**Question 4 Environmental**

What are environmental challenges and regulatory barriers related to
expanding our natural gas supply and how can they be remedied?

-   The Wilderness Society

-   Natural Resources Defense Council

-   National Commission on Energy Policy

-   Independent Petroleum Association of America

-   Domestic Petroleum Council

**Senate Energy and Natural Resources Committee**

**Natural Gas Conference**

**Domestic Petroleum Council**

**Executive Summary**

**Priority natural gas supply initiatives** should include adoption of
legislation to:

-   Put in place a **process of opening offshore areas** currently under
    legislated and/or executive moratoria for exploration, development
    and production -- **with a portion of federal revenues (bonuses and
    royalties)** derived from resulting leasing and production to be
    **shared with states in proportion to the amount of energy-related
    activity off their respective coasts**.

-   Ensure **adequate funding for mineral resource management**,
    including environmental and land management planning -- including
    energy project permitting \-- within agencies of the Departments of
    Interior and Agriculture, including specifically the Bureau of Land
    Management, Minerals Management Service and the U.S. Forest Service.
    Such funding should carry **with** it **requirements for improved
    management information reporting** that will better enable
    evaluation of agency, bureau and office efficiency and effectiveness
    upon which the need for management and operational improvements may
    be based.

-   **Ensure** that **congressional intent** with respect to potential
    or proposed regulatory initiatives **in such areas as hydraulic
    fracturing, stormwater rules, SPCC requirements and permit
    consideration deadlines** is followed, or clarified if necessary, so
    as to improve the operation of applicable laws and avoid unintended
    energy supply consequences of agency actions.

-   In the area of tax policy, **allow expensing of geologic and
    geophysical costs** that are critical to the search for, **and**
    production of, new natural gas supplies. In addition, **consider new
    incentive approaches** (such as the "uplift" concept employed in
    other energy producing countries whereby a greater taxable income
    deduction is allowed) for spending on activity that is to be
    encouraged (such as for increased gas exploration or for production,
    especially related to nonconventional or deep gas formations, etc.)

Additional energy-related provisions of previously considered
legislation, especially those of the Conference Agreement on HR 6
(108^th^ Congress) should be approved.

**4. Environmental**

What are environmental challenges and regulatory barriers related to
expanding our natural gas supply and how can they be remedied?

In addition to the priority regulatory matters identified in Section 1
of this submission as needing attention to prevent adverse energy supply
impacts, consideration should be given to process improvements under the
National Environmental Policy Act and perhaps other statutes. Although
the DPC does not have specific recommendations at this time, we are
considering a number of options and will provide any conclusions to the
Senate Energy and Natural Resources and Environment and Public Works
Committees.

It is important to note that the natural gas and oil industry has made
very significant improvements in technology, management and operations
to better ensure the environmental compatibility of energy exploration,
development and production. Those improvements and their positive
environmental effects are summarized in the attached (Appendix B)
testimony (William Whitsitt. *Advances in Technology: Innovations in the
Domestic Energy and Mineral Sector.* Statement on behalf of the oil and
gas exploration and production industry. June 15, 2004.) and the
Department of Energy publication entitled *Environmental Benefits of
Advanced Oil and Gas Exploration and Production Technolog*y (1999.
[http://www.fe.doe.gov/oil_gas/environ_rpt/index.html]{.underline}).

**Senate Energy and Natural Resources Committee**

**Natural Gas Conference**

**Independent Petroleum Association of America**

**Executive Summary**

This document presents the comments of the Independent Petroleum
Association of America and its Cooperating Associations (specifically
including the Colorado Oil and Gas Association, the New Mexico Oil and
Gas Association, and the Ohio Oil and Gas Association), and the US Oil &
Gas Association.

Developing domestic natural gas supply will be an essential component to
meet future domestic natural gas demand. This challenge requires action
by Congress to encourage and allow supply to be developed. Broadly
stated, it will require access to the national resource base, the
capital to produce it, and a reasonable regulatory framework.

Access to the national resource base is significantly dependent upon
resources underlying federal lands, both onshore and offshore. Access to
onshore resources is constrained by a mosaic of restrictions that arise
in the federal leasing and permitting process. Some of these arise
because of the complexity of the process and the failure to adequately
fund the agencies that must administer it under increasingly more
complicated standards. Others, however, are a result of planned efforts
to use the complexity of the process to delay or derail development.
Access to key offshore resources is prohibited by moratoria.

Domestic natural gas cannot be developed without adequate capital. A
stable federal permitting process is a key step. Without a belief that
projects can be completed in a time certain, external capital will not
be attracted to this inherently high risk industry. Similarly, internal
capital -- income from production -- is dependent in part on federal tax
policy and royalty policy.

The regulatory framework must be well reasoned. Environmental management
of natural gas production remains an important component of supply
development. However, novel interpretations of federal law and
burdensome procedural requirements that do not benefit the environment
must be avoided. For example, interpretations of the regulation of
hydraulic fracturing under the Safe Drinking Water Act and of stormwater
management during the construction of exploration and production
facilities under the Clean Water Act are clearly at odds with the intent
of these laws.

Detailed responses to the questions presented in this document address
more comprehensively the challenges to natural gas supply.
Recommendations are included for actions that the 109^th^ Congress
should take to improve natural gas supply

**4. Environmental**

What are environmental challenges and regulatory barriers related to
expanding our natural gas supply and how can they be remedied?

Duel environmental challenges confront the expansion of domestic natural
gas supplies during the exploration and production (E&P) phase. The
first relates to specific regulatory requirements; the second involves
the federal decision-making process. This latter issue was addressed in
Question 1.

In general, natural gas E&P operations must address the costs of
environmental regulation compliance largely driven by federal laws.
However, several compliance issues pose significant threats to the
development of future supply.

First, potential federal regulation of hydraulic fracturing well
stimulation practices would affect new natural gas development,
particularly in nonconventional gas plays. Hydraulic fracturing is a
technique used to allow natural gas and oil to move more freely from the
rock pores where they are trapped to a producing well that can bring
them to the surface. The technology was developed in the late 1940s and
has been continuously improved and applied since that time.

Application of hydraulic fracturing to increase recovery is estimated to
account for 30 percent of U.S. recoverable oil and gas reserves and has
been responsible for the addition of more than 7 billion barrels of oil
and 600 trillion cubic feet of natural gas to meet the nation's energy
needs. The National Petroleum Council estimates that 60 to 80 percent of
all the wells drilled in the next decade to meet natural gas demand will
require fracturing.

Congress enacted the Safe Drinking Water Act (SDWA) in 1974. By then,
hydraulic fracturing had been used for 25 years with no environmental
problems. State permitting programs regulated it to assure its safe use.
Under the Act, states developed extensive Underground Injection Control
(UIC) programs to manage liquid wastes and the reinjection of produced
waters. These programs addressed liquids intended to be injected and --
to remain -- in underground geologic formations.

At no time during these debates was there any suggestion of including
hydraulic fracturing in the UIC waste management requirements. Yet, in
the mid-1990s litigation challenged Environmental Protection Agency's
(EPA) failure to regulate hydraulic fracturing of coalbed methane under
the SDWA. The 11^th^ Circuit Court ruled against EPA but never addressed
the environmental risks of hydraulic fracturing; it merely decided that
the plain language of the statute includes hydraulic fracturing as
underground injection. Years of further litigation has resulted in EPA
requiring Alabama to regulate hydraulic fracturing under its UIC
program.

States are concerned about the implications of the court's decision.
States recognize the large threat of the decision to state UIC
regulatory programs. Currently, the two state organizations with the
greatest involvement in oil and gas regulation -- the Interstate Oil and
Gas Compact Commission (IOGCC) and the Ground Water Protection Council
(GWPC) -- support the need for legislation to resolve the issue and
return the SDWA to its original intent.

Meanwhile, EPA initiated a study of coalbed methane hydraulic fracturing
environmental risks. EPA limited its study to coalbed methane partly
because the court cases were directed toward coalbed operations and
partly because, if hydraulic fracturing environmental risks existed,
they would occur in the shallow coalbed fields. In June 2004, EPA
released the results of its study. Its results were straightforward.
"Based on the information collected and reviewed, EPA has concluded that
the injection of hydraulic fracturing fluids into coalbed methane wells
poses little or no threat to USDWs and does not justify additional study
at this time."

*The H.R. 6 Conference Agreement provided a straightforward resolution
to the regulatory uncertainty facing hydraulic fracturing. The 109^th^
Congress should adopt it.*

A second regulatory issue posing significant implications for the E&P
industry is the regulation of stormwater discharges during construction
of its facilities. The 1987 Clean Water Act (CWA) included two
stormwater provisions that are now intertwined regarding their
application to oil and natural gas E&P facilities. The first provision
-- Section 402(l)(2) -- excludes uncontaminated stormwater from oil and
natural gas E&P facilities from the National Pollutant Discharge
Elimination System (NPDES) permitting process. The second subsection --
Section 402(p) -- directs the EPA to permit municipal and industrial
stormwater discharges.

In 1992, EPA promulgated stormwater construction permitting regulations
affecting facilities greater than five acres. In *Natural Resources
Defense Council v. Environmental Protection Agency* (*NRDC v EPA*), the
Court concluded that EPA had been arbitrary and capricious in proposing
a one acre limit and finalizing the regulations at five acres. Following
this litigation EPA developed stormwater construction permitting
regulations in two Phases. Phase I covered facilities greater than five
acres; Phase II covers facilities from one to five acres. During this
period EPA also issued a guidance document in one Region that the
stormwater construction regulations applied to the construction of E&P
facilities. This guidance is inconsistent with the intent of the law.
Congress was clear that E&P facilities should be regulated based on the
nature of its discharge, not the mere act of construction.

The consequences of EPA's action are significant. Most oil and natural
gas E&P sites fall within the one to five acre range. In 2000, a total
of 31,732 exploratory and production wells were drilled -- over 10,000
in Texas and Oklahoma. To meet future natural gas demand, the National
Petroleum Council estimates that the number of natural gas wells alone
needs to increase to approximately 48,000 wells annually. EPA's approach
is inappropriate for oil and gas facilities; it is oriented for
subdivision and shopping center projects. Oil and gas production
operations involve the leasing of surface rights, construction occurs
within a matter of weeks, and timing is critical because it involves
obtaining a drilling rig that must be carefully scheduled and is paid
for based on the number of days it is in use. Disruption in this process
can place entire projects and substantial capital at risk. Some
estimates conclude that the nation could lose between one and three
trillion cubic feet of natural gas per year over the next 20 years
because of EPA's regulations.

*H.R. 6 included a provision to clarify this regulatory process by
directing that regulation occur under subsection 402(l). It needs to be
enacted by the 109^th^ Congress.*

Third, the Coastal Zone Management Act (CZMA) and its consistency
provisions have a long history of impeding energy exploration,
development and production at essentially every step of the process. The
CZMA created a national program designed to encourage the States to
develop programs to manage and balance competing uses of and impacts to
coastal resources. The law was designed to enhance communications
between federal agencies responsible for permitting activities on
Federal lands and coastal states to minimize or eliminate conflicts with
approved State goals and programs. It was viewed as a positive law
designed to help resolve issues.

However, regulatory implementation and States' misuse of the consistency
provisions of the CZMA have created uncertainty and have impeded federal
offshore exploration and production projects as well as the siting of
onshore and offshore energy infrastructure. Some coastal management
policies conflict with the CZMA law, prohibiting siting of onshore and
offshore infrastructure in the state coastal zone and on federal lands.

The National Oceanic and Atmospheric Administration's (NOAA) revised
CZMA federal consistency regulations expand the ability for a state to
use its coastal management program to impede federal permitting
involving proposed activities that occur in federal waters off the
coasts of other States. States have blocked or delayed federal offshore
energy activities far outside of their coastal waters through
unreasonable application of the CZMA consistency provisions. The
Secretary of Commerce has not acted in a timely manner to make decisions
on consistency appeals, thus making the appeals process last many years.

*The H.R. 6 Conference Agreement included provisions to resolve these
conflicts revising the CZMA consistency review process and bring its
implementation into harmony with Congress's original goals. These
changes should be passed by the 109^th^ Congress.*

Fourth, habitat management, particularly those related to the Endangered
Species Act, can pose a significant challenge to natural gas development
primarily on federal lands. Lease stipulations and permit restrictions
that limit either the time or the location for development can
effectively prevent access to the resource base. These restrictions need
to be carefully crafted to balance the protection of wildlife habitat
with the need to develop domestic natural gas. Both the temporal and
spatial restrictions need to be essential to protect the wildlife.
Similarly, the listing process of the Endangered Species Act and the
subsequent constraints need to be based on sound science.

*The H.R. 6 Conference Agreement included provisions to improve the
coordination between agencies in the federal leasing and permitting
process that need to be enhanced. The House Committee on Resources
reported legislation to improve the procedures of the Endangered Species
Act that need to be considered by the 109^th^ Congress.*

Fifth, when Congress passed the 1990 Clean Air Act Amendments, it
decided that multiple oil and natural gas wells could not be aggregated
to treat them as a single stationary source. It rejected efforts to
consolidate these separate facilities -- often owned by different
companies. However, technically, the definition is within the hazardous
air pollutants title of the Act and needs to be clarified.

*Congress should clarify that oil and natural gas wells cannot be
aggregated to treat them as a single stationary source for all purposes
under the Clean Air Act.*

Sixth, the Clean Water Act currently provides authority for the
regulation of produced waters associated with natural gas development
that are discharged to the environment. This authority is adequate and
does not need to be altered.

*Congress should reject efforts to alter the Clean Water Act produced
water authority.*

Seventh, offshore development requires the development of geological and
geophysical data. Use of the equipment to develop this information has
raised concerns about the effects of its sounds on marine mammals. The
Marine Mammals Protection Act (MMPA) addresses harassment of marine
mammals and incidental takings. However, its provisions are imprecise.

*If Congress reauthorizes MMPA, it should address the definition of
"harassment" under the Act and modify the Incidental Takings provisions
to make the Act more responsive to genuine protection of marine mammals
while considering the importance of human activities.*

**Senate Energy and Natural Resources Committee**

**Natural Gas Conference**

**National Commission on Energy Policy**

**Executive Summary**

The National Commission on Energy Policy is pleased to respond to a
request by the Senate Energy & Natural Resources Committee for proposals
concerning natural gas supply and demand to be considered at a
conference scheduled for January 24, 2005. The Commission, which was
launched in 2002 by several foundations[^1] with the aim of developing
bipartisan recommendations for national energy policy, devoted
considerable attention to natural gas issues. Commission members --- who
include leading energy experts from the private sector, government,
non-profit community, and academia --- view recent adverse trends in
U.S. natural gas markets as among the most pressing and important
priorities for national energy policy. Accordingly, the Commission's
final report, *Ending the Energy Stalemate: A Bipartisan Strategy to
Meet America's Energy Challenges*,[^2] includes a set of specific
recommendations for comprehensively addressing current concerns
regarding natural gas supply, demand, and infrastructure.

The Commission strongly supports policies to ensure continued access to
reliable, affordable natural gas resources. No single measure can
accomplish this; rather, the Commission believes a variety of steps must
be taken to diversify and increase the supplies of natural gas available
to meet U.S. demand. As discussed in more detail below, the Commission's
priority recommendations are to encourage construction of a gas pipeline
from Alaska and to facilitate a significant expansion of infrastructure
for importing liquefied natural gas (LNG) from overseas. In addition to
these two priorities, the Commission proposes to improve the ability of
public land managers to make timely and well-informed land-use decisions
and to develop --- through a concerted research, development, and
demonstration (RD&D) effort --- techniques for better characterizing and
utilizing the nation's vast reserves of methane hydrates. Additional
options for ameliorating future stresses on natural gas markets include
making cost-effective, near-term demand-side efficiency improvements;
supporting clean coal technologies that produce synthetic gas (which can
be used like natural gas); and promoting more effective risk-hedging by
gas distribution companies by encouraging long- as well as short-term
supply contracts.

We elaborate on these recommendations and options below, in our detailed
responses to several of the specific questions posed by the Energy &
Natural Resources Committee. Additional information, including the
results of several independent, Commission-sponsored analyses, is
appended to this submission.

**4.Environmental: What are environmental challenges and regulatory
barriers related to expanding our natural gas supply and how can they be
remedied?**

While a variety of environmental and regulatory barriers may play a role
in constraining the potential expansion of domestic natural gas
supplies, the Commission's response to this question focuses on the role
of key government agencies in managing access to the considerable
natural gas resources that exist on public lands in the United States.
In particular, substantial natural gas reserves exist on public lands
managed either by the Department of Interior's Bureau of Land Management
(BLM) --- which is responsible for 262 million acres, primarily in the
12 western states including Alaska --- or by the U.S. Forest Service
(USFS), which is responsible for an additional 191 million acres. The
Rocky Mountain region alone currently accounts for 18 percent of
domestic natural gas production and recent projections indicate that
natural gas production in this region could increase 50 percent by
2020.[^3] The National Petroleum Council (NPC) estimates that the Rocky
Mountains have substantial technically recoverable reserves --- as much
as 284 tcf --- with a large undiscovered potential, 80 percent of which
is in the form of unconventional resources (e.g., coal bed methane,
tight gas).[^4] The same area is, of course, also known for its
spectacular beauty, wildlife habitat, recreational opportunities, and
other values. In the Rocky Mountains and elsewhere, public land managers
play a pivotal role in protecting these values and managing access to
potential energy resources.

The basis for these management decisions is a land-use planning process
designed to evaluate natural and cultural resources, as well as the
impacts of energy development activities, and intended to provide a
foundation upon which BLM can make sound, factually-supported leasing
and permitting decisions. Starting in 2001, Congress significantly
increased BLM's land-use planning funds and BLM has since focused
attention on updating and completing its 162 land-use plans. The
Commission welcomes this trend toward improved planning, while noting
that many of BLM's plans are still out-of-date and leasing decisions are
sometimes made without adequate information. In some offices, a shortage
of personnel with the requisite expertise contributes to the problem.
Despite recent positive trends, the current situation is still
considered --- on all sides --- to be problematic: the lack of
underlying, up-to-date land-use plans may result in overly restrictive
lease and permit decisions, or it may lead to exploration and
development in areas that are, or have become, environmentally
sensitive. In fact, most stakeholders --- from industry groups to
hunters and anglers --- agree that BLM and USFS require increased
resources and more personnel to effectively carry out their land
management responsibilities.

The agencies' overall land management responsibilities also include the
timely processing of lease and permit applications, as well as the
ongoing research and monitoring of species and habitat that are
necessary to evaluate the impacts of specific energy development
activities as they are proposed. At BLM, these interrelated activities
are funded through several budget items. Some of these categories have
increased in recent years. For example, funding for "Oil and Gas
Management" has increased almost 40 percent since 2001; other categories
--- such as "Wilderness Management" and "Wildlife Management" --- have
declined or stayed relatively steady.

**Recommendation**

The Commission supports the recent trend toward increased funding for
BLM permitting and land management activities. In light of remaining
widespread concern about existing planning efforts, permitting delays,
and inadequate monitoring,[^5] the Commission recommends that BLM and
USFS be given sufficient additional funding to effectively perform their
essential land management functions. Specifically, the Commission
recommends an increase in the range of 10--20 percent in the funding
available for updating and completing land-use plans, improving
monitoring and data collection, and achieving reasonable processing
periods for lease and permit applications. In addition, the Commission
agrees with a recent report by the NPC which calls for further work to
develop more consistent assessments of the extent to which government
and other restrictions (e.g., lease stipulations, permit conditions of
approval) are creating either explicit or *de facto* impediments to
accessing Rocky Mountain gas. [^6] Several recent studies have arrived
at different conclusions about this issue; a more consistent assessment
would be useful for future resource and land-use planning purposes.[^7]

**Senate Energy and Natural Resources Committee**

**Natural Gas Conference**

Natural Resources Defense Council

**Executive summary**

The nation's economy, our health and our quality of life depend on the
adoption of a sound national energy policy. Affordable natural gas is a
crucial component of that policy. The challenge is how best to close the
growing gap between supply and demand. While additional domestic
production is possible without weakening environmental protections, the
fastest, cheapest, cleanest way to close the gap and keep prices
affordable is to invest in energy efficiency and conservation. Demand
side actions, such as tax incentives and performance standards for
energy efficiency, can reduce demand for natural gas within a year and
result in increasing reductions every year thereafter. In addition,
renewable energy alternatives can provide critical supplements to
natural gas in both the short and long term.

Some argue that we have to relax existing environmental protections to
increase production of natural gas. We disagree. Significant unexploited
natural gas resources are open to development today. Government
estimates reveal that 88 percent of the technically recoverable
undiscovered gas resources on federal lands in the five major Western
basins are currently open to exploration and development. Similarly, 80
percent of the natural gas on the federal Outer Continental Shelf (OCS)
is available to the industry. On federal public lands, numerous leases
and drilling permits have gone unused. According to the Energy
Information Administration, weakening environmental protections as
proposed in H.R. 6 would result in negligible changes to gas production,
consumption, imports, and prices. In contrast, efficiency and renewables
strategies can deliver large relief quickly and over a sustained period.

In at least one part of the country (the Rockies), domestic gas
production is increasing under existing law. We can help increase
production even more by defusing the controversy that surrounds it. This
requires: (1) Holding gas producers to statutory and regulatory
environmental standards; (2) Providing land managers the resources to
fulfill their permitting responsibilities, including meaningful
environmental review and public participation, in a timely manner rather
than imposing mandatory deadlines; (3) Improving development practices
and respecting the property and other interests of surface owners; (4)
Recognizing that some areas are too sensitive to develop, including
lands with wilderness character; and (5) Preserving the current OCS
leasing moratoria, and protecting sensitive areas off Alaska.

**4. Environmental**

What are environmental challenges and regulatory barriers related to
expanding our natural gas supply and how can they be remedied?

Because severe ecological and other damage can result to private as well
as public lands, and coastal and marine environments, from exploration
and development of federal energy resources, decisions about, and
activities aimed at, increasing supply should be done in an
environmentally responsible manner with effective government oversight
and meaningful input from local government, local residents and other
concerned members of the public. In fact, current available government
data reveal that industry claims that production of federal natural gas
is being hindered by regulatory obstacles are unfounded. Oil and gas
producers already enjoy exemptions from many environmental protections,
such as hazardous waste treatment, storage and disposal requirements
under the Resource Conservation Recovery Act (RCRA) and stormwater
permit requirements under the Clean Water Act. Other industries must
comply with these standards and gas producers claim that they can
develop without harming the environment. If this is the case, gas
producers should not need exemptions from statutory and regulatory
environmental standards.

**Environmental Damage is Real and Significant.** Local, regional and
national concerns about development of natural gas reserves on- and
offshore stem from the significant environmental consequences of
exploration, production and transportation. Offshore development is
associated with onshore infrastructure, including pipelines, which has
caused significant harm to salt marshes and other coastal zone
resources.^20^ The industrialization associated with offshore
development is often at odds with the existing economic base of affected
coastal communities. Offshore development also brings with it the risk
of toxic oil spills, which in turn threaten a wide variety of marine
species.^21^ Extraction of oil or gas from beneath the ocean floor
creates massive amounts of drilling waste containing toxic metals and
other contaminants, most of which is dumped

^20^ For example, OCS pipelines crossing coastal wetlands in the Gulf of
Mexico are estimated to have destroyed more coastal salt marsh than
exists from New Jersey through Maine. Boesch and Rabalais, eds., "The
Long-term Effects of Offshore Oil and Gas Development: An Assessment and
a Research Strategy." A Report to NOAA, National Marine Pollution
Program Office, pp. 13-11.

^21^ If offshore areas are leased for gas exploration and/or production,
there is always the possibility that oil will also be found. We know of
no instance in which a lease prohibits an oil company from developing
oil, if oil is found in a "gas prone" region. We are not aware of any
company ever agreeing to such a condition in the history of the OCS
program. Unless such a restriction were included in a lease, there would
be no assurance that oil in fact would not be developed, raising the
possibility of an oil spill. According to Interior Department
statistics, some *3 million gallons* of oil spilled from OCS oil and gas
operations in 73 incidents between 1980 and 1999. U.S. Department of the
Interior, Minerals Management Service (MMS), *Final Environmental Impact
Statement for Sale* 181, p. IV-50 (2000).

8

untreated into surrounding waters.^22^ In addition, offshore operations
generate large amounts of "produced water," which is brought up from
wells along with oil and gas.^23^ Produced water also contains a variety
of toxic pollutants and typically is discharged into the ocean with
minimal treatment.^24^ Offshore seismic exploration means noise
pollution harmful to whales and other marine mammals that depend on
sound to communicate. And drilling and production generates tons of air
pollutants per well.^25^

Onshore development, like the offshore variety, results in heavy-duty
industrialization of affected areas. Exploration activities degrade
wildlife habitats and roadless areas, harm fragile soils and
archeological resources, and encourage damaging offroad vehicle use. And
extraction activities have displaced wildlife and fragmented and
degraded their habitats.^26^ Wilderness values on millions of acres have
been lost and local communities shattered through "boom and bust"
economies.

Well fields can cover thousands of acres and encompass hundreds, even
thousands, of wells and well pads. Each field is accompanied by a dense
web of power lines, miles of pipelines and roads, waste pits,
compressors, processing plants, and other production facilities.^27^ In
addition to causing increased erosion and dust, these activities pollute
once-quiet open space with noisy machinery -- typically powered by
diesel engines -- that runs continuously. On many days in many places
where development is now occurring, once-clear skies are marred by
emissions from drilling, pumping, and processing operations.

^22^ An average of 180,000 gallons of waste per well are generated by
drilling operations. Id. Drilling "muds" -- which are used, for example,
to lubricate drill bits and maintain downhole pressure -- contain
mercury, lead and cadmium, significant concentrations of which have been
observed around drilling sites. Id. Mercury in particular has been found
in very high concentrations around rigs in the Gulf of Mexico, raising
significant concerns about contamination of fish.

^23^ MMS estimates that each offshore platform discharges hundreds of
thousands of gallons of produced water every day. Id., p. IV-32.

^24^ Toxic pollutants found in produced water include benzene, arsenic,
lead, naphthalene, zinc and toluene. Produced water can contain varying
amounts of radioactive pollutants. All major field research programs
investigating the fate and effects of produced water discharges have
detected petroleum hydrocarbons, toxic metals and radium in the water
column down-current from the discharge. Id., pp. IV-32-33.

^25^ Drilling an average exploration well generates some 50 tons of
nitrogen oxides (NOx), 13 tons of carbon monoxide, 6 tons of sulfur
dioxide, and 5 tons of volatile organic hydrocarbons. Each OCS platform
generates more than 50 tons per year of NOx, 11 tons of carbon monoxide,
8 tons of sulfur dioxide and 38 tons of volatile organic hydrocarbons
every year. Id., p. IV-40.

^26^ A study funded by Questar Exploration and Production Company and
the BLM and made public in November 2004 shows that natural gas
development in the Upper Green River Valley of Wyoming is affecting the
distribution patterns of wintering mule deer. This study conducted by
Hall Sawyer, a wildlife biologist with Western Ecosystems Technology,
Inc., is the first multi-year assessment of the effects of natural gas
development. It can be found at
[http://www.west-inc.com/reports/papa_2004_report.pdf]{.underline} .

^27^ In the Powder River Basin of Wyoming and Montana, for example, BLM
has anticipated that, over the next 10 years, up to 66,000 new coalbed
methane wells will be drilled and 26,000 miles of new roads, 20,000
miles of pipelines and 5,300 miles of powerlines will be constructed.
See U.S. Department of the Interior, BLM, Final Environmental Impact
Statement and Proposed Plan Amendment for the Powder River Basin Oil and
Gas Project, Vol. 1, Table S-1 (January 2003) (hereinafter "Wyoming
Powder River FEIS") and Final Statewide Oil and Gas Environmental Impact
Statement and Proposed Amendment of the Powder River and Billings
Resource Management Plans, Vol. 1, Table S-2 at SUM-30 ((January 2003).

9

In addition, coalbed methane (CBM) development in particular has caused
unique and severe water-related problems. Production of CBM is
accompanied by withdrawal of huge amounts of water from underground
aquifers. In 2002, in the Wyoming portion of the Powder River Basin,
there were over 10,000 CBM wells producing 1.65 million barrels of water
per day along with 975 million cubic feet per day of methane.^28^
According to the BLM, at least 3,069,665 acre-feet of water will be
withdrawn by the 42,567 wells it expects to be developed in that part of
the Basin over the next 10 years.^29^ The problems associated with the
removal of these huge amounts of water include groundwater/drinking
water contamination and drawdown; alteration of intermittent flow stream
to continuous flow, resulting in erosion and sediment loading; death of
existing vegetation, especially where, as in the Powder River Basin, the
produced water is highly saline; and changes in soil composition.^30^

Some Areas are Too Sensitive to Drill. Given these destructive impacts
and legitimate concerns, NRDC believes that there are sensitive areas
both onshore and offshore that should be off-limits to exploration and
development activities for both oil and natural gas. Domestically, these
areas include the Arctic National Wildlife Refuge, Utah's Redrock Canyon
Country, the Jack Morrow Hills (the heart of Wyoming's Red Desert), and
New Mexico's Valle Vidal and Otero Mesa. Sensitive areas of the U.S.
Outer Continental Shelf include waters off the East and West coasts, the
eastern Gulf of Mexico, and offshore Alaska.

NRDC opposes lifting the current OCS moratoria. Beginning in 1981 and
every year since then, Congress has imposed restrictions on OCS leasing
in sensitive areas off the nation's coasts. These moratoria now protect
the east and west coasts of the United States and most of the Eastern
Gulf of Mexico. Congress's actions reflect a clear consensus on the
unsuitability of developing these OCS areas that is shared by most of
the country, and have been endorsed by an array of elected officials
representing diverse political persuasions at all levels of government.
The prospect of opening these areas will likely be extremely
controversial and met with strong resistance from elected officials at
all levels of government, particularly now when oil companies are
enjoying record profits.

NRDC believes that protection of these areas onshore and offshore would
not materially affect the nation's gas supply. As noted above, only a
fraction of total OCS gas is now off limits. Similarly, the maximum
potential of Otero Mesa in New Mexico is estimated at 1 Tcf,^31^ and
.057 Tcf in the Valle Vidal.^32^ Likewise, it has been estimated that
the Utah lands proposed for wilderness protection in America's Redrock
Wilderness Act (in the 108^th^ Congress, S. 639/H.R. 1796), would
provide only 1.495 Tcf of technically

^28^ Wyoming Oil and Gas Conservation Commission Data (September 2002).

^29^ See Wyoming Powder River FEIS, pp. xxx-xxxi.

^30^ See, e.g., id, pp. xxxiii, xxxv-vi. See also
www.epa.gov/region08/water/wastewater/npdeshome/cbm/cbm.htm.

^31^ Ecos Consulting, Potential Impacts of Natural Gas Development on
Otero Mesa, p. 31.

^32^ Adam Rankin, "Study Cites Gas Production Potential in Valle Vidal,"
[Albuquerque Journal]{.underline} (July 30, 2004).

10

recoverable undiscovered resources, out of a total for the entire state
of 15.668 Tcf. None of the state's principal areas of gas and oil
production are included in this proposal.^33^

Where Development Does Occur, It Must be Done in an Environmentally
Responsible Way. Onshore, the BLM is charged with protecting sensitive,
non-energy resources and managing access to and production from energy
resources, which it does through its established land use planning and
environmental review processes. As in the case of LNG development
(Question 2), NRDC believes that the way to minimize controversy about
proposed development projects, mitigate avoidable environmental damage,
and speed on-the-ground implementation of development activities is not
to cut corners. Rather, it is to comply fully with environmental review
and public participation requirements. Westerners and residents of other
regions of the country where energy development has escalated are not
averse to helping the nation meet its energy needs. Because they will
bear the direct and indirect costs of such development, however,
exploration and development activities that will affect their
communities, surrounding federal lands and in many cases their private
lands should be subjected to searching and comprehensive environmental
analysis and they should be permitted meaningful opportunities to have
input into whether, and if so how, resources should be developed. In
this connection, NRDC concurs with the recommendation of the National
Commission on Energy Policy that the BLM (and the U.S. Forest Service)
should be given "increased resources and more personnel to effectively
carry out" their "essential land management functions."^34^

Unfortunately, there are some who believe not only that no place is too
special to drill for oil and gas, but also that environmental
protections should be rolled back to increase production. As detailed
above, however, current government data reveal there is no need to cut
back on, let alone abandon, environmental safeguards to produce more
from our federal reserves. Under the existing regulatory regime, the BLM
is setting new records for approving drilling permits, issuing 5,824
permits in FY04 for the Rocky Mountain region alone, eclipsing the
previous year's record of 3,580.^35^ In addition, the amount of acreage
under lease in the West has increased by 16 percent since 2000.^36^ Yet,
while the number of permits increased by 62 percent in 2004, the number
of wells drilled declined by nearly 10 percent^37^ -- despite high gas
prices. Similarly, although the total acreage under lease in the West
has increased over the last four years, less than 30 percent of leased
lands are actually in production.^38^ These data reveal that, contrary
to industry claims, access to federal lands is not a problem and, more
specifically, that there is no need for legislation that would
"streamline" agency decision-making processes, limit

^33^ Mark Lemkin, An Analysis of Utah Oil and Gas Production, Leasing,
and Future Resources (2003), available at
[http://www.suwa.org/page.php?page_name=Camp_Oil_Home]{.underline}.

^34^ National Commission on Energy Policy, Ending the Energy Stalemate
(December 2004), pp. 49-50.

^35^ BLM data published at
[www.wilderness.org/NewsRoom/Release/20041214.cfm]{.underline} ; The
Wilderness Society, Press Release, December 16, 2004.

^36^ Washington Post, September 24, 2004; BLM, Oil and Gas Leasing
Statistics (March 4, 2004).

^37^ BLM data published at
[www.wilderness.org/NewsRoom/Release/20041214.cfm]{.underline} ; The
Wilderness Society, Press Release, December 16, 2004.

^38^ BLM, Oil and Gas Leasing Statistics (March 4, 2004).

11

public involvement in those processes, or exempt production activities
from public health and environmental laws.

Energy companies and their supporters also contend that the protections
traditionally employed by federal land managers to shield publicly owned
resources from the adverse impacts of development are "obstacles,"
"restrictions," or "impediments" to production. In fact these measures
are sound, authorized by law and, most importantly for purposes of this
question, have not prevented development. On the contrary, the BLM
regularly waives such measures at industry's request.

The BLM carries out its legal mandate to balance energy development with
other resources of the public lands by incorporating terms and
conditions -- known as stipulations -- into oil and gas leases or as
conditions of approvals at the permitting stage. These stipulations are
routinely employed to protect wildlife, municipal water sources, and
recreational and cultural resources. They rarely, if ever, prohibit
development entirely. Typically they affect the timing and/or location
of development activities. When they purchase federal leases, energy
companies agree to honor these measures.

For example, all BLM leases generally include "standard stipulations."
Typical of such measures are prohibitions on surface occupancy within
500 feet of surface waters and riparian/wetland areas or within
one-quarter mile of an occupied building; roadbuilding on steep slopes;
and construction when soil is saturated. These measures are designed to
protect water resources, including waters used for drinking and other
domestic purposes, as well as to prevent landslides and minimize
erosion.

Seasonal or "special" stipulations are used in areas where oil and gas
activities at certain times of the year pose severe threats to wildlife
resources. They allow development to go forward in sensitive wildlife
habitat areas such as elk calving and winter range areas and big game
migration corridors, except during critical periods. The BLM may
restrict operations in these areas when they are in use by the species
of concern. Frequently, it does so at the request of state fish and game
agencies or after consultation with the U.S. Fish and Wildlife Service.

On occasion, the BLM imposes "no surface occupancy" stipulations, which
prohibit operations directly on the surface overlaying a leased federal
tract. Usually the agency does so to protect another resource or use
that conflicts with surface gas and oil activities, such as underground
mining operations, steep slopes or campsites. Reserves subject to these
stipulations may be tapped by drilling at an angle from another
location.

While the industry is now attacking these stipulations as an
unreasonable obstacle to development on federal lands in the Rocky
Mountain West, a telling picture of their actual effect on oil and gas
activities can be found at
[www.wy.blm.gov/pfo/wildlife.htm]{.underline}. At this site, the BLM's
Pinedale,WY Field Office has published its summary of "exceptions" to --
i.e., waivers of -- wildlife stipulations that it granted to oil and gas
operators at their request during the 2003-2004 winter season. The site
reveals that the agency acted on 141 requests for waivers of
stipulations designed to protect sage grouse,

12

whose numbers are rapidly dwindling on BLM-managed lands, granting all
but eight of them. The preceding season, this same office denied 16 of
173 exceptions to those protections.

In sum, the BLM imposes lease stipulations in order to protect western
landscapes and resources and the quality of life of local residents. And
it can - and does - routinely waive them at industry's request.
Accordingly, there is no basis for claims that the authority of federal
managers to employ these measures should be restricted, let alone
eliminated. If the agency's authority to impose these protections is
restricted directly (by changing its mandate) or indirectly (by
establishing arbitrary deadlines for its actions), it is western
communities and their residents who will suffer first and longest.

**Senate Energy and Natural Resources Committee**

**Natural Gas Conference**

The Wilderness Society

**Executive Summary:**

The Wilderness Society's response to the Natural Gas Supply and Demand
Conference questionnaire focuses on questions 4, 5 and 8.

With respect to question 4, in considering the issue of "environmental
challenges and regulatory barriers related to expanding our natural gas
supply" the pertinent facts are these: (1) Most onshore federal natural
gas resources \-- nearly 90 percent \-- within the Rocky Mountain
Overthrust Belt states is currently available for leasing and
development; (2) the BLM, in response to industry demand, has greatly
increased the number of drilling permits issued annually, with a record
6,130 APDs issued in FY 2004; (3) the BLM continues to issue leases on
environmentally sensitive lands -- including tens of thousands of acres
identified by the BLM itself as meriting consideration for wilderness
protection \-- although of the more than 42,000,000 acres under lease,
development has occurred on approximately 12,000,000 acres; and (4)
protective lease stipulations are usually waived by the BLM at the
request of permittees in order to accommodate exploration and
development activities on federal leases. Current public land management
policies favor extraction of oil and gas resources at the expense of the
environmental integrity of western public lands subject to oil and gas
development. We recommend that Congress examine the following issues:

-   Does the BLM's onshore oil and gas program adequately protect the
    scenic, ecological, environmental, air and water resources, wildlife
    habitat, cultural, and wilderness values on our public lands and
    national forests?

-   Are surface owners with split estate lands being treated fairly when
    it comes to coalbed methane development?

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-   Are we being careful enough to protect the precious surface and
    groundwater resources of the rural communities where the coalbed
    methane boom is in full swing?

-   Should the BLM be more careful in reviewing requests for exemptions
    from leasing provisions designed to protect wildlife resources?

-   Does the BLM have adequate resources to meet all of its management
    responsibilities?

-   And, are reclamation bonds imposed upon operators adequate to the
    task of assuring post-operation clean-ups?

With respect to Question 5, we would like to direct the Committee's
attention to a new study by the Lawrence Berkeley National Laboratory,
which documents the salubrious impacts on current high natural gas
prices that would result from the implementation of policies that
emphasize the more efficient use of energy coupled with the development
and application of renewable energy technologies. The report is
available at <http://eetd.lbl.gov/ea/ems/re-pubs.html>.

With respect to Question 8, we recommend that Congress investigate
current reporting requirements with respect to natural gas availability.
Accurate reporting of natural gas in storage and production could help
reduce price volatility and help lower prices.

**4. Environmental**

What are environmental challenges and regulatory barriers related to
expanding our natural gas supply and how can they be remedied?

Our response to Question \# 4 will focus on issues related to the
availability of federal natural gas resources within the Intermountain
West.

For several years oil and gas development advocates have persistently
but incorrectly alleged that various environmental safeguards governing
the extraction of natural gas from onshore federal lands within the
Intermountain West unduly inhibit their ability to obtain "access" to
federal natural gas resources. Industry criticisms have focused on
statutes such as the application of the Clean Water Act, the Safe
Drinking Water Act, measures to protect wildlife habitat, land use
management prescriptions designed to balance energy mineral extraction
with the protection of other natural resource values, public involvement
processes, and lease conditions ("stipulations") that are intended to
provide opportunities for exploration and development activities while
protecting critical wildlife habitats and populations.[^8] Industry
advocates also complain that the Bureau of Land Management takes too
long to process drilling permit applications.[^9] One recent
industry-sponsored analysis of the availability of federal nature gas
resources alleged as much as 69 TCF of onshore federal gas resources was
off-limits to development due to such requirements.[^10] These
allegations do not bear up under an examination of the pertinent facts.

The pertinent facts are these:

> \(1\) The vast majority of federal natural gas resources \-- nearly 90
> percent, or 122.6 TCF \-- within the Rocky Mountain Overthrust Belt
> states taken together (Colorado, Montana, New Mexico, Utah, and
> Wyoming) are currently available for leasing and development, and have
> been for a long time;
>
> \(2\) The BLM has last year issued over 6,100 drilling permits
> ("APDs") on the public lands, a record;
>
> \(3\) The BLM continues to issue leases on environmentally sensitive
> lands -- including tens of thousands of acres identified by the BLM
> itself as meriting consideration for wilderness protection \--
> although of the more than 42,000,000 acres under lease, development
> has occurred on approximately 12,000,000 acres.
>
> \(4\) Protective lease stipulations are usually waived by the BLM at
> the request of permittees in order to accommodate exploration and
> development activities on federal leases.

**Most onshore federal natural gas resources are available for leasing
and development**. Despite industry claims to the contrary, the
Department of the Interior's "EPCA" report (*Scientific Inventory of
Onshore Federal Lands' Oil and Gas Resources and Reserves and the Extent
and Nature of Restrictions or impediments to their Development,* United
States Department of the Interior*,* January, 2003) concluded that 88
percent of the "technically recoverable" natural gas resources
underlying federal lands within the Intermountain West are currently
available for leasing and development.[^11] The report estimated the
federal lands within the study region harbored approximately 138.5 TCF
of "undiscovered technically recoverable" natural gas, and that of this
amount, 122.6 TCF is available for leasing and development.[^12] The
report also noted that the region contained a substantial amount of
natural gas on non-federal lands \-- an estimated 87.7 TCF.[^13] Only
about 12 percent of federal natural gas resources \-- 15.9 TCF \-- were
estimated by the report to be off-limits to development.[^14] Looked at
another way, the 15.9 TCF of off-limits federal natural gas resources in
the region is about 1% of the Energy Information Administration's
estimated total U.S. natural gas resource base of 1,279.5 TCF.[^15]

**Natural gas development and federal permitting activities are robust
on federal lands within the Rocky Mountain West.** In fiscal year 2004,
the BLM issued a record 6,130 "applications for permits to drill"
("APDs") on BLM lands, up from 3,802 APDs issued in fiscal year 2003
(see attachment). Yet, according to BLM data, permittees spud only 2,702
wells during fiscal year 2004 (see attachment). Still, drilling activity
within the region is robust. Colorado, for example, reported record
levels of drilling for natural gas during the year.[^16]

**Tens of millions of acres of federal oil and gas leases under the
control of the oil and gas industry are undeveloped.** BLM data also
indicates that the vast majority of federal lands currently under lease
are not being developed. Of the more than 42,000,000 acres of public
lands under lease, development is occurring or has occurred on
approximately 12,000,000 acres (see attachment). So, despite the claims
of industry that "too much" federal land is unavailable for development,
many lessees are not utilizing the leases they have already acquired.
Unfortunately, despite this surplus of leased but undeveloped federal
land, the BLM continues to offer lease tracts on some, of the most
environmentally sensitive but unprotected public lands in America.

**Exceptions to protective lease stipulations are frequently granted by
the BLM at the request of permittees.** Although federal permittees
frequently complain that protective stipulations included in federal
leases preclude development of such leases, the available record
indicates that these stipulations are usually waived at the request of
the operator.

For example, during the winter of 2002-2003, the BLM's Pinedale Field
Office received 173 requests for "exceptions" to sage grouse
stipulations from federal permittees in Wyoming's Upper Green River
Basin, and granted 157 or 90 percent of them.[^17] As of November 10,
2004, the Pinedale Field Office has reported the receipt of 160 requests
for sage grouse exceptions, granted 132 of them, and determined that
another 18 exception requests were "not required." Only 8 requests were
denied.[^18] Similarly, the Pinedale Field Office received 84 requests
for exceptions to winter range stipulations have been received by
12/17/04, with 76 being granted or partially granted.[^19] During the
past four years, the Pinedale Field Office alone has granted hundreds of
requests for exceptions to protective wildlife stipulations in order to
accommodate the rapidly expanding natural gas fields on BLM lands in the
Upper Green River Basin.

The frequency with which special stipulations are waived to accommodate
exploration and development activities raises questions about how
effective is the BLM's existing framework for balancing development
interests with the need to protect wildlife and other environmental
values.

These facts and trends \-- that nearly 90 percent of federal natural gas
resources in the region are available for leasing and development, that
the BLM has issued unprecedented numbers of APDs, that tens of millions
of acres under lease are not being developed, and that the BLM routinely
issues exceptions to protective lease stipulations \-- clearly indicate
that industry allegations of excessive "restrictions and impediments" to
federal onshore natural gas resources are unfounded. Instead, current
federal onshore oil and gas development policies are putting other
resources at risk. These resources include: wild public lands that have
been identified by citizens as well as the BLM itself as harboring
wilderness values, important seasonal wildlife habitat for big game and
sensitive species, water quality and quantity in areas experiencing the
boom in coalbed methane exploitation, and the farms and ranches of rural
residents in areas of split estate ownership who are experiencing the
boom in coal bed methane development.

Instead of asking, "What are environmental challenges and regulatory
barriers related to expanding our natural gas supply and how can they be
remedied," we should be asking such questions as:

-   Given the extensive availability of our publicly-owned onshore oil
    and gas resources for development, are the scenic, ecological,
    environmental, cultural, air and water resources, wildlife habitat,
    and wilderness values of our public lands and national forests being
    properly protected?

-   Are surface owners with split estate lands being treated fairly when
    it comes to coalbed methane development?

-   Is the BLM being careful enough to protect the precious surface and
    groundwater resources of the rural communities where the coalbed
    methane boom is in full swing?

-   Does the BLM have sufficient resources to properly manage the
    development boom underway on the lands it manages in the
    Intermountain West?

-   Should the BLM be more careful in waiving leasing provisions
    designed to protect wildlife resources?

-   And, are reclamation bonds imposed upon operators adequate to the
    task of assuring post-operation clean-ups?

Unfortunately, virtually all of the legislative proposals that address
environmental issues related to natural gas development on federal
onshore lands have been predicated on assertions by oil and gas industry
representatives that there are too many "restrictions and impediments"
to the industry's ability to exploit these resources. For example,
several provisions in the conference report on H.R. 6 would eviscerate
existing environmental statutes applied to oil and gas activities on
federal lands. These included: Sec. 327, which prohibited drilling
fluids from being considered pollutants to drinking water under the Safe
Drinking Water Act; Sec. 328, exempting the construction of drill pads
and other oil and gas infrastructure from the Clean Water Act; Sec 348,
requiring foreshortened timeframes for the BLM to issue drilling
permits; Sec. 341, mandating the creation of an "Office of Federal
Project Coordination" within the White House to expedite energy projects
on public lands, etc.

Given the impacts of current operations on western public lands, and
future anticipated impacts of tens of thousands of new wells and
associated infrastructure being planned for the Rocky Mountain west,
Congressional efforts to address environmental issues should focus on
the following issues:

\* Increasing the reclamation bonding requirements for federal
permittees;

\* Providing protection for surface owners over split estate lands;

\* Requiring permittees to utilize "minimal footprint" technologies,
such as directional drilling, to

minimize surface impacts where development takes place;

\* Increasing funding for inspection and enforcement activities.

\* Allowing the BLM to develop "cost recovery" initiatives to fund
permitting, inspection, and

monitoring work.

Thank you for this opportunity to present our views.

[^1]: Commission sponsors include The William and Flora Hewlett
    Foundation, The Pew Charitable Trusts, the MacArthur Foundation, the
    Packard Foundation, and the Energy Foundation.

[^2]: The Commission's final report was released on December 8, 2004.
    The full report and additional information about the Commission are
    available at
    [www.energycommission.org](http://www.energycommission.org/).

[^3]: National Petroleum Council, Committee on Natural Gas, *Balancing
    Natural Gas Policy: Fueling the Demands of a Growing Economy,* vol.
    2*, Integrated Report* (Washington, DC: National Petroleum Council,
    2003), 121, http://www.npc.org/reports/ng.html.

[^4]: Ibid., 139-140.

[^5]: See National Petroleum Council, *Balancing Natural Gas Policy*,
    2003, and Terry Z. Riley, Theodore Roosevelt Conservation
    Partnership, "A Review of Energy Development in the West," NCEP
    Technical Appendix (Washington, DC: National Commission on Energy
    Policy, 2004).

[^6]: National Petroleum Council, *Balancing Natural Gas Policy*, vol.
    1, 67.

[^7]: United States Department of the Interior, United States Department
    of Agriculture, and United States Department of Energy, *Scientific
    Inventory of Onshore Federal Lands' Oil and Gas Resources and
    Reserves and the Extent and Nature of Restrictions or Impediments to
    Their Development* (Washington, DC: U.S. Departments of Interior,
    Agriculture and Energy, 2003), 3-5, http://www.doi.gov/epca/;
    developed in compliance with the Energy Policy and Conservation Act
    Amendments of 2003, found that out of 138 tcf total gas resources on
    federal lands, only 16 tcf, or 12 percent, were off limits, while
    National Petroleum Council, *Balancing Natural Gas Policy,* vol. 4*,
    Supply Task Group Report*, which for the first time examined
    post-leasing conditions of approval and increased costs along with
    lease stipulations, estimated that of the total gas resource in the
    Rockies, 125 tcf were subject to access restrictions (Chap. 6, Sec.
    8) and 69 tcf, or 29 percent of the total technical resource base,
    was "effectively off limits" (Chap. 6, Sec.1). As NPC's *Supply
    Group Task Report* points out, these different assessments result
    from evaluating different restrictions on different underlying
    acreages, making direct comparisons difficult.

[^8]: See, for example, *2004 Oil and Natural Gas Issues Briefing Book*,
    Independent Petroleum Association of America.

[^9]: *Testimony of Robert L. Bayless, Jr. on behalf of the Independent
    Petroleum Association of Mountain States and the Independent
    Petroleum Association of America before the Committee on Energy and
    Natural Resources, United States Senate, February 27, 2003*, p. 3.

[^10]: *Balancing Natural Gas Policy, Fueling the Demands of a Growing
    Economy, Committee on Natural Gas Presentation to the National
    Petroleum Council, Overview*, National Petroleum Council, September
    25, 2003, p. 18.

[^11]: *EPCA Inventory Fact Sheet*, BLM, January, 2003, p. 3 of 14.

[^12]: Ibid.

[^13]: Ibid, p. 4 of 14.

[^14]: Ibid.

[^15]: Energy Information Administration, 2003.

[^16]: "Drilling Permits Hit Record, State's 2,379^th^ for the year
    exceeds high set during the early '80s energy boon" *The*

    *Denver Post*, November 10, 2004.

[^17]: *Sage Grouse Winter and Nesting Exceptions, 2002-2003*, BLM,
    Pinedale Field Office, August 1, 2003.

[^18]: *Sage Grouse Winter & Nesting Exceptions, 2003-2004*, BLM,
    Pinedale Field Office, November 10, 2004.

[^19]: *Wildlife Winter Range Exceptions, 2004-2005*, BLM, Pinedale
    Field Office, December 17, 2004.