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75–853 PDF 2012

S. HRG. 112–534 

BUDGET PROPOSAL FOR THE DEPARTMENT 

OF THE INTERIOR FOR FISCAL YEAR 2013 

HEARING 

BEFORE THE

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

TO

CONSIDER THE PRESIDENT’S BUDGET FOR FISCAL YEAR 2013 FOR THE 

DEPARTMENT OF THE INTERIOR 

FEBRUARY 28, 2012 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 
(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

JEFF BINGAMAN, New Mexico, Chairman 

RON WYDEN, Oregon 

TIM JOHNSON, South Dakota 

MARY L. LANDRIEU, Louisiana 

MARIA CANTWELL, Washington 

BERNARD SANDERS, Vermont 

DEBBIE STABENOW, Michigan 

MARK UDALL, Colorado 

JEANNE SHAHEEN, New Hampshire 

AL FRANKEN, Minnesota 

JOE MANCHIN, III, West Virginia 

CHRISTOPHER A. COONS, Delaware 

LISA MURKOWSKI, Alaska 

JOHN BARRASSO, Wyoming 

JAMES E. RISCH, Idaho 

MIKE LEE, Utah 

RAND PAUL, Kentucky 

DANIEL COATS, Indiana 

ROB PORTMAN, Ohio 

JOHN HOEVEN, North Dakota 

DEAN HELLER, Nevada 

BOB CORKER, Tennessee 

ROBERT M. SIMON, Staff Director 

SAM E. FOWLER, Chief Counsel 

MCKIE CAMPBELL, Republican Staff Director 

KAREN K. BILLUPS, Republican Chief Counsel 
(III) 

C O N T E N T S 

STATEMENTS 

Page 

Bingaman, Hon. Jeff, U.S. Senator From New Mexico ........................................ 1 

Bowers, Carla, National WH&B Legislative Team, Volcano, CA ........................ 47 

Murkowski, Hon. Lisa, U.S. Senator From Alaska ............................................... 2 

Salazar, Hon. Ken, Secretary, Department of the Interior .................................. 4 

APPENDIX 

Responses to additional questions .......................................................................... 55 

(1) 

BUDGET PROPOSAL FOR THE DEPARTMENT 

OF THE INTERIOR FOR FISCAL YEAR 2013 

TUESDAY, FEBRUARY 28, 2012 

U.S. SENATE, 

COMMITTEE ON ENERGY AND NATURAL RESOURCES, 

Washington, DC. 

The committee met, pursuant to notice, at 10:03 a.m. in room 

SD–366, Dirksen Senate Office Building, Hon. Jeff Bingaman, 

chairman, presiding. 

OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. 

SENATOR FROM NEW MEXICO 

The CHAIRMAN. OK. Why don’t we get started. 

This morning, the committee is reviewing the President’s proposed budget for the Department of the Interior for fiscal year 

2013. We are very pleased to have Secretary Salazar back with us 

in his old committee room. The Department’s proposed budget of 

$11.7 billion in appropriated funds represents a slight increase 

over current funding levels. In my view, it’s a reasonable proposal. 

It reflects the difficult choices the President’s required to make, 

given the current fiscal environment that a number of programs, 

such as the Land and Water Conservation Fund, that I wish were 

funded at higher levels, but I understand the budgetary constraints 

the administration is facing. 

I want to take a minute to just express my support for the Secretary’s determination to adequately fund and carry out the Interior Department’s responsibilities for safe and environmentally 

sound oil and gas production in Federal lands, and particularly in 

the Outer Continental Shelf. We were commenting in the hall before coming in here that at least it’s not 2 years ago, when we had 

the BP oil spill as a very real issue before our committee. I believe, 

especially given the challenges of the Deepwater Horizon disaster, 

the Department has acted properly in continuing to focus on safety 

issues. 

Obviously, there’s a lot of concern about gas prices abroad in the 

land. I do believe that domestic production is important, robust domestic production is important. It needs to be pursued in a responsible way. That clearly is happening. Domestic production of both 

oil and natural gas are up since 2008. They’re projected to continue 

increasing over the next 10 years to nearly historic levels. Our oil 

imports continue to decline, and they were down to 49 percent of 

consumption in 2010, which is an impressive improvement over 

where we were even 4 or 5 years ago. 
2 

I’m pleased that the budget includes increased funding for renewable energy development on public lands as part of the Department’s new energy frontier initiative. I understand the Department 

has approved 29 commercial-scale renewable energy projects and 

associated transmissions since 2009. I believe these efforts hold 

great promise, and that renewable projects can yield important energy for our economy in an environmentally responsible way. 

I’m also glad to see that the budget proposes enactment of a 

hardrock abandoned mine land fund for the reclamation of mine 

sites that threaten human health and safety, and cause environmental degradation. I’m particularly concerned with the legacy of 

unreclaimed uranium mine sites on Indian lands in States such as 

mine, in New Mexico. Mr. Secretary, I hope you can work with me 

and others here on the committee to seek funding to address this 

very serious issue. 

Finally, I’m pleased to see that the Department’s budget request 

demonstrates a strong commitment to implementing the Indian 

water rights settlements around the country, including funding for 

a number of settlements in my State of New Mexico. 

With that, let me defer to Senator Murkowski for her opening 

statement. 

STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR 

FROM ALASKA 

Senator MURKOWSKI. Thank you, Mr. Chairman. Mr. Secretary, 

good morning. Good to see you. Ms. Haze, Mr. Hayes, welcome to 

you as well. Thank you for the work that you’ve been doing on behalf of so many. These are areas that are contentious, most certainly, and with a budget, it even makes them more contentious. 

I was raised to recognize those that have tried to work with us 

and make good things happen, even if it’s not as much as I would 

like, and so I start off my comments this morning by thank you, 

Mr. Secretary, for your personal involvement in trying to advance 

some issues that are critically important to my State, and I think 

to the country, when it comes to domestic oil and gas production. 

The last time we were all together was when you came up to the 

State to visit, to look at some of the issues that we had before us, 

specifically CD5, at that time, stalled out, because we couldn’t get 

a bridge, permit for a bridge across the area. I had, also, an opportunity to look at the OCS projects and what Shell is pursuing. 

Mr. Hayes, I truly appreciate that you have committed as much 

of your time to help address not only these issues, but some of the 

other Alaska-specific issues. We’ve made some progress, and I 

think it is important to recognize that, but I also appreciate, as you 

do, that we’ve got a ways to go. We will continue to work with you, 

but I appreciate that you are working with us, and I thank you for 

that. 

I would like to address just a couple very Alaska-specific issues, 

and Mr. Secretary, you and I have had a chance to discuss them. 

I’m more than a little bit disappointed about within the budget on 

the Alaska conveyance program, there’s an enormous reduction to 

that program. As you know, we’ve been working for well over 40 

years to try to get the conveyances to our Alaska natives, to try to 

get the land conveyances that were made upon statehood, which is 
3 

now 53 years ago. We’re continuing with that, but we can’t make 

these conveyances unless we have that budget. 

I addressed our State legislature last week, and one of the early 

questions that came up was the issue of the Federal Government’s 

role with regards to our Legacy Wells, the 137 wells that were 

drilled by the Federal Government decades ago, and sit, without attention, literally falling into the landscape. It’s an environmental 

scar. We in Alaska kind of feel that that this is a double standard. 

The private sector is held to the highest environmental standard, 

and yet, the Government is saying, well, we can maybe get to 1 or 

2 of them a year, and I understand that these are budget priority 

issues, but, I think we need to figure out how we make them a priority. 

One of your priorities is full funding for the Land and Water 

Conservation Fund. The chairman has indicated his support of 

that. But it’s difficult for me to say, well, we need to work to expand and bring even more Federal lands under the Federal purview, when we’re not taking care of the commitments and the responsibilities, the promises that have been made with other lands. 

So, we need to resolve that. 

I also want to bring up the very strange relationship that many 

Alaskans feel, where the Federal Land Management Agencies and 

the perceived overreach of the Federal Government into their lives, 

whether it’s the ranger activity on the Yukon River, or the lack of 

cooperation and coordination by refuge managers. I think these are 

legitimate grievances. We need to work with you on this. So, I hope 

that you’ll make it a priority to improve that relationship. 

Next, is an issue that affects not only Alaska, but many others, 

and these are the new and the higher fees and royalties from Interior within this budget. I know that the philosophy is that the Federal royalty rate is lower than many State royalty rates, but you’ve 

got to admit that this isn’t exactly a one-sided bargain. Those 

States easily trump the Federal Government in terms of regulatory 

stability. So, when we ask them to pay more, well, providing less, 

it really doesn’t work. 

I note that the chairman has mentioned the statistics that the 

President also has repeated, that oil and gas production is up. That 

is true. But, when you look to the oil and gas production on Federal 

lands, we’ve also seen an 11 percent decrease on the Federal side. 

So, I think it’s important to put that into context. 

I am hoping that we will get a little clarity about the disclosure 

requirements that the Department is working on for hydraulic 

fracking. The question that I would have is whether it is just that, 

whether it’s a disclosure requirement, as many of the States have 

advanced, or actually a new set of regulations. I think all of us are 

looking very critically at this. We want to make sure that this 

boom that we are seeing across the country, when it relates to our 

opportunities for hydraulic fracking, combined with horizontal drilling, we recognize that it has vastly increased our natural gas supply, and it’s reviving communities, bringing about jobs, but those 

could all be lost if the Federal Government decides to place onerous 

and redundant requirements on the technology. 

Again, I appreciate your efforts in a very difficult area. Folks 

back home in Alaska are talking about nothing but energy right 
4 

now, and it’s not just the price at the pump, but it’s all energy. So 

you are here at a particularly opportune time for us. I thank you, 

and look forward to questions. 

The CHAIRMAN. Mr. Secretary, why don’t take whatever time you 

need to describe the administration’s proposed budget, and then we 

will, obviously, have questions. 

Thank you for being here. 

STATEMENT OF HON. KEN SALAZAR, SECRETARY, 

DEPARTMENT OF THE INTERIOR 

Secretary SALAZAR. Thank you very much, Chairman Bingaman 

and Ranking Member Murkowski. Thank you, Senator Wyden, and 

Senator Barrasso, Senator Lee, and Senator Shaheen, and Senator 

Franken for all the issues that we work on. Many we agree on, and 

sometimes we disagree, but I do think that we’re making progress 

on a whole host of fronts on the energy agenda for the United 

States. 

Let me also just say that at the table with me today is Deputy 

Secretary David Hayes. As Senator Murkowski pointed out, he has 

done a Herculean effort, in terms of moving forward on Alaska 

issues, including the coordination of permitting issues in Alaska. 

Pam Haze, who has been the Budget Director for the Department 

of the Interior for many years now. I also wanted to say thank you 

to the staff on both sides, democrat and republican, on this committee that work with us on so many issues. 

Let me start out by just characterizing the way that I see this 

budget. Senator Bingaman and distinguished Senators, I see it as 

a squeeze budget, with some tough choices and some very painful 

cuts. It’s a budget that cuts government, and requires government 

to do more with less. It supports job creation. Job creation, I know, 

is a focus of this committee, a focus of the President. It’s job creation and energy, both in the conventional energy, as well as renewable energy. 

It supports job creation through conservation and tourism. It 

supports job creation through the water supplies that we manage 

on behalf of the people of this country. Last, it honors our important responsibilities to the 566 tribes and Alaskan natives of the 

United States of America. 

Overall, this budget is 3 percent below the budget which was enacted by this Congress in 2011. That’s 3 percent below 2011. It’s 

about even with the budget that was enacted in 2012. 

Now, let me review each of these pieces in a little more detail. 

First, in terms of cuts and efficiencies in government, which I know 

many of you have been focused on, wanting to make sure that the 

government is run more efficiently. It’s a high priority for the 

President. It’s been a high priority for us at the Department of the 

Interior. This budget foresees that there will be a downsizing of an 

additional 591 FTE within the Department of the Interior. So, we 

are asking our employees to do a lot more. This is, in fact, even 

in the climate where we have asked them to take pay freezes for 

many years, at this point in time, but we’re continuing to figure out 

a way of doing more with less. 

We also have a number of program terminations that are set 

forth in this budget, and downsizing $517 million of downsizing 
5 

and reorganization that’s included in this budget. Some of these 

are painful cuts. The national heritage area programs, which many 

of you on this committee, have supported, those are cut some $8 

million. That’s a painful cut. CUPCA, and some of the central Utah 

project, which I know Senator Lee and the Utah delegation have 

been very interested in, which we have supported and continue to 

work on, we have a cut in there of $18 million for the central Utah 

project. Not cuts that I would like to see, frankly, but given the 

tough budget times, these are things that we’ve had to do. 

Administrative efficiencies, which include revisions to how we 

take a look at procurement, and information technology, and a 

whole host of other administrative functions with the Department, 

there’s budget for 2013 forecasts that we will be able to save $207 

million just from administrative efficiencies. So, we’re doing everything we can, given the fiscal times that we face here in this country. 

I want to spend a few minutes speaking about jobs, and energy, 

and the other components of the budget that I made some comments at the beginning about. 

First, with respect to energy, you will note in the budget there’s 

$662 million for conventional energy. There is $86 million for renewable energy. This is all part of the President’s program to move 

with an all-of-the-above energy strategy. So when we look at the 

$662 million for conventional oil and gas, it foresees our robust 

move into moving forward with development of oil and gas resources in the Gulf of Mexico, and all of you, including Senator 

Landrieu, who was a the point of the sphere on dealing with the 

Deepwater Horizon Macondo oil spill, know how important it is 

that we do the job, and that we do it right. So, we appreciate the 

appropriations from the Congress last year, relative to helping us 

do our job in the oceans of America. We have a lot more work to 

do, but we’re moving forward, not only in the Gulf of Mexico, and 

decisions still have to be made on how we will move forward in the 

Arctic, but preliminary decisions have been made there on additional opportunities there. 

On the renewable energy front, which I know Senator Shaheen 

and others have been so strongly supportive of, along with the 

chairman, we’re doing a lot of different things, but the 29 projects, 

which Chairman Bingaman mentioned at the beginning, that really 

has created a renewable energy revolution on public lands. It’s not 

just in California, and Arizona, and New Mexico, but also places 

Senator Lee, and Milford, Utah, where we see wind energy, and 

Senator Barrasso, where we’re now contemplating and reviewing 

the potential for a 3,000-megawatt project on the eastern part of 

Wyoming. There are huge things that are happening in renewable 

energy. It’s something that we’re very proud of in the Department, 

and we couldn’t have done it without you. 

There are differences in each one of the States. So, for example, 

Senator Murkowski, small renewable energy projects that would 

serve some of the Alaskan native villages is something that we are 

very focused on, and, again, here Deputy Secretary Hayes has been 

leading an effort to try to bring down the costs of energy for native 

villages by looking at opportunities with renewable energy, and ac-
6 

tually working with some members of industry to see how we can 

get that done. So jobs and energy are a big part of this budget. 

Second, jobs and outdoor recreation, and conservation and preservation, I think, without a doubt, in each one of your States, there 

is a huge cornerstone of your economies that is dependent on our 

outdoor recreation activities. It’s the boaters, the hikers, the hunters, the anglers, who bring so much to the economy of the States, 

from Utah, to New Hampshire, Minnesota, to Virginia. Everywhere 

around this country, outdoor recreation is a huge addition to our 

economy. 

When we look at job prospects for the next 10 years, we believe 

that tourism is one of the top 2 areas where we can create additional jobs in the United States of America. I’m proud to say the 

President has asked me and Secretary Bryson to implement a new 

tourism strategy that will also focus in on some of the outdoor 

recreation activities and opportunities that we have as a Nation. 

Independent sources, independent reports, outside groups contemplate that there’s approximately 8 million jobs a year that are 

created through outdoor recreation. McKenzie International has 

predicted that we can create an additional 2.1 to 3.3 million jobs 

just through outdoor recreation. So, much of what you see in this 

budget is in support of the job creation that comes through our conservation efforts. 

In addition, the Department is moving forward with supporting 

water supply issues, which are so important to all of you who share 

the Colorado River Basin, for example. It’s an area where the 31 

million people who depend on Bureau of Reclamation projects, including the production of much of the food of the United States and 

the agricultural communities of the Southwest. We continue to 

push on that agenda. So, there is a $20 million increase for 2012. 

It will result in an increase of water supply of some 730,000 acre 

feet. Now, you think about 730,000 acre feet, that’s a very significant amount of water through the WaterSMART program. It’s included in this budget, and working with local communities, and 

with the water users, we expect that we will achieve that goal. 

Finally, let me just say that the budget honors the commitment 

that the United States of America does have to the tribal Nations 

of the United States. President Obama vowed from day one, when 

he became President of the United States, that we would change 

the relationship with Native Americans in this country. As we have 

implemented that agenda over the last 3 years, we have much to 

be proud of, from the major Indian water rights settlements, which 

this committee has helped lead and helped define, to the settlement 

of Cobell, and so many other efforts. 

Law enforcement, we have a number of high-performing priority 

areas, where we have been able to reduce violent crime on reservations by as high as 36 percent. We intend to continue those law enforcement efforts, and they are set forth in this budget as well. 

In conclusion, Mr. Chairman, and all of you, because I consider 

you to be friends, on this committee, let me just say, this is a good 

budget, but it is a squeeze budget, and there are tough and painful 

decisions that are included in this budget. It invests in job creation 

through energy, conservation, water, science, and in the honoring 

of our commitment to the tribes of America. 
7 

With that, Mr. Chairman, I’d be happy to take questions. 

[The prepared statement of Secretary Salazar follows:] 

PREPARED STATEMENT OF HON. KEN SALAZAR, SECRETARY, DEPARTMENT OF THE

INTERIOR

Mr. Chairman and members of the Committee, I am pleased to be here today to 

present the details of the 2013 budget request for the Department of the Interior. 

Interior’s 2013 budget totals $11.5 billion, essential level with 2012 funding. The request includes reductions and savings of $516.8 million. We made difficult choices 

in this budget, sacrificing in many areas, deferring projects, and programming savings for efficiencies in order to maintain funding for key priorities and investments 

that will contribute to strengthening the economic vitality and well-being of the Nation. 

As the President has detailed in his Blueprint for an America Built to Last, the 

budget proposes investments in an economy that works for everyone. Our budget 

request supports responsible domestic energy development, advances an America’s 

Great Outdoors strategy to maintain our legacy and stimulate new opportunities, 

applies science to address the most formidable natural resource challenges, and invests in self-determination and economic development to strengthen tribal Nations. 

INTRODUCTION

The mission of the Department of the Interior is to protect and manage the responsible use of America’s natural resources, support our cultural heritage and 

honor the Nation’s trust responsibilities to American Indians and Alaska Natives. 

Interior’s people and programs impact all Americans. According to a Department 

study, in 2010, Interior programs and activities supported over two million jobs and 

approximately $363 billion in economic activity. The Department is the steward of 

20 percent of the Nation’s lands. Interior manages the resources of the national 

parks, national wildlife refuges, and public lands and assists States, Tribes, and 

others in the management of natural and cultural resources. 

Interior manages many of the Nation’s natural resources, including those that are 

essential for America’s industry—oil and gas, coal, and minerals such as gold and 

uranium. On public lands and the Outer Continental Shelf, Interior provides access 

for renewable and conventional energy development and manages the protection and 

restoration of surface mined lands. The Department of the Interior oversees the responsible development of 24 percent of America’s domestic oil and gas supplies, 

while striving to ensure safety and environmental protection and the effective collection of revenue from this development. We estimate that energy and minerals development on Federal lands supported 1.3 million jobs and $246 billion in economic activity in 2010. 

The Department is also the largest supplier and manager of water in the 17 Western States, promotes and assists others to conserve water and extend water supplies, and provides hydropower resources used to power much of the Country. The 

Department estimates that the use of water, timber, and other resources produced 

from Federal lands supported about 370,000 jobs and $48 billion in economic activity. 

Interior works to ensure that America’s spectacular landscapes, unique natural 

life, and cultural resources and icons endure for future generations, tells and preserves the American story, and maintains the special places that enable the shared 

American experience. In 2012, visitors made 476 million visits to Interior-managed 

lands and supported an estimated $47 billion in economic activity. 

Interior manages and delivers water, arbitrates long-standing conflicts in water 

allocation and use, and actively promotes water conservation. As one of the Nation’s 

primary natural and cultural resource stewards, the Department makes decisions 

regarding potential development on the public lands and offshore coastal areas that 

can greatly impact the Nation’s energy future and economic strength. Factored into 

this balance is the Department’s unique responsibility to American Indians and 

Alaska Natives. The Department supports cutting edge research in the earth 

sciences—geology, hydrology, and biology—to inform resource management decisions 

at Interior and organizations across the world and in earthquake, volcano, and other 

hazards to protect communities across the Nation. Maintaining and building the capacity to carry out these responsibilities on behalf of the American people is Interior’s primary focus. 
8 

POWERING AMERICA’S ECONOMY

Stewardship of America’s lands and natural resources is at the heart of the national spirit and the economy—from the responsible management and development 

of natural resources and increasingly, the economic power of outdoor recreation. In 2011, the Department of the Interior generated a total of $13.2 billion in receipts benefitting the U.S. Treasury—from a combination of fees, royalties, rents 

and bonuses from mineral, timber, and other natural resource development. The Department estimates that conventional and renewable energy produced on Interior 

lands and waters results in about $230 billion in economic benefits each year. In 

2011, of the total receipts generated by Interior, $11.3 billion was collected from energy production on public lands, tribal lands, and Federal offshore areas—a $2.0 billion increase over the previous year—with receipts disbursed and revenues shared 

among Federal, State, and tribal governments. 

Since 2008, oil production from the Federal OCS has increased by 30 percent, 

from 450 million barrels to more than 589 million barrels in 2010. Balancing the 

need for safety and environmental enforcement, Interior currently manages over 35 

million acres of the OCS under active lease. A recently proposed five-year oil and 

gas leasing program would make more than 75 percent of undiscovered technically 

recoverable oil and gas estimated on the OCS available for development. 

Onshore, the Bureau of Land Management held 32 onshore oil and gas lease sales 

in 2011. The BLM offered 1,755 parcels of land covering nearly 4.4 million acres. 

Nearly three-quarters or 1,296 of those parcels of land offered were leased, generating about $256 million in revenue for American taxpayers. This was a 20 percent 

increase in lease sale revenue over 2010, following a strong year in which leasing 

reform helped to lower protests and increase revenue from onshore oil and gas lease 

sales on public lands. The BLM recently has seen a 50 percent jump in industry 

proposals to lease for oil and gas exploration. Oil and gas companies nominated 

nearly 4.5 million acres of public minerals for leasing in 2011, up from just under 

3 million acres the year before. Industry nominations are the first step in the BLM 

leasing process. After evaluating the parcels, BLM may offer them at auction. Successful bidders can then apply to drill for oil and gas. 

Interior is moving aggressively to put the President’s energy strategy, Blueprint 

for a Secure Energy Future, into action and expand secure energy supplies for the 

Nation—a strategy that includes the responsible development of renewable energy 

sources on the public lands. At the start of this Administration, there were no solar 

energy facilities sited on the public lands, and wind energy development was relatively limited compared to development on private lands. Since March 2009, 29 onshore projects that increased approved capacity for production and transmission of 

power have been approved including the first ever utility scale solar project, five 

wind projects, and eight geothermal projects. The Cape Wind Energy Project, approved for construction and operation, is the first ever offshore commercial wind operation. The 2013 budget reflects an expansion of these accomplishments with the 

goal of permitting 11,000 megawatts by the end of 2013. 

The President’s Blueprint recognizes the economic potential of renewable energy 

development. The economic benefits could be particularly significant in America’s remote and rural places near public lands. The Department’s 2010 estimates identified nearly $5.5 billion in economic impacts associated with renewable energy activities, a growing economic sector that supports high paying jobs. 

GROWING THE ECONOMY OUTDOORS

Interior is at the forefront of the Administration’s comprehensive effort to spur 

job creation by making the United States the world’s top travel and tourism destination. In a recent statement, President Obama cited Department of Commerce figures 

showing that in 2010, international travel resulted in $134 billion in U.S. exports. 

International travel to the U.S. is the Nation’s largest service export industry, with 

seven percent of total exports and 24 percent of service exports. The Bureau of Economic Analysis estimates that every additional 65 international visitors to the 

United States can generate enough exports to support an additional travel and tourism-related job. According to the travel industry and Bureau of Economic Analysis, 

international travel is particularly important as overseas or ‘‘long-haul’’ travelers 

spend on average $4,000 on each visit. 

President Obama has asked me to co-chair an interagency task force with Commerce Secretary Bryson to develop a National Travel and Tourism Strategy to expand job creation by promoting domestic and international travel opportunities 

throughout the United States. A particular focus of the Task Force will be on strategies for increasing tourism and recreation jobs by promoting visits to the Nation’s 

national treasures. The Department of the Interior manages iconic destinations in 
9 

the national parks, wildlife refuges, cultural and historic sites, monuments, and 

other public lands that attract travelers from around the country and the globe. According to a Departmental study, in 2010, 437 million visits were made by American 

and international travelers to these lands, contributing $47.9 billion in economic activity and 388,000 jobs. Eco-tourism and outdoor recreation also have an impact on 

rural economies, particularly in Arizona, California, Colorado, Florida, Nevada, 

North Carolina, Oregon, Utah, and Wyoming. 

Interior is working to maximize the benefit of the outdoors for the millions of 

Americans at home. Hunting, fishing, and outdoor recreation contribute an estimated $730 billion to the U.S. economy each year. More than 12 million Americans 

hunt; more than 30 million Americans fish; and three out of four Americans engage 

in some kind of healthy outdoor activity. One in twenty U.S. jobs is in the recreation 

economy. 

Through the America’s Great Outdoors initiative, the Administration continues to 

expand opportunities for recreation—through partnerships with States and others 

and the promotion of America’s parks, refuges, and public lands. The 2013 budget 

requests $5.1 billion in support of this initiative, a $145.6 million increase compared 

to 2012. Funding is focused on programs supported through the Land and Water 

Conservation Fund, land management operations, and other grant and technical assistance programs that promote conservation and improve recreational access. 

By encouraging innovative partnerships in communities across the Nation, the 

Administration is expanding access to rivers and trails, creating wildlife corridors, 

and promoting conservation while working to protect historic uses of the land including ranching, farming, and forestry. As part of America’s Great Outdoors, Interior is supporting 101 signature projects in all States across the Country to make 

parks accessible for children, create great urban parks and community green spaces, 

restore rivers, and create recreational blueways to power economic revitalization. 

Projects were selected in concert with governors, tribal leaders, private landowners, 

and other stakeholders, and were evaluated based on the level of local support, the 

ability of states and communities to leverage resources, and the potential to conserve important lands and promote recreation. 

The America’s Great Outdoors initiative is being implemented in partnership with 

communities and stakeholders across the Country. In January of this year, I accepted the first donation of land in south-central Florida to officially establish the Everglades Headwaters National Wildlife Refuge and Conservation Area—conserving 

one of the last remaining grassland and longleaf pine savannah landscapes in eastern North America. The new refuge and conservation area—the 556th unit of the 

national wildlife refuge system—was established with the support of local ranchers, 

farmers, and landowners who are working cooperatively with Interior and the Fish 

and Wildlife Service to conserve the wildlife values on their lands while retaining 

their right to raise livestock or crops, an approach championed by the Obama Administration. 

The Everglades Headwaters National Wildlife Refuge and Conservation Area is 

one example of the new parks and refuges Interior has recently established to protect key natural and cultural resources for future generations. In addition to 650 

miles of new national trails, designation of several national natural and historic 

landmarks, Interior welcomes the Martin Luther King, Jr. Memorial in Washington, 

D.C.; the Paterson Great Falls National Historical Park in New Jersey; the Fort 

Monroe National Monument in Virginia; the Dakota Grassland Conservation Area 

in North and South Dakota; New Mexico’s first urban national wildlife refuge, the 

Middle Rio Grande National Wildlife Refuge in Albuquerque; and a signature America’s Great Outdoors project in the Crown of the Continent Conservation Area in 

Montana. Interior launched significant efforts to protect America’s enduring icons 

including upgrading the Statue of Liberty, initiating repairs to earthquake damage 

at the Washington Monument, and withdrawal of over one million acres in the vicinity of the Grand Canyon from additional uranium and hardrock mining, to protect and preserve the natural beauty of the Grand Canyon. 

Interior’s 2013 budget request for appropriations from the Land and Water Conservation Fund includes a total of $450 million for Interior and Forest Service Program. The budget requests $212.0 million for Federal land acquisition within national parks, national wildlife refuges, and BLM public land boundaries, including 

$83.6 million for a collaborative program to support landscape-scale conservation 

projects developed in a collaborative process conducted by the Forest Service and Interior land management bureaus. Investments in ecologically important landscapes 

will be coordinated with State and local efforts to maximize ecosystem benefits, support at-risk species, and create wildlife corridors. The request includes $128.4 million for acquisition to facilitate protection of parks, refuges, and BLM designated 

areas based on bureau mission-specific priorities. 
10 

The 2013 Federal land acquisition budget for BLM includes funding to will improve access for hunters and anglers to the public lands. Often these sportsmen and 

women are frustrated by complicated ‘‘checkerboard’’ land ownership and are unable 

to access BLM lands that provide recreation opportunities. The budget includes $2.5 

million that will be used to purchase easements to alleviate these challenges and 

provide improved access for public recreation. 

An additional $120 million is proposed for key grant programs supported by the 

LWCF, including $60 million each for the Cooperative Endangered Species Conservation Fund program and State LWCF grants. 

SPURRING GROWTH AND INNOVATION THROUGH SCIENCE

Investments in research and development promote economic growth and innovation, ensure American competitiveness in a global market, and are critical to achieving the mission of the Department of the Interior. Investments in Interior’s research 

and development will improve management of U.S. strategic energy and mineral 

supplies, water use and availability, and natural hazard preparedness. Sustainable 

stewardship of natural resources requires strong investments in research and development in the natural sciences. 

Research and development funding is increased by nearly $60 million in the 2013 

budget, with R&D funding increases among all of the DOI bureaus, and particularly 

USGS, FWS, BSEE, BLM and BOR. With these investments, Interior will support 

research that addresses critical challenges in energy production and the management of ecosystems, invasive species, public lands, and water. 

Recent technology and operational improvements have led to increased use of hydraulic fracturing in developing natural gas resources. To ensure the prudent and 

sustainable development of this important source of domestic energy, economic development, and job creation, the 2013 budget invests in research and development 

that proactively addresses concerns about the potential impacts of hydraulic fracturing on air, water, ecosystems, and earthquakes. The 2013 budget supports a $45 

million interagency research and development initiative by the USGS, the Department of Energy, and the Environmental Protection Agency aimed at understanding 

and minimizing potential environmental, health, and safety impacts of shale gas development and production through hydraulic fracturing. 

The BOEM is working with the University of Texas and a team of arctic researchers on a five year comprehensive study of the Hanna Shoal ecosystem in the 

Chukchi Sea off Alaska’s northwest coast. Past studies have identified this area as 

an important biological ecosystem, which supports a high concentration of marine 

life. Valuable data on physical and biological processes in the area obtained from 

this research effort will be combined with the results of previously conducted studies. The resulting information will be used by industry, as well as by BOEM in decisions regarding energy development in this region, and will be included in future 

National Environmental Policy Act analyses. 

In 2011, USGS used cutting edge technology to complete the genome sequencing 

of the fungus that causes the skin infection that is a hallmark of the white-nose 

syndrome, which is decimating bat populations across the country. This sequencing 

will support further research that is necessary to develop management strategies to 

mitigate the spread of the syndrome among bats. Recognizing the impact of this is 

not limited to wildlife health, USGS and university partners produced a study which 

determined that bats contribute $3.7 billion to the agricultural economy by eating 

pests that are harmful to agricultural and forest commodities. The 2013 budget provides $1.8 million for USGS to conduct further research and development to address 

this critical issue. 

In 2013, the Budget requests a $2 million increase in the BLM Wild Horse and 

Burro program to fund research on contraception/ population control. Research may 

include topics such as studies on herd genetics, animal behavior and overall rangeland use as it relates to sterilization and other population growth suppression techniques. The goal of the research will be to develop additional methods to minimize 

wild horse population growth and maintain herd health. 

DELIVERING SUSTAINABLE GROWTH THROUGH WATER

Although the Bureau of Reclamation is within the jurisdiction of the Energy and 

Water Subcommittee, it plays a critical role in addressing the Nation’s water challenges which are of interest the Subcommittee. Reclamation maintains 476 dams 

and 348 reservoirs with the capacity to store 245 million acre-feet of water. The bureau manages water for agricultural, municipal, and industrial use, and provides 

flood control and recreation for millions of people. Reclamation’s activities, including 
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recreation, generate estimated economic benefits of over $55 billion and support 

nearly 416,000 jobs. 

These facilities deliver water to one in every five western farmers to irrigate 

about ten million acres of land, and provide water to over 31 million people for municipal and industrial uses and other nonagricultural uses. The water managed by 

Interior irrigates an estimated 60 percent of the Nation’s vegetables each year. Reclamation facilities also reduce flood damages in communities where they are located 

and thereby create an economic benefit by sparing these communities the cost of rebuilding or replacing property damaged or destroyed by flood events. 

WaterSMART, established in 2010, has assisted communities in improving conservation, increasing water availability, restoring watersheds, resolving long-standing water conflicts, addressing the challenges of climate change, and implementing 

water rights settlements. The program has provided more than $85 million in funding to non-Federal partners, including Tribes, water districts, and universities, including $33 million in 2011 for 82 WaterSMART grant projects. In December, Interior released a report on the effectiveness of the WaterSMART program, which demonstrates the importance of this work to the sustainability of resources in the Colorado River Basin. 

Another example of Interior’s efforts to stretch water resources is the Yuma 

Desalting Plant in Arizona. Reclamation recently completed a year-long pilot operation of the Plant in collaboration with California, Arizona, and Nevada water agencies. The pilot demonstrated the capability of the Plant to augment Lower Colorado 

River supplies and produced sufficient water for use by about 116,000 people in a 

year. Reclamation and the regional water agencies are reviewing the results of this 

effort to evaluate the potential for long-term and sustained operation of the 

desalting plant. 

ENCOURAGING ECONOMIC DEVELOPMENT IN INDIAN COUNTRY AND HONORING TRUST

RESPONSIBILITIES

The Department has a unique responsibility to American Indians and Alaska Natives, which is upheld by Interior’s support for a robust government-to-government 

relationship as demonstrated by a new comprehensive and transparent consultation 

policy that ensures there is a strong, meaningful role for tribal governments. The 

Department and the President hosted the third White House Tribal Nations Conference in December 2011, bringing together tribal leaders from across the United 

States and enabling tribal leaders to interact directly with Administration representatives and identify priority actions for American Indians and Alaska Natives. 

In 2011, Interior began planning to implement the landmark $3.4 billion settlement of the Cobell v. Salazar lawsuit, and appointed a Secretarial Commission on 

Trust Administration and Reform to oversee implementation of the Settlement 

agreement. The Commission is undertaking a forward looking, comprehensive evaluation of Interior’s management of nearly $4 billion in American Indian and tribal 

trust funds—with the goal of making trust administration more transparent, responsive, customer focused, and accountable. 

The Department held regional consultations across the Country to set the framework for the Cobell land consolidation program. The Settlement establishes a $1.9 

billion fund for the voluntary buyback and consolidation of fractionated land interests to provide individual American Indians with an opportunity to obtain cash payments for divided land interests and consolidate holdings for economic and other 

uses, a significant benefit for tribal communities. Almost four million individually 

owned interests involving nearly nine million acres have been identified as part of 

this effort. 

To further encourage and speed up economic development in Indian Country, the 

Department took a significant step forward announcing the sweeping reform of antiquated, ‘‘one-size-fits-all’’ Federal leasing regulations for the 56 million surface acres 

the Federal government holds in trust for Tribes and individual Indians. The proposed rule identifies specific processes—with enforceable timelines—through which 

the Bureau of Indian Affairs must review leases. The regulation establishes separate, simplified processes for residential, business, and renewable energy development, so that, for example, a lease for a single family home is distinguished from 

a large solar energy project. The proposed regulation incorporates many changes requested by tribal leaders during extensive consultations this past year to better 

meet the goals of facilitating and expediting the leasing process for trust lands. During the initial consultation period more than 2,300 comments were received from 

more than 70 Tribes as well as several Federal agencies, including the Departments 

of Housing and Urban Development, Agriculture, and the Internal Revenue Service. 
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The BIA regulatory drafting workgroup is expected to review the comments and 

publish the final rule in 2012. 

The Claims Resolution Act of 2010 settled the Cobell lawsuit and four settlements 

that will provide permanent water supplies and economic security for the five New 

Mexico Pueblos of Taos, the Crow Tribe of Montana, and the White Mountain 

Apache Tribe of Arizona. The agreements will enable construction and improvement 

of reservation water systems, irrigation projects, a regional multipueblo water system, and codify water-sharing arrangements between Indian and neighboring communities. The primary responsibility for constructing water systems associated with 

the settlements was given to the Bureau of Reclamation and BIA is responsible for 

the majority of the trust funds. 

Reclamation is requesting $21.5 million in 2013 for the continued implementation 

of these four settlements and $25.0 million for the Navajo-Gallup Water Supply 

project. In total, the Indian Affairs budget includes $36.3 million for ongoing Indian 

land and water settlements, which includes $9.5 million for the seventh and final 

payment for the Nez Perce/Snake River Water Rights Settlement. 

A key responsibility for Indian Affairs is ensuring and improving the safety of Indian communities. Some Indian reservations experience violent crime rates that are 

twice the national average. The high crime rates are a key issue for tribal leaders 

as they degrade the quality of life for residents, attract organized crime, and are 

a real disincentive for businesses to consider these communities for economic development. FY 2011 was the second year of a two-year pilot at four reservations to conduct expanded community policing, equip and train the law enforcement cadre, partner with the communities to organize youth groups and after school programs, and 

closely monitor results. The results exceeded expectations with a 35 percent overall 

decrease in violent crime in the four communities. Information about the four reservations is being analyzed and the program will be expanded in 2013 to an additional two communities. The 2013 budget includes $353.9 million for Public Safety 

and Justice programs, a program increase of $8.5 million to support this expansion 

and other public safety activities. 

INTERIOR’S BUDGET IN CONTEXT

President Obama has challenged agencies to encourage American innovation, employ and educate young people, rebuild America, and promote economic development. Interior’s 2013 budget invests in areas that are responsive to these challenges 

and more. This budget continues funding for important programs that will protect 

the Nation’s significant natural resources and cultural heritage, makes strategic investments in energy development, advances partnerships to leverage resources, and 

seeks improved outcomes for Indian communities. At the same time, this budget recognizes the need for fiscal responsibility. The priority programs that are level funded with 2012 and limited strategic investments proposed in 2013 are balanced by 

reductions in lower priority programs, deferrals and planning efficiencies. 

Taking Fiscal Responsibility—Interior made its 2013 budget decisions in the context of the challenging fiscal environment. The 2013 budget of $11.5 billion, including Reclamation, eliminates and reduces lower priority programs, defers project 

start-ups, reduces duplication, streamlines operations, and captures savings. The 

2013 request is $97.9 million, essentially level with 2012 enacted and $280.4 million 

below 2011. 

The 2013 budget contains $516.8 million in program terminations, reductions, and 

savings from administrative efficiencies. Staffing reductions of 591 FTEs are 

planned for 2013, a reduction of 741 FTEs from 2011 levels. These personnel reductions are focused on areas where there are funding reductions. Staffing reductions 

will be achieved through attrition, and buy-outs in order to minimize the need to 

conduct reductions in force to the greatest extent possible. 

This budget is responsible, with strategic investments in a few, targeted areas, 

and maintains the core functions that are vital to uphold stewardship responsibilities and sustain key initiatives. The budget also continues efforts to shift program 

costs to industry where appropriate. Permanent funding that becomes available as 

a result of existing legislation without further action by the Congress results in an 

additional $6.0 billion, for $17.5 billion in total budget authority for Interior in 2013. 

Administrative Savings—As part of the Administration’s Campaign to Cut Waste, 

the Department will achieve additional administrative efficiencies that result in cumulative savings of $207.0 million from 2010 to 2013. These reductions are being 

implemented throughout Interior and result from changes in how the Department 

manages travel, employee relocation, acquisition of supplies and printing services, 

and the use of advisory services. The proposed savings in administrative functions 
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will not have an impact on programmatic performance, and to the greatest extent 

possible savings will be redirected into priority programmatic areas. 

The Department’s 2013 budget reflects a freeze on Federal salaries for 2012 and 

a 0.5 percent pay increase in 2013. The budget fully funds fixed costs for the civilian 

pay increase, anticipated changes in the Federal contributions to health benefits, 

rent increases, changes in workers and unemployment compensation costs, programs financed through the Working Capital Fund, and specific contract requirements for P.L. 93-638 agreements with Tribes. 

Cost Recovery—Significant portions of Interior’s budget are funded by cost recovery, offsetting collections, and discrete fees linked to uses of lands and resources. 

The budget proposes to increase cost recovery to offset the cost of some resource development activities that provide clear benefits to customers. The proposed fees on 

oil and gas inspections are consistent with the recommendations of the National 

Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. The Commission’s report stated the oil and gas industry should be ‘‘required to pay for its 

regulators’’ so that the costs of regulation ‘‘would no longer be funded by taxpayers 

but instead by the industry that is permitted to have access to a publicly owned 

resource.’’ 

The budget includes $48.0 million from new inspection fees to be paid by onshore 

oil and gas producers. Instituting these fees will allow for a $10.0 million program 

increase to be used to strengthen the BLM inspection program, along with a $38.0 

million decrease in current appropriations for BLM as a whole. Similar fees were 

proposed in 2012 but not adopted due to concerns about impacts on the producers. 

The fees would be on average, 0.2 percent of the annual income collected by the producers. In addition to the proposed onshore inspection fees, estimated fee collections 

from the offshore oil and gas inspections instituted in 2012 are slightly increased 

in 2013 to $65.0 million. This fee-based funding is critical to maintaining the Administration’s aggressive implementation of a robust offshore safety program. 

The 2013 budget proposes a new grazing administrative fee of $1.00 per animal 

unit month on a three-year pilot basis. The fee is estimated to generate $6.5 million 

in 2013 and will be used to assist BLM in processing grazing permits. During the 

period of the pilot, BLM would work through the process of promulgating regulations for the continuation of the grazing fee as a cost recovery fee after the pilot 

expires. The 2013 budget continues an offsetting collection initiated in 2012, allowing the Office of Surface Mining to retain coal mine permit application and renewal 

fees for the work performed as a service to the coal industry. An estimated $3.4 million will be collected in 2013. 

MAJOR CHANGES IN THE 2013 REQUEST

The Department’s 2013 budget request totals $11.5 billion in current authority including $10.5 billion for programs funded by the Interior, Environment, and Related 

Agencies Appropriations Act. This is $140.3 million, or 1.4 percent, above the 2012 

level. The 2013 request for the Bureau of Reclamation including the Central Utah 

Project Completion Act, funded in the Energy and Water Development Appropriations Act, is $1.0 billion in current appropriations, $42.4 million or 3.9 percent below 

the 2012 level. 

Interior continues to generate more revenue for the U.S. Treasury than its annual 

appropriation. In 2013, Interior will generate receipts of approximately $13.9 billion 

and propose mandatory legislation with a total net savings of roughly $2.5 billion 

over ten years. 

Bureau of Land Management—The 2013 request is $1.1 billion, essentially level 

with the 2012 enacted budget. This includes a decrease of $8.2 million for BLM’s 

two operating accounts, an increase of $11.2 million for Land Acquisition, and a reduction of $3.6 million that eliminates the Construction account. 

To advance the America’s Great Outdoors initiative, the request includes $6.3 million in programmatic increases for recreation, cultural resources, and the National 

Landscape Conservation System for BLM to expand and improve opportunities for 

recreation, education, and scientific activities while enhancing the conservation and 

protection of BLM managed lands and resources. 

The BLM will continue to promote and facilitate the development of renewable 

energy on public lands, as part of the New Energy Frontier initiative. The 2013 

budget includes a program increase of $7.0 million for renewable energy to support 

wind, solar, and geothermal energy. An additional $13.0 million in program increases are requested to maintain and strengthen management of the oil and gas 

program, along with a requested $10 million increase in mandatory funding specifically focused on strengthening BLM’s oil and gas inspection program. These increases would be more than offset by $48.0 million in proposed inspection fees to 
14 

shift the cost of the oil and gas inspection and enforcement activity from taxpayers 

to the oil and gas industry. 

The other major program increase is $15.0 million to implement sage grouse conservation and restoration measures to help prevent the future listing of the species 

for protection under the Endangered Species Act. The BLM will use $10.0 million 

of the requested increase to incorporate the necessary protections into BLM’s land 

use plans to address conservation of the sage grouse. These plans will guide energy 

development, transportation, and other uses and ensure conservation of sage grouse 

habitat. The remaining $5.0 million funds on-the-ground projects to restore and improve sage grouse habitat and additional inventory, monitoring, and mapping efforts 

to delineate areas of highest priority habitat in the range of the sage grouse. Other 

program increases in the BLM budget include $1.5 million for the Secretary’s Western Oregon Strategy, $2.0 million for research and development on population control in the Wild Horse and Burro Management program, and $4.4 million in the Resource Management Planning program to support high priority planning efforts. 

A $15.8 million program decrease is proposed in the Rangeland Management program, however, the impact of this funding decrease will be mitigated by a new grazing administrative processing fee of $1.00 per animal unit month that BLM proposes to implement on a pilot basis through appropriations language, estimated to 

raise $6.5 million in 2013. The 2013 budget reduces programmatic funding for the 

Alaska Conveyance program by $12.4 million from the 2012 level. Interior will explore opportunities to further streamline the program. A $3.5 million program reduction is proposed in the Public Domain Forest Management program. 

Bureau of Ocean Energy Management—The 2013 operating request is $164.1 million, including $62.7 million in current appropriations and $101.4 million in offsetting collections. This is an increase of $3.3 million above the 2012 enacted level. 

The 2013 budget includes program increases of $2.0 million from the 2012 enacted 

level for activities to promote offshore conventional and renewable energy development that is safe and environmentally responsible. Increased funding will be used 

to develop baseline characterization and monitoring capabilities in the Gulf of Mexico that are required as a result of the Deepwater Horizon incident, as well as to 

support renewable energy lease auctions. 

Bureau of Safety and Environmental Enforcement—The 2013 operating request 

is $222.2 million, including $96.3 million in current appropriations and $125.9 million in offsetting collections. This is an increase of $24.8 million above the 2012 enacted level. The $4.8 million increase for offsetting collections includes an estimated 

$3.0 million increase in inspection fee collections. 

The 2013 budget includes funds to increase operational safety capabilities, develop 

the National Offshore Training and Learning Center for inspectors, and conduct research and development activities on critical safety systems associated with offshore 

oil and gas development. 

Office of Surface Mining—The 2013 budget request is $140.7 million, a decrease 

of $9.5 million from the 2012 enacted level. The reduction reflects decreases in 

grants to States and Tribes to encourage regulatory programs to recover costs from 

fees charged to the coal industry and finalize the transition of abandoned mine land 

reclamation from discretionary to mandatory funding. 

I signed a Secretarial Order on October 26, 2011, to review certain functions of 

OSM and BLM for potential consolidation. As part of this effort, I asked the Directors of OSM and BLM and other Interior officials to report by February 15, 2012 

on the results of discussions with the bureaus’ employees, congressional committees, 

and interested parties, such as Tribes, State regulatory officials, industry representatives, and representatives of communities affected by coal mining. Our efforts in 

consolidation will respect existing law and identify actions that will strengthen 

these two bureaus. 

Bureau of Reclamation—The 2013 budget request for the Bureau of Reclamation 

totals $1.0 billion, including the Central Utah Project Completion Act program. Interior’s 2013 budget proposes to consolidate the CUPCA program with the Bureau of 

Reclamation. This will allow the Department to evaluate the priority of the CUPCA 

program in the context of other water programs. The 2013 CUPCA request is $21.0 

million, a decrease of $7.7 million from the 2012 enacted level. The Bureau of Reclamation total adjusted in 2012 to include CUPCA funding, is a decrease of $42.4 

million below the 2012 enacted level. 

Reclamation’s 2013 request reflects reductions due to the completion of the construction of Animas-La Plata and the Central Valley Project Red Bluff pumping 

plant and fish screen, discontinues the Geographically Defined Investigation Programs and Rural Water Program, Title I, and does not continue the following congressional additions in the 2012 enacted budget: fish passage and fish screens; 
15 

water conservation and delivery studies, projects and activities; and environmental 

restoration and compliance. The 2013 budget includes $7.1 million to begin implementation of actions under 

the Klamath Basin Restoration Agreement that are currently authorized under existing law, and some increases in programs such as: rural water projects, which includes a $9.2 million increase to complete the construction of the Mni Wiconi Project 

in South Dakota by the 2013 sunset date; the WaterSMART program; and the Safety of Dams program. 

Funding for Native American programs in Water and Related Resources shows a reduction of $52.1 million, reflecting the shift of $46.5 million to the requested new 

Indian Water Rights Settlements account and smaller decreases. Reclamation is requesting the establishment of an Indian Water Rights Settlements account in 2013 

to assure continuity in the construction of the authorized projects and to highlight 

and enhance transparency in handling these funds. The total for Reclamation’s implementation of Indian water rights settlements in 2013 is $106.5 million, $46.5 million in current funding and $60.0 million in permanent authority. U.S. Geological Survey—The USGS budget request is $1.1 billion, $34.5 million 

above the 2012 enacted level. The President’s budget supports science, monitoring, 

and assessment activities that are critical to understanding and managing the ecological, mineral, and energy resources that underlie the prosperity and well-being 

of the Nation. The 2013 budget includes a program increase of $51.0 million to fund 

research and development priorities in disaster response, hydraulic fracturing, 

coastal and ocean stewardship, and ecosystem restoration. The budget also supports 

the Secretary’s initiatives in responsible energy development and further resolution 

of water challenges with funding above the 2012 enacted level. 

The USGS budget also includes investments in important science programs to help meet societal needs. A program increase of $13.0 million above 2012 for the 

WaterSMART Program will be used to conduct research on predictive models on regional water availability, explore methods of integrating and disseminating data 

through science platforms, and establish a National Groundwater Monitoring Network. 

A program increase of $8.6 million is requested to improve rapid disaster response 

to natural disasters. Funding will be used to improve capacity to provide timely and 

effective science and information products to decision makers, in order to minimize 

the risks hazards pose to human and natural systems. Funding will be invested in 

capability improvements to the USGS monitoring networks for rapid response to 

earthquakes, volcanoes, volcanic ash, debris flow, tsunamis, floods, hurricanes, and 

other potential threats to populations and infrastructure. The budget includes a program increase of $13.0 million to support the hydraulic 

fracturing research and development effort with the Department of Energy and Environmental Protection Agency to understand and minimize potential adverse environmental, health, and safety impacts of shale gas development through hydraulic 

fracturing. New work will build on existing efforts and address issues such as water 

quality and quantity, ecosystem impacts, and induced seismicity. 

With a program increase of $16.2 million, USGS will conduct science in support 

of ecosystem management for priority ecosystems such as the Chesapeake Bay, California Bay-Delta, Columbia River, Everglades, Puget Sound, Great Lakes, Upper 

Mississippi River, and the Klamath Basin. With an increase of $2.0 million, the 

USGS will address overarching ecosystem issues related to the invasive brown tree 

snake, white-nose syndrome in bats, and coral reef health. These increases will provide information management and synthesis and land change science support for 

these ecosystem activities. Included in the total above is $500,000 identified for research efforts through the DOI Climate Science Centers to enhance work with 

Tribes to understand the impacts of climate change on tribal lands. Funding increases will also support priorities in sustaining our National environmental capital, 

including development of the first coordinated multi-departmental effort of its kind 

to develop a standardized ecosystem services framework. 

The 2013 budget also provides a program increase of $6.8 million to sustain and 

enhance existing activities and for a new initiative on Science for Coastal and Ocean 

Stewardship that supports priority objectives of the National Ocean Policy in the 

areas of marine and coastal science, resource and vulnerability assessments, ecosystem based management, and providing science based tools to inform policy and 

management. The USGS will work with partners to provide access to comprehensive 

maps and assessments of seabed and coastal conditions and vulnerability. The increase will improve the integrated science needed to inform development of resources while conserving the Nation’s coastal and marine ecosystems. 

Fish and Wildlife Service—The 2013 budget includes $1.5 billion, an increase of 

$72.0 million above the 2012 enacted level. In addition, the budget includes a $200.0 
16 

million cancellation of prior year unobligated balances in the Coastal Impact Assistance program. The budget includes America’s Great Outdoors increases of $20.9 million in the Resource Management account and $52.3 million for land acquisition. 

There is a $3.9 million increase in the North American Wetlands grants program, 

a component of the AGO initiative. State and Tribal Grants are funded at $61.3 million, level with 2012. Funding for the Construction account is reduced by $3.9 million. 

The budget proposes a program increase of $4.0 million for activities associated 

with energy development. This enables FWS to participate fully in priority landscape level planning and assist industry and State fish and wildlife agencies as they 

plan for renewable energy projects and transmission corridor infrastructure. The 

2013 budget continues the commitment to ecosystem restoration by including $13.5 

million for the Everglades, an increase of $3.0 million; $4.9 million for California’s 

Bay-Delta, level with 2012; $10.2 million for the Gulf Coast, level with 2012; $10.3 

million for the Chesapeake Bay, a program increase of $145,000; and $47.8 million 

for the Great Lakes, a program increase of $2.9 million. Funding for the Cooperative 

Landscape Conservation and Adaptive Science activity is $33.1 million, an increase 

of $856,000. This funding supports the operation of 14 Landscape Conservation Cooperatives. The budget includes $994.7 million available under permanent appropriations, 

most of which will be provided in grants to States for fish and wildlife restoration 

and conservation. 

The 2013 budget proposes a reduction of $14.0 million to eliminate the discretionary contribution to the National Wildlife Refuge Fund payments to counties to 

offset local tax loss due to Federal land ownership. An estimated $8 million in mandatory receipts collected and allocated under the program would remain. Payments 

collected by counties can be used for non-conservation purposes and as such, this 

Fund does not provide the high priority conservation benefits delivered by other 

FWS programs. The budget also proposes the cancellation of $200 million in prior 

year balances within the Coastal Impact Assistance Program. National Park Service—The 2013 budget includes $2.6 billion, $1.0 million below the 2012 enacted level. Within the total available for NPS in 2013, $2.4 billion is 

for programs that support the goals of the America’s Great Outdoors initiative. The 

budget proposes strategic increases to advance the goals of the initiative, including 

increases of $13.5 million for park operations and $17.5 million for Land Acquisition 

and State Assistance. The budget proposes reductions of $7.8 million in the National 

Recreation and Preservation account from the National Heritage Areas program, 

and $24.2 million from Construction. The request for the Historic Preservation Fund 

is level with 2012—grants to States and Tribes are continued at the 2012 level of 

$55.9 million. 

Select programmatic increases in the park operations account include $5.0 million 

for Climate Change Adaptive Management tools, $2.0 million for U.S. Park Police 

operations including $1.4 million in support of the Presidential Inauguration, $1.2 

million for National Capital Area parks in support of the Presidential Inauguration, 

and $610,000 for the Challenge Cost Share program. These increases are offset with 

strategic reductions of $24.8 million to park operations and service-wide programs. 

Funding for Land Acquisition and State Assistance totals $119.4 million and includes a programmatic increase of $2.5 million for Federal land acquisition. The 

Land Acquisition proposal includes $9.0 million for matching grants to States and 

local entities to preserve and protect Civil War battlefield sites outside the national 

park system. The budget also requests a programmatic increase of $15.1 million for 

the State Assistance grant program. The $60.0 million request for State grants includes $20.0 million for competitive grants that support urban parks and green 

spaces, blueways, and landscape level conservation projects in communities that 

need them the most. 

Funding for Construction includes a programmatic reduction of $25.3 million for 

line-item construction projects, however, the budget proposes funding for the most 

critical health and safety projects in the national park system. It also includes programmatic reductions of $1.5 million from construction program management and 

planning, $760,000 from the housing improvement program, $443,000 from construction planning, $450,000 from management planning, and $228,000 from equipment replacement. 

Indian Affairs—The 2013 budget includes $2.5 billion for Indian Affairs programs, 

a decrease of $4.6 million from the 2012 enacted level. This includes an increase 

of $11.7 million for Operation of Indian Programs and a decrease of $17.7 million 

in the Construction account. The budget includes an increase of $3.5 million in Indian Land and Water Claim Settlements and a decrease of $2.1 million in the Indian Guaranteed Loan program. 
17 

In 2013, the largest increase, $8.8 million, is in Contract Support Costs and the 

Indian Self-Determination Fund, both high priorities for Tribes. Public Safety and 

Justice activities receive a program increase of $8.5 million to support additional police officers and detention corrections staff. 

The budget proposes program increases of $7.8 million for the Trust Natural Resources programs and $7.0 million for Trust Real Estate Services programs. Funding increases for Trust Land Management programs are proposed to assist Tribes 

in the management, development, and protection of Indian trust land and natural 

resources. The budget proposes a $2.5 million program increase to support increasing enrollment at tribal colleges. 

The 2013 request reflects a reduction of $19.7 million as the bureau will undergo 

a consolidation in 2013 to streamline and improve oversight operations. The BIA 

will engage in extensive consultation with Tribes to identify strategies that will ensure tribal needs and priorities are addressed. Following consultation, Indian Affairs 

will construct an implementation plan for a streamlined, cost-effective organization. 

The budget also includes $13.9 million in administrative savings from reductions to 

fleet, travel, contractors, and awards. 

Departmental Offices and Department-wide Programs—The 2013 request for the 

Office of the Secretary is $261.6 million, a reduction of $266,000 from the 2012 enacted level. Of this, $119.6 million is for Office of Natural Resources Revenue including a program increase of $1.2 million to complete termination of the Royaltyin-Kind program and a program decrease of $2.3 million for completed information 

management system upgrades. The budget for OS includes a program increase of 

$1.6 million for minerals receipts modeling development to improve revenue estimation and reporting capabilities and a program increase of $2.0 million for facilities rent necessitated by the delay in the Main Interior Building modernization 

project. Other changes include a general program reduction of $3.7 million and the 

transfer of the Indian Arts and Crafts Board from OS to BIA resulting in a reduction of $1.3 million. 

The Department’s 2013 request for the Working Capital Fund appropriation is 

$70.6 million, an increase of $8.7 million from the 2012 enacted level. Within this 

request is $62.1 million to continue deployment of the Financial and Business Management System including implementation of the acquisition and financial assistance functionality as recommended by an independent assessment of the program. 

The budget proposes an increase of $3.5 million to improve Interior’s stewardship 

of its cultural and scientific collections and an increase of $2.5 million to expand 

collaboration similar to the Service First to improve delivery and operating costs. 

Proposed reductions include $5.0 million to reflect the shift of the Department’s Information Technology Transformation initiative from appropriated funds to the Departmental Working Capital fund and $2.5 million for completion of the Department’s Acquisition Improvement initiative. 

Major changes in other Departmental programs include an increase of $243.0 million in the Wildland Fire Management program. The net increase is comprised of 

a program increase of $195.8 million that fully funds the 10-year suppression average and a program reduction of $39.0 million in the Hazardous Fuels Reduction program reflecting a refocusing of the program toward treatments in the wildlandurban interface. 

The budget request for the Office of Insular Affairs is $88.0 million, a decrease 

of $16.4 million from the 2012 enacted level. The budget includes $5.0 million to 

mitigate the impacts and costs of Compact migration and $3.0 million to implement 

energy projects identified by the Territories’ sustainable energy strategies. Funding 

of $13.1 million for the Palau Compact is not requested for 2013 as it is expected 

the Compact will be authorized in 2012. 

The Office of the Special Trustee request is $146.0 million, $6.1 million below the 

2012 enacted level. The 2013 request includes a program increase of $3.0 million 

for the Office of Trust Review and Audit to conduct compliance audit reviews for 

Interior bureaus. The budget includes program decreases of $9.9 million for streamlining, administrative savings, and the completion of certain trust reform activities. 

MANDATORY PROPOSALS

In 2013, Interior will collect $13.9 billion in receipts and distribute $6.0 billion 

in permanent funding without further appropriation for a variety of purposes, under 

current law. The budget includes 13 legislative proposals that will be submitted to 

the Congress to collect a fair return to the American taxpayer for the sale of Federal 

resources, to reduce unnecessary spending, and to extend beneficial authorities of 

law. Together these proposals will save a net total of approximately $2.5 billion over 

the next decade. 
18 

Reform Coal Abandoned Mine Land Reclamation—The Administration proposes to 

reform the coal Abandoned Mine Lands program to reduce unnecessary spending 

and ensure the Nation’s highest priority sites are reclaimed. First, the budget proposes to terminate the unrestricted payments to States and Tribes that have been 

certified for completing their coal reclamation work because these payments do not 

contribute to abandoned coal mine lands reclamation. Second, the budget proposes 

to reform the distribution process for the remaining funding to competitively allocate available resources to the highest priority coal abandoned mine lands sites. 

Through a competitive grant program, a new Abandoned Mine Lands Advisory 

Council will review and rank the abandoned coal mine lands sites, so OSM can distribute grants to reclaim the highest priority coal sites each year. These reforms will 

focus available coal fees to better address the Nation’s most dangerous abandoned 

coal mines while saving taxpayers $1.1 billion over the next ten years. 

Create a Hardrock Abandoned Mine Reclamation Fund—To address the legacy of 

abandoned hardrock mines across the U.S., the Administration will propose legislation to create a parallel Abandoned Mine Lands program for abandoned hardrock 

sites. Hardrock reclamation would be financed by a new abandoned mine lands fee 

on the production of hardrock minerals on both public and private lands. The BLM 

would distribute the funds through a competitive grant program to reclaim the highest priority hardrock abandoned sites on Federal, State, tribal, and private lands. 

This proposal will hold hardrock mining companies accountable for cleaning up the 

hazards left by their predecessors while generating $500 million in savings over 10 

years. 

Reform Hardrock Mining on Federal Lands—The Administration will submit a 

legislative proposal to provide a fair return to the taxpayer from hardrock production on Federal lands. The legislative proposal would institute a leasing program 

under the Mineral Leasing Act of 1920 for certain hardrock minerals including gold, 

silver, lead, zinc, copper, uranium, and molybdenum, currently covered by the General Mining Law of 1872. After enactment, mining for these metals on Federal lands 

would be governed by the new leasing process and subject to annual rental payments and a royalty of not less than five percent of gross proceeds. Half of the receipts would be distributed to the States in which the leases are located and the 

remaining half would be deposited in the Treasury. Existing mining claims would 

be exempt from the change to a leasing system but would be subject to increases 

in the annual maintenance fees under the General Mining Law of 1872. Holders of 

existing mining claims for these minerals could, however, voluntarily convert claims 

to leases. The Office of Natural Resources Revenue will collect, account for, and disburse the hardrock royalty receipts. The proposal is projected to generate Treasury 

revenues of $80.0 million over ten years. 

Fee on Non-producing Oil and Gas Leases—The Administration will submit a legislative proposal to encourage energy production on lands and waters leased for development. A $4.00 per acre fee on non-producing Federal leases on lands and waters would provide a financial incentive for oil and gas companies to either get their 

leases into production or relinquish them so the tracts can be leased to and developed by new parties. The proposed $4.00 per acre fee would apply to all new leases 

and would be indexed annually. In October 2008, the Government Accountability Office issued a report critical of past efforts by Interior to ensure companies diligently 

develop their Federal leases. Although the report focused on administrative actions 

the Department could undertake, this proposal requires legislative action. This proposal is similar to other non-producing fee proposals considered by the Congress in 

the last several years. The fee is projected to generate revenues to the U.S. Treasury 

of $13.0 million in 2013 and $783.0 million over ten years. 

Net Receipts Sharing for Energy Minerals—The Administration proposes to make 

permanent the current arrangement for sharing the cost to administer energy and 

minerals receipts, beginning in 2014. Under current law, States receiving significant 

payments from mineral revenue development on Federal lands also share in the 

costs of administering the Federal mineral leases from which the revenue is generated. In 2013, this net receipts sharing deduction from mineral revenue payments 

to States would be implemented as an offset to the Interior Appropriations Act, consistent with identical provisions included in the Act since 2008. Permanent implementation of net receipts sharing is expected to result in savings of $44.0 million 

in 2014 and $449.0 million over ten years. 

Repeal Oil and Gas Fee Prohibition and Mandatory Permit Funds—The Administration proposes to repeal portions of Section 365 of the Energy Policy Act, beginning in 2014. Section 365 diverted mineral leasing receipts from the U.S. Treasury 

to a BLM Permit Processing Improvement Fund and also prohibited BLM from establishing cost recovery fees for processing applications for oil and gas permits to 

drill. Congress has implemented permit fees through appropriations language for 
19 

the last several years and the 2013 budget proposes to continue this practice. Upon 

elimination of the fee prohibition, BLM will promulgate regulations to establish fees 

for applications for permits to drill administratively, with fees starting in 2014. In 

combination with normal discretionary appropriations, these cost recovery fees will 

then replace the applications for permits to drill fees currently set annually through 

appropriations language and the mandatory permit fund, which would also be repealed starting in 2014. Savings from terminating this mandatory funding are estimated at $18.0 million in 2014 and $36.0 million over two years. 

Geothermal Energy Receipts—The Administration proposes to repeal Section 

224(b) of the Energy Policy Act of 2005. Prior to passage of this legislation, geothermal revenues were split between the Federal government and States with 50 

percent directed to States, and 50 percent to the Treasury. The Energy Policy Act 

of 2005 changed this distribution beginning in 2006 to direct 50 percent to States, 

25 percent to counties, and for a period of five years, 25 percent to a new BLM Geothermal Steam Act Implementation Fund. The allocations to the new BLM geothermal fund were discontinued a year early through a provision in the 2010 Interior Appropriations Act. The repeal of Section 224(b) will permanently discontinue 

payments to counties and restore the disposition of Federal geothermal leasing revenues to the historical formula of 50 percent to the States and 50 percent to the 

Treasury. This results in savings of $4.0 million in 2013 and $50.0 million over ten 

years. 

Deep Gas and Deepwater Incentives—The Administration proposes to repeal Section 344 of the Energy Policy Act of 2005. Section 344 mandated royalty incentives 

for certain ‘‘deep gas’’ production on the OCS. This change will help ensure Americans receive fair value for Federally owned mineral resources. Based on current oil 

and gas price projections, the budget does not assume savings from this change; 

however, the proposal could generate savings to the Treasury if future natural gas 

prices drop below current projections. 

Repeal of Authorities to Accept Royalty Payments In Kind—The Administration 

proposes to solidify a recent Departmental reform terminating the Royalty-in-Kind 

program by repealing all Interior authorities to accept future royalties through this 

program. This change will help increase confidence that royalty payments will be 

properly accounted for in the future. The budget does not assume savings from this 

change because the Administration does not anticipate restarting the program; however, if enacted, this proposal would provide additional certainty that a new Royalty-in-Kind program could not be initiated at some point in the future. 

Federal Land Transaction Facilitation Act—The Administration proposes to reauthorize this Act that expired July 25, 2011 and allow lands identified as suitable 

for disposal in recent land use plans to be sold using the Act’s authority. The sales 

revenues would continue to be used to fund the acquisition of environmentally sensitive lands and to cover the administrative costs associated with conducting sales. 

Federal Migratory Bird Hunting and Conservation Stamps—Federal Migratory 

Bird Hunting and Conservation Stamps, commonly known as Duck Stamps, were 

originally created in 1934 as the annual Federal license required for hunting migratory waterfowl. Today, 98 percent of the receipts generated from the sale of these 

$15.00 stamps are used to acquire important migratory bird areas for migration, 

breeding, and wintering. The price of the Duck Stamp has not increased since 1991, 

while the cost of land and water has increased significantly. The Administration 

proposes to increase these fees to $25.00 per stamp per year, beginning in 2013. Increasing the cost of Duck Stamps will bring the estimate for the Migratory Bird 

Conservation account to approximately $58.0 million. With these increased receipts, 

the Department anticipates additional acquisition of approximately 7,000 acres in 

fee and approximately 10,000 acres in conservation easement in 2013. Total acres 

acquired for 2013 would then be approximately 28,000 acres in fee title and 47,000 

acres in perpetual conservation easements. 

Compact of Free Association—On September 3, 2010, the U.S. and the Republic 

of Palau successfully concluded the review of the Compact of Free Association and 

signed a 15-year agreement that includes a package of assistance through 2024. 

Under the agreement, Palau committed to undertake economic, legislative, financial, 

and management reforms. The conclusion of the agreement reaffirms the close partnership between the U.S. and the Republic of Palau. Permanent and indefinite funding for the Compact expired at the end of 2009. The 2013 budget seeks to authorize 

permanent funding for the Compact as it strengthens the foundations for economic 

development by developing public infrastructure and improving health care and education. Compact funding will also support one or more infrastructure projects designed to support Palau’s economic development efforts. The Republic of Palau has 

a strong track record of supporting the U.S. and its location is strategically linked 
20 

to Guam and U.S. operations in Kwajalein Atoll. The cost for this proposal for 2013- 

2022 is $184.0 million. 

Extension of Payments in Lieu of Taxes—PILT payments are currently authorized 

only through 2012. The budget proposes a one-year extension of mandatory PILT 

payments at the current authorization levels in 2013. These payments support local 

government services in counties that have significant Federal lands within their 

boundaries. The Administration looks forward to working with Congress to develop 

a longer-term strategy for providing sustainable levels of funding for PILT payments, in light of overall constrained budgets and the need for appropriate offsets 

for new mandatory spending. This extension utilizes the current PILT payment formula that is prescribed by law and based on population, certain receipt sharing payments, and the amount of Federal land within an affected county. The cost for this 

proposal in 2013 is estimated at $398.0 million. 

OFFSETTING COLLECTIONS AND FEES

The budget includes several proposals to increase cost recovery fees, so that industries share some of the cost of regulation. 

Fee Increase for Offshore Oil and Gas Inspections—Through appropriations language, the Administration proposes to continue the current offshore inspection fee 

levels authorized by Congress in 2012. These fees are estimated to generate $65.0 

million in 2013, up from $62.0 million in 2012, from operators with offshore oil and 

gas drilling facilities that are subject to inspection by BSEE. The increased fees will 

fund an expanded inspection program, and as enacted for 2012, operators will now 

be charged for the inspection of drilling rigs in addition to production platforms. 

These inspections are intended to increase production accountability, human safety, 

and environmental protection. 

New Fee for Onshore Oil and Gas Inspections—Through appropriations language, 

the Administration proposes to implement an inspection fee in 2013 for onshore oil 

and gas drilling activities that are subject to inspection by BLM. The proposed inspection fee is expected to generate an estimated $48.0 million in 2013, $10.0 million more than the corresponding $38.0 million reduction in requested BLM appropriations, thereby expanding the capacity of BLM’s oil and gas inspection program. 

The fee would support Federal efforts to increase production accountability, human 

safety, and environmental protection. 

Onshore Oil and Gas Drilling Permit Fee—The 2013 budget proposes to continue 

a fee for processing drilling permits through appropriations language, an approach 

taken by Congress in the Interior Appropriations Acts. A fee of $6,500 per drilling 

permit was authorized in 2010, and if continued, would generate an estimated $32.5 

million in offsetting collections in 2013. 

Grazing Administrative Fee—The 2013 budget includes a new grazing administrative fee of $1.00 per animal unit month. The BLM proposes to implement the fee 

through appropriations language on a three-year pilot basis. The budget estimates 

the fee will generate $6.5 million in funds that will assist the BLM in processing 

grazing permits. During the period of the pilot, BLM would work through the process of promulgating regulations for the continuation of the grazing fee as a cost recovery fee after the pilot expires. 

Surface Mining and Reclamation Permit Fee—The 2013 budget continues an offsetting collection initiated in 2012, allowing OSM to retain coal mine permit application and renewal fees for the work performed as a service to the coal industry. 

The fee will help ensure the efficient processing, review, and enforcement of the permits issued, while recovering some of the regulatory operations costs from the industry that benefits from this service. The fee, authorized by section 507 of SMCRA, 

would apply to mining permits on lands where regulatory jurisdiction has not been 

delegated to the States. The permit fee will generate an estimated $3.4 million in 

offsetting collections in 2013. 

CONCLUSION

Thank you for the opportunity to testify on the President’s 2013 budget request 

for the Department of the Interior. We have a tremendous opportunity to invest in 

America’s energy independence and economic growth. This budget balances forward 

looking investments with fiscal restraint. For America to be at its best, we need 

lands that are healthy, waters that are clean, and an expanded range of energy options to power our economy. This concludes my written statement. I am happy to 

answer any questions that you may have. 

The CHAIRMAN. Thank you very much. 
21 

Let me start with a few questions related to the oil and gas industry. I think, Senator Murkowski, you said that that there has 

been a reduction in oil and gas production on Federal lands, although, the oil and gas production in the country, overall, has increased. That’s not my understanding, but I wanted to ask you, Mr. 

Secretary, if you have those figures available, and if you could inform us as to what has happened with regard to production of oil 

and natural gas on Federal lands, both on shore and offshore. 

Secretary SALAZAR. Chairman Bingaman, I appreciate the question. I think the bottom line that we should all be very proud of 

is the fact that we have been able to develop our domestic resources in a very robust way. When you look at the crude oil production in the United States in 2011, it’s the highest level since it’s 

been in 2003. When you look at oil imports into this country, 

they’ve dropped below 50 percent. 

I remember being on that side of the table when we were speaking about import levels that were above 60 percent, and not so long 

ago, at 70 percent. So, we’re moving in the right direction, and it’s 

coming about as a result of multiple approaches, including what’s 

happened with development of private lands, and the domestic gas 

industry, which is so abundant and so important to the future of 

this country. But, it’s also happening with respect to our efforts in 

the onshore, as well as in the offshore, and so let me just say something about the public lands onshore. 

On public lands, the natural gas production just on the public 

lands alone, Senator Murkowski, was the second highest since 

2004, and oil produced on public lands, highest in 2010, since 1997. 

So, the amount that is being produced is very huge. 

I would also say that contrary to some of the reports that you 

see from some of the trade associations in the press, we’ve continued to provide permits and to lease out vast amounts of acreage. 

Right now, on the onshore, for example, 7,000 permits are out 

there that companies hold in their hands, and they ought to be 

moving forward on those 7,000 permits. 

Offshore, this committee knows very well, because of the number 

of hearings that you held with respect to the Deepwater Horizon 

and the Gulf oil spill, we have stood up the industry again. Today, 

we have more rigs working out there in the Gulf of Mexico than 

there were right before the oil spill, and we’ve continued to do 

leases in the Outer Continental Shelf, including the first lease in 

the Gulf, which we held back in December. 

I attended that hearing in New Orleans, and it was one which 

attracted more than $338 million in bids in the Gulf of Mexico. We 

expect to have a combined lease sale from 2 areas in June or July 

of this year. In addition to that, Secretary Clinton, at the direction 

of President Obama and President Calderon, and I just signed a 

major transboundary agreement in the Gulf of Mexico that will 

allow development to move forward with both our resources on the 

transboundary area as well as with the resources on the Mexican 

side. So, we continue to be very bullish about the opportunity to 

develop our oil and gas resources on the public lands, both onshore 

as well as offshore. 

The CHAIRMAN. Let me ask on a different issue, the Park Service 

has been working for some time to put in place a final rule with 
22 

regard to over-flights in the Grand Canyon. The reason I’m asking 

about this is we have a transportation bill on the Senate floor, and 

one of the amendments that has been offered is an amendment 

we’ve seen before, which would essentially override what the Park 

Service would propose in that regard. 

Could you tell me when the Park Service would expect to have 

a final rule in place on this issue? Do we have a date certain that 

we could say that this will be established by a certain date? 

Secretary SALAZAR. Chairman Bingaman, I do not. I know it’s 

been a tough issue to work through, and I will be happy to speak 

with Director Jarvis, and get that information to you. 

The CHAIRMAN. OK. That will be helpful. 

Let me ask about another somewhat parochial issue. In 2006, we 

passed the United States Mexico Transboundary Aquifer Assessment Act. This was directing the Geological Survey to work with 

States and universities, both in the U.S. and in Mexico, to do an 

assessment of underground water aquifers on the 2 sides of the 

border. 

It’s my understanding that we don’t have any funds being allocated to continue with this work at the current time. I don’t know 

if this is something you focused on, but to me, it’s important. We 

have large population centers in El Paso and Wattis, that you’re 

very familiar with, that there’s great disagreement between officials in the 2 countries as to what the groundwater situation is, 

and the thought behind this legislation was to try to correct that. 

Is this an issue you could give us any information on today? Or 

maybe you need to get back to me on the record for this 

Secretary SALAZAR. Let me get back to you. On the record, let me 

just say that I have been to El Paso and have worked on issues 

regarding both the Rio Grande and the Colorado River systems, 

and under the great leadership of the Bureau of Reclamation Commissioner Mike Connor, we have made huge progress on the surface water issues between the United States and Mexico. We have 

developed a series of agreements with the States on the Colorado 

River. We are working on some on the Rio Grande as well. 

The underground issues, with respect to the transboundary 

aquifers, I believe that we were not able to fund those studies, because the money just was not in the budget. But I recognize the 

importance of the issue. Let me get back to you, Chairman Bingaman, with more specific information on what, if anything, we were 

able to do with the money that we have, or has or has not been 

requested. 

The CHAIRMAN. Thank you. Senator Murkowski. 

Senator MURKOWSKI. Thank you, Mr. Chairman. 

In the discussion that you were having with Senator Bingaman, 

it sounds like there’s going to be some debate back and forth in 

terms of what the real numbers are, where the activity is. But, I’m 

looking at a map here of the lower 48 States that indicate that 93 

percent of shale oil and gas wells are on private and State land, 

and that’s where we’re seeing this uptick. 

You know, I think it is important for us to understand where 

we’re seeing the increased activity, and I would like to see more on 

the Federal side, not only in the lower 48, but, of course, up north. 

So I think this is a pretty telling map. So we’ll share that with you. 
23 

I wanted to ask you about this royalty study that came out. Apparently, last week, the Department of the Interior had commissioned it last year to compare the Federal royalty rates with other 

regimes. The report says when comparing jurisdictions, based on 

average government take among the cases generated for this study, 

all 3 Federal jurisdictions are levering a higher government take 

than other jurisdictions, relative to their remaining recoverable reserve ranking. 

It also found that the bonus bids, which, of course, are pretty sig- nificant, can top $3 billion in a single lease sale, aren’t being counted when the government assesses whether the taxpayers are getting a fair return on their resources, which is a pretty large factor 

to leave out. 

So, as it relates to the onshore piece, the question that I would 

ask is whether we’re really ready to call for an increase in royalties 

on Federal onshore areas. The report said, and this was just one 

piece pulled out of it, ‘‘Any of the suggested alternative rates for 

Wyoming Federal lands, however, will deteriorate their competitive 

position in the market, which is rather weak, as it is.’’ Now, that’s 

coming from your report, indicates that onshore, it really questions 

whether or not we should be increasing those royalty rates, because 

it will make the lands less competitive. Then as it relates to offshore royalty, the study says, ‘‘Any increase of the already high 

royalty rate levied in the Gulf of Mexico will increase the risk of 

system instability. Any potential gains from the higher royalty rate 

are likely to be offset by reduced revenue from signature bonuses 

and its lower pace of leasing.’’ 

So, what I’m trying to understand is, given what your own report 

has said, why are we proposing within this budget to raise the royalty rates both onshore and offshore? 

Secretary SALAZAR. Senator Murkowski, I’m going to have David 

Hayes respond to the specific question. But, let me just say that 

the principle that we have followed, and we will follow in looking 

at these royalty rates, including the onshore royalty rates, is the 

principle of the fair return to the taxpayers. I think, as I’ve not reviewed the whole of the study, but what I remember from the 

pieces that I did read, is that when you look at the onshore royalty 

rates, Texas, Alabama, and many other States have a royalty rate 

that is significantly higher than what the United States has. So the 

question is whether the United States citizen and the taxpayer is 

getting a fair return on these lines, and so that’s what we will look 

at. 

Senator MURKOWSKI. OK. 

Secretary SALAZAR. I need to take a look at the whole of the report. But, let me have David, because I think he may have more 

on the timeline. 

Senator MURKOWSKI. Mr. Hayes, if you can also address the 

issue of whether or not the bonus bids then are being counted 

when the government assesses whether the taxpayers are getting 

a fair deal, because it’s my understanding that they’re not. I would 

further add that the difference that you might have in North Dakota or Texas is you’ve got a level of stability and predictability 

there that we’re not seeing, certainly, with the Federal leases. So, 

Mr. Hayes. 
24 

Mr. HAYES. Senator, there are a variety of studies that are under 

way to help address the question of whether the taxpayer is getting 

an appropriate royalty rate or not. Of course, this started with a 

GAO study, which very strongly suggested that the Federal leases 

were not getting an equivalent rate to many State leases, with 

Texas being a prime example. 

This study, as you know, primarily looks at the global question, 

and there are very few U.S. jurisdictions in this particular study. 

We’re looking at that analysis, and we’ll address it. I don’t know 

the answer to your specific question about the bonus issue or not. 

It’s a very important study, and it’s part of it. We have another significant study under way as well, and it’s the cumulative impact 

of all of these studies that we will utilize to determine if and what 

an appropriate proposal would be for a royalty rate. 

Senator MURKOWSKI. It was my understanding that the GAO 

study was the one that left out the bonus bids, and, again, extraordinarily significant when you factor in what the Federal Government receives. $3 billion is pretty significant. 

My time is up, but I’ll come back for a second round. What I 

would leave you with is this is the Department of the Interior’s 

study. This is what you had requested, in terms of the comparative 

royalty study. So, the fact that you’re saying that it was more of 

a global study, as opposed to one domestically, I obviously need to 

understand a little bit more about what was requested. But what 

came out, I think, is pretty telling, in saying that efforts to increase 

the royalty rates onshore or offshore will make us less competitive 

and I don’t think that that’s a position that we would like to be 

in. 

Thank you, Mr. Chairman. 

Secretary SALAZAR. If I may, Senator Murkowski. 

Senator MURKOWSKI. Yes. 

Secretary SALAZAR. I think the study has to be read as a whole, 

and we obviously will do that. But, it was the GAO’s finding back 

in 2008 that said that the American taxpayer was not getting its 

fair return, and so these studies have been put together to do that. 

My understanding is that it has a very different conclusion than 

the one that you articulated, but we’ll take a look at it, and we’ll 

work with you, because at the end of the day, we ought to be getting a fair return to the taxpayer. 

Senator MURKOWSKI. Thank you, sir. 

The CHAIRMAN. Senator Wyden. 

Senator WYDEN. Thank you, Mr. Secretary. I want to welcome 

Secretary Salazar as well. Today, as a former member of this committee, he always reaches out to us, and did again with me last 

night. Mr. Secretary, it’s very much appreciated, and I know other 

colleagues feel the same way. 

Let me ask you a question about gasoline prices, if I might, to 

start with. The argument is being made that the reason gasoline 

prices are so high is that you haven’t opened up enough public 

land. You’ve heard that argument, and it’s been made by a variety 

of groups and individuals. Your testimony, of course, today 

counters that, and describes that you disagree with that position. 

So, I think it would be helpful if you could lay out on the record, 

particularly because trends are so important, what areas in the 
25 

last year, offshore and onshore, have you opened up for energy development? 

Secretary SALAZAR. Thank you, Senator Wyden, for that question. You know, we have moved aggressively in opening up and 

putting on the market new areas in the Gulf of Mexico. The conclusion of the treaty that Secretary Clinton and I signed last week, 

or the agreement, which still has to be ratified by the Congress, is 

part of that effort in the Gulf of Mexico. 

We’re moving forward to look at the potential for oil and gas exploration in the Arctic Seas. Onshore Alaska, Senator Murkowski 

well knows, the 22-million acre national petroleum reserve area, 

through the construction of the bridge into CD5, it may open that 

up in a very significant way. Onshore, I believe the numbers are 

close to 40 million acres of land has been leased to oil and gas companies. 

As I indicated in my earlier testimony, there are 7,000 permits 

out there that have been given onshore, and just waiting for companies to drill, and the Gulf is back, and the Gulf is working. So 

I think we are doing everything that we can. 

In terms of the gas price question, I think the realty of it is that 

it’s easy to play politics with gas prices, and everybody has their 

bumper sticker solution to what we can do with it. The reality of 

it is that gas prices are set on the global market. You know, the 

instability in the Middle East is part of what has created the most 

recent gas price hike. We’ve seen these kinds of spikes over a long 

period of time, dating back, according to a report that I have at Interior, to 1857. So these kinds of issues are issues that we’ve confronted in the past. 

Senator WYDEN. There’s no question that there are a variety of 

factors with respect to gasoline prices. You didn’t mention Iran, for 

example. I sit on the Intelligence Committee. We can’t get into 

classified matters, obviously, but there are a whole host of issues. 

I think the only other point on gasoline prices is, I think it would 

be very helpful for the record, and I think you have this information Mr. Hayes. 

The Secretary went through, I think, 3 major areas that he felt 

would constitute significant additions and supply, a couple of comments with respect to onshore. I think, for the record, if you could 

tell us your projections of what that would mean in terms of additional supply, I think that would be helpful. 

Let me move on to one other quick question. It involves the matter you and I talk about often, Secretary Salazar, and that’s the 

forestry situation in my home State. As you know, we’re particularly concerned, because the cut level doesn’t seem to be going up 

at the rate we need, particularly in southern Oregon and in Medford. 

Now, to your credit, you-all are proposing 5 new pilot, you know, 

projects. You’re dealing with a host of protests of sales from, you 

know, previous years. So the question is going to be: How are you 

going to balance all of these multiple tasks, get out the timber 

sales, and get the volume up, which means that you’ve got to essentially perform on a number of fronts, in order to try to strike 

the kind of balanced multiple-use approach we want for forestry in 

our part of the world. 
26 

How are you going to juggle those things, so that we can get 

more timber to the mills, particularly in southern Oregon, Mr. Secretary? 

Secretary SALAZAR. Senator Wyden, thank you for your leadership on the issue. It is a difficult issue, and I will say that what 

we have done in developing the ecological forestry principles has 

followed the lead of Dr. Franklin and Dr. Johnson. They are the 

ones who are probably most respected, in terms of how you can do 

ecological forestry. I was in Medford, at the Pilot Joe project, and 

saw timbering that was going on in that place. Timber is being cut, 

and not just thinning out of the forest, but also timber that is substantial, that will provide timber to the mills. 

There are some few hundred timber sales that are forecast by the 

BLM to go on the market in the year ahead. We hope that we are 

able to move forward with the sustainable forestry principles developed by Dr. Johnson and Dr. Franklin, to be able to provide timber 

to the mills, and at the same time be able to move forward with 

a healthy forest initiative that will restore the habitat, and also address other issues that have been very difficult, such as the issues 

relating to the Barred Owl and the invasive species, which is creating significant problems for the Spotted Owl. 

Senator WYDEN. Thank you, Mr. Chairman. Thank you, Mr. Secretary. 

The CHAIRMAN. Senator Lee. 

Senator LEE. Thank you, Mr. Chairman, and thank you very 

much, Mr. Secretary, for joining us today. I appreciate your willingness to discuss your budget proposals and other matters of importance and concern to Americans. 

BLM is currently operating under an interim plan that outlines 

certain procedures for maintaining the habitat of the sage grouse. 

I wanted to ask, just off the bat, if there’s any possibility that a 

State plan could be approved as a substitute to that interim habitat management plan. 

Secretary SALAZAR. Senator Lee, I think you have your finger on 

what is one of the most important issues for us in 11 States in the 

West. In that vein, Governor Mead, from Wyoming, and Governor 

Hickenlooper, from Colorado are working with Bob Abbey, the Director of the BLM, to see how we can move forward with a template that was developed in Wyoming, so that we can allow development to move forward, and at the same time, have a Western 

States strategy that is protective of the habitat and that is protective of the sage grouse. 

It seems to me that in dealing with all of these ESA issues, that 

being proactive, as we are now doing in southern New Mexico and 

in Texas, with the dunes lizard, working with oil and gas industry 

to set up conservation programs that will allow oil and gas development, but that’s the way to go. My hope is that we’re going to be 

able to do that with respect to the sage grouse. 

Senator LEE. OK. 

Secretary SALAZAR. Utah and your Governor obviously are very 

involved with us. 

Senator LEE. So you could potentially be supportive of such a 

plan in Utah, especially given that the State would bear, you know, 
27 

the primary burden of the regulations, and enforcing them, implementing them, and so forth. That’s a possibility. 

Secretary SALAZAR. It is. 

Senator LEE. Great. 

I next wanted to talk to you a little bit about the Central Utah 

water project, which you mentioned in your opening remarks. As 

you know, of course, in your proposed budget, you proposed authorizing language that would place management supervision, the oversight of this project back within the Bureau of Reclamation. Of 

course, it came out of the supervisory jurisdiction of the Bureau of 

Reclamation after Congress passed the Central Utah Water Project 

Completion Act of 1992. 

Now, there were reasons for that. While this project was under 

the jurisdiction of the Bureau of Reclamation, prior to the 1992 

act’s passage, there were often significant cost overruns. Sometimes 

the overhead costs exceeded 50 percent of the total project cost. 

But, since 1992, since that act took effect, and since the Central 

Utah water project was placed under the jurisdiction of the Central 

Utah Water Conservancy District, the overhead costs have been reduced rather substantially. 

In fact, I believe the Department of the Interior, not too long ago, 

recognized this good management by giving it a secretarial award. 

So, I just wanted to ask, given how well it’s been managed under 

the Central Utah Water Conservancy District, and given the problems that we had when it was previously under the jurisdiction of 

the Bureau of Reclamation, why is it a good idea to change that, 

to offset that balance that Congress imposed this fix for back in 

1992? 

Secretary SALAZAR. Senator Lee, first, let me say that the Central Utah project has been a priority for President Obama and for 

me, as Interior. We have invested literally hundreds of millions of 

dollars during my time, including significant allocations from the 

stimulus program, the American Recovery Act, to get that project 

moving on a timeline that’s a good timeline. 

We’re not abandoning the project. It’s an important project. The 

consolidation issue of the agency into the Bureau of Reclamation, 

it seems to me that it makes no sense to have another government 

agency out there doing one of our Bureau of Reclamation projects, 

when we have hundreds of other Bureau of Reclamation projects 

within the Bureau of Reclamation. So by having the Central Utah 

project office come within the Bureau of Reclamation, I believe that 

it will allow us to do a better job. So, it’s an efficiency measure on 

our part. 

Senator LEE. But given the data prior to the 1992 act taking effect, suggesting that just the opposite was true, how do you respond to that point? Is there something that’s different now about 

the way the Bureau of Reclamation is run? 

Secretary SALAZAR. I think, Senator Lee, if you look at the leadership that we have been able to bring into the Department at the 

highest levels, the Assistant Secretary for Water and Science, Anne 

Castle, Mike Connor, the Commissioner of the Bureau of Reclamation, we are doing tremendous things on the water supply through 

the Bureau of Reclamation. I have no doubt that the same commitment and the same level of support for the Central Utah project, 
28 

in terms of our staff, will absolutely continue with the new configuration. 

Senator LEE. OK. I see my time has expired. Thank you. 

The CHAIRMAN. Senator Franken. 

Senator FRANKEN. Thank you, Mr. Chairman. Thank you, Mr. 

Secretary. 

As you well know, oil and gas companies are making record prof- its. In fact, the big 5 oil companies combined made a record $137 

billion in profits in 2011. So, I am pleased that you have proposed 

a $–per-acre fee on leases that are not being used. There’s a lot of 

leases that the oil companies have been granted by the Federal 

Government that they’re not using, and it creates an incentive for 

them to drill on these leases. I’m also pleased that some of the permitting expenses have been transferred to the companies. In light of that, I would like to ask you whether the $45 million 

USGS fund that you intend to use to study shale gas development 

through hydro-fracking, will that also be paid by companies engaged in this activity? We had testimony from the commission, and 

I think that under Interior that was studied, and I wondered 

whether the companies that benefit from this would pay for that 

study. 

Secretary SALAZAR. The answer to that, Senator Franken, is the 

President is strongly supportive of research and development, and 

developing the science. In fact, much of the great boom and promise that we now have, with respect to shale gas in the United 

States, is a direct result of investments that this Congress has 

made, both in the United States Geological Survey and in the Department of Energy. The Bakken formation is an example where 

the USGS has been very involved in developing the numbers there, 

and helping industry develop the technologies. 

So, this money, in response to your question, is part of our investment in understanding shale gas. Within the Department of 

the Interior, I believe the number is $18 million that would be appropriated in the 2013 budget for USGS to continue to do these 

studies. We will work closely with the Department of Energy, as 

well as EPA, to make sure that there’s a coordinated effort in the 

study and the studies that are set forth in the budget. 

Senator FRANKEN. You say $18 million, but the testimony is $45 

million. 

Secretary SALAZAR. You’re correct. It’s $45 million overall. 

Senator FRANKEN. My point here is that this just seems like, in 

a time when we have these tight, tight, tight budgets, here is something where the top 5 oil and gas companies are making $137 billion profit, $45 million, it seems like it could be funded by the oil 

and gas companies themselves, or the gas companies that benefit 

from that. 

Let’s move on, because I’ve got a project where I could see that 

$45 million going, and you may know what I’m talking about. It’s 

the Lewis and Clark water project, which we’ve talked about, the 

regional water system in Minnesota, Iowa, and South Dakota. Your 

budget requests include $4.5 million for this project, which is much 

more than the $493,000 that you requested for it last year, and we 

talked about at this hearing last year, and I thank you for that increase. 
29 

Unfortunately, this number still barely dents the remaining Fed- eral cost share of more than $190 million, and we’ve discussed before the local partners have prepaid 99.7 percent of their share. So 

they’re just waiting for the Federal portion, and the delay is holding up economic development in the region. 

So, my question really is: What is your plan to make sure this 

project gets completed in a timely way, or that it even ever gets 

completed? 

Secretary SALAZAR. Senator Franken, let me, first all, just say 

thank you for being such a great advocate for a great project that 

is very deserving of additional money. Frankly, because of the fact 

that your water users, local communities, have stepped up to the 

plate, have put up their cost share, we were able to prioritize this 

project, and have put in as much money as we possibly can in these 

very tough budget times. 

As I said in the outset, it’s a squeeze budget, with some painful 

decisions. If we didn’t have the constraints we were facing, frankly, 

we would put in a lot more money, and we would get the Lewis 

and Clark project done, because it is a top priority project. But I 

will say as well, this committee knows better than probably any 

other committee in this Congress that the needs that we have with 

respect to water supply, especially rural water supply, are huge. 

Frankly, even the requests that we put in this budget in 2013 barely makes a dent on the need that we have there. 

Senator FRANKEN. I really appreciate that, and I appreciate your response. My time is done. But I would just note that there is $45 

million to study fracking, where the industry that benefits from it 

is doing really well. They’re not hurting. They could pay for that, 

and there’s $45 million that could go to a water project, or several 

water projects. I’d just give some thought to that. 

Thank you. Thank you, Mr. Secretary. 

Secretary SALAZAR. Thank you, Senator Franken. 

The CHAIRMAN. Senator Barrasso. 

Senator BARRASSO. Thank you, Mr. Chairman. Thank you, Mr. 

Secretary, for being here. 

Last week, President Obama went to Miami to give another 

speech on energy. He stated that, quote, I will do whatever I can 

to develop every source of American energy so our future isn’t controlled by events on the other side of the world. Nice words. The 

President too often says one thing and then does, in my opinion, 

something very different. To me, that’s nowhere more evident than 

what we’re seeing in the Interior Department, because the President says he supports an all-out, all-of-the-above energy strategy, 

but the Department has repeatedly taken steps to limit American 

energy production. A couple of examples. 

In November, the Department proposed a 5-year plan for offshore 

oil and gas development, which excludes both Pacific and the Atlantic Oceans. The plan excludes the development off the coast of 

Virginia, even though both Senators, both democrat Senators and 

the Governor of Virginia, republican, supported such development. 

In January, the Department withdrew approximately a million 

acres in Northern Arizona from uranium production. The Department withdrew this land, even though both Senators and the Governor of Arizona opposed the withdrawal, and the Department con-
30 

tinues to pursue new stream protection regulations, which will 

limit American coal production. The Department is taking this 

step, even though Members of Congress and officials from coal-producing States oppose the new regulations. 

Now, we get to the specific pain at the pump. On Friday, the 

front page of the ‘‘USA Today’’ read, ‘‘Most ever could get hit by 

$5 gasoline.’’ The President said he’s focused on production. But 

the Department policies seem to speak otherwise, as does the fiscal 

2013 budget, which includes tens-of-billions of dollars in new taxes 

and fees on American energy. The President can’t have it both 

ways. He can’t pursue quote, An all-out, all-of-the-above energy 

strategy, and at the same time, block or tax new energy production. 

A couple of questions, and following up specifically with the release the President did last year from the strategic petroleum reserve. Has this administration begun any planning to tap the strategic petroleum reserve again this year? 

Secretary SALAZAR. Senator Barrasso, all options are on the 

table. 

Senator BARRASSO. So that is something that then you are considering tapping. So, could you explain what happened to gas 

prices last year following the President’s decision to tap the strategic reserve? 

Secretary SALAZAR. What I would say, Senator Barrasso, is, you 

know, all options are on the table, and I would disagree, as you expect that I would, with you, in terms of your characterization of the 

President’s agenda. From day one, in the Department of the Interior, we have worked to develop our oil and gas resources in a safe 

and responsible way, and we have done so both on the onshore as 

well as on the offshore. 

We also have moved forward to develop other energy resources, 

including renewable energy, and for the first time since Three Mile 

Island, we’ve opened up the door to the possibility of nuclear energy as well. So, when the President says an all-of-the-above energy strategy for the United States, he’s serious about getting us 

moving beyond the gridlock that has basically kept this energy program in the United States in a failing paradigm for the last 30 

years. 

Senator BARRASSO. So when the ‘‘Washington Post,’’ last year 

said the release of the 30 million barrels from the strategic petroleum reserve, quote, Whatever the rationale, it’s a bad idea, you’re 

going to continue with that bad idea on the table this year, was 

what I just heard. So, could you explain to me then what your assessment is of the purpose of the strategic petroleum reserve? 

Secretary SALAZAR. First, the strategic petroleum reserve, the 

SPRO, is under the jurisdiction of my colleague, Secretary Chu, 

and the President of the United States. I will just say the President is very cognizant of the pain at the pump that people are feeling. We have an energy strategy and a policy that we’ve been working on from day one, and we believe it continues to show good results. We’ll move America to a new energy future. We’re committed 

to doing that. In terms of dealing with the immediate issue of the 

high gas prices, all options are on the table. 

Senator BARRASSO. Are you familiar with Senator Schumer’s insistence that the State Department press the Saudis to increase oil 
31 

production? Yet, Senator Schumer opposes the Keystone XL pipeline, as you know, as the President has refused to move forward 

in granting the pipeline from Canada. 

My question is: Do you agree with Senator Schumer that we 

should be pressing for more Middle East capacity, rather than 

North American production, such as can be brought in from Canada via the Keystone pipeline? 

Secretary SALAZAR. First, on the international effort, that’s obviously something that is a focus of the administration, along with 

dealing with what we can produce here domestically in the United 

States. That’s part of all the options on the table. On the Keystone 

issue, yes, we just remarked that the pipeline that was proposed 

by TransCanada yesterday, that will take the segment from Cushing to the Gulf, is a step absolutely in the right direction. That has 

to be processed, and frankly, no judgment was ever reached, Senator Barrasso, on the Keystone Pipeline XL project, because of actions that were taken by the Congress, insufficient time to move 

forward with the processing of the alternative that is required. 

Senator BARRASSO. Mr. Chairman, my time is gone. It’s interesting, because the Keystone pipeline was actually proposed 7 

years ago, and it’s still not enough time. 

Secretary SALAZAR. Senator Barrasso, I was with the Governor 

from Nebraska yesterday. There were serious concerns raised by 

both the republican Governor as well as our republican colleagues 

here in the Senate, with respect to that proposed pipeline. So, the 

alternative to that pipeline is still to come from TransCanada, and 

then it will be evaluated. So, if we play by the facts, it will be a 

process, and then a judgment will be reached on the facts, just as 

a judgment will be reached on the segment from Cushing down to 

the Gulf. 

Senator BARRASSO. Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Shaheen. 

Senator SHAHEEN. Thank you, Mr. Chairman. Mr. Secretary, and 

Deputy Secretary Hayes, and Ms. Haze, we’re pleased that you’re 

here today. 

Mr. Secretary, you talked about your new role to help develop a 

tourism strategy for the country, and the importance of protecting 

our outdoors and our beautiful environment and special places as 

being critical to that tourism strategy. As you know, the Land and 

Water Conservation Fund has been one of the Federal programs 

that has been most successful at protecting our special places, and 

wildlife habitats, and public recreation. In New Hampshire, we’ve 

got all kinds of examples from the LWCF. Our Umbagog National 

Wildlife Refuge, parts of the Appalachian Trail that are in New 

Hampshire have all been protected through the Land and Water 

Conservation Fund. 

I was pleased to see additional funding in the proposed budget 

for that program, and I know that you’ve said you’re committed to 

getting full funding for LWCF by 2014. I wonder if you could talk 

about your plans for how we should get to full funding, and whether you think there is a dedicated funding stream, an additional 

dedicated funding stream that we can add to what’s been proposed 

by Congress, but has only been fully funded, I believe, twice since 

the program started. 
32 

Secretary SALAZAR. Senator Shaheen, let me first say, thank you 

for your leadership on this issue, and I thank the Chairman of the 

committee, Senator Bingaman, and others who worked hard on trying to get full funding for the Land and Water Conservation Fund. 

I do agree with you. It is part of our tourism and job creation strategy that comes through conservation, as we see through L.L. Bean 

and so many other wonderful stores that have a presence in your 

State, the hunting community, the angling community, boaters. It’s 

a big part of the future of these United States. 

As I’ve said often in front of this committee, both when I was on 

that side of the dais and on this side, the reality of it is that’s been 

a broken promise to America. You know, in the 1960s, it was authorized to take a portion of the proceeds that come from offshore 

oil and gas production, and yet, if you look at the books of the 

Treasury, it is now north of $17 billion that are owed to the conservation programs of this country. 

So, even in these tough fiscal times, I think it’s important for us 

to continue to look for the possibility of that funding. You know, 

it pains me, frankly, when I look at the list of land and water conservation projects which we are not able to fund. You know, Senator Barrasso just left, but we’re putting a significant amount of 

money into buying some of the in-holdings in the Grand Teton National Park. You know, in every one of your States, there are huge 

needs, and the needs are probably in the $5-billion-a-year range for 

the foreseeable future. So, from my point of view, the $450 million 

set forth in the 2013 budget is a fraction of what is needed. 

But, as I said at the outset, this is very tough budget, and it’s 

a very painful budget for me personally, but if we could find ways 

of doing more with LWCF, I think we should be open to that. 

I’ll note, Senator Landrieu and Senator Alexander, in the passage of the GOMESA Act, actually were able to set aside a permanent conservation royalty, and maybe there’s more of that that can 

be done. 

Senator SHAHEEN. Thank you. I was pleased to work with some 

members of your staff after the oil spill in the Gulf to try and address the Outer Continental Shelf Reform Act of 2011. Deputy Secretary Hayes, we worked on that. I was pleased to get a model for 

an Ocean Energy Safety Institute that was modeled on a partnership that NOAA has had with the University of New Hampshire, 

called the Coastal Research Response Center, and was very disappointed that that legislation has not gone forward. 

But, as we think about the research that we still need to do to 

address cleanup to oil spills, are there additional opportunities for 

partnerships like the one we have at the University of New Hampshire, with NOAA, to do some of that research that is not going to 

be done at least right now, as the result of the legislation that’s not 

gone forward? 

Secretary SALAZAR. Deputy Secretary. 

Mr. HAYES. Senator, first of all, thank you so much for your assistance on the Ocean Energy Safety Institute. We continue to believe it’s very important that we have in the law the authority for 

the Bureau of Ocean Energy Management to have a safety institute that will, as a primary mission, have the ability to partner 
33 

with universities, and industry, and others to be on the cutting 

edge of research. 

We do have ongoing research through the Bureau of Ocean Energy Management. This budget has pretty robust investment in 

continuing to raise the bar of safety, but I think until we have a 

dedicated institute, we’re not taking full advantage of where we 

should be as a Nation. 

Senator SHAHEEN. Thank you. My time is up, but I think it’s important to point out that it’s not just safety we need to protect. We 

need to figure out how to deal with the problems after they occur, 

because as much as we want to protect safety and prevent spills, 

the reality is we’re probably going to see some in the future, and 

so having the best technology to address those and research to do 

that is very important. 

Thank you. 

Secretary SALAZAR. If I may, Mr. Chairman. 

The CHAIRMAN. Go ahead. 

Secretary SALAZAR. I think it’s a useful conversation with all 

members of this committee, April 20, 2010, was really not that long 

ago, and this committee, like the rest of the Nation, was laser focused on what was happening as 50,000 barrels of oil were spewing 

out into the Gulf of Mexico every day. It was a national crisis, and 

something that we all have lived through. We ought not to ever 

have amnesia, as a Nation, and the President nor I have amnesia 

about what happened, in the Gulf of Mexico, nor the Members of 

Congress should not have amnesia either. But, to your point, Senator Shaheen, there’s a lot of work that has been done, but a lot 

more work that has to be done. 

Today, Tom Hunter, well known in the State of New Mexico, 

leads up a committee for us on offshore safety, looking at a whole 

host of things, from the technology on blowout preventers, to a 

number of other things that need to be done to ensure that we have 

the safest production. 

We will move forward in the development of oil and gas in the 

Nation’s Outer Continental Shelf, it’s something that has bipartisan support to do that, but we need to make sure that we do it 

in the safest possible way. Frankly, having the additional resources 

to be able to develop the kinds of technologies that will keep us at 

the cutting edge is very important to the United States. I’m mindful as well, Senator Shaheen, with respect to your question here, 

that this goes way beyond the United States of America. When we 

talk to any of the oil and gas companies, which I do on a regular 

basis, we know that they are a global industry. So what’s happening off the coasts of Nigeria and Algeria, or off the coast of 

Brazil, or off the coasts of Norway and Russia, those are all important matters. So how we elevate the technology, in terms of dealing 

with all aspects of ocean drilling is a really important opportunity 

for the United States, and we have to do it from the safety side, 

the prevention side, the response side, all aspects of ocean energy 

development. 

The CHAIRMAN. Senator Heller. 

Senator HELLER. Thank you, Mr. Chairman, and Mr. Secretary, 

thank you for being here. 
34 

Nevada is 110,000 square miles, so you’ve got a lot of work to 

do. 85 percent of it, as you know, is owned by the Federal Government. So that, I think, in itself, presents a lot of unique challenges. 

The economic activity on the public lands in Nevada is important, and obviously comes in a lot of forms, mining, renewable energy development, the ranging, and recreation, some of those 

things. So, I’m concerned about the President’s budget, as it concerns your office. Obviously, there’s concerns to my constituents, 

also. They include smaller budgets for hazardous fuel reduction, I 

believe misguided prioritization of land acquisition, the 74 percent 

fee increase on public land grazers, and, in my opinion, an ill-conceived proposal to tax mining out of competitiveness. 

Unfortunately, all those take a backseat to rising gas prices in 

my State today. I’ve seen the bumper stickers you talk about back 

in 2006, during those interim elections, coming from the left. So, 

both sides, I think, have issues and concerns, and certainly, like 

the bumper sticker politics. But I want to talk a little bit about verbiage versus reality. 

I think Ms. Murkowski made comment to the production of natural gas on public lands and waters that in fiscal year 2011 have 

actually dropped 11 percent from the previous year, according to 

the Interior data. Also, oil production on public lands has dipped 

nearly 14 percent. So as the administration talks about all this new 

production, none of it’s being done on public lands. It’s all being 

done on private land. 

In 2008, when you were a Senator, you refused to vote for any 

new offshore drilling. In fact, you had a conversation with leader 

Mitch McConnell at that time, where you objected to allow any new 

drilling on America’s Outer Continental Shelf, even if gas prices 

reached $10 a gallon. You’re halfway there, halfway there. 

The question, I guess, we need to ask ourselves: Is this the direction that this department is going, and are we, at some point, believing, under your leadership, that gasoline prices will get to $10 

a gallon? 

Secretary SALAZAR. Senator Heller, let me first say that I think 

that exchange on the floor of the U.S. Senate, like the exchange 

that you’re engaged in, is part of the phony debate with bumper 

sticker solutions to what is one of the most fundamental issues facing the United States of America. 

Senator HELLER. So are you saying that conversation didn’t—— 

Secretary SALAZAR. Let me finish. So, when you speak to the statistic of what happened in 2011, in terms of production, you have 

to look at what was happening in the Gulf of Mexico. It’s about 30 

percent, roughly, of all our domestic energy comes from the Gulf of 

Mexico, which Senator Landrieu knows so full well. 

We went through a crisis in 2010, and we’re back, and the rigs 

are back at work. In fact, there are more rigs working now, both 

offshore and onshore, in the United States of America than at any 

time in recent history, maybe in all of history. So whatever dip 

there was in production is because of the dip that happened in the 

Gulf of Mexico, in the wake of the 2011 Macondo oil well blowout. 

Senator HELLER. I guess the question, just to follow-up, did that 

exchange occur on the Senate floor, and is it accurate? 
35 

Secretary SALAZAR. You know, Senator Heller, I know you will 

appreciate this, that there are lots of conversation that take place 

on the floor of the Senate, which are made for a political statement, 

and at that point in time, there was a political statement. I think 

the facts are that we moved forward with—— 

Senator HELLER. So it’s a bumper sticker. It was a bumper sticker. 

Secretary SALAZAR. It’s a bumper sticker. We move forward, Senator Heller, with a very robust Outer Continental Shelf production. 

I think there were many people who thought that after the Deepwater Horizon that there would not be any more deepwater production in the United States of America. I think we’re going to continue to lead the world, in terms of both the technology, as well as 

the production that we’re doing there. The $300 million lease sale 

that occurred just in December in New Orleans I think is telling 

that we’re moving forward in that direction. 

So, in terms of my credentials, and the President’s credentials, 

and support for offshore drilling, I have absolute confidence that 

we’ve moved in the right direction, and that we’re moving forward 

in a balanced direction that’s making sure that we have safety, and 

that we’re protecting the environment as well. 

Senator HELLER. Mr. Secretary, thank you. 

The CHAIRMAN. Senator Landrieu. 

Senator LANDRIEU. Mr. Chairman, thank you so much, and Mr. 

Secretary, thank you for your, you know, focus and interest in the 

Gulf Coast, and your many visits down, and your commitment to 

the restoration of our region, and the investments in our national 

parks and State parks. I know that you have a passion for conservation, and we appreciate that. 

But, I want to add my voice to try to clarify that, in fact, the oil 

and gas production in our country, as you’ve just tried to explain, 

is lower than it has ever been on Federal lands, both offshore and 

onshore, and the increase has come from production on private 

land. 

Now, those are the facts. I’m not arguing about the price of gas, 

and I would say to my republican colleagues that they should know 

that we can’t drill our way out of this problem. We cannot drill our 

way back to $2 or $3 gasoline. I don’t want to engage in bumper 

sticker politics, but I do want to engage in good policy for this country. Speaking from Louisiana’s perspective, we need to get a more 

aggressive drilling policy in this country. We can’t drill our way 

out, but we most certainly can create jobs. We most certainly can 

strengthen the U.S. independence. We most certainly can reduce 

our reliance on foreign oil. The facts are that drilling on public 

lands are down, and they need to be increased. 

The other fact is contrary to the inference that we are drilling 

everywhere we can in the Outer Continental Shelf, you know, Mr. 

Secretary, the facts are these: We are drilling on less than 2 percent of the OCS, 2 percent. Now only a small portion is leasable, 

and of that leasable portion, we’re drilling on 2 percent. The OCS 

is 200 miles wide, and it goes from Oregon to Maine, and we’re 

drilling on less than 2 percent. So, I just think that it’s important 

for us to be clear about what our situation is. 
36 

In addition, I want to say that despite the administration’s arguments that are laid out that you-all are all guns blaring and green 

lights for drilling, the facts that I checked, and if you disagree, tell 

me, only 21 permits for offshore drilling have been issued by the 

second half of February. In 2010, there were 32 permits. I just left 

the annual conference of LOGA, which is Louisiana Oil and Gas 

Association, Mr. Secretary, yesterday. They are beside themselves 

with not being able to get their permits processed. 

To answer you, Mr. Franken, let me just say that Exxon and 

Shell may be making record profits, but according to a study recently done by the Greater New Orleans, Inc., 41 percent of our oil 

and gas independent operators and service companies, I’m not talking about Exxon and Shell, that have operations all over the world, 

I’m talking about companies in the Gulf Coast, in Texas, Mississippi, Louisiana, and Alabama. Let me tell you what the studies 

show about their profits. Fourty-one percent of them are not making a profit at all. Seventy percent have lost significant cash reserves. Fourty-six have moved operations away from the Gulf. 

Eighty-two percent of business owners have lost personal savings 

as a result of this slowdown. Now, part of it is the accident, and 

part of it is the permitoreum. 

I have to continue to express this to you privately and publically. 

I know what you’re trying to do, and you’re making statements 

about increasing production, but I can tell you the reality in the 

Gulf Coast is not there. So that is one point that I wanted to make. 

Second, and I’ll get to a question in a minute, this 4 percent of 

an acre is being proposed for non-producing leases, can you explain 

how much money that would raise, where it would be going, because we’re already experiencing an increase of fees, a decrease in 

permits. We don’t know if that money is coming from us and going 

elsewhere to promote what, we don’t know. But we need more inspectors to get our permits and our drilling under way in places 

that the people support drilling, and the country needs the jobs. 

Where’s the 4 cents going to go, and how much is it going to raise? 

Secretary SALAZAR. Senator Landrieu, let me first say, I disagree 

with your conclusions. The fact is when you’ve lived through a national crisis, I think it’s very responsible that we have moved forward. Now, with the approval, in just the last year over 100 shallow water permits, 60 deepwater permits, and the rigs are back 

and working, is very much public knowledge. We feel very comfortable, in terms of the production that is coming off of our public 

lands, both onshore and offshore. I’m going to have the Deputy Secretary make just a quick comment on that as well. 

Mr. HAYES. Thank you, Mr. Secretary. Very quickly, on the onshore, we have 38 million acres available for leasing right now. 

Only 16 million are, in fact, being leased. Last year, we had 32 onshore lease sales. 

Senator LANDRIEU. I realize that, but Mr. Hayes, not to interrupt 

him, Mr. Chairman, it’s not about what percentage you have under 

production that are leased. If you said how much land you have in 

the United States on public lands, and then took your percentage 

of what is leasable, and then took your percentage of what is 

drilled, you’d give the people of this country a better picture. 
37 

Again, and I’m not an expert on onshore, but I am on offshore, 

2 percent of the OCS is being drilled, do you agree with that or not, 

because those are the facts, 2 percent of the entire land of the OCS. 

Yes or no? 

Mr. HAYES. We’ve made available 75 percent of the reserve. 

Senator LANDRIEU. That is not what I’m asking. 

Mr. HAYES. We are not leasing areas where there is no oil in the 

offshore. 

Senator LANDRIEU. OK. What percent of the entire OCS of this 

country is being drilled on right now? What is the percentage? 

Secretary SALAZAR. Let me take that, David. 

Senator Landrieu, the fact of the matter is that there are over 

40 million acres that we just did in the one lease sale. There’s more 

that will be leased. The lease sale that I did in New Orleans in December, I think was 38 million acres. About 2 million acres of it 

was leased. 

Senator LANDRIEU. Mr. Secretary. 

Secretary SALAZAR. So when you make available in one lease sale 

tens of millions of acres, and you have some of it that’s bid on, the 

companies are going where they know the oil and gas is. 

Senator LANDRIEU. Mr. Secretary. 

Secretary SALAZAR. So, the fact is, we are moving forward with 

a very robust gas leasing program. 

Senator LANDRIEU. In my view, Mr. Chairman, we’re never going 

to get clear, as long as we continue to talk around and throw statistics out that try to make both sides look good. I’m not trying to 

make you look any worse. I’m just trying to get the facts out to the 

public. When you speak, you get people thinking that we’re drilling 

everywhere, onshore and offshore. The facts don’t justify that. You 

know that 98 percent of our offshore is limited to drilling. We can’t 

even explore there. We’re talking about what we’re drilling within 

that 2 percent. 

My final point, and I’ll say this, Mr. Chairman, you’ve been very 

good to me. I, as a Senator from Louisiana, have to come to this 

meeting every year, and I’ve now looked at my notes to find out 

that Wyoming, last year, got $1.7 billion in royalties. The Senator 

is not here. But, I want my colleagues to know. The State of Wyoming has 500,000 people. They got $971 million that they kept. I 

don’t know what they’re doing with that money. I don’t know if 

they’re preserving land or conservation. Louisiana, which produces 

more oil and gas than they have off of our shore has more infrastructure, got $38 million, and we have 4.5 million people. 

Mr. Chairman, this is the greatest injustice to the Gulf Coast of 

this United States, and I hope nobody puts a revenue-sharing bill 

anywhere around this committee, because this Senator will fight to 

the end. No State is going to be treated like our State, and we’ve 

been treated like this since 1920. 

The CHAIRMAN. Do we have Senators that haven’t had the first 

round? I don’t think so. So, let me start with the second round. 

Mr. Secretary, let me pass out and give to you a few charts that 

are from previous hearings we’ve had, and some that we’ve developed ourselves. I’ll go through the 3 charts, and then ask for any 

comment. Is someone passing those out? 

Voice: Yes. Yes, they have. 
38 

The CHAIRMAN. OK. The first of these charts is the one that Mr. 

Burkhart, from Cambridge Energy Research Associates, provided 

to us at our hearing about a month ago, and he entitled it, ‘‘The 

Great Revival of U.S. Oil Production.’’ It says, ‘‘The great revival 

of U.S. oil production has made the United States a leader in global oil production growth,’’ and pointed out that there’s substantially 

more growth in oil production in this country, and that’s both private and public land, obviously, but it’s a useful document. 

Another chart that I’ve passed out relates to weekly retail price 

for premium unleaded gasoline, from 1996 to October 2011. It’s not 

this chart, but it’s a different one that’s been passed out, showing 

the price of gasoline in the United States, at the retail, tracks pretty closely the price worldwide for gasoline, with the exception, of 

course, we don’t have the taxes that the rest of the world has, and 

that’s the big difference. 

Then the third is the chart that we put up here on the board that 

shows U.S. oil production and gasoline prices, the percentage 

change year over year for the last 2 decades. I think it’s clear from 

this chart, at least it’s clear to me, that there is no relationship between the amount of oil we’re producing in any particular year in 

the United States and the price of gasoline. 

The price of gasoline is determined by the price of oil on the 

world market. What we are producing here in the U.S. has been 

relatively constant. It has gone up somewhat in the last several 

years, but the price of gasoline has fluctuated dramatically during 

that period of time, as shown on that previous chart. It has done 

so because of the changes in the world price of oil. 

So, I bring these charts out and distribute them here in order to 

make the point that, you know, there’s an underlying argument on 

this gas price issue that the high price of gas at the pump is a result of some failure to allow production to occur in this country. 

The truth is, production in the U.S. is up, is up substantially. Production on Federal lands is up. But in spite of that, the price of 

oil on the world market is also up. It’s up, because of Iran, and it’s 

up, because of all kinds of factors, increased demand from China, 

and all kinds of factors that are causing the world price of oil to 

rise. Unfortunately, it is impacting consumers in this country. I 

wish it weren’t. I wish we had some way, in the near term, of disassociating ourselves from the world price of oil, but we don’t. 

That’s what’s hurting us. 

Anyway, Mr. Secretary, I give you those charts for what they’re 

worth, and ask for any comments you have in the last few moments of my time. 

Secretary SALAZAR. Thank you very much, Chairman Bingaman. 

I would say 2 things with respect to the presentation that you just 

made. First, oil and gas production in the United States is higher 

than it’s been in a very, very long time. As your chart indicates, 

it’s moving in the right direction, and I think there probably is no 

figure in my mind that says it better than the fact that we’re importing less oil today than we have for a very, very long time. So, 

we are producing more here in the United States. 

I think the second point you make is one that economists have 

recognized for a long time, that we don’t control the price of gasoline here in the United States, based on the amount of production 
39 

* Document has been retained in committee files. 

that happens here in this country. It’s a global marketplace that 

sets the price of oil, and it is the global factors that we see, both 

in terms of Iran, as well as the growing demand that we see from 

countries, such as India and China, which are part of what we’re 

seeing in terms of the global economics which we face today. 

The CHAIRMAN. Thank you very much. Senator Murkowski. 

Senator MURKOWSKI. Thank you, Mr. Chairman. I think we 

would all agree, as Senator Landrieu has mentioned it, you know, 

the answer is not just drilling. Coming from an oil-producing State, 

the answer is not just drilling. But it is part of the solution. So, 

I think it is something that we would agree we are subject to the 

vagaries of the market. We are certainly subject to the volatility on 

the global scene, but I think that the fundamental problem that we 

have here is that we’re too dependent on our oil imports from the 

OPEC countries, and we’re too vulnerable to the price instability 

in the global market. So, I’m not sure how we can argue that producing more oil here at home and lessening our dependence on 

OPEC oil wouldn’t make a difference. It just seems, to me, it makes 

sense to have as much as cushion as we can, because I think we 

recognize that the cushion that is available within the world markets is one that we’re not entirely sure. 

Senator Schumer has asked that Saudi Arabia crank it up a bit, 

so that we can get more from Saudi Arabia. How much spare capacity they have? I think this is one of those things that causes the 

volatility that we see. 

I want to move off that subject for a moment and bring up the 

issue that I raised in my opening comments, and this relates to the 

Legacy Wells that were drilled, again, from 1944 to 1981, when the 

government drilled more than 100 wells. They have only plugged 

and properly abandoned about 10 out of 137 wells. 

When I was in the legislature, giving my address, a representative from the House asked me, ‘‘Well, Senator, what can we do? 

What’s our action plan on this?’’ I said, ‘‘We need to raise a little 

hell. We need to point out that there cannot be a double standard 

here.’’ There’s a resolution* that was passed by the State house of 

representatives, and I’d ask that it be included as part of the 

record. 

The CHAIRMAN. We’ll include that, of course. 

Senator MURKOWSKI. Thank you, Mr. Chairman. It points out that the Federal Government has received over $9 billion from 

leased sales within the petroleum reserve, where these exploratory 

wells were drilled. The State can’t impose fines on the Federal Government, but if it could, the fines would exceed over $8 billion. If 

the statute of limitations were disregarded, the fines would exceed 

over $40 billion. So, again, what I’d like to do, Mr. Secretary, is 

work within the department to figure out how we can do a better 

job of this. 

Right now, DOI has suggested to the State of Alaska that we can 

do one well a year. If that’s the rate that we’re going, we’re sitting 

here with over a hundred years to remediate and repair. I need to 

have an action plan for the people of the State of Alaska on this, 

and I need you-all to be working with me a little more aggressively. 
40 

In that same vein, I will also bring up the Alaska Land Conveyance Act, and, again, asking you to assign to me—I know that Secretary Hayes has been tasked with the double duty of taking on so 

many of Alaska’s issues, we appreciate that, but we need to have 

a better path forward as to how we’re going to complete these conveyances. 

Again, if we keep on the track that we have been on, it’s going 

to be an additional 70, 80 years for Alaska to get our lands conveyed, those lands that were promised on statehood, that lands 

that were promised to Alaska natives under the Alaska Native 

Claims Settlement Act. That’s too long for the Federal Government 

to keep its promise. I need to be able to go back and report that, 

in fact, we are making progress, and better than just a couple conveyances a year, or a couple Legacy Wells a year. So, I would ask 

for your commitment to be working with me, with your folks, and 

the people in Alaska. 

Secretary SALAZAR. Senator Murkowski, we know the priorities 

for both of these issues, and we agree with you that both of them 

need to get done. As I said at the outset of the budget, it’s a painful 

budget, because I wish that we could do more, including on the 

Legacy Wells, and on the conveyance issues for Alaska. 

The priority that I’ve placed on the Legacy Wells, I think you can 

see evident, in terms of the investments that we made from the 

American Recovery Act, the stimulus package, which helped us 

move forward with the plugging and abandonment of some of these 

wells. 

Senator MURKOWSKI. We got 3. 

Secretary SALAZAR. Yes. No, we did then, in the Recovery Act, 

and we proposed an additional 3 in the 2013 budget. But I recognize there’s more to go. Close to 40 more that we have to get done, 

and I hope that we can find a way of getting it done. 

The same thing is true with Alaska conveyance. I mean if we 

could put more money into Alaska conveyance and get it done a lot 

faster, we would be happy to do that. We’d be happy to work with 

you, to tell you what the plans are, given the fiscal constraints that 

we face. If there are other ways in which we can get to the same 

end, which we both agree on, we both agree that we need to get 

both of these things done, we’d be happy to work with you on that. 

Senator MURKOWSKI. We need an action plan that works. It’s not 

just this administration, I will tell you. I had to push the previous 

administration on this as well. I don’t think that any other State 

would sit and wait for 50 years to get the lands that were promised 

at their statehood. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you. Senator Lee. 

Senator LEE. Thank you, Mr. Chairman. 

Mr. Secretary, I want to make sure I understood what you said 

a moment ago in response to the chairman’s questions. Surely, 

you’re not suggesting, are you, that there is no relationship, to use 

the verbiage of this chart, that there is no relationship between 

U.S. oil production and U.S. gasoline prices. Would you agree with 

that statement, that there is no relationship between U.S. oil production and U.S. gasoline prices? 
41 

Secretary SALAZAR. What I said, Senator Lee, is that gas prices 

are set as a matter of the global marketplace, in terms of oil. 

Senator LEE. As a result of the complex interaction between supply and demand, and all the factors, domestically and internationally, that affect supply and demand. 

Secretary SALAZAR. Yes. 

Senator LEE. OK. U.S. oil production is one of those factors. 

Secretary SALAZAR. Yes. 

Senator LEE. OK. Mr. Secretary, your office recently issued a 

programmatic environmental impact statement dealing with oil 

shale production, basically, se of Federal lands for oil shale production. This PEIS proposes to replace a previous PEIS issued by your 

department in 2008, I believe. The 2008 PEIS identified about 2 

million acres of Federal public land that could be potentially suitable for leasing for the development of oil shale and tar sands. 

Your new PEIS proposes to limit that amount by more than 75 percent, bringing it down to about 450,000 acres. 

Meanwhile, in 2007, the Bureau of Land Management issued 

several R&D leases for purposes of oil shale development. One of 

those R&D leases was in Utah. Can you assure me that your recent 

PEIS won’t affect those previous leases that were issued in 2007? 

In other words, will those be taken off the map now as a result of 

this reduction? 

Secretary SALAZAR. You know, with respect to your specific question, let me get back to you. 

Senator LEE. OK. 

Secretary SALAZAR. With respect to the specific lease. With respect to your more general question on the oil shale potential in 

your State of Utah, and Wyoming, and my State of Colorado, the 

fact is that there’s still a lot of research and development that 

needs to take place. Senator Domenici and I, actually, when he was 

chairman of this committee, went to visit a couple of those places. 

There are huge unanswered questions, in terms of water supply, 

unanswered questions in terms of technology. The companies themselves admit that they need to have answers to those questions. So, 

my approach to oil shale and what is set forth in the PEIS is a conclusion that I have reached, that we ought not to engage in a 

wholesale giveaway of the public domain until we have some of 

these questions that are answered, but at the same time, moving 

forward in full support of the research and development programs 

that are under way both in my State, as well as your State. 

Senator LEE. But you’re aware, of course, Mr. Secretary, that 

this technology, or variations of it, has been in place and use in Europe for about a hundred years, and it’s been used in some circumstances to produce oil, to produce electricity, and is still in use, 

to some extent, in Europe. I believe they produce about a million 

barrels a year from oil shale in Europe, currently, and they do all 

of this, meeting European environmental standards. It has not 

been used extensively in this country on a commercial scale, but it 

has been in Europe. 

So, is that really what we need? Is it what, another hundred 

years of research? What is it that we’re waiting for? What’s the 

magic bullet? 
42 

Secretary SALAZAR. Senator Lee, we’re waiting for the technology 

to be developed to be able to honestly assess the potential here. 

The fact is, I think you were born by then, but you might remember the 1980s, and what happened in Colorado and other places 

with the oil shale bust. That was after the investment of billions 

and billions of dollars, because the technology wasn’t there. So the 

research and development that’s taking place now, with respect to 

the development of kerogen from these rocks, which is very different from shale gas, and very different from shale oil, is something that is very important. We’re very supportive of moving forward with those research and development efforts to get the right 

answer. 

Senator LEE. There was a bust in the 1980s. Of course, we both 

know, there were a lot of reasons for that. A lot of those reasons 

have to do with kinks in the technology that have since been 

worked out, kinks in the technology that have been worked out, in 

terms of the amount of processed water, the amount of input energy that’s required, the carbon footprint, the physical footprint 

that’s required for these retoured systems. A lot of that has been 

worked out. 

But, I do think that it’s important to remember, I don’t think it’s 

your job to mitigate and to protect against all risk from the oil companies. In other words, if they want to make that investment, they 

are placing their own investment at risk. But, should they not be 

given the opportunity to make the investment, and to lease these 

Federal public lands for that purpose, knowing that they could develop oil there? An estimated 1.2 trillion barrels of proven recoverable oil locked up in oil shale in just a small segment of 3 Western 

Rocky Mountain States, Utah, Colorado, and Wyoming alone. 1.2 

trillion barrels. More than the combined petroleum reserves of the 

top 10 oil-producing countries of the world, combined. 

Secretary SALAZAR. You know, Senator Lee, it’s my job to protect 

the public lands and public resources of the United States, as the 

custodian of America’s natural resources. When I look at the oil 

shale potential of your State, Wyoming, and Colorado, I think there 

is potential there, but we need to move forward with answers to 

some very tough questions, including one of the key questions. You 

know, if it’s going to take upwards of 1 million of acre feet of water 

to develop oil shale on the western slope of Colorado, where is that 

water supply going to come from? What’s it going to do to agriculture? What’s it going to do to municipalities? Those questions 

have not yet been answered. That’s why the research and development efforts that are under way, which we are fully supportive of, 

are important. We will get answers to those questions. It’s part of 

what we are undertaking right now. 

Senator LEE. OK. I see my time has expired. But let me just 

close with the thought, this is one of the reasons why I hope you’ll 

allow these research and development leases to move forward. This 

is one way that I think you really can get some of the answers that 

you’re looking for. Allow those R&D leases to move forward. Don’t 

cancel them. Let them do their thing, because they’ll prove their 

ability to make it happen in an environmentally responsible and a 

commercially feasible way. 

Thank you. 
43 

The CHAIRMAN. Senator Manchin. 

Senator MANCHIN. Thank you very much, and thank you, Mr. 

Secretary, for being here. I have 2 points that I want to talk about. 

The AML, the Abandoned Mine Land Fund, from OSM, Office of 

Surface Mining, I see that where you-all have made some recommendations there and changing the process of the grant funds, 

which I applaud. I think it’s the right direction, picking the most 

hazardous sites or the worst environmental sites that we have in 

the States that are most affected. 

The money had been distributed before a little differently, as you 

know, by tonnage. You know, how much mining was done, how 

much per ton. Then it was coming back in that same, where it was 

kind of not really addressing the environmental needs. I think 

you’re taking that step in the right direction, from what I can see 

here. 

You estimated there will be some great savings on that, I would 

like to hear. The savings, I guess, would come, and it might be, Mr. 

Secretary, that, if you want Mr. Hayes, if he’s worked on that end, 

or whatever you would think about that, how the savings are calculated. 

Secretary SALAZAR. Let me just say I appreciate that comment, 

Senator Manchin. What we’re trying to do is to focus on the highrisk areas. 

Senator MANCHIN. Our State has a lot of old mining and Kentucky has a lot of old mining. Pennsylvania has a lot of old, old 

mining that really helped build the country. I think it’s a step in 

the right direction to clean that up and put it back into production, 

so we can do something with the land. 

Secretary SALAZAR. I think that was part of the intention of 

SMCRA, when it was passed, so we’d go after those old mines and 

get them cleaned up, and that’s happening. I’m going to have either 

David or Pam—I don’t know whether you know enough about the 

process and how it’s changed. 

Senator MANCHIN. If not, you can get back to me on that. 

Mr. HAYES. I think the savings, Senator, is gained from focusing 

on the intent of SMCRA, which are the coal mine issues themselves, as opposed to other deeds. 

Senator MANCHIN. I interpreted it by looking at the now targeting the return on the AML money, the abandoned mine land 

money. 

Mr. HAYES. Yes. 

Senator MANCHIN. Even though it was received from the tonnage 

that was produced, it’s going to where the need is. 

Mr. HAYES. Right. 

Senator MANCHIN. Where we’ve always said—— 

Mr. HAYES. That’s the primary intent. That’s right. 

Senator MANCHIN. That the savings would be that basically we 

were able to clean up and put land in production. I would assume 

that’s the effect you-all have. 

Mr. HAYES. Right. 

Senator MANCHIN. Does everyone agree to that? 

Secretary SALAZAR. That’s correct. 

Senator MANCHIN. Now, where I disagree. You were afraid of 

that, right? 
44 

Secretary SALAZAR. I’m not afraid of it. 

Senator MANCHIN. Concerning the OSM and the Bureau of Land 

Mines, the merger, I can’t find anybody that seems to be in favor 

and think that this would be a good thing. I don’t see the generation of savings for the disruption of the operation. The OSM, you 

know, it’s been kind of a long-term relationship, learning how to 

work as a partnership, working, making sure that there’s a balance 

between the environment and the economy. 

Going into the BLM, or recommending that merger, and I know 

you’re doing it on from cost-effectiveness, and I can understand 

that, but, sir, on this one, I don’t see the savings for what could 

be the downturn of having more regulations to the point we can’t 

do anything. We’re having a hard time now. Maybe somebody will 

want to talk to that. Are you-all serious about the OSM, BLM 

merger, or is it something maybe we can forget about? 

Secretary SALAZAR. Senator Manchin, let me first say that I 

think it’s important for us in government to always take a look at 

our—— 

Senator MANCHIN. Sure. 

Secretary SALAZAR [continuing]. Agencies and see how we can do 

a better job, and it’s in that vein that we move forward with my 

effort, which I authorized, approved, and supported then, and still 

support today, to take a look at how we could do a better job between BLM and OSM. 

Based on the review that we’ve gotten, and a report, which is 

currently on my desk, I think there will be efficiencies that we can 

find between BLM and OSM. I have not yet read the final report. 

The deputy secretary has been leading it. But my since is that the 

guidance from this committee and your staff, especially Sam 

Fowler, who knows a lot about this, means that there’s not going 

to be the wholesale consolidation—— 

Senator MANCHIN. Right 

Secretary SALAZAR [continuing]. That was once planned for OSM 

and BLM. But there will be changes, and there will be more efficient ways of doing some of our work. 

Senator MANCHIN. I understand that. That’s not a problem. The 

bottom line is, I think we were expecting a report by February the 

15th . Do you happen to have your report? 

Secretary SALAZAR. I actually received it last night. 

Senator MANCHIN. OK. 

Secretary SALAZAR. It’s in my briefcase. 

Senator MANCHIN. You’ll be sharing it with us. 

Secretary SALAZAR. I am reviewing it. 

Senator MANCHIN. It will not go the direction that we thought 

that it might have been going before. 

Secretary SALAZAR. I think we should have a separate conversation, as soon as we get it. 

Senator MANCHIN. Be happy to do it. 

Secretary SALAZAR. To the point where we release it, but I think 

it will improve both the functions of OSM and BLM. 

Senator MANCHIN. Yes. 

Secretary SALAZAR. I think we will find some efficiencies there. 

I hope you will be positive in your response to it. 
45 

Senator MANCHIN. It’s a stream buffer, sir, and I know it’s been 

talked about briefly. I think it’s been brought up by Senator 

Barrasso. I know my time’s running short. 

I’m concerned about the definition. I mean I want people to know 

in West Virginia, our streams are very valuable, our water sources 

are very valuable. But our topography, it is what it is. A stream 

that carries water 12 months a year, a stream that provides recreation, provides life-giving water and sources that have not have 

been touched, nor never intended to be touched, and I think there’s 

a misnomer. We’re talking about what some people have identified 

as a stream which is basically a drainage ditch, or a drainage area 

that might, if you had a piece of property, and you’re putting the 

property, you want to make it more useful, and you change the 

ditch from here to here, so when they have heavy rains, and it runs 

off, it goes in an area that still keeps your property more useful, 

and that’s a discussion I’d love to have with whoever in your office 

that we could have that with. 

I know my time’s up, but if you would accommodate me with 

that, I would really appreciate it, sir. 

Secretary SALAZAR. Senator Manchin, let me just say, we know 

the importance of a stream buffer protection rule to you. 

Senator MANCHIN. Right. 

Secretary SALAZAR. To your State. As we move forward in addressing how we can both support coal development, at the same 

time making sure that we’re protecting the streams, we will make 

sure that we are including you in our conversation. 

Senator MANCHIN. In West Virginia, we believe very strongly, 

there’s a balance between the environment and the economy, and 

we are more than glad to lead the way, if you will. But we want 

a partnership. 

Thank you. 

The CHAIRMAN. Thank you. Senator Heller. 

Senator HELLER. Thank you, Mr. Chairman. I’ll get off my $10- 

a-gallon bush, and talk about another issue that’s important for 

Nevada. It’s something that you’ve already touched on, Mr. Secretary, a little bit. That is the listing of the sage grouse. I know 

Senator Lee brought that up a little bit. 

I have a letter here that you responded to a request for some information. First of all, I want to tell you, thank you. I’m not used 

to the administration responding to requests for information, so to 

have this here means a lot. In fact, I share a concern that we have 

for that listing, was an important part of that. 

If the sage grouse were to be listed, I think it would have a devastating impact on the economic activities on public lands, including one of, I think, our shared priorities, and that’s renewable energy. I have many concerns with the land management controls 

proposed by BLM and the sage grouse, and for that reason, I’m 

putting together a sage grouse working group. 

You have an interim plan, without the listing, an interim plan, 

and it was, I believe, called an instructional memoranda. That was 

to maintain and enhance sage grouse habitat, which I think is an 

appropriate goal. A concern I have is that mitigation is not part of 

the restrictions. So this is my question. 
46 

I am concerned if the proposed actions of themselves would not 

be more restrictive, perhaps even more harmful than an actual listing. Can you respond to that? 

Secretary SALAZAR. Senator Heller, you are focused on a very important issue for all the Western States, including Nevada, at least 

the 11 Western States where we know that there is sage grouse 

habitat. Director Abbey is moving forward with new resource management plans that deal with sage grouse, I think in 62 areas. But 

important to that effort, we are working very closely with the 

States, including your Governor, Governor Sandoval. 

Senator HELLER. Correct. 

Secretary SALAZAR. Governor Hickenlooper, from Colorado, Governor Mead, Governor Otter, and trying to move forward in the 

program, where, hopefully, we’ll be able to develop a Western 

States habitat conservation program that will protect the species, 

and at the same time allow development to go forward. Based on 

successes that we’ve had with other species in other parts of the 

country, I am very hopeful, and I do believe that we’ll get it done. 

Senator HELLER. Here’s the concern. Here’s the concern. With 

this new memorandum that, as I just mentioned, was mitigation, 

if you have an application for a new mining site, without mitigation, do you think you can maintain or enhance sage grouse habitat? If you had an application for a solar farm, do you think you 

could produce and put up a solar farm without mitigation that 

would maintain and enhance the sage grouse habitat? The same 

thing with agriculture, can you do the same thing with agriculture, 

if you have some kind of an application to push agriculture, can 

you do that without mitigation? That’s the concern that I’m hearing 

from my constituents back home. 

They have no problems with moving forward, and to your goal, 

a healthy goal of maintaining the sage grouse, but the question is: 

Can you meet those goals without some possibility or ability to 

mitigate mining issues, agricultural issues, and renewable energy 

issues? 

Secretary SALAZAR. Senator Heller, I think with respect to all of 

our permitting programs, including many in your State, both on 

mining and renewable energy, and transmission, and so many 

other things, mitigation is part of the package. We have done a 

good job on that, from my point in view, in terms of requiring mitigation when you have impacts in the development of renewable energy, where there are other projects. It would be better, frankly, if 

we did have a complete cohesive plan for sage grouse strategy 

across the 11 States than trying to do it project by project, and 

hopefully, the effort that we have under way, with the leadership 

of Director Abbey and Director Ash, and the involvement of the 

Governors of the States, we’ll get us to that point. 

Senator HELLER. OK. Thank you. You answered my question. 

Thank you. 

The CHAIRMAN. Senator Murkowski, did you have additional 

questions? 

Senator MURKOWSKI. Mr. Chairman, I do have a whole bunch of 

additional questions, but in the interest of time, and recognizing 

that the Secretary has given us a great deal of time this morning, 

I will submit them in writing. 
47 

I will ask, though, it’s my understanding that last year, after a 

similar budget hearing, it took almost 6 months to get some responses to our questions, and by that time, of course, they’re stale. 

I understand you have an awful lot on your plate, but if I could 

ask that we have more prompt replies. 

I’m going to have the pleasure of having you before the Appropriations Committee tomorrow, so we’ll be able to spare you some 

of the written responses in those questions tomorrow. But if we 

could have a little more expediency with the responses, I would certainly appreciate it. I know that all the staffs would. So, thank you. 

But, thank you for being here today. 

Secretary SALAZAR. We will do our best. 

Senator MURKOWSKI. Thank you. 

The CHAIRMAN. Mr. Secretary, you’ve been very generous with 

your time, as Senator Murkowski said. We appreciate it, and we 

look forward to continuing to work with you to solve these problems. Thank you for coming. 

Secretary SALAZAR. Thank you very much. 

The CHAIRMAN. That will end our hearing. 

[Whereupon, at 11:54 a.m., the hearing was adjourned.] 

[The following statement was received for the record.] 

PREPARED STATEMENT OF CARLA BOWERS, NATIONAL WH&B LEGISLATIVE TEAM, 

VOLCANO, CA 

This is an urgent call to the Appropriations & Natural Resources Committees and 

Congress delegates to redirect funding from unsustainable, fiscally irresponsible 

roundups/removals/ warehousing of America’s threatened wild horses and burros to 

on-the-range management through the FY13 appropriations process. The appropriation powers vested in Congress must be used immediately to stop the waste of millions of tax dollars and to save America’s fast-disappearing national treasures, our 

valued wild horses and burros of the West. Independent research using BLM numbers and methodology has uncovered the following: 

Fiscally Irresponsible Management—Millions of Tax Dollars Wasted 

• The BLM is creating the out-of-control costs of the Program by taking wild 

horses and burros off the range, including non-excess animals, and by not allocating reasonable resources to them on their legal Western public lands. The 

herds are better managed on the range at very little cost using limited fertility 

control & scientifically based, reformed management protocols. 

• Millions of taxpayer dollars are being wasted on the unnecessary, inhumane 

roundups and removals of herds, $11.4M in FY11, and the warehousing of animals, $48M in FY11. 

• Millions of taxpayer dollars are spent to support the BLM Grazing Program for 

less than 0.5% of the total U.S. livestock inventory (on HAs/HMAs) at a loss 

of up to $1B per year. 

• The 2008 GAO report stated the Program lacks accountability, science and fiscal sustainability. 

Dangerously Low Numbers On The Range—BLM Removing Non-Excess WH&B 

• 26,600 WH&B is the BLM’s targeted national HIGH AML (appropriate management level). Research shows BLM appears to be using taxpayer dollars to unnecessarily round up non-excess animals below 26,600 in violation of the l971 

Act. They are actually targeting LOW AML, ca. 18,000 total WH&B nationally. 

• 18-26,600 are dangerously low numbers for long-term health & survival of the 

protected herds. Of that number, burros are in grave danger at only about 2- 

3,000 left in the wild. The majority of herds on the range consist of numbers 

well below the 150 animals per herd considered necessary for sustainability 

over time by expert equine geneticists. 

• Compare the exorbitant numbers of livestock (up to 3M on BLM lands & 1.5M 

on USFS lands) & other wildlife (20+M deer; 1M elk; 780K pronghorns; 70K 

bighorns, considered a ‘species of concern’, to the miniscule numbers of WH&B. 
48 

Minimal Land / Forage / Water Allocated For Sustainability Over Time—Constant 

Downward Trend 

• The herds are not overpopulated. They are under-allocated land, forage and 

water. • They are being squeezed off their legal public lands. The original 53M acres 

where they were found in 1971 have been reduced to 27M BLM acres. Continued reductions are planned. These actions are in direct defiance of the 1971 Act. • The herds are restricted to these 27M BLM acres or 4% out of 650M total Federal public land acres (which includes 245M BLM acres). • Livestock graze over 238M USFS and BLM acres, which includes the 27M acres 

to which iconic herds are restricted in their HMAs (Herd Management Areas). 

On the HMAs, livestock are given preference and are allocated the majority of 

forage (3-15 times more) compared to the legally protected WH&B. • 339 Herd Areas, or HAs, in l971 have been reduced down to BLM’s count of 

179 HAs and HMAs. Needless to say, hundreds of unique herds have been zeroed out and lost forever over the last 40 years, again counter to the intent of 

the 1971 Act. • BLM claims to be managing the land for ‘thriving natural ecological balance’. 

This mandate is impossible to achieve without ‘natural predation’ because of extreme predator control to benefit the livestock & hunting industries and the 

grazing of ‘unnatural’ livestock on public lands. WH&B are ‘an integral part of 

the natural system of the public lands’ per the 1971 Act. • BLM also claims to be managing the land ‘in balance with other multiple uses’. 

The numbers of livestock & other wildlife compared to WH&B in no way demonstrates any semblance of ‘balance’. BLM ‘zeroing out’ 160 herds from their 

legal lands defies the ‘multiple use’ mandate as well. 

Lack of Science, Consistency, Accuracy, Credibility, Transparency 

• BLM’s published data over the Program life is inaccurate, inconsistent, noncredible and non-transparent. • No state-of-the-art, scientific census of actual WH&B numbers on the range has 

ever been undertaken to substantiate the Program goals. BLM cannot prove 

their estimated numbers. • Current on-the-range management practices lack science and long-term efficacy 

studies on fertility treatment, sex ratio adjustments, herd/band behavior/dynamics/health and on the BLMs haphazard roundup protocols that have most 

probably caused the destruction of the social fabric of the herds & compensatory 

reproduction. Also, current roundup methods are inhumane as demonstrated by 

ample documentary evidence. • Program lacks true independent peer review and accountability. • Forced to acknowledge the lack of a science based Program, BLM has engaged 

the National Academy of Sciences to analyze the whole Program and make recommendations. However, this 2-year Study is flawed from the start because it’s 

based on the false assumption made by BLM that the herds are overpopulated 

& are ruining the rangelands. The Study is not based on the whole Program. 

Plus, it is not an ‘independent scientific study’ because the BLM has ‘directed’ 

it, from creating the ‘scope’ of the Study, to influencing who is on the Study 

Panel to who presents information to the Study Panel at the meetings. Two 

years time, $2M more taxpayer dollars and 15K more WH&B rounded up in the 

meantime will render this Study biased & useless, with very few WH&B even 

left on the range to manage. 

America asks Congress to redirect funding through the FY13 appropriations process from the wasteful, destructive roundups/removals/warehousing of wild horses 

and burros to humane, science based, on-the-range management protocols. These 

protocols can be implemented right now as indicated on pages 3 & 4 of this submission. 

WHAT CONGRESS CAN DO IMMEDIATELY TO SAVE TAXPAYER DOLLARS AND SAVE

AMERICA’S THREATENED WILD HORSES AND BURROS

Vote for Fiscal Responsibility in the Program 

• Utilize the current FY13 budget process to redirect funding away from all 

roundups/removals of WH&B, with the exception of independently verified 

emergency situations. 

• Redirect Program funds for humane, on-the-range WH&B management and 

stop additional stockpiling of animals in government holding facilities. 

• Redirect Program funds for an immediate independent, accurate, state-of-theart census of animals on the range & in holding. 
49 

• Redirect Program funds to repatriate as many animals as possible in holding 

back to their legal Western public lands. (Potential to save up to $48M in FY13) 

• Ensure continued funding for all horses in holding until they can be repatriated 

back to their legal Western public lands. 

• Ensure no funds are allocated for euthanasia or slaughter of wild horses & burros. 

• Acknowledge & encourage revenue-producing ecotourism centered around the 

cultural, historic & heritage assets of America’s living legends. Wildlife viewing 

is a $45B a year national industry as reported by USFWS, 2006. 

Demand Science, Credibility, Accuracy, Consistency & Transparency in the Program 

• Question the validity & credibility of the NAS Study. If the following parameters are not additionally considered, the Study & Recommendations will be biased & useless: 

1) Detailed accounting of current AUM allocations between livestock, WH&B 

& other wildlife, how they are established & the best course of action to raise 

the AUMs/AMLs for WH&B to maintain healthy, genetically diverse herds longterm in all WH&B management areas, i.e. amend all Land Use Plans & Range 

Management Plans. 

2) Detailed analysis of current uses of over 20M acres removed from WH&B 

usage by the BLM & scientific assessment of these lands for the repatriation 

of some animals in holding. 

3) Analysis & determination if compensatory reproduction has been caused by 

BLMs roundup/removal protocols, i.e., fragmenting the harem family bands, selective removals & selective returns to the range, as opposed to natural selection & keeping family bands intact. 

4) Analysis & determination if less compensatory reproduction would occur if 

family bands, including the lead stallions, lead mares & older family members 

were returned to the range intact minus a couple of younger adoptable members. 

5) Analysis & determination of the effects of 60/40 sex ratios, PZP & other 

fertility control methods on long-term herd behavior, dynamics, structure & 

health. 

6) Analysis & determination of best management protocols for truly humane 

treatment of WH&B through all phases of management. 

7) Analysis & determination of the best live stream tracking system to follow 

all animals during helicopter roundups & during removals from the range 

through & to their final destinations. 

8) Analysis & designation of non-traumatized, non-manipulated herds still on 

the range to be used as control groups for pilot research projects (very few left 

in this category). 

9) Independent, state-of-the-art census of all populations on the range & in 

holding facilities to obtain an accurate baseline utilizing FLIR (forward-looking 

infrared), satellite imagery &/or drones. 

• Develop and pass legislation to re-protect America’s WH&B. 

• Develop and pass legislation to ensure the highest humane treatment and management practices on the range, which includes improved WH&B handling, 

tracking, accountability and real consequences for inappropriate management. 

• Consider alternatives to remove entire Program from BLM’s jurisdiction and 

create another entity that will truly preserve and protect America’s herds as the 

original 1971 Act intended. 

Create More Equitable Land/Forage/Water Reallocation Legislation to Protect and 

Preserve Viable Herds on the Range Long-Term 

• Acknowledge that reducing the original HAs of 53M acres down to 27M acres 

and zeroing out over 150 herds has violated the multiple-use mandate of the 

1971 Act. 

• Acknowledge WH&B are not being allocated equitable resources on their restricted, legal Western public lands to sustain their health and longevity as 

Federally-protected species mandated by the 1971 Act. 

• Utilize powers already vested in the 1971 Act to return all original HA acreage 

to WH&B and designate WH&B as the ‘‘principle’’ user on all HMAs and HAs. 

This will entail passing legislation requiring BLM to amend the Land Use and 

Range Management Plans of all the HMAs and HAs in order to: 

1) reinstate migratory routes and lands lost to WH&B, 

2) designate the lands as ‘ranges’ for WH&B, 
50 

3) reflect marked increases in forage and water allocations to WH&B, as the 

‘‘principle’’ user of those resources, and 

4) reflect marked increases in appropriate management levels of WH&B to 

ensure their continued survival for generations to come on public lands. 

Stand up for Increased Appropriate Management Level Numbers of Wild Horses and 

Burros on the Range for their True Preservation Well into the Future 

• Acknowledge that 18-26,600 WH&B on the range in the 10 Western states are 

far below a ‘species of concern’ population level as compared to other large wild 

land species. Wild burros numbering from 2-3,000 are in the endangered category right now. • Support the increase of appropriate management levels of WH&B so their numbers will be sustainable for long-term survival on all HMAs & HAs. • Support repatriation of WH&B currently in expensive holding facilities back to 

their legal lands in the West, thus saving millions of taxpayer dollars and preserving and protecting America’s living legends as was originally intended by 

the 1971 Act. 

WILD HORSES & BURROS (WH&B)—THE NATIONAL PICTURE 

SOME PERSPECTIVE, NUMBERS, QUESTIONS & SOLUTIONS

• America’s ‘legally protected’ WH&B are not ‘overpopulated’. They are being 

squeezed off their legal lands and are not getting a fair share of forage & water. • The national AML range of 16,000-26,600 for WH&B is too low & threatens the 

genetic diversity & survival of healthy, self-sustaining herds over the long-term. 

—38,500: BLM reported total of WH&B population (as of 2/28/11, not validated) 

[1] 

—26,600: BLM High AML (appropriate management level) for WH&B population [1] 

—16,000-18,000 actual current targeted Low AML for WH&B population by 

BLM [2] 

—21,354: WH&B population as of 2/28/11 using BLM’s own data & 20% growth 

model (independent analysis) [3] 

120,000-480,000: Approximate head of livestock on WH&B management areas 

[4] 

—720,000-2.9M head of livestock on BLM lands [5] 

—Up to 1.5M livestock on USFS lands [6] 

—20 million deer, 1 million elk, 700,000+ pronghorns, 70,000 bighorns (considered a ‘‘species of concern’’) on Federal, state & private lands [7] 

—245 million: Number of acres BLM currently manages [8] 

—157 million: Number of BLM acres allocated to livestock use [8] 

—53.8 million: Number of BLM & private acres originally designated for WH&B 

in 1971 [1] 

—31.6 million: Number of BLM & private acres currently managed for WH&B 

[1] 

—22.2 million: Number of acres WH&B have lost since 1971 [1] 

—27 million: Number of BLM acres currently allocated to WH&B use (with livestock) [1] 

11%: Amount of BLM land currently designated for WH&B use [9] 

—83%: Average estimated forage allocated to livestock in BLM WH&B areas 

[10] 

—17%: Average estimated forage allocated to WH&B in BLM WH&B areas [10] 

—339: Number of BLM original Herd Areas designated for WH&B in 1971 [1] 

—179: Number of BLM reduced-size Herd Management Areas currently designated for WH&B [1] 

—160: Number of WH&B Herd Areas BLM has zeroed-out [1] 

—191 million: Number of acres USFS currently manages [11] 

—81 million: Number of USFS acres allocated to livestock use [12] 

—million: Number of USFS acres allocated to WH&B use (with livestock) [13] 

—1.05%: Amount of USFS land currently designated for WH&B use [14] 

—650 million: Number of Federal land acres [15] 

—4.5%: Amount of Federal land acres (BLM/USFS) designated for WH&B use 

(with livestock) [16] 

Costs to Taxpayers: 

—$75.7 million: FY2011 total cost of BLM’s WH&B Program [17] 

—$11.4 million: FY2011 cost of roundups, including fertility control [17] 
51 

—$48.2 million: FY2011 cost of BLM warehousing WH&B [17] 

—$766,164: FY2010 cost of BLM WH&B census & range monitoring (3.3% of 

budget) [17] 

—$144-500 million: FY2011 cost of livestock grazing program [18] 

—$13 million: FY2011 cost of predator control program to benefit livestock [19] 

QUESTIONS

—Considering the above numbers, is it fair to claim WH&B are overpopulated 

in America? 

—Why is livestock allocated the majority of forage on WH&B legal areas? 

—How does BLM arrive at AML for WH&B versus livestock on WH&B legal 

areas? 

—Is WH&B genetic diversity & survival of healthy, self-sustaining herds considered at all in AML establishment? 

—Shouldn’t the above requirement be the first consideration in WH&B AML establishment before forage allocations are set on WH&B legal areas? 

—What is the best mechanism to correct the insufficient & unfair allocations 

between livestock & WH&B on WH&B legal areas? 

—Shouldn’t the original Herd Areas legally designated by the 1971 Act be restored for WH&B use? 

—How is damage to the range studied exactly & how much time is dedicated 

to monitoring? 

—How is it determined unequivocally what animals did any range damage, i.e., 

WH&B, livestock or other wildlife? 

SOLUTIONS

—Suspend helicopter roundups, in all but verifiable emergency situations, while 

the entire BLM WH&B Program undergoes objective & scientific review & reform. 

—Increase Appropriate Management Levels (AML) & Animal Unit Months 

(AUM) for WH&B. 

—Implement in-the-wild management that would keep WH&B on the range in 

their family bands & save taxpayers millions annually by avoiding the mass 

removal & stockpiling of them in government holding facilities. 

—Restore lost acreage designated for WH&B by law in 1971. 

—Create WH&B corridors for herd connectivity & to support summer/winter 

migration patterns. 

—Protect predators in & around the WH&B management areas. 

—Use only bait/water trapping to manage the herds, no helicopters. 

—Apply only 1-year dartable PZP fertility control between the months of NovFeb. 

—Increase budget for accurate censusing, range monitoring & range improvements. 

—Return short-term holding WH&B to zeroed-out HAs/HMAs (Herd Areas & 

Herd Management Areas). 

—Obtain an independent, state-of-the-art census of all management areas. 

—Develop safari-style tourism around the WH&B for job creation & added 

value to this iconic natural & cultural asset. 

References: 

[1] http://www.blm.gov/wo/st/en/prog/whbprogram/herdlmanagement/Data.html 

[2] Estimated two-thirds of High AML 

[3] Chart 2 by C.R. MacDonald, updated by Carla Bowers 11/4/11, originally Table 

1 from Report to Congress, 11/10, http://tinyurl.com/46pppfx 

[4] Calculated as 1/6 of [5] based on 27M BLM WH&B acres being 1/6 of 157M total 

BLM lands grazed 

[5] 8.6M AUMs allocated to livestock in FY10 per BLM feeds this range of cattle/ 

calves depending on usage months 

[6] http://www.fs.fed.us/rangelands/ftp/docs/GrazingStatisticalSummaryFY2009.pdf 

[7] http://wildlifecontrol.info/deer/pages/deerpopulationfacts.aspx 

http://www.rmef.org/AllAboutElk/FastFacts/ 

http://en.wikipedia.org/wiki/Pronghornlantelope 

http://www.defenders.org/wildlifelandlhabitat/wildlife/bighornlsheep.php 

[8] http://www.blm.gov/wo/st/en/prog/grazing.html 

[9] 27M acres/245M acres = 11% 

[10] Calculation based on 1/6 of 8.6M AUMs allocated to livestock on WHB HMAs, 

or an estimated 1,433,333 AUMs, compared to 301,000 AUMs allocated to WH&B 
52 

at High AML 1,433,333 + 301,000 = 1,734,333; 301,000/1,743,333 = 17.3% (most 

probably high) 

[11] http://www.fs.fed.us/rangelands/whoweare/index.shtml 

[12] http://www.fs.fed.us/rangelands/ftp/docs/GrazingStatisticalSummaryFY2009.pdf 

[13] Estimate by Barry Imler, National Program Manager, Rangeland Products, 

USDA Forest Service, email communication with Carla Bowers dated 3/8/10 

[14] 2M acres/191M acres = 1.05% 

[15] http://nationalatlas.gov/printable/fedlands.html 

[16] 29M acres/650M acres = 4.5% 

[17] http://www.doi.gov/budget/2011/data/greenbook/FY2011lBLMlGreenbook.pdf, 

pgs. 1-34 to I-35 & IV-71 to IV-82 

[18] http://sagebrushsea.org/pdf/factsheetlGrazinglFiscallCosts.pdf 

[19] http://greenscissors.com/wp-content/uploads/2011/08/GreenlScissorsl2011.pdf, 

pg. 21 

2009 FORAGE ALLOCATION—ANIMAL UNIT MONTHS (AUMS) CHART

References 

AUM—The estimated amount of forage that one horse, one cow & calf, 5 sheep, 1.7 

elk, 5 pronghorn & 5 bighorn consume in one month at: http://projects.ecr.gov/ 

tushar/pdf/CarterlAUMlpaper.pdf 

Ten Western states include CA, OR, NV, ID, UT, CO, AZ, AR, MT, WY 

Wildlife AUMs do not include over 20 MILLION deer nationally 

Additional references from WWW.AMERICANHERDS.BLOGSPOT.COM: 

(1) 8.6M AUMs—BLM Grazing Fact Sheet downloaded 9/13/10 at: 

www.blm.gov/wo/st/en/prog/grazing.html 

(2) 301K AUMs—At High AML (Appropriate Management Level) that support 

only 23K WH & 3K Burros. BLM Wild Horse & Burro Program Quick Facts, 

Updated 8/25/10, downloaded 9/11/10, at: http://www.blm.gov/wo/st/en/prog/ 

wildlhorselandlburro/whlblinformationlcenter/FactlSheet.html 

(3) 1,031,000 Elk—Elk Population Reflects Success of RMEF’s First 25 Years, 

Rocky Mountain Elk Foundation, Press Release, April 27, 2009, at: http:// 

www.rmef.org/NewsandMedia/NewsReleases/2009/ElkPopulations.htm 

(4) 780,800 Pronghorn— 

(a) 2002 Pronghorn Antelope populations obtained from Pronghorn Population Totals as of 2002, Nevada’s Pronghorn Antelope: Ecology, Management and Conservation, Nevada Department of Wildlife, 2003, Table 2, at: 

http://www.ndow.org/about/pubs/pdf/reports/pronghorn.pdf 

(b) 2006 Pronghorn antelope population estimates for MT, WY obtained 

from Conservation of the Northern Yellowstone Pronghorn: A Report and 

Possible Approach for NPCA’s Involvement, Blank, Intern, Stevens, July 

2006, National Parks Conservation Association, pg. 1, MT/WY average 

(c) 2009 NM pronghorn antelope population obtained from NM Fish & 

Game at: http://www.wildlife.state.nm.us/commission/presentations/documents/PronghornManagement.pdf 

(d) 2009 NV pronghorn antelope population estimates obtained from Nevada Department of Wildlife at: http://www.ndow.org/ 

(5) 70,000 Bighorn—2008 National bighorn sheep population estimates found 

at: ‘‘Bighorn Facing Smaller Habitat, Federal agency wants to reduce protected 

area by more than 50%’’, Mike Lee, Union-Tribune [San Diego], March 23, 2008, 

at: http://www.signonsandiego.com/uniontrib/20080323/newsl1n23sheep.html 

BUSTING A HOLE IN THE BUDGET

US TAXPAYER COSTS FOR BLM WH&B PROGRAM AND BLM/USFS GRAZING PROGRAMS

References 

$21M in the black—http://www.sagebrushsea.org/pdf/factsheetlGrazinglFiscall 

Costs.pdf (ca. 2007) 

About one-half of that $21M goes back into the Range Betterment Fund for range 

improvements, so the income is really only about $10.5M from grazing permit fees— 

http://www.sagebrushsea.org/pdf/factsheetlGrazinglFiscallCosts.pdf (ca. 2007) 

and http://www.biologicaldiversity.org/publications/papers/assessinglthelfulll 

cost.pdf (2002) 

$75M in the red—FY11 Proposed & Granted WH&B Program Budget 
53 

$144M in the red—http://www.sagebrushsea.org/pdf/factsheetlGrazinglFiscall 

Costs.pdf (ca. 2007) 

Up to $1B in the red—http://www.biologicaldiversity.org/publications/papers/assessinglthelfulllcost.pdf (2002) 

American taxpayers are in the hole in a major way to support livestock grazing on 

public lands (which produces less than 3% of the total cattle inventory of the U.S.— 

Managing For Extinction booklet, Animal Welfare Institute, pg. 15) 

America’s wild horses & burros should be kept on their legal Western public lands 

basically free to the taxpayer, not rounded up, removed and warehoused to benefit 

livestock & other commercial uses of public lands, all at huge taxpayer expense. 

(55) 

APPENDIX 

RESPONSES TO ADDITIONAL QUESTIONS

RESPONSES OF SECRETARY KEN SALAZAR TO QUESTIONS FROM SENATOR BINGAMAN

NATIONAL OCEANOGRAPHIC AND ATMOSPHERIC ADMINISTRATION

Question 1. The President has requested that Congress provide him with reorganization authority to streamline government, and the transfer of the National 

Oceanographic and Atmospheric Administration from the Department of Commerce 

to the Department of the Interior was one example that was mentioned in that context. I am very interested in learning more about the Administration’s ideas on this 

proposal, and would like to have more details. I understand that this proposal was 

not initiated by your Department, but I would appreciate it if you would coordinate 

with other appropriate offices in the Administration to provide me with the Administration’s views on what such a transfer would entail. 

Answer. On February 12, 2012, the President submitted to Congress the proposal 

the ‘‘Reforming and Consolidating Government Act of 2012,’’ which would reinstate 

reorganization authority similar to that afforded to Presidents for almost 50 years. 

In general, the authority would allow the President to present, for expedited review by Congress, proposals to reorganize and consolidate Executive Branch agencies to streamline the government and improve operations. A coordinated planning 

effort will begin once Congress provides authority to the President to reorganize. 

PRICE’S DAIRY (MIDDLE RI ́O GRANDE NATIONAL WILDLIFE REFUGE)

Question 2. I’d like to thank you again for visiting Albuquerque last September 

to announce the creation of the Middle Rio Grande National Wildlife Refuge in the 

city’s South Valley. I am concerned, however, that the Administration has not requested sufficient funding to complete the purchase in a timely manner. Can you 

tell me what the Department’s timeline is for acquiring these lands? 

Answer. As proposed, the Middle Rio Grande National Wildlife Refuge outside of 

Albuquerque, New Mexico, will become the first urban National Wildlife Refuge in 

the southwestern United States, and would serve as host to thousands of visitors 

each year as a cornerstone for recreation and restoration along this reach of the Rio 

Grande. This proposal is one of the key projects of the America’s Great Outdoors 

Initiative. The Office of Valuation Services recently completed an appraisal of the 

property and we have identified adequate funds necessary to complete a Phase 1 

acquisition closing by July 29, 2012. This is consistent with the landowner’s current 

agreement with the Trust for Public Land to keep the Price’s Dairy property off the 

market. The U.S. Fish and Wildlife Service (Service) plans to incorporate Bernalillo 

County’s financial contribution into this acquisition phase in advance of the expiration of those funds. Due to the cost of these lands, the timing of project approval 

in relation to the appropriations cycle, and the limited amount of funds available 

through the Land and Water Conservation Fund, the Service is also exploring potential funding resources from an array of local, State and Federal partners. 

Notably, execution of a first phase acquisition will formally establish the Refuge, 

which will enable the Service to pursue additional federal funding to complete acquisition of the property. Furthermore, Service staff continues to identify partners 

and additional sources of funding for future acquisition, habitat restoration, and infrastructure development. 

TRANSBOUNDARY AQUIFER ASSESSMENT ACT

Question 3. In 2006, Congress passed the United States-Mexico Trans-boundary 

Aquifer Assessment Act which directed USGS to work with states and universities 

on both sides of the border to perform a comprehensive assessment of aquifers that 
56 

extend to both sides of the border. Since 2008, approximately $1.5 million has been 

spent on this program. 

I understand that significant progress has been made in implementing this Act 

by research universities in New Mexico, Texas, and Arizona along with USGS and 

their counterparts in Mexico. I also understand that Mexico has provided funding 

for the next phase of research and is waiting for matching funds from the US. 

Under those circumstances, why hasn’t the Department of the Interior allocated 

any funding for this effort so that we can continue to try to better understand the 

aquifer characteristics and foster better bi-national relationships like we are doing 

on energy issues and within the Colorado River Basin? 

Answer. The U.S.-Mexico Transboundary Aquifer Assessment Program has been 

a successful partnership between Mexico and the USGS, and the Water Resources 

Research Institutes from Arizona, New Mexico and Texas. Progress has been made 

in developing and implementing bi-national workplans. As a result of this partnership, a five-year interim report on the United States-Mexico Transboundary Aquifer 

Assessment is in development. Despite the success of this initiative, direct funding 

for this effort has not been continued as a result of other priorities. However, the 

USGS Groundwater Resources Program has provided funding to the USGS Arizona 

and Texas Water Science Centers to complete activities already in progress, and the 

USGS’ NAWQA program is contributing funding to ongoing work in Texas. 

FEDERAL OIL & GAS

Question 4. Critics of the Department’s management of the Outer Continental 

Shelf often state that only 2-3% of the OCS is available for leasing or development. 

This apparently refers to the percentage of the 1.7 billion acres of the Outer Continental Shelf that are currently under lease, and not to a percentage of the available 

oil and gas resources. Do you believe that this is a valid measure of the extent to 

which the oil and natural gas resources on the Outer Continental Shelf are available to industry? If not, why not? 

In your response, please provide information on the percentage of federally owned 

oil and gas resources that are currently available for lease both onshore and offshore; the percentage of those resources that are currently in the pre-leasing planning process; the percentage of the acres onshore and offshore available for lease 

that actually have been leased by industry; and the percentage of those acres available for lease that have been put into production by industry. 

Answer. Regarding development on the Outer Continental Shelf (OCS), the Bureau of Ocean Energy Management published the Proposed Five-Year Program for 

2012-2017 in November 2011, and on June 28, 2012, the Secretary announced the 

Proposed Final Program. The Proposed Final Program would make available offshore areas that contain more than 75 percent of undiscovered technically recoverable oil and gas resources that the OCS is estimated to hold. As the Outer Continental Shelf Lands Act requires, this represents a proper balance among the potential for environmental damage, the potential for the discovery of oil and gas, and 

the potential for adverse impact on the coastal zone. 

Two primary guiding principles underlie this Proposed Final Program. First, the 

program is designed to promote the diligent development of the Nation’s offshore oil 

and gas resources, which are and will remain central to the Nation’s energy strategy, economy, and security. The program is in alignment with the Administration’s 

Blueprint for a Secure Energy Future, which aims to promote the Nation’s energy 

security and reduce oil imports by a third by 2025 through a comprehensive national energy policy that includes a focus on expanding safe and responsible domestic oil and gas production. 

Second, this Proposed Final Program is grounded in the lessons learned from the 

Deepwater Horizon explosion and oil spill. Since the Deepwater Horizon incident, 

DOI has raised standards for offshore drilling safety and environmental protection 

in order to reduce the risk of another loss of well control in our oceans and improve 

our collective ability to respond to a blowout and spill. While offshore oil and gas 

exploration and development will never be risk-free, the risk from these activities 

can be minimized and operations can be conducted safely and responsibly, with appropriate measures to protect human safety and the environment. 

The Department recently released a report that shows that, offshore, industry had 

leased nearly 36 million acres, but only about 10 million acres were active. Moreover, in the lower 48 states, an additional 20.8 million acres remain idle, and 7,000 

approved but unused permits to drill on public lands continue to be held by companies. 
57 

BUREAU OF OCEAN ENERGY MANAGEMENT

Question 5. How many acres of the OCS are under lease but not producing oil 

and gas? 

Answer. As noted in response to the previous question, the recently released report shows that offshore, industry had leased nearly 36 million acres, but only about 

10 million acres were active. 

OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

Question 6. The Budget proposes to eliminate payments to certified states and 

tribes. This will hit the Navajo Nation, which I understand uses the funds for public 

facilities and the reclamation of contaminated uranium mine sites, particularly 

hard. Have you engaged in a government-to-government consultation regarding the 

elimination of this funding with the Navajo Nation consistent with the trust responsibility? 

Answer. Consultation with the Tribe has taken place on several occasions over the 

past several years. For the FY 2013 Budget Request, the Director of the Office of 

Surface Mining led a call on February 14, 2012, with all interested groups and briefly touched on the proposal, which is the same proposal as that put forward last 

year. Most recently, on May 18, 2012, OSM sent a letter to the Tribe to determine 

the Tribe’s interest in consulting on the proposal this year. That letter noted that 

the legislative proposal contained in the FY 2013 budget is identical to that proposed for the current fiscal year and that consultation took place on last year’s proposal, which was not enacted by Congress. 

Question 7. OSM is in the process of revising permanent program regulations relating to excess spoil and stream buffer zones. Please provide your time table for 

this rulemaking. 

Answer. OSM will take the time necessary to make informed decisions on the 

rulemaking, and plans to publish a Proposed Rule and associated Draft Environmental Impact Statement later this year. 

Question 8. New Mexico and the Navajo Nation have serious needs with respect 

to the reclamation of abandoned uranium mines, many of which were developed initially to provide uranium for our Nation’s weapons program. Please provide for the 

record by state and tribe the funds included in the President’s Budget proposal for 

the reclamation of abandoned uranium mines. Please include this information for 

all the Bureaus within the Department of the Interior and for all Federal agencies 

which fund abandoned uranium mine reclamation. 

Answer. There are no funds included in the FY 2013 budget proposal for the Department of the Interior bureaus to cleanup abandoned mines on tribal lands. 

The BLM’s appropriated funds for abandoned mine cleanup, $19.5 million in 

FY2012, will be used to mitigate public safety and environmental hazards associated with abandoned mines on public lands, and projects are undertaken based on 

a priority ranking irrespective of the mineral once mined at the site. 

BUREAU OF LAND MANAGEMENT

Question 9. How many fulltime I&E inspectors are currently employed in the 

Farmington Field office? 

Answer. There are 45 fulltime I&E inspectors currently employed in the Farmington Field Office. 

Question 10. How much Federal onshore acreage is under oil and gas lease but 

not producing? 

Answer. As of December 31, 2011, approximately 56 percent of total acres of public land under lease in the Lower 48 States—totaling approximately 20.7 million 

acres—are undergoing neither production nor exploration activities. As of September 

30, 2011, there are over 7,000 approved permits to drill on public and Indian lands 

that have not yet been acted on by companies. In the lower 48 states, 20.8 million 

acres remain idle, and 7,000 approved but unused permits to drill on public lands 

continue to be held by companies. 

Question 11. What is the current level of funding and what level is proposed for 

fiscal year 2011 for the administration of renewable energy development on public 

lands? Please provide allocation by energy type. 

Answer. In the current year, FY 2012, wind and solar activities are funded at 

$19.7 million through the BLM’s Renewable Energy Management program. The 

BLM does not break out funding by energy type for wind and solar energy development activities. The BLM does have a breakout for geothermal energy because the 

program has been historically managed within the BLM’s oil and gas appropriation. 

In FY 2012, funding for geothermal activities comes from two sources: $1.3 million 
58 

from the Oil and Gas Management program; and $3.9 million from the Geothermal 

Steam Act Implementation Fund under the Energy Policy Act of 2005. New deposits 

into the Geothermal Steam Act Implementation Fund ceased in 2010, and current 

year expenditures are expected to exhaust the remaining balance. 

For FY 2013, the budget request for the BLM’s Renewable Energy Management 

program is $26.8 million, and incorporates geothermal activities. This request includes a transfer of $2.0 million from Oil and Gas Management for geothermal activities, and an increase of $5.0 million for a combination of geothermal activities 

and other high-priority renewable energy studies. 

Question 12. Please describe all geothermal leasing activity, including date and 

state for all lease sales, subsequent to the Geothermal Steam Act amendments contained in the Energy Policy Act of 2005. Please provide a table of lands showing 

acres under geothermal lease (and whether production is occurring) by state. 

Answer. BLM geothermal sales since passage of Energy Policy Act of 2005 are 

contained in the following chart: 

BLM geothermal leases by state and producing status are contained in the following chart: 

Question 13. How many applications for solar rights-of-way are pending? How 

many applications for wind rights-of-way are pending? Please provide listings by 

state and location. 

Answer. The following chart contains the requested information: 
59 
60 
61 

Information related to pending solar energy right-of-way applications is contained 

in the following charts: 
62 
63 
64 
65 

Question 14. How many acres administered by the Forest Service and the BLM 

have been leased for oil and gas development during each of the past ten fiscal 

years? Please display this on a state-by-state basis and by agency. 

Answer. The BLM administers all acres of federal oil and gas mineral estate. The 

following link provides data for the total acres of federal land leased for the last 

10 years by state. The attached table breaks out the acres of the Forest Service 
66 

leased each of the past ten fiscal years for each state.http://www.blm.gov/style/ 

medialib/blm/wo/MINERALS—lREALTY— 

lANDlRESOURCElPROTECTIONl/energy/oillgaslstatistics/ 

datalsets.Par.80157.File.dat/table05.pdf 

Question 15. How many acres of lands administered by the Forest Service and the 

BLM in states west of the hundredth meridian have been under oil and gas lease 

in each of the past ten fiscal years? Please display by state and agency. 

Answer. The BLM administers all acres of federal oil and gas mineral estate. The 

following table and link provides data for the total acres of BLM and Forest Service 

land leased for the 12 western states and those states through which the 100th meridian passes. The attached table breaks out the acres by agency of BLM and Forest 

Service land leased for the 12 western states and those states through which the 

100th meridian passes. http://www.blm.gov/style/medialib/blm/wo/MINERALSlREALTYlANDlRESOURCElPROTECTIONl/energy/ 

oillgaslstatistics/datalsets.Par.67327.File.dat/table-03.pdf 

Question 16. How many wells were started on federal lands (BLM and Forest 

Service) in each of the past 10 fiscal years? Please provide by state. Please also provide the number of completions per state per year on federal lands. 

Answer. The number of wells started (spud) on all federal mineral estate in each 

of the past ten years is shown on the table below. The following data table and link 

provides the data on total well starts.http://www.blm.gov/style/medialib/blm/wo/ 

MINERALSlREALTYlANDlRESOURCElPROTECTIONl/energy/ 

oillgaslstatistics/datalsets.Par.36209.File.dat/table09.pdf 
67 

Question 17. Please list the total number of new federal oil and gas leases by state 

by year. 

Answer. The following table and link provides the total number of new federal oil 

and gas leases by state by year for the last ten years.http://www.blm.gov/style/ 

medialib/blm/wo/MINERALSlREALTYlANDlRESOURCElPROTECTIONl/energy/oillgaslstatistics/datalsets.Par.62098.File.dat/table04.pdf 
68 

BUREAU OF RECLAMATION

Question 18. What is the status of Reclamation’s efforts to develop rules or criteria for the Rural Water program? If criteria have been finalized, please provide 

a copy. 

Answer. The Bureau of Reclamation released its Rural Water Assessment Report 

on July 9, 2012, which reviews the status of the Bureau’s rural potable water 

projects and includes a description of the proposed prioritization criteria. This comprehensive set of draft criteria for ranking projects will enable the Bureau to direct 

its limited construction dollars to the completion of the most meritorious projects. 

The draft assessment report reflects Reclamation’s revisions to the interim criteria 

used to allocate the additional appropriations received in FY 2012. The interim criteria were also used to formulate the President’s FY 2013 budget request for rural 

water construction. Reclamation modified the interim criteria to account for the collection of data on regional economic impacts and the use of renewable energy to 

meet project power demands. The revised criteria are available for public review and 

comment for 60 days, ending at 5:00 p.m. (MDT) on September 10, 2012. It is impor-
69 

tant to note that the prioritization criteria will not be finalized until Reclamation 

has considered and reviewed comments submitted during the 60 day review period. 

Reclamation will continue to work closely with members of Congress, project partners, and stakeholders to finalize the criteria. 

The revised criteria include factors that account for project completion, urgent and 

compelling needs for water supply, economic impacts in areas with low employment, 

Native American populations served, available non-Federal cost-share, and energy 

efficiency and renewable energy use. A copy of the Report and funding prioritization 

criteria can be found at: http://www.usbr.gov/ruralwater/docs/Rural-Water-Assessment-Report-and-Funding-Criteria.pdf. 

Pursuant to Section 9505 of the Act, the Department of Energy (DOE) is in the 

process of conducting an assessment on the effect of, and risk resulting from, climate change with respect to water supplies that are required for the generation of 

hydropower. In consultation with Reclamation and USGS, along with the Power 

Marketing Administrations, the National Oceanic and Atmospheric Administration 

and the Army Corps of Engineers, DOE is preparing a report to Congress on climate 

change effects at Federal hydropower facilities, and recommendations on how to 

change operating and contracting practices to address identified climate change 

risks. 

Question 19. What is the status of Reclamation’s efforts to develop rules or criteria for the Title XVI program? 

Answer. In October 2010, after receipt of public comments, Reclamation finalized 

funding criteria to identify Title XVI projects that most effectively stretch water 

supplies and contribute to water supply sustainability; address water quality concerns or benefit endangered species; incorporate the use of renewable energy or address energy efficiency; deliver water at a reasonable cost relative to other water 

supply options; and that meet other important program goals. Those criteria were 

incorporated into funding opportunity announcements in FY 2011 and FY 2012 to 

prioritize projects that most closely meet program goals for available funding. 

Question 20. Please summarize the work being done to implement the SECURE 

Water Act, authorized by Section 9501 et seq. of P.L. 111-11? 

Answer. The Department of the Interior is addressing the authorities within the 

SECURE Water Act (Act) through a broad set of activities. These activities, in conjunction with Secretarial Order 3289 establishing the Department’s integrated approach to addressing climate change and Secretarial Order 3297 establishing the 

WaterSMART Program, are implementing the Act’s intent to assess risks to the 

water resources of the Western United States and develop strategies to mitigate 

risks to help ensure that the long-term water resources management of the United 

States is sustainable. The Act requires identified Federal agencies to assess climate 

change implications for water supplies, water deliveries, hydropower generation, 

fish and wildlife, water quality, flood control, ecological resiliency, and recreation. 

The following summarizes the work being done by the Department to implement the 

Act. 

Secretarial Order 3297 established the WaterSMART Program (WaterSMART), 

calling for coordination across agencies to integrate energy and water policies, and 

to ensure the availability of sound science and information to support decisions on 

sustainable water supplies. WaterSMART addresses current and future water shortages, degraded water quality, increased demands for water from growing populations and energy needs, amplified recognition of environmental water requirements, and the potential for decreased water supply availability due to drought and 

climate change. WaterSMART includes funding for cost-shared grants for water and 

energy management improvement projects, basin-wide efforts to evaluate current 

and future water supplies and demands, Title XVI water reclamation and reuse 

projects, the establishment and expansion of collaborative watershed groups, and 

smaller-scale water conservation activities through the Water Conservation Field 

Services Program. Together, these programs form an important part of Reclamation 

and the USGS’s implementation of the Act. 

The Department, through the Bureau of Reclamation, is addressing climate 

change impacts and water supply and demand imbalances through the Basin Study 

Program, which implements Section 9503 of the Act through three activities: (1) 

Basin Studies, through which Reclamation works with State and local partners to 

comprehensively identify strategies to meet future water demands within a river 

basin; (2) West-Wide Climate Risk Assessments (WWCRAs), which provide consistent projections of risks to water supplies and demands and impacts to Reclamation operations due to the potential impacts of climate change across the eight major 

Reclamation river basins identified within the Act; and (3) Landscape Conservation 

Cooperatives, which are focused on working with partners to identify shared science 

needs and meeting those needs through the development of applied science tools, 
70 

collaboration, and information sharing to support resource management at the landscape scale. 

WaterSMART grants, under WaterSMART, implement Section 9504 of the Act by 

providing cost-shared assistance on a competitive basis for the following types of 

projects: (1) water and energy efficiency improvements that save water, increase energy efficiency and the use of renewable energy in water management, address endangered species and other environmental issues, and facilitate transfers to new 

uses; (2) pilot and demonstration projects that address the technical and economic 

viability of treating and using brackish groundwater, seawater, impaired waters, or 

otherwise creating new water supplies within a specific locale; (3) system optimization reviews that assess the potential for water management improvements and 

identify specific ways to implement those improvements; and (4) projects to develop 

climate analysis tools to more efficiently manage water resources in a changing climate. 

In FY 2013, Reclamation anticipates funding approximately 50 new WaterSMART 

grant projects, including approximately 35 projects. Additionally, to ensure that the 

most effective approaches to sustainable water conservation and water recycling are 

being employed, Reclamation will continue to develop the WaterSMART Clearinghouse website as a resource to provide leadership and assistance in coordinating 

and integrating water conservation and sustainable water strategies. On May 2, 

2012, Reclamation announced $11 million in WaterSMART Water and Energy Efficiency Grants, which will allow 34 projects sponsored by States, Indian tribes, irrigation districts, water districts and other organizations to partner with Reclamation 

on projects that increase water conservation or result in other improvements that 

address water supply sustainability in the West. Eight congressionally authorized 

Title XVI water recycling and reuse projects will receive $20.3 million in funding 

as well. 

Pursuant to Section 9505 of the Act, the Department of Energy (DOE) is in the 

process of conducting an assessment on the effect of, and risk resulting from, climate change with respect to water supplies that are required for the generation of 

hydropower. In consultation with Reclamation and USGS, along with the Power 

Marketing Administrations, the National Oceanic and Atmospheric Administration 

and the Army Corps of Engineers, DOE is preparing a report to Congress on climate 

change effects at Federal hydropower facilities, and recommendations on how to 

change operating and contracting practices to address identified climate change 

risks. 

In 2011, USGS issued a report pursuant to Section 9506 of the Act which documents actions that can be taken to help manage and prepare for the changes that 

may occur to our Nation’s water supply systems as a result of climate change with 

a particular focus on observational data and measuring and monitoring systems. In 

addition, USGS has begun its work on implementing the WaterSMART availability 

and use assessment program pursuant to Sections 9507 and 9508 of the Act and 

has completed an initial pilot study in the Great Lakes system. Additional pilot 

studies are underway in the Colorado River Basin, Delaware River Basin and the 

Apalachicola-Chattahoochee-Flint River Basin. 

A National Groundwater Monitoring Network (NGWMN) was authorized under 

Section 9507 of the Act, which is being implemented by USGS. In 2013, the USGS 

will transition from the pilot-scale NGWMN data portal to a production-scale portal. 

Using hydrologic understanding and modeling tools currently available and being 

developed for selected major aquifers, as part of groundwater availability studies, 

USGS scientists will identify monitoring locations to enhance the national monitoring network. In consultation with State and local agencies, the USGS will incorporate qualified wells and springs from State and local agencies into the NGWMN. 

The USGS will begin expansion of the groundwater climate response network to improve the understanding of the effects of climate change on groundwater recharge 

and availability. The proposed NGWMN will bring comparable monitoring data together from disparate sources in order to close spatial data gaps and evaluate national-scale groundwater levels, quality, and rates of change. 

A Brackish Aquifer Assessment is also authorized under Section 9507 of the Act. 

Hydrologic understanding for selected major aquifers gained through the regional 

groundwater availability studies will be used to assist in identification of brackish 

groundwater resources. In addition, the USGS, in consultation with State and local 

water resource agencies, will begin assembling available data and other relevant information in order to identify significant brackish groundwater resources located in 

the United States and develop a work plan for the national Brackish Aquifer Assessment. 

Over the next 10 years, the USGS plans to conduct a new assessment of water 

availability and use pursuant to Section 9508 of the Act, which calls for the estab-
71 

lishment of a national water assessment program. The USGS Science Strategy identifies a water census as one of six USGS science priorities, and the Water Resources 

activity is able to provide scientific underpinnings for a coordinated assessment of 

water availability and use through its Hydrologic Networks and Analysis Program. 

Question 21. The WaterSmart grant program supports innovative efforts to improve water and energy efficiency among other things. Of the projects that have 

been funded in the program’s two-year history, are there any that you would like 

to highlight as demonstrable successes? Answer. In 2011, Reclamation awarded more than $25 million for 58 Water and 

Energy Efficiency Grants. These projects were estimated to save about 100,000 acrefeet of water, enough to supply water for about 400,000 people for one full year. In 

addition, over 25 of the projects were expected save more than 15 million kilowatt 

hours of electricity per year, enough electricity for about 1,300 households. 

The Three Sisters Irrigation District in Oregon, for example, will use its 

WaterSMART award to conserve water for environmental needs in the Upper 

Deschutes Basin. The district will use $859,149 to replace 20,000 feet of open canal 

with pipe expected to result in 750 acre-feet of water savings annually. The water 

conserved will then be marketed through the Deschutes River Conservancy for a 

protected instream right to support critical habitat for bull trout, red band trout, 

summer steelhead and chinook salmon. The District also will install a 950-kilowatt 

capacity turbine generator as part of the project. This renewable energy source is 

expected to supply 3.1 million kilowatt-hours of electricity annually. 

Another project of note is the Vadose Zone Recharge Wells Capital Improvement 

Project being carried out by the City of Surprise, Arizona. Reclamation announced 

a $1 million WaterSMART Water and Energy Efficiency Grant for the City of Surprise in May 2011. Through this grant, the City intends to construct and operate 

15 additional vadose zone wells, increasing the amount of reclaimed water that can 

be recharged annually by about 6,049 acre-feet annually (AFA). This $4,517,600 

project would enable the City to recharge up to a total maximum of 8,049 AFA of 

reclaimed water that would be stored underground for later City use. 

Question 22. How are grant applications for WaterSmart evaluated and prioritized 

for funding? 

Answer. Each year, Reclamation posts funding opportunity announcements that 

describe eligibility requirements and funding criteria for the public. For example, 

water and energy efficiency projects should seek to conserve and use water more efficiently, increase the use of renewable energy and improve energy efficiency, protect endangered and threatened species, facilitate water markets, or carry out other 

activities to address climate-related impacts on water or prevent any water-related 

crisis or conflict. These projects include, but are not limited to: canal lining/piping, 

municipal metering, irrigation flow measurement, and groundwater recharge. Applications received in response to Reclamation’s funding opportunity announcements 

are scored against evaluation criteria by a review committee composed of experts 

in relevant disciplines selected from across Reclamation. Reclamation then 

prioritizes projects for funding based on those results and additional steps conducted 

to ensure the total amount of all awards does not exceed available funding levels. 

This is to ensure that the projects meet the scope and priorities of the WaterSMART 

program. 

Question 23. WaterSmart grants support projects focused on water and energy efficiency, pilot and demonstration projects, system optimization reviews, and climate 

analysis tools. Will the same WaterSmart thematic areas be supported by increased 

funding in 2013 or are there new priorities that the Bureau of Reclamation are considering supporting with additional funds? 

Answer. Yes, the same WaterSmart thematic areas will be supported by increased 

funding in 2013. In FY 2013, Reclamation proposes to fund WaterSMART at $53.9 

million, $6.8 million above the 2012 enacted level. This request includes $21.5 million for WaterSMART grants, a $3 million increase in funding from the FY 2012 

budget request. With that additional funding, Reclamation plans to provide costshared assistance on a competitive basis for the four existing categories of projects: 

(1) water and energy efficiency improvements that save water, increase energy efficiency and the use of renewable energy in water management, address endangered 

species and other environmental issues, and facilitate transfers to new uses; (2) pilot 

and demonstration projects that address the technical and economic viability of 

treating and using brackish groundwater, seawater, impaired waters, or otherwise 

creating new water supplies within a specific locale; (3) system optimization reviews 

that assess the potential for water management improvements and identify specific 

ways to implement those improvements; and (4) projects to develop climate analysis 

tools to more efficiently manage water resources in a changing climate. Interest 

from eligible applicants is strong. For example, Reclamation has received 167 pro-
72 

posals for new FY 2012 water and energy efficiency grants, together representing 

a request for approximately $100 million in Federal funding. Significant interest is 

also expected for all grant categories in FY 2013. 

Question 24. Please provide by agency the funds to be expended by the Department on restoration of the Klamath River Basin restoration during FY 2013. If possible, please also provide this information for other Federal agencies working on 

Klamath Basin restoration. 

Answer. The fiscal year 2013 budget request for Klamath River Basin restoration activities includes: $7.1 million for the Bureau of Reclamation to support implementation of a number of the restoration and water supply actions that are authorized 

under existing law; $7 million for the Bureau of Indian Affairs to be provided to 

the Klamath Tribes to implement economic activities that support the Klamath 

Basin Restoration Agreement; $1.6 million for the Fish and Wildlife Service to fund 

the Arcata, Yreka, and Klamath Falls Fish and Wildlife Conservation Offices to support critically needed fisheries and fish habitat monitoring and modeling, fish and 

watershed habitat planning and restoration projects, and projects to improve 

instream flows for fish; and $901,000 for the U.S. Geological Survey to determine 

relationships between water availability, fish habitats, and water quality on sucker 

growth, condition, and survival in the Upper Klamath and Clear lakes, investigate 

aquatic productivity with special attention to intensity, magnitude, and composition 

of plankton blooms, investigate production of blue green algae and transfer of 

cyanotoxins through food webs to endangered suckers, and assess the biological effects of exposures of cyanotoxins in leading to a possible bottleneck in population 

recovery. 

UNITED STATES GEOLOGICAL SURVEY

Question 25. I have a longstanding concern about depletions in the southern High 

Plains Aquifer. This is especially important in New Mexico because communities in 

eastern New Mexico rely on the Aquifer for their water supplies. Will you undertake 

more analysis necessary to address this serious problem? 

Answer. We understand how important the High Plains aquifer is to New Mexico 

and many other states, and the USGS has been monitoring and studying this aquifer for many years. Since 2009, the USGS, through the Groundwater Resources Program, has been conducting a High Plains aquifer groundwater availability study to 

quantify groundwater resources, evaluate changes in those resources over time, and 

provide tools to forecast how those resources will respond to stresses from future 

human and environmental uses. This work already has resulted in several publications, and we expect more. A recent noteworthy product (2011) is a water budget 

analysis for the entire aquifer (USGS Scientific Investigations Report 2011-5183), 

including the Southern High Plains aquifer (NM, TX, and OK). Additionally, in 1987 

Congress directed the USGS, in collaboration with numerous Federal, State, and 

local water resources entities, to assess and track water level changes in the High 

Plains aquifer. The most recent product (2011) summarizes changes in water levels 

and drainable water in storage in the High Plains aquifer from predevelopment to 

2009 (FS 2011-3069). Groundwater quality of the High Plains aquifer also was evaluated by the USGS (1999-2006) as part of the National Water-Quality Assessment 

(NAWQA) Program. 

For more information: 

High Plains Groundwater Availability Study web page (http://txpub.usgs.gov/ 

HPWA/index.html) 

High Plains Water-Level Monitoring Study web page (http://txpub.usgs.gov/ 

HPWA/index.html) 

High Plains Groundwater Quality Study web page (http://co.water.usgs.gov/ 

nawqa/hpgw/HPGWlhome.html) 

OFFICE OF INSULAR AFFAIRS

Question 26. The proposed FY13 OIA budget again assumes enactment of legislation approving the Agreement with Palau to extend financial assistance under the 

Compact through 2024. However, the Committee has been unable to report the necessary legislation because no viable offset has been identified to pay for the mandatory spending provided by the Agreement. 

One option being considered is based on the proposal of Delegate Donna 

Christensen as set forth in H.R. 2220. This bill would authorize a ‘‘Pilot Program 

for Public-Private Territorial Investment’’ and would allow taxpayers a one-time 

transfer of existing IRA, 401k, and other tax-deferred investments into a special 

fund with no tax or penalties at the time of the initial transfer. 1/3rd of the collected 
73 

1.5% transfer fee would be made available for critical infrastructure construction in 

the USVI. 

Is the Administration willing to consider support for the concept in H.R. 2220— 

to provide a portion of collections from such a pension fund transfer fee to be used 

by the territories to meet essential infrastructure needs, and at the same time, support Congressional use of a portion of the U.S. Treasury collections of the transfer 

fees as an offset for the legislation to approve the Palau Agreement? 

Answer. The Administration proposes the following offsets to the legislation approving the Agreement with Palau to extend financial assistance under the Compact 

through 2024: Net Receipt Sharing, which takes into account the costs of managing 

Federal oil and gas leases before revenues are shared with the States; terminating 

payments for reclaiming abandoned coal mines to states that are already certified 

as having cleaned up all of their priority sites; and production incentive fees on nonproducing Federal oil and gas leases. The Department has not developed a position 

on the bill. The Department looks forward to working with you and the Committee 

to find an appropriate offset for the Palau legislation. 

Question 27. What is OIA’s rough estimate of unfunded critical infrastructure 

need in each of the territories? 

Answer. Covenant Capital Improvement Project (CIP) funds address a variety of 

infrastructure needs in the U.S. territories including critical infrastructure such as 

hospitals, schools, wastewater and solid waste systems. Improvements to critical infrastructure not only benefit the current population and businesses, but lay the 

groundwork to attract new investment to the territories thereby promoting economic 

development. The territorial governments, individually, compile and budget for anticipated actual infrastructure investment. Thus, there is no grand total for unfunded needs. The insular areas would certainly require billions of dollars to upgrade infrastructure to mainland standards. 

Question 28. Would you please work with OMB to provide the Committee with 

a list of non-pension, and non-healthcare mandatory spending programs/authorizations, with spending in excess of $200 million annually, within the budgets of the 

State and Defense Departments, a portion of which could be considered as offsets 

for the Palau Agreement. 

Answer. The Administration has proposed the following offsets to the legislation 

approving the Agreement with Palau to extend financial assistance under the Compact through 2024: Net Receipt Sharing, which takes into account the costs of managing Federal oil and gas leases before revenues are shared with the States; terminating payments for reclaiming abandoned coal mines to states that are already certified as having cleaned up all of their priority sites; and production incentive fees 

on non-producing Federal oil and gas leases. The Department will forward to OMB 

your suggestions for proposing additional offsets from the budgets of the Departments of State and Defense. The Department looks forward to working with you and 

the Committee to find an appropriate offset for the Palau legislation. 

Question 29. I am concerned that the corpus remaining in the Rongelap Resettlement Fund may be insufficient to provide annual income sufficient to provide for 

future food importation and radiological remediation requirements. 

a. What is the current balance in the Fund? 

Answer. The balance of the Rongelap Resettlement Fund as of Friday, March 2, 

2012, was $11,033,272. 

b. What is the OIA/DOE estimate for the future annual cost for importing 

food and remediating radiation that would be expected to be funded by the Resettlement Fund? 

Answer. The Office of Insular Affairs has not been involved with the importation 

of food to or the remediation of radiation at Rongelap Island. Representatives of the 

Departments of Energy and Agriculture would develop such an estimate; however, 

funding would be required for such an undertaking. 

c. What size corpus would be needed to meet these future needs? 

Answer. The size of the corpus would have to be determined by the Departments 

of Energy and Agriculture after estimating annual need. 

d. What steps will OIA take to ensure that a sufficient corpus remains in the 

Fund to meet these and other long-term resettlement needs? 

Answer. Working in consultation with the Committee, OIA has forbidden in fiscal 

years 2011 and 2012 the use of Rongelap Resettlement Trust Fund proceeds for activities other than those directly connected with the resettlement of Rongelap Island. OIA will continue this policy indefinitely. 
74 

e. An initial ‘‘target date’’ for initial resettlement was set for last October 1st. 

What is the current timeline for people to return to Rongelap? 

Answer. The Mayor of Rongelap Atoll Local Government has informed OIA that 

he anticipates that by September 2012 all Rongelap schoolchildren from Mejatto Island will be enrolled in the public school on Rongelap Island. This will of necessity 

mean the return to Rongelap Island of many adults, who will accompany the returning schoolchildren. In addition the Mayor foresees that many Rongelap schoolchildren enrolled in the 2011-2012 academic year on Ebeye Island will return to 

Rongelap Island during the 2012-2013 academic year with a concomitant return of 

adult family members as well. 

Question 30. I commend the Department for requesting $5 million to supplement the $30 million provided under P.L. 108-188 to mitigate compact impact, and for indicating its intent to hire a full-time employee in Hawaii to focus on this issue. 

a. Please outline of the tasks you anticipate OIA, the Affected Areas, and the 

FAS governments will be jointly undertaking to reduce Compact Impacts. 

b. How does OIA intend to enhance the education of migrants and prospective 

migrants regarding their rights and responsibilities under the Compact? 

c. How does OIA intend to reduce the high cost of providing dialysis and cancer treatment in the Affected Areas? 

d. What will be the performance indicator to determine progress in reducing 

compact impacts? 

Answer. The Department will be establishing an OIA Compact Impact Initiative, 

which will focus on bolstering the Department’s bilateral relationships and communication opportunities, while ensuring there is an annual forum to discuss issues of 

concern, make recommendations, and implement agreed upon policies. As part of 

the initiative, OIA will seek to facilitate travel by freely associated state (FAS) 

presidents to the affected jurisdictions to enhance relationships and coordination 

among territorial or State, Federal, and FAS leadership and communities. This provides opportunities for coordinated messaging and information distribution from 

FAS and U.S. senior officials to FAS migrant communities. Assistant Secretary of 

the Interior for Insular Areas, Anthony Babauta convened the inaugural Pacific Island Leaders Addressing Compact Impact (PILACI) a bilateral meeting of officials 

from the FAS and U.S. in March 2012. The PILACI meeting provided a forum 

where stakeholders including the FAS Presidents, Governors of the Federated 

States of Micronesia, Guam, and Commonwealth of the Northern Mariana Islands 

(CNMI), as well as the Lt. Governor of Hawaii, Guam Congresswoman, and participants from the CNMI Congressman and State Department raised concerns and discussed solutions. Future PILACI meetings will be held to advance joint undertakings and develop performance indicators. Utilizing existing resources, OIA will 

review and evaluate its ability to dedicate a member of the OIA staff to lead the 

OIA Compact Impact Initiative while working closely with PILACI stakeholders. 

OIA is also working with a number of Federal agencies and the appropriate regional 

bureaus to use existing authority under the Compacts of Free Association and other 

relevant Federal statutes. 

As a result of the PILACI meeting, joint undertakings identified were: 

• To better facilitate meaningful outreach meetings in the affected jurisdictions, 

OIA will convene regularly scheduled meetings with FAS and affected jurisdiction leadership to provide advance notice of travel, structure and format of outreach meetings in a way that maximize distribution of joint messaging and engages stakeholders from the affected jurisdictions. 

• OIA will work directly with the affected jurisdictions about the feasibility of developing uniform reporting guidelines detailing impact of the Compacts of Free 

Association. The Abercrombie Administration announced they are pursuing efforts to acquire better data and would be providing input about how report 

guidelines may be developed. Upon receiving input from the Abercrombie Administration, OIA will distribute to other affected jurisdictions for their comments. Emphasis will be placed on evaluating the impact of qualified nonimmigrants, ‘‘. . .a person, or their children under the age of 18, admitted pursuant to the COFA who is a resident of an affected jurisdiction.’’ 

• Given the finite resources available to PILACI participants, the value in 

leveraging existing relationships, funding, and expertise is a shared priority to 

address needs in the FAS and affected jurisdictions. To date there has been limited investment by private foundations in Micronesia. This is an area the Micronesian Chief Executives seek to explore further to secure additional resources 

for the region. OIA will develop a network of private and non-profit sector 

stakeholders conducting health and education work in the Micronesia region 
75 

with the assistance of PILACI participants. Once the network is established, 

OIA will work to provide a forum to facilitate discussion with PILACI participants and the network to strengthen existing partnerships and develop new 

joint initiatives. 

The Department has supported and funded efforts by the FAS governments to 

provide educational materials to orient their citizens, prior to departing their country, about the challenges and responsibilities associated with residing in the United 

States. OIA is supportive of awarding additional technical assistance to fund FAS 

government grant proposals that create, update, or enhance education and orientation materials for their citizens. 

In addition to the joint undertakings previously mentioned, there are three ongoing OIA initiatives intended to reduce the effects of Micronesian migration on 

United States jurisdictions. First, in order to better educate and prepare citizens 

from the RMI traveling to the United States, OIA has awarded a technical assistance grant to develop an orientation pamphlet and video. These materials identify 

important documents that are necessary to live and work in the U.S., information 

about housing, employment, health care, education, U.S. law, and additional resources that can contribute to a better understanding of their rights and responsibilities while in the United States. The RMI has expressed interest in producing radio 

broadcasts of the orientation content to enhance the dissemination of such information. 

Second, OIA has engaged in discussions with the FAS Governments to establish 

a health screening process. The goal of this initiative is to ensure that FAS citizens 

receive medical attention they need prior to traveling and limit the spread of communicable diseases, such as drug resistant tuberculosis. This targeted effort will assist in reducing the burden of providing expensive medical care and may prevent 

unnecessary loss of life. Areas of continued discussion with FAS officials, OIA, and 

the Departments of Health and Human Services as well as Homeland Security include how to develop and implement such a health screening process how to ensure 

consistency with FAS statutes, and how to handle the associated costs. 

Third, OIA awarded the FSM Government a technical assistance grant to conduct 

a Household Income and Expenditure Survey (HEIS) that will provide data on the 

distribution of income, compile its national accounts, provide nutritional information 

and food consumption patterns for families, and conduct a poverty hardship assessment. 

The OIA has participated in discussions with HHS, health officials from Hawaii 

and Guam, and FSM and RMI leadership about the establishment of dialysis facilities. There remains a substantial cost involved with establishing, operating, and 

maintaining dialysis facilities. Challenges such as water quality, power reliability, 

limited presence of specialized medical professionals, and comprehensive projections 

for needs of existing and future patients were factors that would affect the size and 

cost of each facility. OIA is in the process of contracting for a feasibility and cost 

assessment for constructing dialysis facilities and necessary operation, resource, and 

staff requirements to support such facilities in the FSM and RMI. 

Question 31. The budget request proposes a large (70 percent) reduction in funding for the Maintenance Assistance Program. Does this reflect a decrease in the 

need for maintenance assistance in the territories? 

Answer. In 2012 and 2013, the Maintenance Assistance Program plans to continue funding immediate needs for maintenance in the insular areas. Although the 

maintenance assistance program has proven to be an effective method of institutionalizing better maintenance practices throughout the U.S.-affiliated islands, the 

Department was faced with difficult budgetary decisions in a challenging fiscal environment. The increase to Empowering Insular Communities to support the implementation of sustainable energy strategies offsets the decrease to the Maintenance 

Assistance Program. 

Question 32. The budget proposes $2.971 million for Empowering Insular Communities and identifies the two critical areas of focus as being lessening the impact of 

the Guam military buildup, and implementing sustainable energy strategies. Given 

that plans and priorities have been developed in these two critical areas, what is 

the purpose of the ‘‘call letter’’ and selection process as described on page 82 of the 

Green Book? 

Answer. The Department believes that consultation with the territories via a call 

letter is an important part of determining priorities. OIA plans to use the call letter 

process in future years. The Department believes that proposals for Empowering Insular Communities funding need to be reviewed through open and transparent criteria. 
76 

Question 33. GAO and the DOI/OIG have reported on the need for OIA to improve 

grant monitoring. What is the current level of OIA’s effort in this area and how 

would this proposed budget enhance that effort? 

Answer. OIA currently has 15 financial assistance managers to manage a budget 

of $561 million in 2012. In order to respond to the findings of GAO and the OIG, 

OIA has moved two policy employees in to the Budget and Grants Management Division to provide additional financial assistance oversight. By the end of 2012, the 

Office plans to have hired two more financial assistance managers to manage FSM 

and compact impact issues. 

Question 34. The OIA ‘‘Green Book’’ has a limited description regarding the CNMI 

Labor Ombudsman’s Office. Accordingly, please have the CNMI Labor Ombudsman 

submit a brief report to the Committee describing: 

a. The type and number of cases being handled by the Office, 

b. The changes in the Office workload anticipated for the coming year, 

c. A description of the issues that the Office has been involved in related to 

implementation of P.L. 110-229, and the status/outlook on resolution of these 

issues. 

(If there are questions regarding this request, please have the Ombudsman and other appropriate officials contact the Committee staff at 224-7865 

for clarification). 

Answer a. Since its inception in May of 1999, the Ombudsman’s office has assisted 

nearly 11,000 aliens in over 9,000 cases or complaints, the results of which have 

been awards of over $7 million during the thirteen-year period. Over the past three 

years since the position was filled in May of 2009 with the hiring of Pamela Brown 

Blackburn, the office has assisted nearly 4,000 aliens in close to 3,000 cases or complaints. Neither of these numbers includes telephone or walk-in inquiries not requiring a full in-take into the Ombudsman data system. 

The office has handled much of the same types of cases over the past nearly 13 

years of its existence. The law enforcement agencies to which aliens are referred for 

resolution of their cases/complaints have changed to include the various offices of 

the U.S. Department of Homeland Security, which only recently arrived in the 

CNMI. Referrals are still being made to the Federal Bureau of Investigations (FBI), 

U.S. Department of Labor, Wage & Hour Division, Equal Employment Commission, 

and CNMI Department of Labor, and when appropriate, CNMI Department of Public Safety. 

The vast majority of alien cases and complaints involve the assistance of this office with aliens’ labor complaints, such as failure to pay wages for hours worked, 

improper termination, failure to provide repatriation benefits as required by CNMI 

law, failure to provide payment of medical expenses as required by CNMI law, and 

other similar complaints of failure of employers to honor contractual obligations or 

CNMI labor law requirements. 

Several labor complaints involved large numbers of workers complaining of an 

employer’s failure to properly pay overtime wages for hours worked. These cases as 

always are referred to the U.S. Department of Labor, Wage & Hour Division. There 

has not been a marked increase in discrimination complaints but the steady flow 

of such complaints continues with the Ombudsman office working closely with the 

Equal Employment Commission to resolve these complaints expeditiously. 

In 2009, the Ombudsman’s office experienced a drastic increase in the number of 

aliens reporting to the office complaining of trafficking and labor fraud. From May 

2009 to present, the office has directly assisted 243 aliens with trafficking and labor 

fraud complaints. While the majority of those aliens seeking help were Chinese nationals, 15 Indian nationals were also assisted. 

Many aliens reported having been brought to the CNMI in mid-2008; however, 

most arrived during 2009 with increasing numbers coming just prior to the effective 

date of P.L. 110-229. Regardless of when or from where they came, all told similar 

stories detailing the promises and benefits they would receive in the CNMI. Promises ranged from high-paying jobs in resorts, construction companies or elegant restaurants once they completed a few months of English language classes. They were 

told that not only were these jobs waiting for them in the CNMI but that employers 

in Guam were also ready to hire them as soon as they completed such English training. The vast majority also reported the promise of Federal immigration status once 

they arrived in the CNMI and P.L. 110-229 became effective. All of these aliens 

were interviewed, questioned as to documentary evidence which could corroborate 

their claims, and whether any fee was paid either here or in their respective countries of origin. They all paid recruitment fees ranging from US$4,000 to US$50,000. 
77 

Finally, the vast majority of the aliens had the return portion of their air-ticket cancelled upon arrival in the CNMI, effectively stranding them here. 

All were referred to the FBI since there were no DHS investigators on island at 

that time and operational during this period. It was later learned, however, that 

some of these victims were part of a DHS, Immigration and Customs Enforcement 

(ICE) investigation. Since ICE (now known as Homeland Security Investigations or 

HSI) became operational here in the CNMI, many of the victims are being referred 

to their agency for investigation and enforcement. 

Service providers are limited but the U.S. Department of Justice and Office of Insular Affairs have provided funds to the only shelter in the CNMI, Guma 

Esperansa, to assist these victims with food and shelter. Also, Micronesian Legal 

Services working in conjunction with this office and Guma Esperansa is filing for 

T and U visas for the victims on a case by case basis. All of the victims have agreed 

to cooperate with law enforcement investigations and have done so when asked. 

The number of aliens per year reporting to the Ombudsman office with trafficking 

and labor fraud complaints is: in 2009—153; in 2010—71; in 2011—17, in the first 

3 months of 2012—3. The above numbers include both severe forms of trafficking 

as well as trafficking and labor fraud. The same recruitment scheme is being reported by the vast majority. 

The other major addition to the caseload of the Ombudsman office since 2009 has 

been the increasing number of aliens and employers seeking assistance and clarification of P.L. 110-229. 

Answer b. Based on the number and types of complaint and cases encountered 

by the Office during the first quarter of 2012, it is not anticipated that the Office’s 

workload will change from workloads of 2010 and 2011. During these respective 

years, the number of aliens assisted was 1,748 and 901 respectively. The complaints 

did not change from those experienced by the Office during the 13 years of operation. The Office does, however, expect an increase in labor related complaints once 

aliens’ Federal statuses are finally determined. It is suspected that a number of employers are paying aliens improperly or not at all during the past two years as well 

as not providing them with the benefits required under CNMI law, such as medical 

benefits. Years of experience working with aliens in the CNMI suggests that these 

matters are going unreported due to aliens’ concerns for their Federal statuses. 

The office continues to see more aliens and employers seeking assistance with 

how to navigate the complex Federal immigration system under which the CNMI 

now operates. Many of these simply require having procedures explained. Those 

with more complicated situations are either referred to the fledgling CNMI immigration bar for assistance or assisted in filling out and submitting an appropriate form 

to the DHS agency tasked with handling such matters. Demand for translation and 

interpretation numbers are expected to increase as a result of the continuing transition to Federal immigration procedures. Currently, the major area of concern is the 

uncertainty surrounding the Federal immigration statuses available under P.L. 110- 

229 for aliens who were lawfully present in the CNMI on November 28, 2009. Once 

the system is fully functioning, the Office may see a decline in the number of aliens 

seeking clarification of this process. It is not expected that demand for other immigration matters will decline, however. 

Additionally, there will be an increase in the workload due to the expansion of 

the geographical region of responsibilities not only to the territory of Guam but also 

in correlation with the interagency focus on a Pacific regional approach to anti-trafficking in persons. The Ombudsman was recently named a member of the Advisory 

Board for a regional project funded through a grant from the U.S. Department of 

State to the National Association of District Attorneys. The project is a joint effort 

involving State, the Department of Justice, and the Department of the Interior to 

establish anti-trafficking operations within the freely associated states (FAS) of the 

Republic of Palau, Republic of the Marshall Islands and the Federated States of Micronesia. The project is also in consultation and coordination with the governments 

of the FAS. 

The election of the Ombudsman as the co-chair of the CNMI Human Trafficking 

Intervention Coalition along with the U.S. Attorney for the Districts of Guam and 

the Northern Mariana Islands is also expected to increase workload within the Office. The HTIC focus for 2012 is community outreach and education as well as expanding the pool of service providers within the CNMI. The Ombudsman is expecting to be involved in such an effort as part of her expanded duties in Guam. 

Answer c. The number one issue involving the implementation of P.L. 110-229 

was the late date of October 2011 for the publication of the final CW visa regulation. 

The implementation of P.L. 110-229 created a great deal of anxiety, uncertainty and 

associated rumors. The Office has been seeing a large number of aliens and employers seeking clarification of the immigration procedures, which appear to the lay per-
78 

son as a shifting set of rules and expectations. The numbers were more than 40 to 

50 a day during 2009 and 2010 but began to dwindle until the final deadline of November 28, 2011. With the delayed publication of the final rule, the Office’s workload greatly increased due to calls and appointments with employers seeking to understand what needed to be submitted to support the petition for CW workers and 

where it should all be sent in order to meet the deadline for submission. 

Further, after the filing of the CW petitions and the United States Citizenship 

and Immigration Services’ (USCIS) decision to issue humanitarian parole status to 

certain classes of aliens, the Saipan Application Service Center was inundated with 

aliens and employers requesting status on their respective petitions and applications. Also, the increase in the number of biometric examinations required for the 

granting of each and every request for some type of status or benefit simply overwhelmed the operation. Walk-in aliens were suddenly being turned away and the 

info-pass system was unavailable for many months. During this period, the Office, 

again, provided clarification and assistance to aliens and employers alike in seeking 

updates to their status questions and answers to other immigration related matters. 

Most employers were unaware of which employment status could be or should be 

requested for alien employees. Therefore, despite several being qualified to begin 

seeking H1B or L1 federal employment status for their alien workers during the 

umbrella permit period from November 28, 2009 to November 28, 2011, most waited 

to see the final CW rule to begin a process for an H1 or L1 visa that usually takes 

up to 7 days to get a labor condition application (LCA) from USDOL for an H-1B, 

and another 60 days to simply get the proper clearance from USCIS for an H-1B 

or an L-1 visa petition. Most of these workers were, therefore, required to acquire 

a parole status and employment authorization (EAD) to continue employment in the 

CNMI. Many of these H and L petitions are still awaiting final adjudication from 

USCIS almost six months later. This translates into an alien needing to renew both 

the parole and EAD in order to remain in lawful status prior to final adjudication 

on the petition. 

The second major area of concern involved the employment status of aliens for 

whom an employer submitted a petition. Many parolees were only given parole status until January 31, 2012 due to USCIS’ expectation that CW petitions would be 

expeditiously processed and granted by that date. Out of 11,000 petitions, very few 

CW visas were issued by early April 2012. Petitioners seeking CW, H, and L visas 

suffer severe anxiety as they strive to maintain a lawful presence in the CNMI during an elongated petition period, which was unanticipated. 

The Office discusses these issues regularly with the appropriate USCIS officials 

and disseminates the appropriate response within the community but each time an 

EAD must be renewed, it costs the alien or the employer $380. This is placing a 

heavy fiscal burden on alien workers who typically earn $5.15 per hour. 

The Ombudsman is told that more adjudicators are being temporarily assigned to 

the California Service Center where all CW petitions are processed. She further successfully resolved the issue of having all parole requests and EADs for pending petitions adjudicated in Guam and not through the normal procedures of sending such 

requests to Chicago. USCIS expects to see most of the back log cleared within the 

next few months. 

The third issue regarding implementation of P.L. 110-229 that required the Ombudsman’s attention was the lack of regulations for issuance of visas for CW and 

E2C investors once they received their respective Federal immigration status. In response to my inquiry regarding two of the first aliens issued E-2C status who had 

been awaiting visa issuance in Seoul, Korea for over 6 months, State sent the following explanation: 

While the publishing of guidance for consular officers adjudicating E-2C 

and CW visa initially delayed by the interagency clearance process, the 

guidance was published in 9 FAM 41.34 on December 27th. On January 10, 

the ALDAC announcing the established reciprocity arrangement for these 

visa classifications was distributed worldwide. With those publications, 

posts have the resources necessary to begin issuing E-2C and CW visas 

(and our embassies in Malaysia and Japan have already begun doing so). 

Please advise individuals who require an E-2C or CW visa to contact the 

U.S. Embassy or consulate where they intend to apply for their visa. While 

this message was encouraging, many aliens possessing CW status were still 

experiencing delays in the issuance of visas and being told by embassy and 

consulate staff that they were awaiting guidance in order to adjudicate such 

requests. 

Finally, with the implementation of P.L. 110-229 came the application of other 

Federal laws such as the Title VII of the Civil Rights Act of 1964 which prohibits 
79 

national origin discrimination in all aspects of employment, such as hiring, firing, 

promotion, wages, and retaliation. It covers employers with 15 or more employees, 

and is enforced by the Equal Employment Opportunity Commission (EEOC). In addition, the Immigration Reform and Control Act of 1986 (IRCA) makes it illegal for 

an employer to discriminate against a person because of that person’s citizenship 

or immigration status when it comes to hiring, firing, or referral. It also supplements Title VII prohibitions against national origin discrimination, covering employers with four to 14 employees. The IRCA also prohibits retaliation. At present, the 

Ombudsman is in discussions with the Office of Special Counsel for ImmigrationRelated Unfair Employment Practices at the United States Department of Justice 

(DOJ), which enforces the IRCA’s nondiscrimination requirements, regarding establishment of the Ombudsman’s office as the outreach and educational office for its 

mission. Such a relationship already exists between the Ombudsman office and the 

EEOC, and has since 1999. 

When and if such an arrangement is implemented, then it is expected that additional workload will result. There is, however, DOJ grant money available to fund 

such an operation by the Ombudsman. 

Question 35. I understand that the responsibilities of the CNMI Labor Ombudsman have been expanded to include Guam. If this is correct, would you please describe these new responsibilities and how they will affect the Ombudsman Office 

budget? 

Answer. In light of the relocation of several thousand military personnel to Guam 

and anticipated need for an increase of H-2B workers to accommodate the associated infrastructure development, the Office of Insular Affairs (OIA) recognized the 

potential for an increase of the types of abuse of alien workers experienced in the 

CNMI. As such, the Assistant Secretary for Insular Areas expanded the geographic 

area of responsibility for the Ombudsman to Guam. OIA determined that having the 

Ombudsman operational prior to the introduction of a large number of H-2B workers would be advantageous. During the course of the last ten months, the Ombudsman has travelled to Guam to develop relationships with Federal and local government officials as well as with the alien communities in an effort to understand the 

community and the unique issues facing Guam. She has already formed strong ties 

with the U.S. Attorney, FBI, USCIS, Guam Attorney General, Guam Department 

of Public Safety, Guam Department of Labor, and many in the faith-based community as well as with consulates located on the island. 

Temporary office space was secured in the U.S. Attorney’s office in Hagatna, 

Guam, with the Ombudsman having full access to the building once she received 

the appropriate security clearance. The majority of these trips have been day trips 

with only occasional overnight travel. So far, costs have been kept to a minimum. 

Once the office is fully established and operational with its own office space, it is 

anticipated that the Ombudsman will make weekly trips to Guam to provide assistance to aliens as she does in the CNMI at present. This includes assistance with 

labor abuses, immigration abuses, trafficking and other criminal matters. 

RESPONSES OF SECRETARY KEN SALAZAR TO QUESTIONS FROM SENATOR WYDEN

WESTERN OREGON TIMBER SALES

Question 1. I appreciate the leadership that you personally have taken in advancing pilot projects on the BLM forestlands in western Oregon and am glad you recently had a chance to tour these projects. I similarly appreciate the proposed increase in the budget of $1.5 million towards western Oregon forest management 

programs. Following up on my question and your answer at the hearing, you highlighted the pilot projects and I appreciate that these are moving forward and five 

more projects are being planned. However, I continue to have concerns about the 

overall lack of timber volume coming from the BLM lands in western Oregon, particularly in southwest Oregon. While in 2010 the agency came close to meeting the 

target of 230 million board feet laid out in your 2009 announcement, it fell well 

short in 2011. In fact, in Fiscal Year 2011 the BLM only awarded 137 mmbf in western Oregon and 6.3 mmbf in the Medford District. While the pilot projects are moving forward, my understanding is that part of the shortfall is because other timber 

sale projects have been protested. As a result, they simply have not moved forward 

and the expected timber volume never gets to the mills that desperately need the 

timber. Mr. Secretary, what is the BLM doing to resolve the protests on these 

projects and this year’s program so this timber can be made available to local mills? 

Is the proposed budget increase intended in any way to help with this issue and 

juggling the other forestry tasks the agency is undertaking, such as the new pilots 

and revised plans? 
80 

Answer. The BLM is working to make timber sales available and has prioritized 

resolving protest and appeals in the Medford district. In FY 2012, the BLM plans 

to offer the program target volume of 193 mmbf of timber for sale; the Roseburg 

target is 28 mmbf and the Medford target is 19 mmbf. The BLM also plans to 

reoffer additional volume from eight more contracts that were mutually cancelled. 

The increase in the program volume target from 190 mmbf to 193 mmbf corresponds 

with a budget increase of $527,000 in the O&C forest management program in the 

FY2012 Budget. 

The proposed increase of $1.5 million towards western Oregon forest management 

programs in the Fiscal Year 2013 budget proposal is intended to increase western 

Oregon’s offered volume from the Fiscal Year 2012 target of 193 MMBF, to a Fiscal 

Year 2013 target or 197 MMBF, or an increase of 4 MMBF. 

The BLM Districts in western Oregon, and the Medford District in particular, are 

working diligently to resolve administrative protests. This includes exploring protest 

resolution through informal agreement with timber sale purchasers and conservation organizations, as well as issuing protest decisions. Protesting organizations can 

subsequently appeal BLM’s protest decision to the Department of the Interior Board 

of Land Appeals (IBLA), triggering a second phase in administrative remedy and 

response. The BLM’s Medford District has issued several protest decisions since the 

BLM provided a briefing for your staff on this topic in December of 2011. Some of 

the 2010 and 2011 protest decisions have been appealed to the IBLA, creating a respective workload. One 2010 timber sale decision was appealed to the IBLA and has 

subsequently been challenged in court (pending decisions in IBLA and District 

Court jurisdictions). 

WATER RESOURCES/RESEARCH

Question 2. The U.S. Geological Survey (USGS) budget zeroes out $6.5 million in 

Water Resources Research Act programs. In my state, Oregon State University has 

fostered important water resources research and understanding over the past 50 

years. It, and other land grant universities across the nation, use the funds primarily for important student research opportunities. The USGS budget justification 

touts the value of this research saying, ‘‘[w]ater resources research, information, and 

monitoring activities support the USGS Science Strategy to provide scientific information on the water availability and quality of the United States in order to inform 

the public and decisionmakers about the status of freshwater resources and how 

they are changing.’’ I’m concerned that even though the USGS budget request is a 

$ 34.5 million increase over the 2012 enacted level, federal contributions to state 

water quality research is left by the wayside. Q: Can you explain why the Department is turning away from its partnership with the states after 27 years since the 

Water Resources Research Act passed? What message does this send to the state 

water resources research institutions and the students who are learning to tackle 

the many water issues we face? 

Answer. The Water Resources Research Institutes (WRRIs), located at 54 landgrant universities across the Nation, use their 2:1 (non-Federal to Federal) matching 

grants to support over 250 research and technology transfer projects annually. 

These projects are developed in response to priorities set by the institutes’ individual State Advisory Committees and address a wide variety of water resources 

issue and problems. The research projects provide support and training to over 700 

students nationwide each year, contributing to the development of the next generation of water resources scientists, engineers, and technicians. The Water Institutes’ 

program is described at http://water.usgs.gov/wrri/. 

Federal funding for WRRIs is often highly leveraged by multiple sources of State 

and local funding. With diverse sources of funding and stakeholder involvement in 

WRRI decision-making, the priorities of individual Institutes are not solely driven 

by the Federal government. As a result, their priorities have not always been 

aligned with the national priorities of the USGS water programs. This is not a comment on the overall excellence or quality of the Institutes, which produce research 

products and students that can directly benefit the USGS mission. The USGS is currently evaluating different ways in which the work of the Institutes can become 

more aligned with National priorities, while retaining a local focus. 

Though the USGS recognizes and appreciates the contributions of the Institutes, 

in a time of severe fiscal constraints, tough decisions were made in the formulation 

of the 2013 budget to meet the science needs of the Nation as a whole. The 2013 

budget reflects efforts to balance USGS research, assessment, and monitoring activities to ensure the USGS’s continued ability to address a broad array of natural resources and natural science issues that face the Nation. The budget supports a continued legacy of world-class science to support decision-making. 
81 

COUNTY PAYMENTS PROPOSAL—O&C LANDS FUNDING

Question 3. I am pleased that the President’s budget includes a funding proposal 

to reauthorize the county payments program and that it specifically funds it as 

mandatory spending. But, I am again disappointed that—like in last year’s proposal—the Bureau of Land Management provides no funding for its portion of this 

critical program and that steep cuts to the program are again being proposed. Under 

the recently expired county payments program, the BLM payments are a significant 

portion of what the O&C counties receive from the county payments program. However, in this budget request, there is no recognition that this portion of the program 

for the BLM’s lands is BLM’s responsibility. Rather, BLM’s role in providing county 

payments to the O&C counties has been handed over to the Forest Service. I asked 

you about this issue last year, and raised it in subsequent discussions with the 

Agency, but was never able to get an explanation as to why it makes any sense for 

the BLM to hand over responsibility for these payments to another agency. Mr. Secretary why is the BLM handing over responsibility for providing funding to these 

counties to another agency? Can you explain to me what portion of the proposed 

county payments program funding will consist of the O&C payments, how the allocation of funding for Forest Service and BLM lands will be made and whether the 

Interior Department will be providing any funding for the program? 

Answer. Sec. 601 of P.L. 110-343, the Secure Rural Schools and Community SelfDetermination Program, authorized an extension and ramping down of payments to 

the counties through fiscal year 2011. The final, mandatory payments by Sec. 601 

were previously authorized, and final Secure Rural Schools program payments were 

made in October 2011. 

The Budget reflects a five-year reauthorization, starting in FY2012, of the Secure 

Rural Schools Act with funding through mandatory U.S. Forest Service appropriations. This includes Secure Rural Schools payments to western Oregon counties. 

This SRS proposal revises the allocation split between the three portions of the program from the current authority emphasizing enhancement of forest ecosystems, 

restoration and improvement of land health and water quality and the increase of 

economic activity. The FY 2013 payment is proposed for $294 million. 

Upon expiration of PL 110-343, the BLM’s authority to make payments for FY 

2012 to the O&C grant lands and CBWR counties is limited to the Oregon and California Grant Lands Act of 1937 and the Act of May 24, 1939. For any of the 18 

counties in Western Oregon choosing not to receive payments for 2012 (in 2013) 

under the reauthorization proposal discussed above, the payments would revert 

back to payments under the 1937 O&C Act and subsequent amendments. The 1937 

statute authorizes payments of 50 percent of Federal receipts from activities on 

O&C grant lands. In the case of Coos and Douglas Counties, if they were to choose 

not to receive payments for 2012 (in 2013) under the proposal, the 1939 statute authorizes payments for lost tax revenue not to exceed 75 percent of the receipts from 

activities on Coos Bay Wagon Road grant lands. For payments for 2011 (received 

in 2012), this totaled approximately $40 million. 

RESPONSES OF SECRETARY KEN SALAZAR TO QUESTIONS FROM SENATOR CANTWELL

‘‘FUNDAMENTAL TRANSFORMATION’’ OF THE OIL AND GAS INDUSTRY

Mr. Secretary, in addition to calling for sorely-needed improvements in government oversight and regulation, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling report focused a great deal on the need for a 

transformation within the oil and gas industry itself. The report stated: 

Government oversight must be accompanied by the oil and gas industry’s 

internal reinvention: sweeping reforms that accomplish no less than a fundamental transformation of its safety culture. 

Question 1a. What are the top three big, tangible steps the industry needs to take 

to show the American public that they mean business about achieving the ‘sweeping 

reforms’ the Commission is calling for? 

Answer. It is in our country’s interest to have a robust offshore oil and gas industry, one that carries out both safe and responsible operations on the OCS. The Department has been working hard since the Deepwater Horizon explosion and spill 

to bring this to fruition. 

In this regard, it is important that a new culture of safety emerges throughout 

the industry, strong enough to overcome ingrained practices. This new safety culture should reflect the Bureau of Safety and Environmental Enforcement’s credo of 

‘‘Safety at all levels, at all times.’’ Additionally, industry must establish a record of 

safety for offshore oil and gas operations under today’s more stringent regulatory 
82 

regime by demonstrating compliance with all offshore safety rules and regulations. 

And finally, it is important that industry demonstrate a record of commitment to 

continuous improvement and innovation regarding operational and workplace safety. 

Question 1b. If the oil and gas industry falls short of the fundamental transformation you are calling for today, do you believe the industry has the right to ask 

for the trust of the American people in the future? 

Answer. It is important that industry demonstrate a commitment to this culture 

of safety and compliance following the Deepwater Horizon explosion and spill, and 

falling short of these expectations will likely jeopardize the public’s trust. 

Question 1c. What reform has been implemented at DOI to ensure better oversight of the industry? Please give specific examples of changes made to programs, 

staff changes, expertise, and permitting. 

Answer. In the time since the Deepwater Horizon oil spill in the Gulf of Mexico, 

the Department has launched the most aggressive and comprehensive reforms to 

offshore oil and gas regulation and oversight in U.S. history, including: 

• Implementation of strong new safety rules that raise standards for everything 

from drilling equipment and well design to casing and cementing; a requirement 

that companies establish comprehensive risk management programs; a requirement that operators demonstrate the capability to deal with a catastrophic 

blowout; limiting the use of categorical exclusions so that proposed lease sales 

and drilling projects go through rigorous environmental reviews under the National Environmental Policy Act (NEPA); and requiring companies certify that 

their rigs comply with safety and environmental laws and regulations; 

• Dissolution of the Minerals Management Service, with the transfer of minerals 

revenue management to a newly-established Office of Natural Resources Revenue in the Office of the Secretary and the creation of two separate bureaus— 

the Bureau of Ocean Energy Management and Bureau of Safety and Environmental Enforcement—to handle the leasing and safety oversight functions of 

the former MMS; 

• Development and implementation of regulations and guidance to operators responsive to the recommendations of the DOI Safety Oversight Board, the National Academy of Engineering, and the National Commission on the BP Deepwater Horizon Oil Spill; 

• Completion of a review of ethics issues related to the Department’s management of the OCS program, and creation of the Investigations and Review Unit; 

• Implementation of a recruitment strategy to expand the field of inspectors and 

engineers in the offshore program; and 

• Establishment of the Ocean Energy Safety Advisory Committee to advise the 

Department on issues related to offshore energy safety, including drilling and 

workplace safety, well intervention and containment, and oil spill response. 

Within BSEE, which is tasked with providing safety and environmental oversight 

of offshore oil and gas operations on the OCS, we have increased the number of inspectors by 50 percent since April 2010, and the number of engineers, who also perform critical safety functions, by nearly 10 percent. With regard to permitting, 

BSEE has held permit processing workshops for industry, which has improved the 

quality and thoroughness of applications; published a permit application completeness checklist to make it clear to industry what information is required and to reduce the frequency of incomplete applications; established priorities for reviewing 

permit applications; and allowed authorized users of our online permit application 

system to track the status of their applications, answering the call for greater transparency in our permitting process. As a result of these steps, and the industry’s increasing familiarity with the process, permit review times have decreased significantly in the past year. 

Question 1d. What legislative action, if any, does DOI need to oversee the industry better? 

Answer. In testimony before the Senate Energy and Natural Resources Committee 

on May 17, 2011, the Secretary announced a series of legislative principles intended 

provide a framework for the efficient and responsible development of our domestic 

resources. In the realm of enhanced oversight, these principles include: 

• Codifying new safety and environmental standards for offshore oil and gas development that have been established through administrative procedures by the 

Bureau of Safety and Environmental Enforcement and the Bureau of Ocean Energy Management. 

• Statutorily extending exploration plan approval time under the Outer Continental Shelf Lands Act to allow for appropriate environmental review. 
83 

• Formalizing existing research collaboration by authorizing an Ocean Energy 

Safety Institute to connect government, industry, academia, and outside experts 

devoted to developing cutting-edge safety, containment, and response capabilities. 

• Formalizing the reorganization of the Bureau of Ocean Energy Management, 

Regulation and Enforcement by adopting organic legislation for: (1) the Bureau 

of Ocean Energy Management; (2) the Bureau of Safety and Environmental Enforcement; and (3) the Office of Natural Resource Revenue. 

• Provide special hiring authorities for BOEM and BSEE that allow those bureaus to hire personnel for critical positions during times of need at competitive 

salaries. 

In addition, the Department proposed the following legislative proposals in its FY 

2013 Budget Request that will improve oversight or ensure a fair return to the public for development of their resources: 

New Fee for Onshore Oil and Gas Inspections.—Through appropriations 

language, the Administration proposes to implement an inspection fee in 

2013 for onshore oil and gas drilling activities that are subject to inspection 

by BLM. The proposed inspection fee is expected to generate an estimated 

$48.0 million in 2013, $10.0 million more than the corresponding $38.0 million reduction in requested BLM appropriations, thereby expanding the capacity of BLM’s oil and gas inspection program. The fee would support Federal efforts to increase production accountability, human safety, and environmental protection. 

Onshore Oil and Gas Drilling Permit Fee.—The 2013 budget proposes to 

continue a fee for processing drilling permits through appropriations language, an approach taken by Congress in the Interior Apppropriations Acts. 

A fee of $6,500 per drilling permit was authorized in 2010, and if continued, 

would generate an estimated $32.5 million in offsetting collections in 2013. 

Repeal of Deep Gas Incentives.—The Administration proposes to repeal 

Section 344 of the Energy Policy Act of 2005. Section 344 mandated royalty 

incentives for certain ‘‘deep gas’’ production on the OCS. This change will 

help ensure that Americans receive fair value for federally owned mineral 

resources. Based on current oil and gas price projections, the budget does 

not assume savings from this change; however, the proposal could generate 

savings to the Treasury if future natural gas prices end up below current 

projections. 

Fee on Non-Producing Oil and Gas Leases.—The Administration proposes 

to encourage energy production on lands and waters leased for development. A $4.00 per acre fee on non-producing Federal leases would provide 

a financial incentive for oil and gas companies to either get their leases into 

production or relinquish them so that the tracts can be leased to and developed by other parties. The proposed fee would apply to all new leases onshore and offshore and would be indexed annually. In October 2008, the 

Government Accountability Office issued a report critical of past efforts by 

Interior to ensure that companies diligently develop their Federal leases. 

Although the report focused on administrative actions that the Department 

could undertake, this proposal requires legislative action. This proposal is 

similar to other non-producing fee proposals considered by the Congress in 

the last several years. The fee is projected to generate revenues to the U.S. 

Treasury of $13.0 million in 2013 and $783.0 million over ten years. 

Net Receipts Sharing for Energy Minerals.—The Administration proposes 

to make permanent the current arrangement for sharing the cost to administer energy and minerals receipts, beginning in 2014. Under current law, 

States receiving significant payments from mineral revenue development on 

Federal lands also share in the costs of administering the Federal mineral 

leases from which the revenue is generated. In 2013, this net receipts sharing deduction from mineral revenue payments to States would be implemented as an offset to the Interior Appropriations Act, consistent with identical provisions included in the Act since 2008. Permanent implementation 

of net receipts sharing is expected to result in savings of $44.0 million in 

2014 and $449.0 million over ten years. 

ARCTIC OIL SPILL RECOVERY PLANS

Mr. Secretary, the United States plans to open the North Slope to exploratory 

drilling during the Summer of 2012. The Coast Guard and others have testified to 
84 

Congress that we do not have the technology required to clean up oil in ice conditions. 

Question 2a. Has DOI identified methods to clean up oil in ice conditions? If not, 

what clean up procedures have been submitted by the proposed resource users, and 

why does DOI think that they are or are not sufficient? 

Answer. The Department is aware of a large amount of research that has been 

done on the cleanup of oil in ice conditions. Research has been ongoing for decades, 

most recently through the Joint Industry Program on Oil Spill Response for Arctic 

and Ice-covered Waters (‘‘JIP Oil in Ice’’) launched in 2006 by the independent Scandinavian research organization SINTEF in conjunction with industry and academic 

partners. Field tests with oil released into icy Arctic waters were conducted in 2008 

and 2009, with experiments conducted on mechanical recovery equipment, in-situ 

burning, dispersants, remote sensing, oil weathering, and more. These experiments 

showed that a number of response strategies could be employed in icy waters. In 

January of this year, the International Association of Oil & Gas Producers announced that it is launching a new JIP Oil in Ice program, which will consist of 

additional field tests of oil removal in ice conditions. A summary of the current state 

of knowledge in this field is available in Chapter 5 of the USGS’ An Evaluation of 

the Science Needs to Inform Decisions on Outer Continental Shelf Energy Development in the Chukchi and Beaufort Seas, Alaska. 

Question 2b. The Arctic is lacking coastal infrastructure that was essential in the 

Deep Water Horizon Oil Spill cleanup. For example, cleanup efforts relied on local 

fishing boats, docks, hotels, outfitters and other services to fuel the cleanup effort. 

What is the plan for the Arctic? Is there a plan? Are there response plans currently 

in place that are inaccurate and have unrealistic assumptions? 

Answer. BSEE conducted a thorough and critical review of the oil spill response 

plans submitted by Shell in conjunction with its planned exploration activities in 

the Beaufort and Chukchi Seas during the summer of 2012. Shell was required to 

make clear how they would mobilize and sustain a massive response over an extended period of time. Shell plans to stage a full suite of response assets near the 

offshore drill site for immediate response, while also having additional equipment 

available for quick delivery in the event that sustained spill response is necessary. 

BSEE’s approval followed months of comprehensive internal, public, and interagency review, including involvement of the Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska, chaired by Department of the Interior Deputy Secretary David J. Hayes. More information on the 

federal government’s preparedness and response coordination efforts is available at: 

http://www.bsee.gov/BSEE-Newsroom/BSEE-Fact-Sheet/Arctic-Fact-Sheet.aspx. 

INDEPENDENT CERTIFICATION OF DRILLING SYSTEMS

Mr. Secretary, the U.S. Coast Guard has a fairly good model for a regulatory 

working relationship between vessel owners and independent classification societies 

like the American Bureau of Shipping (ABS). ABS and other classification societies 

use their technical and engineering expertise to help the government ensure that 

ships meet the stringent requirements to be considered safe and seaworthy. 

Question 3a. What is BOEM doing to ensure that regular third-party audits occur 

at three-to five-year intervals and certification of drilling systems? 

Answer. Safety certification of drilling systems is part of an operator’s Safety and 

Environmental Management System (SEMS). 30 CFR 250, subpart S, defines the 

regulations regarding SEMS. Specifically, 30 CFR 250.1920(a) states: 

(a) You must have your SEMS program audited by either an independent 

third-party or your designated and qualified personnel according to the requirements of this subpart and API RP 75, Section 12 (as incorporated by 

reference in 30 CFR 250.198) within 2 years of the initial implementation 

of the SEMS program and at least once every 3 years thereafter. The audit 

must be a comprehensive audit of all thirteen elements of your SEMS program to evaluate compliance with the requirements of this subpart and API 

RP 75 to identify areas in which safety and environmental performance 

needs to be improved. 

If non-compliance resulting from an inspection or BSEE-directed audit poses actual harm or threat to the human and marine environment, BSEE will proceed with 

a civil penalty review of that violation(s) subject to 30 CFR part 250, subpart N— 

Outer Continental Shelf Civil Penalties. Should non-compliance with subpart S display serious and pervasive safety management concerns, BSEE may restrict or revoke the operator’s privilege to operate on the OCS as a designated operator or les-
85 

see operator through probationary or disqualification actions as detailed in 30 CFR 

250.135. 

While BSEE currently allows the audit to be performed by an operator’s designated and qualified personnel as set forth in 30 CFR 250.1926, the agency proposes to remove this option from the existing regulation. The new requirement 

would instruct the operator to use an approved independent third party auditor to 

perform the audit. 

Question 3b. What effect does the current lack of independent third-party certification have on the overall safety culture? 

Answer. As outlined in the response above, BSEE does not feel there is an overall 

lack of independent third-party certification. Subpart S requires the operator (a lessee, the owner or holder of operating rights, or the designated operator) to integrate 

a comprehensive SEMS program into the management of their OCS operations. 

Question 3c. The American Bureau of Shipping (ABS) and other classification societies have the expertise to ‘‘class’’ sub-sea drilling systems, and already do so when 

companies opt to do this voluntarily in the U.S. Is there a possible role for classification societies to act as an independent third-party certifier as recommended in the 

National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling 

report? 

Answer. As BSEE continues to improve, enhance, and enforce offshore oil and gas 

safety requirements, it is identifying best-practices, standards, and third-party organizations which may be used where appropriate. 

R.S. 2477 CLAIMS

Mr. Secretary, Revised Statute 2477 (R.S. 2477) was enacted by Congress in the 

1866 Mining Law to provide ‘‘the right of way for the construction of highways 

across public lands, not reserved for public uses.’’ While Congress repealed the law 

in 1976 as part of the Federal Land Policy and Management Act (FLPMA), existing 

R.S. 2477 rights were grandfathered. The state of Utah has recently filed a notice 

of intent to sue the DOI to gain title to over 18,000 rights of way. The vast quantity 

of these claims causes me to question whether all of them are valid. I understand 

that thousands of these claims may have never even been constructed or maintained. I urge you and the DOI to evaluate these claims carefully and vigorously 

defend against any invalid claims in Utah—and across the country. 

Question 4a. How will DOI determine how these R.S. 2477 claims would impact 

existing and proposed conservation designations? How would they affect your conservation goals and achievements? 

Answer. The Department is still in the early stages of this matter, and we are 

beginning to gather the kind of information that will inform questions such as this. 

In general, once a suit to quiet title on an R.S. 2477 claim is filed BLM will, among 

other things, carry out an analysis of the resources that could potentially be impacted by designation of such a right-of-way. If an alternative resolution cannot be 

found, all parties agree that adjudication of these lawsuits will be time consuming 

and costly. Depending on the nature and scope of the right-of-way and the designation or resources at issue, if a county successfully proves R.S. 2477 claims in or near 

existing and proposed conservation designations, historic sites, or other areas managed by BLM to protect sensitive resources, BLM’s ability to implement protective 

management could be impacted. 

Question 4b. How would the recognition of these claims affect DOI’s ability to 

manage federal public lands? Would they affect the effectiveness of law enforcement 

or the protection of archaeological sites? 

Answer. The BLM will take any RS 2477 claims traversing the public lands that 

are recognized by a court into account when it manages the public lands. The BLM 

retains the power to reasonably regulate such rights-of-way. The BLM reviews travel impacts to archeological resources on a case-by-case basis. As appropriate, the 

BLM protects archeological resources from damage by exercising its statutory and 

legal authorities, and by entering into agreements with neighboring land managers. 

Question 4c. Some of the state of Utah’s claims lie in BLM wilderness areas as 

designated in the Cedar Mountains Wilderness Act and the Washington County Wilderness Act. How will you manage congressionally designated wilderness areas in 

relation to R.S. 2477 claims? 

Answer. The BLM will comply with Wilderness Act and Congressional direction 

regarding the management of designated Wilderness Areas. The BLM’s ability to 

manage areas to preserve wilderness character could be impacted if the county and 

state are successful in proving R.S. 2477 claims in wilderness. Validity of an R.S. 

2477 claim is ultimately left to the determination of a court of competent jurisdiction. Holders of valid R.S. 2477 rights-of-way may complete some maintenance and 
86 

improvement activities on recognized rights-of-ways after consultation with the 

BLM, but are not entitled to engage in new road construction without obtaining a 

Title V permit under the Federal Land Policy and Management Act from the BLM. 

The BLM will not issue such a permit in a Wilderness Area. 

LAND AND WATER CONSERVATION FUND (LWCF)

Mr. Secretary, LWCF not only helps families get outdoors and lead healthier lives, 

it also protects watersheds and drinking water for our communities and boosts our 

local and state economies. Each year over 2.7 million people enjoy hunting, fishing 

and wildlife watching in Washington State, and according to the Outdoor Industry 

Foundation, the outdoor recreation economy contributes more than $11.7 billion and 

supports 115,000 jobs annually. Cuts to LWCF undermine the real economic asset 

that our federal, state and local public lands provide. 

Since the program was created, LWCF has invested over $500 million in Washington State. This year, we have nationally ranked, ready-to-go LWCF projects, such 

as those for the Pacific Crest Trail, Nisqually National Wildlife Refuge, and Mt. 

Rainier National Park. Funding cuts to LWCF would mean that these and many 

other important recreation and conservation projects cannot be completed. 

Question 5a. Do believe that LWCF should be fully funded? Could you please explain why the budget request is half of that amount? 

Answer. The Administration remains committed to funding LWCF programs, 

which helps preserve, develop, and assure access to outdoor recreation resources; 

provide clean water; preserve wildlife habitat; enhance scenic vistas; protect archeological and historical sites; and maintain the pristine nature of wilderness through 

Federal land acquisition and grants. 

Question 5b. Are you aware of any other avenues that could mitigate this insufficient funding level of LWCF? Under this budget request, how do propose to protect 

the jobs and economic opportunities associated with LWCF projects? 

Answer. Conserving large landscapes requires collaboration among all stakeholders, including private landowners, conservation and recreation groups, and 

local, State, tribal, and Federal governments. In FY 2013, the budget proposes $60.0 

million for grants to states, a programmatic increase of $14.9 million over the FY 

2012 enacted level. This increase will provide an economic impact and support jobs 

in local communities across the country. 

RESPONSES OF SECRETARY KEN SALAZAR TO QUESTIONS FROM SENATOR MURKOWSKI

OIL AND GAS

Pre-approval 

Question 1. The leaked draft of BLM regulations on hydraulic fracturing refers to 

a new requirement for ‘‘pre-approval’’ of well stimulation operations. What is the 

technical basis on which such approval will be given or withheld by the agency? 

a. Is it common for operators to make adjustments to well stimulation fluid 

during the process of drilling and completing a well? As a practical matter, is 

this something that can be done 30 days in advance with no changes? 

b. Do you agree that because of the level of detail and specificity required by 

BLM’s proposed regulations, an operator that changes its fluid formulation 

could be forced into a situation where it must stop and resubmit a new proposal 

to the agency? 

Answer. Information collected by the BLM and used for pre-approval of hydraulic 

fracturing operations is needed for a variety of reasons so that the BLM may determine the parameters of the well stimulation operation; verify that the operator has 

taken the necessary precautions to prevent migration of fluids in to the usable 

water horizons; ensure that the facilities needed to process or contain the estimated 

volume of fluid will be available on location; and ensure the methods used will adequately protect public health, safety and the environment. 

It is common for operators to make adjustments to well stimulation fluid during 

the process of drilling and completing a well, and this is not something that, as a 

practical matter, can be done 30 days in advance with no changes. Moreover, we 

do not agree that the level of detail and specificity required by BLM’s proposed regulations would force an operator to stop activities and resubmit a new proposal to 

the agency because, within 30 days after completion of well stimulation operations, 

operators would submit a Subsequent Report Sundry Notice on Form 3160-5 (Sundry Notices and Report on Wells). The information included in such a report will 

allow BLM to: 
87 

1) Document and assure that stimulation fluids are going into the formation 

for which they were designed; 

2) Document and assure that stimulation fluids remain confined to the petroleum-bearing rock layers; 

3) Confirm that the disposal methods used are those that were approved and 

conform to the regulations and; 

4) Obtain reasonable assurance that other resources are adequately protected. 

Tribal Consultations 

Question 2. Mr. Secretary, can you describe the process by which you have consulted the Tribes on these draft regulations? 

a. What feedback have you received from these consultations? 

Answer. Tribal consultation is a critical part of this effort, and the Department 

is committed to making sure tribal leaders play a significant role as we work together to develop resources on public and Indian lands in a safe and responsible 

way. The BLM has initiated government-to-government consultation with tribes on 

this proposal and has offered to hold follow-up consultation meetings with any tribe 

that desires to have an individual meeting. The BLM held four tribal consultation 

meetings, to which over 175 tribal entities were invited. These initial consultations 

were held in Tulsa, Oklahoma on January 10, 2012; in Billings, Montana on January 12, 2012; in Salt Lake City, Utah on January 17, 2012; and in Farmington, New 

Mexico on January 19, 2012. Eighty-four tribal members representing 24 tribes attended the meetings. Attending for the BLM were both senior policy makers from 

the Washington Office as well as the local line officers that have built relationships 

with the tribes in the field.In these sessions tribal representatives were given a 

draft of the hydraulic fracturing rule to serve as a basis for discussion and substantive dialogue about the hydraulic fracturing rulemaking process. The BLM 

asked the tribal leaders for their views on how a hydraulic fracturing rule proposal 

might affect Indian activities, practices, or beliefs if it were to be applied to particular locations on Indian and public lands. A variety of issues were discussed, including applicability of tribal laws, validating water sources, inspection and enforcement, wellbore integrity, and water management, among others. 

At the request of various tribes, the BLM subsequently has met with several tribal representatives, including the United South and Eastern Tribes, the Coalition of 

Large Tribes, and the Mandan, Hidatsa and Arikara Nation to discuss hydraulic 

fracturing and the impacts it may pose to their lands. The development of this hydraulic fracturing rule will continue to include proactive Tribal consultation under 

the Department’s newly-formalized Tribal Consultation Policy. This policy, announced on December 1, 2011, emphasizes trust, respect and shared responsibility 

in providing Tribal governments an expanded role in informing Federal policy that 

impacts Indian lands. Under this policy, consultation is an open, transparent, and 

deliberative process. 

The agency will continue to consult with Tribal leaders throughout the rulemaking process and has offered continued government-to-government consultation 

on this proposal through follow-up meetings as part of the consultation process with 

any tribe that desires to have an individual meeting. On May 11, 2012, the BLM 

sent over 180 invitations for continued government-to-government consultation to 

exchange information on the development of the hydraulic fracturing rule. Regional 

meetings were held in June in Salt Lake City, Utah; Farmington, New Mexico; 

Tulsa, Oklahoma; and Billings, Montana. The BLM has initiated follow-up calls 

with many of the Tribal leaders or their representatives and will continue to keep 

multiple lines of communication open during the Tribal consultation process. Responses from Tribal representatives will inform the agency’s actions in defining the 

scope of acceptable hydraulic fracturing rule options. 

Info Sharing 

Question 3. In the course of developing the draft BLM regulations, please describe 

the efforts BLM has made to consult with the state agencies that are now regulating 

drilling and completion activities within their borders. 

a. Did any of these conversations lead you or others within the Department 

or BLM to determine that the state regulatory programs were insufficient in 

such a way that a new set of BLM regulations was required? 

Answer. At the President’s direction, the Secretary of Energy’s Advisory Board 

convened a Natural Gas Subcommittee (Subcommittee) to evaluate hydraulic fracturing issues. The Subcommittee met with industry, service providers, state and 

Federal regulators, academics, environmental groups, and many others stake-
88 

holders. Recommendations were issued by the subcommittee. Among other things, 

the report recommended that more information be provided to the public, including 

disclosure of the chemicals used in fracturing fluids. The Subcommittee also recommended the adoption of progressive standards for wellbore construction and testing. The report recommended that operators engaging in hydraulic fracturing prepare cement bond logs and undertake pressure testing to ensure the integrity of all 

casings. 

The BLM recognizes the efforts of states to regulate hydraulic fracturing and is 

focused on coordinating closely with individual state governments to avoid duplicative regulatory requirements. The agency has a long history of working cooperatively with state regulators and the BLM often enters into memorandums of understanding or establishes working groups to coordinate state and Federal activities, 

such as the oil and gas working groups that currently exist in many of our oil and 

gas states. The BLM is applying the same approach to this effort and will work 

closely with individual states on the implementation of the proposed regulation. The 

BLM’s intent is to encourage efficiency in the collection of data and the reporting 

of information. The BLM routinely shares information on oil and gas operations 

with state regulatory authorities and the BLM will continue to work with individual 

states to ensure that duplication of efforts is avoided to the extent possible. Some 

states already have in place rules and regulations that address hydraulic fracturing. 

The BLM found that these rules may be either more or less stringent than the provisions in the BLM regulation proposal. 

Domestic Production 

Question 4. During his State of the Union, the President called for an all-of-theabove energy policy. This is a phrase many of us are familiar with, having advocated for such an approach over the last several years. We understand it as the development of all energy resources, without supporting one at the expense of another. 

But the President’s record and much of the Interior Department’s budget request 

tell a decidedly different story. 

First we saw the President sign into law a Stimulus bill whose only direct beneficiaries were renewable and transmission projects, with nuclear power, clean coal, 

and other promising technologies cut out. Then we saw the delay or outright cancellation of oil and gas lease sales in Utah, Alaska, and throughout the Outer Continental Shelf. Recently, you approved the withdrawal of over 1 million acres—outside 

the boundaries of a park—from production of high-grade uranium, which is needed 

to fuel clean nuclear power. And now we are confronted with a budget request that 

seeks to raise taxes and fees on energy sources that Americans rely upon to keep 

the economy growing, keep their homes heated, and keep their vehicles on the road. 

Those tax hikes would show up in electric bills, at gas pumps, and home heating 

prices for every family in the country. Needless to say, this has created some confusion for those of us trying to square the President’s rhetoric with the reality of his 

Administration’s actions. The Administration appears to be saying no to domestic 

energy production more than it’s saying yes. So I’d ask if you can you shed some 

light on how these actions represent an all-of-the-above strategy? 

Answer. The Obama Administration and the Department of the Interior are working to secure our energy future by ensuring that our domestic oil and gas resources 

are safely and responsibly developed and that the potential for clean energy development on our public lands and waters is realized. We have taken a balanced approach, and it is an approach that works. Interior is moving aggressively to put the 

President’s energy strategy, Blueprint for a Secure Energy Future, into action and 

expand secure energy supplies for the Nation—a strategy that includes an all-of-theabove approach, including the responsible development of both conventional and renewable energy sources on the public lands. 

To encourage energy production, the Administration is taking a series of common 

sense steps as part of the Blueprint, a broad effort to reduce our dependence on foreign oil by producing more oil and natural gas at home and using cleaner, alternative fuels and improving our energy efficiency. Specifically with regard to domestic hydrocarbon production, the President has made clear that he wants us to continue to produce more oil and natural gas here at home. 

While production levels fluctuate from year-to-year based on market conditions 

and industry decisions, a recently published Energy Information Administration report confirms that this Administration has overseen an overall expansion of production on federal lands and waters as part of the nationwide rise in production levels 

even when taking into account the impact of the Deepwater Horizon oil spill in the 

Gulf of Mexico in 2010. 

At the Department we are expanding development of cleaner sources of energy, 

including renewables like wind, solar, and geothermal, as well as natural gas on 
89 

public lands. The Administration is also working to facilitate the development of advanced coal technologies. But domestic oil and gas production remain critical to our 

energy supply and to reducing our dependence on foreign oil. We are also taking 

steps both onshore and offshore to encourage industry to develop the thousands of 

leases and permits it already has but that are currently sitting idle. 

During calendar year 2011, the BLM held 32 onshore oil and gas lease sales, offering 1,755 parcels of land covering nearly 4.4 million acres. Nearly three-quarters 

(1,296) of those parcels were leased, generating about $256 million in revenue. Onshore mineral leasing revenues are estimated to be $4.4 billion in 2013. The 2011 

lease sale revenues are 20 percent higher than those in calendar year 2010, following a strong year in which leasing reform helped to lower protests and increase 

revenue from onshore oil and gas lease sales on public lands. This strong record is 

expected to continue in 2012 with over 30 planned lease sales. 

Following the Deepwater Horizon explosion and oil spill, the Administration has 

been implementing the most aggressive and comprehensive reforms to offshore oil 

and gas regulation in U.S. history. Production from leases on the OCS generates billions of dollars in revenue for the federal treasury and state governments while supporting thousands of jobs. In calendar year 2010, OCS leases produced 589.5 million 

barrels of oil and 2,300 billion cubic feet of natural gas, accounting for about 30 percent of domestic oil production and 10 percent of domestic natural gas production. 

Western Gulf of Mexico Lease Sale 218, held on December 14, 2011, was the last 

Western Gulf sale scheduled under the current Five-Year Program, and the first 

sale conducted after completion of a supplemental environmental impact statement 

that considered the effects of the Deepwater Horizon oil spill. That sale attracted 

$337,688,341 in high bids on 191 tracts comprising over a million acres. The sum 

of all bids received was over $700 million, and the total area made available for 

leasing was more than 21 million acres. BOEM conducted Consolidated Central 

GOM Sale 216/222, the final sale in the current Program, on June 20, 2012. That 

sale made available 39 million acres in an area of the Gulf estimated to contain 

close to 31 billion barrels of oil and 134 trillion cubic feet of natural gas that are 

undiscovered and technically recoverable, and attracted $1,704,500,995 in high bids 

for tracts on the U.S. outer continental shelf offshore Louisiana, Mississippi and 

Alabama. A total of 56 offshore energy companies submitted 593 bids on 454 tracts 

covering more than 2,402,918 acres. The sum of all bids received totaled 

$2,602,563,726. 

BOEM also recently finalized the next Five-Year Program for 2012-2017, which 

will be in effect later this year. The proposed Program includes substantial acreage 

for lease in regions with known potential for oil and gas development, making areas 

containing more than 75 percent of undiscovered technically recoverable oil and gas 

resources estimated in federal OCS available for exploration and development. It 

also advances an innovative, regionally-tailored approach to offshore oil and gas 

leasing that will take into account the particular resource potential, environmental 

and social concerns, and infrastructure condition of each planning area. In sum, this 

Proposed Program both promotes responsible and expanded OCS development and 

is informed by lessons learned from the Deepwater Horizon tragedy and the reforms 

that we have implemented to make offshore drilling safer and more environmentally 

responsible. 

Moreover, while we continue to offer additional new acreage for oil and gas development, industry now has more leased acreage than it is putting to productive use. 

While the Department can, and does, offer significant acreage in its lease sales, it 

is industry that makes the final decision whether or not to purchase a lease on any 

particular tract and, subsequently, whether and when to develop the resources on 

such lease. The Department is also providing greater incentives for its lessees to 

make production from their leases a priority. 

This balanced approach will secure our energy future by ensuring that our domestic oil and gas resources are safely and responsibly developed and that the potential 

for clean energy development on our public lands and waters is realized. 

US FISH AND WILDLIFE SERVICE

Unimak Island 

Question 1. Secretary Salazar, as you know, the caribou herd on Unimak Island 

is nearing a critically low point—subsistence users have even been banned from harvesting caribous—but USFWS and the Alaska Department of Fish and Game have 

been unable to reach an agreement on how to proceed with managing the herd numbers. Can you please address if and when the EIS will be revisited? 

a. Currently, is it legally possible for the State ADFG to conduct any predator 

management on Unimak Island? 
90 

b. Can you explain what will be done by the Department of the Interior to 

ensure that this herd is not wiped out? 

Answer. The most recent Environmental Assessment (EA) on this matter was 

completed in December 2011, with a decision document issued shortly thereafter 

that supported a ‘‘no action’’ alternative regarding predator management on Unimak 

Island. As such, the FWS has not authorized a management program to conduct 

predator control on Unimak Island. The analyses in the EA/FONSI pointed to effects on refuge purposes related to natural diversity, biological integrity, and the 

stewardship of wilderness resources. This, along with the need for more scientific 

information, precluded the implementation of management actions such as predator 

control. 

Regarding herd management, caribou numbers have fluctuated widely on Unimak 

Island. There are likely multiple factors contributing to this, including variable 

habitat conditions, predation by bears and wolves, and harvest by humans. Current 

and expanded efforts are needed to improve the science surrounding these issues, 

and the FWS believes the best path forward is to carry out a joint State-FWS effort 

to identify those scientific needs, set biological objectives, and define management 

actions needed to achieve those objectives. 

We have committed significant levels of staffing and funding to address the caribou decline on Unimak Island. This includes an ongoing cooperative study with the 

University of Alaska, Anchorage, in collaboration with the Alaska Department of 

Fish and Game on habitat and nutritional ecology of island caribou entitled: Habitat 

and Nutritional Ecology of Unimak Island Caribou: Does Habitat Play a Critical 

Role in Caribou Population Dynamics and Health? This study is a component part 

of a larger National Science Foundation study conducted on the Alaska Peninsula 

and southwestern Alaska investigating caribou-vegetation relationships entitled, 

Nutrient Cycling in Tundra Soil-Plant-Caribou System. The FWS is also sponsoring 

a floristic community classification focused on composition and structure. We continue to cooperate with the State on routine herd monitoring; radio-collaring of caribou, and spring calving, mid-winter total herd counts and mid-summer cow-calf and 

fall composition counts, and the FWS has offered the State the opportunity to transplant caribou bulls to augment the population and address the low bull to cow ratio 

on the island while we work to identify the cause of the overall decline. Continuing 

these efforts, and initiating needed studies, will allow us to make the appropriate 

management decisions. 

The FWS believes the best approach is to work with our partners to develop a 

more comprehensive management plan for Unimak Island that balances and meets 

the requirements of relevant statutes, including the Alaska National Interest Lands 

Conservation Act, which directs the FWS to conserve fish and wildlife populations 

in their natural diversity, and to provide, in a manner consistent with this purpose, 

the opportunity for continued subsistence uses by rural residents; the National 

Wildlife Refuge System Improvement Act, which requires the FWS to maintain the 

biological integrity, diversity, and environmental health of each refuge; and the Wilderness Act, which requires the FWS to preserve the wilderness character of refuge 

lands. Development of such a plan would prompt an accompanying NEPA document, 

likely another EA. 

Wood Bison 

Question 2. As you know, the State of Alaska is currently working towards reintroducing a non-essential experimental population of Alaska Wood Bison. The 

herd is being housed at the Alaska Wildlife Conservation Center at a cost of over 

$250,000 per year. What is the current status of the Alaska Wood Bison reintroduction efforts? Can you please explain to me why the USFWS has decided that this 

non-essential and experimental species would need such a high threshold number 

before any harvest would be permitted? 

Answer. The FWS has been working closely with the State to support wood bison 

reintroduction efforts. Last year we contributed $250,000 toward the cost of maintaining wood bison at the Alaska Conservation Center. We have jointly prepared a 

proposed rule that would designate a nonessential experimental population of wood 

bison and enable the State to be the lead agency in the reintroduction and subsequent management of wood bison in Alaska. The proposed rule is currently undergoing final review; it does not contain a specific threshold number that would need 

to be reached before harvest would be permitted. We have worked closely with the 

State agreed upon language in the rule over six months ago that would allow hunting based on sustained yield principles established by the State and the FWS. 
91 

AMERICA’S GREAT OUTDOORS AND LAND AND WATER CONSERVATION FUND

Question 1. The Land and Water Conservation Fund budget request is for a fund- ing level of $450 million, which represents $105 million increase above the current 

level for DOI agencies and the Forest Service. Can you please explain to me why, 

with such an enormous maintenance backlog, DOI is focusing such a large amount 

of money on acquiring more federal land? Shouldn’t these funds be used to pay 

down our maintenance backlog? 

Answer. The Department of the Interior takes seriously our responsibilities to 

maintain facilities and infrastructure. The FY 2013 Budget proposes focusing funding on the most critical health and safety issues through line-item construction accounts and facility maintenance subactivities within operation accounts. Construction of new facilities has been restricted to replacement of facilities in poor condition 

for the fiscal year 2013. This will focus our resources on correcting the most critical 

repairs on our highest priority assets. 

Through the America’s Great Outdoors listening sessions and public input process, we learned that there is a powerful consensus across America that outdoor 

spaces—public and private, large and small, urban and rural—remain essential to 

our quality of life, our economy, and our national identity. Americans communicated 

clearly that they care deeply about our outdoor heritage, want to enjoy and protect 

it, and are willing to take collective responsibility to protect it for their children and 

grandchildren. 

Americans support concrete investments in conservation. In November of 2010, 

voters across the country overwhelmingly approved a variety of measures for land 

conservation, generating a total of $2 billion in new land protection funds according 

to the Trust for Public Land. Of 36 proposals on State and local ballots for conservation funding, 30 passed—an approval rate of 83 percent. This is the highest rate 

during the past decade and the third highest since 1988. 

Consistent with these results at the State and local levels, the feedback received 

during the AGO listening sessions indicated that funding LWCF program is a high 

priority for the American people. Respondents also suggested that LWCF funding 

could be more effectively used if it was strategically focused on specific project types 

and/or locations. With this in mind, an investment in the Crown of the Continent 

ecosystem was developed in the Rocky Mountain Front where Interior proposes to 

invest $28.6 million to protect threatened and endangered plants, fish, and wildlife; 

ensure terrestrial ecosystem and watershed health; ensure resiliency, connectivity, 

and climate change adaptation; support working farms, ranches and forests; enhance recreational access; and protect rivers and waterways. This land comes with 

minimal operations and maintenance costs. This proposal includes the outstanding 

landscapes of Glacier National Park; four units of the National Wildlife Refuge System; famous western rivers and lakes; and vast high deserts and high mountain valleys administered by the three DOI bureaus. The lands proposed for acquisition, 

both conservation easements and fee, will protect crucial wildlife migration corridors, endangered biological and geological systems, and special status species. 

Conserving these properties enhances cultural and natural landscapes while allowing for traditional working ranches and forests in many cases. Outdoor recreational 

opportunities will be enhanced by increasing access, maintaining the integrity of the 

scenic vistas and the primitive qualities of the Crown of the Continent Ecosystem. 

Once these lands are developed, there is no going back to how they currently exist. 

Interior’s 2013 request, together with the Forest Service’s request, funds the 

LWCF at $450 million, half of the legal limit that could be appropriated for this 

fund. Interiors’ Federal land acquisition request of $212 million includes $84 million 

for line-item projects resulting from a collaborative effort. The collaborative effort 

between the Departments of the Interior and Agriculture was in response to directives from Congress in House Report 111-180 and Conference Report 111-316. The 

remaining $58 million in Interior’s line-item projects support bureau specific, mission related priorities. Smart investments in strategic conservation through both the 

interagency collaborative process and the bureau specific, mission related process 

will prevent further ecosystem decline or collapse, which is expected to preclude the 

need for future investments in restoration. 

Activities funded under LWCF ensure public access to the outdoors for hunting, 

fishing and recreation; preserve watersheds, viewsheds, natural resources and landscapes; provide corridors for wildlife to migrate within; and protect irreplaceable cultural and historic sites for current and future generations. LWCF funds are also 

used to protect historical uses of working lands, such as grazing and farming. 

Interior’s acquisition programs work in cooperation with local communities, rely 

on willing sellers, and maximize opportunities for easement acquisitions. Proposed 

acquisition projects are developed with the support of local landowners, elected offi-
92 

cials, and community groups. LWCF funds for Federal acquisition will support simpler, more efficient land management; create access for hunters and anglers; create 

long-term cost savings; address urgent threats to some of America’s most special 

places; and support conservation priorities that are established at the State and 

local levels. 

COASTAL IMPACT ASSISTANCE PROGRAM RESCISSION (CIAP)

The Coastal Impact Assistance Program was created by the Energy Policy Act of 

2005 to provide funding to six OCS oil and gas producing states to conserve and 

protect the coastal environment. These states include four on the Gulf coast and 

Alaska and California. 

The Fiscal Year 2013 budget proposes to rescind $200 million—almost 40 per- cent—of the remaining $550 million allocated for this program. I realize this is a 

large amount of unobligated funding waiting to be spent by the states, but there 

is a good reason for this. Just last year, your budget recommended—and Congress 

agreed—that the program administration should be moved from the former MMS 

to the Fish and Wildlife Service, who administers many similar grant programs 

with states. It’s my understanding states had complained about the timeliness of 

federal approval for project plans. 

Question 2a. Can you explain the Administration’s thinking behind this rescission? It seems to me that you’re penalizing these states because of past failures of 

the federal government. Of course, it did give you an extra $200 million to spend 

on your other priorities in the bill, so maybe I already know your answer. I worry 

that with flat budgets, we’re using gimmicks that ultimately we have to pay for and 

we are also giving unrealistic expectations of inflated budget numbers for other programs. 

Question 2b. How would you respond to states that have been critical of the burdensome administrative regulations that have, in their view, delayed the timely distribution of funds which has resulted in the large carryover balances? Answer. Of the $1 billion provided during FY 2007—2010, $540 million remains 

available under the Coastal Impact Assistance Program (CIAP). CIAP gives states 

broad flexibility to use the funds, so there is little accountability for achieving specific results. The Administration plans on using this reduction in CIAP balances to 

fund higher priorities elsewhere. 

The Department (through the former Minerals Management Service) approved 

State CIAP Plans for each of the six States for FY 2007—2010 funds, with the exception of Texas that has an approved Plan for 2007-08 funds, and a proposed Plan 

for 2009-10 funds. Additionally, there have been subsequent amendments to approved plans submitted by States, for example, Louisiana submitted a fourth revision to their plan in November 2011. 

There are a number of factors that have contributed to the relatively slow obligation rates for CIAP. A primary factor is that CIAP requires a substantive public 

planning process that is coordinated through a designated State lead agency with 

a great degree of information and planning provided by local Coastal Political Subdivisions (CPS). In addition to the 6 eligible states, there are 70 CPSs, which are 

the County, Parish and Borough governments eligible to receive CIAP funds directly. A multi-level CIAP Plan review process at the federal level also contributed 

to the delayed Plan implementation and slow obligation rates. Further, the proposed 

projects are all located in sensitive coastal habitats that often involve a high degree 

of time-consuming activities, such as permitting and appraisals, prior to the full obligation of funds as part of the grant review process. The complexity of the administrative process was also a recognized factor in the slow obligations. In FY 2012, the 

Secretary re-delegated CIAP administration authority to the FWS under its Wildlife 

and Sport Fish Restoration Program, and the FWS is in the process of awarding 

the balance of CIAP funds, with the goal of completing all obligations by December 

2013 for projects to be completed by December 31, 2016. 

ALASKA SPECIFIC QUESTIONS

Alaska Water Resources 

Question 1. Your budget is proposing to cut funding for hydrologic networks and 

analysis by the U.S. Geological Survey by $2.6 million. Back in 2008 I won passage 

of the Alaska Water Resources Act (S. 200) which required USGS to do what it has 

done in every other state, conduct a survey of aquifers in urban parts of Alaska to 

see how much drinking water the state has underground. The USGS has never done 

any of the work, even though USGS wrote a great briefing paper in 2008 supporting 

the approved law saying that the law was needed since ‘‘the understanding of the 

connectivity of small aquifers across the (Anchorage) area is poor.’’ It is hard for me 
93 

to support an increase of $51 million for USGS nationwide, partially to fund the 

new WaterSMART Program, when you ignore laws and authorizations that actually 

are about to expire without ever having been implemented by the Department. Is 

there any assistance that the USGS can provide to assess potable water reserves 

for Fairbanks, the Mat-Su Valley, Anchorage and the Kenai Peninsula should we 

fund your WaterSMART initiative? 

Answer. Through the Cooperative Water Program, the USGS Alaska Science Center has worked with the Alaska Department of Natural Resources (ADNR) on a 

groundwater assessment in the Mat-Su Valley (2009-present). A similar groundwater assessment of the Anchorage Bowl has been proposed by the Alaska Science 

Center to ADNR. Through USGS’ WaterSMART Initiative, the USGS Groundwater 

Resources Program is supporting (FY11-12) an assessment of the glacial aquifer system from Maine to Alaska. In the initial phase of this work, the USGS compiled 

a bibliography of hydrogeology-related studies in Alaska, and performed a GIS analysis to delineate the approximate extent of glacial aquifers across the state. The 

USGS is evaluating this initial information, performing a gap analysis, and formulating plans for subsequent groundwater-related activities in this and other areas 

of the glacial aquifer system. Under the proposed FY13 budget, the WaterSMART 

Initiative will fund implementation of these plans by the Groundwater Resources 

Program. 

Local Hire 

Question 2. Can you please provide me with an update of the ANILCA Local Hire 

Program that was included in the last Interior Appropriations bill? Will this program be implemented for the summer hiring season of 2012? If not, can you explain 

what the holdup is and when Alaskans can expect to be able to rely on the Local 

Hire program? 

Answer. The Department (and USDA/FS) successfully carried out a local hire program for nearly 30 years following passage of ANILCA. The program has been of 

great benefit in securing experienced and knowledgeable personnel for the management of our federal lands in Alaska as well as providing economic and social benefits to communities and residents located near federal lands. We believe your 

amendment clarifying that the Alaska local hire program was an ‘‘excepted service’’ 

overcame an OPM opinion that advised that the program ran counter to Civil Service provisions. 

While re-starting the local hire program subsequent to enactment of your amendment last December has taken longer than expected, the Department has recently 

issued policy guidance to all bureaus and offices that provides direction for consistent application of the new statutory provisions. In the past many local hires 

were seasonal hires, primarily for the summer. Unfortunately, seasonal hiring for 

the 2012 season began early in 2012, with some employees entering on duty as early 

as late March and early April. While some seasonal hiring is still taking place that 

can benefit from the implementation of the local hire program, the benefits of the 

legislative change will be felt most fully in 2013. Additionally, the local hire program is also used to fill permanent positions and will be used as vacancies and positions occur in the future. The Department expects future local hires for our land 

managing agencies (NPS, FWS, BLM) to return at least to historic levels of several 

hundred people annually. The US Forest Service is also expected to hire significant 

numbers of people under the local hire authority. 

Yukon-Charley 

Question 3. Can you please provide me with an update of how law enforcement 

efforts are going within Yukon-Charley National Preserve, notably on the Yukon 

River? Has the new law that bans the National Park Service from conducting boater 

safety checks negatively impacted the Park’s management efforts in any way? 

Answer. Because the rivers remain frozen until the ice goes out in May, no boating has occurred in Yukon-Charley Rivers National Preserve since the FY 2012 appropriations language prohibiting NPS from conducting boater safety checks went 

into effect. In 2011, park rangers did not make boating safety contacts on the water, 

but did contact more than 140 visitors on land to check hunting and fishing licenses 

and to discuss boating safety, among other reasons. Preserve managers continue 

their work with the State of Alaska’s safe boating program, distributing free life 

jackets at kiosks in Eagle and Circle. 

Hunting Closures 

Question 4. Recently, when the National Park Service has closed preserves in 

Alaska to hunting (Wolf hunting in Yukon-Charley and Lake Clark, Bear Denning 

in Denali and Gates of the Arctic) it has cited ‘‘Park Values’’ in those closures. Can 

you provide me with a definition of the ‘‘Park Values’’? 
94 

a. What hunting closures does the National Park Service anticipate for 2012? 

Can you provide my staff with a list all current closures or anticipated closures 

for this calendar year? 

Answer. The term ‘‘Park Values’’ is derived from NPS laws and policy. In the provision commonly known as the Redwood Amendment to the National Park System 

General Authorities Act, Congress directed that the protection, management, and 

administration of areas within the National Park System shall be conducted ‘‘in 

light of the high public value and integrity of the National Park System and shall 

not be exercised in derogation of the values and purposes for which these various 

areas have been established. . . .’’. 

National Park Service Management Policies (What Constitutes Park Resources 

and Values—1.4.6) provides a list of park resources and values that are subject to 

the no-impairment standard of the National Park Service Organic Act and the General Authorities Act. This list includes, among others, ‘‘the park’s scenery, natural 

and historical objects, and wildlife, and the processes and conditions that sustain 

them, including to the extent present in the park: the ecological, biological, and 

physical processes that created the park and continue to act upon it.’’ 

Specifically, the Alaska National Interest Lands Conservation Act states that the 

purpose for establishing the units is to ‘‘preserve for the benefit, use, education and 

inspiration of present and future generations certain lands and waters . . . that contain nationally significant natural, scenic, historic, archeological, geological, scientific, wilderness, cultural, recreational, and wildlife values. . . .’’. 

On March 15, 2012, after the consideration of public comments, the NPS published the 2012 Compendiums for units of the national park system in Alaska. The 

2012 Compendiums for Aniakchak, Katmai, and Lake Clark National Preserves include a prohibition on killing wolves under state hunting and trapping regulations 

within those units during the time wolves are denning and raising pups. The shortened season aligns with the federal subsistence season, but remains roughly eight 

months long. The NPS action protects wolves at their most vulnerable period, a time 

in which pelts are also of poor quality and typically not in demand. The 2012 Compendiums for Gates of the Arctic and Denali National Preserves renew the prohibition of killing bear cubs and sows at den sites and the prohibition on the use of 

artificial light to assist in killing black bears at den sites within those units. 

Alaska NPS Town Hall Meetings 

Question 5. Can you provide me with a schedule of the National Park Service 

Town Hall meetings that the NPS plans to hold around the State of Alaska this calendar year? I would like to commend and thank the Park Service for this outreach 

to Alaskans and I look forward to attending the events myself. 

Answer. The NPS held town hall meetings in Fairbanks on April 17 and Palmer 

on May 22 and participated as a guest or as a sponsor in other public forums 

through the spring and summer. The NPS is planning an open house in Anchorage 

and an event in Juneau in the fall, along with offering input opportunities at the 

Alaska Federation of Natives conference in October, and other public events. 

OIL AND GAS

Question 1. Interior has proposed raising onshore royalty rates from 12 and a half 

percent to 18 and a half percent—this is a 50 percent increase in royalty rates. To 

clarify, this is both for oil and natural gas, correct? 

a. Last Tuesday, Bloomberg reported that ‘‘Profits for the biggest U.S. energy 

producers including Exxon Mobil are poised to decline the most since the financial meltdown of 2008-09 as the drilling technique known as fracking collapses 

natural gas prices.’’ In other words natural gas producers have basically stopped 

drilling because natural gas is so cheap (around $3.00)—could a higher royalty 

on natural gas mean higher gas prices? Could it mean even more gas wells become uneconomical and are shut down? 

—If more gas wells do become uneconomic, will you seek to make royalty relief available to any of them? 

—Moving to gasoline prices, if the royalty payment is 50% higher on 

a barrel of oil, will there be a corresponding increase in the cost of that barrel for refiners, and could the price of gasoline and other fuels rise with this 

increase as well? 

Answer. The Administration believes that American taxpayers should get a fair 

return on the development of energy resources on their public lands. Following on 

a 2008 Government Accountability Office (GAO) report that suggests that taxpayers 

could be getting a better return from federal oil and gas resources in some areas, 
95 

the Administration has been looking at ways to address this issue. When determining value and fair return, the government has multiple, diverse objectives that 

must be balanced, including collecting a fair return for the use of shared resources, 

promoting responsible resource and energy development, private investment and 

employment, energy security, and environmental protection, among other goals. The 

Department is continuing to gather and review relevant information as it determines a path forward. 

Question 2. The Interior Department states that charging more money for oil and 

gas producers to bring these resources to market will bring the federal percentage 

closer in line with the percentages which some states charge for development of 

their lands. But I question whether this tells the whole story. More specifically, how 

does the federal government compare with the states in terms of legal and regulatory certainty, and in terms of the length of time it takes from lease sale to drilling? 

Answer. Although we have not completed a comprehensive survey, we believe that 

Federal leases compare favorably to those of other jurisdictions in terms of the legal 

and regulatory certainty they provide leaseholders. The government has multiple, 

diverse objectives that must be balanced, including collecting a fair return for the 

use of shared resources, promoting responsible resource and energy development, 

private investment and employment, energy security, and environmental protection, 

among other goals. These factors must all be weighed when determining value and 

fair return. 

Question 3. If the federal government wants to obtain more revenue and return 

to the taxpayer, will a corresponding 50 percent increase in acreage of oil and gas 

leases be made available? 

Answer. While the Department can, and does, offer significant acreage in its lease 

sales, it is industry that makes the final decision whether or not to purchase a lease 

on any particular tract and, subsequently, whether and when to develop the resources on such lease. Currently industry has more leased acreage than it is putting 

to productive use. 

Last year BLM held 32 onshore oil and gas lease sales, offering 1,755 parcels of 

land covering almost 4.4 million acres. Of those, 1,296 parcels, or nearly three-quarters of those offered, were purchased, generating about $256 million in revenue for 

the public. In 2010, the Department offered nearly 37 million acres on the OCS for 

lease, but industry leased just 2.4 million acres. And in 2011, a lease sale for the 

Western Gulf of Mexico made available more than 21 million acres, equal to an area 

the size of South Carolina, and just over 1 million acres received bids from industry. 

The Department recently released a report that shows that, offshore, industry had 

leased nearly 36 million acres, but only about 10 million acres were active. Moreover, in the lower 48 states, an additional 20.8 million acres remain idle, and 7,000 

approved but unused permits to drill on public lands continue to be held by companies. 

Question 4. Will the states in which these increased federal royalties are assessed 

be entitled to their 48 percent revenue share under the Mineral Leasing Act? 

a. Why does the Mineral Leasing Act call for onshore states to receive this 

share of revenue? (ANSWER: Sec. 35 of the Mineral Leasing Act reads that the 

revenue should be disbursed to give ‘‘priority to those subdivisions of the State 

socially or economically impacted by development of minerals leased under this 

act, for planning, construction and maintenance of public facilities, and provision of public service.’’ 

—Are coastal states ever impacted socially or economically from the development of offshore resources? Should they be entitled to similar revenue 

shares as onshore states? 

Answer. The Department is aware of the applicable statutory provisions and any 

administrative changes would comply with the applicable laws. 

TAX INCREASES

Question 5. I think it would be a huge mistake to raise taxes on our nation’s energy producers by $40 billion over the next ten years, as this budget proposes. I 

think my general concerns are well known on this, so today I want to ask a more 

specific question. Why has the administration continued to target natural gas producers for a tax hike? With prices at historical lows, we have seen reports that some 

producers are already considering shutting in their wells because they simply cannot make any money off of them. Did the administration give any consideration to 

the impacts that its proposed tax increases could have on natural gas production— 

and therefore prices, jobs, and investments—in the longer term? 
96 

Answer. As noted in response to previous questions, the Administration believes 

in encouraging sustainable domestic oil and gas production while ensuring a fair return to taxpayers. The President’s budget includes assumptions in the Interior 

budget for new fees that will encourage production, proposals to eliminate tax preferences within the Treasury budget that are specific to oil and gas companies. Collectively, these proposals increase the return on Federal mineral resources. The Administration carefully considered the impacts of various revenue proposals in cooperation with the Departments of the Interior, Treasury, Energy, and others. 

CHEM DISCLOSURE

Question 6. Mr. Secretary, the states with the most stringent disclosure requirements for hydraulic fracturing require that operators provide disclosure of the 

chemicals they used via the FracFocus website. The leaked draft BLM regulations 

on hydraulic fracturing that we have seen make no reference to FracFocus. Does 

BLM intend to create an entirely new database of fracture stimulation chemicals 

at taxpayer expense? 

a. Who would be responsible for administering it? 

b. Given that state regulators already require operators to provide information on maximum concentrations of fracking chemicals, I wonder if you could 

explain what added benefit your new system will provide? 

c. How do you envision operators of valid leases issued by BLM establishing 

and assuring compliance with these draft regulations? 

Answer. FracFocus is a voluntary hydraulic fracturing chemical registry website 

that is a joint project of the Ground Water Protection Council and the Interstate 

Oil and Gas Compact Commission. The site was created to provide public access to 

reported information on the chemicals used in hydraulic fracturing activities. BLM 

is working closely with the Ground Water Protection Council and the Interstate Oil 

and Gas Commission in an effort to integrate the disclosure of non-proprietary information called for in the proposed rule with the existing FracFocus program.As stewards of the public lands, and as the Secretary’s regulator for oil and gas leases on 

Indian lands, the BLM has evaluated the increased use of these practices over the 

last decade and determined that the existing rules needed to be updated to reflect 

significant technological advances in hydraulic fracturing in recent years and the 

tremendous increase in its use. The BLM recognizes that some, but not all, states 

have recently taken action to address hydraulic fracturing in their own regulations. 

The BLM’s proposed rulemaking ensures consistent protection of the important federal and Indian resource values that may be affected by the use of hydraulic fracturing. The proposed rule is also designed to complement ongoing state efforts to 

regulate fracturing activities by providing a consistent standard across all public 

and tribal lands. The BLM is actively working to minimize duplication between reporting required by state regulations and reporting required for this rule. 

The proposed rule would require oil and gas operators using hydraulic fracturing 

techniques to identify the chemicals used in fracturing fluids by trade name, purpose, Chemical Abstracts Service Registry Number, and the percent mass of each 

ingredient used. This information is needed in order for the BLM to maintain a 

record of the stimulation operation as performed. The information would be required 

in a format that does not link additives to the chemical composition of fluids, which 

will allow operators to provide information to the public while still protecting information that may be considered proprietary. And the disclosure of the fluids used 

in hydraulic fracturing would only be required after the fracturing operation has 

taken place. 

DOUBLE PERMITS

Question 7. The leaked draft of BLM regulations on hydraulic fracturing refers to 

a proposal for well stimulation operations that an operator must submit on a separate notice application form—a process entirely separate from the review and approval process for the application for permit to drill. To me, this seems like it could 

create a situation where an operator could be approved to drill, but not to complete 

its well—is that a fair estimation? 

a. How does BLM intend to reconcile this potential permitting dilemma? 

Answer. Overall, the proposed rule favors flexibility over prescriptive standards— 

something that became more pronounced during the drafting and development process. For example, the proposed rule would allow operators to apply for approval for 

well stimulation activities when they submit an application for a drilling permit for 

a new well, or seek approval later, through a simple sundry notice. For wells per-
97 

mitted prior to the effective date of this section or for wells permitted after the effective date of this section, the operator would submit a sundry notice and Report on 

Wells for the stimulation proposal for approval before the operator begins the stimulation activity. Under the proposal, an operator must also submit a sundry notice 

prior to stimulation if the BLM’s previous approval is more than five years old or 

if the operator becomes aware of significant new information about the geology, the 

stimulation operation or technology, or the anticipated impacts to any resource. 

However, as noted in the analysis accompanying the proposal, BLM does not anticipate that the submittal of additional well stimulation-related information with 

APD applications will impact the timing of the approval of drilling permits. The bureau believes that the additional incremental information that would be required by 

this rule would be reviewed in conjunction with the APD and within the normal 

APD processing time frame, and anticipates that requests to conduct well stimulation activities on existing wells that have been in service more than five years will 

be reviewed promptly. However, as with any operational activity, there may be unforeseen circumstances that may on rare occasions delay approval of APDs. 

COORDINATION

Question 8. Does BLM plan to consult with the state agencies that will also be 

enforcing regulations that pertain to well drilling or completion? 

a. How will BLM archive the data it receives? 

b. How will this data be compiled, reported and analyzed? 

Answer. BLM has participated in several public meetings on this topic, including 

with representatives from states, and is also seeking public comment on this proposed regulation. BLM recognizes that some, but not all, states have taken action 

to address hydraulic fracturing in their own regulations. The BLM’s proposed rulemaking ensures consistent protection of the important federal and Indian resource 

values that may be affected by the use of hydraulic fracturing. The proposed rule 

is designed to complement ongoing state efforts to regulate fracturing activities by 

providing a consistent standard across all public and tribal lands. The BLM is actively working to minimize duplication between reporting required by state regulations and reporting required for this rule. Regardless of any action taken by the 

BLM, operators still would need to comply with any state-specific hydraulic fracturing requirements in the states where they operate. 

As noted in response to a previous question, the disclosure of the fluids used in 

hydraulic fracturing would only be required after the fracturing operation has taken 

place. The BLM intends to place non-proprietary information on a public web site 

and is working with the Ground Water Protection Council in an effort to integrate 

this information into the existing disclosure website known as FracFocus.org. 

WATER

Question 9. Can you please describe the basis of BLM’s interest in requiring operators to provide volumes of flowback fluid? 

a. How do you expect this to be accomplished, and over how long a period? 

b. How will this data be archived, reported and analyzed? 

Answer. Estimates and information related to the handling of recovered fluids are 

required under the proposed regulations in order to provide BLM the information 

necessary to ensure that facilities needed to process or contain the estimated volume 

of fluid will be available on location, to help protect human health and safety, and 

prevent the contamination of the environment. As noted in the draft, BLM also 

needs to confirm that the disposal methods used are those that were approved and 

conform to the regulations, and such information will assist the bureau in making 

that determination. 

PAVILLION, WYOMING STUDY

Question 10. In early December you stated that the ‘‘jury’s still out’’ on the validity of EPA’s study of potential groundwater contamination in Pavillion, Wyoming. 

You also stated that ‘‘it’s important that the real facts finally get to the table with 

respect to peer review’’ on that study. Based on what we have all learned in the 

last two months about the real facts of that case and the questions that have 

emerged about EPA’s procedures and peer review process, can you characterize your 

current thoughts on the Pavillion study? 

a. Do you think the Administration should gather all of the necessary facts before 

making public conclusions about the impact of hydraulic fracturing on groundwater? 
98 

Answer. Collaboration and use of the best available science are critical in meeting 

the needs of area residents and resolving longstanding issues surrounding the safety 

of drinking water and groundwater. The Administration is committed to ensuring 

the peer review process is conducted with maximum transparency and the highest 

level of scientific integrity. 

We are aware that the Environmental Protection Agency, the State of Wyoming, 

and the Tribes all recognize that further sampling of the deep monitoring wells is 

important to clarify questions about the initial monitoring results. The EPA is 

partnering with the State and the United States Geological Survey, in collaboration 

with the Tribes, to complete this sampling as soon as possible and will also collaborate with the State and other stakeholders in designing the sampling methodology, 

the quality assurance plan, and other features of the next phase of testing. 

Question 11. Fracture Length and Height: The draft regulations that we have 

seen would require operators to provide BLM with ‘‘actual, estimated or calculated 

fracture length and fracture height’’. From a practical standpoint, how difficult is 

this for operators to do and how will the agency use this information? 

a. Please describe the situations that BLM may have encountered in the past 

concerning the extent of subsurface fractures from well stimulation that this requirement is supposed to address. 

Answer. The proposed regulation would require the operator to submit to the 

BLM the estimated or calculated fracture length and height anticipated as a result 

of the stimulation. This information will be determined as a matter of well stimulation engineering design. The operator will determine this so they can estimate appropriate fracture locations, pressures, and fluid volumes for the stimulation operation. The BLM will use this information to verify that the intended effects of the 

well stimulation operation will remain confined to the petroleum-bearing rock layers 

and will not have unintended consequences on other rock layers, such as aquifers. 

While the BLM is not aware of any conclusive evidence of negative impacts to 

groundwater as a result of hydraulic fracturing on federal wells, we recognize the 

need to be diligent, and it is for this reason that the new and strengthened regulations on hydraulic fracturing on Indian and public lands are being developed. The 

BLM is committed to ensuring that development activities occurring on the public 

lands are being conducted in a safe and responsible manner that protects human 

health and the environment. 

NEW REGULATIONS ON DRILLING

Question 12. The President has proclaimed that he wants to see more leasing. As 

a practical matter, how do you propose to accomplish this? 

a. In the State of the Union, the President emphatically stated that he was 

directing your department to increase offshore leasing by 70%. Are you confident that you can accomplish that with the constraints imposed with your 5- 

year leasing plan? 

Answer. Consistent with the President’s statement, BOEM published the Proposed Five-Year Program for 2012-2017 in November 2011 and, on June 28, 2012, 

the Proposed Final Program. The program will make available offshore areas that 

contain more than 75 percent of undiscovered technically recoverable oil and gas resources that the OCS is estimated to hold. It will, as the Outer Continental Shelf 

Lands Act requires, represent a proper balance among the potential for environmental damage, the potential for the discovery of oil and gas, and the potential for 

adverse impact on the coastal zone. 

The Proposed Final Program is designed to promote the diligent development of 

the Nation’s offshore oil and gas resources, which are and will remain central to the 

Nation’s energy strategy, economy, and security. The program is in alignment with 

the Administration’s Blueprint for a Secure Energy Future, which aims to promote 

the Nation’s energy security and reduce oil imports by a third by 2025 through a 

comprehensive national energy policy that includes a focus on expanding safe and 

responsible domestic oil and gas production. 

The Proposed Final Program is also grounded in the lessons learned from the 

Deepwater Horizon explosion and oil spill. Since that event, DOI has raised standards for offshore drilling safety and environmental protection in order to reduce the 

risk of another loss of well control in our oceans and improve our collective ability 

to respond to a blowout and spill. While offshore oil and gas exploration and development will never be risk-free, the risk from these activities can be minimized and 

operations can be conducted safely and responsibly, with appropriate measures to 

protect human safety and the environment. 
99 

Based on these principles, the Proposed Final Program provides for lease sales in 

six offshore areas where there are currently active leases and exploration and where 

there is known or anticipated hydrocarbon potential. This represents a regionally 

targeted approach that is tailored to the specific needs and environmental conditions 

of different areas in order to best achieve the dual goals of promoting prompt development of the Nation’s oil and gas resources and ensuring that this development 

occurs safely and with the necessary protections for the marine, coastal and human 

environments. This approach accounts for the differences between different areas— 

including differences in current knowledge of resource potential, adequacy of infrastructure to support oil and gas activity, accommodation of regional interests and 

concerns, and the need for a balanced approach to our use of natural resources. 

The Proposed Final Program is designed to be commensurate with the maturity 

of the infrastructure necessary to support offshore oil and gas activity, including infrastructure for spill containment and response. It also places an emphasis on the 

idea that OCS leasing should not be ‘‘one size fits all,’’ and consideration of lease 

sales in the Beaufort and Chukchi Seas will also be specifically tailored to those regions. The traditional area-wide leasing model that has been used in the Western 

and Central Gulf of Mexico (GOM) is not appropriate for the Arctic, and BOEM is 

working to develop alternative leasing strategies specifically for the Arctic in order 

to focus potential leasing on areas that have significant resource potential while also 

mitigating the impact of offshore oil and gas activity on the unique Arctic environment and its subsistence resources. 

While the Department can, and does, offer significant acreage in its lease sales, 

it is industry that makes the final decision whether or not to purchase a lease on 

any particular tract and, subsequently, whether and when to develop the resources 

on such lease. The Department recently issued an update on unused leased federal 

acreage and, according to the report, more than 70 percent of the tens of millions 

of offshore acres currently under lease are inactive, neither producing nor currently 

subject to approved or pending exploration or development plans. 

In addition to offering significant acreage from which to lease the Department is 

also providing greater incentives for its lessees to make production from their leases 

a priority. These resources are important in creating jobs and reducing our dependence on fossil fuels and oil imports, and ensuring the diligent development of lands 

under lease should be a priority for Congress as well. 

DOI BUDGET

Question 13. The President’s proposed budget includes $32.5 million for the ‘‘processing of applications for permit to drill and related use authorizations’’ and $47.95 

million for ‘‘conducting oil and gas inspection activities.’’ Can you tell us how many 

new Federal employees your Department envisions adding to conduct these activities in a timely manner? 

a. The budget also notes that this funding will be reduced by a $6,500 application fee to be charged to permit applicants. Based on the number of applications filed in previous years for drilling permits on Federal land, can you estimate for us what the anticipated total is that you expect to collect in permit 

application fees? 

Answer. The 2013 budget proposes to expand and strengthen the BLM’s oil and 

gas inspection capability through new fee collections from industry, similar to the 

fees now charged for offshore inspections. Collection of these fees is consistent with 

the principle that users of the public lands should pay for the costs of use authorizations and the costs associated with the oversight of authorized activities. The inspection fee schedule included in the budget is estimated to generate $48.0 million in 

collections, which would offset a proposed reduction of $38.0 million in BLM’s appropriated funds, while providing for a net increase of $10.0 million in funds available 

for this management responsibility. 

The increased funding is aimed at correcting deficiencies identified by the Government Accountability Office in its February 2011 report, which designated Federal 

management of oil and gas resources including production and revenue collection as 

high risk. The $10.0 million increase will help BLM achieve the high priority goal 

of increasing the completion of inspections of Federal and Indian high risk oil and 

gas cases by nine percent over 2011 levels. 

The proposal includes shifting 162 FTE and $37,950,000 from Oil and Gas Mgmt 

requested appropriations, which will be fully offset by the collected fees. The proposal also includes collecting an additional $10 million and funding an additional 

46 FTE. The proposed inspection fee will total $47,950,000 and fund a total of 208 

FTE. As noted in this question, the budget request also contemplates continuation 
100 

of the fee for processing onshore drilling permits currently enabled by appropriations language in 2010. If continued, it would generate an estimated $32.5 million 

in offsetting collections in 2013. 

Question 14. Virginia leasing: Will you reconsider leasing off the Virginia coast 

as the Governor, legislature and Virginia delegation has requested? 

Answer. The Proposed Final Program for 2012-2017 does not include lease sales 

in the North-Atlantic, Mid-Atlantic, and South-Atlantic planning areas based on, 

and in alignment with, the principles that underlie the entire Program. Many Atlantic states expressed concerns about oil and gas development off their coasts. While 

an OCS development strategy announced in 2010 included the Mid-and South-Atlantic under consideration for potential inclusion, a number of specific considerations supported the decision not to schedule lease sales in these areas under this 

Proposed Final Program. Rather, BOEM is proceeding with a specific strategy to address these considerations and support decision-making on whether potential lease 

sales in the Mid-and South-Atlantic would be appropriate in the future. 

First, the oil and gas resource potential in the Mid-and South-Atlantic is not well 

understood and surveys of these areas are incomplete and out of date. Prior to 

scheduling lease sales in these planning areas, it is prudent to develop information 

evaluating the oil and gas resource potential of these regions. BOEM is moving forward expeditiously to facilitate resource evaluation in these areas, including conducting a programmatic Environmental Impact Statement (EIS) relating to seismic 

surveys in the Mid-and South-Atlantic. BOEM announced in March 2012 the publication of the draft EIS and has just concluded a series of public hearings across the 

Mid-and South-Atlantic states. 

Second, there are complex issues relating to potentially conflicting uses, including 

those of the Department of Defense, which should be addressed so that any potential future leasing activity in these areas is designed appropriately. Finally, while 

evaluation of the resource potential of the Mid-and South Atlantic regions moves 

forward, analysis and planning regarding the additional infrastructure necessary to 

support potential oil and gas activities, including spill response resources, should as 

well. 

EPA QUESTIONS

Question 1. The hydraulic fracturing studies announced in the Administration 

budget involve multiple agencies addressing the same issues. What are the specific 

roles and responsibilities of each agency? 

a. What management structure will exist? 

b. What Agency will be the controlling agency? 

Answer. While the Department defers to the Environmental Protection Agency for 

information related to that agency, the research activities that the U.S. Geological 

Survey will conduct will be carefully coordinated with the Department of Energy 

(DOE), EPA, other federal agencies, including the BLM, FWS, and NPS in the Department, tribal and state entities, academia, and non-governmental organizations. 

The Department, DOE, and EPA will soon release a joint Memorandum of Agreement that will guide this interagency effort. This agreement will emphasize the fundamental core competencies of each agency in synergistic ways that lead to complementary and non-duplicative work. Working collaboratively, the agencies will develop a comprehensive federal research plan to address the highest-priority challenges to safe and prudent development of unconventional natural gas resources 

through hydrofracturing. The agencies have already begun to work cooperatively on 

studies of environmental impacts through EPA case studies at prospective drill 

sites, in areas of potential induced seismicity, in technology enhancements, and in 

the development of a comprehensive plan to assess the potential effects of Marcellus 

Shale gas production on the environment. 

Question 2. EPA is planning a study on air emissions from oil and natural gas 

production related to hydraulic fracturing. The Agency has proposed a new source 

performance standard (NSPS) for oil and natural gas production. Based on comments submitted to the docket on this proposal, it appears that EPA overestimated 

emissions from hydraulically fractured natural gas wells by as much as 1,400 percent. Is EPA taking steps to correct this overestimation by re-testing wells? 

Answer. While this matter falls under the jurisdiction of the EPA and the Department defers to that agency for a complete response, on April 17, 2012, EPA issued 

cost-effective regulations to reduce harmful air pollution from the oil and natural 

gas industry while allowing continued, responsible growth in U.S. oil and natural 

gas production. The final rules include, for the first time, federal air standards for 

gas wells that are hydraulically fractured. These rules rely on proven cost-effective 
101 

technology and practices that industry leaders are using today at about half of the 

fractured natural gas wells in the United States. Extensive public comment was 

sought on the proposed rules, which the agency was required to review under the 

Clean Air Act, and a number of changes were made in response to comments received. 

Question 3. In the same NSPS proposal EPA uses emissions factors for vapor from 

oil storage tanks that is refuted in its own docket support materials. Does the Agency have a process in place to ensure that its regulatory proposals make sense? 

Answer. As indicated in the response to the previous question, while this matter 

falls under the jurisdiction of the EPA, and the Department defers to EPA for a 

complete response, extensive public comment was sought on the proposed rules, 

which the agency was required to review under the Clean Air Act, including two 

public meetings as it was developing the rules and three public hearings on the proposal. The agency received more than 156,000 comments on the proposal, and a 

number of changes were made in response to comments received. 

Question 4. EPA has issued requirements for the reporting of Greenhouse Gas 

(GHG) emissions for oil and natural gas production under Subpart W. In this Subpart it creates a definition of facility that at times includes entire states, and in one 

case includes the area from the Rio Grande to the Mississippi River and from the 

Gulf of Mexico to a line running through Austin, Texas and Baton Rouge, Louisiana. 

EPA even acknowledges that its purpose is to require data that it would not get 

using any normal definition of a facility. These costs appear to be imposed solely 

to create an inventory. What is the Agency’s justification for its actions? 

Answer. While this matter falls under the jurisdiction of the EPA, and the Department defers to EPA for a complete response, this issue was addressed in EPA’s 

responses to the comments received after publication of the proposal, which can be 

found at http://www.epa.gov/climatechange/emissions/downloads10/SubpartWlRTClpart2.pdf. 

Question 5. EPA announced that it plans to continue its Effluent Limitation 

Guideline (ELG) development for coal bed methane-produced waters. Its current efforts are based on information that appears to be fairly grossly out of date. Its economic information is based on natural gas prices three times current prices and its 

production information does not reflect the dramatic drop in coal bed methane production. Since CBM-produced water comes at the beginning of the production process, what benefit is it to continue this ELG action? What will it cost? 

Answer. This matter falls under the jurisdiction of the EPA, and the Department 

defers to EPA for a complete response. The Department understands that EPA continues to evaluate significant amounts of information collected during the study of 

this issue, in addition to continuing to obtain additional pollutant?related data; and 

to meet with stakeholders to review regulatory approaches and solicit input. 

Question 6. EPA announced its intent to create an ELG for shale gas extraction 

produced water. Its ‘‘trigger’’ for this announcement was the discharge of shale gas 

extraction produced water in Pennsylvania. Pennsylvania has prohibited the discharge of this water to surface waters. What will it cost to develop this ELG for 

what would seem to be a nonexistent discharge category? 

Answer. This matter falls under the jurisdiction of the EPA, and the Department 

defers to EPA for a complete response. EPA conducts an annual review of existing 

industrial wastewater discharge regulations. Comments submitted to EPA in early 

2010 as part of the annual review prompted EPA to carefully review wastewater 

discharges from shale gas extraction, which generally contain elevated salt content 

many times higher than that contained in sea water, conventional pollutants, 

organics, metals, and naturally occurring radioactive material. Additional data show 

that flowback waters contain concentrations of some of the fracturing fluid additives. Some shale gas wastewater is transported to public and private treatment 

plants, many of which are not properly equipped to treat this type of wastewater. 

As a result, pollutants are discharged into surface waters such as rivers, lakes or 

streams where they can directly impact aquatic life and drinking water sources. 

EPA plans to reach out to affected stakeholders and to collect information to better 

characterize shale gas wastewaters and the efficiency of various treatment, re?use, 

and disposal technologies that will reduce shale gas wastewater pollutant discharges, including those technologies currently in use in public and private treatment plants. EPA also plans to collect financial data on the shale gas industry to 

determine the affordability of treatment. 

Question 7. States do not regulate fracturing under Underground Injection Control 

(UIC) programs, but EPA is stating that permits are required under the UIC program for fracturing. This calls into question whether states that have UIC primacy 

are meeting the requirements of the delegation process. How will EPA assure that 
102 

it can withstand challenges to the primacy delegation of the UIC program now that 

it has created this inherent conflict? 

Answer. This matter falls under the jurisdiction of the EPA, and the Department 

defers to EPA for a complete response, but the Department understands that the 

SDWA specifically excludes hydraulic fracturing from UIC regulation under SDWA 

δ 1421 (d)(1), the use of diesel fuel during hydraulic fracturing is still regulated by 

the UIC program. Any service company that performs hydraulic fracturing using 

diesel fuel must receive prior authorization through the applicable UIC program. 

Just this month EPA published and is receiving public comments on draft Underground Injection Control (UIC) Class II permitting guidance for oil and gas hydraulic fracturing activities using diesel fuels that outlines for EPA permit writers, 

where EPA is the permitting authority, requirements for diesel fuels used for hydraulic fracturing wells, technical recommendations for permitting those wells, and 

a description of diesel fuels for EPA underground injection control permitting. 

USGS

Question 1. Can you provide my staff with existing data by fiscal year showing 

USGS work to inventory or survey the mineral estate of US Public Lands? 

Answer. The USGS does not track our assessments by fiscal year nor by land classification [public versus private]; our assessments in general take 5-10 years and, 

particularly oil and gas assessments, cover geologically defined areas such as petroleum basins. Below, we provide information about funding levels for the Mineral Resources and Energy Resources Program from FY2002, as well as major resource assessments for the past decade or more. An attached table (see Attachment 1) shows 

USGS mean estimates of undiscovered, technically recoverable oil and gas resources. The table includes different commodities on different tabs, including conventional resources and continuous (unconventional). The numbers given represent 

the most recent USGS assessment of each basin from 1995 through 2011. 

MINERAL RESOURCE PROGRAM INFORMATION 

MRP Enacted Budgets 

Research & 

Assessments 

Minerals 

Information 

Total 

$1,000s 

FY02 $39,295 $16,400 $55,695 

FY03 $39,490 $16,283 $55,773 

FY04 $39,926 $15,884 $55,810 

FY05 $38,255 $15,509 $53,764 

FY06 $36,997 $15,787 $52,784 

FY07 $36,028 $15,608 $51,636 

FY08 $35,470 $15,360 $50,830 

FY09 $36,900 $15,527 $52,427 

FY10 $37,900 $15,880 $53,780 

FY11 $36,800 $15,600 $52,400 

FY12 $34,462 $14,769 $49,231 

Listed below are selected major Mineral Resource Program bodies of work that 

ended in the year noted (and scheduled to end in FY12). Projects followed by an asterisk include a combination of (1) inventories of known mineral resources (e.g. 

FY10 REE resource inventory), (2) qualitative mineral resource assessments outlining areas permissive for undiscovered mineral resources (e.g. FY02 Humboldt 

River assessment), and (3) quantitative mineral resource assessments providing a 

probabilistic estimate of the amount of undiscovered mineral resource in a permissive area (e.g. FY07 Bay Resource Area assessment). All other projects were research efforts to help decrease uncertainty in our mineral resource and mineral environmental assessments. 
103 

Hyperlinks point to summary Fact Sheets, Circulars, project web pages with product lists, or to a representative example of one of many products that came from 

the effort. All listed efforts were funded from Research and Assessment dollars, and 

most had a lifespan of 5-10 years, though some were shorter-term efforts (e.g. the 

2010 REE domestic inventory). So it is important to note that the FY funding 

should not be correlated with the work that ended in the corresponding FY. For example, GMRAP will end in FY12 but was funded from Research and Assessment 

dollars for the past 10 years. 

FY02 

• Rare-earth element resources: A basis for high technology * • Aeromagnetic surveys of south-central Alaska • Resource Potential and Geology of the Grand Mesa, Umcompahgre, and Gunnison National Forests and Vicinity, Colorado * • Assessment of Metallic Resources in the Humboldt River Basin (BLM Humboldt 

Resource Area), Northern Nevada * 

FY03 

• Geology, geochemistry, and geophysics for mineral exploration across the central Alaska Range (Talkeetna Transect) • Integrated geologic, geochemical, and geophysical studies of Yellowstone National Park • Availability and environmental effects of phosphate deposits in southeastern 

Idaho and surrounding area • Geochemical processes occurring in mineral deposits in the eastern US 

FY04 

• Investigations of earth science methods to help interpret the geologic links between mineral dusts (including asbestiform minerals) and human health problems • Investigation of the Headwaters Province, Idaho and Montana, to provide geoscience data and interpretations to the Federal Land Management Agencies 

that are basic to sound policy and land-stewardship practices * • Advanced resource assessment methods • Research on the relationship between plate tectonics and the occurrence of a 

wide variety of geologic features in the northwestern U.S. and Canada • Investigations of the geological and mineral resources of Nevada 

FY05 

• Geology and nonfuel mineral deposits of the United States * • Metals in Basinal Brines and Petroleum • Large Igneous Provinces, Alaska 

FY06 

• Regional fluid flow, northern Alaska • Crustal evolution and fluid flow, northern Nevada 

• Industrial mineral studies 

• Complex systems modeling for mineral resources 

• Hydrothermal systems in Cascade volcanoes 

• Aqueous geochemistry research 

FY07 

• Tintina metallogenic province: Integrated studies on geologic framework, mineral resources, and environmental signatures 

• Process studies of contaminants associated with mineral deposits 

• Geochemical characterization of black shale (Mancos Shale) 

• Integrated geologic, geochemical, and geophysical studies of Big Bend National 

Park, Texas 

• Pathways of metal transfer from mineralized sources to bioreceptors 

• Undiscovered Locatable Mineral Resources in the Bay Resource Management 

Plan Area, Southwestern Alaska: A Probabilistic Assessment * 

FY08 

• Central Colorado Assessment Project * 

• Geochemical and isotope studies of the evolution of ore deposits 

FY09 

• Regional geologic, geochemical, geophysical, and mineral deposit data for economic development in Alaska in the 21st century 

• Uncertainty and risk analysis in mineral resources 
104 

• Tracers of surficial processes affecting mineral deposits in humid environments 

• Mineral Resource Assessment of Northern Nye County, Nevada * 

FY10 

• North American Soil Geochemical Landscapes Project 

• Federal Lands in Alaska—Geologic Studies (FLAG) 

• Geology, hydrothermal systems, and resources of the Cascades arcs and central 

California Coast Ranges 

• Inventory of Rare Earth Resources of the United States * 

FY11 

• Mineral Resources Data System * 

• Minerals at Risk and for Emerging Technologies 

FY12 

• Global mineral resource assessment project (GMRAP) * 

• Updated National Mineral Resource Assessment—Planning Phase * 

• Assessment Techniques for Concealed Mineral Resources 

• Development of Mineral Environmental Assessment Methodologies 

• The Integrated Methods Development Project 

• Critical Zone Processes Across Landscapes 

ENERGY RESOURCES PROGRAM INFORMATION

Energy Resources Program Enacted amounts for FY2002 to FY2012: 

2002—$24,107,000 

2003—$23,705,000 

2004—$25,068,000 

2005—$23,250,000 

2006—$23,760,000 

2007—$25,150,000 

2008—$26,381,000 

2009—$26,749,000 

2010—$27,237,000 

2011—$27,750,000 

2012—$27,292,000 

Listed below are major domestic Energy Resource Assessments organized by commodity. This list does not include: (1) the research leading up to and resulting from 

the assessment activities, which are additional publications; (2) international assessments, which are a large part of the Energy Resources Program; (3) research on environmental aspects of energy occurrence and use. 

In a companion attachment is an excel spreadsheet showing USGS mean estimates of undiscovered, technically recoverable oil and gas resources. The spreadsheet includes different commodities on different tabs, including conventional resources and continuous (unconventional). The numbers given represent the most recent USGS assessment of each basin through 2011. Two additional assessments, 

published in 2012, have not yet been added to the table: 

• Alaska North Slope shale gas and shale oil: 0—2 billion barrels of oil; 0—80 trillion cubic feet of gas 

• Eagle Ford Group, U.S. Gulf Coast Region, conventional and continuous oil and 

gas [mean]: 994 million barrels of oil, 54 trillion cubic feet of gas, 2,028 million 

barrels natural gas liquids 

Other major assessments of the Energy Resources Program include: 

National Geothermal Assessment—2008 

Assessment results indicate electric power generation potential from: 

• identified geothermal systems is 9,057 Megawatts-electric (MWe), distributed over 13 states 

• mean estimated power production potential from undiscovered geothermal resources is 30,033 MWe 

• another estimated 517,800 MWe could be generated through implementation of technology for creating geothermal reservoirs in regions characterized by high temperature, but low permeability, rock formations. 
105 

National Coal Resource Assessments 

(no numbers are given, as resources are reported out in a number of ways, and 

tables can be found in each of the links) 

Team, USGS Fort Union Assessment, 1999 Resource Assessment of Selected Tertiary Coal Beds and Zones in the Northern Rocky Mountains and Great Plains Region by Fort Union Assessment Team: U.S. Geological Survey Professional Paper 

1625-A, Version 1.2, Discs 1 and 2. [CD-ROM]. http://pubs.usgs.gov/pp/p1625a/ 

Group, USGS Colorado Plateau Coal Assessment, 2000, Geologic Assessment of 

Coal in the Colorado Plateau: Arizona, Colorado, New Mexico, and Utah, compiled 

by Colorado Plateau Coal Assessment Group: U.S. Geological Survey Professional 

Paper 1625-B, Version 1.0, Appendix. [CD-ROM]. http://pubs.usgs.gov/pp/p1625b/ 

Northern and Central Appalachian Basin Coal Regions Assessment Team, USGS 

Northern and Central Appalachian Basin Coal Regions Assessment, 2001, 2000 Resource Assessment of Selected Coal Beds and Zones in the Northern and Central 

Appalachian Basin Coal Regions, by Northern and Central Appalachian Basin Coal 

Regions Assessment Team: U.S. Geological Survey Professional Paper 1625-C. [CDROM]. http://pubs.usgs.gov/prof/p1625c/ 

Hatch, J.R., and Affolter, R.H., 2002, Resource Assessment of the Springfield, 

Herrin, Danville and Baker Coals in the Illinois Basin: U.S. Geological Survey Professional Paper 1625-D. [CD-ROM]. http://greenwood.cr.usgs.gov/energy/coal/ 

PP1625D/ 

Osmonson, L. M., Scott, D.C., Haacke, J.E., Luppens, J.A., and Pierce, P.E., 2011, 

Assessment of Coal Geology, Resources, and Reserves in the Southwestern Powder 

River Basin, Wyoming: U.S. Geological Survey Open-File Report 2011—1134, 135 

p.http://pubs.usgs.gov/of/2011/1134/Oil Shale Resources:Piceance Basin: 

Johnson, R.C., Mercier, T.J., Brownfield, M.E., Pantea, M.P., and Self, J.G., 2009, 

Assessment of in-place oil shale resources of the Green River Formation, Piceance 

Basin, western Colorado: U.S. Geological Survey Fact Sheet 2009—3012, 6 p. http:// 

pubs.usgs.gov/fs/2009/3012/ 

Estimated in-place oil is about 1.5 trillion barrels, based on Fischer assay 

results from boreholes drilled to evaluate oil shale, making it the largest 

oil shale deposit in the world. 

Uinta Basin 

Johnson, R.C., Mercier, T.J., Brownfield, M.E., and Self, J.G., 2010, Assessment 

of in-place oil shale resources of the Green River Formation, Uinta Basin, Utah and 

Colorado: U.S. Geological Survey Fact Sheet 2010-3010, 4 p. http://pubs.usgs.gov/fs/ 

2010/3010/ 

The total in-place resource for the Uinta Basin is estimated at 1.32 trillion barrels. 

Green River Basin 

Johnson, R.C., Mercier, T.J., and Brownfield, M.E., 2011, Assessment of In-Place 

Oil Shale Resources of the Green River Formation, Greater Green River Basin in 

Wyoming, Colorado, and Utah: U.S. Geological Survey Fact Sheet 2011-3063, 4 p. 

http://pubs.usgs.gov/fs/2011/3063/ 

Total in-place resources are estimated at 1.44 trillion barrels of oil. 

BLM/LIVESTOCK

Question 1. Why has the BLM proposed an administrative fee on grazing which 

will raise the cost of grazing on BLM administered lands by 74%? Is it this Administration’s intent to balance the budget on the backs of rural America and small businesses? We adamantly oppose this arbitrary fee and encourage a stop this misguided action. 

Answer. The permit administration fee is proposed to recover some of the costs 

for processing grazing permits/leases for the permittees who are economically benefitting from use of the public lands. This is the same concept as used in the Oil and 

Gas program and Rights-of-Way program, where the users of the public lands pay 

a fee for the processing of their permits and related work. The budget includes appropriations language for a three-year pilot program, beginning in 2013, which 

would allow BLM to recover some of the costs of issuing grazing permits/leases on 

BLM lands. During the period of the pilot, BLM would work through the process 

of promulgating regulations for the continuation of the grazing administrative fee 

as a cost recovery fee after the pilot expires. 
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Question 2. Why, after Congress having just last year decided to increase the range budget, would the administration propose to cut that budget by nearly $16 

million? How do you propose to keep pace with permit renewals given the NEPA 

backlog, or deal with ever-increasing litigation costs, while cutting the range budget? Won’t more missed deadlines, due to lack of resources, lead to more litigation— 

thereby creating a self-feeding, vicious cycle? Answer. The FY 2013 budget requests a program decrease of $15.8 million from 

2012. The BLM is using the increase over FY 2011 in FY 2012 to address numerous 

challenges, including completion of grazing permit renewals; monitoring of grazing 

allotments; and strengthening the BLM’s environmental documents. The decrease 

will be partially offset by the proposed pilot project for an administrative processing 

fee of $1 per animal unit month that is estimated to generate $6.5 million in 2013, 

which will be returned to the BLM to use for the same purposes.In addition, section 

415 in the FY 2012 Appropriations Act assists BLM in meeting several challenges 

with grazing activities. That section specifies that the transfer of a grazing permit, 

during the term of the permit, is not subject to additional NEPA if there is no 

change in the mandatory terms and conditions required. This provision will significantly streamline the work process on approximately 10 to 15 percent of BLM’s annual permit workload, and allow BLM to process permits originally scheduled to expire. It allows the BLM more opportunity to focus on analysis of environmentallysignificant permits. Focusing on the most environmentally sensitive allotments will 

increase attention on land health assessments and quantitative data collection; improve the usefulness of both the RMP/EIS and site-specific NEPA analyses; and result in grazing management decisions guiding land health solutions for the future. 

This strategy will assist in ensuring that unprocessed permits consist of the least 

environmentally-sensitive allotments that are more custodial in nature and/or are 

already meeting land health standards. Section 415 also extends, through 2013, the 

BLM’s ability to renew expiring grazing permits without additional NEPA analysis. 

This provision will allow the BLM to focus on the grazing permit renewals in highpriority areas. 

Question 3. Research shows that most public lands ranchers already pay more 

than market price for their federal permits, considering factors such as added regulatory costs, ownership of water rights, maintenance of improvements, and the difficulties of managing livestock in rough, arid rangelands. Have you analyzed how 

many ranching operations would go out of business in light of this 74% increase in 

the cost of grazing fees? Or what the cost would be to BLM if ranchers were not 

there to provide land management services, such as fuels reduction and fire prevention, open space, noxious weed control, and water improvements for wildlife? 

Answer. As noted in response to a previous question, the permit administration 

fee is proposed to recover some of the costs for processing grazing permits or leases 

for the permittees who are economically benefitting from use of the public lands, 

and it is the same concept used in the Oil and Gas program and Rights-of-Way program, where the users of the public lands pay a fee for the processing of their permits and related work. The three-year pilot program proposed in the budget would 

allow BLM to recover some of the costs of issuing grazing permits or leases on BLM 

lands and, during that period, the bureau would work through the process of promulgating regulations for the continuation of the grazing administrative fee as a 

cost recovery fee after the pilot expires. 

Question 4. Why does the Department continually back down from gathering excess wild horses and burros and buckle to special interest groups on implementing 

management options to reduce wild horses on the range, while continuing to come 

back to Congress and ask for more funds for the program? 

Answer. The BLM conducts gathers in the areas of highest priority and as compatible with funding levels and available holding space. While some gathers have 

been delayed due to litigation, the BLM has continued to pursue other options to 

reduce population growth on the range. The BLM is finalizing a wild horse and 

burro management strategy as part of its ongoing effort to reform the Wild Horse 

and Burro Program and put it on a cost-effective, sustainable track. The strategy 

emphasizes population control techniques, including fertility control; promotes public-private ecosanctuaries to hold excess wild horses removed from Western public 

rangelands; seeks to boost adoptions by making more trained wild horses available 

to the public; and establishes a comprehensive animal welfare program. 

Question 5. Preventing the listing of the Sage Grouse under the ESA is a goal 

we can all rally behind. In fact, many ranchers have been making great efforts to 

improve the bird’s habitat. Ranching and grazing is critical to Sage Grouse habitat. 

How will you use funds allocated in 2013 to ensure that your Sage Grouse planning 

efforts reward ranchers for their efforts and help them stay in business so that they 

may continue preserving Sage Grouse habitat? 
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Answer. The BLM is committed to working with public land users to discuss their 

concerns throughout our sage-grouse planning process. Although the BLM does not 

have resources to provide financial incentives to ranchers as part of our sage-grouse 

planning process, our efforts to improve sage grouse conservation through better 

planning will help to improve certainty for ranchers that they will be able to continue to graze on Federal lands in the future. The Department of Agriculture’s Natural Resources Conservation Service does provide incentives for ranchers to complete habitat improvement projects on private lands through their Sage-Grouse Initiative. The U.S. Fish and Wildlife Service can also provide assurances for activities 

on private lands through Candidate Conservation Agreements with Assurances. 

Question 6. The President has proposed millions of dollars in decreases to programs that provide economic benefit to the country, while simultaneously proposing 

a $70 million increase to a fund (the Land and Water Conservation Fund) to grow 

the federal estate. How do you juxtapose managing more land while dealing with 

an even smaller budget? How would you rate your ability to keep up with current 

land management duties, such as catastrophic wildfire control, grazing permit renewals, and wild horse management? Common sense tells us that the agency will 

have difficulty managing all these responsibilities on more land, with fewer dollars. 

Answer. The FY 2013 budget request ensures that Departmental agencies will be 

able to maintain their core responsibilities on federal lands while providing for strategic increases to conserve land for current and future generations. The lands identified for acquisition in the FY 2013 budget request address the most urgent needs 

for recreation; species and habitat conservation; and the preservation of landscapes, 

and historic and cultural resources. Such acquisition may also assist the government to achieve greater efficiencies that resolve management issues. In addition, increased federal land acquisition funding would provide more opportunities for landowners, if they wish, to sell their property yet ensure that it will be protected in 

perpetuity rather than developed in a way that threatens resources in national 

parts, wildlife refuges, forests, and other public lands. 

RESPONSES OF SECRETARY KEN SALAZAR TO QUESTIONS FROM SENATOR BARRASSO

Question 1. Soda ash is a great American export. It reduces our nation’s trade deficit and creates good-paying jobs. However, it is in competition with heavily subsidized synthetic soda ash from China. In the House, you testified that you do not 

have the authority to extend the 2 percent royalty rate to America’s soda ash producers under current law. What other steps can you take to assist America’s soda 

ash producers? 

Answer. As noted in recent testimony before the Committee, the BLM reported 

to Congress in fall 2011 in its report titled U.S. Department of the Interior Report 

to Congress: The Soda Ash Royalty Reduction Act of 2006 that the Soda Ash Royalty 

Reduction Act of 2006 resulted in a substantial loss of royalty revenues to the Federal Government and the states which exceeded Congressional estimates at the time 

of enactment. The royalty rate reduction does not appear to have contributed in a 

significant way to the creation of new jobs within the industry, to increased exports, 

or to a notable increase in capital expenditures to enhance production. In addition, 

the royalty rate reduction appears to have influenced a shift of production away 

from state leases and private lands and onto Federal leases. 

Regarding global competitiveness, the report found that U.S. production has remained stable at around 11 million tons since 2002, with exports stable at around 

5 million tons since 2005. U.S. exports continue to account for over 40 percent of 

total world exports. In contrast, China’s production has doubled since 2002, from approximately 10 million to approximately 20 million tons, while Chinese exports remain far below U.S. exports. Since 2002, world-wide production has risen from 37 

million tons to 48 million tons in 2010. 

Finally, the report found that overall domestic employment has not increased 

since passage of the Act. However, it is not readily apparent from the available data 

whether jobs have been maintained due to the royalty rate reduction in the face of 

the global economic downturn. Any analysis of the number of jobs maintained during the royalty reduction period is highly uncertain; employment levels in the industry depend on a number of factors, such as soda ash market conditions and employee productivity. 

Question 2. The Office of Surface Mining (OSM) is rewriting the 2008 stream buffer rule. I understand that OSM’s 2008 rule took about five years to complete. I understand that this process involved two proposed rules, approximately 5,000 pages 

of environmental analysis, and took into account about 40,000 public comments. 

a. How much is the rewrite of the 2008 rule costing taxpayers? 
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b. How many coal mining jobs would be impacted if the new rule were implemented today? 

c. What steps are you taking to ensure that OSM complies with the National 

Environmental Policy Act and the Administrative Procedure Act? 

d. What steps are you taking to ensure that OSM provides cooperating state 

agencies and the public sufficient time to comment on the new rule and participate in the rulemaking process? 

Answer. OSM has been developing improvements of its regulations to more completely implement the Surface Mining Control and Reclamation Act by better protecting streams from the adverse impacts of coal mining while helping meet the nation’s energy needs. Since 2009, OSM has spent about $7.7 million to develop this 

rulemaking, with the majority of the expenditures representing obligations for contract support to develop portions of an Environmental Impact Statement and the 

regulatory impact analysis. OSM is developing this rule in response to litigation as 

well as in consideration of the more than 50,000 comments the bureau has received 

from the public on the Advance Notice of Proposed Rulemaking (ANPR), stakeholder 

outreach meetings and public scoping meetings, and also based on OSM’s statutory 

obligation to balance protection of the environment against production of the coal 

necessary to meet the Nation’s energy requirements. The proposed rule and Draft 

EIS, when published, will contain a detailed economic analysis, including any anticipated impacts on jobs in the coal mining industry. 

OSM published an ANPR on which the bureau received over 32,000 public comments, and conducted nine scoping sessions pursuant to the National Environmental Policy Act, receiving over 20,000 comments. The Proposed Rule and Draft 

EIS will be made available for public notice and comment in accordance with the 

Administrative Procedure Act, NEPA, and other applicable federal laws. Prior to 

publishing a Final Rule and EIS, the bureau will consider public comments received 

on the proposal. Fourteen state agencies, acting as cooperating agencies on the 

OSM’s Draft EIS, reviewed and provided extensive comments on early working 

versions of the Draft EIS. OSM has taken those comments into consideration as it 

develops both its Proposed Rule and Draft EIS. When OSM publishes its Proposed 

Rule and makes available its Draft EIS in the Federal Register, the states, along 

with the public, will have the opportunity to review and provide comments on those 

documents in accordance with applicable laws. 

Question 3. It is my understanding that OSM is rewriting the 2008 stream buffer 

rule to address an issue specific to the Appalachian region. However, the rule will 

affect every coal mine throughout the country. 

a. Has OSM provided any documentation or evidence that there is a nationwide problem that requires a new rulemaking? 

b. If so, when did OSM provide this documentation and will you share it with 

the Committee? 

Answer. As noted in response to the previous question, OSM is still in the process 

of developing its Proposed Rule and Draft EIS. Those documents, when published 

and made available for public notice and comment, will provide a full explanation 

of the scope of the Proposed Rule, including reasons for the geographic application 

of various provisions of the Proposed Rule, as appropriate and in accordance with 

applicable law. When OSM completes its development of these documents, they will 

be published and made available to the public, and they will detail the basis for provisions of the proposal. 

Question 4. I understand that the Department is working with other Federal 

agencies to expedite the permitting process for a number of large renewable energy 

projects. 

Is the Department taking any steps to reduce the delays in the permitting process 

for traditional energy projects (including oil and gas and coal projects)? If so, please 

describe the steps your Department is taking. If not, please explain why the Department is not addressing these delays. 

Answer. On April 3, 2012, Secretary Salazar unveiled new initiatives to expedite 

safe and responsible leasing and development of domestic energy resources on U.S. 

public and Indian trust lands. As part of the BLM’s ongoing efforts to ensure efficient processing of oil and gas permit applications on both Tribal trust and public 

lands, the agency will implement new automated tracking systems that could reduce 

the review period for drilling permits by two-thirds. The new system will track permit applications through the entire review process and quickly flag any missing or 

incomplete information—greatly reducing the back-and-forth between BLM and industry applicants. The new drilling permit system will automate the process that 

tracks APDs, providing greater online accessibility and transparency. It will improve 
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communication between the BLM and industry, resulting in more consistent APD 

processing standards and timeframes and a significantly reduced review period. The 

new system will allow the public and operators to view the BLM processing status 

of APDs, enabling operators to more promptly address deficiencies in their applications. By upgrading and improving our oil and gas drilling permit processing systems and technologies we believe we can improve efficiencies while ensuring thorough reviews for safety and compliance. 

Question 5. The BLM is proposing a 3-year pilot program to charge a $1.00 per 

Animal Unit Month administrative fee to assist processing of grazing permits. This 

proposal would represent a 75% increase for ranchers who have grazing permits. 

The grazing fee formula is set by law in the Public Rangelands Improvement Act 

of 1978, and in an Executive Order signed by President Reagan. 

Under what authority are you raising by 75% the amount paid per AUM by grazing permit holders? 

Answer. The BLM is not raising the current grazing fee. The goal of the administrative fee proposed in the Budget Request is to recover some of the cost of processing grazing permits or leases for the parties (permittees) who are economically 

benefitting from use of the public lands. This fee mirrors the concept used in the 

Oil and Gas and Rights-of-Way programs where the users of the public lands pay 

a fee for the processing of their permits and related work. The budget includes appropriations language for a three-year pilot program, beginning in 2013, which 

would allow BLM to recover some of the costs of issuing grazing permits/leases on 

BLM lands. During the period of the pilot, BLM would work through the process 

of promulgating regulations through the traditional notice and public comment process for the continuation of the grazing administrative fee as a cost recovery fee after 

the pilot expires. 

Question 6. During the pilot period, the BLM will be working to promulgate regulations for the continuation of this $1/AUM grazing fee as a ‘‘cost recovery fee’’ after 

the pilot expires. 

a. Does it cost the BLM more time and resources to process grazing permit 

applications, or fight anti-grazing litigation lawsuits? 

b. How much does your department spend processing grazing permits? defending anti-grazing litigation? 

c. If there needs to be a cost recovery fee for processing grazing applications, 

shouldn’t the BLM also explore ways to recover cost associated with frivolous 

litigation? 

Answer. Processing grazing permit applications costs the BLM more than addressing litigation lawsuits. The average annual cost to process grazing permit applications is approximately $35 million to $40 million. The BLM does not have detailed 

expenditures related to anti-grazing litigation, but the costs associated with range 

management-related litigation in FY 2011 were approximately $850,000, and for FY 

2012 the costs to date are $456,000. These costs do not include EAJA fee payments 

or costs associated with work of the Department of the Interior Solicitor’s Office. 

The Department is open to working on opportunities to address costs associated 

with frivolous litigation. 

RESPONSES OF SECRETARY KEN SALAZAR TO QUESTIONS FROM SENATOR LEE

Question 1. Mr. Secretary, please detail your reasoning behind the proposed administrative fee on grazing on BLM-administered lands. In percentage terms, how 

much will this raise the cost of grazing? Please explain how you analyzed the impact 

that such percentage increase would have on ranchers and other small businesses 

that rely on BLM lands for grazing. Please include in your explanation any stakeholder input that you received from ranchers and local small businesses. 

Answer. The goal of the administrative fee is to recover some of the cost of processing grazing permits or leases for the parties (permittees) who are economically 

benefitting from use of the public lands. This fee mirrors the concept used in the 

Oil and Gas and Rights-of-Way programs where the users of the public lands pay 

a fee for the processing of their permits and related work. The budget includes appropriations language for a three-year pilot program, beginning in 2013, which 

would allow BLM to recover some of the costs of issuing grazing permits/leases on 

BLM lands. During the period of the pilot, BLM would work through the process 

of promulgating regulations through the traditional notice and public comment process for the continuation of the grazing administrative fee as a cost recovery fee after 

the pilot expires. 

Question 2. Mr. Secretary, please explain in more detail your proposal to reduce 

wild horse and burro populations on public lands. Please describe the various op-
110 

tions considered and why your chosen option is the most cost-effective and efficient 

method. 

Answer. The BLM proposed a long-term strategy in February 2011 for accelerating reforms on how wild horses and burros are managed on public lands. The 

bureau is working to finalize this strategy, which will guide BLM activities through 

FY 2014 while the National Academy of Sciences completes a two-year independent 

study of wild horse management practices and research needs. 

The strategy will put the program on a cost-effective, sustainable track by emphasizing population control techniques, including fertility control; promoting public-private ecosanctuaries to hold excess wild horses removed from Western public rangelands; seeking to boost adoptions by making more trained wild horses available to 

the public; and establishing a comprehensive animal welfare program. The FY 2013 

budget proposes a $2 million increase to further the research and development of 

fertility control techniques. 

Question 3. Mr. Secretary, in 2009, Congress passed the Utah Recreational Land 

Exchange Act that was widely supported by the State of Utah, local governments, 

the environmental community and the Department of Interior. This exchange benefits the school children of Utah and it gives the BLM some of the most sensitive 

conservation lands in Utah—including lands within your designated ‘‘Crown Jewels’’. Yet, the reason this exchange has not progressed is that the BLM refuses to 

pay for its half of the appraisal costs for the transaction. When will the BLM pay 

its half of these transaction costs and carry out the will of Congress? 

Answer. The BLM in Utah is working cooperatively with the State of Utah’s 

School and Institutional Trust Lands Administration (SITLA) to move forward on 

the appraisal process required by Public Law 111-53. In August, 2011, the State and 

BLM signed the exchange agreement that documents the responsibilities of both the 

State and BLM to complete the exchange. Because this is a complex exchange including lands with potentially high mineral values, the process is complicated. BLM 

is working to prioritize its funding for high-priority land exchanges, including its 

commitments under P.L 111-53. 

Question 4. In 2007, the BLM issued several RD&D leases, one of which is in 

Utah. Can you confirm for the record that the current PEIS effort will not impact 

these previous leases and that these leases will be considered prior existing rights? 

Answer. The scope of the analysis for this PEIS does not include review of the 

decisions by the Secretary to issue the 2007 RD&D leases, including the lease in 

Utah’s Uintah Basin. As noted in the PEIS, those RD&D leases are prior existing 

rights and are not the subject of decisions within the PEIS, with the exception that 

all alternatives address the subsequent availability of the lands contained in the 

leases should the initial leaseholder relinquish the existing leases. 
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