National Wildlife Refuges: Opportunities to Improve the 	 
Management and Oversight of Oil and Gas Activities on Federal	 
Lands (28-AUG-03, GAO-03-517).					 
                                                                 
The 95-million acre National Wildlife Refuge System contains	 
federal lands devoted to the conservation and management of fish,
wildlife, and plant resources. While the federal government owns 
the surface lands in the system, in many cases private parties	 
own the subsurface mineral rights and have the legal authority to
explore for and extract oil and gas. GAO was asked to determine  
the extent of oil and gas activity on refuges, identify the	 
environmental effects, and assess the Fish and Wildlife Service's
management and oversight of oil and gas activities.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-517 					        
    ACCNO:   A08260						        
  TITLE:     National Wildlife Refuges: Opportunities to Improve the  
Management and Oversight of Oil and Gas Activities on Federal	 
Lands								 
     DATE:   08/28/2003 
  SUBJECT:   Environmental monitoring				 
	     Land management					 
	     Natural gas					 
	     Oil drilling					 
	     Wildlife conservation				 
	     National Wildlife Refuge System			 

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GAO-03-517

                                       A

Report to Congressional Requesters

August 2003 NATIONAL WILDLIFE REFUGES Opportunities to Improve the
Management and Oversight of Oil and Gas Activities on Federal Lands

GAO- 03- 517

Contents Letter 1

Results in Brief 3 Background 7 Extent of Oil and Gas Activities in
Refuges 10 Overall Effects of Oil and Gas Activities Are Unknown,

but Those Activities Have Diminished Some Refuge System Resources 18 FWS
Management and Oversight of Oil and Gas Activities

Varies Widely 31 Conclusions 42 Recommendations for Executive Action 43
Matter for Congressional Consideration 44 Agency Comments and Our
Evaluation 44

Appendixes

Appendix I: Refuges with Oil and Gas Activities 48

Appendix II: Summary of Oil and Gas Activities at Refuges Visited 53

Appendix III: Analysis of Legal Authority of the Fish and Wildlife Service
to Impose Prospective Permit Requirements 55

Appendix IV: Scope and Methodology 60

Appendix V: Comments from the Department of the Interior and U. S. Fish
and Wildlife Service 64

Appendix VI: GAO Contacts and Acknowledgments 67 Tables Table 1: Number of
Refuges with Oil and Gas Activities,

by FWS Region 11 Table 2: Refuges with the Highest Number of Wells 12
Table 3: Types of Oil- and Gas- Related Wells Located on National

Wildlife Refuges 13 Table 4: Oil and Gas Production from Refuge System
Wells, January 2003 14

Table 5: Refuges with Oil and Gas Pipelines Crossing Refuge Lands 15 Table
6: Elements of Management and Oversight Found at

Refuges Visited 33

Figures Figure 1: Fish and Wildlife Service Regions 8 Figure 2: National
Wildlife Refuges with Oil and Gas Wells 12

Figure 3: Pipeline Storage and Loading Facilities, Delta NWR (La.) 16
Figure 4: Deep Fork NWR (Okla.) Current and Approved

Acquisition Boundaries 17 Figure 5: Ongoing Cleanup of Oil Spill at Delta
NWR (La.) 20 Figure 6: Wellhead at Delta NWR (La.) 22 Figure 7: Compressed
Marsh Grid from 3- D Seismic Study at

McFaddin NWR (Tex.) 24 Figure 8: Site Restoration at McFaddin NWR (Tex.)
27 Figure 9: Examples of Unreclaimed Infrastructure on NWRs 28 Figure 10:
Marsh Restoration Project Funded by Oil and Gas

Operators at Sabine NWR (La.) 40 Figure 11: Butte Sink Wildlife Management
Area (Calif.), Plot of

Wells and One- Half Mile Boundary 61

Abbreviations

CAP Contaminant Assessment Process FWS Fish and Wildlife Service NPMS
National Pipeline Mapping System NWR National Wildlife Refuge PCB
polychlorinated biphenyls RMIS Refuge Management Information System VOC
volatile organic compounds WMA Wildlife Management Area WMD Wetland
Management District

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Letter

August 28, 2003 The Honorable Wayne T. Gilchrest Chairman Subcommittee on
Fisheries Conservation, Wildlife, and Oceans Committee on Resources House
of Representatives The Honorable Edward J. Markey House of Representatives
The mission of the National Wildlife Refuge System, as expressed in its
governing legislation, is to *administer a national network of lands and
waters for the conservation, management, and where appropriate,
restoration of the fish, wildlife, and plant resources and their habitats
within the United States for the benefit of present and future generations
of Americans.* The system is unique in that the 95 million acres of land
in the system are the only federal lands managed primarily for the benefit

of wildlife, providing habitat for native plants and animals, including
endangered or threatened species, as well as important way points for
migrating species, such as ducks, cranes, and eagles. The system, which
represents more than 14 percent of all federal lands and has a presence in
every state, is administered by the Department of the Interior*s Fish and
Wildlife Service and includes both land that has always been federally
owned and land that has been acquired from others. While the federal
government owns almost all the surface lands in the system, in many cases
the federal government does not own the subsurface mineral rights. Subject
to some restriction, owners of subsurface mineral rights have the legal
authority to explore for mineral resources such as oil and gas and, if
such resources are found, to extract them.

In October 2001, we reported that the Fish and Wildlife Service recognized
some type of oil and gas activity on 77 of the 567 refuges and wetland
management districts within the National Wildlife Refuge System in

calendar year 2000. 1 However, our report recognized that this accounting
of activities might be incomplete because the data were based on refuges*
self- reporting. Therefore, to gain a more complete assessment of oil and
gas activities, you asked us to (1) determine the nature and full extent
of oil and gas activities in the National Wildlife Refuge System, (2)
identify environmental effects of oil and gas activities on refuge
resources, and (3) assess the Fish and Wildlife Service*s management and
oversight of

these activities. Our updated information on the extent of past and
present oil and gas activities within current wildlife refuge boundaries
is based on a variety of sources. Using national geographic information
databases, we determined how many documented oil and gas wells and transit
pipelines were located within or immediately proximate to refuge
boundaries. We also used

Fish and Wildlife Service records to identify other evidence of oil and
gas activities. Premier Data Services, a firm with extensive experience in
computer- based geographic information systems and oil and gas leasing,
aided our data acquisition and analysis (see app. IV). Our analysis is
more extensive than any undertaken by the Fish and Wildlife Service or the
Department of the Interior, and at their request, we are providing our
database to them for future use.

We visited 16 refuges, representing a range of type and scale of oil and
gas activities and environmental effects. At each refuge, we asked the
refuge manager to describe the range of environmental effects of these oil
and gas

activities, obtained any available studies of the effects, and visited
selected locations of oil and gas activity to observe actual conditions.

To assess the authority of the Fish and Wildlife Service to manage and
oversee oil and gas activities on refuges, we obtained information from
the Department of the Interior*s Office of the Solicitor and reviewed the
laws and regulations pertaining to the Fish and Wildlife Service and other
federal land management agencies and recent court cases concerning private
mineral rights on federal lands. To assess the Fish and Wildlife

1 U. S. General Accounting Office, U. S. Fish and Wildlife Service:
Information on Oil and Gas Activities in the National Wildlife Refuge
System, GAO- 02- 64R (Washington, D. C.: Oct. 31, 2001). The National
Wildlife Refuge System, at that time, consisted of 530 refuges as well as
37 wetland management districts, which are management entities created to
administer waterfowl production areas. In this report, we use the term
*refuge* to refer to any unit of the National Wildlife Refuge System,
including national wildlife refuges, wildlife ranges, wildlife management
areas, and waterfowl production areas.

Service*s management and oversight of oil and gas activities, we obtained
information on policy, guidance, and practices from headquarters and the 7
regional offices and documented the actual practices in use at the 16
refuges we visited.

Results in Brief About one- quarter, or 155, of the 575 refuges, have past
or current oil and gas activities, some dating to at least the 1920s.
These activities include oil and gas exploration, active and inactive
drilling and production

facilities, and active pipelines transiting refuge lands. As of December
2002, 4,406 oil and gas wells were located on 105 refuges, with many of
the wells concentrated in Louisiana and Texas. Of the 4,406 wells on
refuge lands, a majority (2, 600 wells) were inactive, either permanently
plugged and abandoned or temporarily idled with the possibility of future
activation. Thirty- six refuges have 1,806 active wells and more than half
of these are located in just 5 refuges. Since 1994, oil and gas
exploration has occurred at 44 refuges. In addition, at least 1 active
pipeline is present at 107 refuges, 35 of which do not have any other oil
and gas activity. During the most recent 12- month reporting period, the
1,806 active wells produced 23. 7 million barrels of oil and 88.2 million
cubic feet of natural gas, about 1.1 and 0.4 percent of total domestic oil
and gas production, respectively. Based on 2001 average prices, refuge-
based production had an estimated total commercial value of $880 million.

The Fish and Wildlife Service has not conducted any assessments of the
cumulative environmental effects of oil and gas activities on refuge
resources. Available studies, anecdotal information, and our observations
show that the environmental effects of oil and gas activities and the
associated construction, operation, and maintenance of the infrastructure
on wildlife and habitat vary in severity, duration, and visibility. For
example, the environmental effects range from infrequent small oil spills
and minimal debris from abandoned infrastructure to large and chronic
spills and large- scale industrial development. Some damage, such as
habitat loss from infrastructure development, may last indefinitely, while
other damage, such as wildlife disturbance from exploration, is of shorter
duration. While certain types of damages are readily visible, others, such
as changes in groundwater hydrology or habitat conditions, are more
difficult to quantify or to link solely to oil and gas activities. Over
the years, new environmental laws and industry practice and technology
have reduced, but not eliminated, some of the most detrimental effects of
oil and gas activities. In addition, oil and gas operators have taken
steps, in some cases voluntarily, to reverse damages resulting from oil
and gas activities, but

operators have not consistently taken such steps and the adequacy of these
steps is not known. The Fish and Wildlife Service does not have a complete
and accurate record of spills and other damage resulting from refuge-
based oil and gas activities, has conducted few studies to quantify the
extent of damage, and, therefore, does not know its full extent or the
steps needed to reverse it.

The Fish and Wildlife Service*s management and oversight of oil and gas
activities varies widely among refuges. Management control standards for
federal agencies require federal agencies to identify risks to their
assets, provide guidance to mitigate these risks, and monitor compliance.
2 For the Fish and Wildlife Service, effectively managing oil and gas
activities on refuges would entail, at a minimum, identifying the extent
of oil and gas activities and their attendant risks, developing procedures
to minimize

damages by issuing permits with conditions to protect refuge resources,
and monitoring the activities with trained staff to ensure compliance and
accountability. However, we found a wide variance in the extent to which
these management practices occur. Some refuges identify oil and gas
activities and the risks they pose to refuge resources, issue permits that
direct operators to minimize the effect of their activities on the refuge,
monitor oil and gas activities with trained personnel, and charge
mitigation fees or pursue legal remedies if damage occurs. For example,
two refuges in Louisiana collect mitigation fees from oil and gas
operators that are then used to pay for monitoring operator compliance
with permits and state and

federal laws. In contrast, other refuges do not issue permits or collect
fees, are not aware of the extent of oil and gas activities or the
attendant risks to refuge resources, and provide little management and
oversight.

There are two primary reasons for the variation in management of oil and
gas activities. First, the Fish and Wildlife Service*s legal authority to
require oil and gas operators to obtain access permits with conditions to
protect refuge resources varies considerably, depending upon the nature of
the mineral rights. For reserved mineral rights* cases where the property
owner retained the mineral rights when selling the land to the federal
government* the Fish and Wildlife Service can require permits only if the
property deed subjects the rights to such requirements. For outstanding
mineral rights* cases where the mineral rights were separated from the
surface lands before the government acquired the property* the Fish and

2 U. S. General Accounting Office, Standards for Internal Control in the
Federal Government, GAO/ AIMD- 00- 2131 (Washington, D. C.: Nov. 1999).

Wildlife Service has not formally determined its position regarding its
authority to require access permits. However, we believe, based on
statutory language and court decisions, that the Fish and Wildlife Service

has the authority to require owners of outstanding mineral rights to
obtain permits. Second, refuge managers lack sufficient guidance,
resources, and training to properly monitor oil and gas operators. Current
Fish and Wildlife Service guidance regarding the management of oil and gas

activities where there are private mineral rights is unclear, according to
refuge staff. Refuge staff said they also lack sufficient resources to
oversee oil and gas activities, which at some refuges are substantial.
Only three refuges in the system have staff dedicated on a full- time
basis to monitoring these activities, and some refuge staff cite a lack of
time as a reason for limited oversight. Staff also cite a lack of training
as limiting their capability to oversee oil and gas operators; the Fish
and Wildlife Service has offered only one oil and gas related workshop in
the last 10 years. In addition, on a related management issue, the Fish
and Wildlife Service has not, in all cases, adequately examined new
property for possible contamination from oil and gas activities prior to
acquisition. While the Fish and Wildlife Service requires an assessment of
all possible contamination, the guidance and oversight provided to
regional and refuge personnel are inadequate to ensure that the
requirements are met. We found that three of the Fish and Wildlife
Service*s seven regions acquire

lands without fully investigating hazardous substances and environmental
problems for which they may become liable. For example, one region
acquired a former oil storage site that required extensive soil removal
and

disposal, costing the Fish and Wildlife Service and others $58,000. We are
recommending that the Secretary of the Interior direct the Director of the
Fish and Wildlife Service to strengthen its management and oversight
practices by (1) collecting and maintaining better data on oil and gas
activities and their environmental effects, and ensuring that staff
resources, funding, and training are sufficient and (2) clarifying
acquisition regulations to ensure that the Fish and Wildlife Service does
not acquire unknown liabilities in its future land acquisitions. We are
also recommending that, to improve the framework for managing and
overseeing oil and gas activities, the Secretary and the Director work
with the Department of the Interior*s Office of the Solicitor to (1)
determine

the Fish and Wildlife Service*s existing authority over outstanding
mineral rights and (2) seek from Congress, in coordination with
appropriate Administration officials, including those within the Executive
Office of the President, any necessary additional authority over such
rights, and over reserved mineral rights, to ensure that a consistent and
reasonable set

of regulatory and management controls are in place for all oil and gas
activities occurring on national wildlife refuges. In light of the
department*s perceived limitations of its ability to request additional
legislative authority, Congress may also wish to consider expanding the
Fish and Wildlife

Service*s authority to enable it to consistently regulate the surface
activities of private mineral owners on wildlife refuges. The Department
of the Interior*s response to the draft report was mixed. The department
agreed that it could improve its acquisition policy and guidance. The
department was silent on our recommendations that it should collect and
maintain better data on oil and gas activities and their effects and that
it should ensure that staff are adequately trained to oversee oil and gas
activities. We continue to believe these recommendations are warranted.
The department did raise a concern in regards to two of our
recommendations. First, the department questioned whether hiring
additional dedicated staff would be the most cost- effective solution to
improving oversight. In voicing its concern, however, the department
apparently misinterpreted our recommendation for the FWS to determine what
level of staffing is necessary to oversee these activities as a call to
hire additional staff. If the department determines that there

are more cost- effective means to ensure adequate staffing, such as the
use of contractors or temporary staff, that would also satisfy this
recommendation. Second, the department raised concerns about GAO*s
recommendation that it seek additional authority from Congress to regulate
private mineral rights. The department indicated that doing so would
violate the Recommendations Clause of the U. S. Constitution by infringing
upon the role of the President to recommend legislative

action to Congress. We disagree. As a practical matter, we expect that the
department would coordinate legislative proposals with the Administration
and we have clarified the recommendation accordingly. Moreover, as a legal
issue, there is nothing in the Recommendations Clause that bars an
executive branch department from recommending legislation to Congress.
Given the department*s opposition to this recommendation, we have also
raised this matter to Congress for its consideration.

Background The refuge system comprises 538 refuges, 37 wetland management
districts (an administrative system of thousands of Waterfowl Production
Areas and

conservation easements, primarily in the north central United States), and
50 coordination areas. 3 The Fish and Wildlife Service (FWS) owns the
surface lands and, in some cases, the mineral rights of National Wildlife
Refuges and Waterfowl Production Areas, while conservation easements and
coordination areas are owned or managed by others. Day- to- day management
of wildlife refuges is the responsibility of local refuge managers,
subject to the direction of seven regional refuge chiefs and the Chief of
the National Wildlife Refuge System (see fig. 1 for a map of FWS regions).
Of FWS*s nearly $1.3 billion budget in fiscal year 2002,

about $319 million was devoted to the operations and maintenance of the
refuge system. In fiscal year 2002, $99.13 million from the Land and Water
Conservation Fund was used for the acquisition of additional refuge lands.
4

3 Waterfowl Production Areas, which were incorporated into the refuge
system in 1966, are lands acquired by the FWS using Federal Duck Stamp
monies for the preservation of wetland and grassland areas critical to
waterfowl and other wildlife. A majority of these lands are located in the
prairie wetlands of the Dakotas, Minnesota, and Montana.

Coordination areas are federal lands made available to a state by
cooperative agreement between the FWS and the state fish and wildlife
agency.

4 The Land and Water Conservation Fund is authorized for, among other
things, acquisition of land and waters for diverse purposes under several
different laws. This includes conservation of endangered or threatened
species under the Endangered Species Act, as well as the acquisition of
any areas authorized for the refuge system by specific statutes. 16 U. S.
C. S: 4061.

Figure 1: Fish and Wildlife Service Regions

Portland Region 6

Hadley Region Minneapolis

1 Region 5

Region 3 Denver

Region 4 Albuquerque Albuquerque Region Region 2 2

Atlanta Alaska

Region 7 Hawaii Puerto Rico &

Virgin Islands

Region 1 Region 4

Source: GAO.

Over the years, we and others have examined the effects on the refuge
system of secondary activities, 5 such as recreation, military activities,
and oil and gas activities* which include oil and gas exploration,
drilling and production, and transport. Exploring for oil and gas involves
seismic mapping of the subsurface topography. Seismic mapping, regardless
of the technology employed, requires surface disturbance, often involving
small dynamite charges placed in a series of holes, typically in patterned
grids. If seismic mapping reveals potential oil or gas deposits
exploratory drilling

begins. Oil and gas drilling and production often requires constructing,
operating, and maintaining industrial infrastructure, including a network
of access roads and canals, local pipelines to connect well sites to
production

5 U. S. General Accounting Office, National Wildlife Refuges: Continuing
Problems with Incompatible Uses Calls for Bold Action, GAO/ RCED- 89- 196
(Washington, D. C.: Sept. 8, 1989).

facilities and dispose of drilling wastes, and gravel pads to house the
drilling and other equipment. In addition, production may require storage
tanks, separating facilities, and gas compressors. Finally, transporting
oil and gas to production facilities or to users requires transit
pipelines. Typically buried, these pipelines range in size, with some as
large as 30 inches in diameter. Pumping stations and storage tanks may
also be needed for pipeline operations.

Under the National Wildlife Refuge System Administration Act of 1966, as
amended, FWS is responsible for regulating all activities on refuges. The
act requires FWS to determine the compatibility of activities with the

purposes of the particular refuge and the mission of the refuge system and
not allow those activities deemed incompatible. 6 However, FWS does not
apply the compatibility requirement to the exercise of private mineral
rights on refuges. Department of the Interior regulations also prohibit
leasing federal minerals underlying refuges outside of Alaska, except in
cases where federal minerals are being drained by operations on property
adjacent to the refuge.

Nevertheless, the activities of private mineral owners on refuges are
subject to a variety of legal restrictions, including FWS regulations. A
variety of federal laws affect how private mineral rights owners conduct
their activities. 7 For example, the Endangered Species Act of 1973
prohibits the *take* of any endangered or threatened species and provides
for penalties for violations of the act; 8 the Migratory Bird Treaty Act
prohibits killing, hunting, possessing, or selling migratory birds, except
in

accordance with a permit; 9 and the Clean Water Act prohibits discharging
oil or other toxic substances into waters of the United States and imposes
liability for removal costs and damages resulting from a discharge. 10

6 16 U. S. C. S:S: 668dd( a), (d). 7 State laws also may affect the
conduct of oil and gas activities. 8 16 U. S. C. S:S: 1538, 1540. The term
*take* means to harass, harm, pursue, hunt, shoot, wound, kills, trap,
capture, or collect. 16 U. S. C. S: 1532 (19). 9 16 U. S. C. S: 703.

10 33 U. S. C. S: 1321( b).

Also, FWS regulations require that oil and gas activities be performed in
a way that minimizes the risk of damage to the land and wildlife and the
disturbance to the operation of the refuge. The regulations also require
that land affected be reclaimed after operations have ceased. 11 Whether
FWS has authority to impose permitting requirements on private oil and gas
activities is discussed later in this report.

Extent of Oil and Gas At least 155 of the 575 refuges of the National
Wildlife Refuge System

Activities in Refuges have some past or present oil and gas activities*
exploration, drilling and

production, or transit pipelines. Many of these activities are
concentrated around the Gulf Coast of Louisiana and Texas. We found that
oil and gas exploration has occurred at 44 refuges since 1994. We also
determined that there are 4, 406 wells on 105 refuges, though only 41
percent of the wells at 36 refuges are active, with the other wells either
plugged

and abandoned or temporarily idle. Active wells on refuge lands produce
roughly 1.1 percent and 0.4 percent of domestically produced oil and gas
from onshore wells, with an approximate value of $880 million based on
2001 prices. In addition, active oil and gas transmission pipelines cross
at least 107 refuges. Bordering refuges, another 4,795 wells reside within
one- half mile outside refuge boundaries, in some cases on lands that FWS
may acquire in the future.

One- Quarter of All Refuges About one- quarter, or 155, of the 575 refuges
(538 refuges and 37 wetland

Have Past or Present Oil and management districts) that constitute the
National Wildlife Refuge System

Gas Activities have past or present oil and gas activities* exploration,
drilling and

production, transit pipelines, or some combination of these (see table 1).
12 Since 1994, FWS records show that 44 refuges have had some type of oil
and gas exploration activities* geologic study, survey, or seismic work.
More than one- half of these exploratory activities occurred in the
southeastern and southwestern regions of the United States. We also
identified 105 refuges with inactive or active oil and gas wells and 107
refuges with transit pipelines. Exploration or drilling and production
activities occurred at 120 of the 155 refuges.

11 50 C. F. R S: 29.32. 12 This analysis does not include coordination
areas, which are managed by states, or conservation easements, which are
not owned by FWS.

Table 1: Number of Refuges with Oil and Gas Activities, by FWS Region
Unduplicated counts, Number of refuges, by category by category group

Exploration Drilling and production

Active pipelines Exploration

Exploration, drilling (survey and

(active and inactive oil (transiting refuge

and/ or drilling and production,

FWS region a seismic work) b

and gas wells) c lands) d

and production and/ or pipelines

1 (Pacific) 5 20 9 22 24 2 (Southwest) 10 22 24 22 29 3 (Great LakesBig
Rivers) 1 10 14 10 19

4 (Southeast) 14 28 37 34 45 5 (Northeast) 1 4 6 4 6 6 (MountainPrairie) 9
20 15 24 27

7 (Alaska) 4 1 2 4 5

Total 44 105 107 120 155

Sources: FWS, Premier Data Services, and Office of Pipeline Safety. a See
figure 1.

b Based on GAO*s analysis of refuge reported data to FWS*s Refuge
Management Information System, 1994- 2001. c Based on GAO*s analysis of
Premier Data Services* nationwide well database, January 2003.

d Based on GAO*s analysis of the National Pipeline Mapping System and
Refuge Management Information System data, 1994- 2001.

Wells in the Refuge System Are In total, we identified 4, 406 oil and gas
wells within 105 refuges. The

Geographically Concentrated number of wells per refuge ranged from 1 dry
hole well drilled at Willapa

Bay National Wildlife Refuge (NWR) in Washington to 1,120 wells at Upper
Ouachita NWR in Louisiana. Although refuges with oil and gas wells are
present in every FWS region, they are more heavily concentrated in the
Gulf Coast of the United States (see fig. 2). More than one- half of the
wells (2,512) are located on refuges in FWS Region 4 and a majority of
these are in Louisiana.

Figure 2: National Wildlife Refuges with Oil and Gas Wells

Well status by refuge Active wells

(36) Only inactive wells (69)

Source: Premier Data Services (data) and GAO (analysis).

Wells are also concentrated among a minority of the system*s units. For
example, five refuges contain 57 percent of all the wells in the system,
as shown in table 2.

Tabl e 2: Refuges with the Highest Number of Wells Number of Refuge FWS
region State wells

Upper Ouachita NWR 4 La. 1,120 St. Catherine*s Creek NWR 4 Miss. 465 Deep
Fork NWR 2 Okla. 362 Delta NWR 4 La. 338 Lower Rio Grande Valley NWR 2 Tex
. 217

Tot al 2,502

Sources: Premier Data Services (data); GAO (analysis).

A Minority of Wells in About 4 out of 10 wells located on refuges are
actively producing. Of the

Refuges Are Actively 4,406 wells, 1,806, or 41 percent, were known to be
actively producing oil

Producing, Yielding About or gas or disposing of produced water as of the
most recent reporting

1 Percent of the U. S. *s Total time period as of January 2003. Of the 105
refuges with oil and gas wells,

36 refuges have actively producing wells. The remaining 2,600 wells did
Onshore Production

not produce oil, gas, or water during the last 12 months; many of these
were plugged and abandoned or were dry holes. 13 Gas wells were the most
common type of well as indicated in table 3.

Tabl e 3: Types of Oil- and Gas- Related Wells Located on National
Wildlife Refuges Type of well Tot al

Gas 1,265 Dry hole 967 Unknown a 677 Plugged and abandoned 642 Oil 618
Injection or disposal 99 Oil and gas 65 Active permit 34 Miscellaneous b
23 Temporarily abandoned 10 Coalbed methane 6

Tot al 4,406

Sources: Premier Data Services (data); GAO (analysis). a Permittees had
not yet updated the status of these wells to their respective state oil
and gas

commissions b Includes service, test, recovery, and water wells.

13 Wells that are plugged and abandoned are permanently sealed by
cementing the well bore. Improperly plugged wells can intrude on fresh
water supplies or cause fires and seepage.

Active wells on refuge lands produced a total of 23.7 million barrels of
oil and 88, 171 million cubic feet of natural gas during the most recent
12 months as of January 2003* about 1.1 percent of the 2.117 billion
barrels of oil and 0.4 percent of the 24,532,514 million cubic feet of
natural gas produced during 2001 (see table 4). 14 The 1,806 active oil
and gas wells on refuge lands were roughly 1 percent of the approximately
148,750 active onshore oil and gas wells in the United States in 2001. 15
The value of all

refuge- based production, based on 2001 average prices, was over $880
million. However, in addition to levels of production and oil and gas
prices, the net benefit of oil and gas activities depends on a number of
factors, including size of the investment in infrastructures and any
adverse effects on the environment, recreation, and tourism. 16

Tabl e 4: Oil and Gas Production from Refuge System Wells, January 2003
Refuge- based

Refuge- based production (last

Domestic onshore production Wellhead price

Value of 12 months) production (2001) (percent of total) (2001) production

Oil production (barrels) 23, 694,548 2, 117,512, 000 1.1 $21. 84 (per
barrel) $517,488, 928 Natural gas production

$4. 12 (per thousand (million cubic feet) 88,171 24,532, 514 0.4 cubic
feet) $363,264, 520

Tot al $880,753, 448

Sources: Premier Data Services and Energy Information Administration
(data); GAO (analysis).

14 All production data are based on information reported to each state oil
and gas commission by oil and gas operators. This information is updated
on different cycles in each state. The totals reported reflect the most
recent data as of January 2003. 15 The total number of wells is based on
the Energy Information Administration*s Financial Reporting System for 33
major energy- producing companies based in the United States. 16 The exact
economic impact of oil and gas activities in wildlife refuges has never
been estimated, according to FWS officials. Determination of such an
impact is extremely

difficult due to a number of factors. Because many of these refuges have
had oil and gas activities for many decades, the effect that these older
operations may have had on the local economy, including the possible
adverse impacts on recreation or tourism industries, would be impossible
to measure.

Transit Pipelines Cross Refuges At least 273 miles of transit pipeline
from 49 different oil and gas pipelines cross 28 of the 138 refuges for
which data are available. 17 These pipelines are almost exclusively buried
and generally require right- of- way permits from FWS. The pipelines vary
in size, up to 30 inches in diameter and carry a variety of products,
including crude oil, refined petroleum products, and high- pressure
natural gas (see table 5). While pipelines cannot be constructed across
refuge lands unless FWS determines that the pipelines are compatible with
the purposes of the refuge and issues a right- of- way permit, some
pipelines were constructed before FWS acquired the

property. These pipelines did not undergo a compatibility determination
and may not have received a right- of- way permit.

Tabl e 5: Refuges with Oil and Gas Pipelines Crossing Refuge Lands Number
of refuges Number of pipelines Miles of pipeline

Liquids pipelines a 19 24 146.3 Natural gas pipelines b 5 7 24.2 Both
liquid and gas 4 18 102.4

Tot al 28 49 273

Sources: National Pipeline Mapping System and Department of Transportation
(data); GAO (analysis based on 138 of the 575 refuges). a Category
includes crude oil, liquid petroleum gas, natural gas liquids, and other
petroleum products.

b Category includes natural gas, highly volatile natural gas, and carbon
dioxide.

17 Additional pipelines cross some of the 437 refuges for which digital
boundary data are not available and were not analyzed by us. For example,
79 additional refuges for which we did not have digital boundary data
reported to the Refuge Management Information System that at least 1
transit pipeline crossed their refuges. These figures also do not include
smaller pipelines that are used for gathering production from wells
(called flow- or gathering lines).

Transit pipelines may also have associated storage facilities and pumping
stations, such as those we toured at Delta NWR in Louisiana (see fig. 3),
but data are not available to identify how many of these are on refuges.

Figure 3: Pipeline Storage and Loading Facilities, Delta NWR (La.)

Source: GAO.

Additional Wells and A total of 4,795 wells and 84 transit pipelines
reside just outside refuges, Pipelines Are Located

within one- half mile of refuge boundaries. The 4,795 wells bound within
One- Half Mile of 123 refuges, 33 of which do not have any resident oil
and gas wells. Refuge Boundaries

The 84 pipelines are 186 miles long and border 42 different refuges. While
FWS does not own the land outside refuge boundaries, lands surrounding
refuges may be designated for future acquisition. For example, at Deep
Fork NWR in Oklahoma, 606 wells are within one- half mile outside current
boundaries, and some of this land is within approved boundaries for future
acquisition (see fig. 4).

Figure 4: Deep Fork NWR (Okla.) Current and Approved Acquisition
Boundaries

Deep Fork Refuge Boundary Approved boundary Refuge 0.5 Mile buffer Source:
FWS and GAO.

Overall Effects of The overall environmental effects of oil and gas
activities on refuge

Oil and Gas Activities resources are unknown because FWS has conducted few
cumulative

assessments and has no comprehensive data. Available information Are
Unknown,

indicates that refuge wildlife and habitat have been harmed to varying but
Those Activities

degrees by spills of oil, gas, brine, 18 and industrial materials as well
as Have Diminished

through the construction, operation, and maintenance of the infrastructure
necessary to produce oil and gas. Routine oil and gas activities can

Some Refuge System contaminate a refuge and reduce the quantity and
quality of habitat

Resources available for wildlife. Over the years, new environmental laws
and

improved industry practices and technology have reduced some of the most
detrimental effects of oil and gas activities; however, some harm to
refuges continues to occur and some effects from earlier events have not
been reversed and continue to diminish refuge resources. In addition,

oil and gas operators have taken steps, in some cases voluntarily, to
reverse damages resulting from oil and gas activities, but operators have
not consistently taken such steps and the adequacy of these steps is not
known. FWS does not have an accurate record of the number of spills on
refuges and has conducted few studies on the effects of refuge- based oil
and gas activities and, therefore, does not know the full extent of the
problem or the steps needed to reverse them.

Oil and Gas Activities Available studies, anecdotal information, and our
observations show

Have, to Varying Degrees, that some refuge resources have been diminished
to varying degrees by

Diminished Refuge spills of oil, gas, and brine and through the
construction, operation, and

System Resources maintenance of the infrastructure necessary to extract
oil and gas. The damage varies widely in severity, duration, and
visibility, ranging from

infrequent small oil spills and industrial debris with no known effect on
wildlife, to large and chronic spills causing wildlife deaths and long-
term soil and water contamination. Some damage, such as habitat loss
because of infrastructure development and soil and water contamination,
may last indefinitely while other damage, such as wildlife disturbance
during seismic mapping, is of shorter duration. Also, while certain types
of

damage are readily visible, others, such as groundwater contamination and
reduced habitat quality from infrastructure development, are difficult to
observe, quantify, and associate directly with oil and gas activities.
Finally, oil and gas activities may hinder FWS*s ability to manage or
improve refuge

18 Brine is water mixed with salts, other minerals, and oil.

habitat, such as seasonal flooding of wetlands or prescribed burns, or
hinder public access to parts of the refuge. Spills Spills of oil, gas,
and brine have harmed refuge wildlife and habitat. Oil and gas can injure
or kill wildlife by destroying the insulating capacity of

feathers and fur, depleting oxygen available in water, or exposing
wildlife to toxic substances. Long- term effects of oil and gas
contamination are difficult to determine, but studies suggest that effects
of exposure include reduced fertility, kidney and liver damage, immune
suppression, and cancer. Even small spills may contaminate soil and
sediments if they occur frequently. For instance, a study of Atchafalaya
and Delta NWRs in Louisiana found that levels of oil contamination near
oil and gas facilities

are lethal to most species of wildlife, even though refuge staff were not
aware of any large spills. 19 Figure 5 shows an ongoing clean up of a
relatively small oil spill that occurred at Delta NWR in 2002. Brine
spills can also be lethal to young waterfowl, damage birds* feathers, kill
vegetation, and decrease nutrients in water. Based on well data from
Premier Data Services, over 19. 8 million gallons of brine were produced

from active wells on NWRs during the most recent 12- month reporting
period as of January 2003. Much of this brine was reinjected back into the
ground to prevent surface damage.

19 North Carolina State University, Department of Environmental and
Molecular Toxicology,

Chemical Contamination at National Wildlife Refuges in the Lower
Mississippi River Ecosystem, February 2001, for the U. S. Department of
the Interior.

Figure 5: Ongoing Cleanup of Oil Spill at Delta NWR (La.)

Source: GAO. Note: Absorbent pads and booms in foreground.

The 16 refuges we visited reported oil, gas, or brine spills, although the
frequency and effect of the spills varied widely. For instance, Hopper
Mountain NWR in California reported two oil spills in 1990, the only
spills since 1974, and refuge records indicated that the operator cleaned
up each spill quickly and that refuge staff detected no effect on
wildlife. In contrast,

Anahuac NWR in Texas reported at least 7 oil spills since 1991, including
1 pipeline spill that killed over 800 large fish such as mullet and
redfish and over 180,000 menhaden, a small but ecologically important
fish. FWS officials said that natural gas leaks generally pose a lower
risk to habitat than oil spills, but a gas leak in 2000 at Sabine NWR in
Louisiana killed fish, crabs, and amphibians. Brine spills have also
damaged refuges. For example, Atchafalaya and D*Arbonne NWRs in Louisiana
reported that

brine spills had killed vegetation in the area of the spill. At these
refuges, salt concentrations in the soil have remained high and continued
to spread

for decades after a spill, and some sites do not support vegetation years
afterwards.

The exact number and size of oil and gas spills on NWRs is not known.
Nationally, FWS reported that 348 oil and gas spills were located on or
near refuges during fiscal year 2002, although there are limitations to
this figure. First, it includes spills resulting from activities not
associated with oil and gas production or transit pipelines, such as
shipping accidents. Second, FWS calculated the number of spills by
reviewing spill reports from the National Response Center and other
parties that did not always identify if a refuge is affected. Third, not
all spills are required to be reported. Clean Water Act regulations
require operators to report spills of any quantity if they cause a sheen
to form on waters subject to federal jurisdiction. 20 Other spills are
subject to state reporting requirements, which vary. For instance, Texas
requires operators to report spills over 210 gallons, while Louisiana
requires operators to report spills over 42 gallons. Finally, refuge staff
told us that they knew of spills that operators never reported.

Infrastructure Constructing, operating, and maintaining the infrastructure
necessary to produce oil and gas can harm wildlife by reducing the
quantity and quality of habitat. At Kenai NWR in Alaska, for instance, oil
and gas wells and associated facilities have eliminated at least 524 acres
of habitat, while other infrastructure, such as access roads and
pipelines, has eliminated an additional 424 acres. While this loss of
habitat represents a very small proportion of total refuge acreage, refuge
staff determined that it eliminated food sources that would have supported
between 41 and 136 cow moose and 411 snowshoe hares. In other instances,
habitat lost to infrastructure development is negligible* for example, the
presence of a wellhead or pipelines, such as the wellhead at Delta NWR
shown in figure 6.

20 40 C. F. R. S: 110.3( b).

Figure 6: Wellhead at Delta NWR (La.)

Source: Source: GAO. GAO. Infrastructure development can reduce the
quality of habitat by

fragmenting it and, in some cases, by changing the hydrology of the refuge
ecosystem or contaminating it with toxic substances. Habitat fragmentation
occurs when a network of roads, canals, and other infrastructure is
constructed in previously undeveloped areas of a refuge. Fragmentation
increases disturbances from human activities, provides pathways for
predators, and helps spread nonnative plant species. For example, the
endangered California condor is particularly susceptible to disturbances
from human activities. Condors have been observed landing on oil pads on
the refuge, which poses a safety risk to the birds and reduces

their fear of humans. In addition, FWS estimated in 1980 that oil and gas
activities at Hopper Mountain NWR eliminated about 63 percent of the
potential feeding habitat for condors on the refuge. The current refuge
manager said that the effect of this loss on the condor population may not
be significant because the importance of the feeding habitat provided by
the refuge may not be as great as previously thought. Corridors that oil
and gas operators have developed assist predation* for example, among
songbirds, and allow a pathway for invasive species, a significant
management problem for FWS. 21 Finally, officials at Anahuac and McFaddin
NWRs in Texas said that disturbances from oil and gas activities are
likely significant and expressed concern that bird nesting may be

21 U. S. General Accounting Office, Invasive Species: Clearer Focus and
Greater Commitment Needed to Effectively Manage the Problem, GAO- 03- 1
(Washington, D. C.: Oct. 22, 2002).

disrupted. However, no studies have been conducted at these refuges to
determine the effect of these disturbances.

Infrastructure networks can also damage refuge habitat by changing the
hydrology of the refuge ecosystem, particularly in coastal areas. For
instance, tens of thousands of acres of freshwater marsh at Sabine NWR,
and elsewhere in Louisiana and Texas, have been lost due to saltwater
intrusion. Saltwater intrusion may change the types of plants in the marsh
and can cause erosion that creates an open water habitat that is less
biologically productive than the marsh. While several factors contribute
to the saltwater intrusion, construction of canals to access oil and gas
facilities is considered by many scientists to be significant. Seismic
studies for oil and gas exploration in coastal marshes can also contribute
to saltwater intrusion. Seismic studies are typically conducted in a grid
pattern and may cover large portions of a refuge. Preparing and conducting
seismic studies may require heavy equipment that can compress the marsh,
which changes the plant community and could allow saltwater to intrude

into the marsh, particularly during droughts that decrease freshwater
flows. At McFaddin NWR, the grid pattern from a 1995 seismic study was
clearly visible from infrared aerial photographs taken after the seismic
study was completed (see fig. 7).

Figure 7: Compressed Marsh Grid from 3- D Seismic Study at McFaddin NWR
(Tex.)

Source: FWS. Note: Infrared photograph (1995).

Moreover, industrial activities associated with extracting oil and gas
have been found to contaminate wildlife refuges with toxic substances such
as mercury and polychlorinated biphenyls (PCB). D*Arbonne, Kenai, and
Upper Ouachita (Louisiana) NWRs reported mercury contamination, and Kenai
NWR reported PCB contamination from oil and gas activities that must still
be cleaned up by FWS if the responsible parties cannot be found. Mercury
and PCBs were used in equipment such as compressors,

transformers, and well production meters, although generally they are no
longer used. Mercury has been linked to brain, kidney, and reproductive
system damage, and PCBs are known animal carcinogens.

Legal and Industry Changes New laws prohibiting some of the most harmful
industry practices have

Have Reduced Some of the helped diminish the adverse effect of current and
recent oil and gas

Environmental Effects of activities on refuge resources. For example,
Louisiana now generally

Oil and Gas Activities prohibits using open pits to store production
wastes and brine in coastal

areas or discharging brine into drainages or state waters. Another example
is Texas, which requires operators to install screens or nets over open
tanks and pits to protect birds from contacting hazardous fluids. Texas
also now requires operators to remove oil and gas infrastructure, such as
tanks,

which will not be actively used in the continuing operation of a lease and
to contour closed sites to reduce water contamination.

Improvements in industry practice, including improved technology, have
also reduced the damage caused by oil and gas activities. For example,
where feasible, directional drilling allows (1) operators to avoid placing
wells in sensitive areas such as wetlands and (2) several wells to be
drilled from the same pad, thus reducing the amount of habitat damaged.
Another example is improved geologic mapping through 3- D seismic
technology. While 3- D seismic studies require more vehicle traffic and
may damage more vegetation than 2- D studies, improved geologic mapping
may reduce the number of wells drilled that do not produce oil or gas and
ultimately reduce the amount of habitat damaged. Furthermore, the impact
of 3- D seismic studies has been reduced through other

improvements, including using vehicles less damaging to the surface,
reducing the number of vehicle trips necessary, hand carrying seismic
lines to avoid vehicle damage altogether, and scheduling seismic
operations to avoid sensitive times.

While the relative impacts of the activities have been reduced in recent
years, the effects have not been eliminated. For instance, oil and gas
infrastructure continues to diminish availability of refuge habitat for
wildlife, and spills of oil, gas, and brine that damage fish and wildlife
continue to occur. In addition, several refuge managers reported that
operators do not always comply with legal requirements or follow best
industry practices such as constructing berms (earthen barriers) around
tanks to contain spills, covering tanks to protect wildlife, and removing
pits that temporarily store fluids used during well maintenance.

Reversing Environmental Environmental damage from oil and gas activities
may be partially reversed

Damages Is Inconsistent by remediating contamination or by reclaiming a
site to its prior condition

after oil and gas activities cease. However, oil and gas operators have
not consistently taken steps to reverse environmental damages that have
occurred from oil and gas activities on NWRs. In some cases, officials do

not know if remediation following spills is sufficient to protect refuge
resources, particularly for smaller oil spills or spills into wetlands. In
other cases, FWS has been satisfied with the response. According to refuge
officials and industry representatives, when small oil spills occur,
operators may contain the oil and then remove the oil and the contaminated
soil, but in some cases operators leave the oil and cover it with dirt. In
contrast, the effects of larger spills may be evaluated systematically and
remediated by

the operator. For example, in 2000, a ruptured pipeline spilled nearly
200,000 gallons of crude oil at John Heinz NWR in Pennsylvania, damaging
several species of wildlife and covering a frozen pond. In response, the

operator removed the oil and the contaminated soil, replanted damaged
vegetation, funded scientific studies to determine the effect on refuge
wildlife, compensated the refuge for the value lost to visitors during the
spill; and the operator is negotiating with FWS to identify an appropriate
restoration project to compensate for the ecologic value of refuge
resources lost while the refuge recovers from the spill.

Similar to spill remediation, reclamation of oil and gas facilities
following their use is also inconsistent. For instance, an operator at
McFaddin NWR removed a road and a well pad that had been constructed to
access a new well site and restored the marsh damaged by construction
after the well was no longer needed. Figure 8 provides an aerial view of
the road and the well pad shortly after they were constructed and a photo
of the same site

following reclamation. Other refuges, however, reported that storage
tanks, debris, and access roads remained long after use (see fig. 9).
Refuge staff cited several reasons for some sites not being reclaimed,
including difficulty identifying the responsible parties, operator
insolvency, potential

future use because other locations in the same field remained in
operation, and uncertainty of their authority to require operators to
reclaim sites. Finally, several states do not require operators to reverse
the effects of oil

and gas activities. 22 For instance, Texas law does not require operators
to remove all buried flowlines or access roads. Several states, such as
Oklahoma and Texas, have established programs to clean up abandoned oil

and gas sites, but funds are limited. 22 For a comparison of state
reclamation requirements, see U. S. General Accounting Office,

Alaska*s North Slope: Requirements for Restoring Lands after Oil
Production Ceases,

GAO- 02- 357 (Washington, D. C.: June 5, 2002).

Figure 8: Site Restoration at McFaddin NWR (Tex.)

Sources: FWS (above); GAO (below). Note: Location of well site before
(1996) and after restoration (2002).

Figure 9: Examples of Unreclaimed Infrastructure on NWRs

Sources: GAO (above); GAO (below). Notes: Exposed and abandoned flowlines
at Anahuac NWR (Tex.) (above). Abandoned tank battery at Deep Fork NWR
(Okla.) (below).

Because operators do not consistently or entirely reverse environmental
damages resulting from oil and gas activities, FWS has had to clean up
sites at its expense or leave sites unreclaimed. FWS spent $387,100 to
clean up 14 oil- or gas- related sites between fiscal years 1991 and 2002
and is planning to spend an additional $108,000 at 3 sites in fiscal year
2003. These cleanup projects included removing oil- and gas- related
debris, plugging

unused gas wells, and addressing mercury contamination at 9 refuges in
Arkansas and Louisiana. Other sites remain to be addressed. There are 2,
600 inactive wells on refuges, including an unknown number that have been
abandoned but not plugged, and some sites also have unused tanks,
flowlines, and debris that should be removed. The estimated cost of
cleanup at a site at Anahuac NWR is $1.1 million and currently is deferred
until fiscal year 2009. Refuge managers at some refuges we visited
expressed concern that as oil and gas production declines, operators will
abandon more infrastructure and FWS will have to reclaim these sites.

FWS Documentation of FWS has conducted few studies to quantify the extent
of the damage

Environmental Effects Is caused by oil and gas activities. FWS identifies
and assesses contaminant

Limited and Inconsistent threats to refuges by conducting Contaminant
Assessment Process (CAP)

studies and other studies of contamination. Although CAP studies are FWS*s
primary formal mechanism for identifying potential sources of contaminants
on refuges, the studies do not quantify the extent of any contamination or
its biological effects. Moreover, CAP studies have not been conducted at
all refuges with oil and gas activities, including many refuges that have
significant activities. FWS established the CAP process in 1996, and to
date studies have been completed at about 193 refuges (about 34 percent of
all refuges), including 67 of the 155 refuges (43 percent) with oil and
gas activities. The number of refuges with oil and gas activities that
have completed CAP studies varies by region. For instance, in Region 2,
which includes Texas, 20 of 28 refuges (71 percent) had completed CAP
studies, while in Region 4, which includes

Louisiana, 11 of 45 (24 percent) had completed CAP studies. The national
coordinator for CAP said that the studies are sequenced to coincide with
each refuge*s comprehensive conservation planning process, which, in turn,
is prioritized within each region based on factors including primary
threats, staffing levels, and funding. Finally, the comprehensiveness of
the studies varies widely. The CAP for Kenai NWR lists over 330 known
spills and describes other potential contamination sources from oil and
gas activities. In contrast, the CAP study for Deep Fork NWR did not list
oil and gas activities as a potential source of contamination, even though
there are over 360 wells on the refuge and the refuge*s comprehensive
conservation

plan previously identified concerns over oil and gas activities, including
unplugged wells. The CAP program manager stated that, in this case, FWS
staff did not follow the procedures established in the CAP manual, which
requires that all potential sources of contamination be identified.

If contaminants are identified at a refuge, FWS may conduct additional
studies through its contaminants program. Since 1988, FWS has funded at
least 33 studies at 47 national wildlife refuges nationwide that have

examined the effects of oil and gas activities. 23 The scope of the
studies ranged from general investigations to document the presence and
concentration of a variety of contaminants, including those associated
with oil and gas activities, to specific studies to examine the impact of
oil and gas activities on particular refuges. In some cases, contamination
concerns identified in a general investigation may lead to a more detailed
study. For instance, a contaminants survey at Hagerman NWR identified
contaminants from oil and gas activities, but the survey was insufficient
to determine the effects on fish and wildlife. A later study determined
that brine and oil contaminant levels did not appear to be of concern.

In addition to conducting its own studies, FWS uses studies conducted by
other government agencies and universities, in some cases at its request.
For instance, the U. S. Geological Survey is studying the effects of a 3-
D seismic study at Sabine NWR to determine the long- term effects of
seismic activities on refuge plant species, and Drexel University is
studying the impact of an oil spill on wildlife at John Heinz NWR,
including any effects on a rare turtle species.

The lack of information on the effects of oil and gas activities on refuge
wildlife hinders FWS*s ability to identify and obtain appropriate
mitigation measures and to require responsible parties to address damages
from past activities. For instance, the Chief, Division of Environmental
Quality, stated that FWS does not always know the effects of oil and gas
activities on wildlife or habitat and, therefore, does not know what
actions should

be required of operators to reduce those effects. Lack of sufficient
information has also hindered FWS*s efforts to identify all locations with
past oil and gas activities and to require responsible parties to address
damages. FWS does not know the number or location of all

23 Some of the 33 studies examined the effects of oil and gas
contamination resulting from activities that are outside the scope of
GAO*s study, such as activities occurring outside of the refuge.

abandoned wells and other oil and gas infrastructure or the threat of
contamination they pose and, therefore, its ability to require responsible
parties to address damages is limited. While recognizing the value of this
type of information, the Chief, Division of Environmental Quality, said
that in some cases FWS lacked the budget to fund environmental studies and
that, in other cases, the cost of obtaining the information was
disproportionate to its management value. In those cases where FWS has
performed studies, the information has proved valuable. For example,

FWS funded a study at some refuges in Oklahoma and Texas to inventory
locations containing oil and gas infrastructure, to determine if they were
closed legally, and to document their present condition. FWS intends to
use this information to identify cleanup options with state and federal
regulators. If this effort is successful, FWS may conduct similar studies
on other refuges. In other cases, refuges have requested studies that have
not been funded. For instance, proposals to examine the effects of oil and
gas activities on a wetland management district in Montana and to identify
unknown oil and gas locations at Kenai NWR have not been approved, in
part, due to lack of funds. In the case of Kenai NWR, refuge staff said
that

current operators may be responsible for cleaning up historic sites but
that FWS had to identify the sites before it could make this
determination.

FWS Management FWS*s management and oversight of oil and gas activities
varies widely and Oversight of Oil

from refuge to refuge. Effectively managing these activities across the
refuge system would entail, at a minimum, identifying the risks posed by
and Gas Activities the activities, establishing operating conditions to
minimize damages, and

Varies Widely monitoring the activities with trained staff to ensure
compliance. While

some refuges have adopted comprehensive management and oversight
practices, others have done little. Variation in refuges* management and
oversight of oil and gas activities stems from differences in FWS*s
regulatory authority depending upon the nature of the mineral rights and
from inadequate guidance, resources, and training for refuge staff. In
addition, on a related management issue, FWS*s policy requiring a complete
and thorough assessment of potentially contaminated property prior to
acquisition is not always adhered to because of inconsistent
interpretation

of the requirements by FWS, placing the federal government at risk of
assuming unknown cleanup costs in the future.

Management and Oversight FWS*s objective in managing oil and gas on refuge
lands is to protect

Varies Among Refuges wildlife habitat and other resources while allowing
oil and gas operators

to exercise their mineral rights. Meeting this objective requires basic
management controls. Under the Federal Manager*s Financial Integrity Act
of 1982, 24 we have issued management control standards that apply to all
federal agencies. 25 These standards require agencies to identify risks,
develop procedures to protect against these risks, and monitor adherence
to the procedures. For refuges, doing so would mean identifying the nature
and extent of oil and gas activities on a refuge and the risks they pose
to refuge resources, adopting risk- reduction procedures such as issuing
access permits with conditions to protect refuge resources and securing
financial assurance that reclamation will occur, and overseeing oil and
gas operations with trained and dedicated staff to ensure compliance with
laws and permits.

The refuges we examined varied in the extent to which they identified
risks, adopted procedures to minimize those risks, and monitored oil and
gas activities. First, some refuge staff did not have complete information
on the extent of oil and gas activities occurring on their refuges. For
example,

at Deep Fork NWR refuge staff estimated that there were 600 or more
abandoned wells but knew the location of very few of these wells. Further,
as noted earlier, only 67 of the 155 refuges with oil and gas activities
and

10 of the 16 refuges we visited (see table 6) had completed CAP studies
identifying the possible sources and types of contamination on the
refuges. In contrast, at Kenai NWR refuge staff had detailed information
on oil and gas wells and activities on the refuge, had completed an
exhaustive CAP study, and was completing an Environmental Impact Statement
on the effects of oil and gas activities. 26

24 33 U. S. C. S: 3512( c). 25 U. S. General Accounting Office, Standards
for Internal Control in the Federal Government, GAO/ AIMD- 00- 2131
(Washington, D. C.: Nov. 1999).

26 Swanson River Satellites: Natural Gas Exploration and Development
Project, Draft Environmental Impact Statement, U. S. Fish and Wildlife
Service* Alaska Region, July 2002.

Table 6: Elements of Management and Oversight Found at Refuges Visited
Issue permits with CAP study conditions to protect Refuges Visited by GAO
State FWS region completed

refuge resources Require bonds Number of staff

Hopper Mountain NWR Calif. 1 x Deep Fork NWR Okla. 2 x Hagerman NWR Tex. 2
x x a Anahuac NWR Tex. 2 x x McFaddin NWR Tex. 2 x x Patoka River NWR Ind.
3 Delta NWR La. 4 x x b x Atchafalya NWR La. 4 x x Sabine NWR La. 4 x x
D*Arbonne NWR La. 4 Upper Ouachita NWR La. 4 John Heinz NWR Pa. 5 x
Medicine Lake NWR Mont. 6 x x a x b J. Clark Salyer NWR N. Dak. 6 x x a x
b Upper Souris NWR N. Dak. 6 x x a x b Kenai NWR Alaska 7 x x x One- half
time

Total 16 7 10 11 5 2.5

Source: GAO. a The Bureau of Land Management or the Army Corps of
Engineers issues these federal permits.

b The Bureau of Land Management requires these federal bonds.

Second, permits, which grant oil and gas operators access to specified
areas of a refuge and contain conditions to protect refuge resources, such
as seasonal or vehicle restrictions, to protect air quality, soil, water
and wildlife habitat, were applied to varying degrees at 11 of the 16
refuges we visited. 27 FWS can require permits if the mineral rights are
federally owned, the property deed allows it to, or the operator
voluntarily agreed to one. In the other five cases, refuge staff did not
believe they had authority to require permits. In addition, five refuges
obtained financial assurance in the form of bonds for the future costs of
reclamation, or rely on bonds administered by another federal agency. The
other 11 refuges rely instead on state bonds, which are allowed under FWS
guidance, but may provide different degrees of financial assurance than
federal bonds. For example, the bonds in some states may or may not cover
damages caused by oil and gas activities if the effects are considered to
be reasonable impacts to the land. Reasonable impacts are not consistently
defined among states because impacts to property are determined by what is
usual and customary practice in the area.

Finally, we found little correlation between the scale of oil and gas
activities on refuges and the presence of dedicated staff to oversee them.
Two of the refuges we visited have a fully dedicated staff person to
oversee oil and gas operators* two of the only three in the entire refuge
system.

These two refuges in Louisiana collect fees from operators to help pay for
these staff. In contrast, refuges with greater levels of activity do not
have dedicated staff.

27 Although FWS does not have regulations requiring private mineral rights
owners to obtain permits before conducting oil and gas operations, it does
have a permitting process (set forth in the FWS manual) that applies to
private mineral rights owners whose deeds subject them to permitting
requirements; to private mineral rights owners who agree to be bound by a
permit, even though their deeds do not subject them to permits; and to
others.

FWS*s Authority to FWS*s legal authority to require oil and gas operators
to obtain permits

Require Permits Varies, varies considerably, depending upon the nature of
the mineral rights. Depending on the Nature

Permits granting access to specified areas of a refuge can be used to
establish reasonable operating conditions for private mineral owners to of
the Mineral Rights exercise their rights while protecting refuge
resources. 28 Variation in authority to require such permits, and the
uncertainty that this sometimes creates among refuge staff, partly
accounts for differences in management and oversight we found at refuges.
At one end of the spectrum, FWS has broad authority to deny or regulate
access to oil and gas on wildlife refuges when the federal government owns
the mineral rights. Under Department of the Interior regulations, access
to federal mineral rights

underlying refuges requires the approval of the Secretary of the Interior
with the concurrence of FWS as to the time, place, and nature of the
activities. 29 These regulations also prohibit leasing of federal minerals
on refuges outside of Alaska, except in cases where federal minerals are
being drained by operations on property adjacent to the refuges.

28 In determining what conditions to place in a permit, FWS, like other
federal regulatory agencies, must consider the potential applicability of
the Fifth Amendment to the U. S. Constitution. The Fifth Amendment
prohibits the federal government from taking private property for public
use without justly compensating the private property owner. Government
regulation may place restrictions on the use of property to the extent
that it deprives the owner of its use or economic value. In such cases of
*regulatory taking,* the owner may be entitled to just compensation under
the Fifth Amendment. Thus, if a permit *regulated* the mineral rights to
the point that they were deemed to be taken, FWS would

have to compensate the owner. See, e. g., Foster v. United States, 607 F.
2d 943 (Ct. Cl. 1979) (government*s refusal to allow permit holders of
mineral interest on government land any right of access for the purpose of
extracting minerals was a compensable taking).

29 43 C. F. R. S: 3101.5- 1.

In contrast, FWS*s authority is not nearly as broad or as clear with
respect to private owners of mineral rights. FWS*s authority to require
permits from private mineral owners depends on the nature of the private
rights and, in some cases, whether the property deed contains specific
language. Private

mineral rights may be either *reserved* or *outstanding.* Reserved rights
are created when the property owner retains the mineral rights at the time
that the surface property is transferred to the federal government.
Outstanding rights are created when the mineral rights are severed from
the surface lands prior to the surface property*s transfer to the federal
government and, thus, a third party owns the rights. FWS*s authority to
regulate oil and gas activities of private owners of reserved mineral
rights is limited under current law. 30 The Department of the Interior
takes the position, with which we agree, that FWS can require permits for
reserved rights only if the deed transferring surface ownership to the
federal government contains language that subjects these rights to
permitting requirements. The department*s position was first expressed in
a 1986 opinion by the Office of the Solicitor, which, that office recently
advised us, continues to reflect the department*s position. The
department*s position is largely based on a section of the Migratory Bird
Conservation Act that makes reserved rights subject to government
regulation if the deed includes specific requirements, such as permitting
requirements, or states

that the rights are subject to regulations prescribed by the Department
*from time to time.* 31 Any expansion of FWS*s authority over the owners
of reserved mineral rights, to include cases in which deeds do not contain
such provisions, would thus require a change in the law.

By contrast, it does not appear that the Department of the Interior has
taken a formal position, and the Solicitor*s Office recently declined to
take a position, regarding FWS*s authority to require a permit for private
owners of outstanding mineral rights. The Solicitor*s Office advised us
that it would only provide an opinion on FWS*s authority over outstanding
mineral rights if FWS requested one. Nonetheless, we believe that FWS has
broad general

authority, similar to that of the Forest Service and the National Park
Service, to require owners exercising outstanding mineral rights to obtain

30 Appendix III contains a more detailed legal analysis of FWS*s authority
to require permits for both reserved and outstanding rights owners. 31 16
U. S. C. S: 715e.

permits that contain conditions to protect a refuge and its wildlife. Both
amendments to the National Wildlife Refuge System Administration Act of
1966 (1966 Act) and court decisions since the department issued its 1986
opinion support this conclusion. The National Wildlife System Improvement
Act of 1997 32 (1997 Act) amended the 1966 Act to provide for a more
effective process for determining which secondary uses would be compatible
with refuges and to allow refuges to be managed more like national forests
and parks. 33 The 1997 Act established as a mission of the National
Wildlife Refuge System *conservation, management, and where appropriate,
restoration of [fish and wildlife] for the benefit of present and future
generations of Americans.* In separate cases involving the Forest Service
and the National Park Service, federal courts relied on language similar
to that in the 1997 Act to find that these agencies had authority to
require private owners of outstanding mineral rights to obtain permits

before conducting oil and gas activities. 34 We believe the same
conclusion follows with respect to FWS*s authority.

As a result of these differences in legal authority, there is a
considerable gap in FWS*s management and oversight of oil and gas
activities, but neither FWS nor we know precisely at how many refuges this
is occurring. Because some refuges may consist of hundreds of individual
deeds, it is not possible without considerable investigation to determine
the relative prevalence of reserved and outstanding mineral rights or the
extent to which property deeds allow FWS to require owners of reserved
mineral rights to obtain a permit, according to FWS officials. FWS
officials also said that differences in FWS*s authority to require permits
do not provide for a

consistent way of managing and overseeing oil and gas activities. 32 Pub.
L. No. 105- 57, 111 Stat. 1252 (1997). 33 H. R. Rep. No. 105- 106, at 2- 3
(1997). 34 See Duncan Energy Co. v. United States Forest Service, 50 F. 3d
584 (8th Cir. 1995); Dunn McCampbell Royalty Interest, Inc. v. National
Park Service, 964 F. Supp. 1125 (S. D. Tex. 1995), aff*d on other grounds,
112 F. 3d 1283 (5th Cir. 1997).

Refuges Lack Sufficient In addition to FWS*s inconsistent or undefined
authority to require permits

Guidance, Resources, and oversee oil and gas activities, FWS cannot
improve its management

and Training to Manage and oversight of those activities without better
guidance, resources, and

and Oversee Oil and training. According to refuge managers and officials
in the Department of the Interior*s Office of the Solicitor, national
guidance is insufficient for

Gas Activities refuge staff to know what authority they have to manage oil
and gas

activities, or how to carry out that authority. To supplement the national
guidance, three of FWS*s seven regions have developed more detailed
guidance to assist in managing and overseeing oil and gas activities. For
instance, while the national guidance describes only FWS*s authority to
require permits, guidance in Regions 2 and 6 provides specific examples of
conditions the refuge manager should include in a permit to protect refuge
resources. Staff at Sabine NWR have also drafted, in conjunction with
headquarters staff, more detailed national guidance on managing and
overseeing oil and gas activities, including a detailed description of
FWS*s authority to require permits and many specific conditions to include
in permits. However, FWS has not approved this draft guidance.

Refuge staff we interviewed also cited a lack of staff resources as an
obstacle to properly managing oil and gas activities because staff do not
have time to become familiar with federal and state laws or manage and

oversee oil and gas operations. For example, when FWS purchased property
for Deep Fork NWR, the property deed contained assurances that FWS would
be able to issue permits governing private mineral rights, yet

that information was never conveyed to refuge staff. To determine FWS*s
permitting authority, refuge staff would have to research each individual
property deed. Refuge staff said that they do not have time to do this
research because they must address other management concerns, such as law
enforcement. In contrast, Sabine NWR has a staff person dedicated to

managing oil and gas activities. As a result, this person has sufficient
time to become familiar with applicable laws and to work with operators
and state regulators to manage and oversee oil and gas activities to
reduce their effects on the refuge. This oversight has encouraged the
operator to identify and restore sites damaged by past oil and gas
activities.

Refuges that have access to their own funding mechanisms to recover
damages are better able to manage and oversee oil and gas activities. It
is standard industry practice for operators* conducting seismic activities
to pay exploratory fees to surface landowners. However, only refuges in
Louisiana and Texas have authority to assess and retain such fees to cover
potential damages caused by seismic activity. 35 Refuges in Louisiana
routinely collect these fees to aid management and oversight and fund
restoration efforts, but Region 2 has retained existing policy preventing
refuges in Texas from assessing these fees. To address this lack of
consistency, FWS headquarters officials told us they are drafting guidance
to clarify how these regions should apply their authority to collect and
retain fees. One of the refuges that collects these fees is Sabine NWR,

which uses these fees to fund a staff person specifically dedicated to the
management and oversight of oil and gas activities and to fund mitigation
projects to reduce the effect of oil and gas operations. Figure 10 shows a

recent mitigation project, funded by oil and gas operators at Sabine NWR,
that is designed to restore a marsh damaged by saltwater intrusion due in
part to earlier oil and gas activities. Officials in the Department of the

Interior*s Office of the Solicitor support the use of fees as a more
efficient mechanism than litigation to compensate for damages.

35 Under the Consolidated Appropriations Act, 2000, the Secretary of the
Interior may retain money paid by parties exercising private oil and gas
rights for damages to refuge lands in Texas and Louisiana, to be used to
make damage assessments, mitigate or restore the damages, and monitor and
study the recovery of the resources. Pub. L. No. 106- 113, 113 Stat.
1501A- 140 (1999).

Figure 10: Marsh Restoration Project Funded by Oil and Gas Operators at
Sabine NWR (La.)

Source: GAO.

Trained staff are integral to effective oversight, yet refuge staff we met
with said their principal duties and training as wildlife managers do not
prepare them for managing oil and gas activities. FWS has offered only one
workshop in the last 10 years for refuge staff nationwide that is specific
to managing oil and gas activities on refuges. This 3- day workshop in
June 2001, attended by 36 FWS officials, provided information on possible
sources of spills, effects of oil on wildlife, enforcement avenues, and
damage recovery; however, there was limited discussion of FWS*s regulatory
authority. Refuge staff lack training on standard industry practices,
state and federal laws, and identification of oil- and gas- related
problems. For example, at Atchafalaya NWR, the refuge manager has not been
able to enforce special use permits, citing a lack of training about
applicable state and federal laws.

Acquired Property FWS has not always thoroughly assessed property for
possible

Is Not Always contamination from oil and gas activities prior to its
acquisition. The FWS

Adequately Assessed manual requires a thorough investigation of potential
contamination prior

for Contamination to acquisition of any property so that the full present
and future costs of cleanup can be determined. However, some FWS regions
have interpreted

the guidance more narrowly than others. As a result, FWS has not always
conducted a thorough investigation of properties to be acquired, resulting
in unexpected future cleanup costs.

FWS*s guidance requires a complete environmental site assessment to
determine *the likelihood of the presence of hazardous substances or other
environmental problems associated with the property and any remediation or
other clean up costs.* According to FWS contaminant and realty

officials, a thorough investigation as required by the FWS manual would
include an assessment of both the surface and subsurface properties for
contamination. Some regions consistently conduct adequate assessments,
while other regions* investigations are not as thorough. For example,
Region 6 assesses both the subsurface and surface properties for
contamination, even when acquiring only the surface portion. In two cases,
Region 6 did not acquire property, even when offered as a donation,
because of subsurface contamination from oil and gas activities. In
contrast, FWS Regions 2, 3, and 4 do not always thoroughly investigate all
properties for contamination prior to acquisition. For example, not
examining the subsurface soils for contamination or investigating further
if there is some indication of the presence of contaminants. FWS realty
officials told us that the acquisition guidance needs to be clarified and
that the oversight of regional implementation needs to be improved to
ensure that all new property is thoroughly investigated for contamination.

In one instance, FWS acquired property that is contaminated from oil and
gas activities and is now paying unexpected cleanup costs because staff
did not conduct an adequate assessment of the subsurface property prior to
acquisition. At the Patoka River NWR in Indiana (Region 3), during an
acquisition, FWS staff conducted an initial contamination investigation
and used a state certification of well closure as assurance that the land
was cleaned and closed and did not investigate further, even though they
were aware that the land had contained oil wells and an oil storage
facility. After acquiring the property, FWS found that large amounts of
soil were

contaminated with oil. FWS has thus far spent $15,000 and a local
conservation group spent another $43,000 cleaning up contaminated soil.

Conclusions The National Wildlife Refuge System is a national asset
established principally for the conservation of wildlife and habitat.
While federally owned mineral rights underlying refuge lands are generally
not available for oil and gas exploration and production, that prohibition
does not extend to the many private parties that own mineral rights
underlying refuge lands. The scale of these activities on refuges is such
that some refuge resources have been diminished, although the extent is
unknown without additional study.

Some refuges have adopted practices* for example, developing data on the
nature and extent of activities and their effects on the refuge,
overseeing oil and gas operators, and training refuge staff to better
carry out their management and oversight responsibilities* that limit the
impact of these activities on refuge resources. If these practices were
implemented throughout the agency, they could provide better assurance

that environmental effects from oil and gas activities are minimized. In
particular, in some cases, refuges have issued permits that establish
operating conditions for oil and gas activities, giving the refuges
greater control over these activities and protecting refuge resources
before damage occurs. However, FWS does not have a policy requiring owners

of outstanding mineral rights to obtain a permit, although we believe FWS
has this authority, and FWS can require owners of reserved mineral rights
to obtain a permit if the property deed subjects the rights to such
requirements. Expanding or confirming FWS*s authority to require
reasonable permit conditions and oversee oil and gas activities, including
cases where mineral rights have been reserved and the property deed does
not already subject the rights to permit requirements, would strengthen
and provide greater consistency in FWS*s management and oversight. Such a
step could be done without infringing on the rights of private mineral
owners. Finally, FWS*s land acquisition guidance is unclear and oversight
is inadequate, thereby exposing the federal government to unexpected
cleanup costs for properties acquired without adequately assessing
contamination from oil and gas activities.

Recommendations for To improve the framework for managing and overseeing
oil and gas

Executive Action activities on national wildlife refuges, the Secretary of
the Interior

should direct the Director of the Fish and Wildlife Service to take the
following steps:

 Collect and maintain better data on the nature and extent of oil and gas
activities and the effects of these activities on refuge resources.

 Determine what level of staffing is necessary to adequately oversee oil
and gas operators and seek necessary funding to meet those needs, through
appropriations, the authority to assess fees, or other means.

 Ensure that staff are adequately trained to oversee oil and gas
activities.  Clarify guidance and better oversee FWS*s land acquisition
process so

that all hazardous substances and environmental problems and future
cleanup costs are fully identified prior to acquisition and unexpected
costs are avoided.

As part of the process of improving the framework for managing and
overseeing oil and gas activities on national wildlife refuges, we further
recommend that the Secretary of the Interior and the Director of the Fish
and Wildlife Service work with the Department of the Interior*s Office of
the Solicitor to (1) determine FWS*s existing authority to issue permits
and set reasonable conditions regarding outstanding mineral rights,
reporting

the results of its determination to Congress, and (2) seek from Congress,
in coordination with appropriate Administration officials, including those
within the Executive Office of the President, any necessary additional
authority over such rights, and over reserved mineral rights, so that FWS
can apply a consistent and reasonable set of regulatory and management
controls over all oil and gas activities occurring on national wildlife
refuges to protect the public*s surface interests.

Matter for In light of the Department of the Interior*s perceived
limitation to its ability

Congressional to seek expanded legislative authority over private mineral
rights, Congress

may wish to consider providing that authority. Ensuring that FWS has legal
Consideration authority to issue permits to holders of both outstanding
and reserved mineral rights would improve FWS*s ability to consistently
regulate and oversee oil and gas operations on wildlife refuges.

Agency Comments and We provided an opportunity for the Department of the
Interior and

Our Evaluation U. S. Fish and Wildlife Service officials to review a draft
of this report.

The comments of the department as expressed by the Acting Assistant
Secretary for Fish and Wildlife and Parks were mixed. The department
agreed that FWS*s acquisition policy and guidance should be improved.
However, the department was silent on our recommendations that the FWS
should collect and maintain better data on oil and gas activities and
their effects and that it should ensure that staff are adequately trained
to oversee oil and gas activities. We continue to believe these
recommendations are still warranted. The department did raise a concern in
regards to two of our recommendations. First, the department questioned
whether hiring additional dedicated staff would be the most cost-
effective solution to improving oversight. However, the department
apparently misinterpreted our recommendation for FWS to determine what
level of staffing necessary

to oversee these activities as a call to hire additional dedicated staff.
If the department determines that there are more cost- effective means to
ensure adequate staffing, such as the use of contractors or temporary
staff, it could pursue those actions and be responsive to this
recommendation. Second, while the department was silent on whether it
would review the FWS*s

authority to regulate surface access to refuges for owners of outstanding
mineral rights, the department did raise concerns about GAO*s
recommendation that it seek additional authority from Congress to regulate
reserved mineral rights. According to the department, it would be
unconstitutional for it (as an executive branch department) to make such a
request to Congress, because doing so would infringe upon the President*s
authority to recommend legislation to Congress under the U. S.
Constitution*s Recommendations Clause. We fully anticipated in making this
draft recommendation that the department would coordinate

its legislative proposals with the President. In order to make this
explicit, we clarified the recommendation to recognize that the department
should coordinate its legislative request to Congress through appropriate
Administration officials, including those within the Executive Office of
the President.

Further, as a legal matter, while the Recommendations Clause explicitly
provides for the President to make recommendations to Congress, it does
not deny that same freedom to others. The courts have ruled that

*. . . anyone can propose legislation.* 36 The department also disagreed
with our characterization of lost condor habitat at Hooper Mountain NWR in
California. The department asked that we cite the source for this
characterization and include additional clarification and explanation of
the effect of oil and gas activities on the

condor reintroduction program at this refuge. FWS itself, in 1980, made
the determination that 70 percent of critical condor habitat was lost due
to oil and gas development at Hopper Mountain NWR. However, this
calculation included both refuge and off- refuge lands. Considering only
refuge lands, lost habitat totaled 63 percent and the report has been
revised accordingly.

In an attachment to the letter, the Department of the Interior raised
three additional concerns with our report. These involve our
characterizations of FWS*s land acquisition practices, our inclusion of
oil and gas pipelines in the scope of the report, and the significance of
problems associated with oil and gas activities. First, FWS concurred that
its acquisition policy and guidance could be improved and that regional
implementation has at times been inadequate. Nevertheless, FWS took
exception to our citing problems we found at Patoka River NWR and with
that region*s adherence to established policy in conducting its site
assessment. However, our review clearly indicated that the FWS failed to
conduct additional contamination investigation of lands that FWS officials
knew had supported oil and gas extraction and storage, as required by
their policy. As a result, the FWS acquired lands that are contaminated
and has incurred expenses to remediate that contamination.

36 See Association of Am. Physicians & Surgeons, Inc. v. Clinton, 997 F.
2d 898, 908 (D. C. Cir. 1993)(* The President has the undisputed authority
to recommend legislation but he need not exercise that authority with
respect to any particular subject or, for

that matter, any subject . . .. [A] nyone in the country can propose
legislation.*) (emphasis added).

Second, the department*s Office of the Solicitor raised a concern that
including oil and gas pipelines as an oil and gas activity overstates the
prevalence of oil and gas activities. We disagree; pipeline leaks have
contributed to refuge contamination and affected refuge operations in
other ways. We believe that inclusion of oil and gas pipelines on refuges
is an important factor in assessing the overall scale of oil and gas
activities on refuges. Nevertheless, we have added additional information
to the

report that allows readers to differentiate among the types of activities
on refuges, including pipelines.

Third, the department*s Office of Policy Analysis expressed the view that
our reporting of refuge- based oil and gas activities not previously known
to FWS overstated the problem because we did not link these activities to
*significant detrimental* effects. The department also suggested that any
problems associated with oil and gas activities on refuges should be
considered relative to other problems faced by these refuges. However, our

report already states that FWS has not conducted a cumulative assessment
of the effects of oil and gas activities on individual refuges or the
refuge system as a whole. Identifying the presence of these activities
should be the first step toward any such assessment. Comparing these
impacts relative to other threats to refuges is outside the scope of this
report.

Finally, the department included a number of technical comments from the
FWS and various department offices that have been incorporated within the
report as appropriate. The Department of the Interior*s letter and our
comments on the letter appear in appendix V.

We conducted our work from June 2002 through March 2003 in accordance with
generally accepted government auditing standards. Appendix IV contains
details of our scope and methodology.

As agreed with your offices, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from
the report date. At that time, we will send copies of this report to the
Secretary of the Interior and the Director of the U. S. Fish and Wildlife
Service. In addition, the report will be available at no charge on the GAO
Web site at http:// www. gao. gov. If you have any questions about this
report, please call me at (202) 512- 3841 or William Swick at (206) 287-
4851. Key contributors to this report are listed in appendix VI.

Barry T. Hill Director, Natural Resources and Environment

Appendi Appendi xes x I

Refuges with Oil and Gas Activities Exploration Name FWS region State
Active wells Inactive wells activities Pipelines

Alligator River National Wildlife Refuge (NWR) 4 N. C. 0 9 x Anahuac NWR 2
Tex. 50 16 x Aransas NWR 2 Tex. 14 95 x x Arapaho NWR 6 Colo. 0 1 Arctic
NWR 7 Alaska x Arrowwood NWR 6 N. D. 0 1 Atchafalaya NWR 4 La. 2 35 x x
Attwater Prairie Chicken NWR 2 Tex. 0 11 x x Audubon Wetland Management
District (WMD) 6 N. D. x

Bald Knob NWR 4 Ark. 0 1 x Bayou Cocodrie NWR 4 La. 0 36 x Bayou Sauvage
NWR 4 La. 0 4 x Bear Lake NWR 1 Idaho 0 1 Benton Lake NWR 6 Mont. x Benton
Lake WMD 6 Mont. x Big Boggy NWR 2 Tex. 0 1 x x Big Branch Marsh NWR 4 La.
0 4 x Big Oaks NWR 3 Ind. 0 2 Bitter Creek NWR 1 Calif. 0 11 x Bitter Lake
NWR 2 N. M. 0 28 x Black Bayou Lake NWR 4 La. 20 6 x Bogue Chitto NWR 4
La. x Bosque del Apache NWR 2 N. M. x Bowdoin Lake NWR 6 Mont. 0 2 Bowdoin
WMD 6 Mont. x x Brazoria NWR 2 Tex. 4 25 x Breton NWR 4 La. x x Buenos
Aires NWR 2 Ariz. 0 1 Buffalo Lake NWR 2 Tex. x Butte Sink Wildlife 0 1
Management Area 1 Calif. x

Cache River NWR 4 Ark. 0 6 x Cameron Prairie NWR 4 La. 0 10 x x

(Continued From Previous Page)

Exploration Name FWS region State Active wells Inactive wells activities
Pipelines

Canaan Valley NWR 5 W. V. 2 0 x x Carolina Sandhills NWR 4 S. C. x
Catahoula NWR 4 La. 8 49 x Choctaw NWR 4 Ala. 3 6 x Cibola NWR 2 Ariz. x
Colusa NWR 1 Calif. 0 2 Crab Orchard NWR 3 Ill. 0 20 x Crosby WMD 6 N. D.
9 3 x x Cypress Creek NWR 3 Ill. 0 4 Dahomey NWR 4 Miss. x D*Arbonne NWR 4
La. 51 88 x Deep Fork NWR 2 Okla. 0 362 x Delevan NWR 1 Calif. 0 7 Delta
NWR 4 La. 178 160 x x Des Lacs NWR 6 N. D. x Detroit Lakes WMD 3 Minn. x
Devils Lake WMD 6 N. D. 0 1 Egmont Key NWR 4 Fla. x Emiquon NWR 3 Ill. 0
12 Erie NWR 5 Penn. 2 0 x Fallon NWR 1 Nev. 0 1 Felsenthal NWR 4 Ark. 0 60
x Flint Hills NWR 6 Kans. 3 10 x Florida Panther NWR 4 Fla. 0 1 Grand Bay
NWR 4 Miss. x Grand Cote NWR 4 La. 0 1 x Great Dismal Swamp NWR 5 Va. x
Guadalupe- Nipomo Dunes NWR 1 Calif. 0 2

Guam NWR 1 Guam x Hagerman NWR 2 Tex. 98 93 x x Hailstone NWR 6 Mont. 0 1
Halfbreed Lake NWR 6 Mont. 1 4 x Handy Brake NWR 4 La. x Hatchie NWR 4
Tenn. x Havasu NWR 2 Ariz. x Hewitt Lake NWR 6 Mont. 3 2 x

(Continued From Previous Page)

Exploration Name FWS region State Active wells Inactive wells activities
Pipelines

Hillside NWR 4 Miss. 0 3 Hopper Mountain NWR 1 Calif. 15 2 x Humboldt Bay
NWR 1 Calif. x J. Clark Salyer NWR 6 N. D. 0 26 x J. Clark Salyer WMD 6 N.
D. 1 2 John Heinz NWR 5 Penn. x Kenai NWR 7 Alaska 121 43 x x Kern NWR 1
Calif. 0 2 x Kirtlands Warbler NWR 3 Mich. 2 15 x x Kirwin NWR 6 Kan. 0 1
Kofa NWR 2 Ariz. x Lacassine NWR 4 La. 2 67 x x Laguna Atascosa NWR 2 Tex.
5 7 x Lake Mason NWR 6 Mont. 0 5 Lake Ophelia NWR 4 La. x x Lake Thibadeau
NWR 6 Mont. x Leopold WMD 3 Wisc. x Litchfield WMD 3 Minn. x Little River
NWR 2 Okla. 0 4 Lostwood WMD 6 N. D. 0 1 x Louisiana WMD 4 La. x Lower Rio
Grande Valley NWR 2 Tex. 65 152 x x Mandalay NWR 4 La. 5 34 x Mark Twain
NWR 3 Ill. x Matagorda Island NWR 2 Tex. x Mathews Brake NWR 4 Miss. 0 1
Mattamuskeet NWR 4 N. C. 0 1 McFaddin NWR 2 Tex. 76 29 x Medicine Lake NWR
6 Mont. 2 2 x x Medicine Lake WMD 6 Mont. x x Merced NWR 1 Calif. 0 1
Meredosia NWR 3 Ill. 0 1 Merritt Island NWR 4 Fla. x Minnesota Valley NWR
3 Minn. x Mississippi Sandhill Crane NWR 4 Miss. 0 1 x

Mississippi WMD 4 Miss. x

(Continued From Previous Page)

Exploration Name FWS region State Active wells Inactive wells activities
Pipelines

Montezuma NWR 5 N. Y. 0 1 x Moody NWR 2 Tex. x Mortenson Lake NWR 6 Wyo. 0
1 Nisqually NWR 1 Wash. x Ohio River Islands NWR 5 W. V. 11 10 x Optima
NWR 2 Okla. 0 15 x Ouray NWR 6 Utah 2 5 x Overflow NWR 4 Ark. 0 2 x
Panther Swamp NWR 4 Miss. 0 13 x Patoka River NWR 3 Ind. 0 54 x Pea Island
NWR 4 N. C. x Pixley NWR 1 Calif. 0 1 Pond Creek NWR 4 Ark. x Port Louisa
NWR 3 Iowa x Quivira NWR 6 Kan. 51 98 x x Rocky Mountain Arsenal NWR 6
Colo. 0 1 x Sabine NWR 4 La. 8 51 x x Sacramento River NWR 1 Calif. 1 14 x
x Saddle Mountain NWR 1 Wash. 0 26 Salt Plains NWR 2 Okla. 0 9 x Salton
Sea NWR 1 Calif. x San Bernard NWR 2 Tex. 3 16 x x San Luis NWR 1 Calif. 0
4 San Pablo Bay NWR 1 Calif. 0 1 Santa Ana NWR 2 Tex. 0 2 Seal Beach NWR 1
Calif. 15 15 x Sequoyah NWR 2 Okla. 0 2 x Sherburne NWR 3 Minn. x
Shiawassee NWR 3 Mich. 0 4 x Squaw Creek NWR 3 Mo. 0 1 St. Catherine Creek
NWR 4 Miss. 64 401 x x Stillwater NWR 1 Nev. 0 5 Stone Lakes NWR 1 Calif.
0 2 x Sutter NWR 1 Calif. 1 3 x x Ten Thousand Islands NWR 4 Fla. 0 1
Tensas River NWR 4 La. x x

(Continued From Previous Page)

Exploration Name FWS region State Active wells Inactive wells activities
Pipelines

Tetlin NWR 7 Alaska x Texas Point NWR 2 Tex. 0 3 x x Tishomingo NWR 2
Okla. 0 6 x Trinity River NWR 2 Tex. 0 3 x x Upper Mississippi River NWR 3
Wisc. 0 1 x Upper Ouachita NWR 4 La. 908 212 x x Upper Souris NWR 6 N. D.
0 10 x x Washita NWR 2 Okla. 0 10 x Wheeler NWR 4 Ala. x x White River NWR
4 Ark. x Whittlesey Creek NWR 3 Wisc. x Willapa Bay NWR 1 Wash. 0 1 Windom
WMD 3 Minn. x Yukon Delta NWR 7 Alaska x Yukon Flats NWR 7 Alaska x

Tot al 1806 2600 44 107

Sources: Premier Data Services (well data), FWS (exploration and pipeline
data), and DOT (pipeline data).

Summary of Oil and Gas Activities at

Appendi x II

Refuges Visited Nature and extent of oil and Refuge (State/ FWS region)
gas activity Environmental effects Management and oversight

Hopper Mountain NWR (Calif./ 1)  17 wells (15 active) Feeding habitat for
endangered County issues conditional use

 3 production pads California condors on refuge

permits and works closely with  Unknown number of flow lines

reduced by 63 percent. Minor the Fish and Wildlife Service soil
contamination from oil spills.

(FWS). Deep Fork NWR (Okla./ 2)  362 wells

Old and unused infrastructure Although the property deed

 Unknown number of flow lines and numerous unplugged wells. stipulates
that a special use Brine spills have killed

permit and bond are required, vegetation.

the refuge does not require permits or bonds.

Hagerman NWR (Tex./ 2)  191 wells (98 active) Old and unused
infrastructure

All oil and gas activities are  5 production pads

and numerous unplugged wells. permitted through the Army  2 transmission
lines and Corps of Engineers with several flow lines

FWS input. Anahuac NWR (Tex./ 2)  66 wells (50 active)

Oil spills have killed wildlife and Refuge sometimes issues  3 production
pads

brine spills have killed voluntary permits. Do not require  3
transmission lines, numerous

vegetation. Abandoned operators to post bonds, but in flow lines

infrastructure, including flow one case, has collected fees for lines and
storage tanks remain damage that exceeded the at site.

conditions of the special use permit. McFaddin NWR (Tex./ 2)  105 wells
(76 active)

Soil and groundwater Refuge issues voluntary special

 3 production pads contamination from oil spills.

use permits with conditions to  5 major transmission lines

Abandoned infrastructure protect refuge resources.

remains at site. Patoka River NWR (Ind./ 3)  54 wells Soil and water
contamination Refuge does not require  3 transmission lines, numerous

from oil spills. Abandoned voluntary use permits or bonds.

flow lines infrastructure remains at site. Delta NWR (La./ 4)  338 wells
(178 active)

Sediment contaminated by oil Refuge issues special use and

 2 fields, each with production spills. Saltwater intrusion due to right-
of- way permits with facilities subsidence. Abandoned

conditions imposed by FWS and  6 transmission lines and large
infrastructure remains at the site.

collects mitigation fees. One staff storage facility

dedicated to oversight activities. Atchafalya NWR (La./ 4)  37 wells (2
active)

Brine spills have killed Although the property deed

 3 production pads vegetation. Old and unused

requires a special use permit  5 transmission lines and infrastructure,
including storage

and an approved plan of numerous flow lines tanks, remains at the site.

operations, the refuge has not requested a plan of operations. In the
past, the refuge has

issued special use permits, but the current operator refuses to agree to
their conditions.

(Continued From Previous Page)

Nature and extent of oil and Refuge (State/ FWS region) gas activity
Environmental effects Management and oversight

Sabine NWR (La./ 4)  59 wells (8 active) Pipeline spill caused wildlife
The refuge collects fees from

 4 production pads with storage fatalities and contamination.

operators to fund full- time and separation facilities

Habitat loss from saltwater oversight position. Voluntary

 9 transmission lines intrusion and construction of permits issued to
manage (100 miles) and 40 active flow roads, canals, and other

operator activities. lines (50 miles)

facilities. Habitat fragmentation has contributed to increased number of
predators.

D*Arbonne NWR (La./ 4)  139 wells (51 active) Soil and vegetation damage
The refuge does not issue

 1 storage and injection facility from brine spills and old disposal

permits for any of the gas  5 transit pipelines (75 miles)

pits. Mercury contamination. activities and relies on operator

and numerous flow lines Numerous abandoned wells cooperation.

(199 miles) remain at the site.

Upper Ouachita NWR (La./ 4)  1, 120 wells (908 active) Soil and
vegetation damage The refuge does not issue

 No production pads from brine spills and old disposal

permits for any of the gas  13 transmission lines

pits. Mercury contamination. activities and relies on operator

(31 miles) and numerous flow Numerous abandoned wells cooperation.

lines (313 miles) remain at the site.

John Heinz NWR (Penn./ 5)  10 transmission pipelines Large pipeline spill
resulting in The refuge issues permits for wildlife deaths and soil and

maintenance activities. sediment contamination.

Medicine Lake NWR/ WMD  4 wells (2 active)

Minor soil contamination from oil The refuge staff have developed

(Mont./ 6)  2 production pads spills. regional management policy and

 Numerous flow lines attach conditions to federal

permits. The refuge assesses a fee for seismic activities.

J. Clark Salyer NWR and WMD  29 wells (1 active)

Unknown soil contamination The refuge staff have developed

(N. D./ 6)  2 production pads from oil spills. regional management policy
and

 Numerous flow lines attach conditions to federal

permits. The refuge assesses a fee for seismic activities.

Upper Souris NWR (N. D./ 6)  10 wells Minor soil contamination from oil

The refuge staff have developed  1 production pad

spills. regional management policy and  Numerous flow lines

attach conditions to federal permits. The refuge assesses a fee for
seismic activities.

Kenai NWR (Alaska/ 7)  164 wells (121 active) Soil and water
contamination The refuge issues right of way  60 production pads

from numerous oil spills. and special use permits and  Numerous flow
lines

Mercury and polychlorinated requires bonds. biphenyl contamination. Lost
habitat from infrastructure development. Source: GAO.

Analysis of Legal Authority of the Fish and Wildlife Service to Impose
Prospective

Appendi x III

Permit Requirements The Fish and Wildlife Service*s current authority to
regulate, prospectively, the oil and gas activities of private owners of
*reserved* and *outstanding* mineral rights 1 on national wildlife refuges
(and those who obtain mineral rights from these private owners) is limited
in a number of ways. 2 FWS*s authority over owners of reserved mineral
rights is limited by statute, to those instances in which the deed
transferring the land from the mineral rights owner to the federal
government includes language either requiring permits or requiring
compliance with regulations the Department of the

Interior may adopt in the future, including permitting regulations. FWS*s
authority over owners of outstanding mineral rights is limited in the
sense that FWS*s regulations do not currently require permits. Two of
FWS*s sister land management agencies* the National Park Service and the
United States Forest Service* have regulations that require outstanding
mineral rights owners to obtain permits before engaging in oil and gas
activities on federal lands they manage. 3 FWS, on the other hand, has no
such regulations. As discussed below, while it appears that the Department
of the Interior has not taken a formal position on whether FWS has legal
authority to promulgate such regulations, we conclude it has such
authority, under its statutes and related case law.

1 Privately owned mineral rights within wildlife refuges may be *reserved*
or *outstanding.* Reserved mineral rights are those that were reserved by
the owner when ownership of the surface land was transferred to the
federal government. Outstanding mineral rights are those that were
reserved before the surface was transferred to the federal government, and
thus are owned by someone other than the party making the transfer to the
government.

2 In addition to FWS*s potential authority to establish controls on oil
and gas activities on federal lands in advance of commencement of those
activities, FWS also may have rights, under state law, to address the
results of those activities after they occur. In particular, FWS generally
has a typical landowner*s right to seek monetary damages and injunctive
relief for contamination and other injury from activities beyond those
reasonably necessary to explore and extract underlying minerals. See, e.
g., United Geophysical Corp. v. Culver, 394 F. 2d 393 (5th Cir. 1964);
Flying Diamond Corp. v. Rust, 551 P. 2d 509 (Utah 1976); Guffey v. Stroud,
16 S. W. 2d 527 (Tex. Comm. App. 1929).

3 See 36 C. F. R. S: 9.32 (Park Service); 36 C. F. R. S: 51. 50( a)
(Forest Service). The Forest Service regulations are *special use* permit
regulations that have been applied to outstanding mineral rights. See
Duncan Energy Co. v. United States Forest Service,

50 F. 3d 584 (8th Cir. 1995).

Reserved Rights The Department of the Interior believes, and we agree,
that FWS has legal authority to require private owners of reserved mineral
rights located

within *acquired federal refuges* to obtain *entry permits* only in
limited circumstances, in order to obtain access to the refuge for
minerals exploration and removal. The department*s position was originally
set out in a 1986 legal opinion issued by the department*s Office of the
Solicitor (1986 Opinion), 4 and the office recently advised us that the
1986 Opinion continues to reflect the department*s position. The 1986
Opinion concluded

that FWS generally lacks statutory or other authority to require entry
permits for reserved rights owners and can do so only when the deed
transferring the surface property to the federal government has included
either specific permitting requirements or language subjecting the
exercise of the reserved mineral rights to regulations promulgated by the

department, including permitting regulations. The department*s position is
based on language in the Migratory Bird Conservation Act that was added by
amendment in 1935, making reserved rights subject to requirements
specifically set out in the deed or, if the deed so states, to regulations
prescribed *from time to time* by the Secretary of the Interior. 5 If the
deed does not contain such provisions, the exercise of the reserved rights
cannot be subjected to permitting requirements.

4 See Memorandum from the Associate Solicitor, Conservation and Wildlife,
to the Assistant Secretary, Fish and Wildlife and Parks, *Fish and
Wildlife Service authority to regulate use of reserved mineral interests
on National Wildlife Refuge lands,* FWS. CW. 0661 (Dec. 22, 1986).

5 See Act of June 15, 1935, ch. 261, S: 301, 49 Stat. 378, 381- 82,
codified at 16 U. S. C. S: 715e (* it shall be expressed in the deed or
lease that the use, occupation, and operation of [reserved interests
retained by a grantor or lessor from whom the government acquires land or
wildlife refuges] shall be subordinate to and subject to such rules and
regulations as are set out in such deed or lease or, if deemed necessary
by the Secretary of the Interior, to such rules and regulations as may be
prescribed by him from time to time*).

As the 1986 Opinion explains, prior to the 1935 amendment, the Migratory
Bird Conservation Act had made all reserved rights subject to regulations
that were prescribed by the department *from time to time.* 6 The House
Report associated with the 1935 amendment explains that *some owners of
very desirable tracts are unwilling to convey [property] on such
indefinite and uncertain terms as regulations made *from time to time. *
** 7 The purpose of the change was to provide those who reserved rights in
lands they transferred to the United States with some contractual
certainty, and to protect them from being required to abide by permitting
regulations that were not in effect when the deed was issued. 8

Outstanding Rights The foregoing limits in the Migratory Bird Conservation
Act on how the department may regulate reserved mineral rights do not
apply to the department*s regulation of outstanding mineral rights. A
number of other legal authorities in related areas indicate, in our view,
that FWS has statutory authority to regulate the exercise of outstanding
mineral rights on federal lands.

In Dunn McCampbell Royalty Interest, Inc. v. National Park Service,

964 F. Supp. 1125 (S. D. Tex. 1995), aff*d on other grounds, 112 F. 3d
1283 (5th Cir. 1997), the court ruled that the National Park Service has
authority to reasonably regulate private owners* access to their oil and
gas interests located beneath park system lands, by requiring approval of
a plan of operations before commencement of exploration or production
activities. The court relied on language in the National Park Service
Organic Act

directing the Park Service to *protect and regulate* national parks so as
to *conserve the scenery and the natural and historic objects and the
wildlife therein and to provide for the enjoyment of the same in such
manner and by such means as will leave them unimpaired for the enjoyment
of future

generations,* as well as language directing the Department of the Interior
6 See Act of Feb. 18, 1929, ch. 257, S: 6, 45 Stat. 1222, 1223. 7 H. R.
Rep. No. 74- 886, at 2 (1935). 8 United States v. Little Lake Land Co.,
412 U. S. 580, 597- 99 (1973). See also Caire v. Fulton,

No. 84- 3184 (W. D. La. Feb. 10, 1986) (relying on the 1935 amendment and
legislative history in holding that Interior did not have authority to
impose permitting requirements on private owners of mineral interests when
those interests were reserved from federal control as part of the
acquisition of the land through condemnation).

to issue regulations *as . . . deem[ ed] necessary or proper for the use
of the parks . . . under the jurisdiction of the National Park Service.* 9

Similarly, in Duncan Energy Co. v. United States Forest Service,

50 F. 3 d 584 (8th Cir. 1995), the Eighth Circuit court ruled that
although the Forest Service may not completely deny access to private
owners of mineral interests located within National Forest System lands,
the Forest Service may impose reasonable conditions on the use of the
federally owned surface and thus may require mineral owners to obtain
approval before exploring for or developing minerals. The court relied on
language in the Bankhead- Jones Farm Tenant Act that directs the
Department of Agriculture (the Forest Service*s parent agency) *to develop
a program of

land conservation and land utilization* and to issue regulations necessary
to *regulate the use and occupancy of property acquired [for the National
Forest System] in order to conserve and utilize it.* 10 The court also
relied on the Forest Service*s *special use* regulations providing that *[
a] ll uses of National Forest System lands . . . are designated *special
uses* [and must be approved by an] authorized officer. 11

The statutes addressed in Dunn McCampbell and Duncan bear a number of
similarities to the National Wildlife Refuge System Administration Act
(Refuge System Administration Act), which governs the National Wildlife
Refuge System. Notably, language added to the Refuge System Administration
Act by the National Wildlife Refuge System Improvement Act of 1997 is very
similar to the language of the National Park Service Organic Act relied
upon by the Dunn McCampbell court. As amended in 1997, the Refuge System
Administration Act now provides that the mission of the NWRS is to
administer lands for the *conservation, management, and where appropriate,
restoration of [fish and wildlife] for the benefit of present and future
generations of Americans* and directs the Secretary of the Interior to
*ensure that the biological integrity, diversity, and environmental health
of the System are maintained for the benefit of

9 16 U. S. C. S:S: 1, 3; see 964 F. Supp. at 1133. The court in Dunn
McCampbell left open the possibility that the Park Service*s regulation of
the mineral interests might constitute a *taking* for which the owner
should have been compensated under the Fifth Amendment to the
Constitution, and the court transferred the dispute over the owner*s
taking claims to the appropriate judicial forum in Dunn McCampbell.

10 50 F. 3d at 589, citing 7 U. S. C. S:S: 1010, 1011( f). 11 50 F. 3d at
589, citing 36 C. F. R. S: 251.50( a).

present and future generations of Americans.* 12 The Refuge System
Administration Act also explicitly authorizes the Secretary of the
Interior to issue regulations to carry out the act. 13 Similarly, as in
the statute relied on by the Duncan court regarding the Forest Service*s
permitting authority, the 1997 amendments to the Refuge System
Administration Act added language directing the Secretary of the Interior
to *provide for the conservation of fish, wildlife, and plants, and their
habitats within the [Refuge] System.* 14

Thus, as with the statutes at issue in Dunn McCampbell and Duncan, the
1997 amendments to the Refuge System Administration Act authorize the
Department of the Interior to manage the National Wildlife Refuge System
with the same type of policy direction and management standards with which
the Park System and the Forest System are managed, including issuance of
permitting regulations. 15 The legislative history of the Refuge System
Administration Act confirms Congress*s concern for ecosystem and

fish and wildlife conservation and for ensuring that uses of the refuges
are compatible with their purposes. 16 Although neither the Administration
Act*s 1997 amendments nor their legislative history specifically refers to
regulation of the activities of private oil and gas operators, the
overriding purpose of the amendments* providing better management to
protect the refuges* together with the reasoning of the courts addressing
similar statutes in Dunn McCampbell and Duncan indicate that FWS has
current authority to require private owners of outstanding mineral rights
to obtain permits before conducting oil and gas operations.

12 16 U. S. C. S:S: 668dd( a)( 2), (a)( 4)( B), added by Pub. L. No. 105-
57, S:S: 4, 5( a), 111 Stat. 1252, 1254 (1997). 13 16 U. S. C. S: 668dd(
b)( 5).

14 16 U. S. C. S: 668dd( a)( 4)( A), added by Pub. L. No. 105- 57, S: 5(
a), 111 Stat. 1252, 1254 (1997). 15 See H. R. Rep. No. 105- 106, at 3
(1997). 16 Id. at 3- 4, 8, 9.

Appendi x IV

Scope and Methodology To identify the nature and extent of oil and gas
activities resident within the National Wildlife System, we relied on
several sources of information. We began with our 2001 report, which
identified 77 units with oil and gas activities based on the Fish and
Wildlife Service*s reported activities in the year 2000. We used the same
information source, FWS*s Refuge Management Information System (RMIS), and
reviewed exploration,

production, and pipeline activities for the years 1994- 2001. This
information is self- reported by refuges and, by FWS officials* admission,
incomplete. In addition, RMIS does not indicate the scale of activities

present on a refuge* for example, whether there is one well or hundreds of
wells. Therefore, we contracted Premier Data Services of Englewood,
Colorado, to provide more accurate and comprehensive data on the extent
and type of oil and gas activities occurring on refuges. Premier maintains
a national database of oil and gas wells collected from well permit data
compiled by each state*s oil and gas regulators. Premier recently
contributed to a study for the Departments of Interior, Agriculture, and
Energy under the Energy Policy and Conservation Act, providing a
comprehensive review of oil and gas resources and constraints on their
development in five basins in the interior West.

To determine the number of wells residing on FWS lands, Premier compared a
county- by- county listing of wells against a list of counties with refuge
system lands provided by FWS. For those refuges in counties with at least
one well, Premier either obtained digital maps of the refuges* current
land status from FWS or, in those cases where FWS had not digitized the

refuge boundaries, converted paper maps into digital format. Premier then
overlaid the geographic plots of wells nationwide with the digitized maps
to identify wells within refuge boundaries and to identify wells within 
1/2 mile outside the boundaries. (See fig. 11 for a sample plot of the
Butte Sink Wildlife Management Area.) In addition to obtaining information
on the location of oil and gas wells, we also obtained information on the

status, type, and amount of production of oil, gas, and water (brine) from
each well. We eliminated from the database permitted wells that were not
drilled, while wells with any production in the most recent reporting
period we categorized as active; all other wells we categorized as
inactive.

Figure 11: Butte Sink Wildlife Management Area (Calif.), Plot of Wells and
One- Half Mile Boundary

Butte Sink Refuge Active wells (1) Inactive wells (8)

Source: Premier Data Services (data) and GAO (analysis).

To identify pipelines transiting refuge lands, we relied on the National
Pipeline Mapping System (NPMS), which is maintained by the Office of
Pipeline Safety in the Department of Transportation and on FWS*s RMIS. We
overlaid the NPMS data on the 138 refuges for which we had digital refuge
boundary data because they also had wells inside or just outside their
boundaries. The FWS had not finished digitizing refuge maps for the other
refuges in the system. NPMS is based on data reported to the Office of
Pipeline Safety by pipeline owners. NPMS includes 99 percent of the
nation*s hazardous liquids (including oil and other petroleum products)
pipelines and 61 percent of natural gas pipelines in the United States.

NPMS does not include local gathering lines or pumping and storage
facilities that supplement these lines. To supplement this information, we
included refuges identified in RMIS as having transit pipelines. However,
there may be other refuges with pipelines, not recorded in NPMS, RMIS, or

for which we did not have digital maps. As part of FWS*s review of this
report, they identified additional refuges that may have oil and gas
activities or updated the status of activities at the refuges listed, but
did not offer corroborating documentation. While this information may have
been more current than the Premier or the Department of Transportation
databases, we chose to keep these data

intact and did not make additional adjustments. We attempted to identify
information regarding the overall environmental effects of oil and gas
activities on national wildlife refuges. However, because FWS had
conducted few studies and did not have information

regarding what the overall environmental effects of oil and gas activities
on refuges were and how those effects have changed over time, we selected
at least one refuge in each of FWS*s seven regions for physical
inspection. In making these selections, we attempted to choose a cross
section of refuges considering the type and scale of oil and gas
activities, range of environmental effects, and extent and type of
management and

oversight. In total, we visited 16 refuges containing 1,510 active and
2,695 total oil and gas wells, about 84 percent and 61 percent,
respectively, of all oil and gas wells we identified on refuges. For a
complete list of refuges we visited, see appendix II. At each refuge
visited, we asked the refuge

manager to describe the effects of oil and gas activities on the refuge,
obtained any available studies of these effects, and visited locations of
oil and gas activity selected by the refuge manager to represent a range
of effects. In addition, we contacted state regulators and industry and
environmental representatives and reviewed state laws, FWS contaminant
reports, and scientific and industry and environmental group reports. To
identify reclamation and remediation performed at the refuges visited, we
reviewed files at each refuge, discussed actions taken with refuge
officials, and reviewed information FWS provided from its cleanup and
maintenance databases. To identify steps FWS has taken to document the
environmental effect on refuge resources, we reviewed Contaminant
Assessment Program studies and additional information FWS provided from
its contaminants database. We also discussed these efforts with FWS
officials. To assess FWS*s management and oversight of oil and gas
activities in the National Wildlife Refuge System, we obtained information
on policy,

guidance, and practices from headquarters and the seven regional offices
and documented the actual practices in use at the 16 refuges we visited.
To determine the authority of the FWS to require private mineral owners to
obtain permits containing conditions to protect refuge resources from
damage and to oversee oil and gas activities, we obtained information from
the Department of the Interior*s Office of the Solicitor and reviewed the
laws and regulations pertaining to the FWS and other federal land
management agencies and recent court cases concerning private mineral
rights on federal lands. We also identified the type and amount of
training the FWS staff had received and reviewed mechanisms for funding
positions to manage and oversee oil and gas activities. In addition, we
interviewed

officials and obtained documentation on FWS*s coordination with, and the
involvement of, other federal and state agencies in the oversight of oil
and gas activities on refuges. Finally, we reviewed the acquisition
policies and

practices used by FWS for adding lands to the refuge system, especially
those that contain current or historical oil and gas activities.

Comments from the Department of the

Appendi x V

Interior and U. S. Fish and Wildlife Service Note: GAO comments
supplementing those in the report text appear at the end of this appendix.
See comment 1. See comment 2. See comment 3.

GAO*s Comments 1. We provided opportunity for the Department of the
Interior and the U. S. Fish and Wildlife Service officials to review a
draft of this report.

To protect against the possibility of early disclosure of the report, we
did not provide the department copies of the draft report to retain, but
did give agency officials ample opportunity to review and take notes on
the draft. We allowed department and FWS officials to review a draft of

the report in Washington, D. C.; Denver; Atlanta; and Portland without
restriction as to the time, number of personnel, or note- taking.

2. See our response in Agency Comments and Our Evaluation section on page
44. 3. See our response in Agency Comments and Our Evaluation section on
page 45.

Appendi x VI

GAO Contacts and Acknowledgments GAO Contacts Barry T. Hill (202) 512-
3841 William R. Swick (206) 287- 4851 Acknowledgments In addition to the
names above, Mary Acosta, Paul Aussendorf, Robert

Crystal, Sandra Davis, Jonathan Dent, Doreen Feldman, Chalane Lechuga,
John Mingus, Mehrzad Nadji, and Cynthia Norris made key contributions to
this report.

(360210)

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GAO United States General Accounting Office

About one- quarter (155 of 575) of all refuges have past or present oil
and gas activity, some dating to at least the 1920s. Activities range from
exploration to drilling and production to pipelines transiting refuge
lands. One hundred five refuges contain a total of 4,406 oil and gas
wells* 2,600 inactive wells and 1,806 active wells. The 1,806 wells,
located at 36 refuges and many around the Gulf Coast (see figure),
produced oil and gas valued at

$880 million during the last 12 month reporting period, roughly 1 percent
of domestic production. Thirty- five refuges contain only pipelines.

The Fish and Wildlife Service has not assessed the cumulative
environmental effects of oil and gas activities on refuges. Available
studies, anecdotal information, and GAO*s observations show that the
environmental effects of oil and gas activities vary from negligible, such
as from buried pipelines, to substantial, such as from large oil spills or
from large- scale infrastructure. These effects also vary from the
temporary to the longer term. Some of the most detrimental effects of oil
and gas activities have been reduced through environmental laws and
improved practices and technology. Moreover, oil and gas operators have
taken steps, in some cases voluntarily, to reverse damages resulting from
oil and gas activities.

Federal management and oversight of oil and gas activities varies widely
among refuges-- some refuges take extensive measures, while others
exercise little control or enforcement. GAO found that this variation
occurs because of differences in authority to oversee private mineral
rights and because refuge managers lack enough guidance, resources, and
training to properly manage and oversee oil and gas activities. Greater
attention to oil and gas activities by the Fish and Wildlife Service would
increase its understanding of associated environmental effects and
contribute to more consistent use of practices and technologies that
protect refuge resources.

National Wildlife Refuges with Oil and Gas Wells

The 95- million acre National Wildlife Refuge System contains federal
lands devoted to the conservation and management of fish, wildlife, and
plant resources.

While the federal government owns the surface lands in the system, in many
cases private parties own the subsurface mineral rights and have the legal
authority to explore for and extract oil and gas. GAO was asked to
determine the extent of oil and gas activity on refuges, identify the
environmental effects, and assess the Fish and Wildlife

Service*s management and oversight of oil and gas activities.

In a draft of this report, GAO made several recommendations to enhance the
Fish and Wildlife Service*s management of oil and gas activities,
including collecting better data; improving training, oversight, and land
acquisition

practices; and strengthening permitting authority. GAO also recommended
that the Service seek additional authority to regulate private mineral
rights.

In response to comments received from the Department of the Interior, GAO
has clarified its position as to the means that the Service could use to
improve

oversight. Also, in light of Interior*s comments indicating a perceived
inability to request additional authority, GAO is asking Congress to
consider expanding the Service*s

authority to regulate private mineral rights.

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 517. To view the full product,
including the scope and methodology, click on the link above. For more
information, contact William R. Swick at (206) 287- 4851 or swickw@ gao.
gov. Highlights of GAO- 03- 517, a report to

congressional requesters

August 2003

NATIONAL WILDLIFE REFUGES

Opportunities to Improve the Management and Oversight of Oil and Gas
Activities on Federal Lands

Page i GAO- 03- 517 Oil and Gas on Wildlife Refuges

Contents

Page ii GAO- 03- 517 Oil and Gas on Wildlife Refuges

Page 1 GAO- 03- 517 Oil and Gas on Wildlife Refuges United States General
Accounting Office Washington, D. C. 20548

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Appendix I

Appendix I Refuges with Oil and Gas Activities

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Appendix I Refuges with Oil and Gas Activities

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Appendix I Refuges with Oil and Gas Activities

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Appendix I Refuges with Oil and Gas Activities

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Appendix II

Appendix II Summary of Oil and Gas Activities at Refuges Visited

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Appendix III

Appendix III Analysis of Legal Authority of the Fish and Wildlife Service
to Impose Prospective Permit Requirements

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Appendix III Analysis of Legal Authority of the Fish and Wildlife Service
to Impose Prospective Permit Requirements

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Appendix III Analysis of Legal Authority of the Fish and Wildlife Service
to Impose Prospective Permit Requirements

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Appendix III Analysis of Legal Authority of the Fish and Wildlife Service
to Impose Prospective Permit Requirements

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Appendix IV

Appendix IV Scope and Methodology

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Appendix IV Scope and Methodology

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Appendix IV Scope and Methodology

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Appendix V

Appendix V Comments from the Department of the Interior and U. S. Fish and
Wildlife Service Page 65 GAO- 03- 517 Oil and Gas on Wildlife Refuges

Appendix V Comments from the Department of the Interior and U. S. Fish and
Wildlife Service

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Appendix VI

United States General Accounting Office Washington, D. C. 20548- 0001
Official Business Penalty for Private Use $300 Address Service Requested

Presorted Standard Postage & Fees Paid

GAO Permit No. GI00
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