[Federal Register Volume 72, Number 31 (Thursday, February 15, 2007)]
[Notices]
[Pages 7391-7402]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-2617]


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DEPARTMENT OF AGRICULTURE

Forest Service

RIN 0596-AC34


National Environmental Policy Act Documentation Needed for Oil 
and Natural Gas Exploration and Development Activities (Categorical 
Exclusion)

AGENCY: Forest Service, USDA.

ACTION: Notice of issuance of final directive.

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SUMMARY: The Forest Service is revising procedures for implementing the 
National Environmental Policy Act (NEPA) and Council on Environmental 
Quality (CEQ) regulations. The procedures are being revised through 
issuance of a final directive that amends Forest Service Handbook (FSH) 
1909.15, chapter 30. This chapter describes categorical exclusions; 
that is, categories of actions which do not individually or 
cumulatively have a significant effect on the human environment, and 
therefore, normally do not require further analysis

[[Page 7392]]

and documentation in either an environmental assessment (EA) or an 
environmental impact statement (EIS). The amendment adds one such 
category of actions to the Agency's NEPA procedures to facilitate 
implementation of limited oil and gas projects on leases on National 
Forest System lands that do not have significant effects on the human 
environment.
    This categorical exclusion only applies to oil and gas leasing 
activities on National Forest System lands when there are no 
extraordinary circumstances. Use of this categorical exclusion will 
allow for approval of a Surface Use Plan of Operations for oil and 
natural gas exploratory operations and initial development activities 
associated with or adjacent to a new oil and/or gas field or area so 
long as the approval will not authorize activities in excess of any of 
the following: (a) One mile of new road construction; (b) one mile of 
road reconstruction; (c) three miles of individual or co-located 
pipelines and/or utilities disturbance; (d) four drill sites. More than 
a single action may be categorically excluded under this category in a 
new field or associated area when the aforementioned constraints are 
not surpassed.
    In response to comments on the proposed categorical exclusion, two 
revisions were made to the original proposal: (1) The area in which the 
category is applicable was clarified to allow for variations between 
states on how a field is defined and determined; (2) utilities were 
added to the pipeline provision to address a common practice of co-
locating pipelines and utilities in the same location or corridor.

EFFECTIVE DATE: This amendment is effective February 15, 2007.

ADDRESSES: The new Forest Service categorical exclusion is set out in 
FSH 1909.15, chapter 30, which is available electronically via the 
World Wide Web/Internet at http://fsweb.wo.fs.fed.us/directives/fsh/1909.15/. Single paper copies are available by contacting Peter Gaulke, 
Forest Service, USDA, Ecosystem Management Coordination Staff (Mail 
Stop 1104), 1400 Independence Avenue, SW., Washington, DC 20250-1104. 
Additional information and analysis can be found at http://www.fs.fed.us/emc/nepa/oged/.

FOR FURTHER INFORMATION CONTACT: Peter Gaulke, Ecosystem Management 
Staff, (202) 205-1521, or Tony Ferguson, Minerals and Geology Staff, 
(703) 605-4785, Forest Service, USDA.

SUPPLEMENTARY INFORMATION:

Background

    The Council on Environmental Quality (CEQ) regulations at 40 CFR 
1507.3 provide that agency's National Environmental Policy Act (NEPA) 
procedures, after notice and comment, may identify categories of 
actions that do not have significant impacts on the human environment 
and, consequently, do not require preparation of an environmental 
assessment (EA) or an environmental impact statement (EIS). Current 
Forest Service procedures for complying with and implementing NEPA are 
set out in Forest Service Handbook (FSH) 1909.15, Environmental Policy 
and Procedures, chapter 30. This chapter lists the categories of 
actions that do not require preparation of an EA or an EIS by the 
Forest Service absent extraordinary circumstances. The Forest Service 
calls these ``categorical exclusions.''
    Oil and gas development is widespread throughout the National 
Forest System (NFS). The Federal Onshore Oil and Gas Leasing Reform Act 
of 1987, 30 U.S.C. 226 (FOOGLRA) grants both the Secretary of the 
Interior (acting through the Bureau of Land Management) and the 
Secretary of Agriculture (acting through the Forest Service) authority 
and responsibility regarding oil and gas leases on NFS lands, and both 
agencies have the authority to determine the stipulations under which 
leasing will be permitted (30 U.S.C. 226(h); 43 CFR 3101.7-2(a)). 
FOOGLRA provides that the Forest Service shall regulate all surface 
disturbing activities relating to oil and gas leasing on NFS lands (30 
U.S.C. 226(g)). No permit to drill on NFS lands may be granted without 
the analysis and approval by the Forest Service of a Surface Use Plan 
of Operations (SUPO) covering proposed surface disturbing activities 
within the lease area.
    The Forest Service has established an incremental decisionmaking 
framework for the consideration of oil and gas leasing activities on 
NFS lands that is set out in 36 CFR 228.102. In general, the various 
steps undertaken are as follows: (1) Forest Service leasing analysis; 
(2) Forest Service notification to Bureau of Land Management (BLM) of 
lands administratively available for leasing; (3) Forest Service review 
and verification of BLM leasing proposals; (4) BLM assessment of Forest 
Service conditions of surface occupancy; (5) BLM offers lease; (6) BLM 
issues lease; (7) Forest Service review and approval of lessee's SUPO; 
and (8) BLM review and approval of lessee's application for permit to 
drill (APD). The categorical exclusion set out in this notice applies 
exclusively to the Forest Service's review and approval of an 
applicant's SUPO.
    In 2001, the President issued Executive Order (E.O.) 13212 to 
expedite the increased supply and availability of energy to our Nation. 
E.O. 13212 set forth ``For energy-related projects, agencies shall 
expedite their review of permits or take other actions as necessary to 
accelerate the completion of such projects, while maintaining safety, 
public health, and environmental protections. The agencies shall take 
such actions to the extent permitted by law and regulation, and where 
appropriate.'' In response, the National Energy Policy and the Forest 
Service Energy Implementation Plan were developed. These two 
initiatives called for streamlining the processing of APDs and other 
energy-related permits in an environmentally sound manner. This 
categorical exclusion furthers the President's goals set forth in E.O. 
13212.
    On August 8, 2005, the Energy Policy Act of 2005 was signed into 
law. Section 390 of the Energy Policy Act of 2005 establishes 
categorical exclusions under NEPA that apply to five categories of oil 
and gas exploration and development activities conducted pursuant to 
the Mineral Leasing Act (30 U.S.C. et seq., as amended). The 
categorical exclusion in this notice is not intended to overlap or 
duplicate the categories in Section 390 of the Energy Policy Act of 
2005. Taken in concert, this categorical exclusion and the five 
statutory categories discussed above further the goals set forth in 
E.O. 13212.
    For decades, the Forest Service has analyzed, approved, and 
administered SUPOs for oil and gas exploration and development on NFS 
lands. As part of the Forest Service Energy Implementation Plan 
process, the planning and environmental review process for oil and gas 
leasing was reviewed by field personnel. This review indicated that the 
Forest Service and BLM land management planning process, leasing 
process, and SUPO and APD review processes for oil and gas exploration 
and development frequently caused agency personnel to extend timelines 
and expend undue staff, time, and funding in order to complete the 
planning and environmental documentation for minor exploration and/or 
development projects.
    The Agency reviewed 73 site-specific oil and natural gas projects 
on National Forest System lands in development of the new categorical 
exclusion and determined that the category of actions included does not 
individually or cumulatively have a significant effect on the human 
environment. The Agency

[[Page 7393]]

also considered peer-reviewed scientific literature identifying 
potential effects of oil and gas development activities on wildlife and 
fishery populations, soils, and groundwater. The combination of the 
field review and literature review, available at http://www.fs.fed.us/emc/nepa/oged/, gives the Agency confidence that the categorical 
exclusion is appropriately defined. The Forest Service believes the 
level of effects associated with future activities within the new 
category would also be below the level of significant environmental 
effects.

Response to Comments

    A 60-day comment period on the proposed category was initiated on 
December 13, 2005 (70 FR 73722). A total of 108 responses in the form 
of letters, e-mails, and faxes were received during the comment period. 
These comments came from private citizens, elected officials, and 
individuals and groups representing businesses, the oil and gas 
industry, and conservation organizations.
    Public comment on the proposed category addressed a wide range of 
topics, many of which were directed generally at use of categorical 
exclusions under the National Environmental Policy Act. Many people 
supported the proposal or favored further expansion, while many others 
opposed the proposal or recommended further restrictions on oil and 
natural gas exploration and development on National Forest System 
lands.
    Comment: Some respondents voiced general agreement with the 
proposed category. Some indicated that they thought current analysis 
and documentation requirements for oil and gas exploration and 
development are too burdensome and that the proposal would provide for 
more efficient management. Others believed that the proposal had 
appropriate limitations on the use of the categorical exclusions, and 
that the Forest Service had done sufficient analysis to conclude that 
this category of oil and gas activities normally does not individually 
or cumulatively have significant effects on the quality of the human 
environment.
    Response: These comments were in support of the proposal and need 
no specific response. A summary of the remainder of public comments and 
the agency's responses follows.
    Comment: Some respondents expressed concern and opposition to oil 
and gas exploration and development on National Forest System lands 
stating that these activities are inappropriate uses and incompatible 
with the mission of the Forest Service. Some respondents suggest that 
allowing for oil and gas development creates areas of ``single use'' on 
National Forest System lands.
    Response: Oil and gas exploration and development is consistent 
with the Forest Service mission. Lands administered by the agency are 
managed by law for multiple- use (16 U.S.C. 528). The agency is 
directed to manage the various renewable surface resources of the 
National Forests to best meet the needs of the American people (16 
U.S.C. 531). Under the Federal Onshore Oil and Gas Leasing Reform Act 
of 1987, the Forest Service is charged with regulating surface-
disturbing activities conducted on agency lands pursuant to any lease 
issued under that Act and determining reclamation and other actions as 
required in interest of the conservation of surface resources (30 
U.S.C. 226, 17(g)).
    Comment: Several respondents suggested the Forest Service focus its 
efforts on alternative energy development.
    Response: Alternative and renewable energy supply and development 
is included in the Energy Policy Act of 2005. The subject of this 
category is the effective and efficient management of certain oil and 
gas activities on NFS lands. The category appropriately responds to the 
circumstances and needs associated with this task.
    Comment: Some respondents believe that the proposed category is 
contrary to the State Petitions for Inventoried Roadless Area 
Management Rule, and that inventoried roadless areas should, therefore, 
be excluded from the category. Other respondents believed that 
inventoried roadless areas should be included in the proposed category.
    Response: First, the category is not in conflict with the State 
Petitions rule. The State Petitions for Inventoried Roadless Area 
Management Rule (36 CFR part 294) is a procedural rule that allows 
Governors to petition for State-specific rulemaking that may alter the 
management direction for inventoried roadless areas contained in 
existing land management plans. The Department has been clear that 
during the petitioning process, the management of roadless lands is 
governed by the applicable forest plan. The State Petitions Rule honors 
valid existing rights, including existing permits, contracts or other 
instruments authorizing occupancy and use of National Forest System 
lands.
    The State Petitions Rule enables the Governors and Forest Service 
to give oil and gas resources the same consideration that other 
resources receive when considering alternatives for managing 
inventoried roadless areas. The rule also requires the Forest Service 
to inform the public of the consequences of foregone oil and gas 
production possibilities.
    Second, it should be noted that this category would only be invoked 
in instances where the BLM has already approved a lease. The category 
is not a screening process for which lands should be available for 
leasing. Rather, it is a mechanism for assuring efficient consideration 
of environmental effects in certain situations. Additionally, the 
proposed category would only be available for use where leasing 
activities are consistent with the applicable forest plan and 
regulation, and any regulation promulgated pursuant to the State 
Petitions Rule. Importantly, neither the 2001 Roadless Rule, nor the 
2005 State Petition Rule, prohibited the exercise of valid existing 
rights.
    Finally, it should be noted that under the Forest Service's 
categorical exclusion process, the agency does evaluate potential 
impacts to inventoried roadless areas through its examination of 
extraordinary circumstances. While the mere presence of an inventoried 
roadless area does not disqualify use of the categorical exclusion, the 
responsible official will evaluate potential impacts. Use of the 
category would not be available where it is determined that the effect 
of the action on a resource condition such as an inventoried roadless 
area creates an extraordinary circumstance.
    Comment: One respondent suggested that Executive Order 13212 does 
not support the proposed category.
    Response: The Forest Service disagrees that the proposed category 
is inconsistent with Executive Order (E.O.) 13212. On May 18, 2001, 
E.O. 13212 directed Federal agencies to expedite their review of 
permits or take other actions as necessary to accelerate the completion 
of such projects, while maintaining safety, public health, and 
environmental protections. The Department conforms its policy to 
Executive orders and believes that it is appropriate to take applicable 
Executive orders, such as E.O. 13212, into account in promulgating 
regulations and issuing directives.
    Comment: Some respondents commented that the proposed category was 
an attempt by the Forest Service to circumvent compliance with the 
National Environmental Policy Act (NEPA).
    Response: Categorical exclusions are an integral part of NEPA 
compliance, and use of categorical exclusions in no way evades 
compliance with NEPA. The Council on Environmental Quality (CEQ) 
regulations for implementing the procedural provisions of NEPA direct

[[Page 7394]]

Federal agencies to identify those typical classes of actions which 
normally do not require either an environmental impact statement or 
environmental assessment (40 CFR 1507.3). CEQ defines such classes of 
actions as categorical exclusions. ``Categorical exclusion'' means a 
category of actions which do not individually or cumulatively have a 
significant effect on the human environment and which have been found 
to have no such effect in procedures adopted by a Federal agency in 
implementation of these regulations (Sec.  1507.3), and for which, 
therefore, neither an environmental assessment nor an environmental 
impact statement is required.'' (40 CFR 1508.4).
    In subsequent guidance regarding NEPA regulations, CEQ explained 
that the use of categorical exclusions avoids unnecessary documentation 
of minor environmental effects in environmental assessments and allows 
agencies to focus their environmental review efforts on the major 
actions that will have a significant effect on the environment (48 FR 
34263 (1983), also see 40 CFR 1500.4(p)). CEQ also encourages agencies 
to identify categorical exclusions using broadly defined criteria that 
characterize types of actions that normally do not have significant 
environmental effects, including cumulative effects (48 FR 34263 
(1983)).
    Comment: Several respondents suggested that the Forest Service 
should set time limits for completing NEPA analysis, documentation, and 
decisionmaking using the proposed categorical exclusion. It was also 
suggested that the use of a categorical exclusion can frequently take 
longer to approve than the more complex environmental assessments.
    Response: As noted above, The CEQ has explained that the use of 
categorical exclusions avoids unnecessary documentation of minor 
environmental effects in environmental assessments (48 FR 34263 
(1983)).
    It is the experience of the Forest Service that the use of 
categorical exclusions has resulted in more efficient and expedited 
decisionmaking as compared to that of an environmental assessment. 
Forest Service experience is that an environmental assessment typically 
takes 4 to 6 months or longer to complete. A categorical exclusion 
usually takes 1 month or less to complete, representing a time savings 
of 3 to 5 months. This categorical exclusion is intended to improve 
efficiency in planning activities that normally do not have significant 
environmental effects.
    Comment: Some respondents said the role and application of 
extraordinary circumstance screens is insufficient and open to abuse. 
Other respondents suggested that, without NEPA analysis, categorically 
excluded actions would not consider current information or surveys, and 
managers would be unaware of extraordinary circumstances that preclude 
the use of a categorical exclusion.
    Response: The NEPA procedures in Forest Service Handbook (FSH) 
1909.15, chapter 30, list the categories of actions that the Agency has 
found will not typically have individually or cumulatively significant 
effects on the human environment. These procedures also provide for 
extraordinary circumstances in which a normally excluded action may 
have a significant environmental effect. This chapter includes a list 
of ``[r]esource conditions that should be considered in determining 
whether extraordinary circumstances related to the proposed action 
warrant further analysis and documentation in an EA [environmental 
assessment] or an EIS [environmental impact statement] * * *'' Section 
30.3 also states, ``The mere presence of one or more of these resource 
conditions does not preclude use of a categorical exclusion. It is (1) 
the existence of a cause-effect relationship between a proposed action 
and the potential effect on these resource conditions, and (2) if such 
a relationship exists, the degree of the potential effect of a proposed 
action on these resource conditions that determines whether 
extraordinary circumstances exist.''
    The Forest Service has consistently considered best available 
science and current information when approving the use of a categorical 
exclusion. Pursuant to existing direction, the Forest Service must 
conduct a sufficient review to determine that no extraordinary 
circumstances preclude the use of categorical exclusions (FSH 1909.15, 
sec. 30.3). This determination may include appropriate surveys, 
consideration of the best available science, consultation with Tribes, 
and coordination with agencies that have regulatory responsibilities 
under other statues, such as the Endangered Species Act, National 
Historic Preservation Act, Clean Water Act, and Clean Air Act. 
Responsible officials will consider, on a project-by-project basis, 
whether or not extraordinary circumstances exist.
    Comment: Several respondents asked that the Forest Service conduct 
NEPA analysis for this proposal, including a cumulative effects 
analysis on the impacts of the proposed category.
    Response: The CEQ does not require agencies to prepare a NEPA 
analysis or document before establishing Forest Service procedures that 
supplement the CEQ regulations for implementing NEPA (see Regulatory 
Certifications section, titled ``Environmental Impact'').
    Comment: A considerable amount of comment revolved around public 
notification and involvement when using the proposed categorical 
exclusion and the effect on the public's role in decisionmaking. Some 
respondents believed that the Forest Service's use of categorical 
exclusions would allow the Forest Service to bypass important 
procedural steps for project planning, such as public notification and 
involvement. Other respondents stated that use of the proposed 
categorical exclusion would restrict public involvement activities. 
Still other respondents commented that scoping is not warranted for 
actions that may be categorically excluded.
    Response: As directed by CEQ regulations (40 CFR 1507.3), the 
Forest Service has developed Agency policy for implementing NEPA and 
CEQ's regulations. As noted in Forest Service Handbook (FSH) 1909.15, 
chapter 10, section 11: ``Although the Council on Environmental Quality 
(CEQ) Regulations require scoping only for EIS [environmental impact 
statement] preparation, the Forest Service has broadened the concept to 
apply to all proposed actions.'' FSH 1909.15, chapter 30, section 
30.3(3) further states: ``Scoping is required on all proposed actions, 
including those that would appear to be categorically excluded.''
    As part of the scoping process for proposals potentially covered by 
this categorical exclusion, the responsible official must determine the 
extent of interest and invite the participation of affected Tribes, 
Federal agencies, State agencies, local agencies, and other interested 
parties, as appropriate. The Forest Service is committed to fulfilling 
its public involvement responsibilities with all parties interested in 
projects potentially qualifying for these categorical exclusions.
    Although not intended to be a substitute for scoping, the Forest 
Service also provides notice of upcoming proposals through the use of a 
Schedule of Proposed Actions (see FSH 1909.15, ch. Zero Code, sec. 07). 
The schedule gives early and informal notice of proposals to make the 
public aware of Forest Service activities and provide an opportunity 
for the public to indicate their interest in specific proposals. 
Schedules may be distributed in hard copy by the respective forest and 
can be found at http://www.fs.fed.us/sopa.

[[Page 7395]]

    Pursuant to the Federal Onshore Oil and Gas Leasing Reform Act of 
1987, the Bureau of Land Management and the surface management agency 
are required to post for public review a notice of proposed activities 
as found on the Application of Permit to Drill (APD).
    Comment: Some respondents commented that oil and gas development 
activities are beyond the scope of what activities should be allowed 
for under a categorical exclusion.
    Response: Based on site-specific project-level analysis of 
environmental effects and the belief that the profile of projects 
reviewed representing the Agency's past practices is indicative of its 
future activities, the Forest Service concludes that the category of 
action proposed does not individually or cumulatively have a 
significant effect on the human environment. While confident of the 
conclusion, the Agency, nevertheless, has established limitations on 
the type and extent of activities to be approved under this categorical 
exclusion.
    Comment: Some respondents stated that the proposed category is 
inappropriate as it goes beyond congressional intent as expressed in 
the Energy Policy Act of 2005, Section 390. Other respondents felt that 
the proposed category is inconsistent with Section 390 and the intent 
and activities of the two should be incorporated. Others suggested that 
the effects of the Energy Policy Act of 2005 should be realized before 
the Forest Service undertakes an effort of this type.
    Response: Section 390 of the Energy Policy Act of 2005 establishes 
categorical exclusions under NEPA that apply to five categories of oil 
and gas exploration and development activities conducted pursuant to 
the Mineral Leasing Act (30 U.S.C. et seq., as amended). Independent of 
the categorical exclusion in this directive, the Forest Service has 
provided direction to the field on the use of Section 390. Nothing in 
the Energy Policy Act of 2005, Section 390 precludes agencies from 
adding additional categorical exclusions to their respective NEPA 
procedures.
    The categorical exclusion in this directive does not, and is not 
intended to, overlap or duplicate the activities contained in Section 
390 of the Energy Policy Act of 2005. It is separate and independent of 
the provisions of Section 390. It is based on historical use of 
environmental assessments and field data that support the conclusion 
that the category generally would not result in significant impacts. It 
is complementary to Section 390 and meets the intent of Executive Order 
(E.O.) 13212 that provides: ``For energy-related projects, agencies 
shall expedite their review of permits or take other actions as 
necessary to accelerate the completion of such projects, while 
maintaining safety, public health, and environmental protections.'' 
Taken in concert, the categorical exclusion in the final directive and 
the five statutory categories in Section 390 further the goals set 
forth in E.O. 13212.
    Comment: One respondent encouraged the Forest Service to mitigate 
skewed comments resulting from organized letter writing campaigns 
focusing less on the number of comments and more on the quality and 
substance of the comments.
    Response: Every comment received is considered for its substance 
and contribution to informed decisionmaking, whether it is one comment 
repeated by many people or a comment submitted by only one respondent. 
The public comment process is not intended to serve as a survey process 
to determine public opinion. The emphasis in reviewing public comment 
is on the content of the comment rather than on the number of times a 
comment was received. The comment analysis process is intended to 
identify unique substantive comments relative to the proposal to 
facilitate their consideration in the decisionmaking process. All 
comments are considered, including comments that support and that 
oppose the proposal. That people do not agree on how public lands 
should be managed is a historical, as well as modern dilemma faced by 
resource managers. However, public comment processes, while imperfect, 
do provide a vital avenue for engaging a wide array of the public in 
resource management processes and outcomes.
    Comment: Some respondents commented that the Forest Service should 
track the use and progress of oil and gas exploration and development 
projects under the proposed categorical exclusion and make this 
information and associated NEPA documentation available for public 
review.
    Response: The Forest Service tracks NEPA-related planning 
information of projects, including those for oil- and gas-related 
activities, whose decisions are expected to be documented in a Record 
of Decision, Decision Notice, some Decision Memos, or Forest Plan 
Approval Document. This tracking allows for an assessment use of 
certain categorical exclusions and progress of individual projects. 
Public viewing of this information is contained in the Schedule of 
Proposed Actions which is distributed in hard copy and posted at http://www.fs.fed.us/sopa four times a year: January, April, July, and 
October. The schedule contains a list of proposed actions that will 
soon begin or are currently undergoing environmental analysis and 
documentation. It provides information so that the public can become 
aware of and indicate interest in specific proposals. Oil and gas 
projects analyzed and documented per this categorical exclusion will be 
included on the Schedule of Proposed Actions.
    Comment: A few respondents expressed opinions on subjecting 
proposed actions under this categorical exclusion to the public notice, 
comment, and appeal process requirement in the rules at 36 CFR part 
215. Some respondents considered the public notice, comment, and appeal 
process as absolutely essential for responsive decisionmaking.
    Response: In Earth Island Institute v. Ruthenbeck, the Federal 
District Court for the Eastern District of California ordered that 
categorically excluded timber sales and 10 specific categorically 
excluded activities are subject to notice, comment, and appeal under 
the 36 CFR part 215 rules. Therefore, if use of this categorical 
exclusion includes activities specified by the court, then notice, 
comment, and appeal are currently required. Conversely, if activities 
specified by the court are not included, then notice, comment, and 
appeal pursuant to 36 CFR part 215 does not apply.
    Comment: Some respondents opposed to the proposed categorical 
exclusion feel that any increase in the use of categorical exclusions 
represents a reduction in environmental review and the use of science 
in decisionmaking. As a result, they feel that the proposed categorical 
exclusion could result in adverse impacts to National Forest System 
lands and resources including roadless areas, wilderness areas, 
national recreation areas, threatened and endangered species, American 
Indian sacred sites, and archeological sites.
    Response: Categorical exclusions are to be used for routine actions 
that have been found by the Forest Service through experience and 
environmental review to have no significant environmental effects 
either individually or cumulatively (40 CFR 1508.4). On August 23, 
2002, the Forest Service published a final interim directive to Forest 
Service Handbook (FSH) 1909.15, chapter 30, which provided direction 
regarding how actions, which may be categorically excluded, should be 
considered to determine if they warrant further analysis and 
documentation in an

[[Page 7396]]

environmental assessment or environmental impact statement (67 FR 
54622).
    Forest Service NEPA procedures require that all proposed actions to 
be categorically excluded from documentation in an environmental 
assessment or environmental impact statement must be reviewed for 
extraordinary circumstances, which may include appropriate surveys and 
analyses, taking into account best available science, appropriate 
consultation with Tribes and regulatory agencies, such as those 
required by the Endangered Species Act, the National Historic 
Preservation Act, Clean Water Act, and Clear Air Act. Accordingly, this 
categorical exclusion does not apply where there are extraordinary 
circumstances, such as potentially significant effects on the 
following: Federally listed threatened or endangered species or 
designated critical habitat, species proposed for Federal listing or 
proposed critical habitat, or Forest Service sensitive species; 
floodplains, wetlands or municipal watersheds; congressionally 
designated areas such as wilderness, wilderness study areas, or 
national recreation areas; inventoried roadless areas; research natural 
areas; American Indian and Alaska Native religious or cultural sites; 
archaeological sites, or historic properties or areas (FSH 1909.15, ch. 
30, sec. 30.3, para. 2).
    Comment: A number of respondents raised issues related to the 
possible significant cumulative impacts of projects under this proposed 
categorical exclusion or the impacts of implementing such projects in 
combination with other activities under other authorities or on other 
Federal lands. Most of the statements were general, but some mentioned 
specific impacts, such as those on wildlife or water quality.
    Response: For each of the 73 oil and gas projects considered in 
defining this category, the question of whether there were significant 
cumulative effects was specifically addressed. Reviewers examined the 
possibility of significant cumulative effects from these activities and 
all other activities within the appropriate boundaries for potential 
resource effects. For example, based on an assessment of wildlife 
conditions in the local habitat area, or water quality impacts relative 
to a watershed, significant cumulative effects were not observed.
    Some public concerns with regard to environmental effects, both 
individual and cumulative, include those regarding wildlife populations 
and water quality. As examples, soil and water resources are protected 
during oil and gas projects through implementation of State and 
Environmental Protection Agency approved Best Management Practices and 
lease level stipulations. For Surface Use Plan of Operations, the 
Forest Service has the capacity to protect surface resources through 
the development of conditions of approval.
    The Forest Service is required to consult with the U.S. Fish and 
Wildlife Service (FWS) or National Oceanic and Atmospheric 
Administration (NOAA) Fisheries whenever any proposed actions or 
activities may affect an endangered or threatened species or adversely 
modify designated critical habitat. The Forest Service regularly 
coordinates and consults with the appropriate State wildlife agency, 
FWS, and NOAA Fisheries on species protection and conservation efforts 
to address potential individual and cumulative impacts of Forest 
Service practices on threatened and endangered wildlife and fish 
species and their habitat.
    It is important to note that if a proposed project may have a 
significant effect on a species listed or proposed to be listed on the 
List of Endangered and Threatened Species or on designated critical 
habitat for these species, the Agency under existing Forest Service 
NEPA procedures may not use a categorical exclusion.
    Concerns were raised regarding a cumulative effect of this 
categorical exclusion combined with the Energy Policy Act Section 390 
categories. This categorical exclusion is designed, in part, to be used 
in new fields or areas at the preliminary stages of development, which 
are designed to obtain data needed for planning potential subsequent 
development and performing meaningful analysis of such development. The 
use of Section 390 is for wells in existing fields where a site-
specific NEPA document for oil or gas exploration/development, or 
analysis of drilling as a reasonably foreseeable activity has been 
completed. These documents, in addition to the previously completed 
leasing analysis, address the cumulative effects of field development.
    Comment: Some respondents commented that the impacts considered 
when reviewing the 73 projects used to support the proposed categorical 
exclusion did not include effects to subsurface resources or the 
``subsurface footprint.'' Respondents centered their comments on 
subsurface impacts, including the appearance of extraction-related 
sinkholes, which are argued likely to become more evident after the 5-
year period following initiation of extraction activities.
    Response: Regardless of whether a well is analyzed and documented 
in a categorical exclusion, environmental assessment, or environmental 
impact statement, the BLM holds the primary responsibility for the 
drilling plan portion of the APD and protecting the mineral estate of 
the United States. As part of the drilling plan, the BLM requires 
casing and cementing procedures to protect the ground water from 
contamination from deeper aquifers and prevent the loss of oil or gas 
from the well bore. The casing and cementing programs are also designed 
to prevent the movement of fluid around the well bore that may result 
in the rare occurrence of sink holes.
    Comment: Some respondents stated that the Forest Service should 
perform a thorough economic evaluation that takes into account the loss 
of economic benefits that will result from the proposed categorical 
exclusion. Respondents say that such an evaluation should include 
consideration of existing uses and functions of National Forest System 
lands including recreation, flood control, pest control, carbon 
sequestering, and many other ecosystem services. Much greater attention 
to the costs and benefits of the proposed categorical exclusion is 
necessary.
    Response: The primary economic effects of the proposed categorical 
exclusion for oil and gas exploration and development are changes in 
costs of conducting environmental analysis and documentation. Under 
current NEPA procedures, the level of analysis and documentation 
required for oil and gas exploration and development often required 
agency personnel to extend processing timeframes and expend undue 
resources and funding to complete minor exploration and development 
projects in an environmental assessment. The purpose of the categorical 
exclusion for oil and gas exploration and development on National 
Forest System land under existing Federal leases is to streamline the 
process of applications for permits to drill. In compliance with 
Executive Order 12866, the Forest Service has prepared a cost-benefit 
analysis and has determined that this categorical exclusion will not 
have an annual effect of $100 million or more on the economy or 
adversely affect productivity, competition, jobs, the environment, 
public health or safety, or Tribal, State, or local governments. The 
economic effect from this categorical exclusion is expected to result 
in a reduction in the administrative burden of preparing

[[Page 7397]]

unnecessary environmental assessments and findings of no significant 
impact.
    The economic analysis does not evaluate the loss of economic 
benefits as a result of this change because the Forest Service does not 
foresee that this new categorical exclusion will have a measurable 
effect on the number of oil and gas projects approved by the agency. 
Other factors, such as market forces resulting from fluctuations in 
price due to weather, natural disasters, and demand, and available 
industry infrastructure would likely have a more significant effect on 
the pace of oil and gas exploration and development activities. 
Additionally, the Forest Service's review and approval of an 
applicant's surface use plan of operations is one step of an eight step 
incremental decisionmaking process. Therefore, the agency has assumed 
that the rule will not change the scope or types of projects being 
approved, but only result in cost savings due to a more streamlined 
process for approval.
    Comment: Numerous respondents questioned the sample size and the 
procedures used in selecting the 73 projects evaluated in determining 
that this is a category of actions which does not individually or 
cumulatively have a significant effect on the human environment. Some 
respondents stated that the methodology for establishing the category 
was not publicly available and, therefore, not available for review. 
Other respondents expressed concern that the time period in which the 
data was collected was too short for the actual environmental effects 
to be realized and, therefore, unfairly biased the sample data.
    Response: The Deputy Chief for the National Forest System 
instructed field units to perform on-site monitoring and submit 
corresponding data on 100 percent of oil and gas exploration and 
development projects that had been assessed in an environmental 
assessment and approved and constructed, or partially constructed, 
between October 1, 1999, and September 30, 2004. The projects were 
selected from this time frame because there have been substantial 
improvements in technology and environmental protection requirements 
for oil and gas exploration and development on NFS lands in the last 5 
years. Therefore, the projects that were assessed during this period 
are more representative of how future projects will be designed.
    The objective of the on-site monitoring was to determine if surface 
operations for oil and gas activities approved in site-specific 
environmental assessments did or did not have individual or 
cumulatively significant effects on the human environment and, 
therefore, could or could not qualify for a categorical exclusion in 
accordance with the Council on Environmental Quality regulations for 
implementing NEPA. The Forest Service's review of the 73 projects was 
not intended to determine whether the projects had effects on the 
environment, but to determine whether these types of activities had 
significant effects.
    Upon publication of the December 13, 2005, Federal Register Notice 
of the proposed category, the ``Methodology for Project Data Collection 
And Results of Review'' paper was posted for public review, along with 
other supporting documents, on the Forest Service Web site. The paper 
and other documents remain posted at http://www.fs.fed.us/emc/nepa/oged/.
    The Forest Service relied on the professional judgment of the 
responsible officials, using the implementing regulations for NEPA (40 
CFR 1500-1508) concerning the significance of environmental effects. 
The Agency believes that resource specialists and agency-responsible 
officials involved in the design and analysis of each specific on-the-
ground project were best qualified to identify resulting environmental 
effects and determine whether extraordinary circumstances were present.
    Comment: Several respondents questioned why the proposed 
categorical exclusion was limited to new fields and commented that no 
rationale was given for why existing fields were excluded from the 
categorical exclusion's use. Some respondents commented that limiting 
the new categorical exclusion to new fields will unnecessarily prevent 
expeditious processing of applications for permits to drill associated 
with infill development and other activities that may have no 
significant impact on the environment.
    Response: Parameters of the proposed categorical exclusion (miles 
of road construction, road reconstruction, pipeline and utility 
installation, and number of drill sites) were selected because they 
were found in the site-specific project-level review to individually 
have no significant impacts on the human environment. With the 
exception of 25 projects monitored on the Jicarilla Ranger District 
located in the San Juan Basin, an area that is already largely 
developed, projects monitored were determined to not have individually 
or cumulatively significant effects. Therefore, the scope of the 
categorical exclusion was limited to a single new field to address the 
inconclusive cumulative effects results from the Jicarilla Ranger 
District where numerous production wells are located in single fields.
    It is expected that categorical exclusions identified in Section 
390 of the Energy Policy Action of 2005 would assist in more 
efficiently processing applications for permits to drill in existing 
fields. This category complements Section 390 categorical exclusions 
within new fields.
    Comment: Various respondents questioned the methodology used to 
gather and interpret activity information used in the agency's 
conclusion that the proposed categorical exclusion does not 
individually or cumulatively have a significant environmental effect on 
the quality of the human environment. Some do not believe the evidence 
is sufficient for this conclusion because it does not adequately typify 
all potential National Forest System lands that are or may be put under 
lease and subject to potential development. Others suggest various 
biases toward certain regions of the country are reflected in the oil 
and gas projects selected for review.
    Response: The regional locations of the 73 projects were determined 
by oil and gas development activities during the 60-month time period. 
Geographic characteristics of the projects reviewed ranged from 
relatively flat shrub and grass-covered prairie to rugged, timber-
covered mountainous terrain. Projects included in the sample were 
located across the country from the Colorado Rockies to the eastern 
broadleaf forests, covering nine different ecological subregions of the 
United States. Subregions in the west included: Great Plains Palouse 
Dry Steppe, Southern Rocky Mountain Steppe, Colorado Plateau Semi 
Desert, and the Great Plains Steppe. Subregions in the southeast 
included: The Ozark Broadleaf Forest, Outer Coast Plain Mixed Forest, 
and Southeastern Mixed Forest. Subregions of the east included: Central 
Appalachian Broadleaf Forest and Eastern Broadleaf Forest. The sample 
of projects does not include every region with potential oil and gas 
development activities. Yet, the Agency concluded that this sample size 
was representative of future oil and gas development activity 
locations, and the common activities associated with oil and gas 
exploration and development were adequate to review for significant 
environmental impacts.
    In Alaska, for example, of the 21,969,321 total acres of National 
Forest System lands, only two areas are known to be geologically 
permissible for oil and gas production that is, possessing a reasonable 
probability of having oil and

[[Page 7398]]

gas resources. These are the Yakutat Forelands on the Tongass National 
Forest and the Katalla area on the Chugach National Forest. No oil and 
gas exploration interest or activities have taken place within the past 
40 years on these areas, and no leases currently exist. Though no 
interest or activities exist today, this categorical exclusion would 
apply to National Forest System lands in Alaska. Oil and gas 
exploration and development activities are generally the same whether 
in the lower 48 states or Alaska, and the application of the category's 
extraordinary circumstances provides for screens against significant 
environmental impacts.
    Comment: Some respondents questioned whether the Forest Service 
worked collaboratively with other Federal agencies, namely the Bureau 
of Land Management and the Environmental Protection Agency, in 
developing the proposed category. Others requested that the Federal 
agencies work collaboratively on minerals management on Federal lands.
    Response: In the development and review of the proposed category, 
the Forest Service coordinated with the Bureau of Land Management, the 
Environmental Protection Agency, the Council on Environmental Quality, 
and other Federal Agencies. In general, the Forest Service coordinates 
with these agencies on all oil and gas activities on NFS lands, as well 
as State, Tribal and local governments.
    In addition, the Forest Service and Bureau of Land Management have 
coordinated their implementation efforts of the categorical exclusions 
in Section 390 of the Energy Policy Act of 2005.
    Comment: Several respondents commented that the evidence provided 
by the 73 projects reviewed is not sufficient to make conclusions on 
coalbed methane development or in unconventional fields requiring 
specialized development techniques. These respondents commented that 
methodology used to support the Forest Service's conclusion that the 
proposed category for oil and gas exploration and development actions 
does not individually or cumulatively have a significant environmental 
effect on the human environment was inadequate and, therefore, these 
types of activities should be excluded from the proposed categorical 
exclusion.
    Response: The 73 projects considered in defining this categorical 
exclusion included ``conventional'' oil and gas operations and 
``unconventional'' operations, including coalbed methane projects. 
Approximately half of the projects monitored were oil projects with the 
other half being gas projects. Of the gas projects, about 25 percent 
were coalbed methane. Because coalbed methane projects often contain 
multiple wells, approximately 60 percent of all wells studied were coal 
bed methane. The projects monitored for development of this categorical 
exclusion did show that oil and gas exploration and preliminary field 
delineation activities, irrespective of the type of oil or gas 
reservoir (limestone, sandstone, or coal), have similar environmental 
effects.
    The type of equipment and nature and duration of oil and gas 
operations that could potentially affect other resources are similar 
for oil and gas exploration and initial field delineation activities 
for many types of deposits, including exploration for and development 
of coalbed methane.
    Comment: Some respondents commented that they would prefer to see 
the limitations for road construction or reconstruction, miles of 
pipeline installation, and number of drill sites of this category 
decreased, while others would like to see these constraints increased. 
Some respondents wanted geophysical activities included in this 
category.
    Response: To determine the potential impacts of oil and gas 
activities, data was gathered from 73 oil and gas projects that have 
been implemented within the past 5 years. None of the projects 
evaluated had significant impacts on the human environment. Rather than 
setting any parameters at the limits of the range evaluated, the Forest 
Service believes it is prudent and conservative not to exceed the mean 
of each parameter within the proposed categorical exclusion.
    Statistical analysis was utilized to determine the mean (average), 
median, and mode of all compiled data on all 73 projects on which data 
was collected. While all three are statistically valid measures, the 
mean values of the 73 projects on which the Forest Service collected 
data were used in development of this categorical exclusion. The mean 
resulted in thresholds which created reasonable operability for oil and 
gas operators with limited environmental impacts on National Forest 
System lands. Use of the median or mode provided threshold values which 
were too low (below a value of 1.0) to provide a meaningful scope for 
future projects.
    Limited mineral, energy, or geophysical investigations are 
currently categorically excluded from documentation in an environmental 
impact statement or environmental assessment by Forest Service NEPA 
procedures in FSH 1909.19, 31.2(8) and, therefore, are not included in 
this category.
    Comment: Some respondents commented that the definition of 
``pipeline'' in the proposed category needed clarification. In 
particular, some respondents believe that utilities, such as electric 
lines should be included in the proposal, and others stated that 
pipelines buried within an existing road or pipeline corridor should be 
exempt.
    Response: Of the 73 oil and gas projects monitored for development 
of the proposed categorical exclusion, 16 of 73 project highlighted 
utilities in their decision, and 50 of 73 projects included pipelines 
and/or utilities being placed adjacent to or within the previously 
disturbed and unreclaimed road prism. Thirty-two of the 73 projects 
specified that the utilities be buried. The category's language has 
been expanded to include utilities as well as pipelines.
    It is common practice to co-locate pipelines, utilities, and roads 
within the same corridor of disturbance. The BLM's Best Management 
Practices For Oil & Gas Development on the Public Lands include co-
locating pipelines and utilities together to minimize surface 
disturbance, including roads and utilities sharing common rights-of-
way. These Best Management Practices also state that to reduce visual 
contrast in visually sensitive areas, flow lines and pipelines should 
be buried, preferably in or adjacent to the roadway, particularly if 
the lines are long-term. Where road, pipelines, and utilities share 
common areas of disturbance, the disturbance will not be considered 
cumulatively against the constraints of the categorical exclusion.
    Comment: Many respondents felt that the definition of ``drill 
site'' was not adequately defined in the proposed category and needed 
clarification. Other respondents felt that as currently defined, 
``drill site'' allowed too much flexibility in the categorical 
exclusion's implementation that would ultimately lead to abuse and 
inconsistent application. Some of the respondents felt that the drill 
sites should limited by acres.
    Response: A drill site, commonly referred to as a ``pad'', is a 
location that is needed to accommodate the equipment used to drill a 
well or wells. A drill site may contain more than one well. Not all 
wells may ultimately be producers, at which case the drill site is 
reclaimed. Productive well sites can often be reduced in size following 
the drilling phase.
    The 73 oil and gas projects monitored included a spectrum of drill 
site sizes from small coalbed methane

[[Page 7399]]

development sites, (0.5 acres per site on the Thunder Basin National 
Grassland) up to 3.5 acres for deep, 10,000 feet well on the Dakota 
Prairie National Grasslands. Since the sample included all 
environmental assessments for a 5-year period and individually no 
project identified significant environmental effects, actual pad size 
did not correlate to the significance of effects. Therefore, no change 
to the text of the category is required.
    Comment: Numerous respondents raised concerns that the Forest 
Service could misuse the proposed categorical exclusion through the 
definition of a ``field'', thereby segmenting larger projects into 
sizes that qualify under the categorical exclusions. Some respondents 
commented that such segmentation would violate Council on Environmental 
Quality NEPA regulations. Other respondents stated they felt there is 
not a clear process to establish the boundaries of a field. Some 
respondents noted that a ``field'' is not established until production 
is proven, therefore, exploration drill sites could not fall under this 
categorical exclusion.
    Response: The Society of Petroleum Engineers defines a field as: 
``An area consisting of a single reservoir or multiple reservoirs all 
grouped on, or related to, the same individual geological structural 
feature or stratigraphic condition.'' The field name refers to the 
surface area, although it may refer to both the surface and the 
underground productive formations.
    The comment about the establishment of fields only after the 
discovery of oil or gas is correct. If an exploration well is drilled 
in an area not previously classified as a field, and the well is 
determined to be productive; then the applicable State oil and gas 
regulatory agency follows procedures established for that State to 
define the field. Some States may require more than one productive well 
before they establish a field. If additional wells indicate that the 
boundary defining the aerial extent of the field should be changed, 
State agencies follow established procedures to change the field 
boundaries. These procedures often include open, public hearings. 
Information about the delineation of fields and the procedural process 
for establishing and changing field boundaries vary and can be found on 
the web pages of many States' oil and gas agencies.
    The language in the proposed category has been adjusted for 
activities adjacent to a new oil and/or gas field to more correctly 
reflect that certain exploratory proposals could be approved per this 
categorical exclusion if they met the listed constraints. ``Adjacent 
to'' is defined as within an adjacent spacing unit to a new field or to 
a first productive well in a new area. Temporary spacing units are 
determined by the State's oil and gas regulatory agency through an 
established process based on the formation or pool most likely to be 
productive. This categorical exclusion is designed for preliminary 
operations that are necessary to gather both the surface and subsurface 
resource information necessary to assess the potential for field 
development.
    Regarding segmentation, the responsible official is required to 
properly identify the characteristics of the proposed action (FSH 
1909.15, ch. 10, sec. 11.2). The Forest Service follows the Council on 
Environmental Quality (CEQ) regulations for all their proposals that 
may undergo environmental review, including the documentation for 
categorical exclusions; ``proposals or parts of proposals which are 
related to each other closely enough to be, in effect, a single course 
of action shall be evaluated in a single impact statement'' (40 CFR 
1502.4(a)). The Forest Service also follows the CEQ definition for 
determining the scope of a proposed action as defined at 40 CFR 
1508.25, which discusses connected and related actions. Consequently, 
segmenting a larger project into smaller projects in order to meet the 
stated constraints and be considered under this categorical exclusion 
is contrary to Forest Service guidance. Forest Service oversight of the 
application of these categories through internal reviews such as 
Chief's, regional, and forest reviews emphasizes these compliance 
requirements and should prevent abuse.
    Comment: Some respondents assert that the proposed category wrongly 
assumes that all existing forest plans have comprehensive and recently 
updated pre-leasing information and, because the perceived intense 
future oil and gas development on National Forest System lands was not 
anticipated when most existing plans were written, local forests have 
not appropriately analyzed the environmental impacts. Other respondents 
characterized the proposed category as a shell-game where little or no 
review takes place during general planning and leasing, and then when 
the time comes for such input and review at the drilling stage, a 
categorical exclusion might apply which offers little NEPA analysis.
    Response: The Forest Service has mechanisms for updating oil and 
gas lease information. At the time a parcel is processed for leasing, 
the parcel goes through a review to assure the stipulations are 
correctly applied. As new information is identified, the Forest Service 
reviews and determines if the information is of importance and 
necessitates additional or adjusted stipulations.
    Conditions of Approval, applied to Surface Use Plan Operations, may 
be adjusted or changed when warranted after a review of new 
information. The Forest Service considers all relevant information when 
evaluating Surface Use Plans of Operations.
    Regardless of the type of NEPA document used or the age or 
complexity of prior analysis, the Forest Service develops mitigations 
for each drill site per the terms of the lease. Minimum surface use 
requirements are established in 36 CFR 228.108 and On-Shore Order 
1. Directions for bonding requirements are in 36 CFR 228.109.
    Comment: Some respondent comments noted confusion over the staged 
decisionmaking process involved with oil and gas development on Federal 
lands. Some respondents stated that the proposal would frustrate the 
staged decisionmaking approach established by Congress for onshore oil 
and gas development. Other respondents commented that the proposed 
categorical exclusion is inconsistent with Forest Service oil and gas 
regulations in that the use of the proposed category would be the first 
NEPA analysis conducted for the field.
    Response: The Department of the Interior, Bureau of Land Management 
(BLM), acts as the onshore leasing agent for the Federal Government. 
The BLM schedules and conducts competitive bid lease sales, collects 
the bonus bids and issues leases to the successful bidders. As a land 
management agency, the Forest Service makes initial determinations on 
whether or not lands will be available for leasing, and under what 
conditions (stipulations) the leases will be issued. Forest Service 
decisions about leasing are made in conjunction with approved forest or 
grassland land management plans, as well as in separate forest-wide or 
area-specific leasing decisions. Oil and gas leasing availability 
decisions are made in compliance with the National Environmental Policy 
Act as well as other laws such as the Endangered Species Act and the 
National Historic Preservation Act, and includes public notice and 
opportunity for comment. The BLM may be a cooperating agency in these 
efforts. Final determinations regarding lease offerings and 
stipulations are ultimately made by the BLM.
    The Energy Policy and Conservation Act (EPCA) directed the BLM, in 
cooperation with the Forest Service, to

[[Page 7400]]

summarize Forest Service and BLM plan leasing decisions. In two phases, 
the highest potential onshore geologic basins were studied. The studies 
show that for the National Forest System lands studied 47 percent are 
off-limits to any surface exploration or development (due to legal and 
administrative withdrawal, a ``no leasing'' decision or a ``no surface 
occupancy'' lease), 19 percent are available to exploration and 
development under standard lease terms and restrictions, and 34 percent 
are subject to additional restrictions beyond the standard lease terms 
and restrictions for additional protection of other forest or grassland 
resources or uses. The study shows that oil and gas exploration or 
development activity is not allowed or is restricted where such 
activity would have significant adverse environmental effects or be 
incompatible with other forest or grasslands uses or management 
schemes. The screening that occurs at the leasing decision stage 
contributes significantly to the findings of no significant 
environmental impacts of the 73 projects studied.
    At the stage that this categorical exclusion would be used, Forest 
Service and BLM leasing decisions have been made, and stipulations have 
been determined and applied to the lease. The lease has been issued 
with certain constraints, and development is subject to the terms of 
the lease. When a review of a SUPO has been completed, the Forest 
Service responsible official may approve the plan as submitted, approve 
the plan with specified conditions, or disapprove the plan with stated 
reason (36 CFR 228.107(b)(2)).
    Comment: Some respondents suggested that the Forest Service monitor 
categorically excluded oil and gas exploration activities to ensure 
that they do not have significant environmental impacts. Other 
respondents expressed opinions over what is perceived as a poor track 
record on the Forest Service's part in monitoring and; thus, it could 
not be trusted to maintain their monitoring and enforcement 
obligations.
    Response: Forest and land management plans already provide for 
monitoring of management activities regarding applicable laws, 
regulations, and standards and guidelines; effectiveness of project 
implementation, including any specified mitigation measures; validation 
of models and assumptions used in the planning processes; and 
environmental impacts. Projects implemented under these categories will 
be included in these ongoing monitoring efforts.
    In addition to forest plan determined monitoring, Forest Service 
personnel regularly inspect oil and gas wells and facilities and 
compliance with the respective permit terms and conditions in the 
Surface Use Plan of Operations (SUPO) thus, minimizing or prohibiting 
effects on other resources. Actions required in the SUPO to help 
mitigate various resource concerns are monitored to ensure they are 
appropriately implemented. Upon identifying operations not in 
compliance with permit terms and conditions and/or contributing to 
undesirable effects, Forest Service personnel take steps to ensure that 
noncompliant activities are corrected. Such steps include, but are not 
limited to, requiring the operator to take corrective actions and 
requesting assistance from the Bureau of Land Management to enforce 
lease terms and conditions.
    For oil and gas exploration and development on National Forest 
System lands environmental protection is provided for in an element of 
overlap or redundancy during the implementation of Best Management 
Practices (BMPs) and mitigation measures. Individual NEPA analysis on 
the SUPO, a component of the APDs, includes site-specific BMP and 
mitigations measures, and implementation monitoring then occurs and 
informs future development of BMPs, or mitigation measures.
    Further, respective State inspectors routinely enter Federal lands 
and inspect wells and facilities for compliance with State laws, 
regulations, and requirements.

Conclusion

    The Forest Service, U.S. Department of Agriculture (Forest Service) 
finds that the category of action defined in the categorical exclusion 
presented at the end of this notice does not individually or 
cumulatively have a significant effect on the human environment. The 
Agency's finding is first predicated on the reasoned expert judgment of 
the responsible officials who made the original findings and 
determinations in the oil and gas projects reviewed; the resource 
specialists who validated the predicted effects of the reviewed 
activities through monitoring or personal observation of the actual 
effects; and, finally, the Agency's judgment that the profile of past 
oil and natural gas exploration and development activities represents 
the Agency's past practices and is indicative of the Agency's future 
activities.
    This categorical exclusion will permit timely response to an 
applicant's SUPO for limited oil and gas exploration and development 
activities involving small areas of National Forest System land. 
Additionally, it will conserve limited agency funds.
    The text of the final categorical exclusion is set out at the end 
of this notice.

Regulatory Certifications

Environmental Impact

    The revision to Forest Service Handbook 1909.15 would add direction 
to guide field employees in the Forest Service regarding requirements 
for NEPA documentation for particular oil and gas exploration and 
development activities. The Council on Environmental Quality does not 
direct agencies to prepare a NEPA analysis or document before 
establishing agency procedures that supplement the CEQ regulations for 
implementing NEPA. Agencies are required to adopt NEPA procedures that 
establish specific criteria for, and identification of, three classes 
of actions: Those that require preparation of an environmental impact 
statement; those that require preparation of an environmental 
assessment; and those that are categorically excluded from further NEPA 
review (40 CFR 1507.3(b)). Categorical exclusions are one part of those 
agency procedures, and therefore, establishing categorical exclusions 
does not require preparation of a NEPA analysis or document. Agency 
NEPA procedures are internal procedural guidance to assist agencies in 
the fulfillment of agency responsibilities under NEPA, but are not the 
agency's final determination of what level of NEPA analysis is required 
for a particular proposed action. The requirements for establishing 
agency NEPA procedures are set forth at 40 CFR 1505.1 and 1507.3. The 
determination that establishing categorical exclusions does not require 
NEPA analysis and documentation has been upheld in Heartwood, Inc. v. 
U.S. Forest Service, 73 F. Supp. 2d 962, 972-73 (S.D. Ill. 1999), 
aff'd, 230 F.3d 947, 954-55 (7th Cir. 2000).

Regulatory Impact

    This directive has been reviewed under USDA procedures and 
Executive Order 12866, as amended by 13422, on Regulatory Planning and 
Review. The Office of Management and Budget (OMB) has determined that 
this is a significant regulatory action as defined by the Executive 
order. Accordingly, OMB has reviewed this directive.
    The primary economic effects of the categorical exclusion for 
review of SUPO associated with oil and gas lease operations are changes 
in costs of conducting environmental analysis and

[[Page 7401]]

preparing NEPA documents. The new categorical exclusion would reduce 
agency costs by reducing the documentation requirements for certain oil 
and gas exploration and development on National Forest System land 
under existing Federal leases.
    Effects on local economies and small business entities are expected 
to be nearly the same using either an environmental assessment or 
categorical exclusion for oil and gas exploration and development 
activities. There is potential for an increase in certain oil and gas 
exploration and development projects, as well as an increase in site 
administration since they would be faster and cheaper to prepare.
    Agency costs for categorical exclusions were discounted at 3 
percent and 7 percent discount rates for 10-year period from 2006 to 
2015. By using 3 percent discount rate, total discounted cost for 
categorical exclusions were estimated at $7.1 million with an 
annualized cost of $0.81 million, while the total discounted cost for 
environmental assessments would be $42.7 million with an annualized 
cost of $4.9 million. An annualized cost saving of $4.05 million for 
categorical exclusions is estimated by using a 3 percent discount rate. 
While using a 7 percent discount rate for the same timeframe, the 
results show that total discounted cost for categorical exclusions were 
estimated at $6 million with an annualized cost of $0.8 million, the 
total discounted cost for environmental assessments would be $36 
million with an annualized cost of $4.8 million. An annualized cost 
saving of $4 million is estimated for categorical exclusions by using a 
7 percent discount rate. This quantitative assessment indicates a cost 
savings for the Agency using categorical exclusions for reviewing SUPO 
for oil and gas exploration and development projects.
    The Cost-Benefit Analysis prepared for this categorical exclusion 
can be found on the World Wide Web at http://www.fs.fed.us/emc/nepa/oged/.

Federalism

    The Agency has considered this directive under the requirements of 
Executive Order 13132 issued August 4, 1999, ``Federalism.'' The Agency 
has made an assessment that the directive conforms with the Federalism 
principles set out in this Executive order; would not impose any 
compliance costs on the States; and would not have substantial direct 
effects on the States, on the relationship between the National 
Government and the States, nor on the distribution of power and 
responsibilities among the various levels of government. Therefore, the 
Agency concludes that the directive does not have Federalism 
implications.

Consultation and Coordination With Indian Tribal Governments

    This directive has been reviewed under Executive Order 13175 of 
November 6, 2000, ``Consultation and Coordination With Indian Tribal 
Governments.'' This directive does not have substantial direct effects 
on one or more Indian Tribes, on the relationship between the Federal 
government and Indian Tribes, or on the distribution of power and 
responsibilities between the Federal government and Indian Tribes. Nor 
does this directive impose substantial direct compliance costs on 
Indian Tribal governments or preempt Tribal law. Therefore, it has been 
determined that this directive does not have Tribal implications 
requiring advance consultation with Indian Tribes.

No Takings Implications

    This directive has been analyzed in accordance with the principles 
and criteria contained in Executive Order 12630 on Governmental Actions 
and Interference with Constitutionally Protected Property Rights, and 
it has been determined that the directive does not pose the risk of a 
taking of constitutionally protected private property.

Civil Justice Reform

    In accordance with Executive Order 12988, it has been determined 
that the categorical exclusion in this final directive does not unduly 
burden the judicial system, and that they meet the requirements of 
sections 3(a) and 3(b)(2) of the order.

Unfunded Mandates

    Pursuant to Title II of the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1531-1538), which the President signed into law on March 22, 
1995, the Agency has assessed the effects of the categorical exclusion 
in this final directive on State, local, and Tribal governments and the 
private sector. This categorical exclusion does not compel the 
expenditure of $100 million or more by any State, local, or Tribal 
government or anyone in the private sector. Therefore, a statement 
under section 202 of the Act is not required.

Energy Effects

    This directive has been reviewed under Executive Order 13211 on 
Actions Concerning Regulations that Significantly Affect Energy Supply, 
Distribution, or Use. It has been determined that this directive does 
not constitute a significant energy action as defined in the executive 
order.

Controlling Paperwork Burdens on the Public

    This directive does not contain any additional recordkeeping or 
reporting requirements associated with onshore oil and gas exploration 
and development or other information collection requirements as defined 
in 5 CFR part 1320. Accordingly, the review provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.) and its implementing 
regulations at 5 CFR part 1320 do not apply.

    Dated: February 9, 2007.
Abigail R. Kimbell,
Chief, Forest Service.

Text of Directive

    Note: The Forest Service organizes its directive system by 
alpha-numeric codes and subject headings. Only the section of the 
FSH 1909.15, Environmental Policy and Procedures Handbook, affected 
by this directive is included in this notice. Please note, however, 
that category 16 is reserved. A notice for comment was published for 
category 16 on January 5, 2005, (70 FR 1062). A final directive for 
this categorical exclusion has not been adopted as of the date of 
publication of this Federal Register notice. The complete text of 
FSH 1909.15, chapter 30 may obtained by contacting the individuals 
listed in FOR FURTHER INFORMATION CONTACT or from the Forest Service 
home page on the World Wide Web at www.fs.fed.us/im/
directives/fsh/1909.15/1909.15--30.doc. The intended audience 
for this direction is Forest Service employees charged with planning 
and administering oil and gas exploration and development projects 
on NFS lands under Federal lease.

FSH 1909.15--Environmental Policy and Procedures Handbook

CHAPTER 30--CATEGORICAL EXCLUSION FROM DOCUMENTATION

    Add new paragraph 17 as follows:
    31.2--Categories of Action for Which a Project or Case File and 
Decision Memo Are Required.
    Routine, proposed actions within any of the following categories 
may be excluded from documentation in an EIS or an EA; however, a 
project or case file is required and the decision to proceed must be 
documented in a decision memo (sec. 32). As a minimum, the project or 
case file should include any records prepared, such as: The names of 
interested and affected people, groups, and agencies contacted; the 
determination that no extraordinary circumstances exist; a copy of the 
decision memo (sec 05); and a list of the people notified of the 
decision. Maintain a project or case file and

[[Page 7402]]

prepare a decision memo for routine, proposed actions within any of the 
following categories:
* * * * *
    17. Approval of a Surface Use Plan of Operations for oil and 
natural gas exploration and initial development activities, associated 
with or adjacent to a new oil and/or gas field or area, so long as the 
approval will not authorize activities in excess of any of the 
following:
    a. One mile of new road construction.
    b. One mile of road reconstruction.
    c. Three miles of individual or co-located pipelines and/or 
utilities disturbance.
    d. Four drill sites.
[FR Doc. E7-2617 Filed 2-14-07; 8:45 am]
BILLING CODE 3410-11-P