface estates and potentially destabilize the 
careful balance of ANCSA and ANILCA described above.
   vi. the need for a categorical exemption for alaska from the new 
        rulemaking regarding non-federal oil and gas development
    Turning to those activities the State understands to be the subject 
of the ANPR, there are four points that I would like to make today that 
support the USFWS including a categorical exemption for the 16 Alaska 
Refuges from the potential rulemaking.
The ANPR contemplates adding an unnecessary layer of regulation.
    First, the USFWS has Alaska-specific oil and gas rules in place, so 
adding a new layer has the potential create confusion and delay. 
Additionally, new rules will necessarily further distract USFWS from 
executing on the core missions for which regulations are already in 
place.
    The State currently has in place regulatory systems that govern 
aspects of oil and gas activity from exploration through dismantlement, 
repair and restoration. Most of this regulation is enforced on an 
operator regardless of the land status on which the activity occurs. 
The State prioritizes this regulatory authority, ensures that is 
funded, and regularly verifies that it is keeping pace with technology 
and ever-improving environmental practices.
    This regulatory expertise, when added to the Alaska-specific laws 
and rules, guarantees that no certainty will be gained in Alaska. 
Additionally, the refuge system will be no more protected while the 
taxpayer will see limited refuge resources squandered. Effectively, 
USFWS will have misapplied resources at the expense of missions only 
that agency executes.
    A perfect example is the current back-log of Endangered Species Act 
work USFWS is experiencing. This back-log is currently having a 
negative impact on the species the ESA intends to protect and has 
delayed and hampered economic opportunity for Alaskans. The threat of 
uninformed Section 7 consultations resulting in ``preferred 
alternatives'' to remove ``Jeopardy'' and ``Adverse Modifications'' 
findings has had a chilling effect on resource development investments 
in Alaska. For reference, the extent of these significant impacts is 
described in the State's study of potential impacts from the 
unnecessary listing of polar bear.
The ANPR demonstrates inconsistency with Alaskan land ownership 
        patterns.
    The ANPR outlines that the USFWS's scoping effort will address the 
perceived lack of a cohesive and sufficiently detailed authorization 
framework for non-Federal oil and gas activities within Refuges. More 
specifically, the USFWS would like to develop a homogenous means of 
managing ``those activities associated with any private, State, or 
tribally owned mineral interest where the surface estate is 
administered by the Service as part of the Refuge system.''
    The current regulation used for this purpose similarly focuses on 
Federal lands overlying private rights which were retained upon the 
area's conveyance to or acquisition by the government.\7\ As discussed 
above, there are areas in Alaska with ``in-holdings'' within a refuge, 
where an entity, often an ANC, owns both the surface and the subsurface 
or mineral estate, of a parcel. In these scenarios, the surface land 
may be administered as part of the refuge but it is held as the 
property of the ANC. These properties have special rights of access and 
utilization under ANCSA and ANILCA that would be very different than 
the scenarios apparently contemplated by the USFWS where a third party 
owns some portion or reserved right of the subsurface estate. 
Understandably the language of the ANPR is phrased generally, but this 
is a threshold example of why an Alaska exemption will provide the most 
clarity for both the USFWS and the regulated public. Trying to fit 
Alaska into this rulemaking effort would introduce the need for the 
USFWS to conduct extensive research and analysis to understand all of 
Alaska's unique land ownership scenarios, complicating rather than 
adding clarity to the rulemaking.
---------------------------------------------------------------------------
    \7\ See 50 CFR Sec. 29.32.
---------------------------------------------------------------------------
The ANPR addresses issues that are not pertinent to Alaska Refuges due 
        to the Alaska-specific authorization process based in existing 
        Federal law.
    My testimony so far has repeated the fact that ANCSA and ANILCA 
gave Alaskans and ANCs a suite of access rights to and utilization of 
lands within the State, including in-holdings within the boundaries of 
Alaska Refuges. This includes rights to support economic development of 
property interests and to establish infrastructure to further these 
interests.\8\ Any regulations the USFWS promulgates regarding non-
Federal oil and gas development that do apply to Alaska will have to 
comply with these statutes and valid existing rights.
---------------------------------------------------------------------------
    \8\ See, e.g., ANILCA Sec. 1101 for the approval of transportation 
and utility projects, ANILCA Sec. 1109 for all valid rights of access 
pre-dating ANILCA's enactment, ANILCA Sec. 1110(b) for the economic use 
of subsurface rights, ANILCA Sec. 1111(a) for the right of temporary 
access across Federal lands related to non-federally owned lands, etc.
---------------------------------------------------------------------------
    As the USFWS has stated in the ANPR, one goal of the proposed 
rulemaking is to eliminate an ``uncertain and inconsistent'' regulatory 
environment for oil and gas operators in National Wildlife Refuges.\9\ 
To apply to Alaska Refuges under the existing Federal law, a nationally 
applicable rule would require extensive cross-references, exemptions, 
disclaimers and qualifying statements. This would hardly support 
clarity or consistency for the regulated public. A clearer approach, 
which provides a much more effective use of the USFWS's rule-writing 
time and resources, would be to include a categorical exemption for 
Alaska which clarifies that any new regulation of non-Federal oil and 
gas activities does not apply to refuges in Alaska.
---------------------------------------------------------------------------
    \9\ 79 Fed. Reg. 10080, 10081.
---------------------------------------------------------------------------
    It is important to point out that Alaska Refuges have already 
developed and implemented procedures and standards for the 
authorization of non-Federal oil and gas activities consistent with 
ANILCA and ANCSA. For example, the USFWS recently issued complex 
authorizations for high-tech, low-impact seismic activities within the 
KNWR that will occur over several of the next exploration seasons. 
Historically, there has also been production from non-Federal oil and 
gas areas. This is in addition to the long-standing Federal oil and gas 
development activities that are in production today that show oil and 
gas operations can be compatible with Refuge lands that are mentioned 
above. The evaluation and approval mechanisms the USFWS and Kenai 
Refuge staff have employed with Alaska's unique legal framework to 
provide flexibility and maintain consistent expectations for property 
owners, regulated entities, and the public should not be confused by 
this national rulemaking.
The ANPR references corollary National Park Service regulations that 
        contain a categorical exemption for Alaska.
    Throughout the ANPR, the USFWS asks commenters to consider possible 
models for the scope and content of the proposed rule. In particular, 
the ANPR includes a discrete section asking whether National Park 
Service (NPS) regulations regarding the management of similar 
activities in National Parks should be used as a model for the USFWS 
regulations under consideration. In the referenced regulations,\10\ the 
NPS explicitly recognized the role ANILCA plays in managing these 
activities in Alaska and, for many of the reasons I have noted in my 
testimony, included a categorical exemption for Alaska parklands from 
the national regulations.
---------------------------------------------------------------------------
    \10\ See 36 CFR Sec. 13.15(d)(2).
---------------------------------------------------------------------------
    In this respect, the State finds the NPS regulation provides an 
ideal model for the proposed rule and requests that it also include 
such an Alaska-specific categorical exemption.
                            vii. conclusion
    Consistent with the comments already submitted pursuant to the 
administrative process, the State strongly believes that the most 
efficient and effective path forward for the USFWS is to include at a 
minimum a categorical exemption for Alaskan Refuges due to the 
complexities of ANILCA and ANCSA. As discussed above, the NPS has taken 
this approach so that they can move forward with developing regulatory 
models for the other jurisdictions that are not part of Alaska's unique 
legal framework.
    I also hope that the general narrative information I provided is 
helpful to the subcommittee for framing this issue. It has been my 
purpose to show that the unique legal regimes that control Federal 
activity in Alaska today grew out of Alaska's unique history and 
environment, including its immense resource potential, unparalleled 
conservation, and absolute size. When Congress originally enacted these 
laws, it was striking a very careful balance that intended to carve out 
Alaskans' rights and Federal protections.
    Finally, I wish to repeat how critical continued oil and gas 
development in Alaska's National Wildlife Refuges can be--to our 
citizens' electricity and heat in addition to economic livelihood. This 
is clearly demonstrated in the KNWR, where over 50 years of oil and gas 
activity has provided energy supplies for many of the Alaskans in the 
State. This development serves as an example of both the potential and 
importance of developing oil and gas in a compatible fashion with 
National Wildlife Refuges. While I cannot speak to instances in other 
States, I suspect the long-term success of the Kenai Wildlife Refuge 
could be found elsewhere.

                                 ______
                                 

    Dr. Fleming. Thank you, Mr. Knudson. Thank you for your 
testimony, and Mr. Guertin, as well.
    At this point we would have some questions from the dais to 
our panel members. And I now recognize myself for 5 minutes.
    Mr. Guertin, there are about 100 national wildlife refuges 
that have actively producing oil and gas wells. When the Fish 
and Wildlife Service acquired the land, did your realty office 
know there were non-Federal minerals, and that your agency was 
not purchasing those subsurface rights?
    Mr. Guertin. Mr. Chairman, the way the Service operates is 
to acquire the least amount of interest in any type of property 
as we move forward, in order for us to accomplish our mission. 
In many cases, the United States has only purchased the surface 
estate, and has not purchased the corollary subsurface estate. 
So we had no idea, nor did we do evaluation as to whether or 
not there were minerals underneath that at that time.
    Dr. Fleming. But you were aware that there were actively 
producing oil and gas wells, or certainly well could be.
    Mr. Guertin. There could have been. Yes----
    Dr. Fleming. You really weren't asking the question, either 
way. Your realty office was purchasing the land, or acquiring 
the land in some way, regardless of whether there were oil and 
gas wells, or minerals--under the surface.
    Mr. Guertin. Yes, Mr. Chairman, for the pre-eminent 
wildlife values on that land.
    Dr. Fleming. Right. So you purchased these lands with your 
eyes open, so to speak, or at least capable of having your eyes 
open, whether you chose to look for any well activity or not. 
There was no one who forced the Service to acquire this 
property. You weren't required by anyone else to buy the 
property, regardless of whether there was activity on it or 
not.
    Mr. Guertin. No, Mr. Chairman.
    Dr. Fleming. Thank you. Can the Fish and Wildlife Service 
deny access to subsurface minerals that it does not own?
    Mr. Guertin. Mr. Chairman, the Service recognizes and 
respects that this is private property, and we cannot deny 
access to it. We can, however, work with the owners to get into 
there in a reasonable and prudent way to avoid significant 
impacts to the wildlife values of the refuge around it.
    Dr. Fleming. I am not sure if I caught all of that. You 
said that you can't----
    Mr. Guertin. We cannot----
    Dr. Fleming [continuing]. Deny access. And what was the 
other part?
    Mr. Guertin. We cannot deny them access, Mr. Chairman, but 
we can work with them to avoid and mitigate any of the impacts 
of their ongoing development to the larger wildlife refuge, and 
in partnership with them.
    Dr. Fleming. If you did deny access, that would be a 
violation of the Fifth Amendment, the Constitution?
    Mr. Guertin. Yes, Mr. Chairman. We agree with that.
    Dr. Fleming. OK, thank you. If I am drilling a well from my 
own property and, through the use of horizontal drilling, 
extracting oil and gas resources which I own from underneath a 
wildlife refuge, is the Service currently regulating those 
activities? That is I am drilling in private land, but I am 
horizontally moving underneath the refuge for the mineral 
rights that I may own.
    Mr. Guertin. There have been----
    Dr. Fleming. Is the Service currently regulating those 
activities?
    Mr. Guertin. We are working on some projects with that. In 
fact, it is taking place, Mr. Chairman. What we are envisioning 
for the future is, as technologies emerge, there is going to be 
a lot more of that going on. And we are also addressing things 
at a larger landscape scale, where private lands and the refuge 
itself are pretty closely inter-related.
    Dr. Fleming. But as it stands, you are not regulating that 
activity. You are contemplating some sort of future regulation.
    Mr. Guertin. Yes, Mr. Chairman.
    Dr. Fleming. OK. What are your intentions as to those 
activities in the future? And I guess maybe you have already 
answered, and that is you are reviewing that and still in the 
process of deciding how you may do that in the future.
    Mr. Guertin. Yes, Mr. Chairman. What we have done is move 
forward and put out for public review and comment an advanced 
notice of proposed rulemaking, which, in essence, is asking a 
series of questions to all of the stakeholders--the industry, 
States, Tribes, and private land owners--as we move forward.
    What we envision over the next 2 years is working through a 
public process to solicit ideas, information, and come up with 
a framework----
    Dr. Fleming. All right. But let me ask you this. Do you 
contemplate treating those that are, again, drilled on private 
land but underneath refuge land any differently than those that 
are actively drilling on the refuge land?
    Mr. Guertin. Yes, Mr. Chairman. We are envisioning--
probably looking at a larger landscape approach, which might 
include some of this adjacent land. We have not made a final 
determination as to that. But we are certainly going to 
evaluate this during the process. But open to all the feedback 
we get on that point.
    Dr. Fleming. OK, thank you. Mr. Guertin, the State of 
Alaska has testified that they inspect the 80 oil and gas wells 
at the Kenai--I guess I am saying that correctly--Kenai 
National Wildlife Refuge at least twice a year. Is that a 
sufficient number, or is there something unique about the 
Federal Government that requires further inspections?
    Mr. Guertin. Do you mean the State is inspecting them for 
health and safety at this point, Mr. Chairman.
    Dr. Fleming. Well, the State is inspecting them twice a 
year. Is that inadequate?
    Mr. Guertin. Well, a lot of the State regulatory framework 
is really dealing with the machinery and the down-hole 
functioning of the wells. It is dealing with a lot of the 
production values. We don't have any regulatory authority 
currently to inspect any of these wells at this point in time. 
What we do is evaluate potential impacts that come off of these 
wells.
    Dr. Fleming. But you do contemplate possibly beginning to 
regulate that. So again, the question is, if they are already 
regulating in Alaska and in Louisiana, is there a need for a 
whole other layer of regulation?
    Mr. Guertin. There may not be. If the best practices that 
States employ are going to support our mission, we would 
certainly look at that through this rulemaking process, Mr. 
Chairman. We could very well adopt State standards. If they are 
not up to what we need to manage the Refuge System, we will 
evaluate that during this rulemaking process.
    Dr. Fleming. OK. My time is up, and I yield to the Ranking 
Member for 5 minutes.
    Mr. Sablan. Thank you very much, Mr. Chairman. Mr. 
Guertin--is that----
    Mr. Guertin. Mr. Guertin, sir.
    Mr. Sablan. Mr. Guertin. The 2003 GAO report recommended 
that the Service clarify its permitting authority of non-
Federal O&G operations through regulations. Would updated 
regulations provide a more consistent and reasonable set of 
rules over all oil and gas activities occurring on the Refuge 
System to protect the public's surface interests?
    Mr. Guertin. Our vision is that having a consistent 
framework for the entire National Wildlife Refuge System would 
make it easier for our refuge managers to focus on their 
mission of safeguarding the public's investment in the National 
Wildlife Refuge System. At the same time, it would give 
operators a consistent series of larger, strategic guidelines 
they could tier off of.
    We are also envisioning that we would step down these at 
the local level, much as we do our CCP process, to give the 
refuge managers the opportunity to work with operators at a 
local scale, as well. But we----
    Mr. Sablan. So----
    Mr. Guertin [continuing]. Believe the framework is 
necessary to set that kind of standard for the national system, 
as a whole.
    Mr. Sablan. So there is--because right now I think there 
is--different States have different ways to regulate this, and 
it is just--you know.
    But--so let me ask you another question, Mr. Guertin. How 
do people get onto a wildlife refuge to access fossil fuels?
    Mr. Guertin. Essentially, there is no formal process at 
this point, sir. If operators have legal rights to the 
property, their minerals underneath the surface estate there, 
they have the prerogative to just come onto the refuge. 
Oftentimes we might find out after the fact.
    What we are envisioning is, instead, partnering with them 
at the beginning of a process, and working with them to avoid 
and minimize any potential unintended impacts that this 
development might incur.
    Mr. Sablan. And----
    Mr. Guertin. Right now there is no framework to----
    Mr. Sablan. And so----
    Mr. Guertin [continuing]. Have them go through a process.
    Mr. Sablan. So does this unfettered and unregulated access 
cause damage to wildlife and habitat, or any other problem?
    Mr. Guertin. Well, there has been some anecdotal evidence 
of operators going down to a refuge without our knowing about 
it. But most of the impacts have been from older wells that--
the caps have failed on them, or there have been leaks over 
time, or the breakdown in machinery, sir.
    Mr. Sablan. Yes. And some in Congress always complain about 
the refuge system maintenance backlog. So can you please tell 
us--talk about potential future damages from abandoned oil and 
gas wells on refuge lands?
    Mr. Guertin. Well, there have been some cases where we have 
experienced oil leaks or saline water leaks. There has been 
damage from equipment to the Refuge System. There has been 
damage to roads. Seepage or drainage has gotten into wetlands 
and estuarian areas. And so what we are envisioning is 
partnering with the industry, moving forward in a proactive 
way, to help them plan and evaluate where to site the equipment 
they will need to operate in the future and avoid any 
unnecessary environmental degradation in the years to come.
    Mr. Sablan. Let me go further out. And let me ask, because 
in your advanced notice of proposed rulemaking the Service says 
that the Refuge System has sustained significant damages to 
refuge resources from leaks and spills, inadequate plugging, 
abandonment, and reclamation.
    And you are not going to be able to answer this question 
today, but I would like to ask you if you could supply the 
subcommittee with a more exact counting of the cost the 
taxpayers have to bear to fix the damage from these leaks and 
spills and other cleanup. When you say ``significant damage,'' 
can you put a dollar figure on that? And not just how much 
taxpayers had to pay in the past, but also how much future 
liability are we looking at. And maybe you can't provide that 
information now.
    Mr. Guertin. We can provide information for the record. 
There have been some documented spills that have cost anywhere 
from $200,000 to up to $1.2 million for remediation on 
individual sites on the National Wildlife Refuge System----
    Mr. Sablan. All right.
    Mr. Guertin [continuing]. Tied to oil damage.
    Mr. Sablan. So I am going to go back to my previous 
question, or the question before that, on the backlog. Let me 
ask you. How does removal of and liability for these structures 
contribute to the backlog? I am talking about the maintenance 
backlog and the abandoned oil and gas wells and refuge lands. 
How does the removal and liability contribute to the backlog?
    Mr. Guertin. If the refuge has abandoned equipment and an 
unplugged well, old pads, settling ponds, or buildings, or 
rigs, they would be included in the refuge deferred maintenance 
backlog, and would be the taxpayers' responsibility to pay to 
remove or properly mitigate for those removal or damages. That 
would contribute to the backlog. Yes, sir.
    Mr. Sablan. Thank you very much. I yield back, Mr. 
Chairman.
    Dr. Fleming. The gentleman yields back. The Chair now 
recognizes Mr. Duncan of South Carolina.
    Mr. Duncan. Thank you, Mr. Chairman. Thank you, gentlemen, 
for being here.
    Mr. Guertin, what is the prioritization of the EIS, in 
relation to other priorities for the Fish and Wildlife Service?
    Mr. Guertin. It is one of probably the top 10 or 15 
priorities for the National Wildlife Refuge System management 
going forward, Mr. Congressman.
    Mr. Duncan. OK. Under--well, let me ask you this. Under 
what statutory authority can the Service stipulate how a 
company may explore for its oil and gas resources within the 
Refuge System?
    Mr. Guertin. Could you rephrase the question, sir?
    Mr. Duncan. Yes sir. Under what statutory authority can the 
Service stipulate how a company may explore for its oil and gas 
resources within the Refuge System?
    Mr. Guertin. Sure. We are citing a Refuge Organic Act, the 
Refuge Improvement Act of 1996, as our organic Act that gives 
us the authority to manage the Nation's National Wildlife 
Refuge System, with a responsibility to manage for conservation 
and wildlife first. That organic legislation also dictates that 
we provide CCPs, or Comprehensive Conservation Plans for each 
unit of the National Wildlife Refuge System that drive how we 
are going to manage the program, going forward.
    We cannot stop any land owner from getting to their 
property minerals underneath the wildlife refuge system, but we 
believe this legislation gives us the authority to partner with 
them to help them develop and extract this resource with the 
least amount of impact to the larger refuge unit, itself.
    Mr. Duncan. So let me just follow up. How would you respond 
to a GAO report in 2007 which cited, ``We believe it is for 
Congress, not the DOI, to weigh the needs of the refuge lands 
and interests of the mineral owners, and, ultimately, to 
determine what oversight authority would be appropriate'' ? How 
would you respond to that?
    Mr. Guertin. Our agency and the Administration would point 
to the Refuge Organic Act, the National Wildlife Refuge System 
Improvement Act, as giving us that authority. Clearly, we are 
interested in working with Congress as we plumb this issue 
further in the coming months and years through this proposed 
rulemaking. And so that is how we would go about answering that 
question.
    Mr. Duncan. OK. Just shift gears for a second. This is just 
fact-finding for me. Have there been any major oil spills from 
exploration or production within the Refuge System?
    Mr. Guertin. We can provide for the record some specifics, 
but there have been no significant oil spills from exploration 
on the Refuge System. Most of them have been from----
    Mr. Duncan. Are these pipeline spills? Are those the 
spills----
    Mr. Guertin. Pipeline----
    Mr. Duncan [continuing]. At the wellhead themselves?
    Mr. Guertin. Yes, sir.
    Mr. Duncan. Pipeline?
    Mr. Guertin. Pipeline spills, or there has been some 
leakage off of some of the well pads and things like that.
    Mr. Duncan. OK. So during the past 10 years, how many total 
barrels of oil would you guesstimate--you can provide me 
specifics later--from the oil wells within the Refuge System?
    Mr. Guertin. I would have to provide that information for 
the record, Mr. Congressman.
    Mr. Duncan. OK. If you could provide that, that would be 
great for the whole committee.
    And, Mr. Chairman, I really don't have anything else. We 
will just wait on that information to come back from him.
    Dr. Fleming. The gentleman yields back. Mr. Lowenthal, do 
you have questions?
    Dr. Lowenthal. Thank you, Mr. Chair. The question--Mr. 
Guertin, thank you for coming and testifying before the 
committee.
    When I read the GAO report's recommendation to the Service, 
and then also the Service's advanced notice of proposed 
rulemaking, so it seems like the Service now is--as you pointed 
out, is finally addressing the problems that the GAO first 
uncovered in 2003 and again in 2007. Is that it? So----
    Mr. Guertin. Yes, there has been a lot of unprecedented 
development going on in the country, there has been a lot of 
interest in moving forward on a lot of projects. There are a 
lot of emerging technologies. The time is very ripe for the 
Fish and Wildlife Service----
    Dr. Lowenthal. Right.
    Mr. Guertin [continuing]. To partner with industry and 
promulgate these regulations for certainty, moving forward.
    Dr. Lowenthal. I think the point that I am also--and while 
you didn't mention it much in your oral testimony--in your 
written--that this is a real problem. It is not trying to 
create a problem. It has been documented by the GAO and--the 
two--I recall the two case studies in your prepared testimony 
also cost the taxpayers over $1.5 million. The public deserves, 
I think, a consistent and reasonable set of regulatory and 
management controls of oil and gas activities occurring on the 
Refuge System to protect the public's surface interests.
    So, the first question I have is, do other Federal land 
management agencies manage split-estate lands?
    Mr. Guertin. There are some instances in the National Park 
Service, in the National Forest System. Largely, the BLM would 
have dual estate ownership of this. Fish and Wildlife Service, 
again, has entered into some conservation practices by 
acquiring the least amount of title to a property we needed to 
deliver our mission. That has meant we probably have more of 
this split estate situation on a lot of our lands than some of 
our sister agencies.
    Dr. Lowenthal. And those other Federal land management 
agencies, they have more comprehensive and clearer regulations 
covering the development of non-Federal oil and gas operations. 
Is that not true?
    Mr. Guertin. Yes, that is correct, Congressman.
    Dr. Lowenthal. So that is maybe the National Park Service, 
National Forest Service, and so forth.
    Specifically, what does the National Park Service currently 
require of operations that the Fish and Wildlife Service does 
not----
    Mr. Guertin. They require, in essence----
    Dr. Lowenthal [continuing]. Of operators?
    Mr. Guertin. They require, in essence, a permit, they 
require some type of surety bond or safeguards, moving forward, 
in case there are damages down the road. They also require the 
operator to work with them on siting and avoidance and 
mitigation measures, as well.
    Dr. Lowenthal. I think you mentioned in your testimony that 
many States do not have--or have very minimum kinds of surety 
bonds that cost the Fish and Wildlife Service extensive amounts 
of money when a bond--I think it was in the State of 
Mississippi--was only about $10,000, and the costs ended up 
being far greater than that. And the taxpayers had to cover 
that cost. Is that not so?
    Mr. Guertin. Yes, Congressman. It can vary, State by State. 
There have been cases where we have had to, and the taxpayers 
have had to pay pretty significant damages for remediation and 
cleanup.
    Dr. Lowenthal. Well, you know, I think my colleagues here 
on both sides of the aisle really care about being fiscally 
responsible. And so I would hope that any final rule would also 
keep the taxpayers from being on the hook for the millions of 
dollars for abandoned oil and gas infrastructure and 
contamination cleanup. Is that one of the Service's goals?
    Mr. Guertin. Yes, Congressman. And, above all, our goal is 
that we want to protect the taxpayers and sports-person's 
investment in the National Wildlife Refuge System that has 
been----
    Dr. Lowenthal. Well, thank you. It just seems to me that 
the Service is finally addressing a long-recognized problem, a 
real problem, that the Refuge System has repeatedly borne 
serious degradations to refuge resources from leaks and spills; 
inadequate plugging, as you pointed out in your prepared 
testimony; abandonment, which you pointed out; and reclamation. 
And the Service is now taking the necessary steps to apply a 
consistent and reasonable--hopefully, reasonable--set of 
regulatory and management controls over oil and gas activities 
in the Refuge System in order to protect the public's surface 
interests.
    I think, in conclusion, that this is acting in a fiscally 
responsible manner. And I thank you for beginning that process. 
And I yield back.
    Dr. Fleming. The gentleman yields back. The Chair now 
recognizes Mr. McAllister.
    Mr. McAllister. Thank you, Mr. Chairman. Mr. Guertin, in 
2007 the Government Accountability Office recommended that the 
Service hire 32 refuge oil and gas specialists, 7 regional 
coordinators, and a 6-member mineral regional team. How many of 
those positions are currently filled?
    Mr. Guertin. We have currently filled about four or five of 
the regional coordinators. We have trained over 200 employees 
on oil and gas procedures and regulations and policies in the 
System, Congressman.
    Mr. McAllister. OK. But how many of these actual 
recommendations have been filled?
    Mr. Guertin. We have hired--the first recommendation, we 
have hired four people in the regional offices, of the seven. 
And then, of the 32 you have mentioned, we have probably filled 
about 15 to 20 of those positions, but we have also trained an 
additional 200 employees in the larger regulatory framework in 
working on oil and gas projects.
    Mr. McAllister. So those are current employees that you 
just sent back for retraining, or additional?
    Mr. Guertin. Yes, sir.
    Mr. McAllister. OK. So, in the past 8 years, the Service 
has hired less than 25 percent, according to our numbers, of 
what the GAO recommended, including one licensed petroleum 
engineer. What are your hiring plans in the future?
    Mr. Guertin. Congressman, we are currently evaluating our 
portfolio of program management, going forward. The President's 
budget for 2015 does include some increases for the Refuge 
System and our ecological services program. We are putting a 
priority on energy development processes within the Fish and 
Wildlife Service, and trying to get after these at a landscape 
scale with all of our programs.
    We can't really talk about the internal formulation of the 
2016 budget yet, but we are pursuing a vision which puts a 
premium on energy development and positions for energy in that 
area.
    And also note, as you know, Congressman, all of the 
agencies went through some pretty significant trim in the 
budget the last couple of years. We are actually down several 
hundred employees, overall, with the Fish and Wildlife Service. 
But rather than just willy nilly fill those positions with 
whoever anyone wants, we are targeting energy portfolio program 
management positions as we rebuild the workforce out there in 
the field stations.
    Mr. McAllister. I completely agree, and appreciate that, 
taking the time. But, I mean, 8 years? I think if I had to take 
an 8-year hiring process in my business, we would be out of 
business.
    And also, the GAO recommended in 2003 that the Service 
establish an inventory of oil and gas wells and infrastructure 
on refuge lands. What is the status of that comprehensive 
inventory?
    Mr. Guertin. We have actually completed a pilot, which 
targeted the States with the largest amount of National 
Wildlife Refuges with oil and gas development on the 
Mississippi and Louisiana. That is not ready for public preview 
at this point, but we would be glad to give you or your staff a 
kind of off-the-record update on that, if it would be helpful 
to you. And then we envision moving forward with the full study 
analysis over the coming fiscal year, as well.
    Mr. McAllister. So that is the pilot program that you are 
doing right now that will eventually become a national tracking 
system for----
    Mr. Guertin. Yes, and we have targeted the States with the 
preponderance of units of the Refuge System with oil and gas 
development on them. And that is an internal document at this 
point. But, again, if you are interested, we would offer to 
come up and brief you on that.
    Mr. McAllister. Absolutely. I would appreciate it if you 
could give it to the office whenever you have the chance.
    Since the Service has a legitimate concern about abandoned 
wells and orphaned infrastructure equipment, why not confine 
your new regulations just to addressing these problems?
    Mr. Guertin. We are envisioning taking a look at the larger 
landscape out there. We are also trying to be more strategic 
and look down the road 10, 15, 20 years. Because of the 
burgeoning interest in energy development in the country here, 
a lot of the emerging technologies, new formations being 
discovered, we are really looking at where we think we are 
going to be 15 or 20 years from now, and our vision points us 
that we need to be much more bigger-thinking about this, and 
look at the entirety of the Refuge System, and take that 
strategic stance.
    Mr. McAllister. So how many qualified oil and gas 
inspectors work for the Fish and Wildlife Service?
    Mr. Guertin. Mr. Chairman, I think we have about 10 or 12, 
but I will confirm that for the record for you.
    Mr. McAllister. Ten or twelve to cover the entire Nation?
    Mr. Guertin. Yes, sir.
    Mr. McAllister. OK. So, just to address the two case 
studies you cite in your testimony involving abandoned rigs and 
equipment, why not confine any future regulations to addressing 
what is, obviously, the largest problem facing the Service, and 
that is abandoned energy equipment?
    Mr. Guertin. We are going to evaluate the abandoned energy 
equipment as part of this advanced notice of proposed 
rulemaking. We envision looking at several aspects of the 
issue, including the surety bond we talked about before, access 
fees, if any, looking at public access and other uses. And we 
are certainly going to take to heart your comments on this 
larger issue within this kind of umbrella here of this 
abandoned equipment, because that is one that directly adds to 
our maintenance backlog woes, as an agency.
    Mr. McAllister. Well, I appreciate that. And just to go 
back, as Congressman Duncan had said, previously in your 
testimony your reference to the GAO report was that the Service 
was largely ignored. So you are aware in 2007 the GAO report 
also stated, ``We believe it is for Congress, not the 
Department of the Interior, to weigh the needs of the refuge 
lands and interests of mineral owners, and, ultimately, to 
determine what oversight authority would be appropriate.'' If 
you want to follow the GAO's recommendations, why not just 
submit legislation to Congress, rather than continue with more 
overreach and government regulation?
    Mr. Guertin. Sure, Congressman, that is a great question. 
You know, our administration and our agency believe that the 
refuge organic legislation and the Refuge Improvement Act gives 
us that authority. But we certainly want to continue this 
conversation with yourself, the Chairman, and other leaders 
here on Capitol Hill. We are all after the same thing here: 
that is a vibrant energy economy for America, while 
safeguarding this beautiful natural resource that we have so 
all Americans can hunt and fish and recreate in the great out-
of-doors. So we will continue to partner with the leaders up 
here on congressional hill to pursue that vision.
    Mr. McAllister. Appreciate your time. Sorry, Chairman, for 
overstaying my time.
    Dr. Fleming. The gentleman yields back. And I think we 
would like to have another round of questions. I haven't had a 
crack at Mr. Knudson yet. And so, I would like to ask you, sir, 
of course, some good questions here.
    The only reason that I can ascertain that Fish and Wildlife 
and other services would find a need to regulate oil and gas--
something that was not really done in the past--on refuges 
would be, obviously, that States such as Alaska have no 
regulations that protect human health, groundwater, surface 
water, public safety, at the oil and gas operations at such 
places as Kenai National Wildlife Refuge. Am I wrong about 
that, sir?
    Mr. Knudson. No, if I am understanding the question, I 
mean, if----
    Dr. Fleming. I guess to better phrase the question, does 
Alaska have regulations?
    Mr. Knudson. Yes, sir. If you talk to any private operator, 
they would confirm vehemently that we are paying a lot of 
attention to their activities. Thank you.
    Dr. Fleming. Yes, sir.
    Mr. Knudson. Yes.
    Dr. Fleming. And those regulations would be there to 
protect humans, their health, the groundwater, surface water, 
and public safety.
    So, again, if Alaska has regulatory powers and abilities, 
and expertise--by the way, how many regulatory inspectors are 
there in Alaska for such oil and gas wells?
    Mr. Knudson. Well, I would be afraid to tell you that total 
number, because that could be controversial back home, but it 
is hundreds.
    Dr. Fleming. Hundreds, OK, as opposed to Fish and Wildlife 
that has--you said, Mr. Guertin--10 or 11?
    Mr. Guertin. I think it is about 10 or 12, Mr. Chairman.
    Dr. Fleming. OK.
    Mr. Guertin. I am going to confirm that.
    Dr. Fleming. And so, it seems to me that the expertise lies 
with the State here. So, I guess I am sort of wondering here. 
Why is it that the Federal Government--is there something 
unique about the Federal Government that means it can somehow 
do a better job at regulating such activities as oil and gas 
within States who have developed that expertise over the years?
    I was just speaking with folks back home in Louisiana. They 
tell me that Louisiana does an excellent job. And I think even 
the Fish and Wildlife Service would concede that fact. So it 
just seems to me that we are only adding just yet another layer 
of regulatory bureaucracy to the one that we already have.
    Another question. Are there major gaps in Alaskan State law 
that demand that the Federal Government now implement a new 
series of regulatory requirements? So, yes, you have 
regulations, you have perhaps hundreds of inspectors. But are 
there perhaps some gaps that we haven't, that we are not 
covering there in Alaska?
    Mr. Knudson. No sir. I am not aware of any gaps that have 
been identified. You know, we have primacy for air and water. 
We have an oil and gas conservation commission that works on 
the infrastructure related to the drilling operation. You know, 
soup to nuts.
    Dr. Fleming. And does the State of Alaska have a 
requirement to inspect those 800 wells at Kenai National 
Wildlife Refuge? And how often do those inspections occur? And 
what is the nature of those inspections?
    Mr. Knudson. Sir, I believe it is 80 wells on Kenai. I 
think it is 80, not 800. But----
    Dr. Fleming. OK, somebody dropped an extra zero in on me 
here, so I apologize.
    Mr. Knudson. Yes, it is still, you know, it is a lot. We 
will take credit for that. And it is producing very significant 
amounts of energy.
    The frequency of inspection varies on the operation, 
depending on the operation. But as much as two times a year. 
And, depending on the activity in development, it could be more 
frequent than that.
    Dr. Fleming. Now, what about abandoned wells? Now, in 
Louisiana, I was told today, that there is a well orphan fund 
and regulations that provide for that, that if someone goes 
bankrupt, they abandon the well, you can't find the person who 
operated that, who did the original drilling, the State has a 
fund for that. There is also a bond, as we have already 
discussed. What about Alaska?
    Mr. Knudson. We do not have any privately operated wells 
that have been abandoned or currently don't have a sponsor for 
dismantlement, repair, and restoration. The only operator we 
have a problem with on that front is the Federal Government.
    Dr. Fleming. Yes. Just again, did I hear you correctly? You 
showed a picture here a moment ago, and it was--as it turns 
out, it was BLM that actually created that disaster?
    Mr. Knudson. Yes.
    Dr. Fleming. OK. So----
    Mr. Knudson. We have those throughout the State. And it is 
not just oil and gas activity. But there are almost 100 wells 
on the North Slope--in particular, on the National Petroleum 
Reserve--that have been, effectively, abandoned and not 
appropriately dismantled by the Federal Government.
    Dr. Fleming. So the statement that, ``I am from the Federal 
Government, I am here to help you'' may not apply always in the 
case of Alaska.
    Mr. Knudson. If they are writing checks, we know where to 
send the money.
    Dr. Fleming. Yes, sir. I think I yield back, and I yield to 
the gentleman, Mr. Sablan.
    Mr. Sablan. Well, thank you very much, Mr. Chairman. I am 
really learning a lot here today, also. Eventually, I will 
probably know as much about abandoned wells and orphaned wells 
as I do about red snappers and, what was that other? The Lacey 
Act or something. I mean that in all honesty, too.
    But, Mr. Guertin, again, I come back to you, because some 
of the witnesses today attempt to argue, essentially, that the 
Service does not have the regulatory authority to protect 
public trust resources on National Wildlife Refuge. Could you 
provide some clarity on that point today, please?
    Mr. Guertin. Yes, Congressman. We believe that the organic 
legislation in the National Wildlife Refuge Improvement Act of 
1997 gives us the authority and mandates that we manage the 
National Wildlife Refuge System with a priority placed on 
conservation and its wildlife values. It also charges us with 
developing a series of step-down management plans for each 
individual unit of the Wildlife Refuge System to, again, put a 
priority on conservation and wildlife management.
    And we are going to cite that as authority moving forward 
to give us this impetus to partner with industry, with States, 
Tribes, private land owners, the energy economy, to work with 
them to get access to their property that underlies the 
National Wildlife Refuge System, but partner with them on the 
siting, placement, and timing of when they conduct operations 
to avoid and minimize significant impacts to the Nation's 
investment on the National Wildlife Refuge System.
    Mr. Sablan. OK. In the second panel, but in the written 
testimony, in his testimony Mr. Schutt complains about 
constantly shifting rules being applied to oil and gas 
operations at Kenai National Wildlife Refuge. Isn't the 
problem, though, that there are no rules? And would updating 
your regulations create more certainty and consistency for Mr. 
Schutt?
    Mr. Guertin. There really is no current regime for us to 
operate under on the National Wildlife Refuge System. There are 
some vague executive orders and things like that. We are 
confident that this new regulatory framework would provide us 
that type of certainty for our refuge managers, as well as for 
the energy industry.
    We recognize there are unique circumstances in the State of 
Alaska. There is both the ANILCA legislation, as well as ANCSA, 
that my colleague has talked about here, and then the special 
unique characteristics of the Federal-State partnership in 
Alaska. And we are certainly willing, moving forward, to sit 
down with our partners in Alaska, and talk to them seriously 
about what they envision as a future management regime in 
Alaska, and how we would operate the National Wildlife Refuge 
System up there, as well.
    But the bottom line for us is this rulemaking, we think, 
will give all of the conservation partners the certainty and 
credibility they need, moving forward.
    Mr. Sablan. And, you know, I have been here, what, 5 years. 
And I just finally--I mean, maybe it is not the first time, but 
it is the first time I actually heard my colleagues on the 
other side questioning why you don't hire people consistent 
with--you know, I don't know whether you have the money to do 
that.
    But talking about consistency here, because I am just 
learning these things, to be very honest, but on this instance 
of surety bonds, in Louisiana you have 10 wells, I think, for 
$25,000. So that is about $2,500 per well. In Mississippi, the 
bond is $10,000. My thought is it must be confusing for owners 
and operators of these wells--so many own properties in more 
than one State--to sort out all these different requirements, 
not just on the surety bonds, but I am sure there is different 
regulation in the several States.
    So I thank you for finally--I am going to say finally--
getting to do the work required or expected of you out of this 
GAO report. And I yield my time, Mr. Chairman.
    Dr. Fleming. The gentleman yields. Mr. McAllister, you are 
recognized for 5 minutes.
    Mr. McAllister. Thank you, Mr. Chairman. Just to clarify 
one thing, Mr. Guertin. We are--and I am just reading through 
the National Wildlife Refuge System Improvement Act of 1997. 
And clarify me if I am not seeing it, but where anywhere in 
here does it talk about subsurface rights?
    Mr. Guertin. The Refuge System Improvement Act does not 
specifically address subsurface rights, Congressman, you are 
correct in that observation. What we are citing is the larger 
authorities that were vested with the Fish and Wildlife Service 
to manage the units of the Refuge System with a priority on 
wildlife first and conservation, as well as the mandates in 
that legislation that direct us to establish these management 
plans, or CCPs, for each unit of the Refuge System. And that is 
the authority, we believe, that launches us on this rulemaking 
process.
    Mr. McAllister. OK. Back one more question about the hiring 
of inspectors and petroleum engineers and other stuff.
    Over an 8-year period of time you all haven't been able to 
fill these positions, but you've got the BLM sitting over there 
with hundreds of experts in the same business. Why not contract 
with them to get these services taken care of and get the 
problem handled, rather than continuing to push it off and 
blame it on budget cuts and what else? If we already have them 
on the payroll, why not utilize them?
    Mr. Guertin. Certainly, Congressman, and that is the kind 
of feedback we welcome. We will certainly take that to heart, 
and approach BLM to see if they have any capacities that could 
help us in our endeavor moving forward, as well.
    Mr. McAllister. Now to Mr. Alaska.
    [Laughter.]
    Mr. McAllister. He just walked in. You know, this is 
probably one of the major frustrations I have up here with 
Congress and with our role as a government and all is, we 
should be more of a sounding board and more of a helpful tool 
to 50 States, not try to make the United States a one-State 
system.
    I want to commend you on the information you provided from 
Alaska. And me, being from Louisiana, I know what it is like to 
be an oil and gas-producing State. Do you feel very frustrated 
with sitting here, having to have talks about trying to keep 
more regulation from going to the top of the regulation you all 
have already imposed upon yourself, and you don't feel like you 
get the support from us to help enforce what you are doing? 
Instead we want to try to reinvent the wheel every time we turn 
around and, instead, look over your shoulder?
    Mr. Knudson. Congressman, I believe that we would politely 
express some frustration with that activity. And the issue is 
every environment, every refuge is different, has unique 
circumstances. So, for an agency, a national agency, to write 
rules that apply effectively in all 50 States and the 
territories would be, probably, an impossibility.
    The other issue that we are facing--it is not necessarily 
that we are afraid of more regulation. It is conflicting 
regulation. So logic does not necessarily apply in the rule-
writing process. That is another concern when multiple agencies 
are approaching the same activity, they are not necessarily all 
looking for the same thing.
    Mr. McAllister. Well, I appreciate it, and I appreciate 
your time coming today, and I yield back my time, Mr. Chairman.
    Dr. Fleming. The gentleman yields back. Well, we think--I 
am sorry. Oh, I am sorry. The gentleman from Alaska just joined 
us. And so the Chair would like to recognize Mr. Young for 5 
minutes.
    Mr. Young. Thank you, Mr. Chairman. I will try to make this 
short, because I know the witnesses have been sitting there.
    But this is for Mr. Guertin. Does the Fish and Wildlife 
intend that this rulemaking effect will apply to Alaska?
    Mr. Guertin. Sir, we have been talking about that during 
the beginning stages of----
    Mr. Young. Speak up, I can't hear you.
    Mr. Guertin. We have been talking about that during the 
earlier stages of this hearing. We are currently envisioning 
the rule as applying to all of the States. We are certainly 
willing to hear more about the unique aspects of Alaska, 
particularly the organic legislation up there under ANILCA and 
ANCSA. We understand that creates a whole new dynamic for 
management. We have made no decision, moving forward, but we 
will use this public process to solicit feedback from----
    Mr. Young. With all due respect, this is not coming from 
the public. It is coming from you, not the public.
    Mr. Guertin. No----
    Mr. Young. That is number one. But number two, what bothers 
me is we have a no-more clause, period. And we have an ANCSA 
provision, which is the law, and ANILCA, which is the law. Now, 
you've got a lot of hot-shot lawyers down in that Department 
now--too many, by the way, I have checked that out, you keep 
hiring. Now, they can find all kinds of arguments. But I don't 
want this just to end up in court, which it will, if you go 
forth with this rule and apply it to Alaska. I just want you to 
keep that in mind. That is number one.
    Now, have you--you know, the Department itself has this 
government-to-government relationship with federally recognized 
Tribes. Have you communicated with any of our tribes in Alaska 
about these proposed rules?
    Mr. Guertin. We are starting the outreach now. We have just 
reopened the comment period on the proposed notice, Mr. 
Chairman, and our Alaska office is reaching out to the Native 
corporations up there, as well as tribes. But we will redouble 
our efforts during this reopening of the comment period.
    Mr. Young. And it goes back to the Alaska Native Land 
Claims Act. They were guaranteed a certain amount of land, 
subsurface and surface, where the subsurface is beneath the 
lands which were there before you became a refuge. You are 
proposing that they have to go through certain regulations and 
activities before they can recover what was given to them by 
Congress. What authority will that come under?
    Mr. Guertin. Well, you are talking about the old Kenai 
moose range?
    Mr. Young. That is right.
    Mr. Guertin. Adopted into the----
    Mr. Young. And Doyon.
    Mr. Guertin. And Doyon. And, again, we are envisioning now, 
through this proposed rulemaking, taking a lot of public 
input----
    Mr. Young. Let me stop there. What public? Are you going to 
hear from the Sierra Club? You are going to hear from Save the 
Earth Club? Are you going to listen and give credit to those 
that live there, and were guaranteed by Congress the right to 
develop their resources for their social and economic ability 
or are you going to listen to a bunch of jackasses from 
societies that don't even live there? Who are you going to 
listen to?
    Mr. Guertin. Well, we are not telling them, through this 
rulemaking, that they do not have access to their oil and 
rights. We recognize that, and have made that clear for the 
record.
    Mr. Young. If I shut that door, sir, and lock it, you still 
have access if you have a key. But when I take the key away 
from you, you don't have access. Is that correct?
    Mr. Guertin. Yes.
    Mr. Young. Now, if you have regulations and have 
stipulations that makes it impossible for people who were 
guaranteed, under ANCSA and ANILCA, their rights to land, 
because you have taken the key away from them, is that a right?
    Mr. Guertin. Well, we are not necessarily talking about 
taking the key away from them, though.
    Mr. Young. You are going to make the key this big, OK? And 
the hole is going to be this big. That is not the intent. That 
is why I would say I would suggest respectfully that your 
organization--and thank God we're through with your 
administration--think about previous laws that impose 
restrictions on what was guaranteed under other laws when you 
take away that key.
    And I am not talking about you personally, I am just 
telling the whole God-darn blessed Fish and Wildlife Department 
has got this idea, again, they are God, and Congress doesn't 
count. I sat on this committee and watched us pass these laws 
guaranteeing this, and I have agencies saying, ``Oh, that is 
not what Congress meant. This is what we are going to do,'' 
going against the will of the Congress and hurting the people 
that we are supposed to be helping.
    And I hope you take this back downtown, explain my 
frustration. And they say, ``Oh, that is just Young.'' It is 
not. This is America, not a bunch of dictators dictating 
through agencies. They are taking away the rights of 
individuals this Congress said they had. And that is what you 
are trying to do by who and where this came from.
    Now, and last question. Who brought up this harebrained 
idea? Whose idea was it?
    Mr. Guertin. Do you mean the idea of launching the ANPR?
    Mr. Young. No, the idea about taking away the rights and 
not allowing people to drill on these refuges. What gives you 
the right that they can bring up this idea? Where did it come 
from?
    Mr. Guertin. Mr. Chairman, again, we are not talking about 
denying them access to their minerals.
    Mr. Young. Where did this restriction come from? Whose idea 
was it?
    Mr. Guertin. I can't point to a single individual, Mr. 
Chairman.
    Mr. Young. Which group?
    Mr. Guertin. Well, this is based on guidance we have gotten 
from the General Accountability Office for us to improve the 
management of the oil and gas program on the National Wildlife 
Refuge System. And then, within the Fish and Wildlife Service, 
I, as Deputy Director for Policy, have certainly enforced 
that----
    Mr. Young. I would like to have a report from your 
Department of any correspondence from any other interest 
groups, and where this originated from. I am requesting that, 
Mr. Chairman, respectfully. I want to know where this stinking 
thing arose from, when you take away the right or take away and 
not let the key fit the lock. I want to know where it came 
from.
    Mr. Chairman, my time is up.
    Dr. Fleming. The gentleman yields back. And I want to thank 
the panel today, panel one. You are now dismissed, and of 
course, we may have questions. We will keep the record open for 
10 days. And I will ask the second panel to step forward.
    [Pause.]
    Dr. Fleming. We are now ready for our second panel, which 
includes Mr. Dan Naatz--is that correct?
    Mr. Naatz. Naatz.
    Dr. Fleming. Naatz. Mr. Naatz, Vice President, Independent 
Petroleum Association of America; Mr. J. Davis Powell, Board 
Member, Louisiana Chapter, National Association of Royalty 
Owners; Mr. Ethan Schutt, Vice President for Land and Energy 
Development for the Cook Inlet Region Corporation; Mr. Noah 
Matson, Vice President for Landscape Conservation and Climate 
Adaptation, Defenders of Wildlife.
    Your written testimony will appear in full in the hearing 
record, so I ask that you keep your oral statements to 5 
minutes, as outlined in our invitation letter to you, and under 
Rule 4(a).
    Our microphones are not automatic, so please press a 
button, make sure the tip of the microphone is close to your 
mouth.
    Our timing lights, again, very simple. You have 5 minutes 
to give your oral testimony. You will be 4 minutes under green, 
1 minute under yellow, and when it turns red we ask you to 
quickly conclude, if you haven't already, so we can move on to 
the next testimonies, and also to answer questions.
    Mr. Naatz, you are now recognized, sir, for 5 minutes to 
present your testimony on behalf of the Independent Petroleum 
Association of America.

 STATEMENT OF DAN NAATZ, VICE PRESIDENT, INDEPENDENT PETROLEUM 
                     ASSOCIATION OF AMERICA

    Mr. Naatz. Thank you, Mr. Chairman, and members of the 
subcommittee. My name is Dan Naatz, and I am the Vice President 
of Federal Resources and Political Affairs for the Independent 
Petroleum Association of America. IPAA represents thousands of 
independent oil and natural gas explorers and producers, as 
well as the service and supply industries that support their 
efforts.
    America's independent producers develop 95 percent of 
American oil and natural gas wells, produce 54 percent of 
American oil, and 85 percent of the Nation's natural gas. IPAA 
and our members are concerned with the nature of the advanced 
notice of proposed rulemaking on non-Federal--and I stress non-
Federal--oil and gas development within the National Wildlife 
Refuge System.
    Unfortunately, this rule is similar to many other rules 
that we have seen come from the Obama administration: it is a 
solution in search of a problem. Ultimately, we believe, the 
imposition of additional regulations on non-Federal oil and gas 
development within the National Wildlife Refuge System is 
unnecessary, has not been justified by the Fish and Wildlife 
Service, is constrained by the bounds on the agency's 
authority, and will only result in duplicative layers of 
regulatory oversight.
    After conducting a thorough analysis of the intent and 
scope of the rule, we believe this rulemaking is premature. As 
I mentioned earlier, the Obama administration has consistently 
sought to regulate areas that are already heavily regulated in 
the oil and gas industry.
    One of our biggest concerns with this rulemaking is the 
lack of jurisdiction we believe the Fish and Wildlife Service 
may have regarding this matter. The agency has not identified a 
specific statutory grant of authority to issue this.
    As we have discussed previously, the committee has heard 
regarding the GAO reports that GAO again recommended that the 
Fish and Wildlife Service work with the Department of the 
Interior's Office of the Solicitor to seek from Congress any 
necessary additional authority over outstanding mineral rights. 
As late as 2007 the GAO surmised, ``We do not believe that DOI 
has adequate information on which to base this claim.'' In 
particular, the Fish and Wildlife Service has yet to publicly 
clarify the extent of its current authority over private 
minerals rights.
    Again, other members of the subcommittee have already 
referenced this, but the GAO continues further in writing by 
saying, ``We believe it is for Congress, not DOI, to weigh the 
needs of the refuge lands and the interests of mineral owners 
and, ultimately, to determine what oversight authority would be 
appropriate.''
    Since 2007, the agency has not publicly clarified its 
authority in this regard. For a rule that we believe will 
provide little to no environmental benefit, the first step from 
the Fish and Wildlife Service should be clarification of their 
authority.
    While we understand that the Fish and Wildlife Service 
appears to believe that the current regulatory structure leads 
to an uncertain and inconsistent regulatory environment for oil 
and gas operators on refuges, IPAA members do not share this 
view. To the contrary, the existing regulatory structure 
provides operators and mineral estate owners with the 
flexibility needed to develop mineral interests consistent with 
their legal rights.
    Much of what Fish and Wildlife Service contemplates in this 
rulemaking seems to suggest that there are insufficient 
regulations in place to protect refuge resources. We believe 
that sufficient State regulations already exist to protect 
these areas.
    Unlike other Federal land programs, the National Fish and 
Wildlife Refuge System is unique, in terms of how the United 
States came to acquire the land. Each refuge carries a 
different acquisition history, which means that the Federal 
Government's interest in and administration of each refuge must 
vary. Various refuge lands came with different easements and 
access exemptions, different mineral extraction rights, and 
different obligations to facilitate oil and gas development.
    The Fish and Wildlife Service personnel must also engage in 
differing levels of intergovernmental cooperation from refuge 
to refuge. Each refuge is further subject to different 
conservation plans. In 1997, Congress enacted the National 
Wildlife Refuge System Improvement Act, amending the original 
Refuge Act, and mandating that the Fish and Wildlife Service 
develop comprehensive conservation plans, CCPs, for each 
National Wildlife Refuge.
    Adoption of a CCP involves a deliberation process that 
includes a lengthy public comment period. Congress directed the 
Fish and Wildlife Service to manage each refuge in a manner 
consistent with the completed CCP, and to revise the plan at 
any time, if conditions that affect a specific refuge are 
deemed to have changed significantly. These extensive 
proceedings for developing refuge-specific CCPs underscores 
that a one-size-fits-all approach to oil and gas regulation is 
incompatible with the needs of any specific refuge.
    Mr. Chairman, my written comments go into far more detail 
on many of these issues. But, for the sake of time, I will 
conclude my comments.
    IPAA appreciates the opportunity to appear before you 
today, and we will be happy to answer any questions.
    [The prepared statement of Mr. Naatz follows:]
Prepared Statement of Dan Naatz, Vice President of Federal Resources & 
  Regulatory Affairs, the Independent Petroleum Association of America
    The Independent Petroleum Association of America (IPAA) represents 
thousands of independent oil and natural gas explorers and producers, 
as well as the service and supply industries that support their 
efforts. Independent producers develop 95 percent of American oil and 
natural gas wells, produce 54 percent of American oil and produce 85 
percent of American natural gas. The average independent has been in 
business for 26 years and employs 12 full-time and 3 part-time 
employees. IPAA's members are truly the face of small business in the 
oil and natural gas industry and support more than two million direct 
jobs in the United States.
    This testimony is in regards to an advanced notice of proposed 
rulemaking (ANOPR) on Non-Federal Oil and Gas Development within the 
National Wildlife Refuge System (NWRF) that the U.S. Fish and Wildlife 
Service (FWS) released in February. IPAA is concerned with the nature 
of this advanced notice of proposed rulemaking and we submitted 
extensive comments that describe the challenges with the ANOPR in late 
April. Unfortunately, this rule is similar to many other rules that we 
have seen come from the Obama administration; it's a solution in search 
of a problem. Ultimately, we believe the imposition of additional 
regulations on non-Federal oil and gas development within the National 
Wildlife Refuge System is unnecessary, has not been justified by FWS, 
is constrained by the bounds on FWS' legal authority, and will only 
result in duplicative layers of regulatory oversight.\1\ We requested 
that FWS refrain from future rulemaking in this regard in our official 
comments.
---------------------------------------------------------------------------
    \1\ Domestic oil and gas production from lands within the National 
Wildlife Refuge System is also consistent with Federal energy policy, 
as set forth in the Comprehensive National Energy Strategy announced by 
the U.S. Department of Energy in April of 1998, the Energy Policy and 
Conservation Act, 42 U.S.C.  6201, et seq., the National Energy 
Policy, Executive Order No. 13212, 66 Fed. Reg. 28,357 (May 18, 2001), 
and the Energy Policy Act of 2005, Pub. L. 109-58, 119 Stat. 594.
---------------------------------------------------------------------------
    After doing a thorough analysis of the intent and scope of the 
rule, we believe this rulemaking is premature. As we mentioned in the 
introduction, the Obama administration has consistently sought to 
regulate areas that are already regulated. Another example of 
duplicative regulation is the Bureau of Land Management's hydraulic 
fracturing and well stimulation rule that attempts to solve an issue of 
groundwater contamination that simple does not exist. Administration 
officials, academics, and experts in the field have all testified that 
hydraulic fracturing, which has been done over two million times, does 
not contaminate groundwater.
    In regards to this particular advanced notice, IPAA has many 
questions regarding FWS' authority to regulate development within 
refuge boundaries. Mineral owners have the legal right to explore for 
and extract oil and gas from their mineral estates, a fact FWS 
recognizes.\2\ Mineral rights represent a dominant estate, taking 
precedence over other rights associated with property, including 
surface rights.\3\ As a result, FWS is limited in its authority to 
inhibit operations, including horizontal drilling from private lands, 
to access minerals under a refuge, and we would expect FWS to adhere to 
the legal bounds of its authority.\4\
---------------------------------------------------------------------------
    \2\ See, e.g., Nat'l Wildlife Refuge Sys., Oil & Gas FAQs, 
available at: http://www.fws.gov/refuges/oil-and-gas/faqs.html.
    \3\ See, e.g., Gerrity Oil & Gas Corp. v. Magness, 946 P.2d 913, 
926-27 (Colo. 1997); DuLaney v. Okla. State Dep't of Health, 868 P.2d 
676, 680 (Okla. 1993); Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 
249 (Tex. 2013).
    \4\ Nor is the scope of FWS' authority uniform across refuge lands. 
On each individual refuge, the issue of mineral ownership must be 
addressed on a case-by-case basis since the law of mineral rights 
varies among States, the government's land acquisition contracts 
contain different mineral rights reservations, and contract 
interpretation may depend on the legal rules in place at the time of 
the contract. See, e.g., Petro-Hunt, LLC v. United States, 365 F.3d 
385, 393 (5th Cir. 2004) (concerning private parties' efforts to quiet 
title to mineral rights in federally owned land). See also discussion 
infra p. 4 and notes 13-14. With so many variables, any regulatory 
regime would be confusing, lacking in uniform applicability, and 
potentially subject to perpetual legal challenges.
---------------------------------------------------------------------------
    One of our biggest concerns is the lack of jurisdiction that we 
believe the Service may have with this rulemaking. FWS has not 
identified a specific statutory grant of authority to issue this 
ANOPR.\5\ In a 2003 report, the Government Accountability Office 
(``GAO'') recommended that FWS work with the Department of the 
Interior's Office of the Solicitor to seek from Congress any necessary 
additional authority over outstanding and reserved mineral rights.\6\ 
In response, the Department of the Interior professed its belief that 
it had the requisite authority to oversee oil and gas development. As 
late as 2007, however, GAO disagreed:
---------------------------------------------------------------------------
    \5\ In the Federal Register notice regarding this proposed 
rulemaking, FWS only points generally to the Property and Commerce 
Clauses of the United States Constitution and the National Wildlife 
Refuge System Administration Act of 1966, as amended, for its authority 
to promulgate these rules. 79 Fed. Reg. 10,080, 10,081 (Feb. 24, 2014).
    \6\ GAO, Nat'l Wildlife Refuges: Opportunities to Improve the Mgmt. 
& Oversight of Oil & Gas Activities on Fed. Lands, GAO-03-517 (Wash., 
DC: Aug. 28, 2003).

        [W]e do not believe that DOI has adequate information on which 
        to base this claim. In particular, FWS . . . has yet to 
        publicly clarify the extent of its current authority over 
        private mineral rights. We continue to believe that such 
        information is necessary for DOI to adequately inform the 
        Congress regarding the need for additional authority. Moreover, 
        we believe it is for Congress, not DOI, to weigh the needs of 
        the refuge lands and the interests of mineral owners and, 
        ultimately, to determine what oversight authority would be 
        appropriate.\7\
---------------------------------------------------------------------------
    \7\ GAO, U.S. Fish & Wildlife Serv.: Opportunities Remain to 
Improve Oversight & Mgmt. of Oil & Gas Activities on Nat'l Wildlife 
Refuges, GAO-07-829R (Wash., DC: June 29, 2007) (emphasis added).

    Since 2007, FWS has not publicly clarified its authority in this 
regard. Again, for a rule that we believe will provide zero 
environmental benefit, we believe the first step from the FWS should be 
clarification of their authority before they proceed with a formal 
rulemaking.
    Overregulation without environmental benefit undoubtedly steers 
investment away from those properties. We have seen similar occurrences 
happen with overregulation of Federal minerals. By having application 
for permit to drill (APD) times that nearly triple \8\ those of State 
processing applications, investment has been driven off of Federal 
minerals. An EIA report shows this decline.\9\ In the same respect, FWS 
also fails to provide a legitimate purpose and need for additional 
regulation in regards to non-Federal minerals on National Wildlife 
Refuge Lands. In particular, there is insufficient data to support the 
necessity of a rulemaking at this time. While FWS has begun to collect 
information on ``Oil-Related Leaks and Spills on National Wildlife 
Refuges,'' \10\ that data set is limited, and the information reflects 
only the identity of the substance leaked and the quantity discharged. 
It does not conclude that such spills have had an adverse impact to the 
refuges or that operators categorically fail to address and remediate 
spills. To the contrary, FWS personnel have indicated they are working 
positively with operators.\11\ Combined with this data collection, in 
April 2012, FWS introduced a management program handbook: ``Management 
of Oil and Gas Activities on National Wildlife Refuge System Lands.'' 
Insufficient time has passed to allow either FWS or oil and gas 
operators to determine the efficacy of that tool. A rulemaking premised 
on these same un-tested management guidelines is premature. We urge the 
FWS to complete an analysis of gaps that may exist in their current 
practices before moving forward with another unnecessary and costly 
rulemaking to the American taxpayers.
---------------------------------------------------------------------------
    \8\ http://www.blm.gov/wo/st/en/prog/energy/oil_and_gas/statistics/
apd_chart.html.
    \9\ Link from E+C Committee Web site: http://www.google.com/
url?sa=t&rct=j&q= 
&esrc=s&source=web&cd=2&ved=0CDIQFjAB&url=http%3A%2F%2Fenergycommerce.ho
use.gov %2Fsites%2Frepublicans.energycommerce.house.gov%2Ffiles% 
2F20140410CRS-US-crude-oil-natural-gas-production-federal-non-federal-
areas.pdf&ei=P7VzU-LIG4_LsASD9oDgBA&usg=AFQ 
jCNGCL4GQlkDec1ymQxNi7FkeO0HpOw&sig2=6uUDn8sbVaoF3ApJUAyWnw.
    \10\ See U.S. Fish & Wildlife Serv., ``Oil-Related Leaks & Spills 
on Nat'l Wildlife Refuges'' provided to the Committee on Natural 
Resources (undated).
    \11\ Id. at 1.
---------------------------------------------------------------------------
    While we understand that FWS appears to believe that the current 
regulatory structure leads to ``an uncertain and inconsistent 
regulatory environment for oil and gas operators on refuges,'' \12\ our 
members do not share this concern. To the contrary, as discussed 
further below, the existing regulatory structure provides operators and 
mineral estate owners with the flexibility needed to develop mineral 
interests consistent with their legal rights.
---------------------------------------------------------------------------
    \12\ 79 Fed. Reg, at 10,081.
---------------------------------------------------------------------------
    Much of what FWS contemplates in this rulemaking seems to suggest 
that there are insufficient regulations in place to protect refuge 
resources. We believe that sufficient regulations already exist to 
protect Refuge resources.
    Federal regulations already apply to development of non-Federal 
minerals (see, e.g., 40 CFR 60, 61, 63), as do State and tribal 
regulations. FWS suggests that additional regulation is necessary 
because State oil and gas commissions have a different mission, 
suggesting that they do not adequately address environmental concerns. 
This contention is incorrect. In every State in which FWS has 
identified active and inactive wells,\13\ oil and gas commissions have 
adopted regulations that protect the environment through comprehensive 
drilling, development, and production standards; setbacks; ground water 
protection measures; financial assurance requirements; spill reporting; 
and reclamation requirements.\14\
---------------------------------------------------------------------------
    \13\ See discussion of this data, infra p. 5.
    \14\ See, e.g., La. Admin. Code tit. 43: IX, XI, XIII, XVIII, XIX 
(2013); Okla. Admin. Code Sec. Sec. 165:10-1-1 (2013), et seq.
---------------------------------------------------------------------------
    Unlike other Federal lands programs, the National Wildlife Refuge 
System is unique in terms of how the United States came to acquire the 
land. Each Refuge carries a different acquisition history, which means 
that the Federal Government's interest in, and administration of, each 
Refuge must vary. For example, the Lower Hatchie National Wildlife 
Refuge in Tennessee was acquired by deeded conveyance from a private 
owner and subject to existing easements for pipelines, public highways 
and roads at the time of the government's acquisition.\15\ Nearby 
Reelfoot National Wildlife Refuge, conversely, is comprised of 2,300 
acres that FWS owns outright and 7,860 acres that the State of 
Tennessee leases to the United States.\16\ In addition to differences 
in ownership conditions, certain Refuges are subject to unique 
management mandates; the National Wildlife Refuge System in Alaska, for 
instance, is subject to a unique statutory regime under the Alaska 
Native Claims Settlement Act \17\ and the Alaska National Interest 
Lands Conservation Act of 1980.\18\ Various refuge lands come with 
different easement and access exceptions, different mineral extraction 
rights, and different obligations to facilitate oil and gas 
development. FWS personnel must also engage in differing levels of 
intergovernmental cooperation from refuge to refuge.
---------------------------------------------------------------------------
    \15\ See Burlison v. United States, 533 F.3d 419 (6th Cir. 2008).
    \16\ See Bunch v. Hodel, 793 F.2d 129 (6th Cir. 1986).
    \17\ Pub. L. 92-203, 85 Stat. 688 (1971).
    \18\ Pub. L. 96-487, 94 Stat. 2371 (1980).
---------------------------------------------------------------------------
    Each Refuge is further subject to a different conservation plan. In 
1997, Congress enacted the National Wildlife Refuge System Improvement 
Act,\19\ amending the Refuge Act and mandating that FWS develop 
comprehensive conservation plans (``CCP'') for each national wildlife 
refuge.\20\ Adoption of a CCP involves a deliberation process that 
includes a public comment period. Congress directed FWS to manage each 
refuge in a manner consistent with the completed CCP and to revise the 
plan at any time if conditions that affect the Refuge are deemed to 
have changed significantly.\21\ The development of the CCP often 
includes a public NEPA process resulting in the preparation of an 
Environmental Assessment. For several refuges, the CCP also requires 
adoption of an additional Management Plan. These extensive proceedings 
for developing refuge-specific CCPs underscores that a ``one-size-fits-
all'' approach to oil and gas regulation is incompatible with the needs 
of any specific refuge.
---------------------------------------------------------------------------
    \19\ Pub. L. 105-57, 111 Stat. 1252-1260 (codified as amended at 16 
U.S.C. Sec. Sec.  668dd-668ee).
    \20\ 16 U.S.C. Sec.  668dd(e)(1)(A).
    \21\ 16 U.S.C. Sec.  668dd(e)(1)(E).
---------------------------------------------------------------------------
    Finally, FWS' own data refutes the conclusion that oil and gas 
production has impacted refuges universally. The National Wildlife 
Refuge System includes more than 560 refuges, 38 wetland management 
districts and other protected areas encompassing 150 million acres of 
land and water from the Caribbean to the remote Pacific. There is at 
least one national wildlife refuge in every State and territory. Yet 
FWS' Fact Sheet on ``Non-Federal Oil and Gas Development on National 
Wildlife Refuge System Lands'' recognizes that half of all active wells 
are found on just five refuges. Information FWS compiled \22\ shows 
that despite the fact that the System contains over 600 protected 
areas, only 46 have known and confirmed active wells, and 23 of those 
have five or fewer active wells.
---------------------------------------------------------------------------
    \22\ FWS provided this information to the Committee on Natural 
Resources with a disclaimer noting limitations on the source of the 
information, including an explanation that ``[e]rrors are inherent in 
the collection of data on thousands of wells.''
---------------------------------------------------------------------------
    IPAA's member companies are committed to finding creative solutions 
to problems that exist within the scope of oil and natural gas 
development, but we believe this advance notice falls short of 
providing real environmental benefit. IPAA's member companies are 
committed to being smart, responsible environmental stewards of the 
land, but only when the regulation solves a gap in regulation.
    Thank you for the opportunity to participate in today's hearing.

                                 ______
                                 

    Dr. Fleming. Thank you, Mr. Naatz, for your testimony.
    Mr. Powell, you are now recognized for 5 minutes to present 
testimony on behalf of the National Association of Royalty 
Owners.

     STATEMENT OF J. DAVIS POWELL, BOARD MEMBER, NATIONAL 
        ASSOCIATION OF ROYALTY OWNERS, LOUISIANA CHAPTER

    Mr. Powell. Thank you. Chairman Fleming, Ranking Member 
Sablan, members of the subcommittee, thank you for the 
invitation to be here today. My name is Davis Powell, from 
Shreveport, Louisiana, and I am speaking on behalf of the 
National Association of Royalty Owners, also known as NARO. I 
currently serve on the Board of Directors for the Louisiana 
Chapter of NARO. We have entered a statement for the record, 
and I will briefly touch on a few critical points here.
    NARO estimates that there are between 8.5 to 12 million 
royalty owners nationwide who receive income from the 
production of their oil, natural gas, or other private mineral 
interests. NARO's average member is about 60 years old, 
widowed, and receives around $500 a month in royalty income. 
About 70 percent of the minerals in the United States are owned 
by individual citizens. In 2012, roughly 77 percent of the oil 
and 81 percent of the natural gas produced on shore came from 
these privately owned minerals. For this reason, royalty owners 
are vital to U.S. energy security and to the economy that 
depends on domestic oil and gas production.
    NARO would like to offer four basic tenants for 
consideration by the U.S. Fish and Wildlife Service as it works 
to improve management of oil and gas operations on the Refuge 
System.
    First, it is a well-established point of law in all 
jurisdictions of the United States that the rights of the 
mineral estate are dominant over the rights of the surface 
estate. The law's recognition of the dominant mineral estate 
has been found essential, since any other priority would risk 
the complete devaluation of mineral rights. Existing 
regulations maintain that the Service operations should not be 
applied so as to contravene or nullify rights vested in holders 
of mineral interests on refuge lands. The Service's own manual 
states that it must provide for the exercise of non-Federal oil 
and gas rights, while protecting resources to the maximum 
extent possible. This recognition of dominant private mineral 
interest is critical, and must not change.
    The second tenant we offer for consideration is that any 
further regulation by the Service should not unreasonably 
restrict access to the mineral estate in a way that would 
essentially make development uneconomic. Courts have held that 
Federal agencies cannot impose conditions of approval that 
violate this tenant. Further, courts continue to recognize 
that, inherent in the ownership of mineral rights is also the 
right to use as much of the surface as reasonably necessary to 
extract and produce the minerals. The Service must not develop 
a regulatory avenue to develop the minerals in theory, but 
which actually creates an economic firewall to development in 
reality. Also, the Service must consider all of the varied 
costs incurred by the oil and gas developer as a result of 
surface estate requirements, so that any fee structure would be 
fair and reasonable.
    The third tenant NARO feels should be considered in this 
process is that the Service may not restrict oil and gas 
development to the point of requiring no net impact as it seeks 
to mitigate surface usage. The National Environmental Policy 
Act does not mandate particular results, and does not require 
agencies to elevate environmental concerns over other 
appropriate considerations. In addition, any environmental 
analysis performed must include the economic benefits to States 
and localities which result from the orderly development of oil 
and gas within a refuge.
    The fourth and final tenant NARO offers for consideration 
is that the Service must not attempt to regulate Service 
activity on non-Federal lands adjacent to a refuge. Currently, 
horizontal drilling techniques allow for the development of 
much of the non-Federal mineral estate from adjacent lands 
without ever disturbing the Federal surface estate. In order to 
encourage the surface use off of refuge lands when possible, 
the Service should avoid any attempt to regulate exploration 
activity which originates from non-Federal lands.
    NARO looks forward to working with the Service as it 
strives to improve management of oil and gas operations on the 
Refuge System, and working with Congress as it performs 
oversight of the Service's efforts. We appreciate this 
opportunity to appear before the subcommittee, and thank you.
    [The prepared statement of Mr. Powell follows:]
     Prepared Statement of J. Davis Powell, Board Member, National 
Association of Royalty Owners, Louisiana Chapter, Shreveport, Louisiana
    Chairman Fleming, Ranking Member Sablan, members of the committee, 
it is an honor to speak with you today regarding this important issue. 
Thank you for the invitation.
    I am Davis Powell from Shreveport, Louisiana. I speak today as a 
member of the Board of Directors of the Louisiana chapter of the 
National Association of Royalty Owners (NARO). NARO has members in all 
50 States and educates and advocates for the rights of an estimated 8.5 
to 12 million citizens who receive royalty income from the production 
of their private property--their oil and natural gas minerals.
    The average NARO member is 60 years old, a widow and makes less 
than $500 per month in royalty income. About 70 percent of the mineral 
estate in the lower 48 States is owned by individual citizens. In 2012, 
it was estimated that roughly 77 percent of oil and 81 percent of 
natural gas produced onshore was produced on private property.
    Of all the wells ever drilled around the world, the vast majority 
have been drilled in the United States--a Nation that values private 
ownership of minerals and that also encourages both risk and the 
pursuit of profit.
    The United States is the only former colony that upon achieving 
independence, awarded the ownership of minerals to private citizens 
instead of to the State. This uniquely American model was suggested by 
Thomas Jefferson. His concept has helped make us a strong Nation and it 
today is enabling America's rise to become the world's dominant energy 
producer.
    It is our understanding that the Government Accountability Office 
recommended that the U.S. Fish and Wildlife Service improve management 
and oversight of oil and gas operations on the Refuge System and 
clarify the Service's permitting authority of non-Federal oil and gas 
operations through further regulations.
    This has resulted in the Service issuing an Advanced Notice of 
Proposed Rulemaking and Notice of Intent to Prepare an Environmental 
Impact Statement. On April 22 of this year, NARO submitted comments in 
response to the Advanced Notice. We appreciate the opportunity to 
elaborate on those comments here today.
    It is our belief that if the Service were to continue the process 
of further regulating oil and gas activity on its lands, then the 
following four basic tenets should drive the Service's rulemaking and 
this subcommittee's oversight of it.
    The first is that it is a well-established point of law in all 
jurisdictions of the United States that the rights of the mineral 
estate are dominant over the rights of the surface estate. The law's 
recognition of the mineral estate as dominant has been found essential, 
lest it be subrogated to any other property rights thereby risking its 
devaluation.
    Existing Service regulations also recognize this fact and maintain 
that Service operations should not be ``applied so as to contravene or 
nullify rights vested in holders of mineral interests on refuge lands'' 
50 CFR Sec. 29.32. The Service's manual states that it must ``[p]rovide 
for the exercise of non-Federal oil and gas rights while protecting 
[USFWS] resources to the maximum extent possible.'' 612 FWS Manual 
2.4.B.
    Supplemental information presented for the proposed rulemaking 
acknowledges that, ``subject to State and Federal law, the mineral 
rights owners have the legal authority to develop oil and gas 
reserves.'' It is this group of people that NARO represents. Just as 
the Service has the authority to manage the public surface estate, NARO 
members have a dominant legal authority to access and develop their 
private sub-surface estate.
    Second, the Service may not unreasonably restrict access to the 
mineral estate in a way that makes the development thereof uneconomic 
or unprofitable.
    Courts have held that Federal agencies cannot impose stipulations 
or conditions of approval (COAs) that violate this tenant. See Utah v. 
Andrus, 486 F. Supp. 995, 1011 (D. Utah 1979); see also Conner v. 
Burford, 848 F.2d 1441, 1449-50 (9th Cir. 1988). Concurrent with 
courts' decisions discussing the dominance of the mineral estate is a 
requirement that a holder of mineral rights adhere to the accommodation 
doctrine, which provides that a mineral owner or lessee may ``use as 
much of the surface as reasonably necessary to extract and produce the 
minerals'' as long as that use is reasonable. Merriman v. XTO Energy, 
Inc., 407 S.W.3d 244, 248-49 (Tex. 2013).
    Therefore, the Service must be held to a reasonable set of 
regulatory management controls that does not unduly burden private 
mineral owners. An excessive fee structure for access onto, or across, 
federally owned lands will negatively affect the value of the sub-
surface estate and the economic viability of development of that 
estate.
    The Service must not develop regulatory management tools and fees 
that provide a regulatory avenue to develop in theory but which creates 
an economic firewall to development in reality.
    It is important to note that expenses incurred in the development 
of oil and gas minerals come in many forms. A monetary fee charged by 
the surface estate owner would be another such expense. All of the 
other costs incurred by the oil and gas developer as a result of 
requirements by the surface estate owner also should be taken into 
consideration when calculating a fair and reasonable fee structure. 
These other costs could include the cost and time of preparation of 
Environmental Impact Statements and reports unique to the Federal 
surface estate, rights-of-way fees for pipelines and roads, and lease 
maintenance and operational drilling and service costs associated with 
lengthy application processes.
    The third basic tenet which NARO feel should be considered in this 
process is that the Service may not unreasonably restrict oil and gas 
development to the point of requiring a ``no net impact'' on the 
environment as it seeks to mitigate surface impacts.
    The National Environmental Policy Act (NEPA) ``does not require 
agencies to elevate environmental concerns over other appropriate 
considerations.'' Citizens' Comm. to Save Our Canyons v. U.S. Forest 
Serv., 297 F.3d 1012, 1022 (10th Cir. 2002). Instead, NEPA is a 
procedural statute and does not mandate particular results. Robertson 
v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989). As 
explained by the Interior Board of Land Appeals (IBLA), ``NEPA does not 
bar actions which affect the environment, even adversely. Rather, the 
process assures that decisionmakers are fully apprised of likely 
effects of alternative courses of action so that selection of an action 
represents a fully informed decision.'' Biodiversity Conservation 
Alliance, 174 IBLA 1, 13-14 (2008) (citing the Vermont Yankee U.S. 
Supreme Court case).
    As the IBLA observed in Oregon Natural Resources Council, NEPA does 
not direct that Federal agencies prohibit action even where 
environmental degradation is inevitable. 116 IBLA 355, 361 n.6 (1980). 
NEPA only mandates a full consideration of the environmental impact of 
a proposed action before undertaking it. Nat'l Wildlife Federation, 169 
IBLA 146, 164 (2006).
    As the Service undertakes its proposed rulemaking, it must ensure 
that it allows for a balanced review of oil and gas development 
proposals and assesses any negative impacts of mitigation proposals on 
State and private mineral rights.
    The Service may not improperly elevate environmental concerns over 
other appropriate considerations or seek to create a set of regulations 
that restricts all environmental impacts on the subject lands. Any 
environmental NEPA analysis must also include the economic impacts to 
the orderly development of oil and gas within a refuge. This includes a 
socioeconomic analysis that details the negative impacts any 
restrictions will have on State and private mineral development and the 
impacts to local and State economies and taxes.
    Fourth, the Service must not attempt to regulate surface activity 
on non-Federal lands adjacent to refuges.
    The proposed rulemaking states that ``one of the major goals of the 
Service in this proposed rulemaking is to ensure that operators conduct 
their operations in a way that minimizes impacts to natural and 
cultural resources when operating on a refuge, such as locating 
operations away from sensitive habitats for endangered and threatened 
species, other priority wildlife resources, . . . ''
    One of the best ways to accomplish this goal is to encourage 
operators to access the sub-surface estate from adjacent non-Federal 
surface estates when profitable and economic to do so.
    Therefore, the Service should not attempt to regulate activity that 
does not use the Service's surface estate.
    Today, in many instances where non-Federal land is adjacent to the 
lower-48 refuges, horizontal drilling technology permits the 
development of much of the non-Federal mineral estate without 
disturbing the Federal surface estate. Activity originating on non-
Federal surface estate and accessing the non-Federal subsurface estate 
should be explicitly exempted from this proposed rulemaking.
    In conclusion, NARO wishes to emphasize that the Service must:

     recognize the rights of the mineral estate are dominant 
            over the rights of the surface estate;
     allow economic and profitable access to, and development 
            of, the mineral estate;
     balance environmental concerns with the economic 
            development of oil and gas minerals; and
     forego any attempt to regulate surface activity on non-
            Federal lands adjacent to refuges.

    NARO looks forward to working with the Service as it strives to 
improve management and oversight of oil and gas operations on the 
Refuge System and with Congress as it performs proper oversight of the 
Service's efforts.

                                 ______
                                 

    Dr. Fleming. I thank you, Mr. Powell, for your testimony. 
And also, welcome to Washington from the great city of 
Shreveport, a major city in my district.
    Mr. Schutt, you are now recognized for 5 minutes to present 
testimony on behalf of Cook Inlet Region Corporation.

  STATEMENT OF ETHAN SCHUTT, SENIOR VICE PRESIDENT, LAND AND 
      ENERGY DEVELOPMENT, COOK INLET REGION, INCORPORATED

    Mr. Schutt. Thank you, Mr. Chair. My name is Ethan Schutt, 
I am the Senior Vice President of Land and Energy Development 
for Cook Inlet Region, Incorporated. I would like to thank you 
for the invitation and opportunity to speak to you today. I 
also thank other members of the committee and the Ranking 
Member.
    CIRI is one of the 12 Alaska Native regional corporations. 
We happen to be the corporation in and around Cook Inlet, as 
the name might imply. We are headquartered in Anchorage. As you 
have heard already in prior testimony, we are the only regional 
corporation with active oil and gas production from a National 
Wildlife Refuge. We have a long history, as provided in the 
written testimony that I provided to the committee already, 
working with the oil and gas industry in the Cook Inlet, and 
specifically with the Kenai National Wildlife Refuge.
    I think the theme of the testimony I provided in writing is 
that, although the Fish and Wildlife Service says that they do 
not say no to the subsurface owner, they have many ways to 
actually go about saying no, other than to explicitly deny 
access or prevent oil and gas exploration and development. I 
provided some case study examples in my written testimony. I 
will assure the members of this committee that there are 
actually a number of other examples just in the Shadura 
development within the Kenai National Wildlife Refuge that I 
did not have space or did not feel ranked the priority of 
explaining to this committee.
    Unfortunately, the history of the development in the Kenai 
is that the Fish and Wildlife Service is stepping into the role 
of the State of Alaska, attempting to step into the role of the 
private land owner, and royalty and lessor role, through this 
proposed rulemaking.
    Alaska is a well-regulated State. There are a number of 
steps, permitting steps, required for air, water, oil and gas-
specific activities, drilling, the type of equipment, the 
design of the well, inspections along the way, bonding 
requirements required of the oil and gas operator for anything 
that might happen, including the reclamation of the site at the 
end of oil and gas production or exploration. We are well 
regulated. We do not need an additional layer of financial 
burden. We do not need an additional layer of public comment 
for the development of private oil and gas resources within the 
National Wildlife Refuge System.
    As is also indicated in my pre-filed testimony, the very 
proposal to impose a new set of rules by the Fish and Wildlife 
Service upsets a very careful balance in Alaska. There are 
three major land owners and parties that play in Alaska, as it 
relates to oil and gas. That is the State of Alaska, the Alaska 
Native corporations, and the Federal Government.
    That balance was struck at the Statehood Act first, at the 
Alaska Native Claims Settlement Act some 20 years later, in 
1971, and then a final grand compromise was reached between 
conservation interests and the private interests of Alaska 
Native corporations, the State of Alaska, and the citizens of 
Alaska in ANILCA, in 1980. This proposed rulemaking usurps the 
role of Congress in dictating the result of that balance. That 
was a carefully compromised negotiation between those various 
parties. The very proposal to upset that upsets the balance in 
Alaska, where we already have very much scrutiny, very much 
regulation.
    I have to be honest: Alaska is the place where the 
environmental NGO's fundraise on their Web site in opposition 
to our projects. That is their fundraising mechanism. It is a 
business. If you look at lawyers--our favorite people, 
including me--you know, in Alaska, if you took the number of 
lawyers, the environmental litigation shops would rank probably 
4 out of the top 10 law firms, by number. And they raise money 
in opposition to these projects by filing public comments, by 
soliciting with pretty pictures, ``Look at the habitat that 
will be destroyed by this project if you allow it to go 
forward.'' I think that, actually, is the genesis of what 
Congressman Young was asking in the question, ``Who is behind 
this proposed rulemaking?''
    I think at this point I would defer to the comments that I 
pre-filed, and be happy to answer any questions that you might 
have. Thank you.
    [The prepared statement of Mr. Schutt follows:]
Prepared Statement of Ethan G. Schutt, Senior Vice President, Land and 
        Energy Development, Representing Cook Inlet Region, Inc.
    oil and gas development and permitting on public lands in alaska
    I am Ethan Schutt, Senior Vice President, Land and Energy 
Development at Cook Inlet Region, Inc. (``CIRI''). CIRI is 1 of 12 
Alaska Native Regional Corporations created in 1972 under the terms of 
the Alaska Native Claims Settlement Act of 1971 (``ANCSA''). CIRI is 
the regional corporation for the geographic area of southcentral Alaska 
in and around the Cook Inlet. CIRI is headquartered in Anchorage and 
represents more than 8,200 Alaska Native shareholders and their 
descendants. CIRI is the largest private landowner in southcentral 
Alaska and owns more than 1.3 million acres of subsurface estate and 
more than 600,000 acres of surface land, including more than 200,000 
acres of subsurface oil and gas interests within the Kenai National 
Wildlife Refuge (``KNWR'').
    By virtue of its land holdings in the Cook Inlet, an active oil and 
gas basin, CIRI has a long history of participating in the oil and gas 
business as a lessor and royalty owner. CIRI currently has three active 
lessees with oil and gas exploration, development and production 
activities within the KNWR. This current and historical presence in the 
Cook Inlet oil and gas business provides us with a well-informed 
perspective about the oil and gas industry as it relates to Federal 
regulatory and land management authority, including specifically the 
United States Fish and Wildlife Service (``USFWS'').
    An enormous amount of Alaska is owned by the Federal Government. A 
significant amount of that federally owned land in Alaska is 
categorized as National Wildlife Refuge with more than 76.5 million 
acres of refuge land in the aggregate. Many of the National Wildlife 
Refuges in Alaska were designated as such under the carefully 
negotiated and crafted terms of the Alaska National Interest Lands 
Conservation Act of 1979, commonly referred to as ``ANILCA''. Due to 
the circumstances and timing of Statehood and the passage of ANCSA, 
many Federal conservation units are intertwined with the private 
landholdings and interests of ANCSA corporations and with the State of 
Alaska. ANILCA was a grand compromise that came after statehood and 
ANCSA and set aside a massive geographic area in various conservation 
units such as National Parks and National Wildlife Refuges. But ANILCA 
was not drawn up in a vacuum. It was instead a carefully crafted set of 
compromises by and among the State of Alaska, the ANCSA corporations, 
and the Federal Government to accommodate often competing priorities.
    Although atypical in the exact manner by which CIRI acquired much 
of its ANCSA entitlement land holdings, the intertwined and adjoining 
nature of its lands with Federal conservation unit lands is not 
atypical. In fact, intertwined, adjoining, isolated by, and in-holding 
are the descriptors of many ANCSA corporation- and State-owned tracts 
in Alaska, particularly if you consider the practical impacts of such 
geographic features as mountain ranges, glaciers and large bodies of 
water. Within the system created by these realities, land management 
challenges are inevitable between the USFWS in its administration of 
its conservation units and the rest of us. But that relationship has 
become more and more strained and complicated by management practices, 
rules and standards now required by the USFWS in the administration of 
its refuge system in Alaska.
    Unfortunately, the land management philosophy of the USFWS and 
other Federal land managers in Alaska appears to be evolving away from 
the underlying principles and compromises of ANCSA and ANILCA that 
created the refuges and other conservation areas. I will describe for 
you, as best I can, some of my recent experiences in this area.
 the apparent federal management philosophy--so many ways to say ``no''
    The current apparent land management philosophy of the USFWS in 
Alaska as it relates to oil and gas exploration and development on or 
adjacent to the refuge system can be summed up as: ``No. Not here. Not 
now.'' Unfortunately, this mantra is inconsistent with the careful 
compromise that was historically made in order to achieve a 
satisfactory, if not ideal, land ownership outcome between the 
competing interests of the Federal Government, the State government and 
the Alaska Native people. This grand historic compromise led to the 
creation of a relatively complicated land ownership pattern that 
includes the so-called ``the checker board'' pattern, subsurface-only 
holdings and other extensive ``inholdings'' within the newly created 
National Wildlife Refuge system of Alaska in the early 1980s.
    Some 35 years later, the relationship between the ANCSA 
corporations and the State of Alaska, on the one hand, and the USFWS on 
the other, appears to be diverging. While the ANCSA corporations and 
the State of Alaska are intent on pursuing oil and gas exploration and 
development on their lands, as was promised by the grand compromise and 
the individual compromises that led up to the ANILCA-created refuge 
system, the USFWS seems intent on finding new ways to say ``no'' to 
that activity.
    To be clear, the refuge managers usually do not say ``no'' directly 
when addressing issues of access to or across their refuges for oil and 
gas exploration and development or other activity by ANCSA Regional 
Corporations or other landowners with inholdings or subsurface 
interests. For most actions for which they are approached, they know 
that they may not directly and explicitly say ``no''. They have instead 
adopted more sophisticated ways to attempt to prevent otherwise 
authorized activity.
    A good example comes from the relatively recent drilling of the 
Shadura Number 1 exploration well in the Kenai National Wildlife Refuge 
in the winter of 2010-2011. The Shadura Number 1 was an exploration 
well drilled by NordAq Energy, Inc., a small independent, on a CIRI oil 
and gas lease. The Shadura prospect lies in the northern Kenai 
Peninsula north of Kenai on CIRI-owned subsurface below USFWS surface 
estate within the KNWR. The Shadura prospect was identified from 
reprocessing of historical seismic data gathered in a large exploration 
program by ARCO in the early 1980s under an exploration license from 
CIRI.
    In planning for the exploration well, it became clear to NordAq 
that the KNWR management greatly preferred an ice road/ice pad 
exploration program as opposed to a more traditional gravel road to and 
gravel drilling pad at the exploration site. NordAq therefore planned 
and began permitting for an ice road/ice pad exploration program. 
Tailoring its exploration program to an ice road/ice pad-designed 
program constituted a significant accommodation by NordAq to a minimum 
impacts approach.
    Ice roads and ice pads for oil and gas exploration are common in 
Alaska. But they are less common in the Cook Inlet basin where the 
Shadura prospect is located because of the relatively shorter and less 
predictable winter conditions necessary for the road construction, 
drilling and testing program, and demobilization necessary to 
successfully accomplish an oil and gas exploration well. A full 
exploration drilling program can easily run 75 to 90 days in length, 
which can be a gamble in the climate of southcentral Alaska and its 
maritime-influenced environment. For obvious reasons, an ice road/ice 
pad program requires sustained sub-freezing temperatures for 
construction and maintenance of the road and pad. Nevertheless, NordAq 
planned for an ice road/ice pad program during the fall and early 
winter of 2010.
    But as NordAq's field program drew near, the requirements imposed 
on its ice road/ice pad program shifted. The common means of 
constructing an ice road is to permit a variety of local freshwater 
sources for temporary withdrawal to create the construction materials, 
namely--water to freeze into ice chips to create a road base. The USFWS 
had other ideas. They would not permit any local freshwater locations 
within the KNWR for NordAq's ice road. Nor would they permit the 
scavenging of naturally produced ice from the surface of local lakes or 
ponds. This leads to the inevitable question, how does one build an ice 
road if access to freshwater resources is not allowed?
    Fortunately, NordAq and its ice road contractor, Peak Oilfield 
Services Company, were not easily defeated. NordAq and Peak contracted 
with one of the fish processing plants in Kenai that was closed for the 
winter to purchase an industrial quantity of ice chips made in its ice 
makers--normally used to pack and process fresh fish. Peak then trucked 
the man-made, purchased ice in dump trucks 14 miles, one way to the job 
site. Even this was not without its challenges as USFWS staff raised 
questions about whether the water created when the ``imported'' ice 
chips melted would change the water chemistry or have any other 
deleterious effects.
    Obviously it seems inherently unfair to require a company to 
perform its exploration program from an ice road/ice pad system and 
then subsequently deny access to the local freshwater resources 
necessary to reasonably construct that ice road/ice pad. It is over-
the-top to then question the impact of ``imported'' ice chips that must 
be used in lieu of what should be locally sourced ice. But that is 
exactly what happened to NordAq at its Shadura project in 2010 and 
2011. These are the sorts of inconsistencies that are now common 
behaviors by the USFWS in dealing with oil and gas operators working on 
CIRI's KNWR lands.
    NordAq persevered and prevailed to successfully drill an apparent 
discovery well with its Shadura Number 1 well in February 2011, some 3 
years ago, but it has not quite been able to get back to the discovery 
location to drill a confirmation well and begin production in earnest. 
That is a story that will continue below.
                    junk science or lack of science
    Land management of oil and gas activity should be premised on sound 
science but recent Federal actions in Alaska highlight decisions 
premised on junk science or a lack of science. Many of these actions do 
not emanate from the USFWS but the impacts have an interplay with 
activities on or near refuges. The principal action of this nature is 
the designation of geographically massive critical habitat areas for 
endangered species.
    The two species of note in this regard are the polar bear and the 
Cook Inlet beluga whale. Although the designation of the polar bear as 
endangered and its subsequent critical habitat area do not directly 
affect CIRI's KNWR interests, I mention it here as an analogue because 
of the scale, scope and practical impact on oil and gas activities on 
the North Slope of Alaska. I will focus instead on the designation of 
and critical habitat area of the Cook Inlet beluga whale.
    The Cook Inlet beluga whale was designated as an endangered 
subspecies of the beluga whale, which is not endangered. Due to a 
variety of unique features of the Cook Inlet beluga whale and its 
habitat, very little scientific data and analysis exists about the 
whale, its seasonal migration and local habitat areas. The Cook Inlet 
beluga whale is even a species without an accurate population count or 
model, although this aspect has been greatly improved in the past 
several years, in large part due to data gathered by private companies 
doing work in the upper Cook Inlet. Unfortunately, little accurate 
counting and population modeling was performed prior to a noticeable 
decline in the whales' numbers in the last two decades. Thus, great 
uncertainty surrounds even the baseline question of what a healthy 
population number is for this particular whale subspecies. 
Nevertheless, the National Marine Fisheries Service (``NMFS'') 
designated the Cook Inlet beluga whale as an endangered species--almost 
certainly a justified action. But what it did next was less justified. 
When designating the critical habitat area the NMFS seemingly just took 
a Sharpie to the map and drew a line across Cook Inlet in two places 
from east to west. NMFS then declared all of Cook Inlet, including all 
of Turnagain Arm and Knik Arm, including intertidal estuaries, river 
and creek mouths, tidal mudflats and all other areas up to the mean 
high tide mark, to be class one critical habitat. Between the second 
line and the first was declared class two critical habitat. This is a 
massive geographical area with an enormous length of coastline--an area 
I often equate to the Gulf Coast for all of Texas starting at the 
Mexican border and running up into or beyond Louisiana. This is a 
massive withdrawal of water and adjoining tidelands for critical 
habitat, particularly without any underlying science to justify its 
designation as ``critical'' habitat.
    There are direct carry over effects of the Cook Inlet beluga whale 
critical habitat area designation on oil and gas activities in the 
KNWR. At this point, I have only witnessed one impact but another is 
equally predictable and inevitable. The first is negative impact on 
seismic operations necessary to properly image CIRI's subsurface estate 
within the KNWR to identify good exploration targets for oil and gas. 
CIRI has licensed a large part of its Cook Inlet lands to Apache Alaska 
under an exploration agreement. Apache Alaska spent several years 
attempting to permit what would have been the largest 3d seismic 
program in the history of Alaska. This program was intended to shoot 
modern, 3d seismic in a continuous and robust program from offshore, 
through the transition zone of the tidelands and onto the uplands, 
including CIRI's KNWR subsurface holdings. Due to an inability of the 
various Federal agencies to coordinate their individual permitting 
activities for Apache Alaska's proposed program and timely issue 
permits, a process greatly complicated by the Cook Inlet beluga whale 
critical habitat area, Apache Alaska abandoned its 3d program and 
replaced it with a much smaller, discontinuous 2d seismic program. 
Thus, a scientifically unsupported critical habitat designation 
impaired CIRI's ability to have an oil and gas lessee properly image 
its subsurface resource lands in the KNWR.
    Unfortunately CIRI's experience with Federal actions based on a 
lack of science is not its only experience of late. We have also seen 
issues raised by USFWS junk science. Going back to NordAq's Shadura 
discovery story, the USFWS also impeded its progress toward a 
reasonably timely development, in part by employing junk science within 
the permitting process for a right-of-way application. NordAq toiled 
for more than 30 months after its Shadura discovery to achieve the 
development permits necessary to construct a simple, single land gravel 
road and pad that is necessary to further develop the field. This 
permitting process took so long because the USFWS insisted that a full 
environmental impact statement process was required even though the 
activity is simple, low-impact and cannot be denied. In the process, 
the USFWS raised a habitat issue of note: peat pipes.
    We were shocked to discover the issue of peat pipes raised in the 
Shadura development EIS process. The reason we were so surprised is 
because none of us had ever even heard of such a thing as a peat pipe. 
Our astonishment was well founded. As far as I know, a peat pipe has 
never been identified anywhere in North America.
    A peat pipe is a near-surface, subsurface hydrological feature of 
the extensive, continuous and relatively homogenous peat bogs of 
northern England. It is a natural channel, or pipe, that is eroded into 
the surrounding peat over time by the movement of subsurface water. 
Peat pipes are shallow and somewhat ephemeral features that often link 
surface streams and ponds with the shallow subsurface hydrological 
features.
    Despite no identified peat pipes in the Kenai Peninsula or 
southcentral Alaska, and no credible evidence that would indicate that 
any peat pipes exist in the KNWR, peat pipes were an issue that had to 
be addressed in the Shadura development EIS process. The peat pipes 
issue highlights the consequences of junk science as applied by the 
USFWS to oil and gas activities within the refuge system in Alaska--
NordAq's permitting process was slowed and made substantially more 
expensive by addressing an imaginary issue.
                 inadequate staffing and changing rules
    Two practical realities dominate the interaction between oil and 
gas operators and the USFWS: inadequate staffing and changing rules. 
The USFWS is faced with too few technical experts to properly and 
timely process oil and gas activities on or crossing its refuge lands 
and many of those tasked with such activities do so without adequate 
technical education or training in oil and gas specific issues.
    The practical impact of too few oil and gas technical experts 
within the USFWS has the predictable consequence of slowing down all 
permitting and oversight activities. But there is also a lack of oil 
and gas specific expertise, which has an additional consequence of 
permitters focusing on the wrong issues or creating imaginary issues.
    The very changes being contemplated by the USFWS right now 
highlights the other practical problem: constantly shifting rules. I 
have heard numerous times from my lessees about the problem of moving 
goalposts.
    Another example from the NordAq Shadura case study highlights this 
issue. As mentioned above, NordAq's Shadura development requires an 
access road to get back to the Shadura prospect, which is not 
accessible by existing roads. The Shadura access road was designed as a 
single-lane gravel road in order to minimize the impact on the KNWR and 
its surface habitat. To make the single lane design safe and 
serviceable, it was designed with turnouts every quarter mile to 
facilitate bi-directional traffic. This design was incorporated into 
the right-of-way design that went through the EIS evaluation process. 
Except after the final EIS was issued the USFWS attempted to 
renegotiate the design of the road to eliminate turnouts, in an 
apparent attempt to further limit the habitat impact of the Shadura 
road. Such an after-the-process attempt to change the road was a 
classic example of constantly changing rules and expectations from the 
USFWS staff. Operators are happy to comply with reasonable rules, but 
they need to know what the rules are--and the rules need to stay 
constant.
          the de facto national park service management regime
    Perhaps the explanation for the USFWS's recent behaviors lies in an 
underlying seismic shift in management philosophies by Federal land 
management agencies with regard to their lands in Alaska. The USFWS and 
other Federal land managers--such as the Forest Service and the Bureau 
of Land Management--in Alaska appear to be adopting a de facto National 
Park Service (``NPS'') management regime. Many of the proposed 
rulemakings recently have either implicitly or explicitly been premised 
on, refer to, or adopt standards similar to those of the NPS. In fact, 
the recent proposed rulemaking by the USFWS explicitly referenced the 
oil and gas rules and standards of the NPS as both guidance and 
inspiration. Using the NPS system is inappropriate.
    The problem inherent in this shift is that the NPS manages for one 
explicit purpose, to preserve the wild, natural and undeveloped 
character of its lands, with a minimal accommodation to humans for the 
sole, express purpose of authorized and limited visitation of the 
otherwise undisturbed natural environment. But other Federal lands are 
not parks and, accordingly, those lands should not be managed as such. 
The National Wildlife Refuge System in Alaska, and elsewhere, has 
different purposes. And, importantly, the individual lands that 
comprise National Wildlife Refuges often have a much different and more 
complicated history than those within the National Park System.
    In many, and perhaps most, cases in Alaska, the National Wildlife 
Refuge system was created with a mix of inholdings and subsurface 
interests included within the exterior boundaries of individual refuges 
in order to maximize the geographic area encompassed by that refuge. By 
1980 when most of the National Wildlife Refuges in Alaska were created, 
there were already many competing applications for the same and 
adjoining lands that were due to the then-new ANCSA corporations and to 
the State of Alaska. Many of these lands were under competing selection 
by these non-Federal entities. In order to carve out these very large 
National Wildlife Refuge areas, compromises were struck with the non-
Federal entities. Thus, in creating the refuges in this manner, the 
rights of others were necessarily stirred into the dough of the refuge 
system in Alaska. It is now impossible to cleanly or fairly extract 
those interests some 30 to 40 years after the loaf was baked. 
Attempting to recreate the refuges as parks does not work in Alaska.
                           the alaska paradox
    I must mention one final overarching theme. Alaska is a special 
place, no question about it. It is beautiful, enormous and largely 
undeveloped: a national treasure. Alaska also holds a national 
treasure's worth of developed and undeveloped resources. And therein 
lies a set of circumstances that give rise to what I like to call ``the 
Alaska Paradox.''
    The Alaska Paradox results from the convergence of two powerful and 
competing realities in resource development in a place like Alaska. 
There is an economic reality that drives the scale of resource 
developments in Alaska to the very large or world class in scale. This 
enormous project scale is necessary to justify and fund the development 
and permitting risk of a new resources project in a place as big, as 
Arctic and as undeveloped as Alaska. Where oil and gas operators in the 
Lower 48 may target prospective resources in the hundreds of thousands 
of barrels of oil equivalent, in Alaska they typically target minimums 
in the tens of millions of barrels--and even more if the prospect 
location is far from infrastructure in an undeveloped area.
    The competing reality is that world class-scale projects in an 
otherwise undeveloped area create significant new impacts that in turn 
engender enormous scrutiny.
    Let me give you an example: the Red Dog Mine. The Red Dog Mine is 
one of the world's largest zinc deposits. It sits some 90 miles from 
Kotzebue, the only community of any scale within the Northwest Arctic 
Borough, an area the geographic equivalent of the State of Indiana with 
a mere 7,200 residents, fully half or more of which live in Kotzebue. 
The Red Dog Mine required the development and construction of its own 
access road, port, airport, camp and housing facilities, and power 
plant in addition to the ordinary mine and mine support facilities--all 
in an extremely remote, extremely arctic and completely undeveloped 
area of Alaska. Although the mine was and is extremely successful and 
has had an extraordinary environmental record, and its development and 
operation singularly supports the finances of the Northwest Arctic 
Borough and its communities, it is not clear to me that the Red Dog 
Mine could be developed today. It is simply too large and it and its 
attendant infrastructure have too much of an impact on the otherwise 
undeveloped environment around it. This is the reality of the Alaska 
Paradox: projects must be very large, but very large projects engender 
significant and sustained opposition and scrutiny.
              new rules are neither authorized nor needed
    The USFWS has recently proposed a set of new rules to govern oil 
and gas exploration, development and production on the national 
wildlife refuge system. These rules are neither authorized nor needed 
in Alaska.
    The proposed rules would disturb the careful statutory balance 
between the ANCSA corporations, and specifically CIRI, and the State of 
Alaska on one hand, and the Federal interests on the other. 
Accordingly, the proposed rules may not be implemented. Many of the 
proposed rules, e.g. bonding requirements, tread on the prerogative of 
the lessor and royalty owner and are not an appropriate action by the 
USFWS. Such requirements would impose an additional and unnecessary 
financial burden on oil and gas operators. The USFWS's proposed actions 
would constitute a usurping of the authority and responsibility of the 
landowner/lessor and are inappropriate. The proposed rules would also 
constitute a unilateral rewriting of the statutorily crafted rights and 
duties some 30 to 40 years after many of these issues were settled. The 
USFWS is not authorized to upset this congressionally crafted balance.
                               conclusion
    I can think of no circumstances under which the U.S. Fish and 
Wildlife Service's proposed new oil and gas rules are needed or would 
be justified in their application in Alaska. The effort to rewrite 
these rules is at best an attempt to usurp the role of the oil and gas 
lessor of inholdings, adjoining tracts or subsurface oil and gas rights 
below Alaska refuges. It is at worst an attempt to unilaterally rewrite 
the terms of a carefully crafted compromise between the Alaska Native 
Corporations and the State of Alaska, on the one hand, and the Federal 
Government on the other.

                                 ______
                                 

    Dr. Fleming. Thank you, Mr. Schutt.
    Mr. Matson, you are now recognized for 5 minutes to present 
testimony on behalf of the Defenders of Wildlife.

STATEMENT OF NOAH MATSON, VICE PRESIDENT, DEFENDERS OF WILDLIFE

    Mr. Matson. Thank you, Mr. Chairman, and members of the 
subcommittee. My name is Noah Matson, I am the Vice President 
of Landscape Conservation for Defenders of Wildlife. And thank 
you for the opportunity to provide input on this important 
issue.
    It has come up a bunch of times, where these regulations, 
this idea for regulations, come from. The Government 
Accountability Office, period. It appeared in their 2003 report 
and again in their 2007 report. And they specifically believe 
that the Fish and Wildlife Service has the authority to do 
this, and they recommended that they do actually go ahead and 
implement better regulations. And I will hopefully explain why.
    And, finally, the Fish and Wildlife Service is not 
proposing to deny access to anybody. They are proposing to 
restore a proper balance between resource protection and the 
development of private mineral interests.
    I have been involved in this issue for almost 15 years. In 
2000 I sent one of my staff to a number of national wildlife 
refuges in Louisiana to help Defenders of Wildlife better 
understand how and why oil and gas development occurs on 
national wildlife refuges, and what the impacts of that 
development are. What my staff discovered was nothing short of 
shocking, and I have personally been to a number of refuges 
since, and witnessed the impacts myself.
    I have prepared a slideshow of a number of these 
photographs from our visit to these refuges in Louisiana, as 
well as more recent images. As my staff toured these refuges 
with the Fish and Wildlife Service staff, they discovered a 
brine spill near a well that refuge staff previously was not 
aware of. Slide.
    [Slide]
    Mr. Matson. My staff came back with pictures of 55-gallon 
drums oozing with black chemicals, open waste ponds topped with 
sheens of oil. Slide.
    [Slide]
    Mr. Matson. Abandoned, rusting storage tanks. Slide.
    [Slide]
    Mr. Matson. A rusted pipe leaking into a refuge mark. You 
can see the sheen right there.
    But that was a long time ago. Surely, surely, over the last 
14 years, after three separate Government Accountability Office 
reports, things would be different today. Slide, please.
    [Slide]
    Mr. Matson. They are not. This photo of 55-gallon drums and 
5-gallon pails strewn about a refuge with unknown contents was 
taken just in March of this year, 2 months ago. Slide.
    [Slide]
    Mr. Matson. This photo of the high-quality repair jobs that 
we are seeing at national wildlife refuges was taken just in 
February. Slide.
    [Slide]
    Mr. Matson. And one of my favorites, a leaking tank 
repaired with duct tape and a garbage bag was taken on a refuge 
in March of this year.
    On many national wildlife refuges, development of privately 
owned oil and gas minerals recounts the Wild West. The existing 
single paragraph of Fish and Wildlife Service regulations 
pertaining to non-Federal mineral rights on national wildlife 
refuges is completely inadequate. It is so full of qualifiers 
and discretion that it is meaningless as a practical tool for 
managing oil and gas exploration and development.
    In short, the current regulations cannot be relied on to 
protect the wildlife values of affected wildlife refuges, nor 
the health, safety, and enjoyment of the visiting public.
    Oil and gas exploration and development is extensive, and 
is damaging refuge resources. At St. Catherine Creek National 
Wildlife Refuge in Mississippi, oil and brine spills have led 
to significant soil and vegetation damage on the refuge. Slide, 
please.
    [Slide]
    Mr. Matson. The legacy of brine spills is evident in this 
picture. The field you are looking at should be a woodland. But 
after a brine spill years ago, nothing grew on this plot except 
salt-tolerant shrubs.
    And just last month the Service staff at the Catahoula 
National Wildlife Refuge in Louisiana discovered numerous 
spills and leaks at an oil production facility on the refuge. 
The Service is still assessing the extent and scope of that 
damage.
    Unfortunately, taxpayers are being left with the cleanup 
bill. There are at least 3,300 inactive wells on national 
wildlife refuges. The Fish and Wildlife Service does not have 
adequate assurances that the responsible party will properly 
plug the wells and reclaim the sites. The cost of plugging 
wells and restoring habitat is significant.
    For example, the Lower Rio Grande National Valley National 
Wildlife Refuge in Texas cleanup and restoration costs for just 
three wells in 2011 was $1.2 million, or $400,000 per well. And 
at St. Catherine Creek National Wildlife Refuge in Mississippi, 
replugging an abandoned well and restoring the costs, cost the 
taxpayers $260,000. These costs should be borne by the private 
mineral owners and operators.
    Slide, please.
    [Slide]
    Mr. Matson. The Fish and Wildlife Service's current grossly 
inadequate regulations and capacity will not prevent these 
costs from being borne by taxpayers, nor do they allow the 
Service to properly manage the surface activities of non-
Federal oil and gas development.
    You know, basic information procedures like bonding, 
special use permits, requiring proof of ownership, are not 
currently required. The qualifiers and absence of any 
procedural requirements in the Fish and Wildlife Service's 
existing regulation render them virtually meaningless, and 
stand in sharp contrast to the National Park Service's 
comprehensive and reasonable oversight to the same category of 
activities. The Refuge System deserves nothing less. Thank you.
    [The prepared statement of Mr. Matson follows:]
    Prepared Statement of Noah Matson, Vice President for Landscape 
       Conservation and Climate Adaptation, Defenders of Wildlife
    Mr. Chairman and members of the subcommittee, my name is Noah 
Matson and I am the Vice President for Landscape Conservation and 
Climate Adaptation for Defenders of Wildlife. Thank you for the 
opportunity to provide input to the subcommittee on ``Oil and Gas 
Activities within Our Nation's Wildlife Refuge System.'' This is an 
extremely important issue facing the National Wildlife Refuge System 
and the incredible wildlife the Refuge System was established to 
protect and I appreciate the subcommittee's interest in the issue.
    I have been following this issue for almost 15 years. In 2000 I 
sent one of my staff to a number of national wildlife refuges in 
Louisiana to help Defenders of Wildlife better understand how and why 
oil and gas development occurs on national wildlife refuges and what 
the impacts of that development are. What my staff discovered was 
nothing short of shocking.
    I have included a number of photographs from our visit to these 
refuges in Louisiana. As my staff toured these refuges with Fish and 
Wildlife Service staff, they discovered a brine spill near a well that 
refuge staff previously was not aware of. My staff came back with 
pictures of 55 gallon drums oozing black toxic chemicals; open waste 
ponds topped with sheens of oil; abandoned, rusting storage tanks; and 
rusted pipes and well heads that provided no confidence they would not 
leak in the future.
    On many national wildlife refuges development of privately owned 
oil and gas minerals recounts the ``Wild West.'' The existing single 
paragraph of Fish and Wildlife Service regulations pertaining to 
private mineral rights on national wildlife refuges is so full of 
qualifiers and discretion that it is completely inadequate for the 
Service to be able to reasonably manage surface activities connected 
with oil and gas exploration and development in order to protect the 
fish and wildlife values of affected wildlife refuges, Federal trust 
resources, Federal property, and the health, safety and enjoyment of 
the visiting public.
 oil and gas exploration and development is extensive and is damaging 
                            refuge resources
    According to the Fish and Wildlife Service, over 200 national 
wildlife refuges have existing oil and gas infrastructure including 103 
refuges and 4 wetland management districts that have active oil and gas 
wells. In total there are more than 5,000 wells with almost 1,700 of 
those wells actively producing oil and gas. I consider these minimum 
figures. From my experience, and confirmed by the Government 
Accountability Office (GAO), the Fish and Wildlife Service does not 
have an adequate system for tracking oil and gas development within 
wildlife refuges.
    St. Catherine Creek National Wildlife Refuge in Mississippi is high 
on the list of refuges with the most oil and gas wells, with nearly 
500, over 60 of which are active. Oil and brine spills have led to 
significant soil and vegetation damage on the refuge. One such spill 
occurred in 1993, when a massive leak of briny water, pulled up from 
oil and gas operations, flooded 21 acres of sensitive coastal habitat. 
The salt levels left in the soil were high enough to cause acute and 
chronic effects to tree species and aquatic organisms that persist to 
this day.
    More recently, in 2012, Hagerman National Wildlife Refuge in Texas 
experienced a leak of oilfield brine into a mature woodlands. The brine 
spill killed over 80 hardwood trees--two of these trees were estimated 
to be over 150 years old. The Fish and Wildlife Service estimated it 
would cost over $150,000 to restore the damaged habitat.
    Just last month, the Service staff at the Catahoula National 
Wildlife Refuge in Louisiana discovered numerous spills and leaks at an 
oil production facility on the refuge. The Service is still assessing 
the extent and scope of the damage.
    The impacts of oil and gas development are not limited to large 
spills--even frequent small spills can be deadly over time. According 
to the Service, a study of Atchafalaya and Delta National Wildlife 
Refuges in Louisiana found that ``levels of oil contamination near oil 
and gas facilities are lethal to most species of wildlife, even though 
refuge staff were not aware of any large spills.''
    Overall, the impacts of oil and gas development on wildlife, 
ecosystems, and wildlife refuge management are well known and include:

     Destruction, degradation, and fragmentation of wildlife 
            habitat through clearing and construction of wells, well 
            pads, seismic lines, storage tanks and ponds, pipelines and 
            other infrastructure and the movement of heavy drilling 
            equipment across sensitive habitat.
     Leaks and spills of oil, brine, produced water, 
            contaminated drilling muds, and other toxic chemicals that 
            harm wildlife, vegetation, water quality, air quality and 
            human health.
     Introduction of invasive species that compete with native 
            plants, wildlife and habitat.
     Disturbance of wildlife during construction and operation 
            of facilities.
     Conflicts with important wildlife refuge management 
            activities, for example by inhibiting necessary prescribed 
            fire operations near oil and gas facilities.
     Conflicts with other priority forms of public use and 
            enjoyment of refuge resources like wildlife dependent 
            recreational activities.
             taxpayers are being left with the cleanup bill
    There at least 3,300 inactive wells on national wildlife refuges. A 
substantial proportion of those wells are likely abandoned, or will be 
abandoned, and in many if not most cases, the Fish and Wildlife Service 
does not have adequate assurances that the responsible party will 
properly plug the wells and reclaim the sites.
    Let's assume conservatively for purposes of discussion that only 
1,000 of these inactive wells are abandoned and orphaned--with no known 
operator. The State of Louisiana requires a $25,000 bond for operators 
of 1-10 wells. If you assume that it costs just $25,000 to plug and 
reclaim a single well, then taxpayers could be stuck with a $25 million 
bill from deadbeat drillers to cover restoration costs. The real 
experience of the Fish and Wildlife Service, however, suggests the 
costs of plugging and reclaiming well sites is much, much more.
    At the Lower Rio Grande Valley National Wildlife Refuge in Texas, 
Fish and Wildlife Service staff spent 15 years negotiating with the 
Texas Railroad Commission, which governs oil and gas activities in the 
State, about plugging three abandoned wells on the refuge. In 2011 the 
abandoned well sites were finally cleaned up and equipment were removed 
from the refuge at the cost of $1.2 million--or $400,000 per well.
    At St. Catherine Creek National Wildlife Refuge in Mississippi, 
refuge staff discovered a leaking oil well in 2012. The well had been 
improperly plugged and abandoned in 1983. The State's policy 
transferred responsibility for re-plugging the well site and cleanup to 
the current surface owner--the Fish and Wildlife Service. The 
Environmental Protection Agency (EPA) ultimately assumed jurisdiction 
and all costs of the cleanup because of its size. Re-plugging the well 
alone cost $95,000 (well above the $10,000 bonding requirements in 
Mississippi, or the $25,000 bonding requirement in Louisiana for a 
single well). Site restoration cost an additional $165,000. In total, 
it cost taxpayers $260,000 to cleanup, plug, and restore a single 
abandoned well site because of inadequate State and Federal 
regulations.
    As a well declines in productivity it is usually sold, often 
multiple times, making it difficult to track down responsible parties 
and enforce cleanup costs. Each subsequent owner is often a lower 
budget operation that is trying to squeeze the last drops of oil or 
natural gas at the least cost out of the ground. The last owners often 
disappear or claim bankruptcy.
    The future restoration costs and liabilities of the 5,000 wells on 
national wildlife refuges will cost hundreds of millions of dollars. 
These costs should be borne by the private mineral owners and 
operators. Existing Federal and State regulations are not adequately 
protecting either irreplaceable national wildlife refuge resources or 
Federal taxpayers from these liabilities.
         existing federal and state regulations are inadequate
    The examples I have provided of past damage to national wildlife 
refuges from private oil and gas exploration and development, and the 
lack of adequate financial assurances to properly manage, plug, restore 
and reclaim well sites once they have been abandoned, clearly 
demonstrate that the current system of State and Federal oil and gas 
regulations applicable to national wildlife refuges is not properly 
protecting the surface resources that belong to the American people. 
States prioritize well site inspections, enforcement, and reclamation 
dollars to State and private surface lands above areas owned or managed 
by the Federal Government. And even if they could be expeditiously 
tapped, State bonds for oil and gas development do not adequately cover 
the full cost of plugging abandoned wells, pulling pipelines, storage 
tanks and other infrastructure, and restoring sites to natural habitat.
    As of 2011, the Texas Railroad Commission had only 153 inspectors 
to monitor 263,233 producing oil and gas wells. In order to visit each 
well once per year, each inspector would have to visit seven wells a 
day--a near impossible task given travel times, necessary follow up on 
violations and a myriad of other factors. And visiting a well once a 
year is hardly adequate to ensure compliance with State standards. 
Other States have fewer inspectors per well. Relying on States to 
protect the property and wildlife interests of the Federal Government 
and the American taxpayer within national wildlife refuges simply will 
not work.
    Similarly, the Fish and Wildlife Service's current grossly 
inadequate regulations, procedures, and capacity are not up to the task 
as well. For example, Upper Ouachita National Wildlife Refuge in 
Louisiana has over 1,000 wells--more than any other national wildlife 
refuge. Yet the refuge has no dedicated staff to manage that 
development, does not know the full extent of mineral rights owners, 
and does not require special use permits or operators to post a bond.
    Basic information and procedures like this are not only essential 
to provide balanced and reasonable protection for the wildlife and 
recreational values that our national wildlife refuges provide, but 
they are customary on other land ownerships. Unfortunately, the Service 
has acted for far too long as if it has had no authority whatsoever to 
impose even minimal reasonable restrictions on private mineral 
development that are necessary to reduce serious harm to refuge 
resources. This is simply wrong, and we commend the Fish and Wildlife 
Service for finally recognizing they in fact have the authority and are 
willing to develop a thoughtful and comprehensive approach to protect 
the resources they were charged with protecting, while providing 
reasonable access to private mineral rights.
    The Fish and Wildlife Service's single paragraph in the Code of 
Federal Regulations (50 CFR Sec. 29.32) regarding non-Federal oil and 
gas development reads as follows (emphasis added):

        Persons holding mineral rights in wildlife refuge lands by 
        reservation in the conveyance to the United States and persons 
        holding mineral rights in such lands which rights vested prior 
        to the acquisition of the lands by the United States shall, to 
        the greatest extent practicable, conduct all exploration, 
        development, and production operations in such a manner as to 
        prevent damage, erosion, pollution, or contamination to the 
        lands, waters, facilities and vegetation of the area. So far as 
        is practicable, such operations must also be conducted without 
        interference with the operation of the refuge or disturbance to 
        the wildlife thereon. Physical occupancy of the area must be 
        kept to the minimum space compatible with the conduct of 
        efficient mineral operations. Persons conducting mineral 
        operations on refuge areas must comply with all applicable 
        Federal and State laws and regulations for the protection of 
        wildlife and the administration of the area. Oil field brine, 
        slag, and all other waste and contaminating substances must be 
        kept in the smallest practicable area, must be confined so as 
        to prevent escape as a result of rains and high water or 
        otherwise, and must be removed from the area as quickly as 
        practicable in such a manner as to prevent contamination, 
        pollution, damage, or injury to the lands, waters, facilities, 
        or vegetation of the refuge or to wildlife. Structures and 
        equipment must be removed from the area when the need for them 
        has ended. Upon the cessation of operations the area shall be 
        restored as nearly as possible to its condition prior to the 
        commencement of operations. Nothing in this section shall be 
        applied so as to contravene or nullify rights vested in holders 
        of mineral interests on refuge lands.

    The qualifiers, lack of definition, and absence of any procedural 
requirements in this regulation render them virtually meaningless and 
stand in sharp contrast to the National Park Service's (NPS) 
comprehensive and substantive oversight of the same category of 
activities. Promulgated in 1979, and currently being updated, NPS's 
rules at 36 CFR Sec. 9.30 establish a detailed and precautionary 
approach to the approval and subsequent management of non-Federal oil 
and gas operations on NPS lands. At the core of this program is the 
requirement that oil and gas operators submit a detailed plan of 
operations, with precise information concerning the location, extent, 
and duration of proposed activities and associated infrastructure; the 
affected environment and anticipated environmental consequences; 
technologically achievable alternatives to the proposed operations; 
measures to protect surface and subsurface waters; and many other 
standards. NPS also retains the authority to reject inadequate or 
incomplete plans of operations.
    Additionally, NPS's regulations require specific authorization for 
any use of water within NPS lands, establish substantive reclamation 
requirements and operating standards, mandate registration of oil and 
gas related commercial vehicles with the agency, require guaranteed 
performance bonds, provide for specific damage clauses, and allow 
public participation and comment on a proposed plan of operations.
    The courts have upheld the Park Service's approach. According to 
the GAO:

        In Dunn McCampbell Royalty Interest, Inc. v. National Park 
        Service, 964 F. Supp. 1125 (S.D. Tex. 1995), aff'd on other 
        grounds, 112 F.3d 1283 (5th Cir. 1997), the court ruled that 
        the National Park Service has authority to reasonably regulate 
        private owners' access to their oil and gas interests located 
        beneath park system lands, by requiring approval of a plan of 
        operations before commencement of exploration or production 
        activities. The court relied on language in the National Park 
        Service Organic Act directing the Park Service to ``protect and 
        regulate'' national parks so as to ``conserve the scenery and 
        the natural and historic objects and the wildlife therein and 
        to provide for the enjoyment of the same in such manner and by 
        such means as will leave them unimpaired for the enjoyment of 
        future generations,'' as well as language directing the 
        Department of the Interior to issue regulations ``as . . . 
        deem[ed] necessary or proper for the use of the parks . . . 
        under the jurisdiction of the National Park Service.''

    The Refuge System similarly has a strong organic act, the National 
Wildlife Refuge System Improvement Act (16 U.S.C. 668dd-668ee) that 
declares that the mission of the Refuge System is to ``administer a 
national network of lands and waters for the conservation, management, 
and where appropriate, restoration of the fish, wildlife, and plant 
resources and their habitats within the United States for the benefit 
of present and future generations of Americans.'' The Refuge 
Improvement Act directs the Secretary of the Interior to ``ensure that 
the biological integrity, diversity and environmental health of the 
System are maintained,'' and authorizes the Service to issue 
regulations to carry out the Act.
    Though a more thorough legal analysis during the rulemaking process 
would be helpful, the Fish and Wildlife Service clearly has the 
authority to establish reasonable regulations to protect Federal 
property and to achieve its wildlife conservation mission.
   the fish and wildlife service is compelled to improve regulations 
  pertaining to the surface development of non-federal mineral rights 
                  underneath national wildlife refuges
    The Government Accountability Office has studied the problems 
surrounding the exploration and development of non-Federal oil and gas 
on national wildlife refuges fully three times since 2001 and has 
provided a compelling basis for the Fish and Wildlife Service to enact 
changes to its regulatory structure. A third of all national wildlife 
refuges have some form of oil and gas development occurring within 
their boundaries, the vast majority of which involve the development of 
private oil and gas interests. That development regularly causes harm 
to wildlife, habitat, water and air quality, other priority public use 
and enjoyment of wildlife refuges, and interferes with important refuge 
management priorities. Existing State and Fish and Wildlife Service 
regulations, controls, and capacity are grossly inadequate for properly 
protecting important and irreplaceable wildlife refuge resources. Based 
on these facts, the Fish and Wildlife Service, in order to meet the 
conservation mandates established by Congress in managing the National 
Wildlife Refuge System, desperately needs to update and expand its 
regulations to reasonably manage and provide a nationally consistent 
approach to the development of non-Federal oil and gas resources within 
the boundaries of national wildlife refuges.
    Defenders of Wildlife looks forward to working with the Fish and 
Wildlife Service to ensure reasonable and balanced regulations are 
enacted.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
                                 

       Additional Testimony of Noah Matson, Defenders of Wildlife
    Chairman Fleming, Ranking Member Sablan, and members of the 
subcommittee, thank you again for inviting me to testify before the 
subcommittee. I am providing additional material relevant to the 
hearing.
    The subject of oil and gas development on the Kenai National 
Wildlife Refuge in Alaska was a point of discussion during the hearing. 
Federal minerals were leased on the Kenai refuge before the 1966 
National Wildlife Refuge System Improvement Act. No additional Federal 
minerals have ever been offered, and in fact, additional leasing has 
been officially determined to be ``incompatible'' with the wildlife 
conservation purposes of the refuge.
    It is important to point out that this existing development has 
caused substantial harm to the refuge. Attached to this letter I am 
including a report produced by Defenders of Wildlife and Audubon 
documenting the numerous spills and explosions that have released toxic 
chemicals on the refuge. The refuge documented the presence of deformed 
frogs, among other impacts.
    I bring this to your attentions to demonstrate that reasonable 
regulations of non-Federal mineral development are sorely needed to 
prevent similar problems in the future if and when those resources are 
developed.
    Thank you.

Attachment

      Report on Toxic Tundra by Defenders of Wildlife and Audubon

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 

                                

    Dr. Fleming. OK. Mr. Matson concludes his testimony. At 
this point we will begin Member questioning for the witnesses. 
To allow all Members to participate, and to ensure we can hear 
from all of our witnesses today, Members are limited to 5 
minutes for their questions. However, if Members have 
additional questions, we can have more than one round of 
questions.
    Here we go. Just kind of an opening comment from some of 
the statements made in the testimony I would certainly want to 
address here. For instance, Mr. Naatz talks about a solution 
looking for a problem. I agree. This sounds to me like--the way 
I would put it is a hammer looking for a nail. We have so many 
problems that we need to deal with in this Nation, and we have 
States taking care of problems here. It makes no sense to go 
looking for more problems, particularly in a time of austerity 
that we are here today.
    Of course, Mr. Matson shows us some pictures today. We have 
no idea whether those are contrived, we have had no ability to 
evaluate those situations. You heard earlier from testimony of 
a gentleman showing the damage done, again, barrels just like 
that were shown there, that was done by BLM in Alaska. So, 
again, I would just sum that up by saying that Mr. Guertin 
reassured us there has never been a major spill in a refuge 
area. I think that is testimony for a lot of things here today.
    Now, Mr. Naatz, Mr. Powell, Mr. Schutt, you can kind of 
take these as you want. Is there any doubt in your mind that 
State regulations are committed to protecting human health, 
groundwater, surface water, and public safety at these refuge 
sites?
    Mr. Naatz. Mr. Chairman, I will start. I can tell you from 
IPAA's standpoint, we have great confidence in the State 
regulatory agencies. Again, the States know--and I referenced 
in my testimony the kind of diverse nature of where oil and gas 
activity happens, all the way from Alaska to your State, 
Louisiana, Colorado--the States know the hydrology, the States 
know the geology, the States know how to get that done. And, 
again, we have strong confidence in the ability of the States 
to regulate the oil and gas activities.
    Mr. Powell. Well, I will defer to the IPAA, who has more 
experience with the field operations. But in NARO's opinion, 
the State regulations have been more than sufficient, and do 
not feel that further regulation is warranted.
    Dr. Fleming. OK. Mr. Schutt?
    Mr. Schutt. I would agree with the prior two speakers, the 
State system in Alaska is more than adequate to protect health, 
safety, human interests, and the environment. I would add that 
the Fish and Wildlife Service in the one refuge where it does 
have active oil and gas operations, the Kenai, with regard to 
my lessees, does do active regulation of those lessees in many 
of the same ways it proposes to do so in the notice of proposed 
rulemaking. They require a special use permit, they require 
proof of ownership, running back to CIRI's subsurface, the 
require reclamation bond for any surface infrastructure.
    Dr. Fleming. So----
    Mr. Powell. They are actively regulating my lessees, as we 
sit here today.
    Dr. Fleming. Yes. Thank you for that. Again, basically, 
what we are saying here is the expertise and the experience 
lies with the States. States have been doing this for many 
years, and doing a very good job.
    Are there certain States whose regulations need to be 
improved, or major gaps that need to be closed?
    Mr. Naatz. Mr. Chairman, IPAA is a Federal trade--we really 
haven't looked at that. You know, we would defer to the States. 
The only thing I would add further to the--to your--to the 
comments before, is this idea that we run into all the time, 
that the States don't do a good job of regulating.
    Again, when you are in State capitals, when you are dealing 
with State regulatory agencies, it is far easier to get 
changes. If there are problems that need to be changed, the 
States can do that. So, again, I wouldn't--I don't have the 
expertise to know specific States, but the ability to address 
problems----
    Dr. Fleming. Right.
    Mr. Naatz [continuing]. Is far easier done at the State 
capital than here, in Washington.
    Dr. Fleming. Right, far more nimble, far more responsive, 
absolutely. And what about Louisiana?
    Mr. Powell. I am not a complete expert on the regulations 
in Louisiana. However, it is my understanding that we have 
sufficient regulations, if not more than enough, that support 
their operations. For this reason, I would rather have it in 
the hands of Louisiana, rather than blanket regulations across 
the United States by the Service.
    Dr. Fleming. Well, to sum a recent conversation we had with 
Fishery and Wildlife is that Louisiana is one of the best 
States when it comes to regulations. Apparently, they treat 
wells, oil and gas activity on refuge land, no differently than 
they do private land. It is all the same to them. And in spite 
of what photographs may have been shown today, Louisiana does 
it right, and we get that straight from Fisheries and Wildlife.
    With that, I yield to the Ranking Member for 5 minutes for 
questioning.
    Mr. Sablan. Well, thank you very much, Mr. Chairman. Let me 
start with a yes or no with each one of you.
    I am new here, so--but let me ask. Do we understand that 
your testimony here is under oath?
    Mr. Naatz. Yes.
    Mr. Powell. Yes.
    Mr. Schutt. Yes.
    Mr. Matson. Yes.
    Mr. Sablan. All right. So let me go to my other question. I 
mean, in all cases, wells and infrastructure are abandoned due 
to inadequate finances of an operator, in many cases. So these 
costs are passed on to the taxpayers. Do you believe the 
taxpayers should incur the costs associated with damage to 
refuge resources from leaks and spills, inadequate plumbing, 
abandonment, and reclamation? Sir? Yes or no. Just yes or no. I 
have other questions.
    Mr. Naatz. Yes.
    Mr. Powell. Yes.
    Mr. Schutt. I don't believe that----
    Mr. Sablan. Yes or no.
    Mr. Schutt. I don't believe, with the factual premise of 
the question.
    Mr. Sablan. Please, I have other questions. I only have 5 
minutes. Yes or no.
    Mr. Schutt. It is not a taxpayer burden, no.
    Mr. Matson. Yes, it is a taxpayer burden.
    Mr. Sablan. All right. Mr. Naatz, in your written 
testimony, sir, you drew attention to the fact that half of all 
active wells are found on just five refuges. But it is also a 
fact that oil and gas development can be found on nearly half 
of the Nation's 562 refuges. Why don't you think that people 
who hunt, fish, and enjoy the outdoors at these refuges deserve 
to have a system in place for preventing and cleaning up oil 
spills?
    Mr. Naatz. Congressman, the issue is that they do have a 
system. The current system is nimble, it addresses what is 
going on.
    Again, it is important to remember that that is a property 
right that largely happened as the Federal Government came over 
the top of what was happening. So these are private owners who 
have that property right.
    Again, we want to stress that there is a system in place: 
the State regulatory agencies. And for every area, the States 
have that----
    Mr. Sablan. OK, there is a system in place. But it must not 
be working, because that is what GAO is suggesting in their 
report, that we look into this, and Fish and Wildlife Service 
should look into this, and make sure that there is a way to 
make these things work. That is why we are in a hearing today. 
Don't you think?
    Mr. Naatz. Having sat here, the GAO reports that we are 
talking about is a little bit like the Bible. You take the----
    Mr. Sablan. I like the Bible, sir. I like the Bible.
    Mr. Naatz. Because I would tell you it also says that 
Congress should be the one that finally makes the decision, 
that any of these decisions that you are talking about should 
have Congress really make those decisions, because you are 
talking about important rights. You are talking about property 
rights, which I think we all want to protect.
    Mr. Sablan. You are a smarter guy, so I won't debate with 
you, sir. You are going to probably win it. But I like the 
Bible. I am sorry.
    Mr. Matson, if my oil--I really like to have oil, sir--but 
if my oil is underneath your land, I have a right to access it. 
But don't you also have a right to require me to enter into a 
legally binding contract to access your land and clean up any 
damage I cause?
    Mr. Matson. I sure hope I would have the right, as a 
private land owner. I certainly expect that right to be 
conferred to the Fish and Wildlife Service.
    I want to assure the Chairman that I have no intention of 
misleading or perjuring myself here, in front of the Congress, 
and that all those pictures are from national wildlife refuges, 
where I said they were. But, even if they weren't from national 
wildlife refuges, they are real pictures. And, clearly, some 
system somewhere is broken. And given that most of that 
activity is regulated by the States, I would argue that State 
regulation currently is likely inadequate.
    Finally, on the GAO debate, whether they called for 
Congress, they said the Fish and Wildlife Service needs to set 
reasonable conditions regarding these rights, and to report the 
results of their determination to Congress--and I have it right 
here--and then they finally said to go to Congress for any 
additional authority they might need, above and beyond that.
    Mr. Sablan. I thank you. I have no further questions, Mr. 
Chairman.
    Dr. Fleming. The gentleman yields back. Mr. Young?
    Mr. Young. Thank you, Mr. Chairman. Mr. Schutt, you have 
been involved with trying to develop your leases. What has the 
Fish and Wildlife done without these regulations to help you 
get this done?
    Mr. Schutt. Thank you, Mr. Young, for your question. You 
know, the Fish and Wildlife Service, in the Kenai National 
Wildlife Refuge, has done a more than adequate job in 
protecting surface resources. I think they have the threat of a 
variety of regulatory and legal tools already at their 
disposal, and----
    Mr. Young. OK, let me clarify what I am saying, have they 
been helpful in getting your oil developed?
    Mr. Schutt. Absolutely not.
    Mr. Young. OK. What have they required you to do, even 
without these regulations that are being proposed?
    Mr. Schutt. Basically, any action by one of my lessees on 
the refuge, if it is allowed at all, is required to go through 
a full EIS process. Whether--including the last one that one of 
my lessees went through, which was to develop a 2\1/2\ mile 
gravel--single-lane gravel road to a prospect site for a 
drilling location, went through a full EIS, although the no-
action alternative was explicitly prohibited, because they knew 
that they could not say no, directly. But that was a 30-month 
EIS process for a 2\1/2\ mile, single-land gravel road.
    Mr. Young. OK. What I am leading up to, the gentleman from 
the Fish and Wildlife and the gentleman from the Defenders say, 
``We are not prohibiting you from developing your''--but the 
key doesn't fit. Can you imagine, with these new regulations, 
how long it would take you to try to find your rightfully owned 
oil, because they are imposing these new regulations? I would 
say maybe 25 years. You would have gray hair by then.
    Mr. Schutt. Correct. I think, to be clear, they do 
occasionally say no to things that we don't agree that they can 
say no to. One recent example is, as you know, one of the 
preliminary steps for oil and gas exploration is the shooting 
of modern seismic to gather the subsurface data to identify 
prospects to be drilled. The Fish and Wildlife Service has not 
provided adequate access to the surface of the refuge for that 
non-intrusive seismic gathering activity. So I have a buffer 
around the exterior boundaries of my subsurface for which we 
cannot gain appropriate data.
    Mr. Young. They are prohibiting you from finding what is 
there?
    Mr. Schutt. They are prohibiting us, through our lessees, 
from gathering data adequate to identify targets around the 
periphery of our subsurface holdings, yes.
    Mr. Young. And what regulation are they using for that?
    Mr. Schutt. I am not sure.
    Mr. Young. Would you find that out for me? Because, again, 
they are taking away your subsurface right. If you don't know 
where it is--then you have not been able to use all the tools 
available, frankly, to do less damage. I mean----
    Mr. Schutt. I believe, Mr. Young, that they are 
characterizing the activity that is required as being 
commercial activity in the refuge, and----
    Mr. Young. But oil drilling is commercial, is it not?
    Mr. Schutt. Yes, it is.
    Mr. Young. But the other--finding it with seismic is 
commercial.
    Now, this is an example, Mr. Chairman, again, of an agency 
that has gone amuck. This refuge, when it was developed, said 
subsurface and surface development of oil would take place and 
could take place, and now they are changing the rules.
    Mr. Schutt. Correct. The northern refuge was formed out of 
a compromise between CIRI, the State of Alaska, and the U.S. 
Government. It was a highly negotiated document, and the rules 
have changed, or are being attempted to change at this point. 
We gave up a tremendous amount of rights under the Alaska 
Native Claims Settlement Act to obtain the 200,000-plus acres 
we have of subsurface within the Northern Kenai National 
Wildlife Refuge. That allowed the conversion of the moose range 
into the refuge, as we have it today.
    Mr. Young. And that was the law we passed in Congress, a 
law that you thought was going to be implemented. And now we 
have an executive agency changing the law of Congress.
    Mr. Schutt. Correct.
    Mr. Young. What is wrong with America today. We are now 
being run by a monarchy of agencies supported by outside 
interest groups that don't know one side from the backside. 
Very, very frustrating to America, as far as I am concerned.
    And as long as I sit in this seat, we are going to get 
those oil fields developed that were guaranteed under the Act 
of Congress to Alaska Natives. That is the right that we should 
have. I am done with this.
    Dr. Fleming. The gentleman yields. Mr. McAllister is 
recognized.
    Mr. McAllister. Thank you, Mr. Chairman. I am going to be 
looking for that key, Mr. Young, to see if we can fit that hole 
before this is over with.
    Mr. Matson, to go back to those pictures that you showed--
and, it is one of these things, I see those pictures and I 
understand how--a picture is worth a thousand words. But yet 
you come here before this committee today and show these 
pictures. Do you know when those repairs were made, the garbage 
bags, for instance? Do you know when it was made, prior to when 
you took the picture?
    Mr. Matson. That garbage bag picture was taken just a 
couple of months ago. And I believe it is still unrepaired.
    Mr. McAllister. You believe it is still unrepaired.
    Mr. Matson. That was a Fish and Wildlife Service picture, 
not my own. And I was told that that repair has not been made 
yet.
    Mr. McAllister. OK. So you took a picture of someone who 
was innovative. And rather than leaving the fluid to drip on 
the ground, repaired it with duct tape and a garbage bag. And 
yet you seem to be very upset about that, not knowing if that 
repair was made that morning because they didn't have the right 
tools, and trust me, I come from Louisiana, where I know it is 
very inaccessible to get to some of these facilities where we 
drill for oil and all, and there is not a local pipe supply on 
every corner. So sometimes you have to make do what you can 
make do.
    But yet we are damned if we do and we are damned if we 
don't. We take a garbage bag and fix it and keep it from 
leaking, and yet you are still not happy, and you come to 
Washington, DC, and testify before Congress, and want to throw 
fits because some guy took the initiative to keep from spilling 
fluids on the ground, and you want to use an example of how the 
system has run amuck.
    Mr. Matson. I have a similar picture from a year before 
that one with the same set-up. So they never came back to 
repair it.
    Mr. McAllister. Was it leaking? Did it get into the ground, 
or was it still working?
    Mr. Matson. [No response.]
    Mr. McAllister. Fair question.
    Mr. Matson. I don't have an answer.
    Mr. McAllister. It was contained, was it not?
    Mr. Matson. With a very strong garbage bag, I guess.
    Mr. McAllister. I don't care if it is a strong garbage bag, 
or if it was----
    Mr. Matson. Anybody can come there, a storm can come, can 
punch the garbage bag, and there is a spill. Done.
    Mr. McAllister. Could have. Should have. Would have. It 
didn't. What I am saying is----
    Mr. Matson. Do you want a garbage bag repair on a well on 
your property?
    Mr. McAllister. Absolutely, before it runs on the ground. 
But I would hope they would come back and the proper 
maintenance would be taken.
    Mr. Matson. Exactly.
    Mr. McAllister. But I can take a picture at any time of 
anybody--I can take a picture of a vehicle with wire and bubble 
gum, but it is still working. That doesn't mean I want to drive 
it to California. But as long as it gets me home at the end of 
the night, I am good.
    I am just saying you come up here with these pictures, and 
you try to blast that this industry is not taking care. Look, 
there are bad apples in every bunch of apples you pick. You 
went to the grocery store, and they are sitting on the shelf, 
and they just haven't been sold yet. I get that. I understand 
that we need to continue to do and improve, and you are sitting 
on the panel with three guys that are trying to make sure that 
the regulations are being imposed, and they are doing the right 
thing. You can't always fix--we can't legislate zero risk out 
of everything, and that is the truth of it.
    But I understand your wanting to protect wildlife. And, 
look, I love the great outdoors, and I live in Louisiana, 
Sportsman's Paradise, and I love it, too. But I am not for 
giving ducks and deer weapons to shoot back at me. I am about 
protecting their habitats that they have, and we have done 
that. We have plentiful wildlife there.
    But it just aggravates me that the body of Congress would 
be wasted with someone coming up and taking pictures of 
something that shows that it is fixed--it may not be fixed the 
way you want it, it may not be used by these high-dollar 
couplings and aluminum brass thread, whatever you want to put 
on them, but it is fixed, and it is not leaking, and you 
represent a picture here and you show, ``Look at what has 
happened.'' You don't know if it was fixed that morning, before 
you got there. You don't know if they been using this for--you 
know what? We found the best line of garbage bags there are, 
and they are better than any of the pipes you can go buy down 
at the pipe supply store.
    But the fact of the matter is it is not leaking on the 
ground. And that is what you want to turn your testimony into, 
some pictures portraying the innovation of what America is. And 
I challenge you to--and I did see some sheen going off on the 
water, and you are absolutely right, that needs to be cleaned 
up, it needs to be mitigated, it needs to be taken care of. 
That is in everything, that is in every industry. But out of 
the thousands of wells across this Nation, you brought us four 
pictures.
    Mr. Matson. I could have taken up my entire 5 minutes with 
pictures. I totally get what you are saying, I respect what you 
are saying. I guess--and there are regulations specifically 
affecting those bad apples. Responsible operators have nothing 
to fear with these regulations that they are proposing.
    Mr. McAllister. OK. Then my questions to you other three 
are, do you ever try to weed out the bad apples and make sure 
you only have good apples in the industry?
    Mr. Naatz. Again, Congressman, we always are working to 
have the best standards, and our operators operate that way. 
Are we 100 percent perfect? No. But those are regulated, and we 
address that. So, certainly, we always understand that there 
are going to be operators that need--issues need to be 
addressed, and we try to do that.
    Mr. Powell. I think every day in Louisiana I see examples 
of operators solving these issues. It is almost impossible to 
regulate risk out of it without regulating the industry away. 
But I do see the operators solving these issues on a daily 
basis and complying with the regulations that are already 
there.
    Mr. Schutt. We are extremely careful in the lessees that we 
allow to operate on our leases. I believe that, at the end of 
the day, with the environmental rules as they are written, if 
there is an environmental problem, we, as the lessor and 
beneficial royalty owner, could share in the pain of 
reclamation and remediation activity. So we are careful to make 
sure that our operators are responsible, good apples, and that 
they are well capitalized to take care of any problems they may 
cause on our leases.
    Mr. McAllister. I appreciate that. And I know I am running 
over, Chairman, but one more second.
    I just want to tell you, I appreciate the innovativeness 
and trying to do what is right. And I come from a business 
background. I don't come from sitting at a desk, trying to 
write laws and legislate the risk out of everything. I come 
from getting stuff done and doing it.
    And I guess, Mr. Matson, I am not trying to attack you or 
be on top of you, but it just aggravates the fire out of me to 
see pictures brought up here of someone trying to correct the 
problem. And it may not be the way that you want it done. But 
at the end of the day, you showed me pictures of a duct-taped 
fitting that was not leaking. You showed me pictures of a 
garbage bag capturing the fluids that you didn't want leaked. 
And yet, that seems to be your basis to stand on. And I guess 
it is a little frustrating for me, because I come from the 
business world of getting things done, and trying to create 
jobs, and make things happen for Americans. And I didn't have 
the luxury to be hired by wildlife. I am not an attorney for 
the ducks.
    But I do believe that they have their place to be, and that 
we should protect them at all costs. And I always believe in 
being a true conservationist. But don't attack an industry on 
what I view as being innovative, and not being detrimental. 
And, absolutely, I think those problems should be addressed, 
and they should be fixed with the proper methods. But let's 
give credit where credit is due. At least somebody took the 
initiative to make sure that it wasn't worse than what it could 
have been. And I yield back my time.
    Dr. Fleming. The gentleman yields back. I will open up the 
dais for one more question, and I will recognize myself first.
    I have two comments. One, back to the pictures. Again, that 
is an old, old technique used to create emotion, again, without 
the full context, without a full evaluation and examination 
that is done by both parties and presented to us. This would be 
considered, in a court of law, prejudicial to show pictures 
such as that.
    The other thing that is important, there was a little bit 
of discussion about, well, what did the GAO say. Did the GAO 
say that this is up to Fisheries and Wildlife, or to Congress? 
Well, I will just give you a quote: ``We believe it is for 
Congress, not''--this is GAO, in their report, 2007--``We 
believe it is for Congress, not DOI, to weigh the needs of the 
refuge lands and interests of mineral owners and, ultimately, 
to determine what oversight authority would be appropriate.'' I 
think that is pretty clear language. And you can lift that out 
of any book, any size, and that says it all. GAO says, ``It is 
up for you, Congress.''
    And we are here, representing the people. That is our job. 
When you have a government, as Mr. Young says, that wants to 
function in a dictatorial way to determine, through its own 
power and its own will, what is right for Americans, then we 
are no longer a country of democracy. We are no longer a 
representative democracy, a republic, if you will. We are a 
government that is really run by one branch, rather than three 
branches, as our founding fathers determined.
    So, I would be happy to--again, Mr. Naatz, if you would 
like to comment on that, that goes back to some of the things 
that you were saying.
    Mr. Naatz. Mr. Chairman, we couldn't agree with you more. 
And, if you look at the report--and again, as you look at the 
mineral rights that are owned, they are private mineral rights. 
And in those issues, again, we believe very strongly if you 
look at the GAO report, just what you read, those are issues 
that Congress would have to deal with----
    Dr. Fleming. Well, the right to own property, doesn't that 
go to the very essence of the Constitution of the United 
States, private property rights?
    Mr. Naatz. Yes, sir.
    Dr. Fleming. I mean that is what sets us apart, 
particularly back in 1776, when we declared our independence 
and later wrote the Constitution. That, above all things, set 
America apart from every other Nation in history, that we 
recognize the private property rights of individuals. And even 
today, the right to own a home, to own mineral rights--again, 
subsurface--all of these things are so important. And sometimes 
Government does have to step in, but only as a last resort, not 
because some agency or some bureau feels like--some service 
feels like--``Hey, we don't have enough to do, we are going to 
go take for ourselves more power, regulate in areas we have 
never regulated before, and we will demand from Congress to pay 
for it,'' which is really the taxpayers, the hardworking 
taxpayers, to pay for that.
    And then to, in a supercilious way, do this when, in fact, 
these regulations, these regulatory mechanisms, are already in 
place. So we are only--it is as though the Federal Government 
has run out of things to do. Now we've got to go back and do 
what the States have been doing. That is ludicrous.
    But, anyway, I appreciate your comments on that. And I will 
be happy to yield to the Ranking Member. He is the only other 
Member left on the dais for any comments or questions you may 
have for us today.
    Mr. Sablan. Thank you, Mr. Chairman. Actually, I am going 
to associate myself with Chairman Fleming's just recent 
statement that--which is why I said in my opening statement 
that I thanked him for holding today's hearing. Because any 
time we uncover a situation where private interests get the 
fist and Federal taxpayers get stuck with the bill, then this 
subcommittee needs to pay attention and maybe take action. And 
that is why I am very grateful that we are having today's 
hearing. And I yield back, Mr. Chairman, and I thank everyone 
for taking part in today.
    Dr. Fleming. I thank the gentleman, and thank him for his 
comments.
    Before closing, I would like to ask unanimous consent to 
submit for the hearing record the letter I wrote to Director 
Dan Ashe on April 23, 2014, and a statement for the record by 
the Arctic Slope Regional Corporation.
    [No response.]
    Dr. Fleming. Hearing no objection, so ordered.
    [The information submitted for the record by Dr. Fleming 
follows:]
             Letter Submitted for the Record by Dr. Fleming

                     Congress of the United States,
                                            Washington, DC,
                                                    April 23, 2014.

Hon. Daniel M. Ashe, Director,
U.S. Fish and Wildlife Service,
1848 C Street, N.W.,
Washington, DC 20240.

    Dear Director Ashe:

    On February 24, 2014, the U.S. Fish and Wildlife Service (``the 
Service'') announced the opening of a 60-day comment period to seek 
input on managing non-Federal oil and gas development on National 
Wildlife Refuge System (NWRS) lands. The Service provided the 
justification that it is responding to Government Accountability Office 
(GAO) reports from 2003 and 2007, which criticize the Service for 
failing to adequately catalog and manage existing wells.
    Before the Service puts forth any new regulations, I request that 
the Service work with Congress to identify the extent of its authority 
under existing statutes, per the recommendation of GAO. In addition, 
the Service should be cognizant of the following principles:

     Primacy of State regulation and enforcement: States have 
            unique insights into the lands and people within their 
            borders, and the Service should defer to existing State 
            regulations and State enforcement authorities.

     Avoidance of duplication: The Service should not duplicate 
            functions already conducted by States. In cases where a 
            State regulator is physically unable to inspect the wells 
            within the refuges, the Service may consider ways to 
            supplement the State's effort, but the Service should not 
            create a new regime that duplicates the State's resources 
            and efforts.

     Preservation of access: The Service has made clear its 
            commitment to honoring the private property rights of 
            subsurface rights holders. However, the Service should not 
            consider any new barriers to access through delaying the 
            approval process or expanding requirements in a burdensome 
            manner. The Service should presume issuance of the 
            necessary permits to honor property rights.

    I would discourage the Service from assuming that it must mirror 
other Federal agencies such as the National Park Service or the Forest 
Service. All too often, these agencies have overstepped their bounds 
and impinged on the purview of State regulators. Rather, I urge the 
Service to defer the issuance of any new regulation until it has 
followed GAO's recommendations to work with Congress on determining the 
extent of its authority.

            Sincerely,

                                        John Fleming, M.D.,
                                                      Chairman,    
                             Subcommittee on Fisheries, Wildlife,  
                                        Oceans and Insular Affairs.

                                 ______
                                 

                 Arctic Slope Regional Corporation,
                                         Anchorage, Alaska,
                                                      May 20, 2014.
Hon. John Fleming, Chairman,
House Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs,
1324 Longworth House Office Building,
Washington, DC 20515.

    Dear Chairman Fleming:

    On behalf of Arctic Slope Regional Corporation (ASRC), I write to 
offer our views on oil and gas activities within our Nation's wildlife 
refuge system, the subject of the subcommittee's hearing on May 20, 
2014.
    My comments focus on our continuing frustration, shared by the 
State of Alaska, Alaska's congressional delegation, and the majority of 
the residents of our region, with the long-delayed efforts in Congress 
to allow responsible development of the significant oil and gas 
resources within the northernmost of U.S. wildlife refuges, the Arctic 
National Wildlife Refuge (ANWR).
Who We Are
    ASRC is an Alaska Native-owned corporation established under the 
Alaska Native Claims Settlement Act of 1971 (``ANCSA''). Under ANCSA, 
Innupiat Eskimos living on the North Slope of Alaska in 1971 were 
enrolled as shareholders in ASRC. ASRC has since issued additional 
shares to our descendants, and currently has a shareholder base of 
approximately 11,000 people. ASRC represents the varied interests of 
its Innupiat shareholders, including many of the residents of Alaska's 
North Slope. We are committed to protecting the environment, the land, 
and the culture of the Innupiat people.
ANWR: A Refuge Set Aside to Ensure a Balance Between Conservation and 
        Oil and Gas
    What we now know as ANWR was originally established in 1960, when 
President Eisenhower's Secretary of the Interior, Fred Seaton, signed a 
Public Land Order establishing the 8.9 million acre Arctic National 
Wildlife Range. After years of debate over the fate of the Range, in 
1980, Congress enacted the Alaska National Interest Lands Conservation 
Act (``ANILCA''). ANILCA doubled the size of the Range, renamed it the 
Arctic National Wildlife Refuge, and designated eight million acres 
(most of the original Range) as wilderness.
    The northernmost 1.5 million acres of ANWR, the Coastal Plain, was 
designated in Section 1002 of ANILCA, and is now referred to as the 
1002 Area. Although ANILCA set aside much of ANWR in protected status, 
Section 1002 reserved judgment on the future of the Coastal Plain, 
setting the area aside for further assessment of its oil and gas 
development potential and its fish and wildlife resources.
    In 1987, after 6 years of environmental, geologic, and economic 
study required by ANILCA, the Department of the Interior recommended 
that the 1002 Area be opened to responsible oil and gas development. 
Since completion of that report, numerous wells have been drilled and 
oil fields discovered near ANWR. The U.S. Geological Service estimates 
that a median of 10.6 billion barrels of oil lie within the Coastal 
Plain. By way of comparison, when the Prudhoe Bay oil field was 
discovered in 1968, it was estimated to contain about 9.6 billion 
barrels of recoverable oil. In 2012, oil produced from the field 
surpassed the 12 billion barrel mark. The Prudhoe Bay oil field will 
fuel Alaska's economy for at least 50 years. The 1002 Area could fuel 
our economy for another 50 years, or more. However, in Section 1003 of 
ANILCA, Congress prohibited any development of oil and gas in the 1002 
Area until such development is authorized by an act of Congress.
    In the 113th Congress, legislation introduced by the Congressman 
Don Young would permit leasing within 1002 Area of ANWR. H.R. 49 would 
limit the total surface acreage covered by production and support 
facilities to less than 2,000 acres on the Coastal Plain. Several 
facilities would be connected by pipelines. But the footprint of 
development in ANWR would be a fraction of that in neighboring Prudhoe 
Bay. Today, horizontal drilling means fewer wells, with producers able 
to reach much farther from small drilling pads. Better land use 
planning allows for consolidation of common facilities. Gravel roads 
and drill pads often can be replaced by winter ice roads and drill 
pads, which melt without leaving a trace of human activity.
A Matter of Fairness
    ANWR is roughly the size of South Carolina or Maine. It is a 
beautiful place, worthy of appropriate protections, but it is not an 
empty or unpopulated place. More than 200 Innupiat people live in the 
Village of Kaktovik, on the boundary of the Area. All of ANWR is part 
of our traditional homeland and much of the land around the Village 
remains in Native ownership today.
    ASRC and Kaktovik Innupiat Corporation (``KIC''), the Native 
Corporation for the Village of Kaktovik, own more than 92,000 
subsurface and surface acres, respectively, within ANWR's Coastal 
Plain. These lands hold significant potential for onshore oil and gas 
development. However, as a result of Section 1003 of ANILCA, 
development of these important economic resources remains off limits 
until further act of Congress.
    As early as November 2009, at the White House Tribal Nations 
Conference, President Obama acknowledged that, ``Promises were broken. 
You were told your lands, your religion, your cultures, your languages 
were not yours to keep.'' The U.S. Fish and Wildlife Service (USFWS) 
now appears to be taking steps (without clear legal authority, we might 
add) to recommend that the Coastal Plain should be designated 
Wilderness. \1\ If, in fact, the USFWS intends to make this 
recommendation, this Administration's actions will fly in the face of 
promises that were made to the only Native Americans that live within 
the Federal boundaries of the 19.6 million acres of ANWR. If the 
Coastal Plain were to be designated Wilderness, Kaktovik would be 
surrounded, making the villagers essentially refugees on their own 
land. The residents of the Village of Kaktovik already are deprived of 
substantial economic opportunity because without further act of 
Congress, the Coastal Plain of ANWR is closed to oil and gas 
development.
---------------------------------------------------------------------------
    \1\ The USFWS is updating its comprehensive conservation plan 
(``CCP'') for ANWR. ASRC and the North Slope Borough submitted joint 
comments to the USFWS, in which we urged that the USFWS not take any 
action through the CCP revision process that would, directly or 
indirectly, impact or foreclose the economic opportunities associated 
with the potential for future development of the enormous oil and gas 
reserves in the Coastal Plain or that would place additional regulatory 
or permitting restrictions on local residents that depend on the Refuge 
for their subsistence needs.

      The draft CCP and draft Environmental Impact Statement (DEIS) 
described and evaluated six alternatives for the long-term management 
of the Refuge. These alternatives range from a ``no action'' 
alternative providing for the continuation of current management 
practices to a far-reaching alternative that would recommend virtually 
the entire Refuge, including the nearly 1.5 million acre Coastal Plain, 
for designation under the Wilderness Act and four additional rivers for 
designation as Wild and Scenic Rivers. The draft CCP and DEIS did not 
identify a preferred alternative.
      A revised CCP and final EIS were scheduled to be released 2 years 
ago. Absent any explanation for the delay in releasing these documents, 
we can only presume that the Administration is sitting on a final CCP 
that recommends setting aside the 1002 Area as Wilderness.
---------------------------------------------------------------------------
    Congress has the authority to authorize measured oil and gas 
leasing within ANWR--subject to targeted environmental regulations--
which will provide economic benefits within the region, the State, and 
the country. We know that drilling in ANWR is a controversial issue, 
and how we go about doing it properly is a matter of public debate. Our 
congressional delegation is at the table, as are we.
    Congress must act if the Innupiat people, who once held aboriginal 
title to all of the North Slope's 56 million acres, are to be permitted 
to develop their own lands within the Coastal Plain of ANWR.
Reasonable People Can Find Common Ground on ANWR
    In 2009, Senators Lisa Murkowski and Mark Begich introduced the 
``ANWR No Surface Occupancy Western Arctic Coastal Plain Domestic 
Energy Security Act'', which would have authorized directional drilling 
into ANWR, thereby allowing for development of part of ANWR's oil and 
gas reserves without any footprint whatsoever in the Coastal Plain. The 
bill failed to advance.
    The Innupiat people have the greatest stake in preserving our 
heritage, and for this reason, we have debated oil and gas development, 
as any open and thoughtful community would. We are a practical people, 
and we seek to understand other points of view and we look for 
compromise. We cannot understand why some special interest groups would 
oppose even directional drilling under the Coastal Plain where such 
drilling would result in no surface activity within the Refuge.
    By once again submitting our testimony to this committee, we appeal 
to all of you, who were elected to come here to represent the best 
interests of your communities and of the entire country, to come to the 
table with our elected representatives and our communities to pursue 
Federal legislation that authorizes a reasonable approach to oil and 
gas development in the northernmost of U.S. wildlife refuges.
    A founding principle of ASRC is respect for the Innupiat heritage. 
We adhere to the traditional values of protecting the land, the 
environment and the culture of the Innupiat. That is why we worked with 
Congressman Young and our Senators to include a wide range of special 
environmental protective measures in legislation introduced over the 
years that would open the Coastal Plain to oil and gas leasing. 
Congressman Young's most recent bill, H.R. 49, retains those 
protections, and we thank him for his continuing commitment to 
responsible development in the Coastal Plain of ANWR.
    The potential benefit of opening the Coastal Plain to leasing is 
enormous. 10.6 billion barrels of oil would support our local economy--
and the State of Alaska's economy--for many decades, providing funding 
for education, infrastructure, and health and social services. The 
potential cost of not opening Coastal Plain is enormous, too. 
Responsible new development is desperately needed ensure future flows 
through the Trans-Alaska Pipeline System, which is operating at just 
one-third of its original capacity.
    ANWR is a place that can support both measured development and 
landscape-scale conservation. But ANWR is not a monolithic thing--it is 
a collection of diverse places that are united by a line drawn on a 
map. One of those places--the 1002 Area--offers great potential for the 
people who live in Kaktovik and throughout the North Slope Borough, for 
the State of Alaska, and for the United States. Thank you for your 
support.

            Sincerely,

                                          Rex A. Rock, Sr.,
                                                 President and CEO.

                                 ______
                                 

    Dr. Fleming. While I did not mention the National Park 
Service in my comments, let me be clear. There is a fundamental 
difference between refuge lands and those managed by the 
National Park Service. Any effort to recreate or transform a 
refuge into a national park is inappropriate and wrong.
    I want to thank Members and staff for their contributions 
to this hearing. And again I want to thank our panel, both 
first and second panel, for coming in today and giving their 
testimony and answering the hard questions.
    There being no further business, without objection, the 
subcommittee stands adjourned.
    [Whereupon, at 4:10 p.m., the subcommittee was adjourned.]

            [ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]

  Questions Submitted for the Record to U.S. Fish and Wildlife Service

    Question 1. What is your current regulatory authority over oil and 
gas operations within the refuge system? Please cite specific language 
in P.L. 105-57.

    Answer. Section 5(b)(5)--``Issue regulations to carry out this 
Act''

    Section 5(a)(4)(A) & (B)--``In administering the System, the 
Secretary shall----

  (A)   provide for the conservation of fish, wildlife, and plants, and 
            their habitats within the System;

  (B)   ensure that the biological integrity, diversity, and 
            environmental health of the System are maintained for the 
            benefit of present and future generations of Americans;''

    Question 2. Of the 1,700 active wells within the national wildlife 
refuge system, how many are oil wells?

    Answer. Based on our best available information the U.S. Fish and 
Wildlife Service (Service) estimates there are approximately 257 active 
wells that produce primarily oil and approximately 8 active wells that 
produce a combination of both oil and gas.

    Question 3. Do you have a database on the nature and extent of oil 
and gas activities within the national wildlife refuge system?

    Answer. Yes. The Service has a database that was developed from 
information maintained by the Environmental Protection Agency (EPA) 
that was collected from each State. The Service extracted data on 
refuges from the EPA dataset in 2011 to compile our database.

    Question 4. Of the 1,700 active wells, how many are reserved 
mineral rights vs. outstanding mineral rights?

    Answer. The Service does not have access to this information.
    Question 5. Other than those oil and gas operations that existed 
prior to acquisition, how many new oil and gas activities have begun 
operations within the refuge system within the last 20 years? Please 
provide a list.

    Answer. Since 1994 at least 667 wells were drilled within the 
Refuge System:

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 


    Question 6. In 2007, the Government Accountability Office 
recommended that the Service hire 32 refuge oil and gas specialists, 7 
Regional Coordinators and a 6-member Mineral Regional Team. How many of 
those positions are currently filled?

    Answer. The Service has hired a total of 13 oil and gas-related 
positions including: 4 national level staff which includes a program 
coordinator, a National Environmental Policy Act (NEPA) specialist, 
environmental contaminants specialist, and a petroleum engineer; 4 oil 
and gas specialists in the Service's Southwest Region; 1 oil and gas 
specialist, 1 law enforcement officer, and 1 regional energy 
coordinator in the Service's Southeast Region; 1 regional energy 
coordinator in the Service's Mountain-Prairie Region; and 1 oil and gas 
specialist in the Service's Alaska Region.

    Question 7. GAO also recommended in 2003 that the Service establish 
an inventory of oil and gas wells and infrastructure on refuge lands. 
What is the status of that comprehensive inventory?

    Answer. The Service has assembled a database of over 5,000 oil and 
gas wells that occur on refuge system fee title lands. To keep this 
dataset current, the Service will continually update the dataset with 
data collected from States.

    Question 8. Does the Service have a national tracking system for 
oil and gas activities within the refuge system?

    Answer. The Service has regional oil and gas coordinators/
representatives that collate and share oil and gas data within the 
Service. This national team continues to develop new tools such as a 
national spills database, oil and gas well and pipeline database; 
inspection and monitoring database, and other electronic inspection and 
monitoring forms, guidance and other support tools.

    Question 9. Does the Service charge rent or access fees to energy 
companies who desire to utilize their reserved or outstanding mineral 
rights? What restrictions does the Service place on those companies?

    Answer. Typically, we do not charge rent or access fees to 
companies to utilize their mineral rights. However, if a company needs 
a right-of-way, the Service charges fees for that right-of-way. A 
mineral owner has a legal right to access their minerals; but if the 
owner needs to cross lands that the owner does not own, a right-of-way 
may be required. For example, if a new access route is developed such 
as a road.
    In regard to restrictions, the Service could apply conditions as 
part of the Special Use Permit process or terms and conditions as part 
of the right-of-way process. The most commonly applied condition is a 
timing restriction. This restricts certain activities for a specific 
period of time, such as during nesting season for migratory birds. 
Other conditions are used to reduce environmental impacts, to ensure 
compliance with various Federal laws and regulations. For example, the 
Service may restrict the location of the placement of a well if a 
cultural survey indicates that there is a site eligible for the 
register of Historic Places.

    Question 10. Can the Fish and Wildlife Service deny access to these 
subsurface minerals that it does not own? If you were to deny access, 
wouldn't that be a ``takings'' and a violation of the company's 5th 
Amendment constitutional rights?

    Answer. The Service ordinarily will not deny access to subsurface 
minerals that it does not own. A total denial of access would likely 
constitute a compensable taking under the Fifth Amendment. See Lingle 
v. Chevron U.S.A. Inc., 544 U.S. 528, 539-40 (2005); Lucas v. S.C. 
Coastal Council, 505 U.S. 1003, 1018-19 (1992). Whether restricted 
access to subsurface minerals amounts to a compensable taking would 
depend on the specific facts involved. See Tahoe-Sierra Preservation 
Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 302, 325-28 
(2002); Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124 
(1978). If denial of access is found to constitute a taking, the Fifth 
Amendment would not forbid the taking, but the owner would be entitled 
to just compensation.

    Question 11. Does the Service have oil and gas production figures 
for operations within the refuge system? How did you determine that 
energy companies owed the Service $2.8 million in royalty payments in 
FY13?

    Answer. The Refuge System does not track production figures on non-
Federal minerals. These figures are proprietary information. The $2.8 
million in royalty payments received in Fiscal Year 2013 was from 
Federal mineral leases, not from oil production related to privately 
held subsurface mineral rights. Federal mineral leases are managed by 
the Bureau of Land Management (BLM) and the revenue is collected by the 
Department of the Interior's Office of Natural Resources Revenue 
(ONRR).

    Question 12. Have there been any major oil spills (over 1,000 
barrels of oil) from an exploration or production well within the 
refuge system? What does the Service define as a major oil spill in 
terms of barrels lost?

    Answer. The Service is not aware of a spill over 1,000 barrels of 
oil (bbl) due to an exploration or production well within the Refuge 
System in the past 5 years. There have been numerous smaller spills on 
Refuge System lands that cumulatively surpass 1,000 bbl.
    The Service does not have a specific definition of a ``major 
spill.'' Any spill that is not contained could result in significant 
resource damage, depending on the habitat impacted and the species 
present.

    Question 13. During the past 10 years, how many total barrels of 
oil have been spilled from oil wells within the refuge system? Please 
specify if the spills came from active wells or abandoned wells. Also, 
who paid for the cost of cleaning up these spills?

    Answer. Most spills do not occur at the wellhead--the majority of 
spills are production-related, from flowlines, headers, facilities, or 
storage vessels.
    Most oil and gas activity within the Refuge System occurs within 
the Service's Southeast Region, and the Service focuses its efforts in 
this region. Therefore our best information to answer this question is 
from this region. Approximately 800 bbl have been spilled on refuges in 
the Southeast Region over the last 10 years, based on file records and 
refuge staff interviews, for actively producing wells, At this point in 
time we lack comprehensive information on spills in refuges across the 
Nation and spills from abandoned wells.
    Where wells are actively producing oil or gas, the responsible 
party pays for the cost of clean-up. However, the largest reported 
spill from a single well, a plugged and abandoned well, on Refuge 
System lands happened at St. Catherine Creek National Wildlife Refuge. 
For this spill, there was no responsible party identified, so EPA 
directed the cleanup using funds from the Oil Spill Liability Trust 
Fund.

    Question 14. How many barrels have been spilled because of 
pipelines within the refuge system? Who paid for the cost of cleaning 
up these spills?

    Answer. Many spills go unreported because the spill reporting 
requirements vary from State to State. The Service can provide specific 
examples of spills, but we are unable to provide a comprehensive list 
due to the varying nature of State reporting requirements. A revised 
national level regulation would standardize this reporting requirement.
    Here are two recent examples:

    In the Service's Southwest Region, a pipeline ruptured on Deep Fork 
National Wildlife Refuge on April 7, 2011. This was discovered by 
another pipeline company employee and was reported to the Refuge. 
According to the EPA's National Response Center report, an estimated 50 
bbl was released. The leak had been ongoing for several months, so 
actual total amount of oil released was unable to be determined. EPA 
was notified and responded to the cleanup in coordination with Service. 
The Service was reimbursed for our expenses through the Oil Spill 
Liability Trust Fund.

    On Delta National Wildlife Refuge in Service's Southeast Region, 
Chevron had a 400 bbl spill on the Refuge. Chevron paid for all cleanup 
and restoration efforts.

    Question 15. The Service has indicated that abandoned oil and gas 
infrastructure represents a major environmental hazard within the 
refuge system. What is your current authority in dealing with abandoned 
rigs or equipment?

    Answer. Two existing, but limited, regulatory provisions are 
applicable to such abandoned property:

    50 CFR Sec. 29.32 provides that ``structures and equipment must be 
removed from the area when the need for them has ended.''
    50 CFR Sec. 28.41 provides that ``any property abandoned or left 
unattended without authority on any national wildlife refuge for a 
period in excess of 72 hours is subject to removal. The expense of the 
removal shall be borne by the person owning or claiming ownership of 
the property. Such property is subject to sale or other disposal after 
3 months, in accordance with section 203m of the Federal Property and 
Administrative Services Act of 1959, as amended (40 U.S.C. 484m), and 
regulations issued thereunder. Former owners may apply within 3 years 
for reimbursement for such property, subject to disposal and storage 
costs and similar expenses, upon sufficient proof of ownership.''
    However, there are no penalties applicable for failing to comply 
with these regulatory requirements, nor does either provision provide a 
requirement to post bonds to cover the costs of removal and property 
restoration. Thus, if the mineral interest owner fails to remove the 
property, the Service must seek injunctive relief in court or to remove 
the property itself at taxpayer expense.

    Question 16. Who pays for the clean-up of oil spills from abandoned 
wells? Have you obtained any money from the Oil Pollution Liability 
Trust Fund?

    Answer. The cost of cleanup of oil spills from abandoned wells, 
where no identifiable, viable party can be identified, can be paid by 
the State or the Service. In addition, the Oil Spill Liability Trust 
Fund, which is administered by the United States Coast Guard, is a 
potential source of funding for clean-up of oil spills when there is a 
discharge, or substantial threat of discharge, to waters of the United 
States or adjoining shorelines. The Service has received monies for 
cleanup from this fund.

    Question 17. Do you aggressively seek reimbursement from the owners 
of the abandoned, plugged or shut-in wells when they cause 
environmental damage?

    Answer. When the Service is made aware of a problematic abandoned 
well we actively seek reimbursement from the owners of the abandoned 
wells where those owners have violated Federal statutes. However, often 
there is no solvent owner to pursue for damages. In those cases, the 
cost of addressing the problems caused by the well is paid by 
taxpayers.

    Question 18. On April 6, 2010, there was a 400 barrel oil spill 
from a pipeline at the Delta National Wildlife Refuge. What was the 
reaction and efforts by the pipeline owner to clean-up this spill?

    Answer. The reaction to the spill at Delta National Wildlife Refuge 
by Chevron was immediate. An oil spill response organization was on 
site and cooperated from the initial notification of the spill to 
``close out,'' when the Delta National Wildlife Refuge staff was 
satisfied with the clean-up efforts.

    Question 19. The initial public comment period on your Advanced 
Notice of Proposed Rulemaking closed on April 25, 2014. How many 
comments did you receive during that 60-day period? How many of those 
comments reflected the opinion that the Service should not proceed with 
new Federal regulations?

    Answer. We received 47,454 comments on the Advanced Notice of 
Proposed Rulemaking (ANPR) during the comment period. The Service 
received 10 comments stating that the Service should not proceed with 
new regulations.

    Question 20. How long will it take to review those comments and do 
you intend to complete an Environmental Impact Statement?

    Answer. The Service reopened the comment period for an additional 
30 days beginning June 9, 2014 and closing on July 9, 2014. We 
anticipate finalizing a report on those comments by the end of the 
summer of 2014. Along with the publication of the ANPR the Service 
announced a notice of intent to prepare an Environmental Impact 
Statement (EIS). It is too early to project when we will complete an 
EIS.

    Question 21. Can you assure this committee that the Service will 
not apply for a Categorical Exclusion for these proposed regulations?

    Answer. Yes. If the Service deems the responses to the ANPR/NOI 
justify a rulemaking, then the Service intends to proceed with a 
programmatic EIS, which would incorporate public feedback on the draft 
rule and subsequent NEPA analysis.

    Question 22. When will the final rule be published and what is your 
target date for these regulations to be effective? Will you stipulate 
that any new regulations will be prospective in their authority?

    Answer. We are in the very early stages of considering a 
rulemaking. It is too early to estimate the publication date of a 
potential final rule. Also, at this early stage, we cannot stipulate on 
whether any potential regulations would be prospective although we 
would give full consideration to that approach if we begin to develop 
proposed regulations.

    Question 23. Did the Service receive directions, instructions or 
suggestions from the Department of the Interior, the Public Employees 
for Environmental Responsibility (PEER) or other nongovernmental 
organizations that it was time to more vigorously regulate these 
activities under refuge lands?

    Answer. The Service received an inquiry from PEER in 2011 
suggesting the Service update its oil and gas regulations. We have not 
received a request from the Department of the Interior or any 
nongovernmental organization outside of PEER prior to the opening of 
the comment period on the ANPR.

    Question 24. Since the Service cannot deny access to these oil 
companies who own the minerals, aren't there limits on how much you can 
charge them in terms of an annual permit or what you call 
``reasonable'' access fees?

    Answer. The Service would not charge more than reasonable and 
customary permit or access fees as determined by those charged to 
operators by other oil and gas regulatory agencies and landowners.

    Question 25. Do you intend to require annual inspections of both 
active and inactive wells? What is the cost of such an inspection?

    Answer. We cannot state definitively whether any potential 
regulations would require annual inspections or what they would 
specifically entail. Monitoring of activity is integral to any 
regulatory program, and the frequency is dependent on the type of 
operations, environmental conditions, and other factors. It is 
reasonable to assume that monitoring could be expected on at least an 
annual basis. It is also reasonable to assume that inspections would be 
conducted by Service personnel, and therefore that operators would bear 
no out-of-pocket expense for the inspections themselves.

    Question 26. Let's talk about the scope of these new regulations. 
Here is my hypothetical question: My family has been in the energy 
business for nearly 100 years. We have a number of oil wells that are 
drilled on our private property and because of horizontal drilling we 
are able to extract oil resources from subsurface lands we own under a 
national wildlife refuge. How will any new Federal regulations affect 
my oil and gas activities?

    Answer. The Service is not contemplating regulation of activities 
beyond Refuge System boundaries, including the surface operations of 
wells that are directionally drilled from points outside a unit or the 
Refuge System boundary to points underneath it.

    Question 27. Since the Service has a legitimate concern about 
abandoned wells and orphaned infrastructure equipment, why not confine 
your new regulations to these pressing problems?

    Answer. By definition, orphaned wells have no responsible party, so 
there is no entity to regulate. Orphaned wells would be addressed 
outside of the currently contemplated regulation.
    A comprehensive suite of revised regulations could prevent current 
operations from falling into disrepair and ultimately into an abandoned 
or orphan status.

    Question 28. How many qualified oil and gas inspectors work for the 
Fish and Wildlife Service?

    Answer. When the Service addresses the term ``inspector'', it is 
within the context of our current authorities. Our inspectors are 
biologists, refuge managers, refuge staff, and law enforcement 
officers. The Service has many staff on refuges that deal with a 
variety of damage issues not related to oil and gas as the destruction 
of refuge property, illegal dumping, etc. These staff also examine oil 
and gas infrastructure under our current regulatory authorities. They 
are looking for leaks, spills, physical problems, and poorly maintained 
equipment, among other issues. If we see problems outside our 
authority, we report those to the proper regulatory authority, such as 
the State permitting office.

    Question 29. In the testimony of Mr. Steve Guertin, he indicated 
that the Service acquires refuge property, ``with the least amount of 
property right necessary to carry out our primary mission.'' However, 
by trying to regulate adjacent private landowners attempting to access 
private mineral rights under a refuge, without ever touching the actual 
surface property owned by the Service, it appears that you are trying 
to apply an amount of authority that would be more reflective of having 
acquired the maximum amount of property rights. If the Service wants to 
regulate at this level, shouldn't the agency have acquired the entire 
property rights in the first place?

    Answer. The Service is not contemplating regulation of activities 
outside the boundaries of Refuge System units. We are not contemplating 
regulations that would apply to adjacent private landowners attempting 
to access private mineral rights under a refuge without accessing 
refuge lands administered by the Service,

                                 ______
                                 

   Letter Submitted for the Record from the State of Alaska, ANILCA 
      Implementation Program to the U.S. Fish and Wildlife Service

                                   State of Alaska,
                                         Anchorage, Alaska,
                                                    April 24, 2014.
U.S. Fish and Wildlife Service,
4401 N. Fairfax Drive,
Arlington, VA 22203.

    To Whom it May Concern:

    The State of Alaska reviewed the February 24, 2014 Advanced Notice 
of Proposed Rulemaking and Notice of Intent to prepare a programmatic 
environmental impact statement (PEIS) regarding management of 
activities associated with non-Federal oil and gas development 
occurring on lands and waters of the National Wildlife Refuge System. 
The following comments represent the consolidated views of the State's 
resource agencies.
    The notice indicates the proposed rule is intended to clarify and 
expand existing regulations at 50 CFR 29.32 and defines non-Federal oil 
and gas development as ``oil and gas activities associated with any 
private, State, or tribally owned mineral interest where the surface 
estate is administered by the Service as part of the Refuge System.''
    Alaska contains a complex patchwork of land ownership affected by 
targeted legislation (e.g., Alaska National Interest Land Conservation 
Act (ANILCA) and the Alaska Native Claims Settlement Act (ANCSA)) that 
apply unique statutory provisions to non-Federal oil and gas 
development activities in Alaska. These provisions were put in place to 
protect the property rights of inholders and accommodate the State's 
economic and infrastructure needs.
    The majority of inholdings within Alaska refuges are not split 
estate as described in the notice and therefore would not be subject to 
the proposed rulemaking. While there are limited instances in which 
such a split estate would be encountered, other laws, regulations and 
contractual agreements also apply to the various inholdings. Applying 
additional regulation of oil and gas activities on State and private 
inholdings in Alaska could impose financial, administrative, and 
procedural barriers that would be potentially inconsistent and 
problematic from both a legal and practical standpoint.
    The following comments apply generally to all issues identified in 
the notice but most specifically to the question under Issue 7: ``What 
unique legislation or legal consideration should the PEIS take into 
account when analyzing potential impacts on specific regions or 
States?''
The Alaska National Interest Lands Conservation Act
    In 1980, ANILCA established more than 100 million acres of Federal 
land in Alaska as new or expanded conservation system units (CSUs). 
Sixteen refuges comprising 80 million acres are located within Alaska. 
Due to their vast size, most CSUs in Alaska contain or effectively 
surround numerous State and private inholdings, including lands owned 
by Alaska Native corporations pursuant to ANCSA. Congress incorporated 
Title XI of ANILCA specifically to ensure that inholders would be 
guaranteed adequate and feasible access to their lands for economic and 
other purposes and to further Alaskan's ability to develop the State's 
fledgling economy and infrastructure. ANILCA provides separate 
statutory authority, specific to Alaska, which pertains to oil and gas 
development of non-Federal lands within the boundaries of national 
wildlife refuges.
    ANILCA Section 1101 specifies that ANILCA is the ``single, 
comprehensive statutory authority'' for approval of transportation and 
utility systems, including oil and gas development and distribution 
systems, in Alaska:

        Congress finds that--(a) Alaska's transportation and utility 
        network is largely undeveloped and the future needs for 
        transportation and utility systems in Alaska would best be 
        identified and provided for through an orderly continuous 
        decisionmaking process involving the State and Federal 
        Governments and the public; (b) the existing authorities to 
        approve or disapprove application for transportation and 
        utility systems through public lands in Alaska are diverse, 
        dissimilar, and, in some cases, absent; and (c) to minimize the 
        adverse impacts of siting transportation and utility systems 
        within units established or expanded by this Act and to insure 
        the effectiveness of the decisionmaking process, a single 
        comprehensive statutory authority for the approval or 
        disapproval of applications for such systems must be provided 
        in this Act. [Emphasis added]

    ANILCA Section 1110(b) explicitly protects access by State and 
private landowners, including owners of subsurface rights underlying 
public lands, for exploration and development purposes:

        Notwithstanding any other provisions of this Act or other law, 
        in any case in which State owned or privately owned land, 
        including subsurface rights of such owners underlying public 
        lands, or a valid mining claim or other valid occupancy is 
        within or is effectively surrounded by one or more conservation 
        system units, national recreation areas, national conservation 
        areas, or those public lands designated as wilderness study, 
        the State or private owner or occupier shall be given by the 
        Secretary such rights as may be necessary to assure adequate 
        and feasible access for economic and other purposes to the 
        concerned land by such State or private owner or occupier and 
        their successors in interest. Such rights shall be subject to 
        reasonable regulations issued by the Secretary to protect the 
        natural and other values of such lands. [Emphasis added]

    ANILCA Section 1111(a) secures temporary access across conservation 
system units for resource exploration and other temporary use by State 
or private owners:

        IN GENERAL.--Notwithstanding any other provision of this Act or 
        other law the Secretary shall authorize and permit temporary 
        access by the State or a private landowner to or across any 
        conservation system unit, national recreation area, national 
        conservation area, the National Petroleum Reserve--Alaska or 
        those public lands designated as wilderness study or managed to 
        maintain the wilderness character or potential thereof, in 
        order to permit the State or private landowner access to its 
        land for purposes of survey geophysical, exploratory, or other 
        temporary uses thereof whenever he determines such access will 
        not result in permanent harm to the resources of such unit, 
        area, Reserve or lands.

    ANILCA Section 1109 specifically preserves all valid existing 
rights of access:

        Nothing in this title shall be construed to adversely affect 
        any valid existing right of access.''

    ANILCA Section 103(c) specifically excludes State and private 
inholdings from Alaska CSUs, and prohibits application of public lands 
regulation to them. ``Land'' as defined in ANILCA Section 102(1) 
includes ``lands, waters and interests therein.''

        Only those lands within the boundaries of any conservation 
        system unit which are public lands (as such term is defined in 
        this Act) shall be deemed to be included as a portion of such 
        unit. No lands which, before, on or after the date of enactment 
        of this Act, are conveyed to the State, to any Native 
        Corporation, or to any private party shall be subject to the 
        regulations applicable solely to public lands within such 
        units. [Emphasis added]

    State and private inholdings are therefore not part of national 
wildlife refuges in Alaska, even though such inholdings fall within 
refuge external boundaries. State and private inholdings are therefore 
not subject to CSU-specific regulation.

    Section 9(b) of the National Wildlife Refuge System Improvement Act 
of 1977 also supports the applicability of ANILCA to Alaska refuges:

        Conflicts of Laws--if any conflict arises between any provision 
        of this Act and any provision of the Alaska National Interest 
        Lands Conservation Act, then the provisions of the Alaska 
        National Interest Lands Conservation Act shall prevail. 
        [Emphasis added]
NPS Exemption for Alaska
    Under Issue 1, the notice asks readers to consider whether National 
Park Service (NPS) regulations should be used as a model for managing 
oil and gas resources on refuge lands. In 1981, the NPS promulgated 
implementing regulations at 36 CFR 13.10-13.16, which recognized these 
important ANILCA provisions, and explicitly negated the applicability 
of 36 CFR 9B in Alaska. As stated in the Section-by-Section Analysis 
(46 FR 31845) of the final rule:

        Section 13.15(d)(2) is an interpretive rule stating the 
        Department's views that the regulations of 36 CFR Part 9B are 
        no longer applicable in Alaska park areas. These regulations 
        concerning the development of non-Federal oil and gas rights in 
        parks were premised on the land manager's discretion to 
        restrict access. Section 1110(b) of ANILCA effectively removes 
        this discretion from the land manager. Therefore, 36 CFR Part 
        9B does not apply to Alaska park areas. [Emphasis added]

    The final regulation at 36 CFR 13.15(d)(2) stated:

        Non-Federal Oil and Gas Rights and 36 CFR Subpart 9B. Since 
        Section 1110(b) of ANILCA guarantees adequate and feasible 
        access to park area inholdings notwithstanding any other law, 
        and since 36 CFR Subpart 9B was predicated on the park area 
        Superintendent's discretion to restrict and condition such 
        access, 36 CFR Subpart 9B is no longer applicable in Alaska 
        park areas. [Emphasis added]

    When the Department of Interior adopted final Title XI regulations 
at 43 CFR 36 on September 4, 1986 (51 FR 31629), 36 CFR 13.10 through 
13.16 were repealed and 43 CFR 36 became the sole regulatory authority 
governing access to all non-Federal inholdings within CSUs in Alaska 
(including refuges). This is confirmed in the Section-by-Section 
analysis for 36 CFR 36.10 ``Access to Inholdings'' (51 FR 31624):

        Section 36.10(b) has been modified slightly to correct an error 
        in drafting the proposed regulation. The change clarifies that 
        this part is to address all access issues in CSUs, and it was 
        incorrect to also refer to ``other applicable law.''

    For these same reasons, the Service's revised regulations need to 
also exempt Alaska.
The Alaska Native Claims Settlement Act
    ANCSA was enacted to settle aboriginal land claims in Alaska. ANCSA 
established 12 regional corporations and over 200 village corporations 
to facilitate the transference of land entitlement allocations via 
patents to Federal lands. Non-Federal oil and gas ownership in Alaska 
refuges is largely the result of patents issued pursuant to ANCSA as 
well as subsequent land exchanges and other legal agreements, such as 
the 1975 settlement with Cook Inlet Region, Inc. ANCSA Sec. 22(g) 
addressed the opportunity given to village corporations to select lands 
within existing refuges as part of their entitlement, with certain 
conditions:

        If a patent is issued to any Village Corporation for land in 
        the National Wildlife Refuge System, the patent shall reserve 
        to the United States the right of first refusal if the land is 
        ever sold by the Village Corporation. Notwithstanding any other 
        provision of this Act, every patent issued by the Secretary 
        pursuant to this Act which covers lands lying within the 
        boundaries of a National Wildlife Refuge on the date of 
        enactment of this Act shall contain a provision that such lands 
        remain subject to the laws and regulations governing use and 
        development of such Refuge.

    Not all Native-owned lands within refuge boundaries are subject to 
ANCSA Sec. 22(g). The provision in those affected patents which 
provides that lands will be subject to the same laws and regulations 
governing use and development of the surrounding refuge has been more 
specifically defined through implementation and related regulations and 
policies. For example, the preamble to the final compatibility 
regulations (65 FR 62464) provided a detailed discussion of how Alaska 
refuges generally manage inholdings subject to ANCSA Sec. 22(g), 
recognizing their status as private lands:

        [W]hile the plain reading of ANCSA requires all refuge laws and 
        regulations to apply to 22(g) lands, we have historically 
        maintained that the compatibility requirement is the most basic 
        legal requirement to protect refuge lands against uses that 
        materially interfere with refuges achieving their purposes. We 
        have never proposed to apply any other legal standard to uses 
        of 22(g) lands.

        We have . . . clarified specifically how compatibility is to 
        apply to 22(g) lands based on substantial comments.. . . These 
        clarifications are substantial and, while recognizing that 
        22(g) lands are subject to compatibility review, acknowledge 
        that 22(g) lands are also private lands that deserve special 
        attention. We believe we have the authority to adopt 
        regulations that address compatibility differently from those 
        that deal with our own lands because we are, in effect, stating 
        how we are going to implement and require compliance with a 
        provision in a patent.

    The final rule at 50 CFR 25.21(b)(1) implements this intent by 
including numerous limitations on evaluating compatibility for uses of 
lands subject to ANCSA Sec. 22(g). For example, the Refuge Manager must 
complete a compatibility determination within 90 days of receiving a 
request from the landowner (50 CFR 25.21(b)(1)(i)); consultation and an 
appeal process are provided (50 CFR 25.21(b)(1)(i), (iv)); only effects 
to adjacent refuge lands (not effects on the Sec. 22(g) lands) and the 
ability of the refuge to achieve its statutory purposes will be 
evaluated (50 CFR 25.21(b)(1)(v)).
    The regulations also state that a Special Use Permit will not be 
required for compatible uses of 22(g) lands; noting that special 
conditions to insure compatibility are to be instead included in the 
compatibility determination (50 CFR 25.21(b)(1)(viii)). The preamble 
(65 FR 62466) notes that:

        The commenters stated their desire that proposed uses of 22(g) 
        lands not be subject to the Service's permitting system. We 
        accept this. The final rule states that we will require no 
        additional permits for uses of 22(g) lands beyond the 
        completion of a compatibility determination by the Refuge 
        Manager that finds the use to be compatible with refuge 
        purposes. Any conditions necessary to ensure a proposed use is 
        compatible may be included in the compatibility determination.
Conclusion
    Each of the unique and well-established authorization processes 
applicable to non-Federal oil and gas exploration and development 
within Alaska refuges was specifically developed to provide for the 
Alaska context while protecting refuge resources. These existing 
processes already ensure robust and defensible decisionmaking.
    Efforts to accommodate the Alaska regulatory framework within the 
proposed rule would add unnecessary complexity to the rulemaking 
effort. The possibility for inadvertent omissions is also likely, 
potentially creating an untenable legal situation for Alaska refuges, 
the State, and private property owners.
    We therefore request the revised regulations include an exemption 
for Alaska refuges because existing Department of Interior ANILCA Title 
XI implementing regulations at 43 CFR Part 36 and Service compatibility 
regulations at 50 CFR 25.21 for ANCSA 22(g) lands are the applicable 
regulatory authorities for non-Federal oil and gas development 
activities occurring within refuges in Alaska.

            Sincerely,

                                               Susan Magee,
                                        ANILCA Program Coordinator.

                                 ______
                                 

       National Wildlife Refuge, Tables Submitted for the Record

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