[Federal Register Volume 79, Number 36 (Monday, February 24, 2014)]
[Proposed Rules]
[Pages 10080-10084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03792]


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DEPARTMENT OF THE INTERIOR

Fish and Wildlife Service

50 CFR Part 29

[Docket No. FWS-HQ-NWRS-2012-0086; FXRS12610900000-134-FF09R200000]
RIN 1018-AX36


Non-Federal Oil and Gas Development Within the National Wildlife 
Refuge System

AGENCY: Fish and Wildlife Service, Interior.

ACTION: Advance notice of proposed rulemaking; notice of intent to 
prepare an environmental impact statement.

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SUMMARY: The U.S. Fish and Wildlife Service (Service) is seeking 
comments to assist us in developing a proposed rule on managing 
activities associated with non-Federal oil and gas development on

[[Page 10081]]

lands and waters of the National Wildlife Refuge System (Refuge 
System). Non-Federal oil and gas development refers to 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. The proposed rule will clarify 
and expand existing regulations. We seek public input on how to manage 
non-Federal oil and gas operations on Refuge System lands to avoid or 
minimize, to the greatest possible extent, adverse effects on natural 
and cultural resources, wildlife-dependent recreation, and refuge 
infrastructure and management; ensure a consistent and effective 
regulatory environment for oil and gas operators; and protect public 
health and safety. The Service lacks comprehensive regulations to 
manage non-Federal oil and gas operations on the Refuge System, which 
has led to unnecessary adverse impacts on refuge resources, as well as 
an uncertain and inconsistent regulatory environment for oil and gas 
operators on refuges.
    This notice of intent starts the scoping process in compliance with 
the National Environmental Policy Act (NEPA) and its implementing 
regulations. Currently, we are planning for the programmatic 
environmental impact statement (PEIS) to focus on the national effects 
of the rulemaking, realizing that further environmental analysis of the 
more localized effects may be required with implementation of the rule. 
As part of the scoping process, the Service seeks public comment on the 
scope of the proposed rule; the NEPA alternatives to be considered; and 
the physical, biological, social, and economic effects that should be 
analyzed in the draft PEIS.

DATES: Submit comments on or before April 25, 2014.

ADDRESSES: You may submit comments by one of the following methods:
     Electronically: Go to the Federal eRulemaking Portal: 
http://www.regulations.gov. Search for FWS-HQ-NWRS-2012-0086, which is 
the docket number for this rulemaking. You may submit a comment by 
clicking on ``Comment Now!'' If your comments will fit in the provided 
comment box, please use this feature of http://www.regulations.gov, as 
it is most compatible with our comment review procedures. If you attach 
your comments as a separate document, our preferred file format is 
Microsoft Word. If you attach multiple comments (such as form letters), 
our preferred format is a spreadsheet in Microsoft Excel.
     By hard copy: Submit by U.S. mail or hand-delivery to: 
Public Comments Processing, Attn: FWS-HQ-NWRS-2012-0086; Division of 
Policy and Directives Management; U.S. Fish and Wildlife Service; 4401 
N. Fairfax Drive, MS 2042-PDM; Arlington, VA 22203.
    We will not accept email or faxes. We will post all comments on 
http://www.regulations.gov. This generally means that we will post any 
personal information you provide us (see Public Participation under 
SUPPLEMENTARY INFORMATION for more information).

FOR FURTHER INFORMATION CONTACT: Scott Covington, (703) 358-2427.

SUPPLEMENTARY INFORMATION: 

Background

    In many refuges of the Refuge System, the Federal Government does 
not own the subsurface mineral rights, and, subject to State and 
Federal law, the mineral rights owners have the legal authority to 
develop oil and gas resources. Additionally, some refuges had existing 
oil and gas wells and associated infrastructure and pipelines when 
acquired by the Service. Based on our best available data as of 2012, 
103 refuges and 4 wetland management districts have oil and gas 
operations (oil and gas wells, injection wells for enhanced oil 
recovery and produced water disposal, and pipelines), including more 
than 5,000 wells (oil, gas, injection) and almost 1,700 actively 
producing oil and gas wells (these estimates include wells in both 
Federal and non-Federal minerals). For purposes of this rulemaking, 
non-Federal minerals are considered the rights to develop oil and gas 
resources held by private, tribal, state or other entities. With 
Federal minerals, the development rights are held by the U.S. 
government. The smaller proportion of these wells is in Federal 
minerals, which are administered by the Bureau of Land Management (BLM) 
primarily under 43 CFR 3101.5. Some Federal regulations do apply to 
development of non-Federal minerals (e.g., 40 CFR 60, 61, and 63). 
However, the Service lacks comprehensive regulations to manage non-
Federal oil and gas operations on the Refuge System, which has led to 
unnecessary adverse impacts on refuge resources, as well as an 
uncertain and inconsistent regulatory environment for oil and gas 
operators on refuges. The proposed rule will clarify and expand 
existing regulations at 50 CFR 29.32.
    In 2003, the Government Accountability Office (GAO) issued a report 
(GAO-03-517) to Congress highlighting 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. 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 BLM, and 
the U.S. Department of Agriculture's Forest Service (FS). 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 all oil and gas activities occurring on the Refuge System to 
protect the public's surface interests. We believe that rulemaking is 
necessary for the Service to create a consistent and reasonable set of 
regulatory management controls for non-Federal oil and gas operations 
on the Refuge System. This request for comments and ideas on the 
rulemaking will improve the process.
    The legal authority for the Service to promulgate regulations is 
derived from the Property Clause (art. IV, section 3, cl. 2) and the 
Commerce Clause (art. I, Section 8, cl. 3) of the United States 
Constitution and from various statutes enacted by Congress for the 
administration of the Refuge System. The National Wildlife Refuge 
System Administration Act of 1966, as amended by the National Wildlife 
Refuge System Improvement Act of 1997 (16 U.S.C. 668dd-668ee), states 
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'' and grants authority to the Service 
to establish policies and regulations for the administration and 
management of the Refuge System.
    The Service is not currently proposing any specific approach for 
managing non-Federal oil and gas operations; accordingly, no regulatory 
findings are associated with this advance notice of proposed 
rulemaking. Comments received will help the Service determine the scope 
of any future rulemaking. Lastly, the Service's sister agency, the 
National Park Service, in 2009 issued an ANPR on this issue for their 
Park Units, 74 FR 61596 (November 25, 2009). If commenters wish to 
review the comments the Park Service received, a copy of its analysis 
of received comments can be obtained at http://

[[Page 10082]]

www.nature.nps.gov/geology/oil_and_gas/documents/2011-01-11%20ANPR_
Comment_Analysis_Report.pdf.

Information Requested

    The Service is interested in ideas from the public on ways we can 
improve existing management and oversight of non-Federal oil and gas 
operations. In addition, we request your help in identifying the 
significant issues and NEPA alternatives that we should consider in 
determining the scope of the PEIS for this rulemaking initiative. The 
Service intends to use input from the public to help us develop the 
proposed rule and prepare the draft PEIS. After receiving public 
comments and ideas, we will publish the proposed rule and notice of 
availability of the draft PEIS in the Federal Register for public 
review and comment. In particular, the Service encourages the public to 
provide comments and suggestions on the management and oversight issues 
described in the body of this notice. When commenting, please indicate 
which of the listed issues your comments address and to which question 
you are responding. If your comments cover issues outside of those 
listed, please identify them as ``other.''
    The Service also recognizes its government-to-government 
relationship with federally recognized Native American Tribes and seeks 
their comments in this notice. Tribal representatives may submit 
comments through the process described below, which will include those 
comments in the public record. Alternatively, tribal representatives 
may contact Scott Covington at (703) 358-2427 for additional 
information or to initiate government-to-government consultation.

Issue 1: Plans of Operations and Special Use Permits

    The Service requires entities, such as people, organizations, or 
companies, to get a Special Use Permit for any refuge use not generally 
open to the public. The permitting process allows the Service to ensure 
that refuge resources, as well as public health and safety, are 
protected to the greatest extent practicable before allowing the use on 
a refuge. In their existing regulations, the NPS and FS require that 
oil and gas development operators file a proposed plan of operations or 
operating plan and acquire a permit for use of the Federal surface 
estate. Operations encompass all activities associated with oil and 
gas, and include, but are not limited to: Reconnaissance to gather 
natural and cultural resources information; line-of-sight surveying and 
staking; geophysical exploration; exploratory drilling; production 
(site selection, well pad development, drilling, stimulation, and 
production), gathering, storage, processing, and transport of petroleum 
products; inspection, monitoring, and maintenance of equipment; well 
``work-over'' activity; construction, maintenance, and use of 
pipelines; well plugging and abandonment; reclamation of the surface; 
and construction or use of roads, or other means of access or 
transportation, on, across, or through federally owned or controlled 
lands or waters. The plan of operations includes reasonable operating 
standards with which an operator should comply in conducting all phases 
of oil and gas operations, as well as any other necessary requirements 
for the operator to meet to ensure compliance with Federal and State 
law. The Service believes that requiring a plan of operations, followed 
by issuance of a special use permit once the plan is approved, is the 
most effective way to increase oversight and management of non-Federal 
oil and gas operations on the Refuge System.
    Questions:
    a. Should NPS and/or FS requirements serve as a model for managing 
oil and gas operations on Refuge System lands? If so, should the FWS 
take special note of specific aspects of either set of requirements in 
crafting its own regulations?
    b. Do you have recommendations for alternatives to the processes 
described above that would allow for effective oversight and management 
of non-Federal oil and gas operations on the Refuge System? What are 
the benefits and costs of suggested alternatives?
    c. Do you know of ways that the Service could implement an 
efficient and effective permitting process similar to that described 
above or recommended in the previous question, that reduces the burden 
of compliance for both operators and refuge staff?

Issue 2: Operating Standards

    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, 
cultural resources, watercourses, visitor centers, public use areas 
such as trails and wildlife viewing areas, and administrative 
structures and facilities. The Service is aware that various agencies 
and industry groups have developed standards (e.g., American Petroleum 
Institute, Bureau of Land Management Gold Book, State operating 
standards, EPA's Natural Gas STAR program and New Source Performance 
Standards for VOC emissions) that, if the Service adopts as part of the 
rule, may reduce the effects that non-Federal oil and gas operations on 
refuges may have on refuge resources. The Service may adapt the 
standard to meet requirements identified in the Refuge Administration 
Act. As an alternative, because operating standards may change based on 
the geological formation, habitat, new technology, and other factors, 
we could leave some flexibility in the proposed rule by not 
incorporating particular operating standards. Instead, we could provide 
criteria that operators could address in their plan of operations in 
what they believe to be the best technical and management practices.
    Questions:
    a. Do you have recommendations for how the Service can best ensure 
that operators are conducting operations under effective, enforceable 
operating standards in our proposed rule?
    b. How can the Service best verify that operators are complying 
with applicable standards?
    c. How can the Service best ensure that the standards selected are 
effective and enforceable? Please provide examples with data.
    d. Do you have recommendations for the Service in developing a 
proposed rule that can adapt to technological advances in oil and gas 
development?
    e. What criteria could be used as targets in plans of operation 
using best technical and management practices, and how would compliance 
be assessed?

Issue 3: Financial Assurances

    The Refuge System has sustained significant damages to refuge 
resources from leaks and spills, inadequate plugging, abandonment and 
reclamation. The Service must ensure that taxpayers do not incur the 
costs of restoring refuge resources from irresponsible non-Federal oil 
and gas operations. In their regulations, the NPS requires that an 
operator file a performance bond or other acceptable method of 
financial assurance for all types and phases of non-Federal oil and gas 
operations. The objective of requiring a bond is to ensure that if an 
operator becomes insolvent or defaults on his/her obligations under an 
approved plan of operations, adequate funds will be available to the 
agency to carry out the plugging and reclamation requirements. The FS 
regulations give the Authorization Officer the discretion

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to require a performance bond; however, justification for the bond 
should be documented in the administrative record. The bond ensures 
that adequate funds will be available to restore the site, remove 
equipment and contaminated soil, and revegetate the area.
    Questions:
    a. Should the FWS simply adopt the financial assurance instruments 
and process used by one of our sister agencies (e.g., performance 
bonds, irrevocable letters of credit, and cash)? If so, please describe 
the advantages or disadvantages of the different systems with a 
recommended model.
    b. Are there alternatives to the existing financial assurance 
instruments used by our sister agencies (e.g., performance bonds, 
irrevocable letters of credit, and cash) that will protect the taxpayer 
if refuge resources are damaged by non-Federal oil and gas operations 
on lands and waters of the Refuge System?
    c. If so, please describe the advantages or disadvantages of one 
type of instrument over another, and how it would be designed.
    d. What is the best and most efficient way to ensure that financial 
assurances are maintained when ownership of the operation is 
transferred or sold?

Issue 4: Access Fees

    Operators often need to cross Federal or private lands where they 
have no preexisting rights to do so. Operators must obtain permission 
from the Service for such access to Refuge System lands (50 CFR 29.21). 
The NPS, FS, and BLM, as well as (in most cases) adjacent private land 
owners, charge fees for this access. The oil and gas industry generally 
recognizes such fees today as a cost of doing business. The FWS, as 
with other surface owners in split-estate situations, generally has a 
responsibility to provide reasonable access to oil and gas operators 
wanting to access their non-Federally owned subsurface estate. However, 
we also have clear responsibilities to protect and maintain the surface 
values for which we manage these lands. As a result, the Service wants 
to encourage operators to access their oil and gas operations from 
existing roads that the Service administers, and at a time, place, and 
manner that protects refuge resources to the maximum extent 
practicable.
    Questions:
    a. What is a fair and reasonable method for the Service to 
calculate fees for the privilege of access across federally owned 
lands?
    b. How could the Service establish incentives for operators to use 
existing roads or limit access to protect refuge resources in the 
proposed rulemaking?

Issue 5: Noncompliance

    To ensure protection of refuge resources and public health and 
safety, the Service will need to define a practical method for dealing 
with operators who are not in compliance with the established plan of 
operations or operating standards, or both. The Service has several 
options for handling operators who are noncompliant, including, but not 
limited to: Notifying and working with operators to bring them into 
compliance; issuing formal notices of noncompliance; assessing 
penalties for failure to comply with a notice of noncompliance; and for 
more egregious cases, filing a civil action in Federal court seeking an 
injunction or restraining order to halt operations.
    Questions:
    a. What are the most effective means for the Service to encourage 
compliance with an established plan of operations and operating 
standards?
    b. Are there new and emerging technologies, techniques, and 
verification systems that would improve effectiveness and efficiency of 
monitoring and verifying compliance with regulations and permit 
requirements?
    c. Are some penalties and/or deterrence techniques more effective 
than others to ensure compliance?
    d. Could a system be designed based on transparency of plans, 
operations, and practices that would foster use of better practices and 
compliance, and make it easier for the Service and public to understand 
oil and gas operations?

Issue 6: Existing Operations

    Many operators are already exploring, drilling, and producing non-
Federal oil and gas on Refuge System lands. Our goal is to ensure that 
we bring existing operations into compliance with any new rulemaking as 
seamlessly as possible to meet effective best management practices when 
operating on lands and waters of the Refuge System. We do not want to 
disrupt existing operations or impose an unreasonable burden on 
operators or Refuge System field staff.
    Questions:
    a. What is a fair and reasonable timeline for the Service to bring 
existing operations into compliance with the new regulations?
    b. Is there a way to stagger certain aspects of compliance that 
would make it less burdensome on both operators and Refuge System 
staff?

Issue 7: Impacts from the Proposed Rulemaking

    The PEIS will analyze a range of reasonable alternatives for 
regulating non-Federal oil and gas exploration, development, and 
production, and the potential environmental impacts on refuge 
resources, such as threatened and endangered species, waterfowl, 
migratory birds, air and water quality, soils, vegetation, wetlands, 
cultural resources, viewsheds, and soundscapes. The PEIS will also 
analyze effects on oil and gas operators, visitor experiences, public 
safety, adjacent lands, our changing environment, and refuge 
operations.
    Questions:
    a. Keeping the limited scope of the PEIS in mind, what do you 
believe are the important national impacts for the Service to analyze 
in the PEIS for a proposed rule on non-Federal oil and gas operations 
on the Refuge System (e.g., impacts to daily refuge operations, costs 
involved in monitoring)?
    b. What unique legislation or legal consideration should the PEIS 
take into account when analyzing potential impacts on specific regions 
or states?

Public Participation

    The Service seeks responses from the public to the questions above. 
We also seek any relevant comments on other issues that are related to 
this proposed rulemaking. We especially seek recommendations for 
effective and efficient approaches to managing non-Federal oil and gas 
development on the Refuge System. After analyzing the comments received 
from this notice, we will determine how to proceed with a proposed 
rulemaking.
    All submissions received must include the Service docket number for 
this notice. Before including your address, phone number, email 
address, or other personal identifying information in your comment, you 
should be aware that your entire comment--including your personal 
identifying information--may be made publicly available at any time. 
While you can ask us in your comment to withhold your personal 
identifying information from public review, we cannot guarantee that we 
will be able to do so.

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    The Service will continue to solicit public input through a 
collaborative process as we develop the proposed rule and PEIS. We will 
also include additional background information on non-Federal oil and 
gas operations on the Refuge System at the following Web site: http://www.fws.gov/refuges/oil-and-gas/.

    Dated: February 18, 2014.
Rachel Jacobson,
Principal Deputy Assistant Secretary for Fish and Wildlife and Parks.
[FR Doc. 2014-03792 Filed 2-21-14; 8:45 am]
BILLING CODE 4310-55-P