U.S. Fish and Wildlife Service: Opportunities Remain to Improve  
Oversight and Management of Oil and Gas Activities on National	 
Wildlife Refuges (29-JUN-07, GAO-07-829R).			 
                                                                 
The mission of the Department of the Interior's (DOI) Fish and	 
Wildlife Service (FWS) includes administering a national network 
of refuges for the conservation, management, and, where 	 
appropriate, restoration of fish, wildlife, and plant resources  
and their habitats within the United States for the benefit of	 
present and future generations. The refuges are unique in that	 
they are the only federal lands managed primarily for the benefit
of wildlife. The refuge system's 95 million acres, which	 
represent more than 14 percent of all federal lands and are found
in every state, include land that has always been federally owned
and land that has been acquired from others. While the federal	 
government owns almost all of the surface lands in the system, in
many cases it does not own the subsurface mineral rights. Subject
to some restrictions, owners of subsurface mineral rights have	 
the legal authority to explore for mineral resources such as oil 
and gas and to extract resources that are found. In August 2003, 
we reported that oil and gas activities were occurring on many	 
wildlife refuges and that little was known about the effects of  
those activities on refuge resources. We also reported that FWS  
oversight of oil and gas activities needed improvement, in part  
because of uncertainties related to FWS's authority to require	 
oil and gas operators to obtain access permits before conducting 
exploration and production activities. In addition, we reported  
that FWS guidance regarding land acquisition was unclear and	 
potentially exposed the federal government to situations where it
could unknowingly acquire contaminated land. To address these	 
deficiencies, we made a number of recommendations that, if	 
implemented, we believed would improve FWS's ability to protect  
refuge resources. On May 3, 2007, we briefed House Committee on  
Natural Resources staff on the extent to which FWS had taken	 
corrective measures to address the problems that we previously	 
identified. We reported that FWS has taken steps to implement	 
some of our recommendations, but we believe that more action is  
needed. We consider all but one of the recommendations from our  
2003 report to be open. This document provides further details	 
about the findings and recommendations in our 2003 report and the
status of FWS actions to implement those recommendations.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-829R					        
    ACCNO:   A71770						        
  TITLE:     U.S. Fish and Wildlife Service: Opportunities Remain to  
Improve Oversight and Management of Oil and Gas Activities on	 
National Wildlife Refuges					 
     DATE:   06/29/2007 
  SUBJECT:   Employee training					 
	     Environmental policies				 
	     Environmental protection				 
	     Federal property					 
	     Gas resources					 
	     Land management					 
	     Mineral bearing lands				 
	     Mineral rights					 
	     Policy evaluation					 
	     Public lands					 
	     Wildlife conservation				 

******************************************************************
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GAO-07-829R

   

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United States Government Accountability Office
Washington, DC 20548

June 29, 2007

The Honorable Nick J. Rahall, II
Chairman
Committee on Natural Resources
House of Representatives

The Honorable Madeleine Z. Bordallo
Chairwoman
Subcommittee on Fisheries Wildlife and Oceans
Committee on Natural Resources
House of Representatives

The Honorable Ron Kind
House of Representatives

Subject: U.S. Fish and Wildlife Service: Opportunities Remain to Improve
Oversight and Management of Oil and Gas Activities on National Wildlife
Refuges

The mission of the Department of the Interior's Fish and Wildlife Service
(FWS) includes administering a national network of refuges for the
conservation, management, and, where appropriate, restoration of fish,
wildlife, and plant resources and their habitats within the United States
for the benefit of present and future generations. The refuges are unique
in that they are the only federal lands managed primarily for the benefit
of wildlife. The refuge system's 95 million acres, which represent more
than 14 percent of all federal lands and are found in every state, include
land that has always been federally owned and land that has been acquired
from others. While the federal government owns almost all of the surface
lands in the system, in many cases it does not own the subsurface mineral
rights. Subject to some restrictions, owners of subsurface mineral rights
have the legal authority to explore for mineral resources such as oil and
gas and to extract resources that are found.

In August 2003, we reported that oil and gas activities were occurring on
many wildlife refuges and that little was known about the effects of those
activities on refuge resources.^1 Specifically, we reported that 155 of
the 575 FWS-managed refuges had past or current oil and gas exploration,
production, or pipeline activities, including over 1,800 active and 2,600
inactive oil and gas wells. While available studies, anecdotal
information, and our observations indicated that environmental damage had
occurred, FWS had not assessed the cumulative environmental effects of oil
and gas activities on refuge resources. We also reported that FWS
oversight of oil and gas activities needed improvement, in part because of
uncertainties related to FWS's authority to require oil
and gas operators to obtain access permits before conducting exploration
and production activities. In addition, we reported that FWS guidance
regarding land acquisition was unclear and potentially exposed the federal
government to situations where it could unknowingly acquire contaminated
land. To address these deficiencies, we made a number of recommendations
that, if implemented, we believed would improve FWS's ability to protect
refuge resources.

^1GAO, National Wildlife Refuges: Opportunities to Improve the Management
and Oversight of Oil and Gas Activities on Federal Lands, GAO-03-517
(Washington, D.C.: August 28, 2003).

On May 3, 2007, we briefed House Committee on Natural Resources staff on
the extent to which FWS had taken corrective measures to address the
problems that we previously identified. We reported that FWS has taken
steps to implement some of our recommendations, but we believe that more
action is needed. For example, FWS has made progress in developing a
database to collect information on the nature and extent of oil and gas
activities and their effect on refuge resources. However, the database is
not yet in use and FWS has no estimate for when it will be in place
nationwide. In addition, FWS has developed an estimate of the staffing
levels needed to oversee oil and gas activities but has not yet sought
sufficient resources to fund the needed positions. And, while FWS reported
to us that it has worked with the Department of the Interior (DOI) to
determine the extent of the FWS's authority to require permits from oil
and gas operators, FWS has yet to make that determination public. In
summary, we consider all but one of the recommendations from our 2003
report to be open.

The enclosed briefing document provides further details about the findings
and recommendations in our 2003 report and the status of FWS actions to
implement those recommendations (see enc. I). We conducted our follow-up
review from April 2007 through May 2007 in accordance with generally
accepted government auditing standards.

We provided DOI with a draft of this report and the enclosed briefing
document for review and comment. In reply, DOI commented that, in general,
it agreed with the majority of our conclusions that pertain to FWS (see
enc. II). DOI also provided additional details regarding its actions to
implement recommendations from our 2003 report. We have incorporated these
clarifications in this report as necessary.

DOI stated that it partially concurred with our assessment of its progress
in implementing our recommendation regarding adequate training for staff
responsible for overseeing oil and gas activities. In particular, DOI
disagreed that, as we wrote in the draft briefing document, the training
should be required for appropriate personnel. Instead, DOI stated that
voluntary enrollment was sufficient. Our intent in suggesting that
training be required was to ensure that appropriate personnel attended. We
accept DOI's assurances that the training has been well received and
attended, and its claim that making the training mandatory at this time is
not necessary. We expect that DOI would change this policy if it finds in
the future that appropriate personnel are not seeking such training.
Accordingly, we will close this recommendation.

Additionally, DOI stated that it does not believe that our recommendation
from the 2003 report that the Secretary of the Interior and the Director
of FWS work with DOI's Office of the Solicitor to seek from Congress any
necessary additional authority over outstanding and reserved mineral
rights is necessary. DOI asserted that it is able, under its existing
authorities, to effectively manage and oversee oil and gas development
activities on national wildlife refuges and that it is able to do so
without infringing on the private property rights of mineral owners.

We appreciate DOI's belief that it can protect the public's surface
interests in national wildlife refuge lands with the authority it
currently has. However, we do not believe that DOI has adequate
information on which to base this claim. In particular, FWS has not
comprehensively assessed the extent of the damages occurring on refuge
lands due to oil and gas activities and it has yet to publicly clarify the
extent of its current authority over private mineral rights. We continue
to believe that such information is necessary for DOI to adequately inform
the Congress regarding the need for additional authority. Moreover, we
believe it is for Congress, not DOI, to weigh the needs of the refuge
lands and the interests of mineral owners and, ultimately, to determine
what oversight authority would be appropriate. Before Congress can do so,
DOI must inform the Congress as to what authority FWS might require to
adequately protect refuge resources.

                                   - - - - -

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, copies of this report will be sent to
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If you or your staffs have any questions, please contact me on (202)
512-3841 or at [4][email protected] . Contact points for our offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. Key contributors to this report were Kevin Bray, Ross
Campbell, John Delicath, and Trish McClure.

Robin M. Nazzaro
Director, Natural Resources and Environment

Enclosures

Enclosure I

Briefing for House Natural Resources Committee
U.S. FISH AND WILDLIFE SERVICE

Opportunities Remain to Improve Oversight and Management of Oil and Gas
Activities on National Wildlife Refuges

Enclosure II
                  Comments from the Department of the Interior

(360828)

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Background

Why GAO Did This Study

U.S. FISH AND WILDLIFE SERVICE

Opportunities Remain to Improve Oversight and Management of Oil and Gas
Activities on National Wildlife Refuges

Briefing for House NaturalResources Committee

                                                                     May 2007

The mission of the National Wildlife Refuge System is to administer a
national network of lands and waters for the conservation, management,
and, where appropriate, restoration of fish, wildlife, and plant resources
and their habitats within the United States for the benefit of present and
future generations. While the federal government owns almost all of the
surface lands in the system, in many cases it does not own the subsurface
mineral rights. Subject to some restrictions, owners of subsurface mineral
rights have the legal authority to explore for mineral resources such as
oil and gas and to extract resources that are found.

In August 2003, we reported the following:

           o Of the 575 FWS-managed refuges, 155 had past or current oil and
           gas exploration, production, or pipeline activities. As of
           December 2002, 4,406 active and inactive oil and gas wells were
           located on 105 refuges. The 1,806 active wells, located on 36
           refuges, produced about 1.1 percent and 0.4 percent of total
           domestic oil and gas production, respectively.

           o FWS had not assessed the cumulative environmental effects of oil
           and gas activities on refuge resources. Available evidence
           indicated that effects varied from negligible to substantial. Some
           effects had been reduced through improvements in industry
           practices.

           o Federal management and oversight of oil and gas activities
           varied widely among refuges. The variation occurred because of
           differences in authority to oversee private mineral rights and
           because refuge managers lacked guidance, resources, and training.

           o FWS's legal authority to require oil and gas operators to obtain
           access permits that contain conditions designed to protect refuge
           resources varies 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--FWS 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--FWS
           had not formally determined its position regarding its authority
           to require access permits. We reported that based on statutory
           language and court decisions, we believe FWS has the authority to
           require owners of outstanding mineral rights to obtain permits.

           o FWS's land acquisition guidance was unclear and oversight was
           inadequate, thereby exposing the federal government to unexpected
           cleanup costs for properties contaminated by hazardous substances,
           including oil and gas.

Accordingly, we made numerous recommendations to FWS to address these
deficiencies. We also suggested that the Congress consider providing FWS
with greater authority to oversee private mineral rights.

In 2003, GAO issued a report on the U.S. Fish and Wildlife Service's (FWS)
management and oversight of privately held oil and gas operations on
wildlife refuges. GAO made several recommendations to the Department of
the Interior and FWS to improve oversight. In response to the growing
demand for domestic energy sources, there has been increased pressure to
pursue oil and gas development on federal lands, and some are concerned
about the impact of oil and gas activities on federal resources if they
are not properly managed. In this context, you asked us to determine the
extent to which FWS had implemented the recommendations from our 2003
report and whether additional actions are necessary to properly oversee
and manage oil and gas operations.

To determine the extent to which FWS has implemented corrective actions to
address the problems we identified in 2003, we reviewed agency documents
and relevant laws, analyzed agency responses to written questions, and
interviewed agency officials. This work was conducted in accordance with
generally accepted government auditing standards in April and May 2007.

Scope and Methodology

                                    Briefing

Briefing for House Natural Resources Committee Page 2

GAO's Recommendations from 2003 and FWS's Actions to Implement Them

           1) We recommended that FWS collect and maintain better data on the
           nature and extent of oil and gas activities and the effects of
           those activities on refuge resources.

Agency Actions

           o FWS reported to us that it began working with the Environmental
           Protection Agency (EPA) in October 2006 to evaluate whether an oil
           and gas database used by EPA--the Site Assessment Reconnaissance
           Tracking System--could be adapted to suit FWS's needs.
           o According to FWS, the system includes geospatial location
           information, site photographs, spill information, and an action
           tracking log.
           o FWS told us that it is a priority to complete the evaluation
           process in 2007.
           o FWS's initial estimate is that it will cost approximately $2
           million to create an initial inventory of all wells and pipelines
           on the 155 refuges. Populating and maintaining the database with
           inspection results would add yearly costs.
           o FWS is considering a pilot test of the database in Region 4
           (which includes Louisiana).
           o FWS told us that once a funding source is identified, the agency
           plans to hire contractors to conduct the initial phases of data
           collection and database population. Once that is completed and the
           database is operational, FWS will use existing staff to conduct
           day-to-day oil and gas facility inspections.

GAO Analysis

           o We consider this recommendation to be open.
           o It appears to us that the EPA database contains many data
           elements that would be needed to manage oil and gas activity on
           refuges and is a reasonable starting point for the development of
           an FWS system.
           o It is not clear when the database will be implemented on a
           systemwide basis.

Collect and Maintain Better Data on Oil and Gas Activities

GAO, National Wildlife Refuges: Opportunities to Improve the Management
and Oversight of Oil and Gas Activities on Federal Lands, GAO-03-517.
Washington, D.C.: August 28, 2003.

Prior GAO Products

Briefing for House Natural Resources Committee Page 3

Recommendations and Actions (cont.)

           2) We recommended that FWS determine the level of staffing
           necessary to adequately oversee oil and gas operations and seek
           the necessary funding to meet those needs through appropriations,
           the authority to assess fees, or other means.

Agency Actions

           o A team of FWS managers, working with staff from the National
           Park Service's Geological Resources Division, determined that a
           total of 45 positions are needed to oversee oil and gas activities
           for the national wildlife refuge system, including 32 refuge oil
           and gas specialists, 7 regional coordinators, and a 6-person
           Mineral Resources Team.
           o FWS reported to us that under current budget circumstances,
           creating 45 positions is not feasible.
           o According to FWS, if additional funding becomes available, it
           will create three new positions to form a national Mineral
           Resources Team.
           o FWS has used damage fees to hire oil and gas staff specialists
           in Texas and Louisiana to conduct damage assessments, mitigate or
           restore damage, and monitor or study the recovery of damaged
           resources.
           o FWS told us that it is "strongly considering" initiating a
           process to expand its authority nationally to retain fees
           collected for damages.

GAO Analysis

           o We consider this recommendation to be open.
           o FWS used reasonable factors to determine necessary staffing
           levels, namely comparing staff levels with the National Park
           Service for comparable activities and assessing expected increases
           in oil and gas activities on refuge lands.
           o However, one could argue that reaching parity with National Park
           Service staffing levels would require more than 45 FWS positions .

                        o The Park Service has 13 dedicated positions to
                        manage over 700 wells in 12 parks. This equates to
                        just over 1 person per park, and about 54 wells per
                        person.
                        o FWS has 4,400 wells on 105 refuges. A staffing
                        level of 45 equates to less than 1 person for every 2
                        refuges and almost 100 wells per person.
                        o FWS does not appear to be taking aggressive steps
                        to adequately staff the agency's management and
                        oversight of oil and gas activities. In general, FWS
                        is planning for reductions in overall refuge staffing
                        levels and conceded to us that the loss of staff will
                        have a significant effect on all programs within the
                        refuge system, including oil and gas management.

Determine Necessary Staffing Levels

Recommendations and Actions (cont.)

Briefing for House Natural Resources Committee Page 4

           3) We recommended that FWS ensure that staff are adequately
           trained to oversee oil and gas activities.

Agency Actions

           o FWS developed a new training manual and conducted three training
           sessions in Texas, North Dakota, and Louisiana. A fourth session
           is tentatively scheduled for September 2007 in Alaska.
           o FWS plans to offer one course per year starting in FY 2008.
           o FWS personnel involved with natural resource management or
           enforcement concerning oil and gas facilities are "strongly
           encouraged," but not required, to attend the training.
           o FWS is working on a handbook entitled Management of Oil and Gas
           on National Wildlife Refuges to provide guidance to refuge
           managers. FWS told us that the handbook would be available to
           personnel in August or September 2007.
           o FWS believes that it has met the requirement of this
           recommendation.

GAO Analysis

           o We are closing this recommendation in recognition of FWS's
           actions. However, we have several comments on those actions.

                        o We believe that FWS should monitor the attendance
                        at its training classes to ensure that personnel with
                        oil and gas responsibilities are enrolling. If
                        voluntary enrollment does not prove adequate, then
                        mandatory enrollment might be needed.
                        o In our view, a key element of training concerns
                        FWS's authority to require permits for oil and gas
                        activities. However, FWS's training manual states
                        that the question of permitting authority for
                        outstanding mineral rights is "unresolved." We
                        believe that the handbook will be a more meaningful
                        document than the training manual if it directly
                        addresses the issue of authority over private mineral
                        rights. According to FWS, the handbook will address
                        legal authorities, including mineral ownership, and
                        implementing regulations. Although FWS testified in
                        October 2003 that the handbook would be ready in
                        December 2004, it is still not available.

Ensure that Agency Staff Are Trained

Briefing for House Natural Resources Committee Page 5

Recommendations and Actions (cont.)

           4) We recommended that the Secretary of the Interior and the
           Director of FWS should work with the Department of the Interior's
           (DOI) Office of the Solicitor to determine FWS's existing
           authority to issue permits and set reasonable conditions regarding
           outstanding mineral rights and to report the results of its
           determination to Congress.

Agency Actions

           o According to FWS, it is considering seeking--but has not
           sought--a formal opinion from DOI's Office of the Solicitor
           regarding FWS's authority to issue permits for outstanding mineral
           rights.
           o However, FWS told us that it has consulted with the Office of
           the Solicitor regarding its authorities to issue permits for
           nonfederal oil and gas operations on refuge lands.
           o According to FWS, the Office of the Solicitor has reviewed and
           concurred with the language in the draft FWS handbook on oil and
           gas management regarding FWS's authorities.
           o FWS will not reveal the solicitor's position on this question
           until it releases the handbook on oil and gas management.

GAO Analysis

           o We consider this recommendation to be open until the Secretary
           and FWS report the results of their determination to the Congress.

Enhance Permit Authorities for Oil and Gas Activities

Briefing for House Natural Resources Committee Page 6

Recommendations and Actions (cont.)

           5) We recommended that the Secretary of the Interior and the
           Director of FWS should work with DOI's Office of the Solicitor to
           seek from Congress, in coordination with appropriate
           administration officials--including those within the Executive
           Office of the President--any necessary additional authority over
           such [outstanding] 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.

Agency Actions

           o In October 2003, FWS testified that it did not see the need for
           additional legislative authority--similar to that available to the
           National Park Service and the Forest Service--regarding
           outstanding or reserved mineral rights. FWS has maintained this
           position in its response to our recent inquiries.
           o In response to our request for comments on a draft of this
           product, DOI stated its belief that it does not require additional
           authority to manage oil and gas activities where the mineral
           rights have been reserved. DOI also said that additional authority
           would require permitting for operators who own the subsurface
           mineral rights and that FWS is able to effectively manage oil and
           gas activities on refuges without infringing on the private
           property rights of mineral owners.

GAO Analysis

           o We consider this recommendation to be open.
           o We appreciate DOI's belief that it can protect the public's
           surface interests in national wildlife refuge lands with the
           authority it currently has. However, we do not believe that DOI
           has adequate information on which to base this claim. In
           particular, FWS has not comprehensively assessed the extent of the
           damages occurring on refuge lands due to oil and gas activities
           and it has yet to publicly clarify the extent of its current
           authority over private mineral rights. We continue to believe that
           such information is necessary for DOI to adequately inform the
           Congress regarding the need for additional authority. Moreover, we
           believe it is for Congress, not DOI, to weigh the needs of the
           refuge lands and the interests of mineral owners and, ultimately,
           to determine what oversight authority would be appropriate. Before
           Congress can do so, DOI must inform the Congress as to what
           authority FWS might require to adequately protect refuge
           resources.

Enhance Permit Authorities for Oil and Gas Activities

                                    Briefing

Briefing for House Natural Resources Committee Page 7

Recommendations and Actions (cont.)

GAO Contributors

           6) We recommended that FWS clarify guidance and better oversee its
           land acquisition process so that all hazardous substances and
           environmental problems, as well as future cleanup costs, are fully
           identified prior to acquisition and that unexpected costs are
           avoided.

Agency Actions

           o October 2003--FWS testified that it believed that existing
           policies were sound but that they could be further improved.
           o June 2004--FWS wrote to GAO stating that its policies were clear
           but that it would issue a Director's Order in FY 2004 reaffirming
           the importance of conducting thorough environmental site
           assessments for all sites, including properties with oil and gas
           activities.
           o FWS has now decided to revise the policy rather than issue a
           Director's Order. The agency stated the following reasons for its
           change in plans:

                        o Director's Orders are temporary.
                        o In November 2005, EPA issued regulations describing
                        environmental site assessment practices. Those
                        regulations became effective in November 2006 and FWS
                        needs to address them in its revised policy. 
                        o FWS has assembled a team to work on revising its
                        policy but cannot complete that task until

                                     o DOI and the U.S. Department of
                                     Agriculture issue guidance for
                                     addressing the new EPA regulations and
                                     o DOI revises its land acquisition
                                     policy after issuing the guidance.

                        o In its comments on a draft of this report, DOI said
                        that its guidance for addressing the new EPA
                        regulation is under review and is expected to be
                        completed by the end of 2007.

GAO Analysis

           o We consider this recommendation to be open.
           o We are not yet able to evaluate DOI or FWS changes to policy.
           o The revised FWS policy will not be available until at least
           2008.
           o We note that improved guidance must also be accompanied by
           adequate implementation and oversight.

If you have any questions concerning this briefing, please contact Robin
M. Nazzaro, Director, Natural Resources and Environment, at (202)
512-3841. Other key contributors to this briefing were Kevin Bray, Ross
Campbell, John Delicath, and Trish McClure.

Improve Land Acquistion Guidance to Avoid Problems

References

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