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34-983 PDF 2007

LAND-USE ISSUES ASSOCIATED 

WITH ONSHORE OIL AND GAS 

LEASING AND DEVELOPMENT

JOINT OVERSIGHT HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL PARKS, FORESTS 

AND PUBLIC LANDS

JOINT WITH THE

SUBCOMMITTEE ON ENERGY AND 

MINERAL RESOURCES

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

Thursday, April 26, 2007

Serial No. 110-21

Printed for the use of the Committee on Natural Resources

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

or 

Committee address: http://resourcescommittee.house.gov 

(II)

COMMITTEE ON NATURAL RESOURCES 

NICK J. RAHALL II, West Virginia, Chairman 

DON YOUNG, Alaska, Ranking Republican Member

Dale E. Kildee, Michigan 

Eni F.H. Faleomavaega, American Samoa 

Neil Abercrombie, Hawaii 

Solomon P. Ortiz, Texas 

Frank Pallone, Jr., New Jersey 

Donna M. Christensen, Virgin Islands 

Grace F. Napolitano, California 

Rush D. Holt, New Jersey 

Rau ́l M. Grijalva, Arizona 

Madeleine Z. Bordallo, Guam 

Jim Costa, California 

Dan Boren, Oklahoma 

John P. Sarbanes, Maryland 

George Miller, California 

Edward J. Markey, Massachusetts 

Peter A. DeFazio, Oregon 

Maurice D. Hinchey, New York 

Patrick J. Kennedy, Rhode Island 

Ron Kind, Wisconsin 

Lois Capps, California 

Jay Inslee, Washington 

Mark Udall, Colorado 

Joe Baca, California 

Hilda L. Solis, California 

Stephanie Herseth Sandlin, South Dakota 

Heath Shuler, North Carolina 

Jim Saxton, New Jersey 

Elton Gallegly, California 

John J. Duncan, Jr., Tennessee 

Wayne T. Gilchrest, Maryland 

Ken Calvert, California 

Chris Cannon, Utah 

Thomas G. Tancredo, Colorado 

Jeff Flake, Arizona 

Rick Renzi, Arizona 

Stevan Pearce, New Mexico 

Henry E. Brown, Jr., South Carolina 

Luis G. Fortun ̃ o, Puerto Rico 

Cathy McMorris Rodgers, Washington 

Bobby Jindal, Louisiana 

Louie Gohmert, Texas 

Tom Cole, Oklahoma 

Rob Bishop, Utah 

Bill Shuster, Pennsylvania 

Dean Heller, Nevada 

Bill Sali, Idaho 

Doug Lamborn, Colorado

James H. Zoia, Chief of Staff 

Jeffrey P. Petrich, Chief Counsel 

Lloyd Jones, Republican Staff Director 

Lisa Pittman, Republican Chief Counsel 

(III)

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES 

JIM COSTA, California, Chairman 

STEVAN PEARCE, New Mexico, Ranking Republican Member

Eni F.H. Faleomavaega, American Samoa 

Solomon P. Ortiz, Texas 

Rush D. Holt, New Jersey 

Dan Boren, Oklahoma 

Maurice D. Hinchey, New York 

Patrick J. Kennedy, Rhode Island 

Hilda L. Solis, California 

Nick J. Rahall II, West Virginia, ex officio 

Bobby Jindal, Louisiana 

Louie Gohmert, Texas 

Bill Shuster, Pennsylvania 

Dean Heller, Nevada 

Bill Sali, Idaho 

Don Young, Alaska ex officio 

SUBCOMMITTEE ON NATIONAL PARKS, FORESTS AND PUBLIC LANDS 

RAU ́ L M. GRIJALVA, Arizona, Chairman 

ROB BISHOP, Utah, Ranking Republican Member

Dale E. Kildee, Michigan 

Neil Abercrombie, Hawaii 

Donna M. Christensen, Virgin Islands 

Rush D. Holt, New Jersey 

Dan Boren, Oklahoma 

John P. Sarbanes, Maryland 

Peter A. DeFazio, Oregon 

Maurice D. Hinchey, New York 

Ron Kind, Wisconsin 

Lois Capps, California 

Jay Inslee, Washington 

Mark Udall, Colorado 

Stephanie Herseth Sandlin, South Dakota 

Heath Shuler, North Carolina 

Nick J. Rahall II, West Virginia, ex officio 

John J. Duncan, Jr., Tennessee 

Chris Cannon, Utah 

Thomas G. Tancredo, Colorado 

Jeff Flake, Arizona 

Rick Renzi, Arizona 

Stevan Pearce, New Mexico 

Henry E. Brown, Jr., South Carolina 

Louie Gohmert, Texas 

Tom Cole, Oklahoma 

Dean Heller, Nevada 

Bill Sali, Idaho 

Doug Lamborn, Colorado 

Don Young, Alaska, ex officio 

(V)

CONTENTS

Page

Hearing held on Thursday, April 26, 2007 ............................................................ 1

Statement of Members: 

Costa, Hon. Jim, a Representative in Congress from the State of 

California ....................................................................................................... 3

Grijalva, Hon. Rau ́l M., a Representative in Congress from the State 

of Arizona ...................................................................................................... 1

Prepared statement of ............................................................................... 2

Pearce, Hon. Stevan, a Representative in Congress from the State of 

New Mexico ................................................................................................... 7

Peterson, Hon. John E., a Representative in Congress from the State 

of Pennsylvania ............................................................................................. 4

Statement of Witnesses: 

Adami, Steven M., Rancher, Powder River Basin Resource Council, 

Sheridan, Wyoming ....................................................................................... 77

Prepared statement of ............................................................................... 78

Response to questions submitted for the record ..................................... 80

Bisson, Henri, Deputy Director, Bureau of Land Management, U.S. 

Department of the Interior ........................................................................... 17

Prepared statement of ............................................................................... 18

Response to questions submitted for the record ..................................... 22

Emmerich, John, Deputy Director, Wyoming Game and Fish Department, 

on behalf of the Western Governors’ Association and The Association 

of Fish & Wildlife Agencies .......................................................................... 43

Prepared statement of ............................................................................... 45

Ferguson, Tony L., Director, Minerals and Geology Management, 

National Forest System, Forest Service, U.S. Department of 

Agriculture ..................................................................................................... 11

Prepared statement of ............................................................................... 13 

Response to questions submitted for the record ..................................... 15

James, Jewell, Policy Analyst, Lummi Indian Nation .................................. 47

Prepared statement of ............................................................................... 49

Jurrius, John, Financial Advisor to the Ute Tribe, representing Maxine 

Natchees, Chairwoman, Northern Ute Tribe .............................................. 63

Prepared statement of ............................................................................... 65

Response to questions submitted for the record ..................................... 69

Korenblat, Ashley, President, Western Spirit Cycling .................................. 81

Prepared statement of ............................................................................... 83

Response to questions submitted for the record ..................................... 86

Moseley, Claire M., Executive Director, Public Lands Advocacy ................. 87

Prepared statement of ............................................................................... 88

Response to questions submitted for the record ..................................... 96

Muggli, Roger, Manager, Tongue and Yellowstone River Irrigation 

District, Miles City, Montana ...................................................................... 98

Prepared statement of ............................................................................... 100

Utesch, Peggy, Western Organization of Resource Councils & Western 

Colorado Congress ........................................................................................ 102

Prepared statement of ............................................................................... 104

Additional materials supplied: 

Devaney, Earl E., Inspector General, U.S. Department of the Interior, 

Letter submitted for the record by Hon. Stevan Pearce ............................ 8

Hoeven, Hon. John, Governor of North Dakota, Chairman, Interstate 

Oil & Gas Compact Commission, Letter submitted for the record by 

Hon. Stevan Pearce ....................................................................................... 112

Natchees, Maxine, Chairman, Business Committee, Ute Indian Tribe, 

Uintah & Ouray Reservation Utah, Letter submitted for the record 

by John Jurrius ............................................................................................. 63

(1)

OVERSIGHT HEARING ON ‘‘LAND-USE ISSUES 

ASSOCIATED WITH ONSHORE OIL AND GAS 

LEASING AND DEVELOPMENT’’

Thursday, April 26, 2007

U.S. House of Representatives 

Subcommittee on National Parks, Forests & Public Lands, 

joint with the Subcommittee on Energy and Mineral Resources 

Committee on Natural Resources 

Washington, D.C.

The Subcommittees met, pursuant to call, at 10:08 a.m. in Room 

1334, Longworth House Office Building. Hon. Rau ́l M. Grijalva 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Grijalva, Costa, Pearce, Holt, Lamborn, 

Shuler, and Udall. 

STATEMENT OF THE HONORABLE RAU ́ L M. GRIJALVA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA 

Mr. GRIJALVA. Let me call to order the joint hearing of the 

Subcommittee on National Parks, Forests and Public Lands, and 

the Subcommittee on Energy and Mineral Resources on land uses 

associated with onshore oil and gas leasing and development. 

Our colleagues, the Ranking Members, will be here shortly. One 

is testifying and one is on the Floor, but we will begin with our 

opening statements and by the time we are done I think they will 

be arriving. 

I am pleased today to join Chairman Costa in welcoming our 

witnesses and audience to this joint oversight hearing. Today’s 

hearing will examine how the accelerated pace of oil and gas 

development on public lands in recent years is affecting other 

public uses and resources. 

Today, we will hear from witnesses who have come a long way 

to tell us about what the oil and gas boom has meant to the ranchers, their homes, their health, and their livelihoods. Most have 

never testified before Congress. One is a living descendent of Chief 

Seattle, and another has never traveled east of the Mississippi. At 

least two of our witnesses have had to sell their homes because of 

oil and gas development that drove them off the land that they 

loved. Other witnesses will tell us of leasing operations that have 

been permitted to undermine Federal and state investments, and 

clean water, endangered species protection, and invasive species 

control. 

It is not surprising that regular citizens can’t get satisfaction out 

of BLM when they complain about the harm that their cattle, 

2

property, and water is suffering. The BLM sometimes can’t even be 

bothered to address concerns of the National Park Service, its sister agency in the Interior Department. I have here copies of numerous letters sent to BLM from park superintendents in Utah, 

Colorado, and New Mexico who wrote to express worries and possibly unacceptable damage to park resources. 

The letters talk about threats to the park’s pristine air and sparkling waters, to views of starlit night skies and majestic western 

panoramas, to the backcountry solitude, and the quiet that visitors 

treasure when they visit these sights, to the archeological jewels 

and to the wild creatures that call the parks their home. In most 

cases, the superintendents did not request that the parcels be withdrawn, merely that the leases be delayed until stipulations could 

be put in place to protect those park values. 

In some cases, BLM made changes reflecting the parks’ concerns. 

In others, BLM ignored the superintendents’ pleas, belittled their 

concerns, or simply did not respond. 

I would like to enter these letters into the record. 

[NOTE: The letters submitted for the record have been 

retained in the Committee’s official files.] 

Mr. GRIJALVA. We also will hear today from a representative of 

the Western Governors’ Association, which has called for the repeal 

of a provision in the Energy Policy Act of 2005, that exempted more 

than a thousand new permits to drill annually from any environmental review and public comment. 

Industry supporters are always asking those who worry about 

the impact of oil and gas development if we drive gas-powered cars 

or heat our houses with natural gas. They imply that if we use oil 

and gas, we have no right to complain about how these products 

are produced. That is a false choice. Our irreplaceable natural resources and critical wildlife populations are paying the price not for 

our energy needs but for the lack of vigilance and oversight. 

There are right places and right ways to develop our energy resources, and there are wrong places and wrong ways to undertake 

that development. Balancing energy production with the care of our 

parks, our wildlife, and the livelihoods of our Western citizens is 

possible. We simply need the resolve to meet that standard. 

At this point let me turn to my colleague, Mr. Costa, for any 

opening remarks he may have. 

[The prepared statement of Mr. Grijalva follows:]

Statement of The Honorable Rau ́ l Grijalva, Chairman,

Subcommittee on National Parks, Forests and Public Lands 

I’m pleased to join Chairman Costa in welcoming our witnesses and audience to 

this joint oversight hearing of the National Parks, Forests and Public Lands Subcommittee and the Energy and Mineral Resources Subcommittee. 

Today’s hearing will examine how the accelerated pace of oil and gas development 

on public lands in recent years is affecting other public uses and resources. 

Today, we will hear from witnesses who have come a long way to tell us about 

what the oil and gas boom has meant to their ranches, their homes, their health 

and their livelihoods. Most have never testified before Congress. One is a lineal descendent of Chief Seattle and another has never before traveled east of the Mississippi. 

At least two of our witnesses have had to sell their homes because oil and gas 

development drove them off the land they loved. Other witnesses will tell us of 

leasing operations that have been permitted to undermine federal and state investments in clean water, endangered species protection and invasive species control. 

3

It’s not surprising that regular citizens can’t get satisfaction out of BLM when 

they complain about harm to their cattle, property and water. The BLM sometimes 

can’t even be bothered to address concerns of the National Park Service, its sister 

agency in the Interior Department. 

I have here copies of numerous letters sent to the BLM from park superintendents in Utah, Colorado and New Mexico who wrote to express worries about possibly 

unacceptable damage to park resources. 

The letters talk about threats to the parks’ pristine air and sparkling waters, to 

views of starlit night skies and majestic western panoramas, to the backcountry solitude and quiet that visitors treasure, to archeological jewels and to the wild creatures that call our parks home. 

In most cases, the superintendents did not request that the parcels be withdrawn, 

merely that the leases be delayed until stipulations could be put in place to protect 

those park values. In some cases, BLM made changes reflecting the parks’ concerns. 

In others, BLM ignored the superintendents’ pleas, belittled their concerns, or simply did not respond. I would like to enter these letters in the record. 

We will also hear today from a representative of the Western Governors Association, which has called for the repeal of a provision in the Energy Policy Act of 2005 

that exempted more than a thousand new permits to drill annually from environmental review and public comment. 

Industry supporters are always asking those who worry about the impact of oil 

and gas development if we drive gasoline-powered cars or heat our houses with natural gas. They imply that if we use oil and gas, we have no right to complain about 

how those products are produced. 

But that is a false choice. Our irreplaceable natural resources and critical wildlife 

populations are paying the price not for our energy needs, but for lack of vigilance. 

There are right places and right ways to develop our energy resources, and there 

are wrong places and wrong ways to undertake that development. Balancing energy 

production with the care of our parks, our wildlife and the livelihoods of our western 

citizens is possible. We simply need to resolve to meet that standard. 

STATEMENT OF JIM COSTA, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. COSTA. Thank you very much, Mr. Chairman. It is indeed my 

honor to hold this joint hearing between the two Subcommittees, 

the Subcommittee on National Parks, Forests and Public Lands. I 

know what passion and energy you and your staff and your committee members bring to your efforts in the 110th Congress, to focusing on prioritizing the needs of our national parks, our forests, 

and public lands. 

Our Subcommittee on Energy and Mineral Resources, as it 

relates to our efforts on public lands, complements the efforts that 

you work on, and so it is fitting and appropriate that this morning 

the two Subcommittees meet together in a joint hearing to examine 

how we can better be stewards, responsible stewards in producing 

the necessary energy for our country, for our citizens to maintain 

our ability to provide a quality of life, and to continue economic opportunities for all. But, as we know, therein lies the challenge of 

the balance between providing the sustenance for our economy and 

at the same time protecting that quality of life that all of our citizens, I think, feel very serious about, and concerned. 

So as we look about producing energy from a variety of resources, 

as we talk about the overlapping jurisdictions between these two 

Subcommittees, we need to look at how we do so in a responsible 

way that allows for sustainability. So we will have witnesses testifying this morning in three panels that we are all looking forward 

to hearing from, including our first witness, a colleague of ours, 

Congressman Peterson, that talks about this balance, that talks 

4

about the sustainability, that talks about how we do so in a responsible fashion. 

Certainly we know that the effect of oil and gas development impacts our quality of life. It impacts our lands, our water, 

communities—especially in the West where it is predominant. So 

this morning will give us a chance to better understand and collaborate how we deal with the effects, for example, of coalbed 

methane production that are associated with ‘‘split-a-state’’ concerns. 

We will have a chance to look at the impacts of the 2004 1.5 trillion cubic feet of coalbed methane that was produced in five Rocky 

Mountain states that provides an important source of energy. Six 

percent of the total U.S. natural gas supply, of course, by the Western Governors’ Association account, is derived from there. We know 

that oil and gas currently provides 63 percent of the U.S. consumption needs. 

We held a hearing with our Subcommittee on March 14. Testimony was added from the acting Bureau of Land Management Director Jim Hughes that 44 million acres of onshore bedroll lands 

nationwide are currently under lease out of 270-million-plus acres 

of Federal lands. You can do the math and understand clearly what 

percentage 44 million acres is of 270 million acres. 

In five Rocky Mountain states, 85 percent of all the oil resources 

and 88 percent of all the natural gas resources on Federal lands 

are currently available for leasing. There is always the argument 

we are not doing enough. Well, I would submit for the record that 

85 percent of Federal lands that currently are available is quite a 

bit. 

Finally, let us talk about where we go from here, and I think 

that is something that we are looking forward to in the testimony 

this morning, because this hearing is about balance, it is about sustainability, and it is about being good stewards of our environment. 

So, Mr. Chairman, I am pleased that we could hold the two Subcommittees in a joint hearing for the purpose of doing good public 

policy, and I look forward to hearing the testimony from the 

witnesses. Thank you. 

Mr. GRIJALVA. Thank you very much, Mr. Chairman, and let me 

by way of an announcement, when Ranking Member Pearce and 

Ranking Member Bishop arrive from the commitments that they 

have outside this hearing, wherever we are in the process, I will 

suspend that and allow the gentlemen to give their opening statements. 

With that, let me turn to our first witness today, our colleague 

from Pennsylvania, Representative John Peterson. Representative 

Peterson, thank you so much for being here, and we look forward 

to your comments. 

STATEMENT OF JOHN E. PETERSON, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF PENNSYLVANIA 

Mr. PETERSON. Thank you very much. It is a delight to be back 

at my committee, or what I have been a part of for 10 years. I 

fought to stay here, but got bumped off. I want to thank Chairman 

Grijalva, Chairman Costa, and Ranking Members Bishop and 

5

Pearce for allowing me to come back to my old committee and testify today. 

I spent 10 years here, and represent the most rural district east 

of the Mississippi, a district that looks an awful lot like the West. 

My district is home to Pennsylvania’s only national forest, abundant supply of coal, natural gas, some oil, and I live five minutes 

from Drake Well, the first oil well ever produced in the world, and 

I want to just talk about that a minute. 

Oil Creek Valley that culminated from Drake Well is a valley between Titusville and Oil City, Pennsylvania, and the City of Oil 

City was where Quaker State, Pennzoil and Kendall, and all the 

major refineries, Standard Oil, they all started there. That valley 

was decimated. Back then they didn’t know how to produce oil. 

They punched holes in the ground and oil sprayed everywhere. I 

have pictures of that valley and the hillsides surrounding it where 

there was not a blade of grass, not a tree alive; just dead snags and 

nothing alive. 

Today, that is a state park. It is a mature hardwood forest. The 

springs are clear. Three are brook trout streams which is a pretty 

good symbol that water quality is back, and Oil Creek itself, which 

was called Oil Creek before they produced oil there because oil 

pressure pushed oil up out of the ground, and so there was always 

a scum of oil on Oil Creek historically because of the oil sand being 

close to the surface. It was only 68 feet deep there when they discovered oil. That is why they discovered it there. 

That valley today, that stream today, trout and small-mouth bass 

both propagate there naturally. That is not very common. It is one 

our best fisheries in eastern Pennsylvania. It shows you what nature does when allowed to recuperate. 

My district is the shining example of how we can both produce 

energy responsibly while preserving the natural beauty of our land. 

I know this is the purpose of the hearing today, to help us strike 

this balance. 

However, I fear the committee may be moving beyond mitigation 

of energy production on our public lands toward decreased access, 

which I hope will not be the case. It will cause serious economic 

security, energy security, and national security issues, and I will 

try to explain that more clearly. 

So that is why I am here, to hopefully remind us all that energy 

production on our public lands can be done responsibly while supporting our economy, enhancing our security, and maintaining 

wildlife habitat and recreation right along side of it. 

Today, our energy consumption in this country is 86 percent fossil fuel. I know that is what distresses us all, 86 percent. We have 

8 percent nuclear. That leaves us a small percentage of renewables, 

which I will talk about in a minute. About 90 percent of America’s 

energy is on public land, and as it is under our prevail. Thus, we 

must have access to our public lands in order to have affordable domestic energy to heat and cool our homes and businesses, and to 

employ workers, and produce goods in America. 

Much of this public land is already locked up for energy production, and the numbers were just given, and locking up more I think 

would be bad public policy. It needs to be produced right, by the 

laws, by the rules. It can be done correctly. The resources in the 

6

West do not belong to the West. They belong to all Americans. My 

constituents need access to those resources as the rest of America 

does. 

I am a strong supporter of renewables. I have worked with my 

staff all year on how we can increase renewables, and the farther 

I dig into it the more concerned I get. There is no silver bullet 

when it comes to renewables. I wish there were, and we have the 

chart here of today’s consumption, and when you get down the renewables the number is scarcely small: 86 percent fossil fuels, 8 

percent nuclear, 6 percent renewables, and 5 percent of that is hydroelectric or biomass. One percent makes up all the ones we are 

trying to build our future on—wind, solar, biofuels and hydrogen, 

and I haven’t found one of them that can double in the next 10 

years in volume, though we are increasing our use of energy 3 percent a year. 

I think we need to be careful how we target big oil also. I am 

not a fan of big oil, but some may criticize so-called big oil and say 

they don’t need increased access to oil and gas. Policies aimed at 

hurting big oil, whether they are tax increases by Ways and 

Means, or decreased access to public lands by this committee, don’t 

reach their intended targets because independent oil and natural 

gas producers drill 90 percent of the nation’s oil and gas wells. 

These small business operators are responsible for supplying 68 

percent of American’s oil and 82 percent of overall American natural gas. At the same time increased taxes and decreased access 

here at home simply serve to push production overseas. When we 

produce energy at home, lots of Americans make money, lots of 

people make livings, it is a part of our economy. When we buy 

energy from overseas, there are no American jobs, there is no 

American economy. We just send our money to foreign countries. 

So let us be careful when we use big oil as an excuse to block 

production because in reality it is the small producers who we are 

hurting most. 

The negative impacts from decreased access to domestic energy 

are felt across our country. I believe the biggest threat to America’s 

economic future is not terrorism. It will be available, affordable energy. The world’s energy supplies are very tight. We have never 

faced this before. We have never had China and India that are 

soon going to be larger consumers of energy than us, and we are 

going to fight—and probably the word is fight—to have energy for 

this country, affordable energy for this country. 

American businesses are already being driven offshore by rising 

prices and specifically natural gas. Polymers, plastic, chemicals, 

fertilizer, glass, steel, aluminum are struggling to compete in 

America because they pay the highest natural gas prices in the 

world. When oil is $70 a barrel, the whole world pays. But we have 

had the highest natural gas prices in America now for six years, 

and it is causing our major companies to decide whether they are 

going to remain here or whether they can remain here, and be competitive when other countries have natural gas at a fraction of the 

cost that they pay here. 

They are crying for Congress to make it easier to harness energy 

here at home, not harder. I can also point to the trade deficit as 

an example of inadequate domestic energy supply hurting our 

7

economy. A third of our trade deficit comes from buying foreign 

energy from unstable governments, countries who don’t support us, 

countries who could very quickly be our enemy. 

I don’t know about you, but I don’t feel very comfortable with 

that. 

There is a world shortage of energy. We must conserve. We 

waste a lot of energy, and we must do everything we can to use 

energy more wisely. What has concerned me—I have been in Congress, this is my eleventh year—is that we have increased dependence on foreign oil by 2 percent a year from unstable foreign countries who don’t like us and whose governments are not even friends 

of ours. 

I am not advocating that industry have carte blanche with our 

public lands. We can have access to plentiful domestic energy while 

also improving our environment and public lands thanks to improved technology. 

Yes, we should mitigate environmental impact on public lands 

from oil and gas production, but we should do so in a reasonable 

manner that doesn’t have the end result of shutting down production, moving jobs overseas, increasing our reliance on foreign energy, and decreasing our security. 

It is my view that if we don’t find a way to have more affordable 

energy and prevent the next spikes of energy costs in this country, 

we will be saying to the working men and women of America you 

won’t have a job here. We won’t make bricks here. We won’t make 

glass here. We won’t bend steel here. We won’t bend aluminum 

here. We will not make petrochemicals because 55 percent of their 

cost is natural gas. Seventy percent of the cost of some kinds of fertilizer is natural gas. 

Affordable natural gas is the mother’s milk of the future of 

America, and we have to somehow figure out how to produce natural gas for this country, both onshore and offshore. In my view, 

those who think buying LNG from unstable foreign countries is the 

answer should look in another direction. I don’t think we should 

because we have ample supplies of natural gas. 

We must look at these issues like a three-legged American stool 

made up of energy, environment, and economy. If one leg collapses, 

we all fall. The chair cannot stand. 

I thank you for the chance to speak with you and will be glad 

to take any of your questions. 

Mr. GRIJALVA. Let me see if there are any questions? Mr. Pearce, 

Gentlemen? 

Thank you very much, sir. 

Mr. PETERSON. Thank you. 

Mr. GRIJALVA. At this point let me turn to Ranking Member 

Peace for any opening comments he may have. 

STATEMENT OF STEVAN PEARCE, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF NEW MEXICO 

Mr. PEARCE. Thank you, Mr. Chairman. I apologize for being 

late, testifying in another committee actually, so appreciate the opportunity to visit, appreciate Mr. Peterson’s comments also. He has 

been dedicated to the idea of affordable energy for the entire career 

that I have seen him here. 

8

Before I start, Mr. Chairman, I would like to submit a letter for 

the record. You know, we that get into this business we know that 

there are going to be scraps and scrapes, but we have a lot of public servants out there who work year after year after year, and 

sometimes we thoughtlessly pull them in. We play our games with 

them, and one of our witnesses today, Mr. Bisson, from the BLM 

had an allegation made a year ago that he was somehow breaking 

the law by meeting with state and local officials, and coordinating 

with them. 

After a year-long investigation, the IG put a report out that completely exonerates him, and said he was doing a job. He wasn’t 

meeting with state and local officials. He was coordinating Federal 

government affairs. So I would request unanimous consent to submit this for the record so that his good name has been cleared in 

an official way in this committee. 

Mr. GRIJALVA. Without objection. 

[The DOI letter submitted for the record follows:]


34983.013.eps
9

Mr. PEARCE. Thank you. 

We have had a series of hearing today, and as we have the different panels come up I would like to note that we had a hearing 

called ‘‘The Evolving West’’ where we described maybe the producVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 L:\DOCS\34983.TXT Hresour1 PsN: KATHY

34983.014.eps 34983.015.eps
10

tion should not be oil and gas production, mining those activities 

maybe should not be a part of the West; that there were people 

calling on the new West, the evolving West. 

We also had a hearing called ‘‘Access Denied’’, and then the third 

title was a little curious, ‘‘Implementation of Title 3, Oil and Gas 

of the Energy Policy Act,’’ but the letters that went out inviting 

asked if you would like to testify about anything you would like to 

repeal instead of implementing that Act, and today we are having 

the hearing called ‘‘Land-use Issues Associated with Onshore Oil 

and Gas Leasing and Development.’’

Now, my caution is that I would like for you to think about to 

an earlier time in our history when we began to talk about the timber industry as if it we exploiting, as if it were doing an illegal and 

an immoral thing, and we used the words of fine people who came 

into these rooms and testified to create an illusion that an industry 

needed to be gone, and today it is. Over 20,000 jobs just in the timber mills, we had 22 timber mills in New Mexico. We are down to 

two, and they can’t get enough boards to actually do their business, 

and that decision was made on words that were casually and innocently spoken in these hearing rooms, and then used to justify. 

So contemplate very deeply where we as policymakers might be 

wanting to move. I will tell you that as I look and listen to Mr. Peterson I remember the testimony from last week or the week before 

that said that we were giving away over 3 million manufacturing 

jobs. We have outsourced them because of the high cost of energy. 

Now, if we continue to that, we have to realize our standard of 

living is going to change, that we won’t have the time for the leisure activities or the money. So as we describe the oil and gas industry, I appreciate your objectivity, but also remember, if I could 

get my staff to hold up a chart, we are not producing nearly—I 

mean, when we look at the amount of public lands, the large piece 

of that pie is what is not produced. The small piece is what we actually have a footprint on, what we actually lease. 

So when people are telling me that we are using all of our public 

lands and destroying them with oil and gas and mining, I will tell 

you it is simply not true. The facts speak otherwise. The American 

people deserve more because right now we are in a tremendous 

race with China and India. They would like our jobs, and we have 

people, frankly, in this country that are willing to them our jobs 

to them. They have given our timber jobs to Canada, to other nations. Now they would like to give our oil and gas jobs away, and 

you contemplate if you want to pay three or four times as much 

for your energy. 

For instance, if you are a mountain bike firm, how do your people get there? Your customers come because they fly. Your customers come and stay in hotels that are heated with natural gas. 

If the price of gasoline, the price of oil goes up to three and four 

times, how many of your people are going to come visit? 

So let us be working for the balance here. Let us talk about the 

truth, and while we are trying to turn this country away from oil 

and gas and coal, remember that the Chinese are building 10 

plants in the next year, one plant per week, 544 coal plants already 

being built. So they are willing to have cheap energy while we are 

trying to move toward expensive energy. It is a contemplation that 

11

all should spend a lot of time on, and that we should be very 

thoughtful about. 

Mr. Chairman, I appreciate the opportunity to make a couple of 

statement, and I yield back. 

Mr. GRIJALVA. Thank you, sir, and let me at this point call our 

first panel forward, please. 

Mr. Ferguson, Mr. Bisson, let me welcome you. Thank you very 

much for being here today, and I would like to also advise you that 

your full statements will be made part of the record, and we would 

like to ask you to limit your oral statement to five minutes, and 

let me begin with Mr. Ferguson. Sir. 

STATEMENT OF TONY L. FERGUSON, DIRECTOR, MINERALS 

AND GEOLOGY MANAGEMENT, UNITED STATES FOREST 

SERVICE, U.S. DEPARTMENT OF AGRICULTURE 

Mr. FERGUSON. Thank you for the opportunity to discuss this important topic and the role of the Forest Service in natural and oil 

and gas leasing and development. I am very pleased to be with you 

today. 

The Forest Service manages 193 million acres in the natural 

forest system. More than 7,200 authorized oil and gas leases covering over 6.1 million acres are located on natural forest and grass 

lands. The Forest Service works in partnership with the Bureau of 

Land Management to manage oil and gas resource development on 

the Forest Service lands. The BLM, through the authority of the 

Secretary of the Interior, has management responsibilities for the 

Federal mineral estate, which includes leasing Federal minerals 

that underlie national forest system lands. The Forest Service is responsible for the management of the surface resources on oil and 

gas projects proposed and operating on Forest Service. 

Before the BLM may lease oil and gas resources underlying national forest system lands, the Forest Service completes broad-scale 

leasing analyses to determine which land are appropriate for development. When Forest Service lands are nominated by industry for 

leasing, the leased parcel may be offered for sale subject to Forest 

Service validation and verification of consistency with planned requirement, Forest Service planned requirements in compliance 

with the National Environmental Policy Act and other environmental laws. BLM cannot issue a lease on Forest Service lands 

over the objection of the Forest Service. 

After the lease has been issued, the lessee must submit an application for permit to drill, and you will commonly hear this called 

an APD, to the BLM prior to the surface disturbing activity. The 

application consists of two parts or plans. The first part is a surface 

use plan of operation, and that is commonly called the SUPO, SU-P-O. The second part is the drilling plan. 

When the application for drilling on Forest Service land is received by the Bureau of Land Management, they send us, the 

Forest Service, the surface use plan of operation for processing. The 

Forest Service establishes the terms and conditions of approval for 

both the surface use plan and any necessary associated authorizations. 

Concurrently, the BLM processes the drilling plan. After we have 

notified the BLM that the surface plan has been approved, the 

12

BLM can approve the application for drilling. When the well is 

drilled and operating, agencies share inspection and enforcement 

responsibilities. 

Today, I would like to focus on a couple of sections in the Energy 

Policy Act of 2005 that also relate to oil and gas operations on national forest system lands. There is some additional information in 

my submitted statement. 

Tasks described in Section 362 of the Energy Policy Act resulted 

in the update and re-issuance of the Gold Book, which is sometimes 

called—it is the Surface Operating Standards and Guidelines for 

oil and gas exploration and development. This book specifically addresses best management practices for oil and gas operations, and 

this was a joint effort by the BLM and Forest Service. 

Section 366 resulted in the update and recent re-issuance of the 

Onshore Oil and Gas Order No. 1, which is a set of rules for conducting operations on Federal oil and gas leases. The Forest Service worked closely with the BLM to revise the onshore order and 

the Gold Book as joint authors. We are also coordinating with the 

BLM to develop a training module for oil and gas operators which 

will explain changes in the onshore oil and gas order. 

Section 390 of the Energy Policy Act directed the Secretaries of 

Interior and Agriculture to use five new categorical exclusions for 

approving oil and gas activities conducted pursuant to the Mineral 

Leasing Act. The Section 390 categorical exclusions are limited to 

oil and gas activities in existing areas of development, previously 

analyzed through a National Environmental Policy Act process 

with full public notice and comment. 

New activities must be within land use plans approved within 

the previous five years or with surface disturbance limited to five 

acres and a previous NEPA project decision. To date, the Forest 

Service has used the Section 390 categorical exclusion to approve 

about 300 projects. 

In addition to the categorical exclusions in Section 390, the 

Forest Service has also promulgated a new administrative categorical exclusion for limited oil and gas exploration and development 

activities in newly identified fields. The Council of Environmental 

Quality, upon review of this exclusion, found that it was in conformance with NEPA and its implementing regulations. 

Since approval of this new categorical exclusion in February of 

this year, February 15th of this year, the category has only been 

used two times. For the 2007 program, the Forest Service will continue to process and coordinate energy mineral projects on national 

forest system lands in accordance with the Energy Policy Act, the 

agency’s strategic plan, and the Department of Agriculture’s priorities. We will also continue to process new lease applications and 

surface use plans within the established time frames, and finally, 

the Forest Service will continue to coordinate closely with the BLM 

to meet the mandates of the Energy Policy Act. 

I want to thank you for this opportunity to briefly discuss the 

Forest Service oil and gas program, and I am happy to answer any 

questions you may have. 

[The prepared statement of Mr. Ferguson follows:]

13

Statement of Tony L. Ferguson, Director of Minerals & Geology 

Management, National Forest System, U.S. Forest Service, U.S. 

Department of Agriculture 

Mr. Chairman and members of the Subcommittee, thank you for the opportunity 

to discuss land use issues related to the Forest Service’s role in the federal oil and 

gas leasing and development program. I am pleased to be here with you today. 

Forest Service Oil and Gas Resources 

The Forest Service manages 193 million acres in the National Forest System 

(NFS). More than 7,200 authorized oil and gas leases which cover over 6.1 million 

acres are located on national forests and grasslands. 

Forest Service Oil and Gas Program Authorities 

The Forest Service works in partnership with the Bureau of Land Management 

(BLM) to manage oil and gas resource development on NFS lands. The BLM 

through the Secretary of the Interior has management responsibilities for the federal mineral estate including federal minerals that underlie NFS lands. The Forest 

Service is responsible for management of surface resources on oil and gas projects 

proposed and operating on NFS lands. 

Before the BLM may lease oil and gas resources underlying NFS lands, the Forest 

Service completes broad scale leasing analysis to determine lands that are appropriate for development and made administratively available. This leasing analysis 

process is conducted with public involvement and in compliance with the NEPA. 

When analysis is completed, the Forest Service informs the BLM of the available 

lands and under what surface resource protection stipulations they may be leased. 

When NFS lands are nominated by industry for leasing, the lease parcel may be 

offered for sale, subject to validation and verification of consistency with forest plan 

requirements and adequacy of NEPA and other environmental law compliance completed by the Forest Service. BLM cannot issue a lease on NFS lands over the objection of the Forest Service. 

When the lease has been sold—and prior to development and surface disturbing 

activities such as drilling, the lessee must submit an application for permit to drill, 

commonly called an APD, to the BLM. The APD includes a surface use plan of operations (SUPO) and a drilling plan. The BLM sends the SUPO portion of the APD 

to the Forest Service for processing with appropriate environmental analysis and 

public involvement. At the same time BLM continues to process the drilling plan. 

The Forest Service establishes the terms and conditions of approval for both the 

SUPO and any associated special use authorizations. After the Forest Service notifies the BLM that the SUPO is approved, the BLM can approve the APD. When 

the well is drilled and operating, agencies share inspection and enforcement responsibilities. 

National Energy Policy and the Energy Policy Act 

In May of 2001, the President’s National Energy Policy included goals to diversify 

and increase energy supplies, encourage conservation, and ensure adequate energy 

distribution. The National Energy Policy goals include increasing energy supplies 

while protecting the environment. Increasing energy supply means to ensure that, 

where appropriate, lands are made available for energy mineral development and 

production, as well as for the necessary infrastructure such as energy facility corridors for pipelines. Development of domestic energy supplies will be an essential 

component to meet future national energy demands. This goal to increase energy 

supplies while protecting the environment is consistent with the mission of the 

Forest Service to sustain the health, diversity, and productivity of the Nation’s forests and grasslands to meet the needs of present and future generations. 

Today I will focus on the portions of the Energy Policy Act of 2005 related to oil 

and gas operations on National Forest System lands. The Act tasks Federal agencies 

to help facilitate energy development and encourage the efficient use of resources 

within the U.S. borders, consistent with economic growth and environmental responsibility, and to work to improve energy use and efficiency from both traditional 

sources, such as oil and gas, and from new resources such as wind and solar power. 

The Act directs agencies to emphasize efficiencies to facilitate the timely processing 

of energy leasing and permit applications. 

As previously described, the Forest Service, as a surface management agency, 

works closely with the BLM to implement those portions of the Energy Policy Act 

affecting National Forest System lands. The Secretaries of the Interior and Agriculture signed the Memorandum of Understanding required under Section 363 to coordinate timely processing of lease applications and permits to eliminate duplication 

and coordinate stipulations to protect the natural resources. We are making signifiVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00019 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
14

cant progress in developing the joint data tracking and retrieval system and GIS 

mapping system for tracking lease parcel requests and permit applications. The 

joint GIS mapping system will provide a critical spatial component that will help 

to more easily analyze the relationship and management of surface resources across 

land ownership boundaries. 

Section 366 of the Energy Policy Act sets timeframes and other provisions for 

processing permit applications. Section 362 provides for development of Best Management Practices for improved enforcement and inspection of oil and gas activities 

and terms and conditions of permits to drill. These two sections combined resulted 

in the update and re-issuance of the Onshore Order #1 and the Gold Book—Surface 

Operating Guidelines. The Forest Service worked with the BLM to revise the Order 

and Gold Book. We are working with the BLM to develop a training module that 

will be delivered via satellite to oil and gas operators explaining changes and the 

update to the Onshore Order Number 1. 

To implement Section 365, the Forest Service, Department of the Interior and 

other federal agencies entered into an interagency Memorandum of Understanding 

that has improved energy permit coordination on Federal lands and included assignment of personnel to pilot project offices. The Forest Service participates in four 

pilot project offices located in areas with a high volume of development and project 

proposals. Six Forest Service personnel are located in the Farmington, New Mexico, 

Buffalo, Wyoming, Vernal, Utah and Glenwood Springs, Colorado Pilot Offices. 

The Forest Service through the Program Assessment Rating Tool process developed a definition of ‘‘backlogged’’ lease applications and surface use plans as those 

pending approval at the end of FY 2003. By the end of FY 2007, we anticipate eliminating all of these older ‘‘backlogged’’ lease applications and SUPOs. Beginning in 

FY 2008, the Forest Service will continue to measure program success by evaluating 

processing efficiency measured against timeframes established in Section 366 of the 

Energy Policy Act and incorporated into the revised Onshore Order Number 1. 

Section 390 of the Energy Policy Act directs the Secretaries of the Interior and 

Agriculture to use five new categorical exclusions (CEs) for approving oil and gas 

activities conducted pursuant to the Mineral Leasing Act. The Section 390 CEs are 

limited to oil and gas activities in existing areas of development with previously approved development, analyzed through a NEPA process. The new activities must be 

within existing areas with land use plans approved within the previous five years, 

or with surface disturbance limited to 5 acres and a previous project with a NEPA 

process decision. To date, the Forest Service has used the Section 390 CEs to approve about 300 projects. 

CEs are part of full compliance with the National Environmental Policy Act 

(NEPA). The Council on Environmental Quality regulations (40 CFR 1500 et seq.) 

for implementing the NEPA allows agencies to include categorical exclusions in 

agency NEPA procedures. Agencies are to reduce excessive paperwork and delay by 

using categorical exclusions to define categories of actions which do not individually 

or cumulatively have a significant effect on the human environment and which are 

therefore exempt from requirements to prepare an environmental impact statement. 

(§ 1500.4(p)) and (§ 1500.5(k)). 

In addition to the CEs provided under Section 390, the Forest Service has promulgated a new CE for limited oil and gas exploration and development activities in 

newly identified fields. This CE does not, and is not intended to, overlap or duplicate the activities contained in the Section 390 CEs. It is complementary to Section 

390 and taken in concert, this CE and the five statutory CEs provide the authorities 

to analyze and approve a full range of small projects with non-significant environmental effects in existing and new fields or corridors. In approving this new CE, 

the Forest Service followed a public notice and comment process. The Forest Service 

reviewed the effects of small oil and gas exploration and development projects which 

occurred over a five year period. Based on general program experience and the results of this review, the Forest Service determined those activities with limited 

road-building and utility-laying do not have significant effects and therefore would 

not require documentation in an environmental assessment or environmental impact statement. The Council of Environmental Quality, upon review of this CE, 

found that the CE conformed with NEPA and it’s implementing regulations. This 

CE is to approve a surface use plan of operations for oil and gas exploration and 

initial development activities, associated with or adjacent to a new oil and/or gas 

field or area, so long as the approval will not authorize activities in excess of any 

of the following: one mile of new road construction; one mile of road reconstruction; 

three miles of individual or co-located pipelines and/or utilities disturbance; and four 

drill sites. Since approval of this new CE on February 15, 2007, the category has 

been used two times. 

15

FY 2007 Program 

The Forest Service will continue to expedite and facilitate energy mineral projects 

on National Forest System lands in accordance with the Energy Policy Act, the 

agency strategic plan, and Department of Agriculture priorities. The Forest Service 

will continue to process new lease applications and the Surface Use Plan of Operations portion of an APD within the established timeframes. The Forest Service will 

continue to coordinate closely with the BLM to meet the mandates of the Energy 

Policy Act and direction in the National Energy Plan. 

Conclusion 

Thank you for this opportunity to discuss the Forest Service oil and gas program. 

I am happy to answer any questions that you may have. 

Response to questions submitted for the record by Tony L. Ferguson 

Question from Congressman Rau ́l Grijalva: 

1. How many acres of National Forest System lands has the Forest Service 

determined to be unsuitable and therefore not available for oil and gas 

leasing? 

Prior to identifying lands administratively available for oil and gas leasing to the 

BLM the Forest Service must conduct a broad scale area or forest-wide leasing analysis. At the conclusion of this analysis the authorized forest officer shall identify on 

maps those lands: 

1. Open for development subject to the terms and conditions of the standard oil 

and gas lease form. 

2. Open to development but subject to constraints that will require the use of 

lease stipulations such as those prohibiting surface use. 

3. Closed to leasing, distinguishing between those areas that are being closed 

through exercise of management direction and those closed by law and regulation. 

All forests are required to conduct such an analysis. There are several factors that 

may influence the distribution of acres into each category such as oil and gas potential, resource concerns and special area designations. The specific information requested is not readily available. BLM maintains a database for all federal minerals 

of lands currently under lease and areas with pending lease applications. 

See the leasing information below for the Bridger-Teton National Forest as one 

example of acres determined to be unavailable for oil and gas leasing. 

Questions from Congressman Mark Udall: 

1. How does the Forest Service feel about using the EPAct Section 390 

Categorical Exclusions and the WGA Resolution? 

The Forest Service views the Energy Policy Act Section 390 Categorical Exclusions as a useful tool in processing the surface use plan of operation when applicable. The Section 390 CEs are limited to oil and gas activities in existing areas of 

development with previously approved development analyzed through a NEPA process. The new activity must be within existing areas with land use plans approved 

within the last five years, or with surface disturbance limited to five acres and a 

previous project with a NEPA process decision. When it is appropriate to use one 

of the CEs the Forest must still ensure that the proposed project is in compliance 

with all other laws and regulations such as, the Endangered Species Act and the 

National Historic Preservation Act. To date the Forest Service has used the Section 

390 CEs to approve about 300 projects. This tool has added to our ability to meet 

processing timelines established in Section 366 of the Energy Policy Act while still 

limiting resource disturbance. 

The Forest Service is aware of the concerns expressed by the Western Governors 

Association in their resolution. We are committed to working with the states and 

their resource agencies to ensure that resources are being protected in accordance 

with laws and regulations. 

2. What is the status of oil and gas leasing on the Wyoming Range of the 

Bridger-Teton National Forest? How much production of oil and gas is 

occurring? 

Here is a summary of the status of oil and gas leasing on the Bridger-Teton National Forest, including the Wyoming Range. 

Forest Land Management Plan (LMP) Approved March 1990

Total National Forest Acreage - 3,465,000 acres 

16

Wilderness Acreage - 1,300,000 acres 

Unavailable for leasing in LMP - 223,000 acres (non-wilderness) 

Available for Leasing—1,900,000 acres 

Supplemental Information Review completed re: leasing decision adequacy—

spring of 2004

Determined that 1990 leasing decision adequate and still current. 

Acres currently under lease - 186,770 acres (including 95,675 suspended). 

5.4% of the National Forest acres 

5.7% of the National Forest acres if August sale acres included 

27,301 acres within producing leases (primarily Riley Ridge field) (0.7% of 

the National Forest) 

Acres approved for lease, sent to BLM but later withdrawn - 164,553 acres 

(4.7% of the National Forest) 

(Withdrawn at Governor’s request) 

Resubmitted to BLM for sale after additional review in 2005 - 44,720 acres 

(1.3% of the National Forest) 

Results of lease sales of 44,720 acres:

Note: The parcels for the December and April sales have been issued and therefore listed as leases; the parcels for the June and August sale are under lease sale 

protest and therefore have been sold but not yet been issued by BLM. 

2006 lease sale results: 

Bonus Bid on April lease sale = $114.12/acre. ($2.246 million) 

Bonus Bid on June lease sale = $104.55/acre. ($1.306 million) 

The IBLA issued stays on leases on September 21, 2006. Stays have been issued 

by IBLA for the December and April Sales of 12 leases for 20,908.75 acres. As noted 

above, the lease sale protests for the June and August sales have not been resolved 

yet and therefore no IBLA appeal rights exist until the protests are resolved. Once 

the protests are resolved by the BLM, their decision could then be appealed to the 

IBLA for consideration. 

The production and value data below was provided by the Minerals Management 

Service for 2001, the most recent data received. We would expect the numbers for 

2005 and 2006 would be higher than 2001 based on additional wells being drilled 

with increased production and increases in the market values for the commodities.

The Bridger-Teton National Forest was scheduled to complete their forest plan revision in September, 2008 under the new 2005 Planning Rule. However, a recent 

court order has stayed implementation of the 2005 Planning Rule. At this time it 

is unknown exactly what effect the litigation will have on the schedule and revision 

activities for the Bridger-Teton. Litigation activities are on-going to clarify and resolve the court order. The Bridger-Teton is not conducting oil and gas leasing analysis as part of their revision process. 

Mr. GRIJALVA. Thank you very much, sir. 


34983.009.eps 34983.010.eps
17

Mr. Bisson. 

STATEMENT OF HENRI BISSON, DEPUTY DIRECTOR, BUREAU 

OF LAND MANAGEMENT, U.S. DEPARTMENT OF THE INTERIOR 

Mr. BISSON. Chairman Grijalva and members of the Subcommittees, thank you for inviting me to testify at this hearing. 

My name is Henri Bisson, and I am the BLM’s deputy director 

for operations. 

Lands managed by the Department of the Interior produce onethird of all domestic coal, oil and natural gas. Demand for natural 

gas is expected to increase 50 percent over the next 20 years, and 

oil consumption 30 percent. Much of the oil and gas that American 

consumers and businesses depend upon comes from foreign sources. 

This is a huge drain on the nation’s economy. For this and many 

other reasons the Nation is looking more and more at domestic resources from public lands. Consider a few of these facts: 

Since 1970, the size of the average house increased 55 percent 

while the size of the American family decreased 13 percent. Many 

of us use natural gas to heat our homes and power our modern conveniences. Use of natural gas for power generation has nearly doubled over the last 10 years. Ninety percent of all planned electrical 

plants intend to use natural gas in some capacity. Almost all natural gas is produced domestically or imported from Canada. 

The Phase II study conducted under EPCA, as amended by the 

Energy Policy Act of 2005, found that Federal lands in the 11-basin 

study contained 187 trillion cubic feet of natural gas, enough to 

meet the current residential consumption in this country for 39 

years. 

The BLM manages this vast pool of energy under a multiple-use 

mandate that we take seriously. Of the 700 million-acre Federal 

mineral estate we manage, only 42 million acres or 6 percent are 

leased. Of that, 12.3 million acres, less than 2 percent of the Federal mineral estate are in producing status. Nine major laws regulate BLM leases and development permits for oil and gas. Less 

than 1 percent of the 258 million surface acres managed by the 

BLM experience a surface impact from disturbance from oil and 

gas activity. 

Land that is leased does not always see development. Companies 

explore leases and usually end up excluding more lands from being 

developed than are included, but leasing is still essential to exploring for new domestic development and for in-filling existing fields. 

Interest in leasing is reflected in the amount of land nominated 

for lease sales over the past few years. What was typically nominated in a year-long period several years ago is now nominated for 

a single quarterly lease sale in many western states. Recently sales 

have been much larger than they were prior to this boom cycle, but 

the amount of land under lease is actually much lower than historic highs during the eighties. 

As of 2006, the BLM had just over 48,000 leases, totaling approximately 42 million acres. In 1984, the BLM managed over 

115,000 leases, totaling about 131 million acres. In simple terms, 

there were almost two and a half times as many leases in effect 

in the mid-eighties and three times as many acres under lease. 

18

Leasing decisions are not arbitrary, but are based upon land use 

plans where decisions are made on availability of areas for leasing, 

and consider new information, new circumstances before any decision is made to offer these lands. Where other important uses of 

resources exists, BLM may protect the resources and lease the land 

using a variety of tools and stipulations, or BLM may decide not 

to lease the land. 

Leasing is only the first step in this process. We require additional permitting, further environmental analysis if a company 

wants to explore or develop, and in these reviews we determine 

site-specific needs for mitigation measures. These measures may 

include re-vegetation, strategic placement of structures and machinery, colors that blend in the landscape, buffer zones to protect 

wildlife, and burying of utilities under or adjacent to access roads 

to protect wildlife and minimize visual impacts. These are some of 

what I referred to as best management practices in my written 

statement. 

With new technology and innovative management tools, recreation, wildlife, energy, and a variety of other uses can co-exist. Development has become drastically lighter on the land than in the 

past. 

This concludes my opening remarks, and I will be happy to answer any questions, Mr. Chairman. 

[The prepared statement of Mr. Bisson follows:]

Statement of Henri Bisson, Deputy Director,

Bureau of Land Management, U.S. Department of the Interior 

Messrs. Chairmen and Members of the Subcommittees, thank you for the opportunity to appear here today to discuss Oil and Gas Impacts on the Public Lands. 

Background 

The Bureau of Land Management (BLM) is the steward of 258 million surface 

acres of public lands and 700 million acres of subsurface mineral estate and manages them in accordance with the 1976 Federal Land Policy and Management Act. 

These public lands contain a myriad of important resources and provide for a variety of our Nation’s needs and interests, such as outdoor recreation, domestic energy, 

wildlife habitat, livestock grazing, timber, and the enjoyment and protection of other 

natural, cultural, and historical resources. With the rapid population growth in the 

west—from nearly 20 million people in 1950 to more than 60 million today—the 

pressures to meet complex, and sometimes competing, demands for public land resources also has grown exponentially. 

As one of the Nation’s oldest land management agencies, the BLM also delivers 

value on a daily basis to the American public. Each dollar spent by the taxpayer 

on BLM activities is an investment, not only in the land, but also in an ongoing 

revenue stream. The BLM is an important source of revenue to the Treasury. Royalties collected from energy leasing, and fees collected from other public land uses, 

all serve to benefit the taxpayer. In 2008, public lands will generate an estimated 

$4.5 billion in revenues, mostly from energy development. Approximately 44 percent 

of these receipts are provided directly to States and counties to support roads, 

schools, and other community needs. These activities also contribute to a more secure and reliable energy future for our country, providing a mix of both renewable 

and conventional energy supplies from the public lands. 

At the same time, BLM-managed public lands are being used for recreation by 

the American public in increasing numbers. We also have important responsibilities 

in managing for critical wildlife habitat, cultural resources, our National Monuments, and wilderness values, to name a few. 

The BLM is dedicated to ensuring that all Americans benefit from the agency’s 

multiple-use mandate. This means ensuring that environmental and other recreational interests are considered when making decisions about renewable and conventional energy development on our public lands. We appreciate the opportunity 

19

to discuss our efforts toward this end. Our top priorities in the upcoming fiscal year 

are to: 

• Maintain or restore the health of the land and enhance vital habitat; 

• Provide the Nation with dependable, affordable energy developed in an environmentally-sound manner; and 

• Improve the efficiency of the BLM’s operational and administrative functions. 

Healthy Lands Initiative 

A high priority of Secretary Kempthorne is the Healthy Lands Initiative, which 

was included in the President’s FY 2008 budget request. As activities on public land 

increase, we are seeing growing conflicts among recreation users, energy developers, 

hunters, ranchers, and others all competing to protect, access, and use these public 

lands. Through the Healthy Lands Initiative, the BLM will join with the U.S. Geological Survey and the U.S. Fish and Wildlife Service to identify, restore, and mitigate the potential impacts of increased energy production in wildlife-energy interface areas and increase available habitat for specific species, including sage grouse. 

The Initiative represents a new concept for meeting emerging challenges in managing natural resources with flexible, landscape-level approaches for continued multiple-use. Landscapes are land areas composed of diverse habitat types that include 

winter range and migration corridors. 

Land health is being affected by pressures such as community expansion, 

wildfires, unprecedented demands for energy resources, ever-expanding recreation 

uses, and weed invasion. These pressures often interact among themselves to affect 

large landscapes and ecosystems, particularly those in the growing wildlife-energy 

interface. 

A different management approach is urgently needed to meet these challenges. 

Taking aggressive steps now will help avoid the need for future restrictions on uses 

of public land that would directly affect the Nation’s economy and quality of life. 

The goals of the Initiative are to: 

• Continue to provide access to energy resources, thereby enhancing energy 

security; 

• Manage landscapes to ensure sustainable habitat for wide-ranging species, such 

as the sage grouse, and prevent future ESA listings; and 

• Sustain public lands and wildlife habitat, and traditional activities on public 

lands. 

The BLM will begin aggressive, landscape-scale habitat enhancement projects in 

six geographic areas: southwest Wyoming; northwest and southeast New Mexico; 

south-central Idaho; southwestern Colorado; Utah; and the three-corner area of 

Idaho, Oregon, and Nevada. 

The BLM will concentrate a large number of treatments in each emphasis area, 

resulting in significant improvements to habitat in an entire watershed or landscape-wide area within one to three years. The BLM will also utilize existing budget 

authority, as well as leverage funding with other Federal agencies and our partners 

at the state and local levels. 

The Green River Basin in Wyoming 

One of the six priority areas of the Healthy Lands Initiative is the Green River 

Basin in Wyoming. It is representative of areas in the West where landscapes and 

habitats are undergoing changes in response to pressure from multiple-use. Southwest Wyoming possesses some of the most diverse wildlife habitats in the Intermountain West, which attracts hunters, fishermen, and other outdoor enthusiasts 

each year. While these interests represent important sources of income for surrounding rural communities, this region, principally the Green River Basin (Basin), 

is also under pressure from natural gas development. The 15 million-acre Basin, 

characterized by sagebrush (sage grouse habitat), mountain shrub, aspen, and riparian communities, also has an estimated 83 trillion cubic feet of recoverable natural 

gas. 

The BLM together with the U.S. Fish and Wildlife Service and U.S. Geological 

Survey, are teaming up to protect these important habitats while natural gas production takes place in the Basin through the Wyoming Landscape Conservation Initiative (WLCI). Rather than conducting separate and uncoordinated impact studies 

and mitigation efforts, these partners will: 

• Conduct efficient, science-based species monitoring and habitat enhancement; 

• Facilitate best reclamation and mitigation practices for areas affected by current natural gas development; 

• Integrate existing data with new knowledge and technologies to forecast future 

development of energy resources and assist in habitat conservation planning; 

and 

20

• Conduct habitat enhancement in all habitat types with a special focus on sagebrush, mountain shrub, aspen, and riparian communities. 

The partnership, which also includes efforts underway by the National Park Service, Bureau of Reclamation, Forest Service, and Wyoming Game and Fish, will also 

provide a broader understanding of the valuable Green River Basin ecosystem. 

By using this landscape-level approach and using the WLCI partnership, the BLM 

expects to be able to leverage funding for key projects that will mitigate the pressures these habitats face from a combination of energy, industrial, and residential 

development in both the short- and long-terms. In Wyoming, partners have already 

identified funding priorities including vegetation treatments (sagebrush, aspen 

trees), water projects such as building or restoring water sources for wildlife, and 

improving riparian areas. Funding for the WLCI will be long-term and include 

leveraging funding with other Federal agencies and our partners at the state and 

local levels. 

Land Use Planning 

The BLM’s land use planning process seeks to ensure that domestic oil and gas 

development on public lands is done in a way that protects the environment. Some 

of the recently developed land use plans have been among the most restrictive ever 

developed for oil and gas leasing on Federal lands. 

For example, the BLM recently issued an innovative Resource Management Plan 

(RMP) for limited, environmentally-sensitive oil and gas development on public 

lands in Otero and Sierra Counties in New Mexico. The plan will allow carefully 

monitored activity, leading to a maximum surface disturbance of only 1,589 acres 

from well pads, roads and pipelines—less than one-tenth of one percent of the total 

surface area of 2 million acres. At most, there will be 141 exploratory wells drilled, 

resulting in up to 84 producing wells. Almost 36,000 acres of grasslands with the 

highest potential as habitat for the endangered Aplomado falcon will be closed to 

leasing and permanently protected. In addition to these measures and overall limits 

on development, leasing will not be allowed in six existing and eight proposed Areas 

of Critical Environmental Concern and four Wilderness Study Areas—bringing the 

total number of protected acres to 124,000. This new plan amends a 1986 RMP that 

would have allowed leasing with few restrictions on oil and gas activities, would 

have used standard lease terms and conditions for leasing, and would not have provided the protections for grasslands and other sensitive areas developed in the 

BLM’s current plan amendment. 

The BLM continually seeks new ways to minimize, mitigate, or compensate for 

any adverse impacts from development activities. Innovation of the type envisioned 

in Energy Policy Act of 2005 (EPAct) is already underway at the BLM. For example, 

the BLM is: 

• Initiating a pilot block survey in the Carlsbad Pilot Office to identify cultural 

resource properties in the area; and 

• Evaluating an experimental drilling technique proposed by the operator in the 

Jonah Field in Wyoming using temporary wooden pallets for roads and well 

pads to determine if this technology reduces impacts to surface vegetation and 

soil. 

Best Management Practices and Performance-Based Standards 

The BLM is employing Best Management Practices (BMPs) to enhance its ability 

to protect the environment and reduce long-term impacts on the land from oil and 

gas activity. The focus of BMPs is smart upfront planning and solid implementation 

of best practices to reduce environmental impacts on public and private lands and 

resources. The new policy guidelines require BLM project managers to consider incorporating BMPs into all Applications for Permits to Drill (APDs) and associated 

rights-of-way. Additionally, the policy encourages oil and gas, geothermal, and helium operators to meet with BLM field office staff during project planning to incorporate BMPs at the earliest possible stage of the permit application process. 

Typical Best Management Practices include: 

• Reducing the ‘‘footprint’’ of roads and well heads by choosing the smallest safe 

standard and best location for facilities, and by employing interim reclamation. 

• Selecting appropriate color, shape, size and/or location for facilities to reduce 

visual contrast. 

• Discouraging raptor predation on sensitive species by installing perch-avoidance 

structures or burying power lines on the lease area. 

• Reducing wildlife disturbance by centralizing or automating production facilities 

to reduce frequency of travel to each well head. 

• Using common utility corridors or burying flowlines in a roadway or an adjacent 

right-of-way. 

21

• Drilling multiple wells from a single location; centralizing production facilities 

or relocating them offsite. 

For example, in the Pinedale area of Wyoming, concerns about impacts to wildlife 

have resulted in reduced surface disturbance compared to past development by implementing such measures as the consolidation of infrastructure, such as roads, 

pipelines, and production facilities. As a consequence, the BLM has achieved an 

overall reduction in the footprint of development involved in winter drilling projects 

in the Pinedale Anticline relative to what would otherwise have resulted. 

Final reclamation of all disturbed areas, including access roads, to either their 

original contours or a contour that blends with the surrounding topography is a 

BMP that planners should consider in nearly all circumstances. 

The BLM has included BMPs in the 2005 update of the Gold Book of ‘‘Surface 

Operating Standards and Guidelines for O&G Exploration and Development’’ (posted at www.blm.gov/bmp). Through three separate Instructional Memorandum, the 

BLM also has: 

• Established offsite compensatory mitigation guidelines for oil and gas authorizations to provide additional opportunities to address impacts of proposed projects; 

• Established oil and gas process improvement teams in BLM Field Offices; and 

• Provided guidance on the review of bonding requirements for oil and gas operations. 

To encourage widespread adoption of BMPs and to recognize good environmental 

stewardship through their use, BLM has established an annual ‘‘Best Management 

Practices’’ awards program. Annual awards recognize industry and BLM offices that 

best incorporate BMPs into their oil and gas activities. Recipients are to be selected 

by a panel including representatives from government, industry, and environmental 

and wildlife conservation groups. 

The BLM is also using performance-based standards to challenge industry to reduce emissions, minimize surface disturbance, and develop quick and effective reclamation techniques to improve restoration of disturbed areas. If on-site mitigation 

measures do not achieve the desired conditions, companies have the option of undertaking off-site mitigation measures. For example, in March 2006, the BLM announced that EnCana is contributing up to $24.5 million over ten years toward an 

office dedicated to funding offsite mitigation and monitoring in the Jonah Field. The 

BLM believes that offsite mitigation can potentially become an increasingly useful 

tool for improving habitats adjacent to certain natural gas development areas. 

Inspection and Enforcement and Monitoring 

The FY 2008 President’s budget request includes an increase of $3.1 million to 

support increased oil and gas inspections and monitoring to better ensure that oil 

and gas operations are conducted in an environmentally-sensitive manner and that 

leasing permit terms are enforced. The BLM’s oversight capabilities are being increased in response to the pace of industry’s on-the-ground operations. BLM has increased inspection and enforcement by more than 30 percent since 2001. In FY 

2001, the BLM completed just over fourteen thousand inspections, and in FY2006, 

the BLM completed just under twenty thousand inspections. 

This year, the Buffalo and Rawlins Pilot Office in Wyoming received funding to 

hire 15 additional surface environmental compliance and reclamation inspectors. 

These inspectors will allow Buffalo to exceed its target of approximately 3,600 inspections and will allow Rawlins to increase its inspections by 8 percent to 700 inspections. 

The BLM also is improving inspection and enforcement efforts through cooperative arrangements with the State of Wyoming. For example, a cooperative assistant 

agreement with the Wyoming Fish & Game Commission would establish two wildlife biologist positions in each Pilot Office; these individuals would monitor the effectiveness of BLM lease stipulations and permit conditions of approval as well as 

make adaptive management recommendations to ensure that fish and wildlife resources are protected. Another cooperative assistant agreement, in the process of 

being developed with the Wyoming State Historical Preservation Officer, would establish a position to support the electronic data capture of the large volume of cultural survey reports and site information. The BLM also is collaborating with the 

Governor of Wyoming’s Energy Permit Strengthening and Streamlining Initiative. 

The working groups have addressed such issues as split estate, coordinated reclamation bonding, watershed-based permitting and impacts to local communities, supporting interagency electronic permitting information technology. We look forward 

to continuing these cooperative efforts, and hope to expand these efforts in other 

states. 

22

Onshore Order #1

The BLM’s Onshore Order #1 will be updated effective May 7, 2007. The Order 

is a set of rules that direct the conduct of operations, applications to drill on a lease, 

subsequent well operations, other miscellaneous lease operations, environmental 

and safety obligations, and abandonment on all Federal and Indian onshore oil and 

gas leases nationwide (except for those on lands of the Osage Tribe). The previous 

Order was over 20 years old, and conditions, regulations, policies, procedures and 

requirements have changed a great deal since that time. 

The Final Rule clarifies regulations and procedures to be used when operating in 

split estate situations. Under the revised final order, operators are required to make 

good faith efforts to reach surface access agreements with private surface owners. 

Private surface owners are also being provided with opportunities to participate in 

onsite inspection meetings between the BLM and the operator. The Final Rule also 

states that on split estate lands, the BLM will comply with cultural and endangered 

species regulations in essentially the same way it does when the surface is Federally-owned. 

Conclusion 

The BLM manages 13 percent of the total land surface of the United States. 

These lands contain a wide variety of incredible resources, and the public has a 

wide range of interests in those resources. Our testimony today has outlined the 

ways in which the BLM is working to provide the Nation with dependable, affordable energy that is developed in an environmentally-sound manner. The BLM will 

continue its efforts to ensure that all Americans benefit from the agency’s multipleuse management of our public lands. 

Mr. Chairman, thank you for the opportunity to testify today. I will be pleased 

to answer any questions you may have. 

Response to questions submitted for the record by Henri Bisson 

1. In response to a question from Mr. Pearce, you stated that out of more 

than 19,000 wells, only 20 were ‘‘bonded on.’’ To clarify, is that 20 wells, 

or 20 surface owners? If 20 surface owners, how many wells? What time 

period does that figure cover? (For example, last year, or since enactment of EP Act, or other?) Please list the location of those cases. 

At your request, the BLM completed a detailed review to further clarify and quantify bonding statistics: 

• To date, the BLM holds a total of 42 surface loss and damage bonds, covering 

19 surface owners. The nature of a surface loss and damage bond is that it is 

a tool to ensure compensation of loss and surface damages in the absence of a 

surface use agreement. 

• During calendar year 2006, the BLM accepted 25 surface owner loss and damage bonds from operators/lessees. Each bond is linked to a specific well. A total 

of 15 surface owners are covered by these bonds for loss and damages (some 

surface owners have more than one bond allocated to them.) The bonds accepted 

in calendar year 2006 are held in the following States: CA—17 bonds, MT—6 

bonds, UT—1 bond, and WY—1 bond. 

• After an APD is approved, operators typically continue their negotiation efforts 

with surface owners to reach a surface use agreement. Once an agreement has 

been reached, the bonds are released. This explains the small amount of surface 

bonds the BLM holds today. A summary of the location of the 42 existing bonds 

is as follows: CA—17 bonds, MT—12 bonds, NM—1 bond, UT—1 bond, WY—

11 bonds. 

2. In your oral remarks, you stated that many more acres were under lease 

in 1984 (131 million acres) than currently (42 million acres). Isn’t that 

because oil and gas companies have a much better idea now of where 

they want to explore, and do not nominate, or bid on, lands that they 

don’t consider to be good prospects? 

That is not the primary reason for the significant reduction in leased acres. The 

Federal Onshore Oil and Gas Leasing Reform Act of 1987 (Act of 1987) changed the 

way the BLM offered onshore oil and gas leases to the public, and this reduced the 

speculative demand for leases. Prior to the Act of 1987 it was the BLM’s policy to 

offer for lease as much acreage as was available for leasing. Much of this acreage 

was offered in a lottery format. The BLM would send out a list of parcels to be 

leased and for $75 dollars members of the public could have their name put into 

a pool of potential lessees. The BLM would then randomly select one to be the lesVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00028 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
23

see. The Act of 1987 was passed to change the leasing program. Now only parcels 

that are nominated by the public are considered for lease and if offered, it is done 

through an oral auction. Areas of interest continue to change for oil and gas companies as technology and new discoveries of oil and gas occur. 

3. Where has BLM NOT required Best Management Practices—and why—

in the past three years. 

The BLM did not require the use of Best Management Practices (BMPs) until 

June 2004, when BLM issued a directive to All Field Offices, directing them to use 

BMPs after an appropriate environmental analysis for not only oil and gas resources 

but for energy development related lands and realty actions, i.e. power lines or pipelines to an oil and gas well (see attached policy). Since that time the BLM has increasingly incorporated appropriate BMPs into new Applications for Permit to Drill, 

energy related rights-of-way, and other related permits. 

BLM has always required Lease Stipulations and Conditions of Approval on drilling permits to mitigate potential impacts to surface disturbing activities on the 

ground. However, older oil and gas fields have the least application of best management practices. Examples would include older fields in the Uintah Basin of Utah 

and the Permian Basin of New Mexico. Many oil and gas operators have voluntarily 

adopted Best Management Practices and have included them in their permit applications. 

4. You noted in your oral remarks that the footprint of oil and gas development is quite small, because not all lands that are leased are developed. 

In terms of gauging the footprint, to what degree is the BLM using landscape fragmentation metrics that take into account roads and other 

infrastructure to gauge the footprint of development? 

There are multiple ways of gauging the ‘‘footprint’’ of development, and all provide 

useful information. It is the BLM’s intent to reduce the footprint of energy development and thereby reduce environmental impacts including loss of vegetation, soils, 

visual quality, air quality, habitat, or others. When measuring an environmental impact, such as vegetation loss, it is appropriate to measure the direct footprint of 

vegetation disturbance. When measuring habitat loss, it may be important to measure not only direct vegetation loss, but also the indirect effect of noise, dust, and 

traffic on a wider area. In either case, the BLM has identified environmental Best 

Management Practices (www.blm.gov/bmp) that are effective in reducing the direct 

and indirect footprints of energy development. 

5. Abandoned and Inactive Sites/Wells 

How many sites have been abandoned each year in the past 10 years? For 

each, what is the location, the operator, the type and amount of financial 

assurance, the number of wells, and the projected reclamation cost? 

The BLM defines an abandoned well as one in which the well has been properly 

plugged to the surface but the reclamation has not yet been inspected and accepted 

as final. 

The total numbers of Federal wells plugged (abandoned) for the last 10 years are:


34983.001.eps
24

The detailed listing of each well and operator is provided in a table contained in 

Appendix A. BLM does not track the projected reclamation cost for abandoned wells. 

The operators, not the BLM, are responsible for their reclamation. 

6. What was the total number of abandoned and inactive wells in each of 

the past 10 years? For each year, what is the number of new abandoned 

and inactive wells, the number of abandoned and inactive wells 

reclaimed, the number of abandoned and inactive wells brought back 

into production, the production from each of those wells, and the total 

projected reclamation cost from those wells? 

This question, as well as questions 7 and 9, requests comprehensive data which 

is not accessible through our standard records systems. We will acquire the data 

through a physical review of records located at multiple BLM field offices in several 

States. A request to our field offices to initiate this data collection was sent out during the week of June 4, 2007. We expect to be able to respond to questions 6, 7, 

and 9 in October. 

7. What expenses were incurred in each of the past 10 years due to inadequate financial assurance amounts? For each, what is the location, the 

operator, the number of wells, and the type and amount of financial 

assurance? 

Please see answer to question 6, above. 

8. How many sites achieved final reclamation, final inspection, and final 

bond release each year in the past 10 years? For each, what is the location, the operator, and the number of wells? 

Summary:

The detailed listing of each well and operator is provided in a table contained in 

Appendix B. 

9. For how many operators, projects and wells has BLM increased financial 

assurance amounts in each of the past 10 years? For each, what is the 

location the operator, the number of wells, the type and amount of financial assurance (both before and after the increase), and the projected 

reclamation cost? 

Please see answer to question 6, above. 


34983.002.eps
25

Cultural Resources 

10. In response to a question about Nine Mile Canyon in Utah, you stated 

an expectation that the management plan area would address cultural 

resources concerns. However, the problem may be that oil and gas leasing simply isn’t compatible with the historic and sacred resources in 

that canyon. Many of the leases which Bill Barrett Corporation now 

seeks to develop in Nine Mile Canyon and on the plateau above were 

issued or renewed in the late-1980s and early 1990s. Now, with respect 

to the proposed 750-plus well development, BLM seems to believe that 

it has limited alternatives available to prevent the proposed development or to minimize the impacts because it issued the leases many 

years ago. Does the agency believe that it cannot revisit the terms of 

old leases when renewing them, and if so, why? In the past five years, 

has BLM identified areas that, for cultural or habitat reasons, should 

not be open to leasing at all? If so, please specify. How can BLM prevent the future occurrence of a situation like that of Nine Mile Canyon? 

The BLM has several options available for mitigating oil and gas developmentrelated impacts to cultural and habitat resources. Mitigation developed through the 

consultation and environmental review processes could result in the relocation of development or the mandatory application of site-specific mitigation and best management practices to individual drilling permits. Regardless of the age of oil and gas 

leases, the BLM must comply with applicable statutes, such as the consultation requirements of Section 106 of the National Historic Preservation Act. The BLM must 

also comply with the National Environmental Policy Act, Endangered Species Act, 

Migratory Bird Treaty Act, the Clean Water Act, Clean Air Act, and many other 

Federal statutes. Lease operations are also subject to regulations, such as the oil 

and gas ‘‘Environmental obligations’’ regulatory provisions found in 43 CFR 3162.5-

1. In addition, the Price Field Office is currently revising their Resource Management Plan and will address leasing and other land use planning considerations related to cultural and habitat resources in Nine Mile Canyon and the West Tavaputs 

Plateau areas. 

Specific to Nine Mile Canyon, very little oil and gas development is being permitted in the canyon where the most important cultural resources are found. The 

BLM is restricting drilling locations in the canyon and the majority of the oil and 

gas resources within the canyon will be developed by directional drilling from centralized locations. Currently, there are four wells and one large compressor station 

in the bottom of Nine Mile Canyon. Three of these wells are located on private surface (two of the private surface wells have private mineral ownership and one has 

minerals owned by the State), and one well is located on Federal surface (BLM). 

That well was approved and drilled in July 1962. All of the other wells associated 

with oil and gas production in the area are located outside of Nine Mile Canyon 

proper and most are located on the benches to the south. The one large compressor 

station is located on private land. 

The following chart contains examples of lands that have been deferred or closed 

to leasing in land use plans during the past five years primarily to protect cultural 

or habitat resources. More commonly, in practice, the BLM makes land with habitat 

and cultural resource values available for leasing, but may include major or moderate resource protection lease stipulations in the oil and gas lease. When an actual 

request for a drilling permit is received, the BLM conducts an environmental review 

and may move the well and road location to protect cultural and habitat values and 

will typically attach additional resource protection constraints to the approved permit.

Chart: Examples of BLM-managed lands that have been deferred or closed 

to leasing in land use plans during the past five years primarily to protect 

cultural or habitat resources. The figures are approximate.

26

11. How often-in what percent of APDs-does the BLM attach a cultural resource stipulation to leases? Can the stipulation resolve potential conflicts between oil and gas development and the protection of significant 

cultural and historic resources? How often does BLM later deny an 

APD or activities within a lease due to a cultural resource stipulation 

and eventual finding that there is a threat to cultural resources? 

Section 6 of the standard oil and gas lease form includes requirements for the protection of cultural resources. Regardless of the lease terms and conditions, the BLM 

is required under Section 106 of the National Historic Preservation Act to complete 

consultation with the State Historic Preservation Officer (SHPO) for all subsequent 

permitting actions that affect cultural resources eligible or potentially eligible for 

the National Register of Historic Places. As a result of the consultation process, the 

proposed activity may be relocated or mitigation requirements may be attached to 

the permit. This process has been very effective in mitigating conflicts between oil 

and gas development and protection of important cultural resources. It is extremely 

rare that impacts cannot be mitigated or the site avoided altogether. In consultation, the BLM works with the oil and gas operator and the State Historic Preservation Officer to develop an alternative that allows some form of the action to proceed 

(even if it must be relocated) with little or no impact to cultural resources. Subsequent to consultation, denial of an APD is rare. 


34983.003.eps
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Follow up commitments 

During the hearing, Mr. Bisson stated for the record that BLM would supply information on the following: 

Issue 1: Where BLM is using Section 390 categorical exclusions, and where 

that information is made readily available to the public. 

The following information reflects BLM Field Offices that have used categorical 

exclusions (CXs) during Fiscal Year 2006 (10/1/05 to 9/30/06).


34983.004.eps 34983.005.eps
28

Issue 2: Where the agency is considering the cumulative impacts of the use 

of CXs on wide-ranging species and wildlife corridors? 

The Section 390 CXs essentially tier to existing NEPA analysis which includes a 

cumulative impact analysis. 

The BLM analyzes the cumulative impacts of oil and gas exploration, development, production, and abandonment on resources, including wildlife and its habitat, 

either at: (a) the land use planning stage through the Environmental Impact Statements (EIS) associated with BLM’s Resource Management Plans; or (b) the development stage through geographic area NEPA analysis that looks at all or a portion 

of an oil and gas field. 

a. Cumulative Impact Analysis at the Land Use Planning Stage: 

At the land use planning stage, the BLM determines where and under what conditions oil and gas exploration, and development activities will be permitted. Before 

these determinations are made, the impacts associated with these determinations 

must be analyzed in the EIS prepared with the RMP. To support the cumulative 

impact analysis associated with the RMP, a reasonable foreseeable development scenario (RFDS) for oil and gas development is generated. The RFDS projects management activities and actions likely to occur in the planning area over the life of the 

RMP (typically 15 to 20 years). 

Information within an RFDS includes: 

• Number of wells expected to be drilled over the life of the RMP; 

• typical surface and subsurface activities that are likely to take place if these 

wells are drilled; 

• average amount of acres typically disturbed to drill, complete, and produce a 

well (includes well pads, access roads, and pipelines); 

• waste disposal needs - produced water, H2S, CO2 venting, and flaring; and 

• sequence, timing and duration requirements needed for exploration, drilling, 

and production phases. 

An interdisciplinary team uses the RFDS as a guide to analyze what the cumulative impacts of oil and gas development would be to other resources (i.e., ecological, aesthetic, historic, cultural, economic, social, and/or health) so as to develop 

mitigation measures to avoid or reduce adverse impacts. 

b. Cumulative Impact Analysis at the Development Stage: 

The subsequent method for analyzing cumulative effects is through a geographic 

area NEPA analysis, which is an activity-level analysis of an entire oil and gas field 

or a logical portion of a field where proposed multiple wells, access routes, production facilities, utilities, etc. have been identified. These types of analyses take a 

broad scale, yet site-specific look at a defined area and known or likely development 

proposal. The primary advantage is the ability to look at a broad area in a site-specific manner and analyze the cumulative effects of oil and gas development in relation to other resource uses in one public process rather than individual development 

proposals. 

Issue 3: Examples of areas where BLM is ensuring that mitigation occurs 

on the site of former oil and gas facilities (versus habitat enhancement 

elsewhere). 

Jonah Field of Pinedale, Wyoming: New discoveries have been made in different formations and at greater depths of an existing field. New mitigation the operators have applied to the existing older field include: 

• Reducing the physical footprint of well pads by centralizing operations. Centralization eliminates the need to disturb a large amount of surface area at each 

well pad location to support equipment. 

• After wells are drilled and completed, all facilities associated with the production of these wells are strategically placed at centralized locations to reduce vehicle traffic and needed roads. 

• Producing wells are monitored electronically through remote telemetry, which 

eliminates the need for field visits to well site locations on a continuous basis. 

This decreases vehicle traffic and associated wildlife disturbance. 

• Operators are experimenting and developing improved reclamation techniques 

that would ensure not only the reclamation, but the restoration of disturbed 

areas. These practices are also being implemented at the production phase of 

operations through interim reclamation of disturbed areas not needed for the 

production phase of a well. 

• Furthermore, operators within the Jonah Field have contributed funds to a centralized organization (Jonah Interagency Mitigation and Reclamation Office) 

that provides overall management of field monitoring and on-and off-site mitiVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00034 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
29

gation of oil and gas development. For further information please refer to the 

following website: http://www.wy.blm.gov/jonahloffice/index.htm. 

Carlsbad, New Mexico: The BLM has identified areas (well pads and access 

roads) within old oil and gas fields where past reclamation efforts were unsuccessful 

due to obsolete practices or lack of stringent environmental standards that didn’t 

exist at the time. These abandoned locations are being reclaimed and reseeded with 

native vegetation to stabilize severely eroded soils and reduce the amount of habitat 

fragmentation that has already occurred. These efforts are part of a statewide effort 

by the New Mexico BLM to restore its lands at a landscape level. For further information associated with this project please refer to the following website: http://

www.nm.blm.gov/restorelnm. 

Issue 4: Examples of successful adaptive management efforts. 

Pecos District Office, New Mexico: The BLM is in the process of amending the 

current Carlsbad and Roswell Resource Management Plans (RMP) in response to 

changing resource conditions and new issues in the context of habitat management 

for the lesser prairie-chicken and sand dune lizard while at the same time providing 

for energy production. New monitoring information from the local BLM Field Offices 

and cooperating agencies revealed that these two species are on the brink of being 

listed as threatened or endangered under the Endangered Species Act (ESA). This 

plan amendment was designed to establish new conditions and prescriptions that 

would protect and enhance lesser prairie-chicken and sand dune lizard habitats 

while allowing other uses to continue. 

Anticline of Pinedale, Wyoming: The BLM Field Office is revising its current 

land use plan in response to concerns of declining wildlife populations. The revised 

plan calls for additional mitigation including: 

• reducing the number of pads through multi-well pad development; 

• requiring directional drilling and simultaneous completion operations; 

• requiring operators to develop the oil and gas field in a ‘‘phased approach’’ by 

dividing it into core areas where the location and intensity of drilling activities 

could occur at only one core area at any given time; 

• reducing residual wildlife impacts and air quality impacts by: 

Æ use of liquids gathering systems, centralized facilities, and centralized production tanks where feasible to reduce truck traffic; 

Æ increased use of remote telemetry further reducing trips and traffic during 

production; 

Æ management of traffic through busing and scheduling during seasonal stipulation periods; and 

• reducing rig moves on and off pads. 

These efforts are anticipated to reduce impacts to wildlife populations by decreasing the expected period for development in core areas under seasonal restrictions. 

Issue 5: The number of leases the NPS has requested that BLM withdraw, 

and the number which were subsequently withdrawn. 

The BLM does not lease National Park Service lands for oil and gas development. 

Occasionally the National Park Service will request that the BLM not lease a parcel 

near Park lands. On other occasions, the BLM will proactively notify the National 

Park Service that parcel nominations have been received for parcels near Park 

lands. The BLM typically discusses impacts, mitigation, and seeks the opinion of the 

National Park Service prior to leasing the lands.

30

A. In previous hearings, there has been criticism that oil and gas production in Wyoming is threatening to sportsmen’s activities. Has BLM performed any analysis to determine to big game trends in that area? Have 

the numbers been increasing or decreasing and by how much? Have the 

hunter numbers been increasing or decreasing? Has the hunter success 

rate been increasing or decreasing? 

Major oil and gas development activity began in the Jonah/Anticline fields in 

Sublette County, Wyoming in calendar year 2000. We have reviewed Wyoming 

Game and Fish Department (WG&F) trend data from 1996 to 2005 to determine if 

impacts may be occurring in Sublette County in addition to those occurring on a 

statewide basis. The following data from WG&F shows that overall big game populations and hunting opportunities in Sublette County generally mimic statewide 

results.

*Over the past ten years, the difference between population estimates and population objectives for deer has ranged statewide from 23% below to 3% below objective and for antelope has ranged from 15% below objective to 10% above objective.


34983.006.eps 34983.007.eps
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B. In previous hearings, there has been criticism that the Department has 

a ‘‘lease at all costs’’ approach to managing Federal lands. Is this true 

or false? And can you explain why? 

We disagree with this assertion. The BLM is a multiple-use agency, and domestic 

energy production is only one of the many uses for which we manage the Federal 

lands under the multiple-use mandate. However, the numbers show that leasing is 

not the predominant use of the lands under BLM management. The BLM manages 

a subsurface mineral estate of 700 million acres. Approximately 42 million acres of 

that total, or 6 percent, are under lease for oil and gas. Of the leased acreage, approximately 12.3 million acres are in producing status. This represents approximately 1.8 percent of the 700 million acres of Federal mineral estate. 

Furthermore, approximately 25 million acres of the 258 million surface acres the 

BLM manages are effectively closed to leasing because of special designations such 

as National Monuments, Wilderness and Wilderness Study Areas. In comparison, 

only 12.3 million acres, or less than half the protected number, are under lease and 

in producing status; and of the lease acreage that is in producing status, only about 

240,000 surface acres have direct surface disturbance from activity associated with 

energy production. 

UNITED STATES DEPARTMENT OF THE INTERIOR

BUREAU OF LAND MANAGEMENT

WASHINGTON, D.C. 20240

June 22, 2004

In Reply Refer To: 

3100 (310) P 

2800 (350)

EMS TRANSMISSION 06/22/2004

Instruction Memorandum No. 2004-194

Expires: 09/30/2005

To: All Field Officials

From: Director

Subject: Integration of Best Management Practices into Application for Permit to 

Drill Approvals and Associated Rights-of-Way

Program Areas: Oil & Gas Operations; Geothermal Operations; Helium Operations; Lands & Realty. 

Purpose: The purpose for issuing this Instruction Memorandum (IM) is to establish a policy that Field Offices consider Best Management Practices (BMPs) in NaVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00037 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY

34983.008.eps
32

tional Environmental Policy Act (NEPA) documents to mitigate anticipated impacts 

to surface and subsurface resources, and also to encourage operators to actively consider BMPs during the application process. 

Background: BMPs are innovative, dynamic, and economically feasible mitigation measures applied on a site-specific basis to reduce, prevent, or avoid adverse 

environmental or social impacts. BMPs are applied to management actions to aid 

in achieving desired outcomes for safe, environmentally sound resource development, by preventing, minimizing, or mitigating adverse impacts and reducing conflicts. The early incorporation of BMPs into Application for Permit to Drill (APDs) 

by the oil and gas operator helps to ensure an efficient and timely APD process. 

Policy/Action: All Field Offices shall incorporate appropriate BMPs into proposed APDs and associated on and off-lease rights-of-way approvals after appropriate NEPA evaluation. 

BMPs to be considered in nearly all circumstances include the following: 

• Interim reclamation of well locations and access roads soon after the well is put 

into production; • Painting of all new facilities a color which best allows the facility to blend with 

the background, typically a vegetated background; • Design and construction of all new roads to a safe and appropriate standard, 

‘‘no higher than necessary’’ to accommodate their intended use; and • Final reclamation recontouring of all disturbed areas, including access roads, to 

the original contour or a contour which blends with the surrounding topography. 

Other BMPs are more suitable for Field Office consideration on a case-by-case 

basis depending on their effectiveness, the balancing of increased operating costs vs. 

the benefit to the public and resource values, the availability of less restrictive mitigation alternatives, and other site specific factors. Examples of typical case-by-case 

BMPs include, but are not limited to the following: • Installation of raptor perch avoidance; • Burying of distribution power lines and/or flow lines in or adjacent to access 

roads; • Centralizing production facilities; • Submersible pumps; • Belowground wellheads; • Drilling multiple wells from a single pad; • Noise reduction techniques and designs; • Wildlife monitoring; • Seasonal restriction of public vehicular access; • Avoiding placement of production facilities on hilltops and ridgelines; • Screening facilities from view; • Bioremediation of oil field wastes and spills; and 

• Use of common utility or right-of-way corridors. 

A menu of typical BMPs can be found on the BLM Washington Office Fluid Minerals website. The website is updated frequently and submission of new BMPs and 

photos is encouraged. http://www.blm.gov/bmp 

BMPs have been developed and utilized by numerous oil and gas operators 

throughout the nation. When implementing new BMPs, Field Offices are encouraged 

to work with affected operators early, to explain how BMPs may fit into their development proposals and how BMPs can be implemented with the least economic impact. Discuss potential resource impacts with the operators and seek their recommended solutions while encouraging operators to incorporate necessary and effective BMPs into their proposals. BMPs not incorporated into the permit application 

by the operator may be considered and evaluated through the NEPA process and 

incorporated into the permit as APD Conditions of Approval or right-of-way stipulations. 

Field Offices must be cautious to avoid the ‘‘one size fits all’’ approach to the application of BMPs. BMPs, by their very nature, are dynamic innovations and must 

be flexible enough to respond to new data, field research, technological advances, 

and market conditions. Following implementation, Field Offices should monitor, 

evaluate, and modify BMPs as necessary for use in future permit approvals. 

The overall goal of the Bureau is to promote the best examples of responsible oil 

and gas development. Public lands should be showcases of good stewardship while 

providing for responsible, sustainable, and efficient development of the nation’s oil 

and gas resources. BLM will use the Quality Assurance Team (QAT) and General 

Management Evaluation (GME) processes in order to review our progress. To recognize good environmental stewardship work through the use of BMPs, BLM is establishing an annual ‘‘Best Management Practice’’ awards program with annual awards 

for industry and BLM offices, the details of which will be available subsequently. 

33

Timeframe: Immediately. 

Budget Impacts: Minimal. 

Manual and Handbook Sections Affected: None. 

Coordination: AD-200. 

Contact: Please direct policy questions to Tom Lonnie, Assistant Director, Minerals, Realty, and Resource Protection (AD-300) at (202) 208-4201; or by E-mail at 

thomas—lonnie@blm.gov; and technical questions to Jim Perry, Washington Office 

Fluid Minerals Group (WO-310), at (202) 452-5063; or by E-mail at jim—

perry@blm.gov; or to Tom Hare, Washington Office Fluid Minerals Group (WO310), 

at (202) 452-5182, or by E-mail at tom—hare@blm.gov.

Signed by:

Francis R. Cherry, Jr., Acting Director

Authenticated by:

Barbara J. Brown, Policy & Records Group, WO-560

Mr. GRIJALVA. Thank you very much. I want to thank the witnesses, and if I may, Mr. Bisson, request that the statement that 

you presented to us orally, if you could submit that also for the 

record because it is somewhat different than the statement that we 

have. 

Mr. BISSON. I will do that, sir. 

Mr. GRIJALVA. Thank you. Or a lot different. Let me begin with 

some questions. Mr. Bisson, and it was mentioned as part of Mr. 

Ferguson’s testimony, let me begin with that area. You know, Section 390 of the Energy Policy Act allows BLM to categorically exclude certain wells and other sites from the project level environmental analysis. My questions is, is your agency tracking and mapping where the Section 390 categorical exclusions are being used? 

And the second part of that question is, is that information readily 

available to the public? 

Mr. BISSON. I don’t have that information with me today. We can 

certainly supply it, but we know exactly where those decisions are 

being made using categorical exclusions. We can provide that information, sir. 

Mr. GRIJALVA. And the second part of the question is, is that 

readily available to the—the information that you are going to provide this committee on the mapping and tracking, that is readily 

available to the public is the other part of the question. 

Mr. BISSON. I can’t answer that question. I think each state probably handles it a little bit differently, but I believe that the notices, 

you know, the activity that is going to occur, that an APD is going 

to be approved are published and are a matter of record. But I do 

not believe that there is a public involvement process on the actual 

CXes because the CXes are intended to simplify the process where 

we have already done extensive NEPA analysis in former documents that looked at the very same area. 

Mr. GRIJALVA. OK. And your agency, Mr. Bisson, are you incorporating the recommendations of your wildlife biologists in the decisions as to whether to use or not use categorical exclusion? 

Mr. BISSON. I believe that we are. 

Mr. GRIJALVA. And in that process of the cumulative effects of 

those exclusions, especially in the wide-ranging issue of species and 

wildlife quarters, is that being collected in a cumulative way as 

well in the agency? 

Mr. BISSON. We can provide that information. 

34

Mr. Chair, if I might. 

Mr. GRIJALVA. Please. 

Mr. BISSON. The use of these categorical exclusions does not exclude the application of other environmental laws or regulations, 

environmental best management practices, endangered species consultation or mitigation, protection of sensitive wildlife species such 

as sage grouse, all of these protection measures are still utilized 

and supplement the decisions that we make when we use the CX, 

and we provide a specific guidance to the field that requires our 

managers to consult with the game and fish agencies, as appropriate. 

Mr. GRIJALVA. Let me follow that. So how much mitigation is 

done on a site of former oil and gas facilities in the form of enhancement of habitat elsewhere? What is your agency doing to assure that this mitigation has taken place? What are the requirements or the stipulations in place to assure that enhancement 

takes place? 

Mr. BISSON. First of all, when facilities are removed, and these 

are the permits of development that we are approving now, we will 

require reclamation of the areas that were disturbed. In many 

cases, we are requiring interim reclamation where disturbance has 

occurred even before a field is taken down. But there are so many 

new fields that we are years away from actually carrying out those 

activities. We are monitoring the activities that are happening on 

the ground, and fully intend to require the companies to restore 

their lands when they leave. 

Mr. GRIJALVA. For additional submittal to the committee, I, and 

I think the members of the committee would be curious if you could 

provide information to the examples of successful adaptive management efforts that have gone on. 

Mr. BISSON. Yes, sir. 

Mr. GRIJALVA. OK. One more and then turn it over to my colleague. How many leases has the National Park Service requested 

that BLM withdraw? 

Mr. BISSON. I can’t answer that question. I don’t have that information with me, but I can tell you that as an example last year 

when I was acting state director in Utah, a Utah-specific case. We 

had a lease sale in August. We had requests from the Park Service 

to not consider leasing nine lease tracts adjacent to Arches National Park, and we consulted with the Park Service. We set a 

standard of four miles distance that might impact the park, and we 

removed lease tracts within that four-mile distance from the lease 

sale. 

Mr. GRIJALVA. And my time is up, but also if you could submit 

to the committee how many have been requested, and you gave an 

example of nine by the Park Service, and how many of these—of 

the requests, how many of them were subsequently withdrawn. 

Mr. BISSON. We will provide that information for you, sir. 

Mr. GRIJALVA. Thank you. With that, let me turn to Ranking 

Member Pearce for any questions he might have. 

Mr. PEARCE. Thank you, Mr. Chairman. Thank you, Mr. Bisson, 

again appreciate your service, and I would apologize in public for 

the one of our members who submitted that request that took you 

35

through a year-long investigation for doing your job. That was 

uncalled for. Thank you. 

We have heard characterizations of the Bush Administration is 

just an oil friendly leasing, they are going to lease every ounce of 

land up, and that they are out there destroying the environment, 

and you as an agency are not checking them up. Give me a progression, if I can, for the last five or six years of the number of inspections, number of inspections for remediation, number of inspections for compliance. 

Mr. BISSON. Yes, sir. In 1988, the BLM completed 11,500 inspections of oil and gas. 

Mr. PEARCE. That was how many? 

Mr. BISSON. Eleven thousand four hundred and eight-six to be 

exact. 

Mr. PEARCE. OK. 

Mr. BISSON. In 2006, we completed 16,967 inspections. That is a 

47 percent increase. In addition——

Mr. PEARCE. Yes. So what you are saying that under the Bush 

Administration we are up almost 5,000, which is almost a 50 percent increase over the Clinton Administration. I am not pointing 

fingers at the Clinton Administration, but if anybody was guilty of 

not checking, it would be actually the administration before this 

one because my understanding you have gone up by almost 6,000, 

5,500 inspections. 

Mr. BISSON. It will actually be more this year as well. We are 

going up to 21,000. 

Mr. PEARCE. So we are even going to have another 3,000 increase. 

We have also heard testimony that the Bush Administration is 

a ‘‘lease at all cost’’, lease everything you can get, lease it, lease it, 

lease it, lease it. We hear that testimony in front of this committee. 

Can you give me any impression of what is happening under leases 

because I know, I am from the oil and gas business, I am from that 

section of the country, I know the problems that we are having 

leasing, so can you tell me what has happened to leases since the 

eighties to the present? 

Mr. BISSON. Well, in my testimony a few minutes ago, I talked 

about the fact that in the eighties we actually had three times as 

many acres leased as we do now. 

Mr. PEARCE. So you are actually decreasing leasing? 

Mr. BISSON. We have much fewer acres leased now than we did 

back then. 

Mr. PEARCE. But what were the numbers? 

Mr. BISSON. It was 131 million acres were leased in 1984, and 

we are down to about 42 million acres right now. 

Mr. PEARCE. So from 131 down to 42. If our income had decreased from 131 to 42, we would think our income had dramatically fallen, yet I continue to hear testimony in here that says the 

Bush Administration is trying to lease up the whole world, and 

sometimes the facts get in the way, I know that, but appreciate 

that information. 

Mr. Ferguson, you had—again we are hearing the categorical exclusions are the problem. The categorical exclusions actually were 

worked out in this committee, the Resources Committee down in 

36

the other room that we meet in. It was actually Mr. Peterson who 

testified, and myself, who were sitting, he was on the upper dais, 

I was here, Mr. Miller, Mr. Abercrombie, and we got into a discussion late in the day, it was about a seven-hour markup when we 

were amending the bill, and we actually worked that section out 

word by word, the five categorical exclusions, because we saw that 

the language was actually being used as a tool to bludgeon companies. 

So what we did, and these gentlemen on the minority at that 

time, the majority now, they came to the conclusion that no, we 

think the bill—that the Environmental Protection Act had been 

used to reach too far. The Endangered Species Act was being used 

as a tool, and so they were trying to reach some business compromise. 

Can you tell me how it is actually working out because we are 

going to hear testimony today, and we have previously heard it, 

that you need to get rid of those evil categorical exclusions? 

Mr. FERGUSON. Well, as I mentioned in the testimony, Mr. 

Pearce, we have records that indicate that we have used that Section 390 categorical exclusion on about 300 projects, but I think 

Mr. Bisson made a very good point. Those are not just what sometimes is called a rubber stamp. When a project comes in, we have 

requirements to make sure they are in compliance with all other 

environmental laws, and we actually have situations where we add 

additional conditions of approval for operations to occur when we 

use that categorical exclusion. 

So we have had some pretty good success with it, and we feel like 

we are taking the right approach to how we are processing those. 

We are not just—it is not a factory output type thing, it is a caseby-case situation. 

Mr. PEARCE. Sure. 

Mr. FERGUSON. On the ground. 

Mr. PEARCE. We are trying to do the best we can. 

Mr. Chairman, my time has lapsed, but I have questions for a 

second round if you get them. 

Mr. GRIJALVA. Thank you. Mr. Udall. 

Mr. UDALL. Thank you, Mr. Chairman. I would like to welcome 

the panel. Thank you for taking your time to come up to the Hill. 

Mr. Bisson, if I could start with you, and direct some questions 

your way, and particularly focused on Colorado, of course my home 

state. 

There have been some instances when the BLM has leased lands 

in the areas the communities depend on for their water supplies, 

and my understanding is that some of those communities have 

asked the BLM not to lease in those areas, but those requests have 

been denied. My question is a two-part question. Is that true, and 

if so, why? And I think you probably are aware of at least the situation in Palisade and Grand Junction. 

Mr. BISSON. I am aware of it. I have not been briefed on it, sir, 

but I am aware that a decision was made in Colorado to proceed 

with leasing those several tracts that you are speaking about. 

Mr. UDALL. Could you tell me why you would ever deny such a 

request when water is so crucial, particularly in the West where 

we have limited supplies? 

37

Mr. BISSON. I can speculate. I would speculate that the state director decided that the mitigation measures they put in place 

should be sufficient, and that at the time that any drilling or development would occur, that they could add additional requirements 

that would protect the water. 

Mr. UDALL. I can understand the approach to be taken. I would 

just for the record point out that there was a broad swatch of communities, of groups within those communities who said, please give 

us a little bit more time. This is so important to us. 

Can you provide a complete answer for the record? 

Mr. BISSON. Yes, sir, I will. 

Mr. UDALL. Appreciate that. If I could, let me move to ‘‘split 

estate’’ situations. How much advanced notice does the BLM give 

to surface owners before offering minerals under those lands for 

leasing? 

Mr. BISSON. I can’t answer that question, but if I could take a 

second, what I would like to do is explain that last year as a result 

of the Energy Policy Act BLM was required to do a split estate 

analysis, and we went through a five-month-long process where we 

held nine listening meetings across the West. We accepted more 

than 3,000 public comments about this issue, and one of those 

issues was that public notice that lessees are provided, and we 

have instructed our field offices to take every step possible to make 

sure there is advance notice to landowners about pending lease 

sales. 

Mr. UDALL. Are there any specific requirements for consultations 

with the surface owners? 

Mr. BISSON. Prior to the lease sale? 

Mr. UDALL. Prior and after, yes, sir. 

Mr. BISSON. Yes. I can’t answer that. I do know that the first 

place where decisions are made about leasing is in the land use 

plans, and we have instructed our field offices again to pay for ads 

in the papers, to do whatever they have to do to get the word out 

about the land use plans that are underway, and the decisions that 

are going to be made about where leasing may or may not occur. 

Mr. UDALL. At least one conclusion I could draw is because you 

don’t have any specifics, you don’t have any requirements, but I 

would certainly like you to respond fully for the record, if you 

would. 

Mr. BISSON. I absolutely will, sir. 

Mr. UDALL. If I could direct a question at you, Mr. Bisson, and 

also Mr. Ferguson. Another witness, Mr. Emmerich, will testify on 

behalf of the WGA, the Western Governors’ Association. Have you 

had a chance to review his testimony? 

Mr. BISSON. Yes, I have. 

Mr. UDALL. Mr. Ferguson? 

Mr. FERGUSON. I have not. 

Mr. UDALL. If so, what do you think about the Governors’ proposal to amend the categorical exclusion provision of the 2005 

energy act? 

Mr. BISSON. We feel that the use of the categorical exclusion is 

a very important tool for us in terms of completing our permitting 

activities. We use it judiciously. We have instructed our field offices 

to consult with the game and fish departments. We require interVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00043 Fmt 6633 Sfmt 6602 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
38

disciplinary review. We don’t shortcut the process. What we are 

doing is taking advantage of existing NEPA work that has been, 

and that is where the savings in time comes from. We think we 

need the tool. 

Mr. UDALL. Mr. Ferguson, if you would like to reply for the 

record later, that would be great, once you have had a chance to 

look at the testimony. 

Mr. FERGUSON. I can do that. Thank you. 

Mr. UDALL. Is the BLM giving special consideration as to whether or not to use a CE where BLM-sensitive species and/or candidates for ESA listings are present, specifically sage grouse? 

Mr. BISSON. Absolutely. 

Mr. UDALL. So you are considering it? 

Mr. BISSON. We absolutely consider all the resource values on a 

site where a CX is proposed to be used, and in some cases we determine that a CX is not appropriate. 

Mr. UDALL. Actually, I maybe have—you are not considering 

using a CE for these situations with sage grouse? 

Mr. BISSON. Again, I don’t want to emphatically say yes or no 

because I don’t know, but if we had a BLM-sensitive species that 

could be affected by a project, that would likely elevate the NEPA 

requirement. 

Mr. UDALL. Thank you again. Thanks, Mr. Chairman. 

Mr. GRIJALVA. Thank you, Mr. Udall. 

We are going to do one more round of questions. Mr. Ferguson, 

if I understand your testimony, the Forest Service conducts broadscale leasing analysis to determine which lands are suitable for 

leasing, and then informs the BLM about those lands that are 

available. So can the committee infer that the agency, your agency 

has the authority of determining some lands to be unsuitable for 

development? Would that be a correct inference? 

Mr. FERGUSON. I think that could be an inference that could be 

made. We go through—our planning process at the Forest Service 

is a little different from the process that is followed at the Bureau 

of Land Management. The leasing analysis is specifically targeted 

toward the oil and gas resources when I referenced the leasing 

analysis. So it is identifying lands that our specialist and through 

the public process have identified as being available or suitable, 

and that is again at a very broad level. Once that parcel, if there 

is an interest expressed on a Forest Service parcel, then we have 

another opportunity to look at that parcel and make sure it is in 

compliance with our plans, and conditions haven’t changed. 

Mr. GRIJALVA. Thank you. Let me just follow up on that point. 

So can you answer now or submit for the record for the committee 

how many acres based on that analysis have been withheld from 

leasing because the Forest Service determined that that oil and gas 

development would be inappropriate? How many acres, and if you 

can give us an example of where? 

Mr. FERGUSON. I will have to submit that for the record. I am 

not sure that we have that available right now. We will have to do 

some research with our regional offices and get that information for 

you. 

Mr. GRIJALVA. Thank you very much. 

39

One last question, Mr. Bisson. In the Nine Mile Canyon, BLM 

seem to take the position that the agency was very limited in its 

ability to say no to proposed development because the leases had 

been issued even though the development will substantially affect 

the historical, cultural, archeological resources, the valuable rock 

art panels and the landscape within the canyon will be affected. 

What can you suggest to this committee that BLM can do to prevent a recurrence of a situation similar to the Nine Mile Canyon? 

Mr. BISSON. Mr. Chairman, we are doing all we can to prevent 

unnecessary impacts on archeological resources and other sensitive 

resources in Nine Mile Canyon and elsewhere. The BLM right now 

is going through a revision of its land use plan in both the Vernal 

and the Price field offices. There will be measures included in the 

final outcome of that process, I believe, that will provide additional 

protection for those areas. 

Mr. GRIJALVA. I have no other questions. Mr. Pearce. 

Mr. PEARCE. Thank you, Mr. Chairman. I would like to follow up 

a couple of the questions that have been asked. 

Mr. Bisson, you know, we get the question of split estate, and the 

next panel really goes into that, or the panel after really goes into 

that in great detail, and it is referred to my good friend from Colorado. If you consider all the well that have been drilled on the 

lands that are subject to the split estate, how many problem wells 

do you actually have? How many contentious situations? How 

many failed to get an application? 

Mr. BISSON. Mr. Pearce, right now we have about 19,500 wells 

on split estate, Federal minerals private surface. Of that amount 

I have been told that it is less than 20 wells that have been—you 

know, where there has not been a surface use agreement able to 

be negotiated, and where companies chose to bond up instead of 

going through the surface use agreement process. That is a pretty 

small number. 

Mr. PEARCE. You have 19,000 something wells. 

Mr. BISSON. Twenty. 

Mr. PEARCE. And you have 20, so if I put 20, divide that by 

19,000, I get a couple of zeros, a decimal and a couple of zeros, and 

one-tenth of 1 percent. 

Mr. BISSON. That sounds about right, sir. 

Mr. PEARCE. And yet the testimony that we are going to hear 

today leads us to believe that it is catastrophic out there. Do you 

see the catastrophic nature of the split estate occurring? 

Mr. BISSON. We feel that the great majority of operators want to 

be good neighbors. They need to live in those communities. They 

need to work. They want to work with the private surface owners 

to reach satisfactory conclusions to the process, and we think that 

is the attitude that most of the operators take into their discussions. 

Mr. PEARCE. You are saying most of the operators. Occasionally 

there are operators like anybody who are bad neighbors. Do you 

have tools to——

Mr. BISSON. I would have to believe that there are, sir. 

Mr. PEARCE. You what? 

Mr. BISSON. I have to believe that there are people like that, but 

we——

40

Mr. PEARCE. Do you have tools to deal with them is my question. 

Mr. BISSON. Yes, we do. Yes, we do. 

Mr. PEARCE. So you can make them be reasonable even if they 

don’t want to be reasonable? 

Mr. BISSON. We work hard to get the parties to try to work 

things out. 

Mr. PEARCE. Are there ever any people on the other side of the 

equation, the people with the lands that get unreasonable? 

Mr. BISSON. Having not been personally involved in it——

Mr. PEARCE. Let me tell you about a situation I was personally 

involved in. My company, we did oil wells, but we did work down 

the hole. So we were called down to around Taos, New Mexico. We 

were out on this lease, and we were on the pad. Then one of the 

trucks, not ours, but one of the other trucks on location, you always 

have a lot of equipment moving in, so maybe five or six big 18-

wheelers dropping equipment off to do the work down hole. One 

wheel got off on the grass, and the rancher was sitting there, and 

he cocked his gun, had his rifle, and he said, ‘‘Everything shuts 

down here, my friends.’’ Our trucks were trapped out there for 

hours. 

These kind of things do need balance. I am very familiar. 

You had a question earlier about habitat. You did not know specifics, but I do because again I have worked in the industry. I have 

watched while the big companies—Texaco, Chevron—the big companies began to build quail habitat because quail can’t exist without water, and they need a little watering troughs around a lot of 

the locations, little watering troughs, automatic things, just pump 

water out there. So we have seen actually quite a lot of interest in 

this. 

Now, I grew up in this area of New Mexico, and we hunted 

arrowheads all the time just growing up, so we were always 

wandering around through the sand hills. Not once, not one time 

earlier than my twenties did I ever see a deer. Now, I am not saying that the oil and gas exploration has caused the deer, but I can 

tell you that the biggest deer that are being killed right now are 

about five or six, seven, ten miles from my house, and we never 

used to see them. So what I am saying is that oil and gas production is not exclusive. It does not force the game away. 

Also, on the habitat restoration, the highest land point in Lea 

County, the highest point in my home county is actually where 

they are cleaning up something because my dad was from a different generation. I used to go with him when I was eight-nine 

years old. We would go to the oil fields and they were different. 

The people my age are saying we are not going to mess up the environment. We are going to get the oil and gas, but we are not 

going to mess it up, and the highest point in Lea County is from 

an excavation, one of those sites from the twenties, and they are 

actually doing the right thing, and that is the thing I see. 

Mr. Bisson, do you ever see that kind of thing play out? 

Mr. BISSON. In fact, much of the clean up that we are doing right 

now are wells that are a remnant of that time period. We don’t see 

hardly any—in fact, I am not aware of any operators who have 

walked away from leases right now without carrying out the reclamation responsibilities. 

41

Mr. PEARCE. The walk-awayers were a different generation. 

Mr. BISSON. It was a different time. 

Mr. PEARCE. And it was not excusable then. 

Mr. BISSON. And we won’t let them. 

Mr. PEARCE. All right. Thank you, Mr. Chairman. 

Mr. GRIJALVA. Thank you. You got me there, Mr. Pearce. My 

daddy never took me to the oil fields to have fun. 

[Laughter.] 

Mr. PEARCE. That was bonding that was occurring. 

Mr. UDALL. Thank you, Mr. Chairman. 

I wondered if the gentleman from New Mexico is now in favor 

of some greater form of gun control given the way his ranchers are 

behaving. 

[Laughter.] 

Mr. UDALL. To turn more whimsical here. Mr. Bisson, what is 

the status of the leasing in the Wyoming Range? I am sorry. Mr. 

Ferguson. I don’t want to just pick on Mr. Bisson today, my Forest 

Service friend. What is the status of the leasing in the Wyoming 

Range or the Bridger-Teton? And a couple of question that follow 

on there. How many acres are currently in production or under 

lease, and how many more acres are slated, being considered for 

leasing, and what is the status of planning on those lease sales? 

Mr. FERGUSON. Let me get to my information here. The current 

status, as I understand it right now, is that we are in a holding 

pattern and there is work being processed—the plan is being evaluated and an EIS is being conducted. 

In terms of some of the information, there have been several 

lease sales over the last couple of years, and there are about 20,000 

acres that are currently involved in a stay by the Interior Land 

Board of Appeals, and those are just in a stay position, and there 

is another 23,000 plus that have been appealed, and there is no action being taken on those right now pending this action with the 

environmental impact statement, and making sure that the planning document is up to date, and accurate. 

That is the basic information that I have right now in terms of 

those parcels. I can provide you some more detailed information if 

you would like, but I do know that there is a very concerted effort 

going on right now with getting that plan up to date, and the plan 

revision is scheduled for completion in September of 2008. 

Mr. UDALL. And you will submit additional information for the 

record? 

Mr. FERGUSON. I can do that. Sure can. 

Mr. UDALL. Thank you. Mr. Bisson, if I could turn to another 

Wyoming question. 

Mr. BISSON. Sure. 

Mr. UDALL. When do you anticipate completion of the final EIS 

on the year-round expanded drilling situation in the Pinedale 

Anticline? 

Mr. BISSON. The Pinedale Anticline. 

Mr. UDALL. And particularly what provisions have been proposed 

to protect the migration corridor for the prong horn and other animals? 

Mr. BISSON. Well, we have just concluded the public comment 

process on the draft EIS, and we are in the process right now of 

42

moving toward a final. We got more than 40,000 comments which 

we are analyzing. We have made no final decisions as to which alternative we would propose or exactly what measures would be involved. 

We have 14 different cooperating agencies that we are working 

with before we make those decisions. We will be sitting down with 

them and discussing it, but we are looking at strategies that involve companies agreeing to defer their development on the flanks 

of the Anticline. We have stage development that is being proposed 

where parts of the Anticline would not be developed, and be available for migration corridors while other parts are developed. We 

are looking at directional drilling. We are looking at lots of different strategies to try to do it in the most sensitive way that we 

can. 

Mr. UDALL. If I could editorialize for 30 seconds perhaps on that 

particular area, I have great respect for my colleagues from New 

Mexico, Mr. Pearce. He and I have worked together on some legislative initiatives, and I do take him at his word, particularly in the 

drier area of New Mexico that some of the larger wildlife are not 

as present as they are in other areas, but certainly this area is remarkable in its wildlife abundance, and many of us, all of us, I 

think, want to get this right, whether it is on the industry side, the 

BLM side, the Congress, and I just urge you to everything possible 

here and to go slow. 

As a follow on, at last week’s hearing a witness, Mr. Simpson, 

who testified for the NWF, National Wildlife Federation, said that 

while the BLM has the best management practices requirement, 

those requirements are seldom implemented—or if it is included in 

permit stipulations, if the measures cost too much, the companies 

will demand that the stipulation be scrapped. Would you respond 

to that statement? 

Mr. BISSON. Yes, sir. Best management practices are a tool that 

we instruct our field managers to utilize at the time that they are 

making decision to approve permits to drill, and we require them 

to look at them and made decisions about which ones ought to included as conditions of approval. Simply because a company doesn’t 

want to do something is not a reason not to require them to take 

protective steps that we feel are necessary. 

Mr. UDALL. Good. 

Mr. BISSON. Thank you. 

Mr. UDALL. Thank you, Mr. Chairman. 

Mr. GRIJALVA. Thank you, and let me thank both our agency witnesses, appreciate it very much. If the committee has further questions, we will be submitting those to you, and the information that 

you indicated you would submit for the record, we would like to request that that be within the next two weeks insofar as the full 

committee will be drafting an energy bill in May, and as soon as 

we can have that information and incorporate it into the deliberations. 

Mr. BISSON. Yes, sir, Mr. Chairman. 

Mr. GRIJALVA. Thank you so much. 

Mr. BISSON. Thank you. 

Mr. GRIJALVA. Let me call the next panel up, please, if I may. 

43

Thank you very much, gentlemen, and as I indicated to the previous panel, your full statements will be made part of the record, 

and if at all possible to limit the oral remarks to five minutes, and 

let me begin with Mr. Emmerich. Sir. 

STATEMENT OF JOHN EMMERICH, DEPUTY DIRECTOR,

WYOMING GAME AND FISH DEPARTMENT 

Mr. EMMERICH. Chairman Grijalva, I am John Emmerich. I am 

the Deputy Director with the Wyoming Game and Fish Department, and I thank you for the opportunity to address the Subcommittees regarding Section 390, subpart [b][3] of the Energy Policy Act of 2005 on behalf of the Western Governors’ Association and 

the Association of Fish and Wildlife Agencies. 

The West, including Wyoming, is a national focus for energy development. The current scale and the intensity of energy development is unprecedented in many western states and experts predict 

this development will continue for several decades. The Western 

Governors are strong advocates for environmental responsible 

energy development as demonstrated by the development and implementation of the Western Governors’ Association Clean and Diversified Energy Initiative. 

Much of the West also has world-class wildlife resources and a 

wildlife-oriented culture that the state and the Nation value very 

highly. From the current projected levels of energy development in 

Wyoming, it is estimated that roughly 25 percent of the state will 

experience direct surface disturbance or the effects of indirect wildlife disturbance caused by increased human, vehicular, and development activities associated with this level of development. Specific 

wildlife impacts are documented and are contained in the written 

statement. 

Energy development and fish and wildlife conservation are mutually achievable goals if development decisions are based on sound 

information and early continual engagement between the Federal 

land management agencies, state fish and wildlife agencies, and 

the energy development industry. The level of analysis, disclosure 

and recommended mitigation as appropriate for sensitive wildlife 

corridors and crucial habitat is not provided in programmatic land 

use plans such as RMPs or forest plans. This can only be achieved 

to the more in depth analysis provided by an EA or in most cases 

an EIS developed with full state participation. 

Subpart [b][3] of the Section 309 of the 2005 Energy Policy Act 

is worded in such a manner that oil and gas wells could be drilled 

under a categorical exclusion with no additional analysis if, and I 

quote, ‘‘in an approved land use plan...prepared pursuant to NEPA 

analyzed drilling as a reasonably foreseeable activity...’’ That could 

include an RMP. 

Of the 10 BLM field offices in Wyoming as an example, five are 

currently revising their resource management plans, and four of 

these are scheduled for completion by the end of 2007. The geographic area managed by these field offices contain very significant 

oil and gas resources, including the Continental Creston-Divide 

area that covers by itself over 1 million acres. 

The Governors believe that the categorical exclusions authorized 

broadly under paragraph [b] of the Energy Policy Act may often be 

44

appropriate. However, with specific regard to subpart [b][3], the 

Governors did not want their ability to require adequate mitigation 

in areas that the states have identified as sensitive wildlife corridors and crucial habitats to be diminished or eliminated. 

The Department of the Interior has worked fairly and inclusively 

with the states to date. However, the categorical exclusion provision in subpart [b][3] of the 2005 Energy Act appears to provide a 

legal option to deny state fish and wildlife agencies the opportunity 

to protect and adequately manage fish and wildlife resources on 

BLM lands by authorizing oil and gas development without adequate analysis, disclosure and state agency involvement. 

In February 2007, the Western Governors’ Association adopted 

Policy Resolution 0701, protecting wildlife migration corridors and 

crucial wildlife habitat in the West. The resolution urges Congress 

to amend Section 390, subpart [b][3] of the Act to remove the categorical exclusion for NEPA review for expiration or development 

of oil and gas in wildlife corridors and crucial wildlife habitat on 

Federal lands. 

By removing the categorical exclusion, appropriate environmental site analysis will be completed as necessary to protect these 

crucial habitats. The Wyoming Governors or the Western Governors’ Association and the Association of Fish and Wildlife Agencies would be happy to work with the committee staff on these proposed amendments. 

A second possible solution, especially as an interim step, would 

be to have the BLM develop a memorandum of understanding or 

policy document requiring a companion process with subpart [b][3] 

that would provide the opportunity for state fish and wildlife agencies to review those permits that could be excluded from a formal 

NEPA analysis in these sensitive wildlife corridors and crucial 

habitats. It will also provide BLM with an informal assessment of 

impacts and mitigation responses. 

Mr. Chairman, the Western Governors’ Association and Association of Fish and Wildlife Agencies believe that more informed decisions that provide for both conservation of a fish, wildlife, and their 

habitats and efficient delivery of energy, and this can be achieved 

through early and meaningful coordination and information sharing among all involved. 

A second part of their resolution deals with the efforts to try to 

collect more information on migration coordinators, crucial habitats 

to facilitate the analysis and decision-making process. 

In conclusion, Governors and state fish and wildlife directors are 

solution-oriented. These landscape level activities are complex and 

cut across several governmental jurisdictions and private interests. 

However, we believe that solutions are available if all parties rely 

on the best available information, coordinate often at the earliest 

stage and throughout the process, and develop relationships of 

trust, integrity, and mutual commitment to meeting both fish and 

wildlife conservation objectives and the delivery of energy for our 

citizens. 

Thank you for this opportunity to share our perspectives, and I 

am glad to take any questions. 

[The prepared statement of Mr. Emmerich follows:]

45

Statement of John Emmerich, Deputy Director, Wyoming Game & Fish 

Department, on Behalf of The Western Governors’ Association & The 

Association of Fish & Wildlife Agencies 

Chairman Grijalva, Chairman Costa, and members of the Subcommittees, my 

name is John Emmerich, I am the Deputy Director of the Wyoming Game and Fish 

Department. Thank you for the opportunity to address the Subcommittees regarding 

Section 390 subpart B(3) of the Energy Policy Act of 2005, on behalf of the Western 

Governors’ Association (WGA) and Association of Fish and Wildlife Agencies 

(AFWA). The Western Governors’ Association is an independent, nonprofit organization representing the governors of 19 Western States, American Samoa, Guam and 

the Northern Mariana Islands. Through their Association, the Western governors 

identify and address key policy and governance issues in natural resources, the environment, human services, economic development, international relations and public management. AFWA represents all 50 State Fish and Wildlife Agencies. 

The West, including Wyoming, is a national focus for energy development. Several 

western states contain large domestic reserves of coal and uranium, world-class natural gas and wind resources, as well as significant oil production. There is also potential for oil shale development. These base energy sources are being tapped, and 

plans are underway for power plants, synfuel plants, pipelines and power grids to 

process and ship that energy across the west. The current scale and intensity of 

energy development is unprecedented in many Western states, and experts predict 

this development will continue for several decades. The Western Governors are 

strong advocates for environmentally responsible energy development, as demonstrated by the development and implementation of the WGA Clean and Diversified Energy Initiative. 

While many Western states truly have a world-class energy resource, much of the 

West also has a world-class wildlife resource and a wildlife-oriented culture that the 

state and the nation value very highly. For example, about half of Wyoming’s residents hunt and/or fish, 75% enjoy non-consumptive wildlife watching activities, and 

many thousands of nonresidents also spend time in Wyoming each year specifically 

to take part in those activities. This participation in wildlife-associated activities is 

far higher than most other states. According to the U.S. Fish & Wildlife Service, 

$21 billion was spent in 2001 on renewable hunting, fishing and wildlife watching 

activities in the 19 Western States. At this point in time, energy development is Wyoming’s chief economic resource, but wildlife-associated activities have long been 

and will continue to be a very significant part of the State’s second leading economic 

source, tourism and recreation. Economic support from tourism and recreation will 

need to be maintained to provide economic diversity and continue as a stable and 

vital part of the State’s economy when development of energy sources inevitably 

slows. 

The Western Governors’ Association and the Association of Fish and Wildlife 

Agencies recognize the national energy need and the West’s contribution towards 

fulfilling that need. They also recognize the statutory obligations of our State Fish 

and Wildlife Agencies to conserve and manage the fish and wildlife resources, which 

are so important to the economy, culture and heritage of our citizens. A key aspect 

of this obligation is ensuring the sustainability of the habitats on which these species depend. 

Habitat impacts in many Western States have recently occurred as a result of the 

unprecedented energy development. In seven major oil and gas fields in Wyoming, 

there have been approximately 44,000 wells developed over several decades with the 

majority in the last ten years, and 55,000 additional wells are planned over the next 

20 years. From this activity, it is estimated that roughly 25% of Wyoming will experience direct surface disturbance or the effects of indirect wildlife disturbance 

caused by increased human, vehicular and development impacts associated with 

energy development. 

Many species associated with the sagebrush/grassland steppe, including mule 

deer, pronghorn, sage-grouse, green-tailed towhee, and Brewers sparrow to mention 

a few, have experienced long term declines in productivity and numbers over the 

last thirty years, despite periodic, short term increases. Causative factors are many 

but change in habitat conditions is certainly one of the major factors. The unprecedented level and pace of energy development in the West is an additional impact 

on already struggling wildlife. 

In Wyoming sage grouse numbers have declined by approximately 60% and their 

numbers have declined even more so across their entire range over the last thirty 

years. Recent research and monitoring information on sage grouse and mule deer 

in the Pinedale anticline area of southwest Wyoming and the Powder River Basin 

of northeast Wyoming have clearly documented some of the impacts associated with 

46

intensive oil and gas development. Mule deer use on the crucial mesa winter range 

south of Pinedale has experienced a 27% decline since development started. Wyoming has seen a statewide increase of 68% in sage grouse numbers across Wyoming 

from 2004 to 2006, and a 44% increase in undeveloped areas adjacent to the 

Pinedale Anticline in this same timeframe. However, within the gas field there was 

no increase in grouse numbers associated with 37 leks and at least four of the leks 

were abandoned. 

Energy development and fish and wildlife conservation are mutually achievable 

goals if development decisions are based on sound information and early, continual 

engagement between the Federal land management agencies, State Fish and Wildlife Agencies and the energy development industry. With the current pace, scale and 

intensity of energy development in many Western States, it is vital that State Fish 

and Wildlife agencies have opportunity to be engaged throughout the NEPA process 

to ensure accurate information on the location of crucial wildlife habitat and key migration corridors is identified and recognized and there is adequate analysis, disclosure and mitigation provided to minimize impacts and offset unavoidable impacts. 

It is our expectation that the BLM, particularly given its multiple use mandate, 

would likewise routinely address these issues in RMPs and again at the leasing and 

permitting stages. 

The level of analysis, disclosure and recommended mitigation that is appropriate 

for sensitive wildlife corridors and crucial habitat is not provided in programmatic 

land use plans such as RMPs or Forest Plans. This can only be achieved through 

the more in depth analysis provided by an EA or in most cases an EIS developed 

with full state participation. 

Subpart (b)(3) of section 309 of the 2005 Energy Policy Act is worded in such a 

manner that oil or gas wells could be drilled under a categorical exclusion, with no 

additional analysis, if ‘‘an approved land use plan...prepared pursuant to NEPA analyzed drilling as a reasonably foreseeable activity....’’ We are concerned that completion of an RMP after the five-year period that an EA or EIS covers a reasonably 

foreseeable development scenario, or before an EIS is completed for a developing 

field, would allow authorization of drilling under a categorical exclusion (Cat Ex), 

including in sensitive wildlife corridors and crucial habitat, with general provisions 

provided only by the RMP. 

Of the ten BLM Field Offices in Wyoming, five are currently revising their RMPs, 

and four of these are scheduled for completion by the end of 2007. The geographic 

area managed by these Field Offices contain very significant oil and gas fields, including Moxa Arch, South Piney, Jonah, Pinedale Anticline, Atlantic Rim, and the 

huge Continental Divide-Creston area that alone covers over 1 million acres. 

The Governors believe that the Categorical Exclusions authorized broadly under 

paragraph (b) of the Energy Policy Act may often be appropriate. However, with 

specific regard to subpart (b)(3), the Governors do not want their ability to require 

adequate mitigation in areas the States have identified as sensitive wildlife corridors and crucial habitat to be diminished or eliminated. Development of these sensitive areas obviously needs detailed disclosure and analysis of impacts to other resources, and the permits need to include avoidance and mitigation measures to protect those resources. 

Although the Department of the Interior has worked fairly and inclusively with 

the states to date, the categorical exclusion provision in subpart (b)(3) of the 2005 

Energy Act appears to provide a legal option to deny state fish and wildlife agencies 

the opportunity to protect and adequately manage fish and wildlife resources on 

BLM lands by authorizing oil and gas development without adequate analysis, disclosure and state agency involvement. Unless the problematic language in Subpart 

(b)(3) is amended or removed, or an additional administrative process implemented 

to allow state fish and wildlife agencies an opportunity to recommend appropriate 

protection and conservation conditions to accompany permits to drill in sensitive 

wildlife corridors and crucial habitat, significant wildlife impacts could occur. 

In February 2007, the Western Governors’ Association adopted Policy Resolution 

07-01, ‘‘Protecting Wildlife Migration Corridors and Crucial Wildlife Habitat in the 

West’’ (attached). The resolution urges Congress ‘‘to amend Section 390. Subpart 

(b)(3) of the Energy Policy Act of 2005 to remove the categorical exclusion for NEPA 

reviews for exploration or development of oil and gas in wildlife corridors and crucial wildlife habitat on federal lands. By removing the categorical exclusion, appropriate environmental site analysis will be completed as necessary to protect crucial 

wildlife habitat and significant migration corridors located in the field of development.’’

The WGA and AFWA would be happy to work with Committee Staff on this proposed amendment. 

47

A second possible solution, which would not involve legislation, would be to have 

the BLM develop a memorandum of understanding or policy document requiring a 

companion process with Subpart (b)(3) that would provide the opportunity for state 

fish and wildlife agencies to review those permits that could be excluded from a formal NEPA analysis in these sensitive wildlife corridors and crucial habitat, and still 

provide BLM with an informal assessment of impacts and mitigation responses. 

These would then result in conditions of approval that BLM could attach to drilling 

permits. If this option is pursued, WGA and AFWA would be happy to work with 

the federal land management agencies to that end. 

In some manner, whether by these proposed solutions or others, we strongly recommend that the unintended result of Subpart (b)(3) in potentially excluding States 

from discharging their mandated resource management responsibilities on BLM 

land be addressed. 

Mr. Chairman, WGA and AFWA believe that more informed decisions that provide for both conservation of fish, wildlife and their habitats and efficient delivery 

of energy to our citizens can be achieved through early and meaningful coordination 

and information sharing among all involved. In addition to ensuring language in the 

2005 Energy Act facilitates this sharing it is important to also facilitate the identification of sensitive wildlife migration corridors and crucial habitats and make that 

information readily available to ensure that significant landscape altering activities, 

including energy development, can be done while meeting the State’s obligation to 

sustain healthy fish and wildlife populations. 

The WGA resolution calls for the gathering, assimilation and mapping of this important fish and wildlife information on an ambitious schedule. Much of this information already exists in State Fish and Wildlife Agencies, State Natural Heritage 

Inventories and other places. It is the intent of the WGA to first compile the location 

of existing information and facilitate its availability across state and agency lines 

while initiating inventory and monitoring work to address current gaps in information. This information, beginning with Federal lands, will then be used to enable 

informed decision making regarding energy development, and other associated development including transmission corridors, transportation corridors, etc. The interagency, interdisciplinary Wyoming Landscape Conservation Initiative is using a 

very similar process to determine the best places to assess and enhance wildlife 

habitats on a landscape scale in southwest Wyoming in a manner compatible with 

the unprecedented development occurring on the same landscape. 

Governors and State Fish and Wildlife Directors are solution oriented. These 

landscape level activities are complex and cut across several governmental jurisdictions and private interests. However, we believe solutions are available if all parties 

rely on the best available information, coordinate often at the earliest stage and 

throughout, and develop relationships of trust, integrity and mutual commitment to 

meeting both fish and wildlife conservation objectives and the delivery of energy for 

our citizens. 

Thank you for the opportunity to share our perspectives. I would be glad to answer any questions. 

Mr. GRIJALVA. Thank you, sir. 

Mr. James. 

STATEMENT OF JEWELL JAMES, MEMBER, LUMMI NATION 

Mr. JAMES. Thank you, Mr. Chairman. We appreciate the opportunity to appear here to testify at this oversight hearing. I am 

Jewell James of the Lummi Indian Nation, representing the Office 

of the Chairwoman. 

The Lummi Nation is just one of 525 or more Indian Nations 

throughout the United States. The Energy Policy Act of 2005 provided under Sections 501 to 502 Indian participation in the development of oil, gas, and alternative energies. Under 503, we see that 

there are new laws added where there would be an Indian Energy 

Development and Self-Determination Office, and we know that the 

intent is to provide tribes the opportunity to participate through 

loans and grants, but also under 504, we witness that there is an 

opportunity for tribal governments to come forward and be 

consulted on some of those applications that will have direct 

48

impacts either on the reservations or within their traditional territories. 

The Lummi Tribe is one of the original self-governing Indian Nations under the Title III amendments to the Indians Self-Determination and Education Assistance Acts of 1975 that came out in 

the 1980s. Since then it has been amended to include Title IV, and 

now we are going into Title V. 

The idea is that tribes not only are self-determining, but are selfgoverning. This required us to begin to develop the infrastructure, 

the professional staff that would help us co-manage not only our 

government but our own natural resources. This is one of the questions that is being presented to the Congress on what we call the 

Section 139 tribes and the appropriations process where tribes 

want to have the authority to govern their own natural resources. 

We know that with regards to government-to-government consultation the House Concurrent Resolution 331 of 1988 actually defined it, that it is based on the United States Constitution where 

it is stated that Article 1, Section 2, Clause 3 of the U.S. Constitution provided the words ‘‘excluding Indians not taxed.’’

We are tribal Indians, not counted amongst the ‘‘We the people 

of the United States.’’ Article 1, Section 8, Clause 3 provided Congress the power to regulate commerce with Indian Nations. Article 

1, Section 10, Clause 1 limited states’ powers and/or treaties, and 

Article 2, Section 2, Clause 2 authorized the President and the 

Senate to enter treaty relationships with Indian Nations. 

Article 3, Section 2, Clause 1 authorized the Supreme Court to 

address treaty questions, and Article 3, Clause 2 made treaties one 

of the supreme laws of the land. 

Now, just like constitutions, treaties also have reserved rights 

doctrines that apply to them. Treaties are usually interpreted as 

the Indians would have understood as one of the doctrines of the 

Court for interpreting treaty relationships. 

Our understanding as Indian Nations and what we believe as a 

part of our retained inherent sovereignty is that we have the right 

to protect sacred sites and places that may be impacted within our 

traditional territories. However, in order to do that, this would require a better definition under subsection 2602[a] where the Secretary is authorized to give grants to help develop databases. If 

that grant goes to an inter-tribal organization, the Lummi Nation 

recognizes that the National Tribal Environmental Council would 

probably be the best entity for those funds to go to. However, there 

is not a specific amount that is earmarked for it. We are hoping 

though, because of the inter-tribal organizations, and because of 

the various specialties that we witness amongst the inter-tribal organizations, that the National Tribal Environmental Council would 

be the best fit for organizing the inter-tribal participation as well 

as gathering input from all tribes. 

The 2005 Act is a national policy and we need to have the assistance of the Congress and the Subcommittees to develop a national 

position of Indian Tribes based on not only pro-development oil, 

gas, and energy, but also on organizing our concerns as pertains to 

the sacred sites and places. This is something that we don’t have 

funding for within tribal governments. 

49

We know that most people believe that Indian tribes are very 

wealthy as a result of gaming, but most of that gaming revenue 

goes to a few tribes that are located next to major metropolitan 

areas. The Lummi Tribe, for example, is one tribe that is gaming 

and all of our revenues go back into health and education because 

of funding shortfalls on the Federal appropriations side. 

So we see those funds re-invested back into the community, and 

we know that most of the tribes are really isolated, don’t have the 

technology, and cannot access the professional staff and legal expertise that they would need in order to analyze the impacts, the 

applications for energy development, we will have a part in them 

with regards to the environment as well as the sacred sites and 

places. 

We believe that if the tribes are authorized to work with the National Tribal Environmental Council and the National Tribal Environmental Council secures funding through the Secretary’s office a 

mandate, that we would be able to help develop our recommendations for management regimes that would incorporate our concerns 

associated with sacred sites and places. 

Thank you. 

[The prepared statement of Mr. James follows:]

Statement of Jewell James, Policy Analyst,

Lummi Indian Nation 

The Lummi Indian Nation is located in the Pacific Northwest part of the United 

States, northwest Washington State. Lummi is anthropologically, geographically, 

and linguistically identified as belonging to the Coast Salish Culture by academicians. Lummi is a federally recognized Indian Nation. We have a government-to-government relationship established by the 1855 ‘‘Peace Treaty’’ (12 Stat. 927) with the 

United States. The treaty was ratified by the Senate & proclaimed by President in 

1859. Lummi is one of the original ‘‘Self-governing Compact’’ Indian Nations, as authorized by Congress per amendments to the Self-Determination Act of 1975, under 

Title III. We have never disbanded or terminated our tribal relationships. We, as 

a native community, maintain our tribal status the same as was recognized in the 

Supreme Court decision of Elk v. Wilkins (112 U.S. 94 (1884)). We lead and represent our nation based on the idea that popular sovereignty is an inherent trait 

of our domestic relations. We are a tribal constitutional government (non-IRA) that 

provides and protects the essential governmental functions and services needed by 

our populace. In this light, we appear before the Congress to testify on behalf of 

our people. While we do not have the authority to testify on behalf of other Indian 

Nations, we do recognize and realize that our nation shares common concerns over 

the protection of sacred sites and places and the prevention of the destruction or 

contamination of such places by modern development; which include the impacts of 

oil & gas drilling, mining development, and other fuel industry or energy industry 

activity & operations. 

Historical Politics of American Religious Wars Against the Natives: 

The Lummi People would be classified as practicing a variant of the ‘‘Mother 

Earth Religion’’ that can be found practiced by indigenous peoples (of all four races) 

located all around the world. This religious classification would be placed on the opposite end of a religious continuum in reference to the ‘‘Father/Son God’’ Religions— 

otherwise known as Catholicism, Christianity, Judaism, and Islam/Muslim. Such 

native practices and observances would be considered by the latter religions as 

‘‘pagan, heathen and uncivilized practices of the infidels.’’ This historical ethno-religious prejudice has normally dominated their relationships and opinions about and 

with the respective indigenous communities they encounter—in our case, the Native 

Americans. 

However, the Catholic Church came to dominate the Lummi Indian Reservation 

at and about the same time as the treaty negotiations between the Lummi and the 

United States. This religious denomination has had a predominant claim upon the 

Lummi Populace ever since. When President U.S. Grant authorized the Christian 

Churches to assume control and management over the Indian Reservations, due to 

50

BIA corruptions & fraud in the 1870’s, the Catholic Church kept control of the 

Lummi Reserve. At one time, the Lummi were supervised by a federally appointed 

‘‘Agent-in-charge’’ or ‘‘Farmer-in-charge’’ and after 1872 it became the ‘‘Priest-incharge,’’ until that changed to the ‘‘Teacher-in-charge.’’ These ‘‘Priests-in-charge’’ 

came to dominate the Indian reservations and tribal societies all across the continent, as well as help color the views & opinions of neighboring societies about the 

need to ‘‘civilize’’ the unlearned Indians. 

The story of Christian influences upon the traditional & ceremonial practices of 

the Indian Peoples is as dated as ‘‘Discovery’’ by Christopher Columbus (1492). In 

the beginning, Columbus described the Natives as ‘‘Una gente in dios’’ or ‘‘One People in God.’’ This was reworded to become ‘‘indios’’ people rather than the reference 

‘‘in dios’’ or ‘‘in god.’’ Although he characterized the natives as Christian by any 

other name, this did not theologically or legally allow for the anticipated ‘‘Conquest.’’ 

(See: Privileges and Prerogatives Granted to Columbus, April 30, 1492) needed to 

recover the costs of the venture. Thus, the natives were turned into ‘‘heathens, atheists, agnostics, pagans, savages, infidels, and other convenient classifications that 

made them legally and religiously conquerable as a non-Christian people. In fact, 

the first classifications, shortly after discovery, proclaimed the natives to not even 

be human but monstrosities. At this time, the Vatican issued Papal Bulls (e.g., 

Papal Bull Inter Cartera of May 4, 1493) that further rationalized the conquering 

of the native nations and the pillaging of their territories, societies, and the destruction of their ‘‘heathen’’ ways and archives of knowledge. The Vatican, per Papal 

Bulls, authorized the discovery and conquest of heathen lands by Christian Kingdoms. It became a ‘‘first come then first served’’ campaign. This, eventually, became 

enshrined in U.S. Federal Law as the ‘‘Discovery Doctrine’’ of Johnson v. McIntosh 

(21 U.S. (8 Wheat) 543, 5 L.Ed. 681, (U.S. Sup.Ct. 1823)). 

While Father La Casas (who arrived on the third sailing of Columbus to the New 

World as a Conquistador and then converted) argued before the Spanish Crown 

(from 1530 to 1566) that the rights of the Indians should be respected and written 

into the Laws of the Indies for their protection not conquest and enslavement. It 

was Francisco de Victoria (the father of International law) arguing the rights of 

Indian possession of their lands & territories that had the major influence on the 

development of what latter became U.S. Federal Indian law (as noted in Felix 

Cohen’s Handbook on Federal Indian Law, at 55-100). This influence of Spanish jurisprudence held that Indian lands could only be acquired via treaties that Indians 

held some form of transferable title to the land, and that acquisition could only be 

made by the government. However, before this jurisprudence could become established in international law, the conquest bloodied the relationships with the native 

nations and people throughout the western hemisphere. 

In time, the United States, after the 1776 Revolution and the ratification of the 

1787 Constitution, laid claim to inheriting the rights of ‘‘Discovery’’ in lieu of the 

repelled King of England (and all other foreign monarchy claims). Basically, Supreme Court Chief Justice Marshall said that the claims to the continent were 

based on a lie but to acknowledge it as a lie would require the nation to give the 

land back, and this it could not do, so it had to act as if the lie was true. This, then, 

became the foundation cornerstone to the U.S. claims to ‘‘Discovery’’ of the Indian 

lands & territories. 

This legal fiction, then, was eventually followed by the institutionalization of 

‘‘Manifest Destiny.’’ The idea being that the non-Indians was destined to own the 

whole continent from the Atlantic to the Pacific Ocean. This, then, required the taking of Indian lands & territory by discovery, conquest, or via peace treaties. Congress would authorize appropriations for the President & the Senate to negotiate 

and ratify Indian Treaties (per Article II, Sec. 2, Cl. 2 U.S. Const.). Over 700 treaties were negotiated (between 1787 and 1871). These negotiations were in accordance to the proclaimed congressional regulation for the establishment of new territories (and eventually the admission of new states, per Article IV, U.S. Const.) 

under the N.W. Ordinance (1 Stat. 51, July 13, 1787). A little over half of the negotiated treaties (370) were ratified by the Senate and proclaimed by the President; 

but, while half of the negotiated treaties were not ratified, the U.S. acted upon all 

the treaties as if each and everyone was ratified—in that it used the treaty concessions to completely lay claim to more than 3.8 million square miles of Indian lands 

and natural resources across the continent. 

Generally, ‘‘treaties are to be interpreted as the Indians would have understood 

them, and not in the way of learned lawyers’’ (Winans, 198 U.S. at 380, 25 S.Ct. 

664). This has been a basic guiding light for Supreme Court decisions on treaty 

rights questions. While the President/Senate had constitutional powers to enter 

treaties with the Indians, the Supreme Court has jurisdiction over legal questions 

of interpretations and obligations of the treaties (Article III, Sec. 2, Cl.1). These 

51

treaties, then, would become a part of the ‘‘supreme law of the land,’’ along with 

the constitution and national legislation (Art. VI, Cl. 2). It was more convenient for 

the United States to enter peace treaties with the numerous Indian Nations than 

to enter a state of constant war with the multitude of Indian Nations existing west 

of the Mississippi & Missouri Rivers. Conquest by War was not logical or economical. Still, treaty negotiations had to be authorized first by the congress and then 

respective appropriations instituted to implement the negotiations and commitments 

made in exchange for the vast territorial concessions of the tribes. 

However, the House of Representatives had control over the introduction of appropriations/revenue measures (Article I, Sec. 7) and abused this power in 1871 by attaching an ‘‘Appropriation Rider’’ (now, 25 U.S.C. 71, Act of March 3, 1871) that (by 

the power of political psychology and not proper constitutional amendment) limited 

the President’s/Senate’s treaty-making powers under Article II. While the whole 

Congress had constitutional authority to ‘‘Regulate Commerce...with the Indian 

Tribes’’ (Article I, Sec. 8, Cl.3), this Appropriation Rider began a near-complete congressional take over of Indian Affairs by statutory authority rather than constitutional delegation & treaties-made. But, the limitation did not have complete immediate effect, since the various presidents following then instituted a series of ‘‘Executive Agreements’’ with the Indian Nations or composed various ‘‘Executive Orders’’ 

that created additional Indian reserves, with associated federal obligations and expenses. 

Being as it may, treaties and the constitutions (states and the national) have a 

commonality in that there exists the ‘‘Reserved Rights’’ doctrine (which was enshrined in the U.S. Constitution by the Tenth Amendment, in response to state attempts to limit federal encroachments upon state jurisdiction). A part of the ‘‘peace 

treaties’’ then is the reserved rights of the Indians Nations. If a right or ownership 

is not given by specific treaty to the United States then the language should be interpreted to hold that such right or ownership is reserved to the Indian Nation. As 

Indian Nations, we would argue that there were residue or reserved rights associated with the treaty land concessions. However, in the case of Tee-Hit-Ton Indians 

(348 U.S. 272 (1955)), during the Terminationist Era (See: HJR 108 of 1953, effective from 1948 to 1975) the Supreme Court turned the Peace Treaties into ‘‘Conquest’’ by the United States. The Supreme Court retroactively conquered every 

Indian Nation in North America by a simple decision dealing with a small band of 

federally unrecognized Indians in Alaska. For the Peace Treaty Nations, this retroactive conquest did not abrogate the U.S. treaty obligations or nullify their reserved 

rights. The Terminationist-minded court simply rewrote the history of US/Indian relations into a new fiction. 

In addition, keep in mind that when a lesser nation enters a treaty relationship 

with a greater nation there exists a legal relationship by which the ‘‘Greater Nation’’ 

has a duty and responsibility to the lesser nation; i.e., a ‘‘sacred trust of civilization’’ 

is created. This concept means that the greater nation must assure that the lesser 

nation has the same opportunity to move forward and progress socially, economically, politically, and legally as the greater nation and its populace does. Nor does 

the lesser nation divest itself of its inherent rights to self-determination and selfgovernment (See: Worcester v. Georgia, 31 U.S. (6 Pet.) 515 (1832)). But, working 

with ‘‘church dogma’’ and institutionalized racism over time, the Indian nations 

have become classified as ‘‘dependent domestic nations’’ (Cherokee Nation v. 

Georgia, 30 U.S. (5 Pet.) at 17 (1831)) under U.S. law and policy. The congress, by 

ending treating making, has assumed ‘‘plenary power’’ over the dependent Indian 

communities/nations via acts of legislature, without constitutional foundation or in 

reference to specific treaty agreement. The ‘‘Greater Nation’’ (the US) in fact has 

taken advantage of the changed conditions of the Indian Nations and has instead 

marginalized their tribal societies, and deprived their membership of human 

dignity. 

In 1872, President U.S. Grant did turn Indian Affairs over to the established 

Christian Churches, under the belief they had a higher morality and strong values 

that would induce them to treaty the Indians humanely and not rob them of their 

wealth, resources, and dignity. But, the Church leadership, over the next ten years, 

in compliance with racist opinions of the Indians, then had the Department of the 

Interior institute the Indian Religious Crimes Code (DOI Circular #1665) in 1883 

(See: Comm’r Ind. Aff. Ann. Rep., H.R. Exec. Doc. No.1, 49th Cong., 1st Sess. 21.23 

(1885)), and latter enlarged it to incorporate more fines and imprisonment in 1921 

(See: K. PHILIP, JOHN COLLIER’S CRUSADE FOR INDIAN REFORM 1920-1954, 

at 56-57 (Tucson: University of Arizona Press, 1977)). In 1924, the general Indian 

Citizenship (per congressional authority under Article I, Sec.8, Cl. 4) was authorized 

for all tribal Indians that were not otherwise U.S. Citizens (See: 43 Stat. 253). Even 

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52

ment (Sec. 1 and Sec. 2) per the 39th & 40th Congresses (See: Reconstruction Debates), the enactment claimed to have not deprived the said Indians of their rights 

or property as tribal Indians. 

Even though the original movement to secure First Amendment Religious Freedom, via making Indian U.S. Citizens with constitutional rights, as proposed by Ida 

May Adams (a Southern California Women’s Suffrage Rights Lawyer), was attained, 

this citizenship did not provide Native Americans with First Amendment religious 

freedom. As a consequence, the American Indian Religious Freedom Act (August 11, 

1978) was enacted by Congress and signed by President Carter. In Section 2, the 

President directed the ‘‘various Federal departments, and agencies, and other instrumentalities whose duties impact Native American religious practices to evaluate 

their policies and procedures in consultation with Native religious leaders in order 

to determine and implement changes which may be necessary to protect and preserve Native American religious cultural rights and practices’’ (92 St. 469 (1978)). 

Ten years later, the Supreme Court, in review of the G.O. Road Case from northern California, gutted the AIRFA and concluded that ‘‘the Constitution simply does 

not provide a principle that could justify upholding respondent’’ (Indians, et al.) 

legal claims in that the First Amendment’s Free Exercise Clause had been written 

‘‘in terms of what the government cannot do to the individual, not in terms of what 

the individual can exact from the government’’ (Lyng, 485 U.S. 439, 451 (1988)). In 

a separate legal attack via Oregon v. Smith, the Supreme Court would deprive the 

Native American Church of its sacrament—Peyote, in 1990 (See: Smith II as 494 

U.S. 872). This sacrament was in use for more than 10,000 years according to radioactive carbon dating of associated artifacts—a spiritual practice that predated 

‘‘Jesus’’ by 8,000 years. 

In response to the Supreme Court anti-Indian religious freedom decisions, the 

American Indian Religious Freedom Coalition (AIRFC) formed and sought to amend 

the weak AIRFA. Senator Inouye introduced (S.2269) on July 1, 1994, a bill entitled 

the ‘‘Native American Cultural Protection and Free Exercise of Religions Act, to 

over come the damages done by Lyng and Smith. While this bill failed to pass, 

H.R. 4230, which focused solely on Peyote, was enacted into law on October 6, 1994 

(108 St. 3125). 

In 1993, broad legislation to reconstruct the ‘‘compelling interests’’ test (called the 

Religious Freedom Reformation Act of 1993 (107 St. 1488) was enacted on November 

16th, 1993. Concurrent to this period, debates were held as to why there was need 

for different or greater protection for Native American religious practices, Senator 

Wellstone stated: 

‘‘Throughout the series of hearings held around the country on NAFERA 

[Native American Free Exercise Religions Act] one theme repeated itself 

over and over again: our traditional understanding of how to protect religious freedom, based on a European understanding of religion, is insufficient to protect the rights of the first Americans...The question is not, 

should we protect Indian religious freedoms? Instead, we must ask, how can 

we best live up to our obligations to protect that freedom? This is an important question, because one might legitimately want to ask why we need a 

bill to address specifically the religious freedom of Native Americans, instead of a bill that addresses all religions at one time. There is, of course, 

such a bill, the Religious Freedom Restoration Act (RFRA), which has recently been introduced by my colleagues from Massachusetts, Senator Kennedy, and which I am an original co-sponsor. I believe that there is a strong 

argument to be made that both of these bills ought to be made into law. 

RFRA is designed to respond in a very general way to judicial decisions 

that have been made in recent years restricting the right to free practice 

of religion...But leaving the definition of such standards up to the judiciary 

has not proven very effective for Native American religions. In NAFERA, 

on the other hand, we provide language that makes clear the particulars 

of Native religious practices we intend to address.’’ (U.S. Congressional 

Record (May 25, 1993), 56456). 

The Congress was not able to pass a complete reform of Native American Religions Freedom but has worked to authorize the return of the Peyote Sacrament to 

the Native American Church, restored the rights of native prisoners to access rituals, and restored native rights to the use of eagle feathers and other animal parts. 

In addition, the Native American Graves Protection and Repatriation Act of 1990 

(104 St. 3048) was enacted to return the unearthed bodies of Native American ancestors, stored in government facilities/institutions or universities, to their respective tribal peoples for reburial. The fact is, though, the original Indian Citizenship 

of 1924 did not provide Native Americans with First Amendment Religious Freedom. The original 1978 AIRFA, according to it’s author Morris Udall (D., Arizona), 

53

said that the bill conferred no ‘‘special religious rights on Indians; changes no existing state or federal law, and has no teeth in it.’’ (U.S. Congressional Record (1978), 

2144). And, in consequence, the Supreme Court rendered their anti-Indian religious 

freedom decisions (e.g., Lyng, Smith) and prompted years of political battles to secure Indian religious freedom via piece-meal congressional enactments. 

In all of this history, it has generally been forgotten that the United States, as 

a role model to over 160 Nation/States member to the United Nations, has been living the ‘‘sacred vision’’ of the Iroquois Confederacy. The Prophet of the Iroquois, between five hundred to one thousand years before the 1787 Constitution, proclaimed 

that the ‘‘Great Tree of Peace’’ shall spread its sacred four roots (colored red, black, 

white, and yellow) in the sacred four directions. The U.S. experience of this actually 

began when the new arrivals colonialized the east coast of the North American Continent (original 13 colonies), and lived side by side with the First Americans (i.e., 

the Natives). Over time, this social encounter led the colonists to became ‘‘Americanized’’ (See: Exemplars of Liberty, by B. Johannson, and Indian Givers by Jack 

Weatherford). The vision of the confederacy (Iroquois and that of the Choctaw) became the ideal vision of a united, democratic republic founded upon the sovereignty 

of the People (SCR #76 of 1987 and HCR #331 of 1988). This ‘‘Union’’ (of ‘‘We the 

People of the United States...’’) became the immediate role model for the revolutionary constitutional liberation of France. The idea of this ‘‘vision’’ spread further 

in the form of the proposed League of Nations of President Woodrow Wilson (after 

WWI), who acknowledged that the idea of the League began with the Indians. While 

this Wilsonian Proposal failed, the idea became the originating model for the United 

Nations (after WWII). It is with this model in mind that we believe the U.S. Congress should not disregard the ‘‘Gift of Indian Religious Freedom’’ and its importance to humanity. 

The battle for individual rights and freedoms, politically and religiously, has 

caused millions upon millions of deaths throughout the ‘‘Old World’’ over the millenniums. The new world exemplified the individual freedoms and the concept that government is to be held accountable to the people, that men and women were equal 

participants in government. Included in this the individual Indian had a right to 

the spiritual experience and belief. This was foundational to what could be referenced as making up a main part of individual sovereignty. In this idea, each person adds to the collective sovereign powers of the others. People then compacted to 

live together and to govern over each other. This compact becomes the foundation 

to what is known as popular sovereignty today. This understanding has been exemplified by the famous May Flower Compact (Nov. 11, 1620) in the history books of 

modern America. Such ideas found greater support and value as the colonists began 

to experience the First Americans beliefs—living a form of freedom that could not 

readily be understood by a people living under a monarchy. This is a part of the 

Indian gifts shared with the vision of popular sovereignty & union (Iroquois Vision). 

Each individual had a right to access the spiritual, just as Jesus did by entering 

the wilderness and resisting the temptations according to biblical folklore. It was 

not a fluke that the revolutionary colonists chose to model themselves as ‘‘Mohawks’’ 

at the Boston Tea Party. They (as the Sons of Liberty) simply demanded the freedoms of belief that the natives already enjoyed. 

In 1987, the leadership from nine Christian denominations in the Pacific Northwest, released an ‘‘Apology’’ to the Native Americans for having either helped institutionalized racism against native religious freedom or having passively sat back 

and allowed it to happen. This statement was released to 1800 northwest congregations. Over time, even the National Catholic Churches issued a similar statement, 

as did the Anglican Church of Canada per the plight of the aboriginals. While such 

apologies can be ‘‘google searched’’ over the ‘‘www,’’ debates have been held as to 

whether or not the ‘‘Apologies’’ are real and intended to truly help unravel the web 

of institutionalized racism against Native American Religious Freedom. Even the 

International Council of Churches on Religion and the Environment had become 

sensitized to the religious/spiritual rights and interests of the native communities 

before Earth Summit (1992). It has become apparent, today, that many religious denominations are willing to come forward and to work with their national organizations to help move for changes in the laws of the land that shall improve the status 

of Indian religions amongst a ‘‘Nation’’ that considers itself to be predominantly 

Christian (See: President Bush’s statements justifying the early actions of war in 

the middle east). 

While modern day corporate and state interests continue to be at odds with the 

rights and interests of the Indian Nations and Peoples, it is the question of Indian 

rights of access to sacred sites and places within the natural environment that shall 

be tested over and over again as the local economic drive for more profit and development places the interests of the private person or state/private corporations 

54

against that of the native communities’ interests in sacred sites and places that 

have cultural, ceremonial, biodiverse, and environmental integrity in tact. Neither 

the corporate profit mentality or that of Euro-American religious dogma allows for 

the free exercise of religion by Native Americans—if it is at odds with private property rights and interests of their constituents or congregational membership. The 

Native American Indians, however, believe that they have a reserved right of access 

to such sites located inside and outside the established Indian reservations. They 

believe that the U.S. has a mandated ‘‘sacred trust of civilization’’ duty to assure 

this access. And, that they have an inherent sovereign right to help co-manage such 

sites beyond initial consultation between governments and private interests. However, such sites must have their environmental, biodiverse integrity in tact in order 

to have real values so relevant to Native American traditional culture teachings and 

ceremonial/spiritual practices. This testimony seeks to help clarify such concerns of 

Indian Country in association with prevention of impacts to the environment and 

sacred sites & places that have significance in native spiritual & cultural practices 

& beliefs. 

Native American Religious Practices and Cultural Continuity: 

It has been a stereotypical dilemma for the Non-Indians to classify, on a continuous basis, the multitude of Indian (treaty) Nations, and peoples, that exist all 

across the United States, under a definition that constantly works over time. Words 

or names that we attach to the ‘‘other’’ usually carry connotations that are negative 

and impacting upon the psychic comfort of the targeted other. The world vibrates 

with sounds and the movement of energy. These sounds are recognized by different 

societies as having a vibrational pattern. In time, the parts of the vibrations are 

given an alphabetical name for that sound bit. These parts are joined to form words. 

The words are formed to make sentences. The sentences are formed to make paragraphs. The process continues until the collective can communicate, objectively and 

subjectively, their experiences of the perceived reality of the surrounding social & 

natural environment. The use of language is highly subjective and bias to the culture that lives it. The idea of the sacred is expressed by those collective experiences 

and descriptions. Those expressions are limited in time and place, and continue to 

exist due to the value the collective places upon it for their socio-religious survival. 

Native Americans, all to often, state that it is difficult to translate their concepts 

of the sacred into the American-English language that has come to dominate their 

societies. The individual sounds of the foreign language(s) do not translate into the 

same understandings that their native languages had associated with their immediate socio-religious natural environment, pre-contact. Likewise, we have names 

that identify the sacred for us, in time, in space, in place, and in our comprehension 

of reality. Stereotypical names do not identify the sacred aspects of our living with 

the natural world, and depreciate or devalue the meaning of our existence. 

There are over 525 Indian Nations that exist throughout the ‘‘territory’’ of the 

United States. Most live on federally-established reservations. A few live on stateestablished reservations. Many live, as individuals or as individual families, in urbanite America—due to the massive attempts to relocate tribal Indians into the cities in order to disconnect them from their lands, territories, natural resources, and 

the tribal collective that taught them to be ‘‘tribal people.’’ The many fluctuating 

federal Indian policies, over time, have failed to destroy or completely disseminate 

the Native Americans. They have failed to disconnect them from their ancestral territories, from their multi-generational teachings of the combined collective knowledge of the sacred. Tribalism is alive and well in the continental United States. 

Over time, over the millenniums, the tribal peoples have continued to recognize 

that song, dance, ceremony, sacred knowledge, and the collective is absolutely important to each individual member of the tribal community, and to the constant reestablishment of the sacred contract they have with nature, creation, and the Great 

Spirit. The power of the spiritual is located in sacred places, at sacred times, and 

must be accessed during each generation to maintain the relationship with creation, 

and this happens via the transmittal of sacred knowledge to the lone or the multiple 

initiates taking part in the ceremonial reenactment of original teachings given to 

the collective by a sacred force or being. 

The modern world of the traditionalist is plagued by the damages caused by 

assimilationist mentalities. The modern Indian leaders are convinced that economic 

development is essential to the preservation of the social/tribal community. The traditionalist, however, place their faith in the ancestral teachings that taught each 

generation to not over-harvest, to not over-use or abuse the abundance or limitations of nature. The Hopi Traditionalists hold that the Black Mesa is essential to 

their spiritual practices, while modern tribal leadership meet at the negotiation taVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00060 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
55

bles of Peabody Coal. The San Francisco Peaks are the originating homes of the 

Kachinas, and yet the area is under the control of Coconino National Forest. 

The National Navajo is confronted with competing interests in their four sacred 

mountain regions (Mt. Taylor, Blanca Peak, Hesperus Peak, and Huerfano Mountain lands. Their ancestors arose there. Their mountain chant came from there. The 

Navajo had traditionally divided all of creation up into 27 chapters of sacred creation in specific timing or order, each chapter governing over certain aspects of creation, each chapter corresponding to healing of the human mind, body, and soul. 

Each chapter has an influence over the governance of Navajo socio-religious life 

ways. Each chapter had its complex of sacred chants that must be preserved in perfect order so as to preserve the sacredness of creation and life. A medicine person 

or chanter may only train one apprentice in his life time and two if he is truly phenomenal. Impacts to Navajo topography, geology, territory, society, and practices of 

the sacred has driven some of the ‘‘chants’’ (or chapters of creation knowledge) into 

extinction. 

Today, the Hopi and the Navajo are living under the mutational influences of uranium mining. The pilings of discarded uranium trailings are the playgrounds of the 

goats and sheep, and even native children. The flocks become contaminated and the 

meat and milk is consumed by the families. The radio-active contaminated wools are 

woven into their clothes. Cancers plague the living and babies are born with deformities. The Hopi and Navajo are a mirror of the ill-health of the American Society. 

They are classified as living in the ‘‘National Sacrifice Zone’’ for the enrichment of 

corporations and the creation of cheap energy for the rest of society, in addition to 

the power to bomb those that do not believe as ‘‘we’’ do. 

While the Forest Service proposed to construct parking near the sacred Medicine 

Wheel near Powell, Wyoming, which is sacred to tribes of Montana, the Dakotas, 

and Wyoming, the Badger Two Medicine area of Montana (sacred to the Blackfeet) 

has been the subject of oil drilling and exploitation. Accessing the Black Hills, for 

energy development, has caused constant renewal of the historical trauma suffered 

by the Sioux Nations by the illegal confiscation of their sacred Black Hills. 

The Cochiti Pueblo need access and control over 24,000 acres in the Bandelier National Monument, in order to continue their sacred practices. The San Juan Pueblo 

have been trying to get lands back for their religious purposes. As have the Santa 

Clara Pueblo, before the Claims Commission, as regards 30,000 acres of sacred 

lands and sites under the control of the National Forest Service and the Atomic 

Energy Commission. 

These example tribes and communities can pinpoint their places of sacred emergence. Their songs, their dances, their regalia, their sacred instruments, their preparatory herbs & medicines, their rituals, their communal gatherings of celebration 

and renewal of the bonds with creation, as well as the sacrifices of the individuals 

in questing, all bind them to their traditional territories that have been confiscated 

under the doctrines of discovery and the fallacy of Indian incompetency as nonChristian peoples. Their sacred words and chants reawaken their commitment to 

the natural world that surrounds them. Their identification with the ‘‘sounds’’ of the 

chants, the songs, or the words derive from the time, the place, the energy (spirit) 

of the place of origin. Displacing them completely and divorcing them from the ‘‘sacred creation place’’ forces their knowledge and practices into the realm of folklore 

rather than sacred cosmology. 

Symbols are directly attached to and associated with the reality of the ritualistic 

aspects of native life. The mountains, the rivers, the rain, the elements, the animals, the plants, the birds, the mineral, the aspects of the celestial (sun, moon, 

stars, constellations), the concepts of time and space are all tied to the ceremonial 

observances and ritualistic reenactments. All parts of creation vibrate with energy, 

with sounds of the earth. These sounds help form the basic parts of the songs of 

creation. All parts of creation, sooner or latter, is depicted in the traditional practices of tribal peoples of all four races. These images are carved in many shrines 

and churches worldwide, in celebration and remembrance of the Garden of Eden 

and the time that their ‘‘God’’ talked with humanity. This is not a foreign concept 

that is too difficult for the non-Native to comprehend. However, for the former (the 

Native Americans) the symbology is alive and contributive to maintenance of the sacred. We hear and experience their songs, their vibrates as a part of the collective 

whole. To the latter (the non-Natives), the stone and concrete carving symbology is 

more within the realm of the folktale of Genesis. 

To the Native American, the symbol binds them back to the time of the original 

contract with the Great Spirit, or the spiritual emissaries, to keep creation sacred, 

to keep alive our acknowledge that the material world is manifest with the spiritual, 

and this is a force that binds the tribal individual to the tribal collective. The symbol brings them back to the sacred place where sacred knowledge emerged and 

56

emerges. To understand it in terms of physics, then light is composed of the smallest quantum—the particle or the photon. This makes light an individual (I). But, 

it is not alone. It is multiple and forms waves (we). It is both an individual and 

a wave in theory. Light does not ‘‘not exist.’’ It exists in different places, and exposes 

the colors as if they were a part of the material itself, when it fact matter only has 

density not color. And, this is an example of the sacred transmittal of knowledge, 

it exists some time, some place, and in the right moment we become aware. It is 

permanent, continuous, and waiting to be reflected upon. The particle/wave example 

same holds for mankind. We are individuals and a society. Together we create the 

energetic forces of sacred belief and practices. But, under the law, the ‘‘individual’’ 

Indian person has a right to (ritualistic) religious freedom under the First Amendment, but the collective does not due to its direct ceremonial attachment to large 

tracks of land or territory. 

The Kachinas of the Pueblo are alive. They live and exist with creation, as an 

extension of it. The Buffaloo Head dress of the Sioux is alive with the spiritual 

forces and teachings that reinforce it from generation to generation. The Bear or 

Wolf or Thunderbird or Eagle masks of the Tribal Nations living along the Pacific 

Coast of the North American Continent give meaning to those that participate, that 

practice, that live the life-way required to wear such masks in ceremonial observances. As examples, those that participate in such rituals and ceremonials must live 

a life that is model to those that dependent upon them for keeping the sacred alive. 

They must access sacred sites, sacred places, in proper times and under proper elemental conditions to assure that they are living and reenacting the teachings that 

make the sacred a real aspect of daily lives of their community membership. What 

they symbolize and how they live becomes the role-models to the young observers 

that seek, in their own time, to be chosen to express these aspects of the sacred for 

future generations. 

The Grandmother that brought Peyote to the People was guided to the sacred 

mountain, to the sacred plant, by a deer guide. White Buffaloo Calf Woman brought 

the Prayer Pipe and the other essential rituals to the Plains Indians. Salmon 

Woman brought the salmon children to the tribes of the Pacific Northwest. The 

Hummingbird brought power to the Navajo. The Butterfly Dance of the Hopi Elders 

brings forth the potential harmonic balance that is sought by the community. The 

Warriors suffering at the Sun Dance bring hope of peace and balance to the world 

by their suffering, no less than was intended by the suffering of Jesus on the Cross. 

These few role models that have been mentioned here are of high importance to the 

tribal communities that believe in them. Those that believe in the power of the 

Kachinas do so with as much faith, belief, and commitment as does the Christian 

in light of Jesus the Role-model (‘‘Christos’’). 

The Native Americans turn their faith inward, in search of the sacred that exists 

inside them. The non-Native, as Christians, turn their faith outward. They search 

to find that which is not within them. The Native Americans accesses the sacred 

by means of millennium proven methods of transmittal of knowledge and sacred 

practices that awaken the desire, if not the demand, for a balanced life-way. The 

teachings that go hand in hand with the ritualistic preparation is no less important 

than the teachings contained in the Bible, the Judaic Old Testament, the Koran, 

the Toran, the teachings of Buddha. The former may see the Sun, the Moon, and 

the Earth. The latter may say the Father, the Mother, the Son. Or, they may all 

recognize mind, body, and soul as the governing, symbolic triad. The Christian 

Cross is the sacred four directions of the Native Americans. The teachings, when 

translated and transmitted in the forms of symbols, are readily acknowledged as 

having validity in the minds and spiritual practices of the Natives. 

As Carl Jung put it, there is a ‘‘collective unconsciousness’’ that all societies tap 

into at one time or another. This collective knowledge is universally accessed by 

those that seek it. Jung may say that the individual can access the sacred knowledge via their anima or animus. To the Native, we access knowledge in ritualistic 

prayer to the Grandmother or the Grandfather of Creation. In dreams and visions, 

the symbols of the collective unconsciousness speaks to us. These force us inward 

on to the path to self-discovery, to enlightenment, to seeking the constant path to 

balance all conflicting forces inside and outside of us. Guided by the knowledge of 

the tribal collective, the individual can ritualistically and mentally access these sacred inner paths that shall structure their journey in life outward as well. Access 

to sacred sites and places stimulates the reality of the teachings, helping manifest 

the experience of the sacred. It is this experience that allows the individual to incorporate what was learned into their relationships with all others. They are a part 

of and no longer separate from society or creation or the sacred. In fact, they have 

assumed a duty to protect the sacred aspects of life, society, and creation. 

57

Essentialness of Qualified Practices in Natural Environments: 

Human disturbance and destructiveness is the same by many names. We can call 

it progress, or development or construction. We can call it profit. We can call it the 

conquering of the wilderness. We can call it a greater benefit to humanity or society. 

What it is not is the power of God, or the Great Spirit. It is the power of mankind 

working and rationalizing his dominance over nature and others. The Northwest 

Coast Salish traditionalists have stated that there must exist a quadrant of essentials for the sacred place to have meaning during access. There must be continuity. 

There must be purity. There must be privacy. There must be isolation. The presence 

of these four help assure the initiate, the questing community member that there 

is integrity tied to the location. The general understanding is that locations that are 

natural have their own undisturbed vibrational patterns, sounds, songs, or energy 

that originated with its moment of creation. 

Continuity means that it was created that way. It had always existed that way. 

That mankind did not disturb the original patterns. Purity means that it is not contaminated by negative forces, power, or meaning, or actions of mankind. Privacy 

assures that the initiate can focus upon the ritualistic aspects of the sacrifice, the 

vision quest, the meditation undisturbed by casual or purposeful disturbance by others—i.e., humans. Isolation is an essential characteristic of sacred sites and places 

that have meaning to the initiate and the undisturbed journey inward to locate the 

sacred that shall bind them with creative power. It is a site that is surrounded by 

the biodiverse, geologically intact topography undisturbed by modern development, 

sounds, and contaminants. 

The initiates that seek access to such sites are guided by sacred knowledge associated with preparation for the experience. Such a person must begin their journey 

to understand the laws of balance (harmonic living). They begin to seek knowledge 

and teachings tied with Physical Balance. They clean their bodies inside (fasting) 

and outside (bathing at in natural, sacred pools). They do not contaminate it with 

poisons (drugs, alcohol, unnatural foods). They had to begin this journey by seeking 

Mental Balance. They are taught to think good of themselves, of others, and creation. They learn to control their emotions and let love dominate over fear. They 

have to practice Social Balance. In this practice, they have ‘‘love their neighbor as 

them love themselves.’’ They have to not hurt or threaten others in society and undo 

any damages or hurt feelings them may have caused. They are not to be individualistic. They must learn to share with all others, especially those that are more 

needy then themselves. They have to practice Spiritual Balance. On this path to balance, they must believe in the power of prayer, meditation, and the spiritual powers 

that give life meaning. They begin to understand, study, or appreciate the value of 

Environmental Balance. That means that they appreciate keeping creation as it was 

created, to not contaminate their habitat, to not over harvest the natural environment. To not be selfish, greedy or materialistic. Time Balance is another aspect of 

their teachings. They is a time for play and a time for work. There is a time for 

the sacred as well. They must dedicate the right amount of time to each endeavor. 

Sacred practices require a dedication of the time to accomplish the complete ceremonial observance. Time is infinite as should be their belief. Space Balance is another 

law. We all occupy our space, our location wherever we are. There are sacred places 

and spaces that have not been disturbed and in need of protection for future traditionalists. Space is infinite. But, humanity is quickly destroying the sacred that was 

once attached to specific places or spaces. We are a dot in the massive universe or 

even omniverse. And, yet, our protection of our place (as sacred places are a part 

of the comprehensive whole) is essential to ourselves and future generations. All 

places are created by the power that generated life itself. It is not our privilege to 

destroy. We are only temporary keepers or protectors. 

John Dourley (The Illness That We Are, p. 58, 1984) stated, ‘‘The final goal, then, 

for both the individual and for mankind, would be patterns of incredibly wealthy 

harmonies. And the basis of this, the unitive powers of the Self, Jung locates not 

beyond but within the individual psyche.’’ The teachings of the laws of balance (or 

harmonies) is a life quest that has been sought after by mankind worldwide. It is 

not uniquely Native American. But, it is alive in Native American practices. For 

Jung, the West places God (Creative Spirit by different cultural names) outside of 

themselves, they are alienated from their creative power. For Native Americans the 

spirit is located inside and is a part of them, and always was accessible. This awareness, then, forces them to deal with what they are ultimately responsible for or ultimately contribute to the strife or balance of society. 

The power attached to sacred sites and places that are known have been made 

visible or understandable to the knowledge keepers (usually elders) by 

intergenerational transmittal of knowledge. The powers of such sites help to transform the individual practitioner in a whole (unified in mind, body, and spirit), rathVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00063 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
58

er than fractionated (as in neurosis). Once discovered then the sacredness of the site 

demands the greatest protection of those that the knowledge or power of the site/

place has been exposed for or to. In this light, the elders teach the initiates the requirements of holding themselves accountable to a code of Respect that is passed 

to the initiates. They are to learn to respect all aspects of life, creation, and society. 

Respect starts with themselves and is extended to all those outside of the self 

(human and non-human). They have to be humble in their accomplishments, actions, and conversations. They have to have humble pride in doing things right as 

positive examples to the young and old alike. They have to learn to be unselfish, 

non-materialistic. They have to not take more than is needed to survive. This is 

what Buddha would call the ‘‘Middle way.’’ They have to be considerate of the feelings and rights of others, and the sensitivity of the balance of nature. They have 

to be dedicated to practicing and living the life-way that keeps them on a permanent 

path of enlightenment and self-discovery. They have to be tribally social. This 

means that they have to understand and appreciate that they are a part of the tribal collective which only loaned the knowledge to them. They are, now, only the temporary keepers of knowledge and obligated to share it with the next generation. 

They have to be honest. Their breath is the source of all words. Their breath is sacred. So, they must use their words to speak the truth. Native American traditionalists teach as individuals and as tribal collectives and require that the initiate keep 

alive these valued traits and practicing of sacred knowledge. The means by which 

they do this, in accordance to the ancestral teachings, then distinguishes the individual as having matured into a wise elder, rather than simply growing older and 

constantly making the same mistakes in life. 

The practitioner becomes a part of the naturalness of the environment. Their 

knowledge, their life ways, their preparations, their ceremonial observances, their 

songs, their dances, their thoughts, their emotions, their prayers, their conduct adds 

to or takes away from the qualify of the environment. They either enter the sacred 

placed prepared, observant, and dedicated or they take away from the sacredness 

of the place. The initiate can disturb the sacredness of a site. The site is that sensitive. Thus, the development of such sites for modern demands (oil, gas, mineral 

extraction, etc) is, then, massive in destructive impacts. It is not something that can 

readily be described in native languages. The indigenous knowledge of human destructive forces acting upon the environment goes back into ancestral time of the 

natives. Many native myths are handed down over the generations about the relationships with nature and the repercussions when humans are destructive. We 

know that once we too were destructive. But, our teachings hold that we learned 

in the ancient past and have dedicated our life-ways or social constructs so as to 

spiritually institutionalize the prevention of such destruction. We learned to live 

with Mother Earth and limit our impacts as much as possible. 

John Dourley (The Illness That We Are, p. 58-61, 1984) addressed Jung’s appreciation of the Catholic Marian doctrinal declaration (Assumption of Mary into Heaven, 1950). It was Jung’s view that this placed the Catholic Church far ahead of the 

other dominant religions, in that it was a movement to recognize the feminine principle—which was missing from the Christian Trinity. The feminine has been a 

threat, throughout the history of the male-dominated church, and church hostility 

motivated the barbarism and brutality of the witch-hunters and inquisitors. Native 

Americans practice ‘‘Mother Earth Spirituality’’ and recognition of the validity of 

their religious experiences and beliefs would run counter to church dogma. Any that 

may lend support could be considered heretics. Even in light of the debates of Vatican II (mid-1960’s), the Church has not repelled repressive declarations that forbid 

liberalism (See: Syllabus of Errors, and the encyclical Humani Generis, 1950). 

Consultation with the Indian Nations on Energy Development Impacts: 

In 1987 (via SCR #76), the U.S. Senate recognized that the Native American 

Confederacies (Iroquois and Choctaws) were contributors to the form of constitutional democracy existing in the United States. This same statement was enacted 

by the House of Representatives in 1988 (HCR #331). This was at the 200th Birthday celebration of the United States. Over the terms of the recent Presidents, since 

President Johnson’s statement of the ‘‘Forgotten Americans,’’ Indian Country has 

witnessed and benefited from the enactment of the 1975 Indian Self-determination 

and Education Assistance Act (as since amended to incorporate Indian Self-government, see: Titles III, IV, and V). Over time, the Presidents have continued to use 

their chief executive powers to require or encourage the ‘‘Cabinet’’ members, and 

their various departments, to issue Indian Policy Statements in alignment with the 

promises for ‘‘Consultation’’ with the tribes. 

Consultation requirements with the Indian tribes usually are not written to be 

obligatory but discretionary within the departmental reviews. With the refinement 

59

of Indian lobbying efforts, and improved national coordination, tribes have been 

slowly securing improvements on ‘‘consultation.’’ As tribes become self-determining 

and self-governing there is an escalation of tribal demands for access to the programs and services provided by the respective federal departments and agencies. 

While tribal efforts to secure legislative language that guarantees their access and 

rights to participate in various projects and programs, the gray area is in light of 

‘‘consultation on traditional culture impacts.’’ Modern tribal leadership is encouraged to look at development as a positive thing for tribal communities and membership. But, the more traditional sector sees rapid development as insensitive and in 

disregard to the cultural influences and concerns. Thus, traditionalists are put 

against the power of the tribal government. It almost appears that the tribal governments become the buffer zone between the traditionalists and the federally authorized and encouraged developments. 

By preference, traditionalists would rather stop development and construction of 

projects that destroy the natural environmental quality and integrity so integral to 

their traditional practices. Their primary concern is associated with cultural practices and ceremonials associated with a known environment that is threatened. 

These cultural practices could be exercised in the way of hunting, fishing, gathering, 

or vision questing at sacred sites and places (in caves, on mountains, on plateaus, 

in streams, etc.). Consultation, in those circumstances that it is required, is readily 

recognized as going to the negotiation table—which translates as compromising by 

the parties involved. The historically traumatized traditional communities quickly 

recognize that consultation will result in more lost of a limited natural environment. 

It is the natural environment, not impacted by human activity, that is becoming 

more and more rare in modern America. These are the places Native Americans 

seek the sacred in general, no less valuable than when ‘‘Jesus went into the wilderness.’’ The sacred sites that have already been identified, and acknowledged via ancestral teachings, are even more valuable due to their transgenerational recognition 

of their legitimate sacredness and place of power. 

Both state and federal government agencies have moved toward undefined ‘‘consultation.’’ The problem is the scope of consultation and the amount of knowledge 

that the traditionalists must transmit to be considered as having legitimate interests. Tribal governments have began to structure and control the choice of traditionalists that are allowed to represent the tribal collective during these ‘‘governmentto-government’’ consultations. This is a necessity since it is the collective that is the 

storehouse of the cumulative traditional knowledge. Federal and state entities must 

recognize that there are multitudes of urbanized, individual Indians that are practitioners of traditional ceremonials; but, they are not representative of the tribal collectives living on the reservations. In fact, most were relocated into urban American, 

by government action and policy, in order to destroy their tribal knowledge and relationships. Tribal governments must allowed to choose who represents them at the 

consultation tables, with the premise that they realistically choose representatives 

that truly are concerned about traditional practices and not chosen because they 

support economic development first. 

What is to be consulted about? We have attached, herewith, a proposal by the 

Lummi Nation that seeks to develop an intertribal protocol on the protection of Native Children’s rights to secure and learn their traditional culture. But, such guarantees are useless when the natural environments, the sacred sites and places, essential to exercising such practices are rapidly being destroyed—outside the reservation or even inside the reservation. The ‘‘Protocol’’ is an outline of what needs to 

be protected in order for traditional practices to continue into time. For those native 

communities that have retained a lot of traditional culture then it is a statement 

of the minimal that needs protection; but, for those that have lost a lot, then it becomes an outline for the minimal that needs to be recovered for manifestation of 

the traditional, cultural, tribal collective. 

In consultation, the non-native parties demand more and more information in 

order to justify or rationalize their willingness to even consider the native concerns. 

If the law does not mandate that the Indian views be considered, if it is completely 

discretionary, then the information is ‘‘filed away.’’ Thus, the natives believe their 

voices are not given much credibility. And, the non-native demands more intimate 

information about cultural practices, meanings, intent, locations, and timings but is 

not willing to prevent disclosure of the information under the freedom of information obligations. Thus, traditionalists are hesitant to disclose details because of the 

history of their sacred information becoming the main themes of new publications. 

Native Americans, in various regional intertribal organizations, have considered 

forming intertribal commissions to address the best means and processes for structuring ‘‘consultation’’ on traditional culture with non-Indian society (corporations) 

and government (local, state, federal). But there has never been the financial means 

60

to bring the parties together, to conduct the necessary dialogues, to conduct the necessary interviews, to document the concerns, opinions, and advice. The number of 

opportunities to be consulted with, with state and federal agencies, are numerous 

but the governmental agencies limit participation to tribes that are being impacted 

in their traditional, ancestral territories. The state and federal governments have 

access to revenues to cover the costs and expenses of participating in consultation; 

but, for the tribes the limited revenues require that funds are taken for the more 

needy parts of the tribal community (e.g., women, children, elders) to cover on-going 

consultation dialogues. A part of the financial burdens for consultation with the 

tribes will have to be picked by the departments or agencies that are required to 

consult with the tribes. Failure to finance those costs makes consultation a farce, 

as regards meaningful tribal participation. 

It would benefit both the state and federal governments, as a service to their departments and agencies that are required to conduct consultation, to jointly finance 

the formation of intertribal cultural consultation teams. Any activities that will impact the natural environment will impact the Indian traditional communities. Much 

of the work can be cooperatively worked out in advance and detailed beyond the 

idea of the Protocols, to help streamline the consultation processes. On-reservation 

the tribes would need federal grants to help develop this capacity. And, their success 

would improve their ability to work with the off-reservation projects that are outside 

their jurisdiction but within their traditional territories. Under self-determination 

and self-government management of their natural resource bases, Indian tribes 

(e.g., NWIFC tribes, CERT Tribes, NTEC Tribes) have become experts on environment questions and the science of management of natural resources and the environment; this same idea could apply in regards to the collaboration of how to improve their traditionalists participation in the consultation process and translate 

those into recommended cultural management regimes. This would reflect and be 

composed of what Dr. Gregory Cajete called ‘‘Native Science.’’

As tribes move into control of Indian Self-determination and Self-governance they 

begin to assume more and more control over the delivery of essential government 

functions and services to the tribal community and membership. It is well known 

that Native Americans are constantly under-funded in congressional appropriations 

for health and education, laws enforcement and court services, and all of the other 

programs that they qualify for. Most of the available funding goes to administrative 

structure with few dollars for providing direct services to the community. Economic 

development (as in the success of gaming for half of the federally recognized tribes) 

provides tribal governments with an opportunity to supplement the financial shortfalls in federal funding. But, very few dollars are available to invest in the time and 

staff needed to participate in extensive and time consuming consultation on impacts 

to traditional culture. Marginalized tribal communities live day to day, plagued with 

challenges to make daily survival. Tribal leadership is torn apart trying to balance 

the demands—save culture or save a life today! 

There is a tremendous need to secure congressional authorization and funds to 

develop the intertribal cultural consultation teams. These would work with or could 

work with the National Congress of American Indians, the National Tribal Environmental Council, and the Council of Energy Resource Tribes, as well as the other regionalized intertribal organizations (e.g., Affiliated Tribes of N.W. Indians, United 

South and East Tribes, N.W. Indian Fish Commission, Great Lakes Indian Fish & 

Wildlife Commission). In addition, there is the Native American Indian Graves Protection and Repatriation Act that is being implemented nationally as pertains to sacred sites and places associated with ancestral burial sites and cemeteries. Their involvement would add to the library of knowledge as well. Core funding is needed 

to coordinate, plan, structure, and professionalize the discussions and negotiations 

to assure that the traditional native voices are heard in a constructive way. This 

is a necessity if the traditional values and culture is to ever have influence over the 

natural resource harvest management regimes or those that address oil, gas, ore, 

or mineral extractions. 

Regardless of which federal department, agency, or commission is required to consult with the Indian tribes, before impacts or after the fact, the truth is that unless 

the tribes have a right to sue and the burden of proof is carried by the industrial 

sector or the department or agency, then there will be constant efforts to disregard 

the native consultation rights (or privilege when it has not legal strength) and recommendations. Several years ago a gas pipeline had leaked 277,000 gallons of fuel 

into Whatcom Creek (Bellingham, Washington). Not only did it destroy the creek 

habitat extensively but it incinerated three youth that were present in the creek 

(Liam Wood, 18; Wade King and Stephen Tsiorva, both 10 years old). It has caused 

not only extreme grief but millions of dollars in restoration efforts. Today, the pipeline companies refuse to disclose information about their lines and crossings of 

61

streams/rivers under the pretense of potential threats if the information is known. 

The public has a right to expect the government to require safety. But, instead, public interests have to sue to attempt to get the information released. The companies 

should be required to bear the burden of proof after a lapse of time, and failure to 

make honest efforts to disclose should result in triple damages, fines, and penalties. 

Currently, a test case reveals that the gas companies can continuously stall off public inquiries almost indefinitely. One of the boys was an adopted out Alaskan Native 

Indian, with extended-family located on the Lummi Reservation. We are concerned 

for human life and habitat protection, especially for those streams/creeks that have 

ceremonial bathing sites located within them. The idea though is that without penalties and the threat of lawsuits, the energy companies can afford lawyers to stall 

the proceedings longer than the volunteer public interest groups impacted can afford. 

The Exxon Valdez oil spill is still the focus of major lawsuits by the impacted public interests and the company lawyers that have specialized in stalling the case and 

judgments/awards are well paid. In the meanwhile, 1300 miles of shoreline remains 

destroyed. That same year the Exxon Philadelphia drifted, without any control due 

to mechanical failure, along the Washington coast with 23 million gallons posing a 

risk to the environment. A similar threat transpired with the Cloudsdale, carrying 

28 million gallons of oil. The late Senator Magnuson worked diligently to get double 

hauled tankers authorized as the only ones allowed to pass through Washington waters, just in case hauls were breached. This type of championship is still needed in 

order to prevent a Valdez crisis in Washington. The N.W. Indian Fish Commission 

and member tribes are very concerned. Not only do the tribes have a subsistence 

dependency upon the fish and shell fish that populate these waters, but there are 

sacred sites in the waters as well. Chief Seattle received his Thunderbird Powers 

from the waters of Puget Sound. The late Lummi Medicine Man Isadore Tom received his healing powers from the waters of Bellingham Bay. Tribes have a right 

to be consulted on what passes in and through their ancestral, territorial waters 

(‘‘Usual and Accustomed Fishing Grounds and Stations’’ of U.S. v. Washington, 

1974). 

The Gwichan have been demanding, constantly, the right to be consulted before 

there are any congressional authorizations associated with the development, construction, and maintenance of the pipe lines through their Alaskan territories. Their 

dependence upon the salmon, the sea life, and the Porcupine Caribou Heads have 

been well stated and voiced time and again within the Houses of Congress. While 

pipelines are being constructed, there is on going oil/gas exploration, drilling, and 

with phenomenal rates of water contamination throughout Alaska and the North 

Slope. The polar ice capes are melting due to global warming and still the voices 

of the native peoples are being ignored. Tribal peoples want meaningful consultation, meaningful mediation, meaningful negotiation over how to avoid damages to 

the environment in general and sacred sites and places in specific. As mentioned 

above, without authorization to hold a cause of action against the developing party, 

the tribes are powerless. The 1978 American Indian Religious Freedom Act lacked 

legal teeth for the tribes; there was no power to sue and power to hold the corporations accountable. 

In the 2005 Energy Policy Act, under section 504 ‘‘Consultation with Indian 

Tribes’’ is provided. Consultation, however, should not only address activity that impacts on reservation energy development projects, as regards renewable or non-renewable resources; but off-reservation activities should be subjected to the consultation requirement as well, if it is within traditional tribal territories and could impact tribes rights and sacred sites and places especially. 

George Waters, working with Indian Tribes, stated that ‘‘The Interior energy program section is encouraging not only because it requires the Secretary to provide 

grants to tribes for a number of different purposes, but also because it envisions the 

creation of a database of environmental best practices under subsection 

2602(a)(2)(D). Theoretically, tribes and federal agencies could use the best management practices as references to encourage environmentally sound resource development and coordinate efforts across federal, state, and tribal lines. 

Technological and Scientific Divide Hinders Progress in Consultation: 

The age of the computer has greatly enhanced instant communication between 

points in the world, and especially the more developed countries such as the United 

States. However, even with the rapid economic development of those tribes participating in the gaming industry and located next to major urban centers, most of the 

tribal communities are still struggling to connect to the new communication infrastructure that has become standard daily operations for all levels of government 

(local, state, federal, international), society, and industry. Most of the drilling for oil, 

62

gas, or mineral exploration is not taking place inside of urban centers or next door 

to major metropolitan areas. Impacts are felt though by the rurally isolated communities that have to address potential developments, construction of developments, or 

in the aftermath of developments in the energy industry. 

Indian Country has continued to develop their various intertribal organizations 

that have become ‘‘special focus’’ entities. We have intertribal organizations that address health (National Indian Health Board), education (National Indian Education 

Association of the American Indian Higher Education Consortium), housing, tribal 

courts, and general concerns (as in the National Congress of American Indians). We 

have regional organizations that address intertribal regional concerns (Affiliated 

Tribes of N.W. Indians, United South and Eastern Tribes). We have intertribal organizations that specialize in areas (N.W. Indian Fish Commission, Great Lakes 

Indian Fish & Wildlife Commission, Council of Energy Resource Tribes, Intertribal 

Timber Council). One of the more recent entities to come into existence is the National Tribal Environmental Council (NTEC), which began with 8 tribes and has expanded to nearly two hundred member tribes. 

It is more difficult for a tribe that is rurally isolated to participate in consultation 

associated with impacts to the natural environment and culture when they are not 

able to get the expert advice that may be addressed in association with their traditionalists concerns about management regime development. NTEC could be the conduit that can be geared up to provide the professional staff and research to advice 

the ‘‘traditionalists’’ and tribal governments when they lack the same within their 

tribal systems. It could work with tribes to organize an intertribal traditionalists advisory team to help structure the process of consultation associated with impacts to 

sacred sites and places. But, NTEC would need additional staff, additional research 

funds, access to providing technological assistance and computer equipment and 

hardware &software to isolated tribes confronted with these issues. It would need 

the funds to help organize, coordinate, and implement regional planning processes 

to streamline the consultation network. Without this then the individual tribes have 

to re-invent the wheel each and every time. 

In recognition of the national concerns on energy development, it would be a good 

decision to use the oversight hearing process to rationalize, justify increased authorizations and appropriations for a specific entity (such as NTEC) to coordinate and 

organize a national assistance center for tribes confronted with energy development. 

The Lummi Nation would recommend that NTEC be authorized and charged with 

the task. Funding would be needed annually for the first ten years and then expanded as needed. It should rationalized as an extension of tribal self-determination 

and self-governance rights. Impacted tribes would join NTEC in order to access the 

services and benefits. NTEC would network with the individual tribes and the various intertribal organizations to assure that the whole system is transparent and 

accountable to tribal economic interests as well as tribal traditional concerns. Tribes 

that are directly involved in potential or current impacts by energy development 

projects would be priority for technological updates and coordination assistance. The 

original funding should start at one million for each of the first three years, and 

then increased to two million for the fourth and fifth years, then report to congress 

on the progress and participation success, with options to expand the project indefinitely—provided there are benefits to all sides of the equation. 

While tribes that are impacted directly, on and off-reservation, by energy development projects, may want to directly access the funding from the respective ‘‘Secretary’s’’ office, this funding advocated for NTEC would require their membership 

in NTEC—to assess the assistance. The overall goal is professional coordination 

services by NTEC to tribes willing to partake of their services. NTEC, then, would 

be in the position to assess the specific member tribe’s capacity to respond to the 

consultation process and determine where NTEC can provide professional services. 

In the experience of Lummi, the N.W. Indian Fish Commission has become almost 

indispensable to coordination of the intertribal projects and voice of concerns—legally, politically, technically, scientifically, managerially, as well as in the realm of 

positive public relations. This is the same opportunity advocated for the development of such a division within NTEC. 

Mr. GRIJALVA. Thank you, Mr. James. 

Mr. Jurrius, we will hear your testimony, and then we are going 

to recess because I think votes are going to or have been called already, or are they going to be called? They will be called shortly, 

so Mr. Jurrius. 

63

STATEMENT OF JOHN JURRIUS, FINANCIAL ADVISOR TO THE 

UTE TRIBE OF THE UINTAH AND OURAY RESERVATION 

Mr. JURRIUS. Yes, thank you, Mr. Chairman. 

Before I start, I have a letter from the Tribal Chairman, Maxine 

Natchees, I would like to submit. 

Mr. GRIJALVA. Without objection. 

[The Natchees letter submitted for the record follows:]


34983.016.eps
64

Mr. JURRIUS. Good morning. My name is John Jurrius. I am appearing before you today at the request of Maxine Natchees, the 

Chairman of the Ute Indian Tribe and the Business Committee, 

the Ute Indian Tribe of the Uintah and Ouray Reservation. 

I thank the Subcommittee for the opportunity to appear before 

you this morning to talk about the experience that the Ute Tribe 

and the interdependence between the tribe’s land base, associated 

natural resources, tribal membership, and the tribe’s goals of selfdetermination, and financial independence. 

The tribe’s reservation is located in northeastern Utah. Exterior 

boundaries of the reservation represent approximately 4.5 million 

acres. That represents approximately 8 percent of the surface of 

Utah, making the Ute Tribe, the second largest land-based tribe in 

the country. 

The reservation consists of a matrix of tribal and allottee surface 

and mineral estate, intermixed with Federal, state and private surface and mineral ownership, making the Ute reservation one of the 

more complex jurisdictional tribal land bases in the country. 

Even though the reservation overlays four counties in Utah and 

falls within the jurisdiction of the BLM Vernal and Price offices. 

There are approximately 3,200 members of the tribe with over 85 

percent of the members living on the reservation. As mentored by 

the Federal government, the tribe, like most tribes, has built a central government, but unlike the Federal and state governments the 

tribe does not have a tax base and therefore must rely on resource 

development to provide for the organization and tribal membership. 

The tribe’s annual governmental budget is approximately 62 million, with approximately 85 percent of that budget being provided 

directly from energy resource development on the reservation. In 

2000, the tribe decided that in order to provide a long-term economic stability to its membership they could no longer afford to 

play a passive role in resource development, nor could it depend on 

the Federal government to provide vision, leadership, or strategic 

decision-making, let alone wherewithal for the well being of its citizenry. 

To better serve its members, the tribe decided it must become 

proactive in dealing with resource development and the maximization of its financial resources. The tribe therefore developed a comprehensive plan to manage all aspects of its operations of sovereign 

from providing the basic government services to engage in revenuegeneration activities. The tribe’s leaders knew that it needed a 

comprehensive structure necessary to effect these changes would 

require buy-in from the members, so the financial plan was subject 

to tribal referendum. The membership approved this financial plan 

by a factor of ten to one. 

The financial plan called for the aggressive deployment of the 

tribe’s energy resource estate and financial resources. Similarly, 

the plan authorized aggressively using the tribe’s financial assets 

beyond their historic role of simply subsidizing tribal government 

operations to that of building sufficient financial corpus to provide 

long-term economic stability, thus enabling the tribe to provide core 

government services in perpetuity while providing greater well 

being for tribal members. 

65

Since adopting the plan, the tribe has leased over 400,000 acres 

that had never before been leased acreage, partnering with companies like Bill Barrett Corporation, Quest, Arberry Petroleum, 

Newfield Exploration, Anadarko, Dominion, EOG, to name a few. 

The tribe has also participated in administering the assets, gasgathering plants, and is currently involved in a refining project. 

The tribe’s natural evolution was enhanced by Title V of the 

Energy Policy Act, which included in Title V the Indian Tribal 

Energy Development and Self-Determination Act. In addition to 

that, the evolution seems to be moving forward under Title V, authorizing Indian tribes and Secretary of the Interior to negotiate 

and execute tribal energy resource agreements. An Indian tribe 

may enter into leases agreements right away and other business 

deals for energy development in accord on its own land without 

having the Secretary of the Interior review and approve them. 

However, we have our challenges. We have challenges that were 

mentioned here earlier today, split estate issues. We have EPA 

issues. We have refining issues. I will say that the tribe has over 

300,000 split estate acres. With the exception of about 75,000 of 

those acres, the tribe has worked very diligently with industry and 

has resolved all split estate issues in regards to its deployed assets. 

The only remaining split estate issue has to deal with an exchange with the School and Institutional Trust Lands Administration of Utah, and by doing this exchange the tribe will set aside 

over 150,000 acres of lands in Desolation Canyon. 

We also have environmental challenges such as the tribe currently doesn’t have a minor source permitting program with the 

EPA, and therefore must rely on more onerous permitting than adjacent lands regulated by the state and other agencies. 

Mr. GRIJALVA. Mr. Jurrius, I apologize, but I am going to have 

to ask you to wrap up so that we can go vote. 

Mr. JURRIUS. Yes, sir. 

Mr. GRIJALVA. And then we will come back to this panel for questions. 

Mr. JURRIUS. Yes, sir. Thank you. 

The point and conclusion as this committee and other committees 

look at issues surrounding the nation’s energy policy, those decisions have a great impact to Indian country and their ability to become self-determined by using their resource base. 

Thank you. 

[The prepared statement of Mr. Jurrius follows:]

Statement of John Jurrius, Financial Advisor

to the Ute Tribe of the Uintah and Ouray Reservation 

INTRODUCTION 

Good morning Chairman Grijalva, Chairman Costa, Ranking Members Bishop 

and Pearce, and distinguished members of the Subcommittees. My name is John 

Jurrius and I appear before you today at the request of The Honorable Maxine 

Natchees, the Chairwoman of the Ute Indian Tribe of the Uintah and Ouray Reservation. Mr. Chairman, I am the financial advisor to the Ute Tribe and I am accompanied today by Cameron Cuch, a tribal member and an energy analyst with 

Ute Energy LLC, an integrated energy company formed and owned by the Ute 

Tribe. 

I thank the Subcommittees for the opportunity to appear before you this morning 

to talk about the experience of the Ute Tribe and how we believe other Indian 

Tribes can take advantage of the resources they are blessed with and new opportuVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00071 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
66

nities under the recently enacted energy law to develop and implement their own 

paths to economic development. 

THE PROMISE AND POTENTIAL OF INDIAN TRIBAL ENERGY 

In early 2001, the U.S. Department of Interior estimated that Indian Tribes own 

an enormous reserve of non-renewable energy resources such as natural gas, oil and 

oil shale, tar sands, and coal, as well as enormous potential to harness renewable 

energy resources such as solar, wind, and hydropower. Using then-prevailing market prices, the department estimated that the development of these resources would 

result in some $895 billion in revenues to their tribal owners. 

As we all know, the tragic events of ‘‘9-11’’ and the ongoing war in the Middle 

East have caused the prices of oil, gas, and other energy commodities to skyrocket. 

For example, in 2001 the department valued Indian-owned oil at $35 per barrel. 

Light sweet crude oil is now priced at $65 dollars on the New York Mercantile Exchange. That’s a $30 per barrel difference and suffice it to say that if the department revised its earlier analysis, the value of tribal resources would be in the trillions. 

Because of their geographical remoteness, most Indian reservations were once 

seen as undeveloped—indeed incapable of development. Today the Ute Tribe is one 

of dozens, perhaps hundreds, of Indian Tribes with both a natural abundance of 

energy resources and the determination to maximize those resources for the benefit 

of their members. 

Combined with the sheer volume of energy resources, there are regulatory and 

policy reasons to be excited about the prospects of tribal energy development. In August 2005 President Bush signed into law the Energy Policy Act of 2005 (Pub. L. 

109-58) which included as Title V the Indian Tribal Energy Development and Self 

Determination Act. Title V is designed to assist Indian Tribes promote the development of their energy resources in ways that encourage tribal planning and decisionmaking, protect the physical environment, and result in increased employment and 

revenues to Indian Tribes, their members, and surrounding communities. 

Title V authorizes Indian Tribes and the Secretary of the Interior to negotiate and 

execute ‘‘Tribal Energy Resource Agreements’’ (TERAs). With an approved TERA in 

hand, an Indian Tribe may enter into leases, agreements, rights-of-way and other 

business deals for energy development on its accord and on its own land without 

having the Secretary of the Interior review and approve them. 

The TERA mechanism reinforces the policy of Indian self determination and acknowledges in the law what we already know out in Indian country: armed with 

accurate information, tribal leaders make better and timely decisions than the Federal government when it comes to energy matters. 

The Department of Interior’s Office of Indian Energy and Economic Development 

(OIEED) is taking seriously its responsibilities under the new energy law and is 

preparing to publish the final regulation to implement the TERA provisions. Final 

publication is due to occur in June, 2007. 

PROFILE OF THE UTE TRIBE OF THE UINTAH AND OURAY RESERVATION 

The Uintah & Ouray Reservation (U & O Reservation) is located in northeastern 

Utah in the middle of the Uintah oil and gas basin. The U & O Reservation comprises some 8% of the entire State of Utah and ranges 120 miles north and south, 

east and west, and 150 miles diagonally. The Ute Tribe has become an aggressive 

energy producer and has leased tribal land for oil and gas resources for many years. 

In fact the Ute Tribe recently opened up an additional 400,000 acres of tribal land 

that had never before been developed. 

Simply put Mr. Chairman, energy resource development is the backbone of the 

Ute Tribe’s economy. Thanks to the vision and leadership of Chairwoman Maxine 

Natchees and the Tribe’s Council, the Ute Tribe has taken steps from being a passive royalty collector to vigorously participating in the development of its natural 

bounty. So instead of simply leasing its lands to outside companies, the Tribe has 

begun to partner with the private sector to take an active position in the exploration 

and development of its resources. 

THE TRIBE’S GOAL: FINANCIAL SELF DETERMINATION 

Before I discuss the Tribe’s specific energy projects and plans, it is important that 

I share with you the fundamental decision made by the Tribe’s leaders and members several years ago. In 2001, the Tribe decided that it could no longer afford to 

play a passive role in resource development nor could it depend on the Federal government to provide vision, leadership or strategic decision—making, let alone 

wherewithal, for the well-being of its citizenry. To better serve its members, the 

67

Tribe decided it must become pro-active in dealing with resource development and 

the maximization of its financial assets. 

The Tribe therefore developed a comprehensive plan to manage all aspects of its 

operations as a sovereign from providing basic government services to engaging in 

revenue generating activities. The Tribe’s leaders knew that accomplishing the kind 

of restructuring necessary to effect these changes would require ‘‘buy-in’’ from the 

members, and so the financial plan was subjected to a tribal referendum. The membership approved the financial plan by a factor of 10 to 1, giving it the highest status under the Tribe’s constitutional authority. 

The financial plan called for an aggressive deployment of the Tribe’s energy resource estate. Similarly, the plan authorized aggressively using the Tribe’s financial 

assets beyond their historic role of simply subsidizing tribal government operations. 

The financial plan’s success required a sophisticated land data system that would 

enable the Tribe to identify (1) what it owned, whether surface or mineral estate; 

2) whether those lands or minerals were leased or un-leased; and (3) whether the 

underlying agreements were complied with by the Tribe’s private sector partners. 

In essence, the Tribe built a tool to allow us to manage our energy resource estate 

in real time. 

The new land system helped the Tribe to determine that it had not received the 

market rate for most of its transactions; that nearly 50% of the rights-of-way holders were in trespass; and that a large number of exploration agreements were not 

in compliance. 

The new system now enables the Tribe to show all tribal surface and mineral 

ownership, as well as other ownerships, e.g. Forest Service, Bureau of Land Management, State of Utah, and Fee Lands. The Tribe can also discern production by 

producer, by simply ‘‘clicking on’’ a well on an electronic map and reviewing the relevant agreement and resolution. 

The Tribe can now drill down into any particular production field or well and determine when each well was drilled, determine what formations were completed, 

and calculate annual production. 

Additionally, the new land system has helped the Tribe demonstrate to governmental officials and potential business partners that the Ute Tribe is a sophisticated 

operator with business savvy that cannot and will not be exploited. 

CURRENT CHALLENGES TO TRIBAL ENERGY DEVELOPMENT 

One challenge common in the west and one which Indian Tribes often face are 

the so-called ‘‘split estate’’ issues involving different ownership of surface and mineral estates. In these cases access to the subsurface minerals is an issue that must 

be resolved. 

Mineral ownership is dominant under ‘‘Onshore Order Number One’’ which benefits the mineral owner. However, the Ute Tribe has identified situations where access to non-tribal minerals underlying tribal surface lands presents a major problem 

as it may involve access to sacred sites and areas of cultural and environmental importance to the tribe that the Tribe may seek to protect from development. As some 

on the Subcommittees know, the Ute Tribe is proposing a land exchange with the 

School and Institutional Trust Lands Administration (SITLA) of Utah to rectify a 

class split-estate problem. The proposal is currently pending before the Bureau of 

Land Management. 

The SITLA holds some 20,000 acres of mineral lands in the southernmost portion 

of the Hill Creek Extension of the U & O Reservation. The Ute Tribe holds the surface rights to these lands. These SITLA mineral lands lie in an area of great cultural significance to the Tribe. In addition, the Ute Tribe maintains these lands as 

a wildlife conservation area. Thus, it would be difficult for SITLA to lease these 

lands for mineral development. The proposed relinquishment would protect sacred 

tribal lands, consolidate tribal ownership, and reduce potential use of these sensitive 

lands by third parties. It would also assure a revenue stream to the SITLA by developing mineral resources which are not currently being developed. 

If the proposed land exchange is not approved, the split estate problem will prevent the development of mineral resources, wilderness and culturally significant 

areas will not receive the certain protection they would under the terms of the 

agreement. 

LACK OF REFINING CAPACITY HINDERS ENERGY DEVELOPMENT 

Another current challenge to developing tribal resources is inadequate refining capacity to process production from tribal oil assets. A large volume of the crude oil 

produced on the reservation is what is called ‘‘black wax’’ crude oil. Black wax crude 

is a unique form of crude and is desirable for its low sulfur content and potential 

for the creation of high value wax and lube products. Current black wax crude proVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00073 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
68

duction and drilling activities within the Uintah basin have been curtailed due to 

reductions in what Salt Lake City refiners are willing to accept for processing. 

These refiners have instead turned to imported Canadian crude oil which is fast displacing production from the Uintah basin and deprives regional refineries of any 

economic incentive to make capital investment necessary to process greater portions 

of local basin black wax crude. 

The importation of Canadian oil, along with the fact that black wax crude congeals quickly and therefore cannot be transported long distances by way of pipeline, 

means that in large part local black wax crude is ‘‘stranded’’ with no refinery to 

process it. 

The intersection of these factors could result in a shut down of production for the 

Tribe at a time when the nation needs a boost in domestic oil production. The only 

way to prevent stranding this major energy source is to build new refining capacity 

in the Uintah basin that is capable of processing black wax crude oil. As it has done 

with other mattes, the Ute Tribe is taking the initiative to build a new refinery in 

the Uintah basin. 

Last month, the Tribe signed a Memorandum of Understanding (MOU) with Calumet Specialty Products to explore potential refining solutions for the Tribe’s black 

wax crude production. As many Members know, Calumet is a leading independent 

producer of high-quality, specialty hydrocarbon products in North America and the 

Tribe is excited about the potential for this new collaboration. 

On a related note, the Tribe is keenly aware that there is great interest in the 

potential of oil shale and tar sands to reduce our national dependence on foreign 

oil. There are significant reserves of oil shale and tar sands on the Ute Tribe’s reservation and in the Uintah basin in general. The Tribe is perplexed as to how we 

as a nation can move forward with unconventional hydrocarbon resources such as 

these when it does not have the refining capacity to refine its own domestic energy 

resources existing resources and continues to depend on foreign resources. 

Nonetheless, the Tribe’s refinery blueprint takes the long view and includes plans 

to construct oil shale and tar sand processing and refining facilities at a later date. 

ENERGY DEVELOPMENT AND ENVIRONMENTAL PROTECTION 

The Ute Tribe and all of its activities are inherently tied to its land. In a very 

real sense, the Tribe cannot be distinguished from its land. These lands are the sole 

resource for the Tribe, and the sole source of its economic future. The Tribe protects 

and cherishes its land and has set aside a portion of its reservation as a pristine, 

untouchable area, preserved for its members alone. 

As part of its energy plan, the Ute Tribe is engaged in ongoing discussions with 

the U.S. Environmental Protection Agency (EPA) on a number of issues affecting 

the Tribe. Because the Tribe is entirely dependent on revenues from oil and gas operations on Tribal lands to fund its government, a decrease in those revenues would 

prevent the Tribe from providing fundamental governmental services—health care, 

education, housing, and law enforcement—to its members. 

EPA has requested that the Bureau of Indian Affairs prepare an environmental 

impact statement (EIS) addressing additional oil and gas development on the U & 

Ouray Reservation. The Tribe is taking an active role in that process and is designing an approach that assures development can continue while the review process is 

underway. 

The Tribe is also working to resolve air emissions issues affecting the U & O Reservation. EPA has been slow to promulgate a minor source rule governing air emissions for Indian country and, as a result, operators on tribal lands must comply with 

overly complex and onerous air permitting requirements. 

As the Members would guess, these operators can avoid the harsh and untenable 

air regulations simply by relocating their operations across the border of the reservation to state-regulated lands. The Ute Tribe does not want to see the double 

standards in air standards drive energy development from its reservation. The Tribe 

has been actively engaged with EPA, operators, and other regulators to address this 

anomaly. To its credit the EPA has thus far been open to assisting the Tribe in developing creative approaches to resolving this issue. 

Along these lines, the Tribe has reviewed the recently proposed ‘‘Indian Country 

Minor Source Rule’’ and has provided comments on it. The Proposed Rule is flawed 

because it fails to recognize the comparative disadvantage Indian Tribes are burdened with when it comes to air emissions. Nonetheless, the Tribe remains hopeful 

that EPA will promulgate an equitable and meaningful rule that results in a minor 

air source permit for Indian country. 

69

CONCLUSION 

In conclusion I want to thank you for the opportunity to appear before you and 

discuss the great things that the Ute Tribe is doing in northeastern Utah. 

At this point, I would be happy to answer any questions you might have. 

May 16, 2007

Dear Chairman Costa and Chairman Grijalva: 

In response to the question from Minority Members: 

‘‘Would the commercial potential for oil shale development on the Reservation be improved by encouraging commercial leasing of oil shale on the 

considerable public lands where oil shale formations are found out in the 

West?’’

Yes, leasing for projects on public lands would drive the potential for development 

on Indian Reservations. The leasing of public lands would help Indian Tribes to 1. 

Learn more about oil shale development, and 2. To understand the technologies involved as well as determine which one is best is best suited for Indian country. 

The leasing of public lands would also help the Ute Tribe learn more about the 

potential of oil shale located in Utah and learn about the two technologies namely 

the In-Situ Process and Surface Process or Mining. 

The Ute Tribe is interested in the In-Situ process and feels that the leasing of 

public land here in Utah is important in finding out the result of this technology. 

Concerns about damaging the earth make it important that the right technology is 

perfected otherwise the Tribe will not be interested in developing its resource. 

Therefore the pilot projects help the Tribe quantify the prospective ness of the 

Tribe’s resource and helps identify the right technology. 

Finally, as the federal government continues to cut back on federal funding to 

Indian Tribes. Western Tribes in particular, are dependent on natural resource development to fund core tribal government and to ultimately reach tribal self-determination. 

The Uintah and Ouray Indian Reservation, Utah 

The Uintah and Ouray Indian Reservation, located in northeastern Utah, lies 

within the Uintah Basin, a structural and depositional basin of Tertiary age. During 

Eocene time a thick sequence of kerogen-rich sediments accumulated along he 

trough of a lake that occupied the basin area. Those endurated sediments comprise 

the oil-shale zones of the Green River Formation and much of the reservation is 

underlain by one or more of the zones. The richest of the oil ‘‘shale zones, the Mahogany zone, is deeply buried where it best developed within the reservation (northern part) and crops out where the oil shale grade is much lower, in the southern 

part of the reservation. Total oil-shale resources of the Mahogany zone within the 

reservation cannot be accurately determined due to the scarcity of core hole data, 

however, assay data from core holes adjacent to the eastern part of the reservation 

allow an estimate of the inferred resources of the Mahogany zone in a part of the 

Mahogany zone that yields 25 gallons of oil per ton, is a least 25 ft (7.6) thick, and 

is overlain by less than 3,000 ft (914) of overburden. 

The 1970’s and 1980’s were characterized by exceedingly high petroleum prices 

similar to what is experienced today. At that time, several efforts began to make 

both tar sands and oil shale into commercial ventures that would have contributed 

to the nation’s crude oil supply. Despite those historic efforts, ventures failed as 

world oil prices declined and Federal policies failed to support continued research 

and development of the resources. In Utah, the use of the resources reverted back 

to satisfying historical objectives. Tar sands were used once again for paving roads 

in the Uintah Basin and oil shale reverted to be the object of grand research 

projects and to fuel the plans of future developers. Not surprisingly, the optimism 

and dreams of today are every bit as directed and intense as those wishes and attitudes of yesteryear. Even though oil shale has been historically referred to as ‘‘the 

resource of the future that always will be’’, we feel that there is more future at this 

time for both of these key resources than there ever has been. Prices for competing 

fuels and the availability of those fuels are reaching critical stages in international 

markets, as are the unsettled geo-political situations in countries where conventional fuels are obtained. 

Oil Shale and Tar Sands Resource Quantities: 

The following tables depict current estimates for national reserve quantities of oil 

shale and tar sands.

70

Utah Resources 

Utah contains about 321 billion barrels of kerogen in its oil shale, kerogen being 

an immature form of crude oil that requires treatment prior to refining. This 

amount is a small part of the total resource in the Western U.S. (UT, CO, and WY), 

which totals about 1.5 trillion barrels of kerogen. The vast majority of the oil shale 

resource is part of the Federal expanse of land referred to as Public Domain. There 

are significant parts of the oil shale resource, about 20% on an acreage basis, which 

are held in fee (privately owned) and owned by the School and Institutional Trust 

Lands Administration (SITLA). The latter category of resource is held in trust for 

the Institutions and school children of the State. SITLA owns about 186,000 Acres 

and has about 100,000 Acres leased at this time. 

As noted, tar sands in Utah contain 11 billion measured barrels of oil, about 1/

5th of the US’s 58 billion barrels of tar sands oil. Many recovery estimates vary as 

well. In the same way as oil shale, ownership is a mixed bag among Federal, State, 

and private interests with approximate splits being 80%, 10%, and 10%, respectively. Overburden, or the non-ore material covering the ore, is generally shallower 

than in oil shale deposits. 

Federal Leasing: 

The Bureau of Land Management (BLM) plans to lease and encourage development of the Federal portion of Utah’s oil shale and plans are now under way to 

achieve this goal. Maximum lease size under the new oil shale leasing program to 

any one individual or company would be 5,120 acres. A per-lessee prototype 5,120 

Acre leases which would be mined by underground methods (in Utah) and have the 

ore retorted (baked) to extract about 1/2 of the kerogen from a 48 foot seam would 

yield about 250 million barrels of kerogen over 14 years at about 50,000 barrels per 

day (bpd). As a comparison to today’s conventional oil production, the Utah Division 


34983.011.eps 34983.012.eps
71

1Lease for the RD&D projects in Colorado were released on 12-15-06. 

of Oil, Gas, and Mining (UDOGM) statistics indicate that Utah’s crude oil production for 2005 was about 46,600 bpd. 

Prior to offering the prototype leases, BLM is planning on leasing Resource Development and Demonstration (RD&D) Leases to ‘‘jump-start’’ the oil shale development process. 1 Utah has one RD&D lease in its future. It is a 160-acre lease on 

the same tracts leased in the 1970’s as prototypes for oil shale development in 

Uintah County. An environmental assessment (EA) has been prepared for issuance 

of this lease to Oil Shale Exploration Company (OSEC). Comments on the EA are 

now being considered by BLM. The release for the Utah lease is 

A Programmatic Environmental Impact Statement (PEIS) is being prepared by 

BLM on the long term leasing program. As a program to address large scale future 

leasing, it is planned to take more time in preparation and a draft is scheduled to 

be available by summer 2007. Since Utah is a cooperating agency, we expect a maximum amount of input to the process. The PEIS will evaluate the environmental effects of BLM’s plan for the commercial leasing of oil shale. 

Refinery capacity 

Capacity to refine crude oil in the State is currently about 160,000 barrels per 

day. This limit is currently stretched because of Canadian syncrude coming into the 

State by way of the Express Pipeline and by the need to refine heavier black wax 

crude oil from the Uintah Basin. In fact, there is a substantial amount of produced 

oil, which is not being produced because of this capacity limit. The Ute Indian Tribe 

has established an initiative to build a new refinery in the Uintah Basin to handle 

Heavy crude namely ‘‘Black wax’’ with plans to establish a foot print for expansion 

into tar sand and oil shale refinement when technology to develop oil shale and tar 

sand becomes economic. 

In conclusion, I hope that I have provided some insight into your question. Once 

again, thank you for inviting me on behalf of the Ute Indian Tribe to testify at your 

joint hearings.

Sincerely,

John P. Jurrius 

Financial Advisor/Energy Expert for the Ute Indian Tribe 

Mr. GRIJALVA. I thank the panel, and we are going to recess for 

45 minutes to an hour, and then we will return to this panel for 

questions, and the panel that follows. Thank you very much. 

[Recess.] 

Mr. GRIJALVA. Thank you very much and again let me thank the 

witnesses, and I want to begin with some questions to Mr. 

Emmerich, and when I am done with my allotted time, Mr. Pearce 

will have some questions. 

You mentioned the Western Governors’ Association compiling a 

multi-state inventory of information on sensitive wildlife, migration 

corridors, critical habitat. That would be tremendous information. 

When do you estimate that that inventory will be if not completed, 

at least usable by a state or Federal agencies? 

Mr. EMMERICH. Mr. Chairman, that portion of the resolution as 

you stated is encouraging gathering that information on an accelerated pace. I don’t have a real good time line, but just based on our 

own experience in Wyoming where we have collected a lot of that 

information, I suspect within a year it will take to compile that information. A lot of places migration corridor, crucial ranges are already identified in various state databases or other types of databases. It is a matter of just pulling that together, but there are 

other areas where we have to do more, the baseline information, 

the marking animals or whatever it takes to really define those migration routes. 

72

But I think some initial information we could probably pull together within at least six months, a year max, but in these areas 

where we don’t have specific information it is going to take several 

years because you have to mark animals, follow them, and delineate those areas. 

Mr. GRIJALVA. Thank you. One follow up, if I may. The U.S. Fish 

and Wildlife Service and the states have spent a tremendous 

amount of time and money crafting a plan intended to help the 

sage grouse and preventing formal ESA listing for that particular 

bird. 

My question, is BLM undermining those efforts by not doing 

enough to protect the habitat, and are we at this point, if that isn’t 

protected, heading for a listing? 

Mr. EMMERICH. Mr. Chairman, there has been a lot of energy 

and resources dedicated to completing the conservation strategy for 

the western greater sage grouse, and I think all agencies, and the 

BLM is certainly a player within that conservation strategy and 

working to achieve those results. Currently, one of the huge challenges is funding. They have identified, I am not sure of the exact 

total, but it is like—it is a lot of millions of dollars to actually implement this strategy. 

I believe the BLM recognizes the importance of making sure we 

engage in all practices possible to improve conditions for sage 

grouse because if we don’t and trends continue to decline, the longterm trends are negative. We actually have seen, at least in Wyoming, the last three or four years we have seen some increases in 

sage grouse number, at least outside of the intensive development 

areas, but long term you have fluctuations, but long term the 

trends have been negative. And if we continue to see that, I am 

sure there will be continued interest in listing the species. 

Mr. GRIJALVA. Thank you very much. 

Let me turn to Mr. Jurrius. The land system that you described 

in your testimony, was it developed by the tribe or the Department 

of Interior? That is the first part of the question. 

What you described seems like something that could benefit 

other nations, other tribes, and are other tribes using a similar system? 

Mr. JURRIUS. Mr. Chairman, thank you for the question. No, 

their financial plans, so to speak, was generated by a business consultants. Actually, the Southern Ute Indian Tribe, the Northern 

Ute sister tribe started this process back in the early 1990s, and 

as the three Ute tribes get together, the Ute Mountain Tribe, Ute 

Tribe, and the Southern Ute, they share that discipline, and that 

expertise. It is not something that the BIA or is not a canned 

project, but it certainly has received a lot of notice by other western 

tribes. 

Mr. GRIJALVA. Thank you very much. 

Mr. James, and thank you for being here, Indian tribes have 

raised similar concerns regarding the siting of cell phone towers, 

their effect on sacred sites that have been raised as well regarding 

energy development. To address the concerns raised, tribes have 

entered into negotiated programmatic agreement with the FCC and 

private industry that requires cell phone companies to notify and 

73

work with Indian tribes before cell phone towers may be built in 

areas that may have sacred sites. 

Have the Indian tribes used or considering using a similar programmatic agreement dealing with energy development areas that 

may have sacred sites? 

Mr. JAMES. I can’t really answer conclusively for all tribes, but 

I know that it is something that we try to encourage—to develop 

a system that would be available to those tribes that are concerned 

for sacred sites. Even though tribes are different in regards to time 

and location and membership, and the ceremonial practices, a lot 

of the core values that they have associated with sacred sites is 

fairly common in their traditional culture. 

So if we can develop a system that become a role model compact, 

if you may, for dealing with the industries that come either within 

the reservation or is developing within traditional territories of the 

Indian tribes, then that would help those tribes that are least developed, move further along more rapidly, but it has to be developed as a prototype. 

Mr. GRIJALVA. Thank you, and the last question, Mr. James. In 

your testimony you made the point that tribes often cannot afford 

to participate in the consultation procedures and decisions that 

may affect their culture, sacred sites, and you mention that in your 

testimony but I want to get specific in that. Do you think that additional funding for the National Tribal Environmental Council, a 

committed revenue stream will alleviate that problem that we are 

talking about being there for there for the consultation and having 

the expertise necessary? 

Mr. JAMES. We witnessed in our experience where tribes come together within the inter-tribal organizations where they begin to 

share information and database and technology, that they move 

rapidly forward. That is why I was saying that. In the beginning, 

NTEC, with only eight tribes, now it is about 190 tribes, and so 

they are dealing with both the science of environmental management, but they would need to not only be able to be considered for 

the grant or the funds available for providing the gathering of environmental database and making available to Indian tribes, but also 

to help coordinate those tribes’ contributions to a database associated with cultural practices and sacred sites protection. 

Mr. GRIJALVA. Thank you very much. 

Mr. Pearce. 

Mr. PEARCE. Thank you, Mr. Chairman. 

Thanks, Mr. James, for your testimony. We have a couple of 

tribes in our district that struggle for economic development the 

same way, and so I am very familiar with what you are experiencing. 

Mr. Emmerich, on page 2, you have testimony about the declining numbers of wildlife and things. Would you have this panel to 

conclude that the wildlife and the production of energy on the 

lands that you have jurisdiction over they are mutually compatible 

or incompatible? 

Mr. EMMERICH. Mr. Pearce, Mr. Chairman, I think energy development and managing wildlife resources are compatible, as I stated 

in the testimony, if we work with the best information and early 

74

on in the development of these resources, we share that information, and identify the impacts that are occurring. 

Intensive development, especially in crucial habitats or these 

sensitive migration corridors, do have a negative impact on wildlife. 

Mr. PEARCE. So you mentioned the decline of the deer herd, for 

instance. Do you think that that is due to oil and gas or to intense 

development? Let us use that phrase. 

Mr. EMMERICH. Mr. Chairman, there is several factors that cause 

declines in wildlife. We are doing a specific research that, by the 

way, is funded by industry in the Anticline area south of Pinedale. 

We have been monitoring closely the mule deer population that 

winters there on what we call the Mesa winter range where the 

Anticline development is occurring. We also have a control area 

just east of there. During the winter of 2002, which was about the 

third year of development, there was about a 49 percent decline in 

deer numbers throughout that basin because of weather. 

Mr. PEARCE. Because of what? 

Mr. EMMERICH. On the Mesa itself, there was a 49 percent decline. In the rest of the herd unit, there was about a 23 percent 

decline or 22 percent. 

Mr. PEARCE. And you said because what, what did you speculate 

was the reason? 

Mr. EMMERICH. That was weather, but as I pointed out, if you 

look at the control area compared to the Mesa area, there was a 

27 percent additional decline in the Mesa area where the intensive 

development is occurring. 

Mr. PEARCE. What was the——

Mr. EMMERICH. The only thing that we can attribute that to——

Mr. PEARCE. If you don’t mind, what was happening to the elk 

population at that time? 

Mr. EMMERICH. Elk populations don’t winter in this area. The elk 

populations are stable. 

Mr. PEARCE. What was happening to the antelope population? 

Mr. EMMERICH. The antelope populations have been fairly stable 

in the same area. They migrate through this area, and do winter 

in a portion of what we call the Jonah Field. 

Mr. PEARCE. So you have a decline in deer but you don’t have 

a decline in antelope? 

Mr. EMMERICH. That is correct. 

Mr. PEARCE. You are in the agency that would decrease the number of hunting permits during that decline. Did you all decrease the 

number of hunting permits? 

Mr. EMMERICH. If you look at the trends over the last few 

years——

Mr. PEARCE. I am running out of time. Just a yes or no. 

Mr. EMMERICH. Yes. 

Mr. PEARCE. Yes, OK. How much, just roughly? We are just talking in general terms. 

Mr. EMMERICH. From 2002, there was—I don’t have that information specifically. I think it is in the range of 20 percent. 

Mr. PEARCE. So you had a reduction in 20 percent in the hunting 

permits, the actual takes? 

Mr. EMMERICH. In that particular area. I can provide specific information. 

75

Mr. PEARCE. Mr. Jurrius, do you all do hunting? Most of our 

tribes have hunting is the reason I am asking. Do you all do hunting, give hunting tours, and elk permits and all that? 

Mr. JURRIUS. Yes, sir. 

Mr. PEARCE. Have you noticed—you all are pretty aggressive—

by the way, your tribe has gone from pretty low income levels to 

pretty high income levels, and so I commend you for that because 

a lot of tribes are trying to figure out the—so you do oil and gas 

exploration as well as hunting. Have you noticed your animal population is decreasing the way that Wyoming has? 

Mr. JURRIUS. First of all, I might say that those energy revenues 

that go into the governmental budget, about a third of it, $62 million budget, is for environmental and mitigation type projects. 

Mr. PEARCE. Can you pull the microphone just a little bit closer? 

Mr. JURRIUS. Sorry. 

Mr. JURRIUS. About a third of that governmental budget that I 

mentioned earlier, $62 million that is funded by way of energy revenues would fall into a category of environmental expense for the 

government, mitigation of habitat, and so we have very strong—

whether it is bison herds, elk herds, rams in the Bouk Lifts, sage 

grouse or mule deer, very strong——

Mr. PEARCE. My question is are you seeing declines in population 

as you go up on oil and gas, decline over here? 

Mr. JURRIUS. No, sir. 

Mr. PEARCE. You don’t see the correlation that they are finding 

there in Wyoming? 

Mr. JURRIUS. No, sir, not at all. 

Mr. PEARCE. You all have expressed some openness to—I see my 

time—I will just wait until the second round, Mr. Chairman, if you 

don’t mind. 

Mr. GRIJALVA. I don’t have any further questions, so if you want 

to——

Mr. PEARCE. Sure, I only have a couple more so we will just ease 

through it. 

You have expressed as a tribe some interest in developing a refinery, which is even one layer, more level of complexity in the development phase of oil and gas. Are you thinking that that is going 

to detract from your leased hunting revenues, the revenues you get 

from leasing your property to the hunters? 

Mr. JURRIUS. No, sir. The tribe has done a great job of partitioning off lands that it considered to have cultural value or historic value for habitat versus those lands that it intends to develop. 

Mr. PEARCE. So do you use the categorical exclusions that are 

available to the Federal government in the Energy Policy Act? Do 

you use those same types of things? 

Mr. JURRIUS. Everything on the tribe, of course, is subject to 

NEPA and those same processes. 

Mr. PEARCE. Do you use those categorical exclusions? 

Mr. JURRIUS. No, sir. 

Mr. PEARCE. OK. Mr. Emmerich, you had mentioned that you 

feel uncomfortable. You stopped short of saying it is a bad deal, but 

you were worried about categorical exclusion. Did you bring language to us? 

76

Mr. EMMERICH. Mr. Chairman, yes, there is language in the testimony in terms of the type of changes that the Western Governors’ 

Association would like to see. It pertains specifically——

Mr. PEARCE. If you could just provide that in writing, that is the 

question. If you have it, then we will take it and wring it through 

the mill there. 

Mr. EMMERICH. You have it in writing. 

Mr. PEARCE. If you will provide it to our staffs, I am sure both 

sides would appreciate having that. 

Mr. Jurrius, on the split estate question, do you all run into that 

question? 

Mr. JURRIUS. We run into split estate issues with over 300,000 

acres of split estate where the tribe has the surface and, of course, 

as you know, other than Onshore Oil and Gas No. 1, tribes not subject to condemnation via imminent domain, and has seen massive 

development on its lands, but working with industry we have been 

able to—for all deployed lands and all deployed assets—resolve all 

split estate issues. 

Mr. PEARCE. How much of your 300,000 acres is in the split estate category? 

Mr. JURRIUS. No. Actually, 1.5 million acre surface estate, 

300,000 is in the split estate category. 

Mr. PEARCE. And you have been able to work some sort of a compromise on every single thing? 

Mr. JURRIUS. Yes, sir. It has been a five-year process. 

Mr. PEARCE. Which would match with our testimony from the 

BLM that they have 20,000 wells and only 20 have fallen into a 

category where they couldn’t come to some agreement. 

Well, that pretty well does it for me, Mr. Chairman. I appreciate 

this panel here. They have done a great job. 

Mr. EMMERICH. Mr. Chairman, if I may, I do have those figures 

on another sheet. The sublette herd, which is the one directly affected by impacts on the winter range, in 2000, which is about the 

time the development started, we were issuing about 8,300 licenses, and in 2005, we dropped to 5,415, which is approximately 

a 36 percent decline. 

But if you compare that to the same time period in other populations where we don’t have energy development, there was also 

roughly a 10 percent decline in hunter numbers and licenses 

issued, so there was some decline elsewhere, but not as large as in 

the sublette herd. 

Mr. PEARCE. OK. Thank you very much. 

Mr. GRIJALVA. Thank you very much, and I appreciate all of the 

testimony. I want to note Mr. Jurrius’s comment that the Nation 

that you represent is spending a third of its revenue from those 

leased lands on habitat, wildlife protection, and one can wonder if 

a third was being dedicated by BLM to those same endeavors, 

maybe some of the decline that we are debating about wildlife 

would be moot, but that is for another time. 

Thank you very much, and I will call the next panel. Thank you 

very much and welcome, ladies and gentlemen. This is our last 

panel, and as you heard, your full statements will be made part of 

the record, and we ask you for your oral testimony, if you could 

77

limit that to five minutes and we will proceed alphabetically. Let 

me begin with Mr. Adami. Did I say that correctly? 

Mr. ADAMI. Adami, Mr. Chairman. 

Mr. GRIJALVA. Thank you, sir. 

STATEMENT OF STEVEN M. ADAMI,

POWDER RIVER BASIN RESOURCE COUNCIL 

Mr. ADAMI. Mr. Chairman and Subcommittee Members, on behalf of myself and the Powder river Basin Resource Council, I 

would like to thank you for the opportunity to speak to you today. 

My name is Steve Adami. I am a rancher and CPA in Buffalo, 

Wyoming. I am a life-long resident of Wyoming, and I am here to 

address the problems with development of oil and gas minerals 

when a split estate exists. 

The Stock Raising Homestead Act of 1916 governs the consideration for the surface. 

Mr. GRIJALVA. If I may, let me interrupt you for just a second. 

Could you pull the microphone closer? 

Mr. ADAMI. Is that better, Mr. Chairman. 

Mr. GRIJALVA. Is it on? 

Mr. ADAMI. I think I can hear it. Is that better if I speak here? 

OK. 

The Stock Raising Homestead Act of 1916 governs the consideration for the surface which is growing crops and tangible improvements. This law is 91 years old. Surface uses and values have 

changed since 1916. Wyoming’s Split Estate Act in 2005, that Act 

has proven to be inadequate primarily due to ineffective default 

provisions on the bonding requirements. Furthermore, the BLM 

has refused to recognize Wyoming’s Split Estate Act where the split 

estate exists over Federal minerals. 

Our ranch was bonded onto where we had fee surface over Federal minerals, and earlier today Mr. Bisson made a statement that 

I hadn’t heard before, which is that in the United States there are 

only 20 wells where the surface owner and the Federal government 

can come to an agreement, and on our ranch we have 12 of those 

wells. So I represent to you here today 60 percent of the bonded 

on split estate Federal minerals in America. 

While we were waiting to have our appeal heard, we appealed 

that process to the Interior Land Board of Appeals. While we were 

waiting, the developer completely drilled and developed every mineral at issue. There was no additional bond requirement during 

that period or any other protection for our land during that process. 

This is not about stopping or slowing oil and gas development. 

It is about being fair and responsible with regard to the treatment 

of the surface estate. 

We have sold our ranch, and left many of our oil and gas problems behind. However, I have decided to remain involved in this 

process so that other landowners don’t have to go through what we 

did. 

The problems are easy to identify. The solutions are generally 

much harder. However, I do believe there are a number of things 

that can be done to help that will mitigate the impacts of developVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00083 Fmt 6633 Sfmt 6602 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
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ment of the mineral estate while preserving the viability of the oil 

and gas industry. 

I urge you to pass Congressman Udall’s H.R. 1180 that would 

require surface owner notification and input, reasonable use of the 

site, accommodation of the surface owner, reclamation to support 

the same use as before the development, and compensation for 

damages. Personally I would like you to consider including something in that bill that would put a stay on development during an 

Interior Land Board of Appeal or increasing the bond amount so 

that would not be preferred alternative, and would help keep the 

mineral company at the negotiating table. 

In summary, the oil and gas industry should not be allowed to 

off-load their cost, primarily reclamation, onto the surface owner 

through their dominant negotiating position. The coal mining industry not only survived but it has thrived since legislation require 

them to act responsibly was enacted. I believe oil and gas can also. 

I urge you to pass legislation to bring our antiquated laws up to 

date with the realities of our modern society. 

Thank you very much. 

[The prepared statement of Mr. Adami follows:]

Statement of Steven M. Adami, Rancher,

Powder River Basin Resource Council, Sheridan, Wyoming 

Chairman Costa, Chairman Grijalva and members of the subcommittees, on behalf of myself and the Powder River Basin Resource Council I would like to thank 

you for the opportunity to speak to you today. My name is Steve Adami. I am a 

rancher and CPA in Buffalo, Wyoming, and a lifelong resident of Wyoming. I am 

here to address problems with the development of oil and gas minerals when a split 

estate exists between what has been the dominant mineral estate and the subservient surface estate. 

The idea that the mineral estate is dominant over the surface or land is the cause 

of many conflicts. An example of this attitude of dominance over the land and the 

landowner was testified to in a recent court case in our area when the landowner, 

Mary Brannaman, testified that an oil and gas company representative told her, 

‘‘Mary, it’s just like you and I are married. I can do whatever I want, whenever I 

want, and however I want.’’

For me, the split estate relationship felt more like that between a slave and a 

slave owner, but the result was the same: the developer felt free to do whatever he 

wanted, whenever and however he wanted to do it. This situation, which surface 

owners are encountering more and more throughout the Rocky Mountain West, is 

leading to the passage of split estate laws in Wyoming, New Mexico and possibly 

this year, in Colorado. 

Because of the oil and gas industry’s political influence in Wyoming, the split estate law that was passed did not provide adequate protection for the surface estate. 

Our ranch in Johnson County was the first test of Wyoming’s Split Estate Law. 

Since our ranch’s initial test, the CBM industry has found Wyoming’s Split Estate 

Law a safe haven for inexpensive access to their mineral estate and continued domination over the surface owner. Furthermore, the BLM refuses to recognize Wyoming’s law, despite its weaknesses and shortcomings (see attachment.) 

State and federal split estate law are based around ‘‘good faith negotiations’’, but 

in our experience, no good faith negotiations were required, regardless of state and 

federal law. The company that leased the federal minerals beneath our ranch did 

not want to negotiate and found the BLM an accommodating and cooperative partner in their effort to ‘‘bond on.’’ BLM’s message to landowners in our area is this: 

‘‘You’d better take whatever the operator is offering, because if they ‘‘bond on’’ you 

will get nothing.’’ This is not good faith negotiating. 

In our case, what the operator offered was a one size fits all, non-negotiable surface use agreement. When we asked for some changes in the language ensuring 

proper reclamation, restrictions on water disposal, and $1.37 per day more money 

than was offered for the use and damage of our land, what we received was nothing. 

The initial offer was withdrawn and the operator ‘‘bonded on’’. 

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The BLM and CBM operator sat down and made decisions on how my land was 

to be developed. Although I was invited to the meetings between the operator and 

the BLM, my attendance was simply symbolic. As the owner of the surface, my 

input was given only a token consideration—and it was completely ignored if it conflicted with the operator’s wishes. The ultimate Plan of Development that was approved did not minimize damages, did not compensate me for those damages, and 

did not ensure there would be enough money set aside to reclaim my land when 

the developer is finished. The ‘‘bond’’ BLM required for industry to come onto my ranch was $2,176. This 

money was not and will not be paid to me or any other landowner who is forced 

into this position. The landowner must sue the BLM for damages and the legal fees 

would be several multiples of the bond. Two thousand dollars is not adequate compensation for my losses or cover the damages caused by drilling 11 wells, bulldozing 

miles of roads, installing miles of ‘‘utility corridors’’, and constructing five off-channel water disposal pits of approximately 3 acres each. An engineer I retained estimated reclamation costs to be in excess of 3 to 4 million dollars, particularly given 

the overall lack of development control built into the Plan of Development (POD) 

approved by the BLM’s Buffalo Field Office. The BLM’s response to my protests that 

they allowed industry to post a $2,176 bond against a reasonable reclamation estimate of three million dollars or more, was that they were only required to collect 

a bond for loss of grazing value. 

The developer had D6 Caterpillars working on our ranch within 48 hours after 

the approval of their POD and drilling permits by the Buffalo Field Office. I appealed the BLM approval of the POD and drilling permits to the Interior Board of 

Land Appeals. There are no protections afforded to the surface estate or any additional bond required of the mineral developer during the time of appeal. 

I tried every step of the way to get protection for our land and water. I lost that 

battle, and our ranch looks nothing like it did under our stewardship. What was 

once open pristine ranch land is covered with roads, pits, pads, and constant traffic. 

Our ranch became an industrial park for the production of CBM gas. Our private 

deeded ranch land was sacrificed by BLM for the development of federal minerals. 

We no longer own the ranch I’ve been talking about today. For a variety of reasons, we were bought out by one of the CBM companies in the area. The decision 

to sell was a very difficult one for our family to make, but in the end was the only 

logical solution for us. We were able to leave most of these troubles behind, but the 

fight took a tremendous toll emotionally, physically, and financially for my family 

and me. The abuses continue today for my friends and neighbors, because nothing 

has changed in the way industry and the Bureau of Land Management conduct 

business. You cannot mandate ‘‘good faith negotiations’’. What is needed is a leveling of the playing field between the dominant mineral estate and the subservient 

surface estate. 

Problems are easy to identify. The hard part is to find solutions, particularly 

when the solutions may require an industry with enormous political and economic 

influence to make concessions in the way it does business. However, there are solutions to many of the problems that will not unduly slow down or add unreasonable 

costs to development. This is not about slowing development or making it more expensive, it is about fairness to landowners and making sure that development is 

done in a manner that protects the surface resource. 

The Stock Raising Homestead Act of 1916 declares that the surface estate is entitled to reimbursement for damages to crops (not including native grassland) and 

tangible improvements. That 91-year-old law still rules what protections compensation surface owners receive today when oil and gas is leased (though surface owners 

were given greater protections when coal and hard rock minerals are being developed, thanks to laws passed in 1977 and 1993.) It is time to revisit the true value 

of the surface estate and to provide protections for those who own the surface over 

federal oil and gas. The so-called dominant estate lends itself too easily to the actions of a slave owner or an abusive spouse, and the federal government should not 

be a party to it. 

A new federal Split Estate Law would clearly have jurisdiction over federal minerals and provide protection for the landowner where the local and state governments are unable to provide such protection. 

Mr. Chairmen, I urge you to pass Representative Udall’s H.R. 1180 that would 

require: 

• Notification to the surface owner and opportunities to comment and participate 

at key points in the leasing, permitting, development and reclamation processes. 

• Reasonable use of the site. 

• Accommodation of the surface owner. 

80

• Reclamation of the site so that the land is capable of supporting the same uses 

it was capable of supporting prior to development. • Compensation for damages. 

And I urge you to go further: 

• A federal law should require adequate compensation for the use of the land and 

the mineral development impacts. Requiring a fixed production percentage, 

which would be non-severable, to the surface estate would entitle the surface 

owner to some reasonable compensation for the use of their estate. 

• A stay on development during an appeal to the ILBA would both provide protection against improper development and discourage companies from using the 

‘‘bonding on’’ method of gaining access to their mineral estate except in a case 

of last resort. 

• The best way to defuse the controversies surrounding this industry are to reconnect the minerals with the surface estate, perhaps by requiring that minerals 

not leased or produced over a number of years, 15 for example, revert back to 

the surface owner. 

It is time to pass legislation to rein in the ‘‘dominant’’ position of the mineral estate which has cultivated the arrogance of the operators who are running roughshod 

over surface owners and address the inequity that exists between the land and the 

oil and gas beneath it. We addressed this issue during the boom in coal mining in 

the 1970s and it is time to require it of the oil and gas industry. In the 30 years 

since the passage of our federal coal law, the Surface Mining Control and Reclamation Act, which requires surface owner consent before federal coal is leased, the coal 

industry has evolved into a prosperous and relatively non-controversial industry. We 

believe the oil and gas industry can succeed and thrive from a similar approach. 

Thank you. 

Steven M. Adami

P.O. Drawer G

820 North Main Street

Buffalo, Wyoming 82834

307-684-5557

May 5, 2007

Representative Rau ́l Grijalva 

Subcommittee on National Parks, Forests and Public Lands 

House Natural Resources Committee 

1626 Longworth House Office Building 

Washington, DC 20515

RE: Additional Statements for The Record for the April 26, 2007 Hearing on ‘‘Landuse Issues Associated with Onshore Oil and Gas Leasing Development’’

Delivered VIA email to Holly.Wagenet@mail.house.gov and Fax 202-225-5225

Dear Chairman Grijalva:

My understanding is that we are able to make additional statements or clarification for the record. Additionally, the Committee had a specific question. 

A point of clarification to my written testimony is with regard to the issue of reattaching the mineral ownership to the surface ownership after an extended period 

of inactivity. This statement was only intended to be for fee minerals and not federal minerals. 

Additionally, I wanted to address the statements by Mr. Bisson (Deputy Director 

of BLM) with regard to there only being 20 wells (or perhaps 20 landowners) in the 

nation where an agreement was not reached with mineral developers. I cannot 

verify whether this statistic is accurate or not. Instead, I would like to explain why 

this statistic should not be used to rationalize that the current system is working 

for landowners. What this statistic is really saying (or shouting) is that the playing 

field is so lopsided that there are virtually no challenges. This is a case where the 

surface owner has so few rights that any offer is considered better than the alternative, which is essentially nothing. 

A statistic that would be very helpful, but not available, is the percent of landowners that have had federal minerals developed under their property who were 

happy or satisfied with the agreement they signed. Among the people that I have 

had contact with, that percent is not very large. Operators are currently using the 

leverage they have under the Stock Raising Homestead Act to coerce landowners 

81

into agreements that do not adequately protect, or compensate for the use of, the 

surface. 

BLM’s Onshore Order No. 1 requires that an operator makes a ‘‘good faith’’ effort 

to reach an agreement with the surface owner, but in any negotiations where one 

side has absolutely no leverage, it is virtually impossible for ‘‘good faith’’ negotiations to exist. Regardless, exactly what are ‘‘good faith’’ negotiations? BLM does not 

define the term. Leaving that determination up to a civil action does a great disservice to the surface owner. 

In my case, the mineral developer’s initial offer was withdrawn when I did not 

initially accept it and it was never offered again despite my efforts to restart negotiations. There was no pressure by the BLM to continue negotiations beyond a few 

patronizing statements to the effect, ‘‘we would like to see you guys work something 

out’’. If the BLM believes they have the tools and procedures in place that encourage 

continued negotiations, as Mr. Bisson stated, those procedures were not apparent 

in my case. 

A specific question from the Energy and Minerals Subcommittee, House Natural 

Resource Committee that I received as an email is as follows: 

You have suggested the adoption of a federal law to govern split estate relationships in regards to oil and gas production. As you know the needs and 

requests of a ranch in Wyoming, Texas and any other state are not the same. 

How is a uniform approach to split estate likely to succeed in answering the 

specific needs of ranchers when they each have their own scenario? 

My answer to the above question is: 

Every ranch is different, regardless of where it is located. My neighbors directly 

across the fence have entirely different management issues than our ranch. Each 

ranch has to adapt to the ‘‘cards they are dealt’’ which are size, terrain, water, soil, 

climate, and many other variables associated with any particular ranch. 

That is one the reasons one ranch may be more receptive to mineral development 

than another ranch. Some ranches may be in a greater need of some of the development that accompanies mineral development. 

The adoption of federal split estate legislation that recognizes that the surface and 

its uses are unique (accommodation) will not create a ‘‘uniform approach’’ but will 

facilitate an environment where the unique attributes of each ranch will have an 

opportunity to be recognized. Federal legislation that mandates broader considerations be given to the surface, over the current ‘‘growing crops and tangible improvements’’ to which they are currently entitled, is critical and necessary. 

Federal split estate legislation would create a more level playing field on which 

real negotiations between landowners and mineral developers are possible, by establishing a procedure for negotiation, and by offering greater protections for landowners than merely requiring compensation for growing crops or other tangible improvements. 

Until federal legislation is passed, the vast majority of split estate landowners will 

continue to be forced to take whatever mineral developers are willing to offer. Surface use agreements that fail to adequately protect surface owners’ interests, including reclamation, may ultimately become a taxpayer liability. Please draft and pass 

meaningful and responsible legislation to protect the surface owner in split estate 

situations.

Sincerely yours,

Steve Adami 

Mr. GRIJALVA. Thank you, sir. 

The next witness, Ms. Korenblat. 

Ms. KORENBLAT. Korenblat. 

Mr. GRIJALVA. Korenblat, did I get it? 

Ms. KORENBLAT. Yes. 

Mr. GRIJALVA. Oh, good. 

STATEMENT OF ASHLEY KORENBLAT,

OWNER, WESTER SPIRIT CYCLING 

Ms. KORENBLAT. My name is Ashley Korenblat. Thank you for 

having me. I live in Moab, Utah, with my husband and two-yearold son. I grew up in Arkansas, went to school at Dartmouth, got 

an MBA at the tech school, worked on Wall Street. Then I made 

82

the entrepreneurial leap and ran a bicycle factory that used aerospace materials to make bikes. 

I am not an outfitter on the public lands. I operate guided bicycle 

tours in 17 states. I am a former president of the International 

Mountain Bicycling Association, IMBA. I am currently serving my 

second term on the Utah BLM Resource Advisory Council, and I 

am also on a task force for the Governor of Utah that is exploring 

outdoor recreation economic systems—not a good acronym. 

I have spent the last 10 years traveling through the public lands 

developing bike trips. My company, Western Spirit Cycling, holds 

permits from the BLM, the Forest Service and the Park Service. 

Our guests join us for week-long trips throughout the backcountry, 

and on those trips they need not just a bike and a helmet, but they 

need a tent and a sleeping bag and a good raincoat, making us one 

of the links in the $730 billion outdoor industry. 

Some of our trips are truly challenging, five days above 10,000 

feet on the Colorado Trail, and some are very mellow like the 

Grand Staircase, which my mother-in-law did for her seventieth 

birthday. 

What if every American had the opportunity to spend a week a 

year traveling through our public lands under their own steam, 

sleeping under the stars? I think that would go a long way toward 

solving a lot of problems. 

Our public lands are an incredible resource that belong to all of 

us, and there are 10,000 companies like mine who take people into 

the public lands, and our businesses all depend on access to land 

in its natural form. 

The restorative powers of a trip to the backcountry are well 

known. Companies such as the National Outdoor Leadership 

School and Outward Bound run trips in the backcountry 18-day, 

21-day trips. Everyone in this room would be a better person if 

they did those trips. The outdoors really has the power to heal and 

make us stronger people. Being outside in the vast landscape of our 

public lands is integral to the human condition. 

Now, many of these lands, of course, were set aside originally for 

resource extraction, and the idea of managing them for recreation 

is a relatively new idea. In many places recreation and resource extraction can co-exist, but increasingly we are being forced to choose. 

You think what we could do is just a simple cost/benefit analysis. 

Well, the challenge is that by definition an oil well has a projected 

life span, but land in its pristine form can provide revenues to the 

outdoor industry forever. 

So the question is what do we do to make sure that the two 

things can co-exist? And you as leaders of our society, one of the 

questions I am wondering about is, is it absolutely necessary to 

find every last drop of oil on our public lands when we know that 

oil is by definition an non-renewable resource? It is finite. And if 

this is the curve, aren’t we on the downward slope? Aren’t we past 

the peak? 

I don’t think my grandchildren are going to be burning oil to 

travel, and I also think there is as much money to be made on alternative sources of fuel as there was in the oil industry. 

Ultimately, it is a long-term versus a short-term question. Our 

public lands are the backbone of the $730 billion outdoor industry 

83

which created 6.5 million jobs and brought 88 billion in tax revenues, and it is going nothing but up. In the last 25 years, we have 

seen nothing but growth. There are two factors contributing to the 

growth: population increase and the fact that more people want to 

be outside. But as demands continues to increase, supply is dwindling, and so at some point we are going to be in the situation 

where only the wealthiest Americans are going to be able to travel 

to our pristine landscapes on our public lands. 

So despite my plea here today you might look at the map and 

say, well, there are millions of acres out there, and an oil well only 

takes up a quarter acre. But it is not just the footprint, it is the 

roads, it is the gases, it is what it does to the views. I have a trip 

where we ride by a giant sign that says ‘‘Beware of poisonous 

gases’’ as we ride by the oil well, and I tell my guests if you get 

a flat tire here, just keep peddling. 

So my real worry is that I am going to have a group call me from 

the Kokopelli Trail and say, you know, we are at camp on night 

three of the Kokopelli Trail and there is a bunch of trucks here and 

they are digging a big hole. So then all of a sudden I am losing a 

camp which I may not be able to replace, so I may lose that whole 

trip from my product line. 

And while I am focusing mostly on permit holders, we represent 

only 40 percent of the recreation that is taking place, and Americans of all types recreate on the public lands, and while not every 

land manager has exact data on who is recreating, they definitely 

know what the patterns are. So, I am urging you to include language in the bill that requires the BLM and the Forest Service to 

consider the recreation economy before issuing leases. 

[The prepared statement of Ms. Korenblat follows:]

Statement of Ashley Korenblat, President Western Spirit Cycling,

Outdoor Industry Association 

Background 

Thank you for inviting me. My name is Ashley Korenblat and I live in Moab, Utah 

with my husband and two year old son. I am originally from Arkansas, went to college at Dartmouth and received an MBA from the Tuck School there. After a stint 

on Wall Street I was hired to run a bicycle factory in Massachusetts called Merlin 

Metalworks. We used aerospace materials to produce what at that time many felt 

was the best bicycle in the world. We sold that company and now I am an outfitter 

on the public lands. I own a bicycle touring company which operates in 17 states. 

I am a former President of the International Mountain Bicycling Association (IMBA) 

and am currently serving on the Utah BLM Resource Advisory Council and on a 

task force formed by the Governor of Utah to study Outdoor Recreation Economic 

Ecosystems. 

I have spent the last 10 years traveling through our public lands developing bike 

trips. My company, Western Spirit Cycling, holds permits on all types of public 

lands: BLM, Forest Service, and both State and National Parks. 

We operate under special use permits, incidental business permits, and commercial use permits from:

The USDA Forest Service in the following National Forests: 

Boise, Coronado, Dixie, Grand Mesa, Gunnison, Kaibab, Manti La Sal, San 

Juan, Sawtooth, Sierra Vista, Uncompahgre, Challis, Clearwater, Beaverhead-Deerlodge, Caribou-Targhee, Black Hills, Mount Hood, Umpqua, 

Nantahala, White Mountain, Monongahela, and Pisgah National Forests 

and the Dakota Prairie Grasslands.

The Bureau of Land Management in the following resource areas: 

San Juan Resource Area; Henry Mountain Field Station; Moab, Arizona 

Strip and Grand Junction Field Offices; Grand Staircase National 

Monument

84

The National Park Service in the following National Parks: 

Bryce, Zion, Capitol Reef, Grand Canyon, Crater Lake and Blue Ridge 

Parkway National Parks. Western Spirit is a concessionaire in Canyonlands 

National Park. 

Our guests join us for weeklong trips into the backcountry by bicycle. And on 

these trips, they need rain coats and pants. They need tents and sleeping bags. 

They need bicycles and helmets. Our guests stay in nearby hotels and eat in local 

restaurants before and after their trips, making us just one of the links in the value 

chain that makes up the $730 billion outdoor industry. 

Some of our trips are for the truly hearty and involve five days above 10,000 feet 

on the Colorado Trail, while others are quite gentle. In fact, my mother-in-law did 

our trip in the Grand Staircase Escalante National Monument for her 70th birthday. She had not been on a bike in years. We got her a good rain coat and a warm 

sleeping bag and she had a wonderful time. 

The Power of the Backcountry 

What if every person in our country had the opportunity to spend one week a year 

traveling under his or her own steam through our public lands camping under the 

stars? I believe such a development would lead to progress on some serious problems from rising health care costs to global warming. Our public lands are an incredible resource that belong to all of us. 

There are over 10,000 companies, like mine, who provide recreational opportunities on our public lands. From Barb and Harlan Opdahl at Triple O Outfitters who 

take people elk hunting on the Lewis and Clark trail to large river companies, like 

OARS, who run white water river trips on many of the major rivers throughout the 

US. What do all of these outfitters have in common, besides the fact that we all 

make people buy raincoats and pants? Our businesses, and the companies that 

make the rain gear, depend on land in its natural form. 

The restorative powers of a trip to the backcountry are well known. As Theodore 

Roosevelt once said, 

‘‘It is an incalculable added pleasure to anyone’s sum of happiness if he or 

she grows to know, even slightly and imperfectly, how to read and enjoy 

the wonder-book of nature.’’

Companies such as the National Outdoor Leadership School and Outward Bound 

continue to grow and thrive because the trips these organizations provide make you 

a better person. There you are, a three day walk from a paved road. The wind is 

howling and the storm is bearing down upon you. You are nervous and unsure, 

because you are out here for 18 more days. But you put on your raincoat and your 

rain pants and you keep moving. You dig into your suitcase of courage and you 

make it over the pass to camp. There, you set up your tent and make a cup of tea, 

and then the storm blows away and you are left with a beautiful sunset. 

I have seen it myself many times, people arrive for their bike trips, clean, a little 

pale, and nervous. There is a bit of panic associated with leaving the grid. Their 

cell phones will not work out there, and that worries them. Then they come back 

after having lived through the storm, having climbed over the pass, having swooped 

down the other side, having really seen the stars—and they actually look different. 

They are dirty, but they are no longer nervous. They have reconnected with themselves and the earth and they have a kind of glow. More than 65% of our customers 

come back every year. 

The proliferation of wilderness therapy programs for at-risk youth is further testimony to the power of the backcountry. The out-of-doors has the power to heal and 

make us stronger. Being outside in the vast landscape of our public lands is integral 

to the human experience. 

Making a Living on our Public Lands 

Many of these lands were originally set aside for resource extraction, and the idea 

of managing them for recreational purposes is relatively new. There are many 

places where resource extraction and recreation co-exist. Yet in more and more 

cases a choice must be made and a simple cost benefit analysis is difficult to perform. Most resource extraction has a lifespan, defined by the productive life of the 

mine or well, while revenues from recreation can continue and increase in perpetuity. 

In addition, many long-time Westerners deeply resent the federal lands in their 

states. How can they make a living if 87% of their county is public land? Well, one 

way is to open the lands to oil and gas exploration. The county government will receive a portion of the revenues, and in some areas, where the locals have the necessary skills, they will be employed. In my direct experience, it is more likely that 

you will begin to see trucks with out-of-state license plates and all the hotels will 

85

be full just for those few months that the wells are being tapped. And if the boom 

continues, some of the local high school kids will become oil drilling experts and 

about the time you think your son is going to settle down, he gets a call to head 

to Alaska or maybe the Middle East to make some serious money, and the bust has 

begun. 

Meanwhile, Grand County, Utah where I live, is 94% public land and that is exactly why I can make a living there. If my son chooses both he and his children 

could also make a living there. Our company started with bicycle trips on nearby 

BLM lands and in Canyonlands National Park. I have been in many meetings with 

county commissioners who express great interest in how our company works. Many 

of them have begun to see the business opportunities which recreation on our public 

lands can provide. The bottom line here is that land in its pristine form has long 

term economic value. 

The Maah Daah Hey Trail in North Dakota 

In 1999 a 96 mile multi-use trail was built to link both districts of Theodore Roosevelt National Park through the Little Missouri National Grasslands which are 

managed by the U.S. Forest Service. The Forest Service issued a competitive prospectus for permits on the trail, and my company, Western Spirit Cycling, was 

awarded a permit. The state of North Dakota began a marketing campaign to promote the trail. Advertisements showing the trail snaking through the grass in and 

out of the badlands geology appeared in all the outdoor magazines. The International Mountain Bicycling Association gave the trail the coveted ‘‘Epic’’ designation. Everything was on track to put North Dakota on the map as a world class 

mountain bike destination. 

There was only one problem, this area of the National Grasslands is an oil field 

with more than 250 active wells. The trail was put in around these wells, and while 

there are many pristine vistas, there are not many places to camp that are not in 

sight of the wells. In fact, there is one section of trail that goes right along a fence 

next to a well which bears a giant sign that says beware of poisonous gases. So my 

guides tell my guests that if they get a flat tire in this area, or have any other problems, do keep moving—and perhaps hold your breath until you get safely away from 

the area. 

On top of these challenges, the current federal energy policy has resulted in a 

five-fold increase in applications to drill in the region. And since none of the land 

management agencies have any obligation to inform recreational permit holders 

about changes in resource extraction, we could roll into camp next week with a 

group of paying guests and find big trucks, big lights and a big hole in the ground. 

It is beginning to look like North Dakota made a bad investment. What steps need 

to be taken to insure that recreation and resource extraction can coexist? 

The Outdoor Industry and Resource Extraction 

To answer this question, we must first ask ourselves as a society, and you must 

ask yourselves as leaders of our society, is it absolutely necessary to recover every 

last drop of oil in the US? We know that oil is a finite resource. So since we must 

begin to transition to alternative fuels, shouldn’t you, the long term stewards of our 

nation initiate that transition? One way to do that would be to require that outdoor 

recreation be considered before oil leases are awarded. 

Ultimately, this is a long term versus short term question. Our public lands are 

the backbone of the $730 billion dollar outdoor industry, which contributes 6.5 million jobs and more than $88 billion in annual state and federal tax revenues. This 

includes bicycling, camping, fishing, hunting, paddling, snowsports, wildlife viewing, 

and trail running, hiking, and climbing. And there is nowhere to go but up, the outdoor industry has seen consistent growth over the past 25 years. 

There are two factors contributing to this growth: increased population and increased awareness that outdoor exercise greatly contributes to both health and happiness So, while demand is increasing, supply is dwindling. A microcosm of what 

the future might hold can be seen in the Grand Canyon. Demand for permits to 

float the Colorado River through the Grand Canyon has skyrocketed. Land managers rightly control access to the canyon to avoid damage to the fragile environment. Commercial outfitters often book all their trips for the year in a single day. 

Private parties have been known to wait over 10 years to receive a permit. Recently 

a lottery has been instituted to provide better access, but the reality is that right 

now, only wealthy people with flexible schedules get to float the Grand Canyon. 

If we insist on extracting every drop of oil from our public lands there will be 

fewer and fewer places that are truly in their natural state. And the law of supply 

and demand will result in a situation where only the wealthiest Americans will be 

able to visit those spots. 

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Opportunities for Outdoor Recreation for all Americans 

Despite my plea here today, you may look at the maps and the millions and millions of acres managed by our federal agencies and think how can a oil well, which 

often occupies less than a quarter acre be such a big problem. The consequences of 

digging the well spread well beyond its mere footprint. There are the roads that 

must be put in to reach it and there is the noise and there is its particular location. 

It is getting harder and harder to find contiguous sections of the backcountry to run 

an 18 day trip, or in some cases, even a 5 day trip. When people are traveling under 

their own steam, you can’t simply change the route or just keep going to get away 

from the well. On an introductory bike trip, we really don’t want to ride much further than 20 to 30 miles in a day. So, if a well pops up in one of our camps, we 

will have to change the entire route of the trip, which often is not possible. And 

suddenly one of the trips in my product line is gone.

USDA Forest Service 

While we have long standing relationships with many of the rangers with 

whom we work, they have no official obligation to contact us should a lease 

be sold on one of our trip routes.

Bureau of Land Management 

The BLM is legally required to consider wildlife, paleontology, and archaeology in both the planning and development stages of oil and gas leasing, 

but there is no such requirement regarding recreation.

National Park Service 

While the Parks themselves are protected from actual drilling, to provide 

a true backcountry experience we must protect the viewshed from the park 

and avoid the noise. 

While my testimony here has focused on permit holders on our public lands, we 

probably represent less than 40% of the recreation that is taking place. Americans 

of all types recreate on our public lands in thousands of ways. While not every land 

manager has perfect data regarding visitation, they are all aware of use and visitation patterns that would be interrupted by drilling. 

If we continue to pursue aggressive resource extraction on the public lands without regard to increased recreational demands we will sacrifice the long term for the 

short term. By definition an oil well is a short term economic engine, whereas land 

in its pristine form can provide a living for guides and outfitters and those that 

make tents, and raincoats and bicycles and boats forever. So I urge you to add language to your bill requiring all land management agencies to consider long term recreational patterns, visitation, economic benefits, and social impacts before leases are 

awarded. 

Response to questions submitted for the record by Ashley Korenblat 

1. Our federal lands are precious resources to be utilized to the benefit of 

all Americans. At the same time, these resources are needed to provide 

fuel for the American public. Do you believe there is a balance in which 

we can maintain the federal lands, but also provide fuel for the economy 

and sustainability of the American public? 

Yes, and one step towards maintaining that balance would be to add language to 

the Energy Bill which would require land managers to consider the recreation economy before lands are leased for oil and gas activities. Since oil and gas are nonrenewable resources, an oil or gas well is a short term economic engine, whereas 

land in its pristine form can fuel the outdoor industry indefinitely. In most cases, 

recreation considerations would result in reducing leased acreage by less than 3%. 

Some members of the committee may feel that sacrificing even as little as 3% is 

not possible given the intense and growing demand for energy worldwide. Yet we 

all agree that oil and gas are finite resources. Prices will go up as supply dwindles. 

As a business person, I ask you to have more faith in the scientists and entrepreneurs of our country. Necessity will lead to invention and the necessity is upon 

us. We will find a cheaper cleaner source of energy and clinging hopelessly to the 

oil and gas establishment is only delaying that transition. 

The small percentage which the Outdoor Industry requires will not solve the 

energy crisis or delay the need to begin the transition. I have been warned that you 

may see the consideration of recreational needs as micromanagement within the 

Energy Bill, but if those lands are all leased, you will do permanent damage to the 

$730 billion outdoor industry. 

You speak of sustaining the American public, how can we sustain them if we do 

not sustain the earth? In my business, I have already noticed distinct changes in 

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weather patterns all over the US. Global warming and its dramatic effect on weather patterns will ultimately do more damage to the U.S. economy than the very predictable rise in fuel prices. Businesses can plan for increased fuel prices, they cannot 

plan for unpredictable natural disasters. 

As leaders of our nation, you have the opportunity to make one of the 

most important decisions in the history of mankind. Initiate the transition 

away from oil and gas dependency before we have done irreversible damage to the earth and its ability to sustain the American public. Including 

language to protect the recreation economy in the Energy Bill is a step you 

can take in the right direction. 

Mr. GRIJALVA. Thank you very much. 

Ms. Moseley. 

STATEMENT OF CLAIRE M. MOSELEY,

EXECUTIVE DIRECTOR, PUBLIC LANDS ADVOCACY 

Ms. MOSELEY. Thank you, Mr. Chairman and Mr. Pearce for inviting me to testify here today. 

I am Claire Moseley. I am Executive Director of Public Lands 

Advocacy in Denver, Colorado. At the risk of divulging my age, I 

have been working on public lands issues for 29 years, since 1978. 

Since that time I have seen oil and gas come under increasing criticism for turning to the last frontier left in the United States, public 

lands for domestic energy supplies, and it has become a partisan 

issue, which is unfortunate. 

Yes, energy is a large, even huge, industry, but it wouldn’t exist 

if there weren’t a huge demand for the goods and services it provides. We currently import 60 percent of our oil. We import 15 percent of our natural gas, but we shouldn’t have to import gas. We 

have adequate natural gas resources in the U.S. to avoid the same 

problem we have with oil. 

A fact that appears to be consistently ignored is that consumer 

demands are not diminishing. They are increasing at a rate where 

demand is projected to outstrip supply by 2025 unless something 

is done to avoid it. 

According to the USGS, an estimated 69 percent of oil and 51 

percent of natural gas lie beneath public lands. However, we are 

locked out of most of these areas since 51 percent of the oil and 

27 percent of the gas is entirely withdrawn from leasing. The lands 

not withdrawn are subjected to high-level lease stipulations, restrictions, and conditions of approval to the point where in many 

areas we are subject to no surface occupancy. 

This could hardly be construed as leasing being the dominant use 

of the public lands. In fact, as you hear earlier this morning, the 

operations on public lands, my figure is less than 1 percent, BLM 

said less than 2 percent. Regardless of what it is, it is still very 

minimal. There is grumbling that industry doesn’t deal fairly with 

surface landowners who bought land underlain by Federal minerals. Yet industry follows the law and the regulations, and makes 

a good faith effort to reach agreements with the landowners for 

surface damages. BLM found in recent studies that were discussed 

this morning under EPCA that of the thousands of wells drilled on 

split estate lands fewer than 20 cases exist where they have had 

to bond off, so to speak, onto those properties. 

It must also be noted that BLM determines the amount of the 

bonds. It is not a function of the industry. Nevertheless, industry 

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has taken many steps, as you all know in my written testimony, 

to try to improve the relationships with the landowners. States 

have also passed legislation that have addressed at a local level 

issues that address their specific needs. There is no need for a onesize-fits-all approach to this issue. 

Recently, the statutory categorical exclusions for oil and gas activities have come under fire. There are concerns that the CXes will 

bypass the NEPA process, but that is not the case. Categorical exclusions are actually part of the NEPA process. They are only 

available for use in cases where adequate NEPA analysis has already been done and no good reason exists to go through a new 

costly analysis. 

I would also like to point out that just because an action is excluded from additional review that the lease stipulations, the permit conditions of approval and site-specific inspections to determine 

resource conflicts are still required, including evaluation of wildlife 

concerns. Elimination of these categorical exclusions will slow down 

critically needed development of new resources for no good reason. 

Produced water from the Powder River Basin has also come 

under fire. Companies who produce coalbed natural gas are allowed 

by state and Federal law to discharge excess water into the Tongue 

River and its tributaries because it meets the water quality standards that have been set by the Federal government and by the 

state departments of environmental quality. No impairment has 

been found as a result of the several studies. Nevertheless, it has 

been found that certain vegetation, irrigation and farming practices 

may need to be changed because of the naturally occurring sodium 

content of the river water. 

In conclusion, PLA urges the members of these Subcommittees to 

recognize that the issues I have discussed this morning do not require Federal action, except for one. We need to allow the processes 

established in the Energy Policy Act to remain in force. It took 

many years to determine what would work best to ensure the U.S. 

can meet its energy needs in the future by improving its domestic 

supplies and while protecting the environment. We need to make 

sure we avoid an embargo-like situation such as we had in the seventies. 

I appreciate this opportunity, and welcome any questions. 

[The prepared statement of Ms. Moseley follows:]

Statement of Claire Moseley, Executive Director,

Public Lands Advocacy 

Mr. Chairman Grijalva and Mr. Chairman Costa and members of the Subcommittees, my name is Claire Moseley, Executive Director of Public Lands Advocacy (PLA) 

based in Denver, Colorado. PLA is a nonprofit trade association whose members include independent and major oil and gas producers as well as nonprofit trade and 

professional organizations that have joined together to foster environmentally sound 

exploration and production on public lands. I would like to thank the Subcommittee 

on Parks, Forests and Public Lands and the Subcommittee on Energy and Mineral 

Resources for the opportunity to testify at this Oversight Hearing on ‘‘Land-Use 

Issues Associated with Onshore Oil and Gas Leasing and Development.’’

Natural gas is extremely important to the nation, not just to the petroleum industry or the states where the resources are produced. According to Energy Information 

Administration (EIA), the highest demand states for natural gas are: Texas, California, Louisiana, New York, Illinois, Michigan, Ohio, Florida, Pennsylvania, and 

New Jersey. Conversely, the Rocky Mountain States (or Public Land States) produce 

much of the natural gas required to keep the standard of living and economies of 

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the rest of the nation at the levels they expect. Meeting American consumer demands for energy, which is expected to increase 23 percent by 2025, requires a tremendous investment by both industry and the Federal government to find and 

produce oil and gas, refine and distribute them and market the wide variety of products derived from them. 

It should be noted that the energy we consume today is possible only through investments made years ago, which includes energy research and development, acquisition of 3D geophysical surveys, and development of new drilling, completion and 

production technologies; all of which have has resulted in a smaller, less obtrusive 

footprint and improved environmental and reclamation practices. Our industry continues to pioneer the development of alternative energy and to expand the use of 

existing sources of energy. According to the American Petroleum Institute, from 

2000 to 2005, the U.S. oil and natural gas industry invested an estimated $98 billion in emerging energy technologies, including renewables, frontier hydrocarbons 

such as oil shale, tar sands, and gas-to-liquids. This represents almost 75 percent 

of the total $135 billion spent on emerging technologies by all U.S. companies and 

the federal government. Industry is also actively investing in second generation 

biofuels research and research to find better ways to reduce greenhouse gases. 

According to the United States Geological Survey (USGS) an estimated 69 percent 

of the nation’s undiscovered oil and 51 percent of its natural gas resources lie beneath Federal public lands. However, for much of the last century, most of the oil 

and gas was produced from state and private lands. As these resources have become 

depleted, industry has been forced to seek out new sources on public lands to meet 

growing demand for energy supplies. It is important to our discussion today to put 

industry’s activities on the public lands into proper context. Industry does not seek 

out new resources from withdrawn lands such as Wilderness Areas, National Parks, 

National Monuments, Wilderness Study Areas, Wild and Scenic Rivers or National 

Wildlife Refuges, which comprise nearly 50 percent of Federal land, but rather on 

those lands found compatible with oil and gas leasing and development through the 

federal land use planning process. 

BLM is responsible for carrying out a variety of programs for the management 

and conservation of resources on 261.8 million surface acres, as well as 700 million 

acres of subsurface mineral estate, These public lands make up about 13 percent 

of the total land surface of the United States and more than 40 percent of all land 

managed by the Federal government. In FY 2005, the Federal Treasury collected 

over $2.3 billion from mineral royalties, rents and bonuses, half of which went back 

to the States. 

Onshore public lands, particularly those in the Rocky Mountain West, are vitally 

important to the energy future of the United States. According to the EIA, the 

Rocky Mountain region is on the verge of surpassing the Gulf Coast as the largest 

supplier of natural gas to the nation. The National Petroleum Council in its 2003 

study, Balancing Natural Gas Policy—Fueling the Demands of a Growing Economy, 

found that ‘‘abundant natural gas resources exist in North America’’ and identified 

the Rockies region as the most prospective area for development of new natural gas 

supplies. The study cautions, however, that ‘‘the recent tightening of the natural gas 

supply/demand balance places greater urgency on addressing the future of this important energy source and resolving conflicting policies that favor natural gas usage, 

but hinder its supply’’ and points out that new and continued development of this 

vital resource can occur only if the importance of allowing reasonable access to natural gas reserves is recognized. 

The Nation is in desperate need of reasonable energy policies that provide access 

to conventional energy supplies, encourage energy efficiency, and promote continued 

development of new energy technologies and to expand the use of existing sources 

of energy. Clearly, there is a great need for reasonable access to public lands and 

minerals. 

OIL AND GAS LEASING 

The Mineral Leasing Act of 1920, as amended, and the Mineral Leasing Act for 

Acquired Lands of 1947, as amended, give the Bureau of Land Management (BLM) 

responsibility for oil and gas leasing on public lands administered by BLM, National 

Forest, and other Federal lands, as well as private lands where mineral rights are 

retained by the Federal Government. Public lands are available for oil and gas leasing only after they have been evaluated through the BLM’s multiple-use planning 

process. That is not, however, the only analysis that is conducted before a lease is 

issued and drilling activities are permitted. 

• Before a lease can actually be issued, BLM conducts a Determination of NEPA 

Adequacy (DNA) to ensure resource conditions have not changed since the ReVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00095 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
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source Management Plan (RMP) was completed and that leasing is still an appropriate use of the area. 

• After a lease has been issued and a company seeks to access its lease for exploration or development, a project level Environmental Assessment (EA) or Environmental Impact Statement (EIS) is prepared which analyzes and discloses the 

impacts of the proposed undertaking. 

• When a specific well location is identified by an oil and gas operator, a subsequent site-specific NEPA analysis and onsite inspection is conducted before the 

drilling permit is approved. 

As can be seen, before surface disturbance activities for oil and gas related activities can occur several levels of NEPA analysis have taken place, all of which are 

subject to public involvement. It must also be noted that during each level of analysis, new mitigation requirements to protect sensitive resource values are often 

identified and imposed by the land management agency. 

Recently, disingenuous claims have been raised that BLM’s predominant focus is 

on leasing for oil and gas. The oil and gas program is one of many priorities for 

BLM, ranging from cultural resources to water and wildlife, so it is simply untrue 

that oil and gas dominates over other programs despite the revenue it generates for 

the Federal Treasury. Moreover the BLM works with states with respect to air and 

water quality issues. According to BLM figures, of the $3.2 billion collected in revenue from BLM programs in FY 04, $2.4 billion were received in mineral royalties, 

lease rentals and bonus bids. The remaining revenue of $778,411,189 was received 

from grazing, recreation, timber, rights-of-way and other BLM programs. 

Despite the huge revenue generated from oil and gas activities, producing oil and 

gas leases cover less than 1/2 of 1 percent of the 261.8 million acres of public lands 

and the additional 700 million acres of federal mineral estate. Oil and gas operations on these leases are subject to varying levels of restrictions imposed through 

the land use planning process to protect other resources associated with these 

leased lands. In addition, proposed activities are required to conform to with BLM 

supervised environmental analyses, either through an EA or an EIS, both of which 

are driven by public involvement. 

In late 2006, the Departments of Interior, Agriculture and Energy, through their 

respective agencies, completed a study required by Congress through the Energy 

Policy Act of 2005, which expanded upon on an earlier report published in 2003 pursuant to the Energy Policy and Conservation Act of 2000, or EPCA. In the 2003 report, the agencies were only required to analyze actual stipulations placed on leases. 

However, the agencies were directed by the Energy Policy Act of 2005 to also consider conditions of approval on specific projects or permits that are not included as 

lease stipulations. The eleven areas inventoried in the 2006 study included six new 

oil and gas basins in Alaska, the Rocky Mountain West and the East, in addition 

to the five basins studied in 2003. The newly inventoried area is estimated to contain 187 trillion cubic feet of natural gas and 21 billion barrels of oil, which represents 76 percent of onshore Federal oil and gas resources. 

Within the 99 million acres inventoried, the 2006 study found that just 3 percent 

of onshore Federal oil and 13 percent of onshore Federal gas are accessible under 

standard lease terms, while 46 percent of onshore Federal oil and 60 percent of onshore Federal gas are subject to additional restrictions, including timing limitations 

for wildlife concerns, controlled surface use for cultural or other sensitive resources, 

as well as no surface occupancy which often renders the lease essentially useless. 

The study found that in the inventory areas, 51 percent of the oil and 27 percent 

of the natural gas reserves on federal lands are presently closed to leasing. These 

figures clearly demonstrate that while the oil and gas program is, indeed, a priority 

program for the agencies, the program is administered with overriding protection 

of other values. 

Conclusion: PLA urges that a balance between oil and gas exploration and development and the protection of the environment and other uses be maintained. Despite certain claims, in reality this has not yet occurred because only 3 percent of 

onshore Federal oil and 13 percent of onshore Federal gas are accessible under 

standard lease terms, while 46 percent of onshore Federal oil and 60 percent of onshore Federal gas are subject to additional restrictions, including timing limitations 

for wildlife concerns, controlled surface use for cultural or other sensitive resources, 

as well as no surface occupancy. Of greatest concern and according to BLM’s own 

figures, 51 percent of the estimated oil and 27 percent of the gas on Federal lands 

are presently closed to leasing. 

We acknowledge that the Federal government is following its multiple-use mandate from the Federal Land Policy and Management Act (FLPMA) by allowing oil 

and gas activities to occur. We strongly urge, however, that production of new oil 

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and gas supplies, along with protection of the environment and the interests of private landowners be better balanced for the sake of the country’s future. 

SPLIT ESTATE 

Surface owners and mineral owners are neighbors. Like many neighbors, they 

don’t always agree. However, it must be recognized that multiple state and federal 

agencies regulate the oil and gas industry. As such, laws and rules are in place to 

protect land, water, air, humans and wildlife. Suggestions that federal minerals are 

developed without this oversight are patently false. Implications that problems exist 

between all surface and mineral owners are equally false. Where conflicts do exist, 

they constitute a very small percentage of the overall activity. Legislators and regulators should analyze the true magnitude of a perceived problem before reacting. 

Existing federal mineral / private surface reclamation bonding requirements: 

• 43 CFR 3104—‘‘Prior to commencement of surface disturbing activities...an operator shall submit a surety or personal bond...to ensure compliance with the 

act, including complete and timely plugging of the well(s), and the restoration 

of any lands or surface waters adversely affected by lease operations after the 

abandonment or cessation of oil and gas operations on the lease(s)...’’

• 43 CFR 3104.2—‘‘A lease bond may be posted...in the amount of not less than 

$10,000 for each lease conditioned with all of the terms of the lease...’’

• 43 CFR 3104.3(a)—‘‘In lieu of lease bonds...operators may furnish a bond in an 

amount of not less than $25,000 covering all leases and operations in any one 

State.’’

• 43 CFR 3104.3(b)—‘‘In lieu of lease bonds or statewide bonds...operators may 

furnish a bond in an amount of not less than $150,000 covering all leases and 

operations nationwide...’’

In addition to posting a reclamation bond, the oil and gas industry is also required by regulation to make good faith efforts to gain consent from all surface owners who obtained their property in accordance with the Stock Raising Homestead 

Act before BLM will approve an APD. If permission cannot be obtained, operators 

must comply with certain bonding requirements before it can proceed with development, as required by 43 CFR 3814. 

The Department of Interior recently revised its Onshore Order No. 1 (OO#1) 

which clarifies the policy, procedures, and conditions for approving oil and gas operations on split estate lands. 

OO#1 directs that BLM will not consider an APD (Application for Permit to Drill) 

or SN (Sundry Notice) administratively or technically complete until the federal lessee or its operator certifies that an agreement with the surface owner exists, or until 

the lessee or its operator complies with bonding requirements under the Order. 

Compliance with the Order requires the Federal mineral lessee or its operator to 

enter into good-faith negotiations with the private surface owner to reach an agreement for the protection of surface resources and reclamation of the disturbed areas, 

or payment in lieu thereof, to compensate the surface owner for loss of crops and 

damages to tangible improvements, if any. 

Under the Stock Raising Homestead Act, there is a bonding requirement that has 

a $1,000 minimum at the discretion of the BLM officer to cover surface damages 

to tangible improvements or crops above and beyond the reclamation bond that is 

already in place. [43 CFR 3814] With this bonding mechanism and policy guidance 

in place, the process encourages landowners to negotiate with operators for acceptable surface damage payments verses the minimum bond. 

Oil and gas operators are required to work through an exhaustive process that 

includes surface owners and multi-agency consultations or approvals before development may occur. Additionally, the federal permitting process provides the private 

landowner with the opportunity to participate in an on site inspection of the well 

location in order to accommodate the landowner’s needs in conjunction with the federal decision to approve the well permit. 

BLM has a statutory obligation to maximize the recovery of federal minerals, 

avoid waste and prevent drainage from occurring while providing protection for 

other resources. 

Wyoming Split Estate Initiative 

The Wyoming Split Estate Initiative was established in the summer of 2002 with 

the purpose of developing protocols that both oil and gas operators and surface owners could use to minimize or alleviate conflicts, while fostering cooperation between 

the parties. The Initiative recognizes that Surface Use Agreements are a private 

contract between the landowner and the operator. 

The partners involved in the initial organization of the Wyoming Split Estate Initiative include: Petroleum Association of Wyoming, Wyoming Wool Growers AssociaVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00097 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
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tion, Wyoming Stock Growers Association, and the Wyoming Farm Bureau Federation. The United States Department of Agriculture Natural Resources Conservation 

Service (NRCS), Wyoming Association of Conservation Districts (WACD), and the 

Wyoming Oil and Gas Conservation Commission (WOGCC) instrumental in developing this Protocol. The Wyoming Department of Agriculture Natural Resource and 

Mediation Board also participated. The overriding goals of this effort include: 

• Minimizing or preventing conflict between landowners and operators while 

maximizing cooperation where oil and gas development occurs in areas of split 

ownership; 

• Enhancing and encouraging responsible development of minerals and continued 

agricultural productivity while maintaining and promoting land, water, air, and 

wildlife resources; 

• Providing a forum for conflict resolution. 

The Wyoming Split Estate Initiative is quite comprehensive and provides for public education and information regarding split estates where oil and gas development 

occurs; an advisory (technical review), mediation (if necessary), and binding/nonbinding arbitration process (if necessary); suggestions for improved communication 

between the landowner and operator; and options/alternatives to be considered by 

both parties during the Surface Use Agreement negotiations. 

The final Wyoming Split Estate Initiative and implementation of educational programs and presentations were set in place July 7, 2003. The Initiative has been very 

successful in assisting parties to reach a successful negotiation. The Wyoming Department of Agriculture and Natural Resources Mediation Program, which was the 

basis of the Wyoming Split Estate Initiative, was also included in the Wyoming Surface Owners Accommodation law that was recently passed. The legislature saw that 

program as being very beneficial to the parties to resolve conflict and has had an 

80 percent success ratio. 

New Mexico ‘‘Good Neighbor’’ Initiatives 

The New Mexico Oil and Gas Association and its members, working with the Petroleum Recovery Research Center at New Mexico Tech, established the Good 

Neighbor Initiatives which demonstrates their dedication to responsible development of New Mexico’s oil and gas resources. The Initiative acknowledges that responsible development includes good relationships with their neighbors and a commitment to environmental and human protection. NMOGA and member companies 

have pledged to be a ‘‘Good Neighbor’’ in the areas where they operate. 

This policy describes specific areas where industry actions as ‘‘good neighbors’’ are 

especially important, i.e., companies will listen to the landowner, lessee permittee, 

and/or resident concerns and respond appropriately; personnel (company employees 

and contractors) must respect rights-of-way; protect livestock/wildlife; drive safely; 

report damages to public/private property to the appropriate parties; assure mechanical integrity of production systems; and ensure that personnel know and understand the rules and regulations applicable to our operations. 

In order to achieve industry’s goals, a host of measures have been adopted: 

• Companies will strive to increase communication with the landowner, lessee, 

permittee and/or residents 

• Companies and company contractors will respect the property and the rights of 

others 

• Companies will promote public safety 

• Companies will promote the responsible maintenance and use of roads 

• Companies will protect the environment 

• Companies will emphasize education by educating our personnel about being a 

good neighbor 

• Companies will communicate with appropriate government officials, including 

city and county officials 

• The oil and gas industry will be proactive in building relationships with city, 

county, state and federal officials 

Adoption of these principles has significantly improved the working relationship 

between New Mexico oil and gas operators, land owners, and State and Federal government officials. 

It is important to note that other industry trade groups are working to adopt similar initiatives in their states as well as at the national level. Clearly, industry has 

taken the issue of working closely with its neighbors, landowners, and government 

officials very seriously, thereby advancing good relationships. To that end, industry 

is committed to ensuring private landowners are treated with respect and given opportunities to work with oil and gas operators in a meaningful way in order to eliminate possible conflicts. 

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Conclusion: BLM has done a good job of soliciting feedback from landowners and 

industry alike in order to determine how best to address the split estate issue. SplitEstate Open Houses were held throughout the country in order to comply with directives contained in the Energy Policy Act of 2005 that required studies to be conducted on Split Estate Rights and Responsibilities under Existing Mineral and Land 

Laws and Surface Owner Consent Provisions under SMCRA. Through the open 

houses and comments received BLM found that very few actual conflicts existed and 

that the current process has proven to work reasonably well. This is supported by 

the fact that out of the thousands of wells drilled on split-estate lands, there are 

fewer than 25 cases, according to BLM, where surface use agreements could not be 

reached and operators were required to post a bond in accordance with the provisions of the Stock Raising Homestead Act. 

As you can see, the energy industry has implemented several new programs 

whereby codes of conduct have been established to ensure improved relationships 

with private landowners. To date, these have proven successful. Moreover, some 

western states have passed (Wyoming and New Mexico) or are considering legislation to address perceived problems between surface owners and mineral operators. 

Therefore, PLA recommends that Congress let this issue be handled at the state 

level in accordance with the specific needs identified locally. 

CATEGORICAL EXCLUSIONS 

Categorical Exclusions represent one of three possible avenues for fulfilling the 

requirements of the National Environmental Policy Act, the other two being Environmental Assessments (EAs) and Environmental Impact Statements (EISs). Categorical Exclusions (CX) have been in use for many years and are defined at 40 CFR 

§ 1508.4: 

‘‘’Categorical exclusion’ means a category of actions which do not individually or cumulatively have a significant effect on the human environment 

and which have been found to have no such effect in procedures adopted by 

a Federal agency in implementation of these regulations (§ 1507.3) and for 

which, therefore, neither an environmental assessment nor an environmental 

impact statement is required....Any procedures under this section shall provide for extraordinary circumstances in which a normally excluded action 

may have a significant environmental effect.’’ [Emphasis Added] 

Congress decided in the Energy Policy Act of 2005 to establish three statutory 

CXs associated with drilling of wells. Following is a discussion of these CXs and why 

they are appropriate. 

1. Individual surface disturbances of less than 5 acres so long as the total surface 

disturbance on the lease is not greater than 150 acres and site-specific analysis 

in a document prepared pursuant to NEPA has been previously completed. 

Before a lease can be issued, a land use plan specifying what stipulations are required to protect sensitive resource values will have been completed. The drilling 

permit would have to conform to these requirements and abide by any other conditions imposed by the agency to protect additional resource values. This provision 

would expedite minor drilling and permitting in areas outside an existing field. If 

a well is within an existing field, it would have to conform to the field development 

analysis. 

2. Drilling an oil or gas well at a location or well pad site at which drilling has 

occurred previously within 5 years prior to the date of spudding the well. 

A site-specific analysis of a well location/site will have already been completed and 

approved and conditions already implemented. Therefore, it is wasteful and duplicative to conduct another analysis simply because the operator wants to drill another 

well from same pad, reenter the well bore or move the bore a few feet on the same 

pad. Even if additional wells would require a minor expansion (less than an acre) 

of the original pad, it will still result in much less disturbance than a brand new 

well pad. 

3. Drilling an oil or gas well within a developed field for which an approved land 

use plan or any environmental document prepared pursuant to NEPA analyzed 

such drilling as a reasonably foreseeable activity, so long as such plan or document was approved within 5 years prior to the date of spudding the well. 

A cumulative impacts analysis in association with a field development NEPA document would have already been completed and as long as the well(s) is in conformance with the development analysis and the operating requirements prescribed 

therein there is no need for further analysis. 

The Western Governors’ Association (WGA) passed a resolution urging Congress 

to amend Section 390 of the Act to ‘‘remove [the 3rd] categorical exclusion for NEPA 

reviews for exploration or development of oil and gas in wildlife corridors and crucial wildlife habitat on federal lands. By removing the categorical exclusion, approVerDate 0ct 09 2002 16:19 Oct 26, 2007 Jkt 098700 PO 00000 Frm 00099 Fmt 6633 Sfmt 6621 L:\DOCS\34983.TXT Hresour1 PsN: KATHY
94

priate environmental site analysis will be completed as necessary to protect crucial 

wildlife habitat and significant migration corridors in the field of development.’’

In addition, the WGA has asked the ‘‘Secretaries of Interior and Agriculture to 

consider placing a moratorium on such categorical exclusions in crucial habitat or 

migration corridors and to work collaboratively with the states to ensure that states’ 

concerns in preserving wildlife migration corridors and crucial wildlife habitats are 

met.’’

The criticism that this statutory CX bypasses adequate NEPA analyses in favor 

of oil and gas exploration and development at the expense of other resources is unfounded. Depending upon the CX that is applicable for a specific action, there must 

have been a NEPA analysis that addressed such an action as part of its reasonably 

foreseeable development scenario or full field development analysis. Moreover, multiple wells could be developed from a location that had already been approved 

through a NEPA review. 

Conclusion: PLA believes the concern of the WGA may be eased by an understanding of the process used by BLM to grant CXs. It is not, by any stretch, a tool 

that can be used to elevate oil and gas uses over and above other uses or a policy 

that well permits will be approved without proper consideration of surface resource 

values. No CX can be approved unless the action meets the test of NEPA adequacy. 

It must also be recognized that all lease stipulations, conditions of approval, and operating standards are still in force. Furthermore, most of the CXs that have been 

approved were based upon project level environmental documentation rather than 

resource management plans. Nevertheless, even in situations where the RMPs are 

the basis for granting an exclusion, careful, site-specific consideration of all resources, including wildlife, is given before the exclusion is granted. 

MONTANA/WYOMING WATER ISSUES 

My testimony this morning will focus on CBNG produced water in the Powder 

River Basin of Wyoming and Montana. Please do not infer my comments as being 

applicable to all oil and gas, especially CBNG produced water. CBNG produced 

water quality varies greatly throughout the producing basins in the United States. 

The quality of groundwater produced by coalbed natural gas operations has become a hotly debated issue among the public, State and Federal agencies, special 

interest groups and industry. As background, methane natural gas can be recovered 

from wells when groundwater contained in coal seams is pumped to the surface to 

reduce pressure allowing the gas to be recovered. Coalbed natural gas (CBNG) 

water is naturally-occurring groundwater; no chemicals or sodium are added to the 

water by drilling or production activities. 

According to studies conducted by independent researcher Schafer Limited LLC, 

using data supplied by the United States Geological Survey (USGS) and other agencies, the quality of Powder River Basin CBNG water is suitable for drinking, livestock, wildlife and crop irrigation uses. For example, water from coal seams is often 

used as drinking water because it is often of higher quality than other available 

water sources and meets primary Federal Safe Drinking Water Act and Montana 

Water Quality Act standards. Primary standards have been established for chemicals that may be harmful to public health. These standards consider the health effects of the chemicals as well as the feasibility of removing the harmful chemicals 

through treatment. There are other standards that apply to the esthetic value of 

water, i.e., taste, which does not mean the water isn’t suitable for domestic uses; 

one just may not enjoy drinking it. 

CBNG water, because of its low to moderate level of salinity, is either the same 

or better than many local water sources used for livestock operations. According to 

studies conducted by the National Academy of Sciences (NAS), CBNG water is appropriate for livestock use. In fact, in parts of southeast Montana, many surface waters contain such high concentrations of salt, that CBNG water is placed in storage 

ponds to provide a source of stock water for use by livestock operations. 

The quality of irrigation water presents a more complex situation because water 

suitability rests with the types of crops being grown, the soil type and irrigation 

methods. Crops differ in their ability to tolerate salinity levels and soils differ in 

their ability to tolerate sodicity levels. Most of the forage crops (alfalfa) grown in 

the Powder River Basin are tolerant to the salinity (±1500ppm TDS) of CBNG produced water The main factor when using CBNG produced water for irrigation is the 

permeability of the soil to be irrigated. Permeability must be high enough so the 

soil can be revitalized by using flood or sprinkler irrigation methods. Due to the 

sodicity of CBNG water, there is a high permeability hazard which limits its use 

on many soils. However, several managed irrigation sites using soils amendments 

such as gypsum (a form of calcium) are demonstrating that CBNG-produced water 

can be used for irrigation while protecting soil quality. 

95

With respect to protection of aquatic life, management opportunities exist where 

CBNG water is discharged into surface water. It must be noted that any such discharge must meet the requirements of the Federal Clean Water Act and the standards implemented by the Wyoming and Montana Departments of Environmental 

Quality, which require non-degradation of water in order to preserve it at its current levels. As such, concentrations of metals in produced water discharged into 

other waters are typically kept at levels that are lower than for personal drinking 

water. It is acknowledged that concern was raised by some researchers regarding 

the potential toxicity of bicarbonate ions in CBNG water that may be discharged 

into rivers. However, toxicity testing over time using CBNG water showed a much 

lower toxicity than was predicted by research models, indicating that discharge of 

CBNG water into Montana and Wyoming Rivers appears not to be harmful aquatic 

organisms. 

Tongue River 

There have been recent claims that CBNG discharge into the Tongue River has 

had a detrimental impact on the river’s water quality. This charge is unfounded. 

The USGS has been collecting daily streamflow data and periodic water quality 

samples at 12 monitoring sites, ranging from Monarch, WY (just north of Sheridan, 

WY) all the way up to Miles City, MT along the Tongue River since the early 1970s. 

These monitoring stations cover 7 mainstem sampling sites and 5 tributary sampling sites. The State of Montana and EPA have also conducted a major investigation of the Tongue, Powder and Rosebud Creek watershed as part of their Total 

Maximum Daily Load (TMDL) assessment program. As part of the assessment, a 

basin-wide predictive water quality model was developed for the Tongue River. The 

model uses climate data, land use and the quality and quantity of discharged water, 

including CBNG water. 

Results of these studies have found that the Tongue River above the T&Y Irrigation Diversion Dam where the CBNG development takes place is currently meeting 

water quality standards. In fact, it was found that even if all permitted discharges 

operated at their maximum allowable level (which rarely occurs) the River would 

continue to meet water quality standards established by both Federal and State 

laws. 

However, it has also been revealed that below the T&Y Irrigation Diversion Dam 

water quality standards are often exceeded during the irrigation season when nearly 

all the water in the Tongue River is diverted into the T&Y Canal. During this time, 

the water in the lower Tongue River is limited that that which is accumulated from 

localized groundwater inflows and irrigation return flow, which does not derive from 

CBNG water that was discharged above the T&Y Diversion Dam. 

Clearly this information demonstrates that the water quality of the Tongue River 

above the T&Y Diversion Dam was found unimpaired by CBNG development or any 

other use, while below the T&Y Diversion Dam impairment due to salinity and/or 

sodium exists and is caused by irrigation water uses. 

Additional data generated by the USGS Montana Water Science Center along the 

Tongue River Surface-Water-Quality Monitoring Network has also been collected 

through the Tongue River Agronomic Monitoring and Protection Program (AMPP) 

The AMPP study involved the identification of soil characteristics and the monitoring of soil quality and crop yields. The Study’s finding indicated that soils physical and chemical characteristics did not change as a result of CBNG development 

but rather, differences in crop yields were the result of farming practices. 

Conclusion: All water produced from CBNG must meet specific narrative and numeric standards. According to data and studies conducted by independent researchers as well as USGS Montana Water Science Center and EPA it has been shown 

unequivocally that CBNG water discharged into the Tongue River and its tributaries has had no impact on the water quality of the River. Rather, it appears water 

quality problems associated with the Tongue River are caused by farming and irrigation practices. In addition, many landowners in the Powder River Basin have 

found that CBNG water provides many beneficial uses, including drinking water, 

livestock water and irrigation when it is coupled with various treatments. Consequently, there is no need for Congress to consider legislative measures to fix a 

problem that does not exist. 

Thank you for this opportunity to provide you with testimony this morning. I will 

be happy to answer any questions. 

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PUBLIC LANDS ADVOCACY

10200 East Girard Avenue, Suite C-141, Denver CO 80231

Phone (303) 303-750-3333 * Cell 303-506-1153 * Fax (866) 718-2692

Email claire@publiclandsadvocacy.org 

May 24, 2007

The Honorable Jim Costa 

Chairman, Energy and Mineral Resources Subcommittee 

The Honorable Rau ́l M. Grijalva 

Chairman, National Parks, Forests and Public Lands Subcommittee 

Committee on Natural Resources 

The Honorable Stevan Pearce 

Ranking Member of the Energy and Minerals Subcommittee 

US House of Representatives 

Washington, DC 20515

Re: Response to Questions from April 26 Hearing, House Resources Joint Subcommittee on Parks, Forests and Public Lands and the Subcommittee on Energy and Mineral Resources Oversight Hearing on ‘‘Land-Use Issues Associated 

with Onshore Oil and Gas Leasing and Development’’

Dear Sirs:

Public Lands Advocacy (PLA) appreciated the opportunity to provide testimony 

before the Joint Subcommittee oversight hearing on ‘‘Land-Use Issues Associated 

with Onshore Oil and Gas Leasing and Development.’’ Following are answers to 

your post-hearing questions. 

1. What, in your opinion and previous experience, would be the effect of 

repealing Sec. 366 of EPAct 05 that require BLM be accountable to a 

timeframe for the processing of Applications of Permit to Drill? 

The 30-day approval time frame for Applications for Permit to Drill (APD) was 

part of a strategy by Congress to establish BLM accountability in the Federal oil 

and gas permitting process. Over the past decade, permit processing time frames 

slipped to a point where it would sometimes take the agency as long as 2 years to 

process a single APD, which led to a backlog of thousands of applications. Of note, 

many of these APDs were for in-fill development, i.e., new wells in existing fields 

for which the requirements of NEPA had already been met. As a result of the new 

time frame established in EPAct 2005, BLM has taken steps to monitor permit approvals to ensure they are acted upon in a timely manner. 

If Section 366 were repealed, it would mean domestic production of natural gas 

is not important to the Nation. Severe gas supply shortages would result, creating 

an even greater rift between supply and demand of the resource and higher prices 

for consumers. 

Production from traditional U.S. and Canadian basins is declining because these 

supplies are produced from mature fields. Therefore, it is crucial that new conventional and non-conventional sources of natural gas be developed, such as coalbed 

natural gas, tar sands and oil shale, on public lands. There are abundant North 

American natural gas resources in the Rocky Mountain region outside designated 

wilderness and national park-type lands that are presently closed to leasing which 

could play a key role in providing future natural gas supplies if Federal leasing and 

permitting processes are responsive to the need. Outside of leasing and development 

of new conventional and non-conventional resources, a key factor in meeting demand is to ensure permits are approved within a 30-day time frame, provided they 

meet the criteria of a complete APD and meet the environmental protection requirements established through land use and project level planning. 

2. As you know, oil and gas are a much sought after global commodity. 

With state-owned companies and the OPEC in control of a majority of 

the global market, do you feel the success of the federal leasing program 

at the BLM has national security implications? 

Yes. Although some new oil and gas fields have been discovered here in the US, 

energy demand has grown at a much higher rate than supply, which has caused 

us to become even more dependent on foreign imports of oil and natural gas. Also, 

there has been a shift from oil to gas because as a clean burning fuel, gas can replace oil in many of its traditional uses, such as home heating fuel, power generation, industrial use and, to limited extent, as a transportation fuel. However, the 

97

importance of bringing more natural gas to the North American market is crucial 

because in so doing future market volatility and fuel shortages can be diminished. 

Although the Rocky Mountain region is projected to contain nearly double the reserves of natural gas than both coasts and the Gulf of Mexico combined, many of 

these areas are off-limits to leasing. Since most sources of energy on private lands 

have already been discovered, it is crucial that we expand the search for new energy 

to Federal land. That is why the success of the BLM leasing program is of vital importance to the nation as a whole. For the U.S. to secure energy for our economy, 

government policies must create a level playing field for U.S. companies to ensure 

international competitiveness. The net effect of current U.S. policy serving to inhibit 

U.S. oil and gas production and to increase our reliance on imports is, in fact, a matter of national security. 

Questions from Minority Members 

1. Why do we have federal split estates? In a split estate situation, what is 

the dominant estate? Why? When one buys federal split estate lands, is 

that land conditioned? 

The United States government encouraged settlement and economic development 

of the West by reserving the mineral estate in land patents granted to homesteaders 

and others. This approach opened western lands for immediate agricultural and 

ranching development and reserved the mineral rights for later development. Split 

estate occurs when there are different owners of the mineral rights and surface 

rights. There may be federal mineral ownership with private surface or private mineral ownership with federal surface. 

The split-estate lands in question are those where the surface rights and mineral 

rights were severed under the terms of the Nation’s homesteading laws. These and 

other Federal laws give BLM explicit authority and direction for administering the 

development of Federal oil and natural gas resources beneath privately owned surface: • Coal Lands Acts of 1909 and 1910 • Agricultural Entry Act of 1914 • Stock Raising Homestead Act of 1916 • Mineral Leasing Act of 1920 and amendments • Federal Land Policy and Management Act of 1976

It is important to remember that split estate owners obtained their surface lands 

subject to development of the mineral estate. Established legal doctrine preserves 

the ‘‘dominance’’ of the mineral estate reflecting the fact that the mineral estate 

would have no value if the mineral owner did not enjoy access to the minerals 

through reasonable terms. This dominance extends to federal minerals where the 

revenue generated to the Federal Treasury exceeds billions of dollars annually. In 

fact, it is the policy of the Federal government to retain mineral rights only when 

it is determined that mineral potential exists. When private landowners purchase 

their land, they are notified of the split estate situation as required by law. 

While in some states disclosure to buyers of severed surface rights is required, 

disclosure of the severed mineral estate may not have been common practice by realtors or sellers in areas where such requirements do not exist. Therefore, situations 

have arisen where surface owners are unaware that the Federal government has retained the mineral rights and that reasonable access to explore for and develop 

those minerals is required by Federal law. 

Thousands of leases have been issued on America’s public lands for the purpose 

of providing clean burning natural gas supplies for the nation. Any efforts by the 

federal government to change existing split estate practices will impact the nation’s 

domestic natural gas supply by imposing unreasonable burdens on lessees of the 

mineral estate. 

2. Other witnesses in their testimony advocate for Mr. Udall’s H.R. 1180 

because it would ‘‘require reclamation of the site to support the same 

uses it was capable of supporting prior to development.’’ Isn’t is true 

that under BLM law, BLM requires ‘‘returning disturbed land as near to 

its pre-disturbed condition as is reasonable practical or as specified in 

the APD? Are these really different standards? 

According to Chapter 6 of the BLM’s Gold Book, Surface Operating Standards and 

Guidelines for Oil and Gas Exploration and Development, Fourth Edition, 2006, it 

is required that ‘‘at final abandonment, well locations, production facilities, and access roads must undergo ‘‘final’’ reclamation so that the character and productivity 

of the land and water are restored. Planning for reclamation prior to construction 

is critical to achieving successful reclamation in the future—The long-term objective 

of final reclamation is to set the course for eventual ecosystem restoration, including 

98

the restoration of the natural vegetation community, hydrology, and wildlife habitats. In most cases, this means returning the land to a condition approximating or 

equal to that which existed prior to the disturbance.’’ In order to ensure satisfactory 

reclamation, the Gold Book provides direction on the specific requirements that 

must be met, including a detailed Reclamation Plan that must accompany an APD 

that addresses:

• Plugging the Well 

• Pit Reclamation 

• Site Preparation and Re-vegetation 

• Pipeline and Flowline Reclamation 

• Well Site Reclamation 

• Road Reclamation 

• Reclamation of Associated Facilities 

• Water well conversion 

• Final Reclamation 

BLM ensures these requirements are met by conducting a thorough inspection before granting final abandonment approval. In the event agency requirements are not 

met, BLM will not release the liability bond for the project until established standards are met. 

Clearly, BLM’s enforcement authority to ensure reclamation is accomplished efficiently and appropriately is effective. No new legislative requirements are needed 

because extensive reclamation procedures and conditions are already in place. 

Thank you for affording PLA this opportunity to provide Congress with additional 

information and answers to your important questions. Please do not hesitate to contact me should you have additional questions or require further clarification. 

Sincerely,

Claire Moseley 

Mr. GRIJALVA. Thank you for your testimony. 

Mr. Muggli. 

STATEMENT OF ROGER MUGGLI,

NORTHERN PLAINS RESOURCE COUNCIL 

Mr. MUGGLI. Mr. Chairman, Members of the Subcommittee, 

thank you for the opportunity to testify here today. 

My name is Roger Muggli, and I am here to represent the 

Tongue and Yellowstone Irrigation District and it is located in Mile 

City, and in our district there is 9,400 acres of irrigated land and 

its water supply is from the Tongue River 12 miles south of Mile 

City, and it has been in existence since 1886. 

I am also representing my family farm, Muggli Brothers, Incorporated. I have been the chairman of this operation for the last 12 

years, and we have 1,700 acres of irrigated land in this district. 

We have also built a feed processing plant to process the hay produced on our farm, and mixed with grain we make a pelletized livestock feed, and we sell 14,000 tons of this feed in the local area in 

any given winter. 

I am also here representing Northern Plains Resource Council, a 

family agricultural group that organizes Montana citizens to protect water quality, family farms, and ranches, and the unique quality of life we love here in Montana. 

My grandfather came here to this valley in 1925 and bought his 

first farm, and he was also manager and secretary of the Tongue 

and Yellowstone Irrigation District, and sometime later bought a 

few more farms, and so did my father when he came on line, and 

he became manager and secretary of the Tongue and Yellowstone 

Irrigation District as well in about 1957, and I was elected to the 

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position in 1987, and the family has been actively involved in it for 

all of these years. 

I also recognized another problem we had was fish going into the 

canal, and I worked hard to come up with a plan to divert the fish 

from our irrigation canal back into the river. The 1987 date is 

when I started, and it came on line in 1999. 

I guess I am here today to talk about coalbed methane gas and 

its production, and how it is done. The first process is there is a 

main. The main thing about that is the pressure has to be released, 

and to release that pressure you have to pump the water out of the 

ground in great volumes. In the Powder River Basin, there is basically—the water is very good for people and animals to drink, but 

it is fatal for plants and aquatic life, and there are three major 

problems associated with the loss of groundwater. 

The first one is the loss of groundwater, and the groundwater, 

first of all, when you take that much out it amounts to about—in 

the Tongue River drainage, it is about 38,000 acre feet, which is 

enough for a population of 345,000 people, or 2.2 million head of 

cattle, and there is about 2.6 million head of cattle in the entire 

State of Montana. Also by pumping this water out, we don’t know 

how much water is in the aquifer, how it got there, and how long 

it has been there, and the draw down can go anywhere from 200 

to 600 feet, and it may take as long as 100 to 1,000 years for this 

water to recharge. 

The second major problem that is associated with this is for the 

ecosystem. The main constituents of this water are harmful to 

aquatic life, and sodium, magnesium, and calcium is the problem, 

and the fish population can—the reproductive part of it—the fish 

population is—will reduce it by 94 to 96 percent in some cases, and 

there are some endangered species in the river. 

One of them is the famed pallid sturgeon that is barely hanging 

on, and it is not even sure where they spawn in the Yellowstone 

River, but it is likely they do move up the Tongue River, and hopefully they will be able to use the bypass I am currently working 

on and hope in the next year will come on line that will allow the 

fish to move around the end of the 12-mile dam, and it is sort of 

unprecedented. You don’t see irrigators involved in fish-saving 

processes, but I have worked with this for 20 years, to try to make 

this a reality, and within the next year it will be, and I hope it isn’t 

for want because of quality of water. 

The third problem relative to water is soil and crops. The USDA, 

associated with the salinity lab in California, came and got a quarter ton sample of our dirt, and took it to California, and raised alfalfa in it, and the conclusion was after a two-year study that it 

was an SAR of two to four would significantly reduce the ability 

of the water to travel into the soil because of the clay content of 

the soil and the dispersion of the surface soil affected by sodium 

bicarbonate. 

And as the pictures show what has happened on my farm in the 

last few years since this process has come into practice, we are now 

this last winter, I am just finishing up with a year-end of our 

pelleting season as winter is over and there isn’t the demand for 

our feed, so it tapers off and we are just finished, about a third of 

my hay production is now gone, and CBM is the only factor that 

100

I can attribute it to. The fertilizer program is still the same, the 

rotation is still the same. We are still managing to do everything 

that we have the same except we have this clay soil and you can 

see from the pictures that the big spot in the foreground of that 

picture is mountain clay, and usually before this kind of a thing 

has happened was that we can raise 100-bushel barley on there, 

and we are about a 7 ton average on our alfalfa, so it is declining 

at a very rapid rate, and there is no other explanation, and scientific world views that at the rates that we are exposed to CBM 

water in the Tongue River, that we are going to take damages and 

I hope that something can be done to at least re-inject this water 

and put it back into the system so we are not affected by it, and 

just stop, simply stop wasting the water, and put the water back 

into the river. 

And Representatives Udall’s H.R. 1180 will require that oil and 

gas operators to replace damaged wells and require them to submit 

plans stating how they will protect the water quality and the quantity, and other resources. The Northern Plains——

Mr. GRIJALVA. Mr. Muggli, your whole statement will be part of 

the record, and so can we get onto the questions I am going to ask 

you to wrap it up as quickly as you can, and then I can move on 

to the last witness. 

Mr. MUGGLI. The Northern Plains Resource Council has been in 

existence and helped us with this situation, and they have been 

here for 30 years, and they intend to be here longer than CBM is 

going to be here, and I hope my family farm and irrigation can 

exist and still survive, but it is getting very doubtful. 

Thank you very much. 

[The prepared statement of Mr. Muggli follows:]

Statement of Roger Muggli, Manager, Tongue and

Yellowstone River Irrigation District, Miles City, Montana 

Mr. Chairmen and Members of the Subcommittees, thank you for the opportunity 

to testify today. My name is Roger Muggli. I am here today representing the Tongue 

and Yellowstone River Irrigation District, located in and around Miles City, Montana. This district consists of 9,400 acres of land that is irrigated with water diverted from the Tongue River, twelve miles south of Miles City. 

I am also representing my family farm, Muggli Brothers Inc. I have been chairman of this operation for the past 12 years. The farm has 1,700 acres irrigated from 

the T&Y canal. We have also built a livestock feed plant that processes 14,000 tons 

of pellet type feed from alfalfa, barley, wheat, field peas, and corn for horse and cattle winter feed. 

I am also representing Northern Plains Resource Council, a conservation and family agriculture group that organizes Montana citizens to protect water quality, family farms and ranches, and the unique quality of life we love in Montana. 

I have lived in the Yellowstone River Valley near Miles City all my life. My 

grandfather, Joseph Muggli, came here in 1925 and bought a 120-acre farm. In 

1930, he bought another farm that consists of 400 acres. In 1932, he became active 

in the T&Y Irrigation District and was elected to the secretary/manager position. 

He was also one of the authors of the 1950 Yellowstone River Compact, which defines the percentage of water from the Yellowstone’s tributaries that will go to 

North Dakota, Wyoming, and Montana. This document was hard fought. In 15 

years, two commissions failed to reach the goal that was finally achieved when the 

compact was signed in 1950. 

My father, Don Muggli, was elected secretary/manager in 1957 and served for 

many years as in this position. My father and grandfather had great engineering 

minds and built and rebuilt many structures on the canal system, such as flumes, 

siphons, and canal checks (water stops). 

Many discussions I listened to as a kid between my father and grandfather centered around water quality and the effects of salts on crops and soil. They worried 

101

me so much that I wondered if the farm could survive until I was old enough to 

have a shot at managing it and the Irrigation District. I am much older now and 

have a better understanding of soils and water related salts and some of the terminology that goes with all of this. I have come to realize that my father and grandfather were right about the threat of salts and the impacts they have on the soils. 

Everyone who’s lived in the Powder River Basin for long knows not to water their 

lawn with groundwater, much less use it on their crops. 

At the age of five I was lucky enough to go with my grandfather some eighteen 

miles south of our farm to the diversion dam up on the Tongue River and check 

on all the related structures along the way. From then on, whether I was with my 

dad or grandpa, it was a learning experience. I had the privilege of going to the 

many fields on our farm that were flood irrigated from the big canal. I could run 

around and gather up the fish that entered the canal at the diversion dam and 

make a dash on my bicycle for the Yellowstone River to release them, sparing them 

from death in the field. As I got older, I tried to come up with several plans to somehow save the fish. The only plan I came with was to screen them from the canal 

in the first place. 

As time passed, I came to have a burning need to do something positive for the 

fish that ended up in our fields. Actually doing something was difficult, as my father 

did not think saving the fish was worth the cost. In fact, nobody in the irrigation 

district really supported this idea. Everyone was afraid of the additional expense. 

In 1987, I was elected manager of the T&Y. By then I had concept plans in hand 

and talked to every agency and organization I could find. From time to time, I would 

take a bucket with a few catfish or smallmouth bass, sauger or whatever the catch 

of the day was to the Fish and Game office and show them. Finally, they agreed 

there was a problem. 

More time went by, months turned into years, and in 1999 we had completed a 

new inlet structure complete with a 90-foot fish louver, a fish bypass flume that will 

let the fish back into the river below the dam. The final stage of the project will 

be completed this year. 

After all of this blood, sweat, and tears, after all the efforts we have made to 

make irrigation and the fish conservation compatible, we could lose both to decreased water quality from the discharge of wastewater from coal bed methane development in the Powder River Basin. 

All for a short-term industry that is projected to be around for 20-30 years. 

Coal bed methane is a gas trapped under water in coal seams. In order to extract 

this resource, developers must release the pressure from the coal seam by pumping 

massive quantities of water to the surface. In the Powder River Basin, the water 

from this process is safe for consumption by livestock and as drinking water, but 

creates a disaster for plants and aquatic life. The three problems associated with 

pumping this volume of water are the loss of the groundwater, the damage to the 

aquatic life and the damage to irrigated soils and crops. 

Mr. Chairmen, in each of these areas, scientists independent of the CBM industry 

and the BLM have predicted that damages from produced water will be more widespread and more extreme than either the industry or the BLM will acknowledge. 

And, in each of these areas, the predictions of these independent scientists are being 

borne out. 

First, groundwater. To put the quantity of water that we are addressing in perspective, the amount of groundwater currently discharged in the Powder River 

Basin from coal bed methane extraction is 38,339 acre-feet of water/year. This is 

enough water to sustain 345,000 people or more than 2.2 million head of cattle. This 

is well over a third of the population in Montana or 60% of the population of Washington, DC. And there are 2.6 million head of cattle in the entire state of Montana. 

Pumping this quantity of water will drain aquifers used for drinking and stock 

water by 240 to 600 feet, with recharge taking over 100 years and possibly as long 

as1000 years. We really don’t know how long it will take, but we do know that it 

will dry up valuable springs and wells. This water could be reinjected, but instead 

most of it is being dumped on the land or sent down the river never to be used 

again. 

The second major problem with CBM produced water is the impact it can have 

on aquatic ecosystems. The main constituents of the wastewater that are harmful 

to aquatic life are sodium, magnesium and calcium. Studies have shown that an increase of these constituents our rivers will reduce reproductive rates of fish by as 

much as 94 to 96%. A recently released U.S. Fish and Wildlife Service study found 

that excessive levels of these contaminants in water and tissue samples taken from 

fish and birds in the Powder River—levels associated with increases in deformities 

and reproductive damage. The fish cannot sustain this level of contamination. Entire species could be wiped out by this change in water chemistry. 

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The third major problem associated with CBM produced water is its impacts on 

soil and crops. The majority of the soils on my farm and in the T & Y Irrigation 

District are largely made up of clay. Last June, a study sponsored by the EPA and 

conducted by the USDA’s Salinity Lab of soil samples from our farm concluded that 

increased sodium, magnesium, and calcium imbalance would drastically lower the 

infiltration rate of water and air to the soil, limiting soil productivity and plant 

growth. In other words, discharges of CBM water into the Tongue River will ruin 

much of the soil located in my irrigation district, making our farms less productive. 

Once again, we are seeing on the ground what independent scientists have predicted would occur. Last August, I irrigated 320 acres of my farm with water from 

the Tongue River. In September, there were several rain events which created an 

imbalance of sodium, calcium and magnesium in the soil and caused a dispersion 

of the clay particles. The rain was the trigger for a chemical reaction that caused 

the alfalfa on my field to turn yellow in some areas and killed the crop in others—

the exact situation predicted in the Salinity Lab Report. In last year’s growing season, production from our farm was off by one-third. Increased discharges of CBM 

water is the only factor that could have caused this loss. You can see why farmers 

in our region feel that agriculture is threatened by this industry. 

There is hope, however, especially in Montana, where development is still just beginning. How big these problems become will depend on how rapidly coal bed methane production occurs and how the produced water is managed. There’s hope if they 

will slow down and do it right. 

What we’re asking for is relatively straightforward—stop wasting water and every 

single one of the problems I’ve talked about will be minimized. 

Treat it and reinject it. If that truly cannot be done, put it to a true beneficial 

use. The industry is doing this in New Mexico and we’ve shown that this approach 

is technically and financially feasible in the Powder River Basin. 

Mr. Chairmen, your subcommittees can help protect the livelihoods of those who 

farm, ranch, and irrigate in Southeastern Montana by ensuring that necessary safeguards are put into place before more development occurs. You can help by passing 

Representative Udall’s H.R. 1180. Require oil and gas operators to replace damaged 

wells. Require them to submit plans stating how they will protect water quality and 

quantity, and other resources. 

I urge you to go further. Require the industry to treat and reinject produced water 

and, if they can’t, require them to put the water to a true beneficial use—not try 

to irrigate with it and not discharge it onto our land or into our rivers. 

Finally, it’s time to replace the self-recording and self-reporting with more government monitoring and enforcement. Last summer, samples from the Tongue River 

concluded that the discharges from coal bed methane increased the salinity of the 

river and exceeded Montana’s new water quality standards for three months. This 

was brought to the attention of the Montana Department of Environmental Quality, 

but little was done to enforce the violation that had taken place. As a taxpayer and 

Montanan, I demand more from my government agencies to protect my interests. 

This industry self monitoring and reporting is blatantly irresponsible and is an indication of a broken system. 

Mr. Chairmen, the Northern Plains Resource Council has been in existence for 

over 30 years, and has every intention of being here long after the CBM industry 

is gone. I’d like my family to be here too, farming and managing the T&Y Irrigation 

District. And, I’d like the fish I’ve spent all of my life trying to restore to the Tongue 

River to be here too. We have never been opposed to coal bed methane development, 

but they must do it right. 

Thank you again for the opportunity to testify. 

Mr. GRIJALVA. Thank you. Thank you for traveling this far. Appreciate your testimony very much. 

Ms. Utesch. Did I get that right? 

Ms. UTESCH. Yes, you did. 

Mr. GRIJALVA. Oh, good. 

STATEMENT OF PEGGY UTESCH, WESTERN ORGANIZATION OF 

RESOURCE COUNCILS & WESTERN COLORADO CONGRESS 

Ms. UTESCH. Thank you for the opportunity to testify today. 

My name is Peggy Utesch, and I have lived with natural gas 

drilling at my front door for four years, during which time I have 

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worked hard on a number of projects aimed at systems improvements. I am here today representing the Western Organization of 

Resource Councils and Western Colorado Congress. 

Before I begin my remarks, I would like to make a couple of unplanned comments. So many times and a lot of the testimony that 

we have heard here today tries to paint people like myself and the 

other panelists that we have heard testify today are having problems with the gas industry as obstructionists. They try to make 

this issue black and white, and it is not black and white. 

I am a landowner who lost my livelihood and my home to gas 

drilling. Am I against energy development? No. I am for energy development. I understand that it is an important thing for this country. I understand that it is an important concept that we are embracing in terms of national security. I am not against energy development. 

The statement was made early on today that the natural resources of the West belong to the nation. I would agree with that 

statement. What does not belong to the Nation is the ability of 

ranchers and farmers to make a living on their land from people 

who own the surface to co-exist, and that is what I am here talking 

about today. 

The Rocky Mountain West is experiencing an unprecedented 

scale of natural gas development, facilitated by Federal tax breaks, 

reduced regulation, and BLM directives to issue more permits faster. Mr. Chairman, I am here today to tell you that that production 

has come at a great cost. Two specific issues come to mind that I 

would like to discuss—reclamation bonding and inspection oversight. 

The state and Federal bonding and reclamation system has not 

changed since 1960, yet the industry has changed dramatically. 

During the last 10 years, well pad spacing in Colorado where I live 

has gone from one pad per square mile, one pad per 640 acres, 

down to one pad per 10 acres. That is a huge change. 

The current bonding system allows operators to post state and 

national blanket bonds, whether they drill three wells or 3,000 

wells. Unlike bonds for coal and hard rock mining industry, the 

BLM does not require oil and gas operators to cover the true cost 

of reclamation. 

In 2005, a professional engineering firm, Kuipers and Associates, 

which does reclamation work with the hard rock mining industry, 

invented the bonding system that is in place for natural gas. In 

Colorado, in 2005, EnCana Oil and Gas had 3,652 wells under a 

blanket bond of $235,000. That works out to $64 per well. In Montana, Fidelity Exploration and Production had a bond that totaled 

$473 per well, and in Wyoming seven operators had bonds that 

provided only $75 per well. How can we believe that reclamation 

can be accomplished with these insignificant amounts? 

In 2004, the BLM and the State of Wyoming estimated that it 

will cost $4 million to reclaim 120 abandoned well sites, and I want 

to point out to you those are sites that were drilled within the last 

four years. We are not talking about historic wells that were drilled 

in the twenties and thirties. 

The state’s blanket bond of $125,000 was insufficient, so the Wyoming Conservation Fund had to contribute $2.6 million. That 

104

leaves $1.4 million in clean up costs with only a $25,000 Federal 

blanket bond to cover the work. 

We are looking at the tip of an iceberg called taxpayer liability 

if this problem is not addressed. Here is what the Western Organization of Resource Councils recommends: 

Require site-specific reclamation plans; improve the performance 

standards for oil and gas operators to be consistent with the coal 

and hard rock mining industries; and base bond amounts on professional engineering estimates; abolish or update the blanket bond 

system; require that reclamation plans and bond amounts be reviewed and updated annually; and I would urge this Subcommittee 

and the committee as a whole to work hard to pass Representative 

Udall’s bill, H.R. 1180. 

Also in need of updating is the inspection and enforcement system. The Western Organization of Resource Councils did a 2005 report that looked into this particular system titled ‘‘Law and Order 

in the Gas Fields.’’ These were the findings: 

The Bureau of Land Management inspection system improvements targeted production, not environmental compliance. The 

number of inspectors has not increased to reflect almost a yearly 

doubling of drilling activities in many states. In 2003, environmental compliance inspectors only spent 15 percent of their time 

doing environmental inspections. Of the six BLM offices that were 

studied, they oversaw 79 percent of the active gas wells but they 

only employed 26 percent of the inspection staff. And based on 

2003 staffing levels, environmental compliance inspections were 

only completed every four to 49 years. 

The pictures that you see scrolling are pictures that were taken 

within a five-mile radius of my home, and I can tell you that there 

are incidents and violations on every well pad that you see in those 

pictures. We need environmental inspections on a more regular 

basis, at least once a year, not once every 50 years. 

While the number of inspectors and inspection activities has increased significantly since 2003, the BLM has not provided the 

hard data that the Western Organization of Resource Councils has 

requested under FOIA. We do not yet know, for example, how 

many environmental inspections are being conducted. We have 

been given a number of inspections as a whole, but we don’t know 

the percentage of environmental versus production. 

What can we do to make the system better? Increase environmental inspection staff, fill all newly created positions, develop 

standardized compliance check lists, repeal the 30-day permitting 

time frame that was set in Section 366 of the Energy Policy Act, 

and don’t rely on industry self-reporting as an enforcement 

strategy. 

Consumers are being hit hard by rising energy prices. Please 

don’t make us pay a second time with a broken regulatory system. 

Thank you for your time, and I appreciate the opportunity to 

testify. 

[The prepared statement of Ms. Utesch follows:]

Statement of Peggy Utesch, Western Organization of

Resource Councils and Western Colorado Congress 

My name is Peggy Utesch. I am a Colorado landowner who lived for four years 

in and around natural gas drilling in the Piceance Basin. During that time, I 

105

worked hard to expose illegal and unethical industry practices, with the intention 

of improving the system. In 2005, I spearheaded a collaborative project that brought 

a drilling company together with a rural community. The resulting agreement—

called the Rifle, Silt, New Castle Community Development Plan—has been endorsed 

by Senator Ken Salazar as a new model for how industry and communities can work 

together. 

I am here today representing the Western Organization of Resource Councils 

(WORC) and the Western Colorado Congress, two non-profit organizations that have 

worked proactively for responsible energy development in the West for nearly 30 

years. WORC is a network of grassroots organizations from seven western states 

that include 9,700 members and 44 local community groups. About a third of 

WORC’s members are family farmers and ranchers, many of whom are directly impacted by oil and gas development. Western Colorado Congress is an alliance for 

community action made up of eight chapters and over 3,200 members on the Western Slope of Colorado. 

The Rocky Mountain West has become the nation’s new center for natural gas 

production. The scale of development is unprecedented, with the number of wells 

being drilled doubling annually in some areas. This energy boom affects public and 

private lands; water, soil and air quality; agriculture, quality of life; property values; 

wildlife habitat; local economies and health. 

Congress and the Bush Administration have facilitated this boom by offering 

energy companies tax breaks, easing regulations and directing the Bureau of Land 

Management (BLM) to issue more permits at a faster pace. Although industry complained a few years ago that the permitting process was too slow, they now sit on 

more leases than they can drill with a year’s time. 

Mr. Chairmen, I’m here to tell you that this emphasis on production has come 

at a great cost. It undermines the BLM’s inspection and enforcement responsibilities 

and sends the message that drilling should not be slowed for any reason and human 

beings are simply collateral damage. Taking the time to listen to substantive public 

concerns, mitigate drilling impacts and ensure that we have enough inspectors and 

an adequate bonding system are viewed by the current system as unacceptable 

delays. 

In this climate, the industry has no incentive to operate responsibly and, to no 

one’s surprise, it is not doing so. I know. In Garfield County, where I life, there are 

over 50 drilling rigs operating full-time. Over 18,000 wells were permitted in 2006 

alone. Within three years, more than 30 natural gas wells were drilled within a mile 

of my home, and I lived with the consequences of an oversight system that is inadequate. The single largest accident in Colorado history, happened three miles from 

my home. Due to faulty well-bore cementing, 115 million cubic feet of gas were released underground. The gas leaked to the surface and sickened ranch families and 

livestock, as well as contaminating water wells and West Divide Creek. The accident 

could have been prevented. 

Today I’m here to outline specific problems and propose solutions in two areas: 

1) reclamation bonding; and 

2) oversight inspections. 

The state and federal bonding and reclamation systems have not changed since 

1960, even though gas production has changed significantly. During the last 45 

years, well pad spacing has been reduced from one well pad per 640 acres to one 

per ten acres in some areas, and the rise of coal bed methane development has 

brought impacts on a scale that was previously unimaginable. Twelve to fifteen 

years ago, some of the technologies that are making this boom possible didn’t even 

exist. 

The current bonding system allows operators to post state or national blanket 

bonds that cover their operations whether they drill 30 wells or 3,000. The minimum federal bond amounts are $10,000 per lease, $25,000 covering all of a company’s leases statewide, or $150,000 covering all of a company’s leases nationwide. 

Although the BLM has the authority to require higher bonds, they rarely do, and 

still in those cases, the amounts fall far short of the what is necessary to repair 

the unprecedented level of disturbance we are seeing on the ground today. Unlike 

coal and hard rock mining industry bonds, the BLM does not require bonding at the 

true cost of reclamation for oil and gas operators. 

In 2005 WORC asked the professional engineering firm of Kuipers and Associates 

to investigate the adequacy of the bonding and reclamation system. The findings are 

contained in a report called ‘‘Filling the Gaps.’’ In general, it was found that land 

management agencies are not balancing booming energy development with protecting taxpayers, landowners, local economies and natural resources: 

1. In Colorado in 2005, EnCana Oil and Gas had 3,652 wells covered by federal 

bonds of $300,000 and a state bond of $235,000, or $146 per well. 

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2. In Montana, Fidelity Exploration and Production Company operated 571 wells under a federal blanket bond of $220,000 or $736 per well. 

How can we believe that removal of equipment, re-vegetation of drilling sites and 

reclamation of roads and pipeline corridors can be accomplished for these insignificant amounts? Environmental engineers have estimated the bond shortfalls for 

these projects and others amount to hundreds of thousands at each site, and in 

some cases several million. 

The BLM and the State of Wyoming estimated in 2004 that it will cost $4 million 

dollars to reclaim 120 well sites that were abandoned by Emerald Restoration and 

Production in 2001. The state’s blanket bond of $125,000 didn’t begin to touch the 

actual cost. The Wyoming Conservation Fund contributed $2.6 million dollars to 

fund the state of Wyoming’s share of this reclamation effort. For the 64 wells on 

federal land that will cost an estimated $1.4 million to clean up, the only funding 

available is the $25,000 federal bond. The rest will be paid by taxpayers or the 

cleanup will not happen. 

We are looking at the tip of an iceberg called taxpayer liability if this problem 

is not addressed. Under the current administration, the Department of Interior has 

refused to finalize a rulemaking effort begun during the Clinton Administration that 

would have raised the minimum bond amounts and have also rejected a rulemaking 

initiative proposed by WORC. 

If the federal oil and gas bonding program is going to be fixed in the next few 

years, Congress will have to do it. Here is what WORC recommends: • Require site-specific reclamation plans; • Improve the reclamation performance standards for the oil and gas industry to 

be consistent with other extractive industries, such as coal; • Abolish or substantively update the blanket bond system; • Base financial assurance on estimates from professional engineers and cover the 

full cost of reclamation; and • Require that reclamation plans and bond amounts be reviewed and updated 

annually. 

Passing Representative Udall’s bill, H.R. 1180, would be a great first step toward 

meeting these goals. 

Also in need of updating is the inspection and enforcement system, which is 

under-staffed and outdated, as documented by WORC’s 2005 report called ‘‘Law and 

Order in the Oil and Gas Fields.’’ The report finds that: 

1. The BLM has made improvements to its Inspection and Enforcement program 

since 1998, but those improvements have targeted production rather than environmental compliance inspections; 

2. The number of BLM inspections had not significantly increased while drilling 

activities have exploded—more than doubling in some states each year from 

FY2000 to FY2003; 

3. In 2003, environmental compliance inspectors spend an average of only 15% of 

their time completing inspection and enforcement activities, in large part 

because they were being diverted to permitting activities; 

4. The 6 BLM Offices studied were responsible for 79% of active oil and gas wells 

on BLM lands nationwide in 2003, yet they only employed 26% of all inspection 

staff; and 

5. Based on 2003 staffing and inspection levels, BLM inspectors inspect active 

wells only once every 2-10 years on average. Environmental compliance inspections are only completed every 4-49 years on average. 

While the number of inspectors and inspection activities has increased significantly since 2003, the BLM has not provided the hard data requested by WORC 

under the Freedom of Information Act on this issue. We do not yet know, for example, whether the inspections being conducted are environmental compliance inspections or production inspections, and we have not verified whether they are keeping 

up with the continuing explosive increases in the number of wells. In Colorado 

where I live, several of the BLM’s newly created environmental inspection positions 

remain unfilled, while additional staff positions to facilitate permitting were hired 

immediately. 

What can we do to make it better? For starters, I urge members of these Subcommittees, in particular, to closely watch what BLM is doing on inspections and 

enforcement and ensure that environmental compliance is getting the long-overdue 

resources and attention that are so greatly needed. We also recommend: 

1. Increasing inspection staff to keep pace with the rapid growth of the industry; 

2. Filling newly created positions; 

3. Don’t rely on industry self-reporting as a compliance strategy; 

4. Requiring regular reviews of environmental inspection programs for accuracy 

and adequacy; 

107

5. Developing standardized compliance checklists; and 

6. Repealing the 30-day permitting timeframe in Section 366 of the Energy Policy 

Act. 

In closing, consumers are getting hit hard by rising energy prices. Don’t make 

them pay again as taxpayers for the failures of an outdated regulatory system. 

Throughout its history, Colorado has been through resource booms that have left 

us with a legacy of scarred landscapes, polluted streams and a tax burden for future 

generations to clean up the mess. If we are to avoid repeating this history, the federal government must play an active role in protecting our environment while permitting the extraction of resources that are so vital to our nation. The choice you 

are making is not for a safe and clean environment or energy extraction. We can 

and should have both. 

Thank you for your time and the opportunity to testify. 

Mr. GRIJALVA. Thank you very much. Let me at the outset thank 

all the panelists. Your comments and testimony are very much appreciated. 

Let me begin my round of questioning with Ms. Moseley. There 

is a reference to the 1977 Surface Mining Control and Reclamation 

Act. Under that Act, surface owners over Federal coal deposits 

must give written consent to surface mining operations before that 

Federal coal can be leased, and no harm has been done. 

On the contrary, I think that the coal industry in the West has 

thrived and there has been no harm as a consequence of this provision, in my estimation, despite the predictions to the contrary at 

the time from representatives of the western coal industry. 

Having said that, do you think surface owners over Federal oil 

and gas deposits deserve that same consent right that surface owners over coal deposits now have under the 1977 law? 

Ms. MOSELEY. Thanks for that question. 

No, I do not believe that they deserve the same rights. The difference between a coal mine and an oil or gas well are so magnificently different. The impacts are completely different. They are 

shorter in term. I don’t think that it is necessary for surface owner 

consent to be applied to oil and gas. 

Mr. GRIJALVA. As we go through this process in the full committee, that is a contradiction in process that is going to have to 

be looked at. In one hand there is a consent required; on the other 

hand there isn’t. I think at the very minimum that needs to be well 

debated. 

Ms. MOSELEY. Mr. Chairman, I know that BLM has taken a look 

at that, and they provided a report to Congress on that specific 

issue. 

Mr. GRIJALVA. OK. 

Ms. MOSELEY. It was one of the split estate reports that they did. 

Mr. GRIJALVA. Let me follow up with one more, then I have a 

couple for some of the other witnesses. 

Ms. Utesch, in her testimony, talked about the cost to reclaim a 

gas well, and then the example I am going to use is Delta County, 

Colorado, where that energy corporation has posted a $25,000 bond 

to cover all the wells in the state, and I think it is between 400 

and 500 wells on Federal land. 

Do you think a bond of at the most $63 per well is adequate? 

Ms. MOSELEY. I don’t think that is the purpose of the bond, Mr. 

Chairman. The purpose of a bond is to make a company aware that 

it has legal responsibilities to reclaim its property. It is sort of an 

108

insurance policy. It is not intended to cover the actual amount of 

the reclamation procedure. Just like with car insurance, you don’t 

pay to have your car fixed, you know, every month that you pay. 

Mr. GRIJALVA. I know that——

Ms. MOSELEY. Go ahead. 

Mr. GRIJALVA. I know, but using the analogy of an insurance 

company, it is a heck of a deductible for the taxpayer, isn’t it? 

Ms. MOSELEY. I don’t believe so, Mr. Chairman. I think that the 

companies are held to those bonds. They cannot have their bond released until they have met the criteria established by BLM for reclamation procedures. 

Mr. GRIJALVA. Thank you. 

Mr. Muggli, thank you again for your testimony. We have heard 

from several Montana ranchers who are using produced water for 

their livestock, and want to continue to do so. Can you talk a little 

bit about that? 

Mr. MUGGLI. Mr. Chairman, Members of the Committee, yes, I 

can address that. 

We have never felt that they should not be able to use the water 

for reasonable watering of livestock and human consumption, and 

that is what the water is there for, and that is why I want the 

water to remain there, not pumping out thousands of times more 

water than what ranch communities or ranch households and their 

livestock can use, and that it is the real problem to pump out that 

much extra water, and it would not be a problem for us if that is 

what they were using. That is what that water is there intended 

for is stock water. We have never limited that because that is the 

type of water, the same water that I have in my well at my house 

is that same type of water. It has got sodium bicarbonate in it, but 

you just flat can’t irrigate with it. 

Mr. GRIJALVA. Thank you. 

Mr. Pearce. 

Mr. PEARCE. Thank you, Mr. Chairman. 

Ms. Moseley, if we were going to consider—we heard from Mr. 

Muggli that there were three conditions that really were problematic and those made sense to me, but where he was making the observation that the only thing he could attribute the loss of crop to 

was coalbed methane water. 

You seem to be familiar. Are you familiar with any of the USGS 

studies, or who else might be doing studies? 

In other words, I know in New Mexico they measure the water 

at different increments, and we have measuring points to see 

where problems occur. Tell me a little bit about that, if you would. 

Ms. MOSELEY. It is my understanding that the USGS has been 

monitoring the water quality in the Tongue River since the early 

1970s. They have several points in which they monitor, and as a 

result of the coalbed natural gas development, they have found no 

change in the water composition. That is what I found on their 

website. 

Mr. PEARCE. So they have points at which they measure. Is there 

a point at which they do begin to find problems? 

Ms. MOSELEY. Well, it is my understanding that once the water 

has been drained out of the river through the T&Y Diversion Dam, 

that the water that comes back out into the river has problems 

109

with water quality. But the water that goes into the diversion dam 

does not have the problem. When the water comes out, it does. 

Mr. PEARCE. And that is what I understand also. That both EPA, 

which I have not found to be a pushover in water quality issues, 

we deal with them a lot in New Mexico, and in fact we have a couple of cities that re-inject their sewage back in, and the EPA is 

checking them, and they have to be at zero parts per million TDS. 

So I tend to believe that if they say they have checked the water 

along a run and it is clear until it gets to the diversion for irrigation, then it might be that this water is picking up things in the 

irrigation process, because I know in New Mexico we have a lot of 

water that is just pulled off of the Rio Grande, and then it is 

pushed back into the Rio Grande, and it simply percolates down 

through the soil, so I see that as being a possibility. 

Now, you are somewhat familiar with the split estate question. 

The idea that we would—I think you heard from Mr. Adami that 

we would want to let split estate lapse, maybe after 15 years, that 

the mineral estate would go back to the landowner. How much 

would that cost the Federal government? A lot or a little? 

Ms. MOSELEY. Well, let us put it this way. When the lands were 

homesteaded back in the 1800s, the Federal government reserved 

the mineral rights for those lands because it was a significant 

source of revenue for the Federal government, and as it states 

today mineral development is second only to the IRS in revenue 

generation. 

So from their standpoint, they did the right thing by withholding 

the minerals from the surface owner. They were able to get the 

lands homesteaded and had crops put on them at the expense of—

not at the expense, but in a hurry, and then they reserved the mineral rights for later use. 

Mr. PEARCE. So it was economic to the IRS, so we wouldn’t need 

to pay go for this provision, we would need a pay went. 

Ms. MOSELEY. I think it would be a problem, sir. 

Mr. PEARCE. OK. On the whole idea of the split estate, what production do people like Mr. Adami have? In other words, he is going 

to buy a ranch, and is it just kind of slid under the table that it 

is a split estate? What notification, what right does he have to understand that there minerals aren’t attached to that land? 

Ms. MOSELEY. You know, it is interesting that you ask that 

because I have bought three houses and every time I have bought 

a house I have looked to see who owns the minerals. Now, maybe 

it is because I work for the mineral industry, but even before I did 

I always looked, and I think that it is part of the record that is involved, and I would recommend that people take a look at that to 

see if——

Mr. PEARCE. So you are saying it is on the deed or whatever 

piece of legal——

Ms. MOSELEY. Yes. Yes. 

Mr. PEARCE. So it is not like people wake up one day and there 

is a knock at the door, hey, we own your mineral rights. It is in 

fact right there on a piece of paper. 

Ms. MOSELEY. Well, it is made public. 

Mr. PEARCE. But it is on the deed also. 

Ms. MOSELEY. Whether people look at it or not is another story. 

110

Mr. PEARCE. I have a couple more rounds of questions, but I will 

yield back. 

Mr. GRIJALVA. Thank you, and let me wrap up my turn. To begin 

with let me ask you, Mr. Muggli, how do you respond to the comments that Ms. Moseley just made about water quality data that 

she says was posted on the USGS website? 

Mr. MUGGLI. Water quality data posted on that website is rounded numbers, and if you go to the true side, it is a very long process 

to do so, it is rounded off to the nearest one percentage point. And 

if you go to some different location on there and get the numbers, 

we have taken a 44 percent increase in sodium adsorption ratio 

numbers on the lower Tongue, and that is what the salinity lab 

claims that we are over that limit of two, between two and four, 

that we are going to start seeing collapses that you were seeing on 

the pictures. 

Insofar as the river return, between the 12 Mile Dam, if you can 

feature the Tongue River runs north, dumps into the Yellowstone. 

Our diversion dam, and we have five flumes that cross five major 

creeks that drain 850 square miles of land that dump into the 

Tongue River below the 12 Mile Diversion, and this water mostly 

comes out of badlands country that is influenced by coal seams and 

heavy clay soils, and that is where the increase is coming. 

The land that T&Y irrigates is less than half of one percent in 

that reach. Seventy-six percent of our land drains back is below 

Mile City on the banks of the Yellowstone. 

Mr. GRIJALVA. Thank you, and let me wrap up my turn of questioning, for that matter the questions in general from my perspective. 

I am going to ask Ms. Utesch, in your testimony I know you have 

experience the impacts of oil and gas drilling in a very personal 

level, and if you could elaborate on that for the committee. 

Ms. UTESCH. In 2001, my husband and I purchased four acres of 

land fives miles south of the Town of Silt. At that time in Colorado—I am sorry, we purchased the land in 2000. At that time in 

Colorado mandatory disclosure of mineral or split estate was not 

required in Colorado, so we did not know that we didn’t own our 

minerals. 

We also never had mineral development on our small four acres 

because there was a wetlands that ran through it, and when you 

have an average well pad that is four acres, there was nowhere on 

our property they could put a well pad. 

However, within four years I had more than 30 gas wells drilled 

within a mile of my home. The mile long road that I used to live 

on that was a dead end, and some, maybe 15 to 17 cars a day became a thoroughfare that saw over 100 semi-trucks every day. I ate 

the dust of those trucks. I watched the magnesium chloride that 

was used to try to mitigate the dust drain into my wetlands, and 

kill grass and kill the plant life that was in the wetlands. 

Also, because our area was low lying area, many of the fumes 

that came off of the wells settled down. They are heavier than air, 

and the ozone and all the production chemicals settled down over 

the area where we lived. 

In 2005, I sold my home. I had lung problems. I had an all-overbody rash. I had extreme fatigue and I had headaches. My doctor 

111

said that the most likely cause of all of those, particularly the unusual skin rash that I suffered, was exposure to industry chemicals. 

I lost my home, I lost my way of life to the gas industry, and during that time I was working hard to try to get the industry to understand I didn’t want them to go away. I just wanted them to consider that I had a right to be there too. 

Mr. GRIJALVA. Thank you. 

Mr. Adami, if you could share your personal perspective and your 

experience. 

Mr. ADAMI. With the split estate, Mr. Chairman? 

When we bought our ranch, I was aware that we didn’t have the 

mineral rights, and there had been no mineral development, and 

as the coalbed methane moved from the eastern part of the Powder 

River Basin to the western edge where we were located, I visited 

with a number of clients and friends that had negotiated with the 

mineral companies, and asked them what problems did you have, 

what areas did you wish you had done different in your agreements, and so I had a fairly long list of things that I wanted to address when the mineral company arrived. 

What they offered was a one-size-fits-all, take-it-or-leave-it surface agreement. And in the case where I was bonded on, they offered that agreement, withdrew it. It was never offered again, and 

they just simply proceeded to bond on. 

The local BLM office made no effort beyond a token effort to require them to negotiate. They were a relatively accommodating 

partner in that process. 

Mr. GRIJALVA. Thank you very much. I have no further 

questions. 

Mr. Pearce. 

Mr. PEARCE. Thank you, Mr. Chairman. 

I would request unanimous consent, one of our witnesses stated 

that North Dakota made a serious mistake in accepting oil and gas 

exploration, and I just would like to ask unanimous consent to submit for the record from the Governor of North Dakota saying that 

actually it has been very positive for North Dakota. 

Mr. GRIJALVA. Without objection. 

[The letter from the Governor of North Dakota follows:]

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34983.017.eps
113

Mr. PEARCE. Ms. Moseley, would you want to—again you kind of 

got into this already. We are talking about the abysmally low 

bonds that are required now. That bond requirement is not a total 

economic requirement for that company. That is not all the companies do. Again, it is not $63 per well that they are going to pay to 

keep them up. It is that they are taking out this bond that says 

I am responsible for every single well that I drill, and this $25,000 

is the beginning point. 

Have you ever found a company that would only pay $63 to clean 

up a site? 

Ms. MOSELEY. No, absolutely not. In fact, in some cases, depending on where the well location is, it can cost hundreds of thousands 

of dollars. 

Mr. PEARCE. And because they only had the $25,000 bond, 

because they only had the $63 per well, did they walk away from 

their investment? Did they walk away from their responsibility? 

Ms. MOSELEY. No. 

Mr. PEARCE. So they paid the 100,000? 

Ms. MOSELEY. They are required to follow the law. They are required to follow the guidelines——

Mr. PEARCE. OK. 

Ms. MOSELEY.—that have been established by the government. 

Mr. PEARCE. Ms. Korenblat, you look like you have a comment 

to make here. 

Ms. KORENBLAT. I am sorry. You should finish that line. 

Mr. PEARCE. I mean it is fine, yes. 

Ms. KORENBLAT. I think that was misinterpreted. I think you are 

referring to my comment about North Dakota. 

Mr. PEARCE. Oh, yes. Excuse me. 

Ms. KORENBLAT. Sorry. And my point was that the mistake was 

made in building the trail and spending lots of money to market 

it after the oil wells had been put in, after the oil fields have been 

established. 


34983.018.eps
114

Mr. PEARCE. Fair enough. Yes, fair enough. 

Ms. KORENBLAT. Thank you. 

Mr. PEARCE. I appreciate that clarification. 

Ms. Adami, when did you buy your ranch? 

Mr. ADAMI. In 1993. 

Mr. PEARCE. 1993? 

Mr. ADAMI. Yes, sir. 

Mr. PEARCE. And you were aware of the split estate question? 

Mr. ADAMI. Actually, I was not. 

Mr. PEARCE. But it was on the deed. 

Mr. ADAMI. No, it was not. It is not disclosed in any fashion. 

Your warranty deed makes no reference whatsoever to the minerals in Wyoming. 

Mr. PEARCE. So would you recommend that we pass a law that 

would say stamp on the face of a piece of property ‘‘This property 

is split estate’’? 

Mr. ADAMI. That to me——

Mr. PEARCE. That would seem reasonable. 

Mr. ADAMI. I think that would be reasonable, and maybe a small 

disclosure about——

Mr. PEARCE. What do you think that would do to property values 

of those pieces of property? 

Mr. ADAMI. I am not sure that it would have much of an effect. 

Colorado could probably answer that where they have done that, 

but I am not sure. 

Mr. PEARCE. I think that is probably the push-back that we 

would get, that people don’t want their property value diminished 

by full disclosure. 

Ms. UTESCH. Colorado does have mandatory disclosure and that 

disclosure has not affected property values. That was established 

in a study that was done in 2004. 

Mr. PEARCE. OK. Now, you sold your ranch? 

Mr. ADAMI. Yes, sir. 

Mr. PEARCE. Who did you sell that to? 

Mr. ADAMI. To Yates Petroleum for New Mexico. 

Mr. PEARCE. Were they the ones who were drilling close by on 

the land? 

Mr. ADAMI. No. Yates was the third developer to come, and it 

was in the negotiation process that they made the offer to purchase, but at that point they had not developed any of their minerals. 

Mr. PEARCE. Are they in the process now? 

Mr. ADAMI. You know, I haven’t been back in the last three-four 

months. 

Mr. PEARCE. What did you get per acre for the land? 

Mr. ADAMI. The terms of the agreement were confidential, Congressman. I guess I would have to refrain from answering that. 

Mr. PEARCE. Above market or below market? 

Mr. ADAMI. I am afraid I shouldn’t answer that, sir. 

Mr. PEARCE. OK. I suspect, I suspect I could guess. 

Mr. Muggli, you had some contentious response, you didn’t think 

that I was accurate in what I was saying about the EPA. Do you 

think the EPA is allowing the oil and gas to put that coalbed methane water into the river and contaminate it? 

115

Mr. MUGGLI. Yes. 

Mr. PEARCE. Mr. Chairman, I would at this point ask that we 

have a hearing, because I think Mr. Muggli is really sincere, and 

I believe he is here with the best of intentions, and if the EPA is 

not doing its job, I think that we should hold them to task and we 

should take a look at that because I have found them to be pretty 

strict in New Mexico. In fact, we are always having to work to clear 

up problems, and this is a pretty serious allegation because that 

is—EPA is one of the key guardians of our fresh water, so I would 

take that as a pretty serious problem, and would request—would 

you join me in the request that we would have an open hearing 

about the standards——

Mr. MUGGLI. Yes. 

Mr. PEARCE.—that EPA is enforcing on that particular coalbed 

methane project? 

Mr. MUGGLI. Yes. 

Mr. PEARCE. OK, appreciate that. 

Ms. Moseley, let us say that we take the recommendations that 

you have heard here to drive the price up per well, put a well bond 

on, who will be impacted by that kind of a—Mr. Chairman, I would 

yield back if you want me to. I have another round of questions——

Mr. GRIJALVA. Yes, please continue. 

Mr. PEARCE. You bet. I saw that red light. You know, it scares 

me. 

Let us say that we do put that bond in. Who is going to be affected among the producers? 

Ms. MOSELEY. If it increases the amount that a company has to 

spend. 

Mr. PEARCE. Yes. 

Ms. MOSELEY. Is that your question? 

Mr. PEARCE. Yes. 

Ms. MOSELEY. I would guess that it would make energy prices 

more expensive. 

Mr. PEARCE. It would make energy prices more expenses. What 

about the size of companies? In other words, in New Mexico, we are 

almost down to just the mom and pops. We are down to the independents. Exxon has moved out a long time ago. Those fields are 

wearing out, people are not much interested. There is a little excitement right now with $70 oil, but when it drops back down to 

50, they are all going to disappear again. 

So what is going to be the effect on the small operator? 

Ms. MOSELEY. Well, the small operators, the one who is most affected by these kind of increases in costs of drilling a well. As you 

heard earlier this morning, 90 percent of the discovery wells are 

drilled by independents. If they can’t afford to go out and drill, 

then they probably will never be drilled, and maybe some people 

feel that that is a good thing. I don’t believe that. I think that our 

country is based upon energy for its economy and for its standard 

of living, and I would recommend that we have a chance to work 

together to come up with the best solutions instead of being attacked for providing the service that we absolutely have to have. 

Mr. PEARCE. You heard the testimony by Ms. Korenblat about 

the problems with the oil and gas industry. Tell me a little bit 

116

about the positive relationship between say the biking industry and 

oil and gas. Where do they intersect? 

Ms. MOSELEY. Well, I would guess that without the oil and gas 

industry and the mining industry you wouldn’t have your bikes. 

Mr. PEARCE. Yes, I was hoping we would get a little response 

here. Ms. Korenblat, obviously, we are into the engaging piece of 

this, but really you get carbon fibers, you get your tires, you get 

the people traveling in, not in a black reference I made in my opening statement, and you can take this opportunity to dig into that 

if you would like with full vigor too, if you would like. 

Ms. KORENBLAT. If I am going to go out of business, does it really 

matter whether I lose my customers first or the supply first? 

As you said in your opening statement, my customers fly in airplanes to get to the trips, and if the prices of their airplane tickets 

go up, I am going to have less customers. But if we continue to drill 

without regard to recreation planning and without any effort to coexist, then I am losing supply because I am going to be losing trips. 

So it is sort of a chicken and egg problem really. 

Mr. PEARCE. Yes, and that really is a problem that we all have 

here is that with every single problem that we have, we do need 

to reach a balance point because, to be honest with you, as a backpacker I have probably been as many miles as anybody in Congress 

just with a pack, a really heavy pack too. I don’t much anymore, 

but I have been. So as a backpacker, I will tell you that the bikes 

and the motorcycles and those things I consider to be—I mean, you 

made the statement that we should be naturalists, we should have 

natural space or something. I am not trying to put words——

Ms. KORENBLAT. Operate under our own power. 

Mr. PEARCE. No. But you were saying that we should have nature, that that should be it, and to be honest, there are people who 

would say that really your bikes are invasive, that they are not 

natural, and I am not that sort of purist. I was the one who said, 

you know, we ought to have a place in our parks that we can use 

motorized stuff, not every place in the parks. That was Mr. Watkins’ language, and I felt like always that was the balance. Not 

every place for everything, but some way we have to get the balance here. 

We have to get the protection for these landowners, and I am 

sympathetic to Mr. Adami that has got 12 of the 20. This is like 

a golf game. High score is not very good in those problems. Still, 

we can overreact, overrespond, and suddenly we begin to squeeze 

off this little golden goose that really provides a lot of jobs, and I 

am talking about the oil and gas industry, provides accessible, affordable energy. 

Ms. KORENBLAT. But——

Mr. PEARCE. Go ahead. 

Ms. KORENBLAT. Well, my question though is aren’t we on the 

downhill side? In 300 years, are we going to be burning oil? I don’t 

think so. Right? We know it is going to last 20, but is it going to 

last 300? It is somewhere between 20 and 300, right? 

Mr. PEARCE. So how would you feel about wind and solar on Federal lands? 

Ms. KORENBLAT. It totally depends on how it is put in, and you 

talk about balance, and I agree with that, but I think one of the 

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points needs to be looking at the longer term. So many people are 

so focused on the current situation that we are so dependent on oil, 

but don’t we have the opportunity—we are going to make a transition. I don’t think my grandchildren are going to be using oil. They 

are going to have to use alternative fuels. 

So my question is do we really want to damage—I mean, land 

in its pristine form is shrinking from the earth. They are not making any more of it. You can’t re-create it. Sure, you can mitigate, 

and you can try to clean up the mess, but land that hasn’t ever 

been touched is very—it is in very short supply. 

So when we look, we talked about 39 years worth of natural gas. 

I mean, that is—in the big picture that is a very short time frame. 

So what I am adding to the equation is not just looking at balance, 

but looking at balance over the really long term because my son 

can make a living the same way I am, and my grandchildren can 

make a living the same way I am, but an oil well has a life span, 

but the damage is relatively permanent. 

Ms. MOSELEY. I don’t agree with that, and I don’t know whether 

I am allowed to speak or not. 

Mr. PEARCE. OK, OK, the Chairman is about to—let me make a 

couple more comments, Mr. Chairman, and we will be wrapped up, 

but these are the kind of conversations that we need to be in. I 

think everyone of us realizes that—I mean, my great fear is that 

we are going to run out of oil quicker than what we think, but the 

truth is we don’t have anything that even comes close to replacing 

it—maybe nuclear, but wind is 1 percent, solar is 1 percent, hydrothermal, maybe 10. 

Ms. KORENBLAT. Necessity is the mother of invention. 

Mr. PEARCE. Yes, well, the mothers of invention are a little 

asleep at the wheel because we haven’t got any way to get those 

inventions to the market. I mean, we really have slept through the 

last 30 years when we should be converting and we have not converted and tremendous dislocation awaits us if we just move wholeheartedly. 

Mr. Chairman, with your indulgence Ms. Utesch tried to log in 

a couple of times, and we just haven’t gotten to her. She wants to 

make closing comments. I don’t have any. You have had comments 

to things that I have said so I am going to turn the floor over to 

her, and when she wraps it up, my time is way past gone, and you 

have been more than congenial, Mr. Chairman. 

Mr. GRIJALVA. No, just 29 minutes. No problem. 

Mr. PEARCE. No sweat. No problem. 

[Laugher.] 

Mr. PEARCE. Thanks. 

Ms. UTESCH. Thank you for the opportunity to speak again. I just 

wanted to offer a couple of clarifications. 

When it comes to the issue of bonding or any regulation of the 

industry, when consumers are—if the government puts additional 

regulation on industry often the argument is made that if the gas 

industry has to pay more, if their cost of business goes up, that 

that will get passed directly to the consumer, and I want to clarify 

for the record that that is not true. 

The natural gas in this country is traded just like corn and soybeans, and any rancher can tell you that it doesn’t matter how 

118

much it costs him, it is the market value at which that commodity 

is traded that sets the price, and natural gas is the same way. 

I also wanted the opportunity to also one more time look at the 

issue of small operators. Ms. Moseley had testified that if small 

companies that come in and want to do drilling have to post high 

bonds, they won’t be able to do the work, and so that it would create a hardship on them in not being able to drill. 

That may be true, but let us look at the other side of what happens, and this does happen and we have seen cases of it in New 

Mexico where small operators can’t afford to post—they post a 

small bond, and they go into an area, and when they are done operating their choice is to pay the $100,000 in reclamation costs that 

Ms. Moseley cited, or to forfeit their $25,000 bond. It is a hell of 

a lot cheaper for them to walk that bond and it has happened. 

So you know, there are two sides to that question. There are two 

ways to look at it. It is not black and white, and I would just welcome the opportunity for both sides to sit down at the table and 

proactively look at the needs on both sides, and address a system 

that is outdated to come up with something that works better for 

everyone. 

Mr. PEARCE. Thank you very much. 

Ms. UTESCH. Thank you. 

Mr. GRIJALVA. Thank you, Mr. Pearce. 

Now let me thank all of our witnesses today, and particularly 

this last panel. 

In closing, I think I can comfortably say that I am not aware of 

a single member of this committee and the full committee who does 

not support responsible oil and gas development in the appropriate 

public places, and public lands, and as we go through this process 

the search for a balance, the search for responsibility and accountability on the part of agencies and businesses doing gas and oil on 

public lands, that process sometimes is going to be viewed as an 

attack, and I would venture to say that it will be described as an 

attack. 

On the contrary. The search for balance many times is a difficult 

process. I wish we would have had this healthy debate as we were 

going through the Energy Act of 2005, and we will have this debate 

as we go through what we need to put together in May in terms 

of an energy policy. 

Today’s hearing and other hearings this month before this committee and all the various subcommittees have been held to find 

out what is not working with that energy policy, and what we need 

to do to fix it. I don’t believe that any of the energy laws that have 

been enacted in the last five years are sacred or sacrosanct. We 

need to look at them. We need to dig for that balance, that accountability, that transparency, and the appropriate responsibility. 

I want to thank all of you for coming today, and with that this 

meeting is adjourned. Thank you. 

[Whereupon, at 2:05 p.m., the Subcommittees were adjourned.]

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