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77-680 PS 2002

FY 2003 BUREAU OF LAND

MANAGEMENT AND FOREST

SERVICE ENERGY AND MINERAL PROGRAM BUDGET

OVERSIGHT HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY AND

MINERAL RESOURCES

OF THE

COMMITTEE ON RESOURCES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

February 14, 2002

Serial No. 107-85

Printed for the use of the Committee on Resources

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

or

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

(II)

COMMITTEE ON RESOURCES

JAMES V. HANSEN, Utah, Chairman

NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska,

Vice Chairman

W.J. ‘‘Billy’’ Tauzin, Louisiana

Jim Saxton, New Jersey

Elton Gallegly, California

John J. Duncan, Jr., Tennessee

Joel Hefley, Colorado

Wayne T. Gilchrest, Maryland

Ken Calvert, California

Scott McInnis, Colorado

Richard W. Pombo, California

Barbara Cubin, Wyoming

George Radanovich, California

Walter B. Jones, Jr., North Carolina

Mac Thornberry, Texas

Chris Cannon, Utah

John E. Peterson, Pennsylvania

Bob Schaffer, Colorado

Jim Gibbons, Nevada

Mark E. Souder, Indiana

Greg Walden, Oregon

Michael K. Simpson, Idaho

Thomas G. Tancredo, Colorado

J.D. Hayworth, Arizona

C.L. ‘‘Butch’’ Otter, Idaho

Tom Osborne, Nebraska

Jeff Flake, Arizona

Dennis R. Rehberg, Montana

George Miller, California

Edward J. Markey, Massachusetts

Dale E. Kildee, Michigan

Peter A. DeFazio, Oregon

Eni F.H. Faleomavaega, American Samoa

Neil Abercrombie, Hawaii

Solomon P. Ortiz, Texas

Frank Pallone, Jr., New Jersey

Calvin M. Dooley, California

Robert A. Underwood, Guam

Adam Smith, Washington

Donna M. Christensen, Virgin Islands

Ron Kind, Wisconsin

Jay Inslee, Washington

Grace F. Napolitano, California

Tom Udall, New Mexico

Mark Udall, Colorado

Rush D. Holt, New Jersey

James P. McGovern, Massachusetts

Anibal Acevedo-Vila, Puerto Rico

Hilda L. Solis, California

Brad Carson, Oklahoma

Betty McCollum, Minnesota

Tim Stewart, Chief of Staff

Lisa Pittman, Chief Counsel/Deputy Chief of Staff

Steven T. Petersen, Deputy Chief Counsel

Michael S. Twinchek, Chief Clerk

James H. Zoia, Democrat Staff Director

Jeffrey P. Petrich, Democrat Chief Counsel

SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

BARBARA CUBIN, Wyoming, Chairman

RON KIND, Wisconsin, Ranking Democrat Member

W.J. ‘‘Billy’’ Tauzin, Louisiana

Mac Thornberry, Texas

Chris Cannon, Utah

Jim Gibbons, Nevada,

Vice Chairman

Thomas G. Tancredo, Colorado

C.L. ‘‘Butch’’ Otter, Idaho

Jeff Flake, Arizona

Dennis R. Rehberg, Montana

Nick J. Rahall II, West Virginia

Edward J. Markey, Massachusetts

Solomon P. Ortiz, Texas

Calvin M. Dooley, California

Jay Inslee, Washington

Grace F. Napolitano, California

Brad Carson, Oklahoma

(III)

CONTENTS

Page

Hearing held on February 14, 2002 ....................................................................... 1

Statement of Members:

Cubin, Hon. Barbara, a Representative in Congress from the State of

Wyoming, Prepared statement of ................................................................ 2

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

Nevada ........................................................................................................... 1

Kind, Hon. Ron, a Representative in Congress from the State of

Wisconsin ....................................................................................................... 3

Prepared statement of ............................................................................... 5

Statement of Witnesses:

Clarke, Kathleen, Director, Bureau of Land Management, U.S.

Department of the Interior ........................................................................... 7

Prepared statement of ............................................................................... 9

Response to questions submitted for the record ..................................... 26

Thompson, Tom, Deputy Chief, Forest Service, U.S. Department of

Agriculture ..................................................................................................... 12

Prepared statement of ............................................................................... 14

Response to questions submitted for the record ..................................... 43

(1)

OVERSIGHT HEARING ON ‘‘FISCAL YEAR 2003

BUREAU OF LAND MANAGEMENT AND

FOREST SERVICE ENERGY AND MINERAL

PROGRAM BUDGET’’

Thursday, February 14, 2002

U.S. House of Representatives

Subcommittee on Energy and Mineral Resources

Committee on Resources

Washington, DC

The Subcommittee met, pursuant to notice, at 10:06 a.m., in

room 1310, Longworth House Office Building, Hon. Jim Gibbons

[Vice Chairman of the Subcommittee] presiding.

STATEMENT OF HON. JIM GIBBONS, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF NEVADA

Mr. GIBBONS. [Presiding] The Subcommittee on Energy and

Mineral Resources will come together.

First of all, let me explain that we have just been notified we do

have a vote. My intentions are to give the Chairman’s and Ranking

Member’s opening statement and then allow for Mr. Hansen to introduce Ms. Kathleen Clarke from the Bureau of Land Management.

Mrs. Cubin is unable to be with us this morning because of a

family health emergency, and she has asked me, as the Vice Chairman, to chair this Committee.

The Subcommittee meets today for our first hearing of the second

session of the 107th Congress. Our topic is the review of the proposed energy and minerals program budget for the coming fiscal

year for the two largest public land management agencies in the

Federal Government, the Bureau of Land Management of the

Department of Interior and the Forest Service of the Department

of Agriculture.

Besides managing surface resources, the BLM administers the

Federal mineral estate beneath the public lands, including national

forests, and under private lands where the United States has reserved a mineral right in the patent, such as the Stockraising

Homestead Act. This is a big job, no doubt about it, and requires

strong leadership at the helm to ensure that public resources are

utilized in a manner consistent with public trust and our Nation’s

economic energy security.

2

The Subcommittee is fortunate to have the new Director of the

BLM with us here today, giving what I believe will be her first testimony before a House of Representatives panel. Ms. Kathleen

Clarke, who was confirmed by our colleagues in the other body a

little less than 2 months ago, I believe, brings a strong background

to this job as the former director of the Utah Department of Natural Resources and, of course, including staff assignments with our

Full Committee Chairman, Mr. Jim Hansen, and Senator Robert F.

Bennett of Utah, as well. In a minute, I will ask Mr. Hansen to

formally introduce Ms. Clarke to the members of the Subcommittee.

President Bush has established a national energy policy, which

includes a significant role for public lands and minerals. Together

with Secretary Norton and her team at the Interior, Director

Clarke’s leadership will be tested as she seeks to steer the Agency

in a new direction from that of her predecessors, but a change is

necessary, and I trust Mrs. Clarke is able to implement that policy.

I believe the Fiscal Year 2003 budget of the President largely reflects these needs with respect to both the BLM and the Forest

Service programs within our jurisdiction. The President has seen

fit to increase the budgets for both renewable and nonrenewable

energy programs on our public lands, including geothermal energy,

an important component of energy in the State of Nevada.

We also have with us today Mr. Tom Thompson, Deputy Chief

of the Forest Service. I want to welcome him here today, and he

is here to testify about the minerals and geology program budget

of his agency. The Forest Service technically does not ‘‘administer’’ the minerals beneath our feet, save for the so-called mineral materials, such as sand, gravel and stone. But this Agency is very much

involved in the permitting process and access to Federally owned

mineral resources within our national forests and grasslands.

Also, the Forest Service, by a Memorandum of Understanding

with the BLM, does perform mining claim examination and otherwise manages the miners’ access to hard-rock minerals beneath the

national forests. As such, we should carefully review the programmatic budget of the Forest Service which will allow officials

in our hinterlands to meet the important national energy policy

goals outlined by the President and Congress.

In conclusion, let me say that perhaps even more important than

money in the budget, is knowing that folks running the agencies

are committed to seeing President Bush’s plans and ideas put into

action.

The Subcommittee looks forward to working with both Director

Clark and Deputy Chief Thompson over the coming year to implement efforts to increase both renewable and nonrenewable forms of

energy to find creative solutions for restoring the health of our domestic mining industry operating on the public lands of the West.

With that, let me turn to my Ranking Member, Mr. Kind, for any

opening remarks that he may have at this time.

[The prepared statement of Mrs. Cubin follows:]

Statement of The Honorable Barbara Cubin, Chairman,

Subcommittee on Energy and Mineral Resources

The Subcommittee meets today for our first hearing of the second session of the

107th Congress. Our topic is the review of the proposed energy & minerals program

3

budgets for the coming fiscal year for the two largest public land management agencies in the Federal Government—- the Bureau of Land Management of the Interior

Department, and the Forest Service of the Department of Agriculture.

Besides managing surface resources, the BLM administers the Federal mineral

estate beneath the public lands, including National Forests, and under private lands

where the United States has reserved minerals in the patent, such as the

Stockraising Homestead Act. This is a big job, no doubt about it, and requires strong

leadership at the helm to ensure the public’s resources are utilized in a manner consistent with public trust and our Nation’s economic and energy security.

As such, I am pleased to have the new Director of the BLM here with us today,

her first such testimony before a House of Representatives panel. Ms. Kathleen

Clarke was confirmed by our colleagues in the other body at the very end of the

first session, and has been in office only six weeks or so. But, Ms. Clarke brings

a strong background to this job, as the former director of the Utah Department of

Natural Resources, and staff assignments with our full committee chairman, Jim

Hansen and Senator Robert F. Bennett of Utah as well. Secretary Gale Norton will

finally have her complete team together—and none too soon—because President

Bush has established a national energy policy which includes a significant role for

public lands and minerals. And, because if lightning strikes the leadership of other

body and they bring up and finish a comprehensive energy bill, we will be conferencing legislative provisions in H.R. 4, the Save America’s Future Energy Act of

2001, which emanated from this subcommittee’s oversight last year and in previous

Congresses. Ms. Clarke’s leadership at the BLM will be critical toward achieving

component goals of a sustainable national energy policy.

I believe the Fiscal Year 2003 budget of the President largely reflects these needs

with respect to both the BLM and Forest Service programs within our jurisdiction.

We also have with us today Mr. Tom Thompson, Deputy Chief of the Forest Service, to testify about the minerals and geology program budget of his agency. The

Forest Service technically does not ‘‘administer’’ the minerals beneath their feet

(save for the so-called mineral materials such as sand, gravel and stone), but this

agency is very much involved in the permitting access to the Federally owned mineral resources within our national forests and grasslands. As such, we should carefully review the programmatic budget of the Forest Service which will allow officials

out in the hinterlands to meet important national energy policy goals outlined by

the President and Congress.

Even more important than the money in the budget for such activities, however,

is knowing that the folks running these agencies are committed to seeing President

Bush’s plans and ideas into action. I look forward to working with both Director

Clarke and Deputy Chief Thompson over the coming year in seeing through the necessary implementation efforts for both renewable and nonrenewable forms of energy.

Our country will be stronger for it. To quote President Bush, ‘‘Let’s roll.’’

STATEMENT OF HON. RON KIND, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF WISCONSIN

Mr. KIND. Thank you, Mr. Chairman. I want to thank the witnesses for anticipated testimony and your presence here today. I

think there is going to be a journal vote so we are going to be running off here in a few minutes to get over there.

I appreciate the opportunity of being able to have this hearing,

looking into the budgets for the BLM and the Forest Service. These

are very important budgets. Obviously, it is in the context of a

national energy policy that we are trying to adopt right now in

Congress. But as we meet today to hear testimony from the administration on the 2003 budget request for energy and minerals of the

BLM and the Forest Service, it is important that we first step back

from our narrow Subcommittee focus to look at the President’s

budget from a broader perspective.

We need to bear in mind that as we view these important budgets, the two before us today, part of his 2003 proposal, President

Bush is proposing billions of dollars in taxpayer subsidies to energy

companies, also, various policy initiatives that may threaten environmental safeguards in public lands and public health for

4

reducing environmental and enforcement funds and weakening the

Nation’s energy security through overreliance, I believe, on the development and exploration and production of more fossil fuels in

the 21st century.

As noted by the Natural Resources Defense Council, the 2003

budget would slash overall spending for the Environmental and

Natural Resources Department by a billion dollars or 3.4 percent

in the next fiscal year alone, from $29 billion to, roughly, $28 billion.

When we review the BLM budget, we see that the President’s

2003 budget assumes that Congress will authorize a lease sale in

the Arctic National Wildlife Refuge. Now, given the debate that is

existing in the Senate and the lack of bipartisan consensus on the

issue and really a lack of public support for that, that appears to

me to be a very big assumption to be making in the next fiscal year

budget outlook.

Furthermore, even some in the oil and gas industry appear to be

less than enthusiastic now, given market prices, at the prospect of

paying huge sums of money to drill for oil in a frontier such as the

Arctic National Wildlife Refuge.

For example, one of the big players in Alaska, British Petroleum

Corporation, has scaled back its Alaska operations, instead, opting

to focus its efforts on the reserves that exist right now and the current leases in the Gulf of Mexico. In fact, just last Sunday, BP’s

CEO stated on the CBS news program ‘‘60 Minutes’’ that there is

certainly more oil in the deep waters of the Gulf of Mexico than

exists in Alaska, according to their opinion. Given the advent of

technology and the advancement in that area, he feels that it perhaps is even more economically feasible and more efficient to be

drilling in that area, rather than opening up the Wildlife Refuge

in Alaska.

Clearly, something must be done to cut America’s reliance on foreign oil. The events of September 11th have intensified that belief.

I think perhaps the greatest single foreign policy failure in the last

quarter century is our inability as a country to wean ourselves

from our dependence on fossil fuel and the importation of oil from

very volatile regions.

However, even those who support increased domestic and oil gas

production agree that development of alternative energy, such as

geothermal, wind, solar, as well as other actions, must be a significant part of our national energy policy. Yet, as the BLM and Forest

Service energy proposals illustrate, the Bush budget for 2003 fails

to adopt that approach. Instead, it continues a dangerous and misguided reliance on the fossil fuels. For example, the BLM budget

proposes doubling its geothermal budget, which may sound good,

but it just goes from $250,000 to $700,000 per year. It is a good

start in the right direction, I believe, but it is a paltry sum when

compared to the BLM’s oil and gas program, which would be increased by over $85 million.

In addition, the Forest Service proposes a $3.5-million boost just

to increase the number of oil and gas lease operations in our

national forests by roughly 1,000.

In sum, the President has proposed increases in these two areas

to support his national energy policy, but that policy, and therefore

5

these budgets, rely, again, much too heavily on the development

and the production of fossil fuels in this country. Investing in

cleaner domestic sources of energy from renewable and alternative

energy sources, increased energy efficiency, for instance, would provide greater national security than our overreliance in these areas.

I, again, thank the witnesses for your presence. I thank Mr. Gibbons for pinch-hitting for Ms. Cubin today, and we look forward to

the hearing.

[The prepared statement of Mr. Kind follows:]

Statement of The Honorable Ron Kind, Ranking Democrat,

Subcommittee on Energy and Mineral Resources

As we meet today to hear testimony from the Administration on the Fiscal Year

2003 budget requests for the energy and minerals programs of the BLM and the

Forest Service, it is important that we first step back from our more narrow Subcommittee focus to look at the President’s budget from a broader perspective.

We need to bear in mind as we review these two budgets that as part of his Fiscal

Year 2003 proposal, President Bush is proposing billions of dollars in taxpayer subsidies to energy companies, threatening the environment and public health by reducing environmental enforcement funds, and weakening the nation’s energy security through over reliance on fossil fuels.

As noted by the Natural Resources Defense Council (NRDC Environment Watch:

The Bush Record), the Fiscal Year 2003 budget would slash overall spending for environmental and natural resources departments by $1 billion, or 3.4 percent, in Fiscal Year 2003—from $29.3 billion to $28.3 billion.

When we review the BLM budget, we see that the President’s 2003 budget

assumes that Congress will authorize a lease sale in the Arctic National Wildlife

Refuge

At a time when there is little public support and no consensus in the other legislative body for opening ANWR to oil and gas development, this assumption makes no

sense.

Further, even some in the oil and gas industry appear to be less than enthusiastic

at the prospect of paying huge sums of money to drill for oil in frontier areas such

as ANWR. For example, one of the big players in Alaska, the British Petroleum corporation, has scaled back its Alaska operations instead opting to focus its efforts in

the Gulf of Mexico.

Just last Sunday, BP’s CEO stated on the CBS news program, ‘‘60 Minutes,’’ that

there is certainly more oil in the deepwaters of the Gulf of Mexico than in Alaska.

Why then focus on drilling in America’s last great wilderness when there are

much larger reserves elsewhere?

Clearly, something must be done to cut America’s reliance on foreign oil. The

events of September 11 have intensified that belief.

However, even those who support increased domestic oil and gas production agree

that development of alternative energies, such as geothermal, wind and solar, as

well as other actions, must be a significant part of a national energy policy.

Yet, as the BLM and Forest Service energy proposals illustrate, the Bush budget

for Fiscal Year 2003 fails to adopt that approach.

Instead, it continues a dangerous and misguided over reliance on fossil fuels. For

example, the BLM budget proposes doubling its geothermal budget ‘‘going from

$350,000 to $700,000 per year. A good start but a paltry sum when compared to

the BLM’s oil and gas program, which would be increased to $85 million.

In addition, the Forest Service proposes a $3.5 million boost just to increase the

number of oil and gas lease operations in National Forests by 1000.

In sum, the President has proposed increases in these two areas to support his

national energy policy. But, that policy, and therefore, these budgets, rely too heavily on fossil fuels. Investing in cleaner, domestic sources of energy from renewable

resources and energy efficiency would provide greater national security than over

reliance on oil and gas.

Mr. GIBBONS. Thank you, Mr. Kind.

While I know we have just but a few minutes before we run out

of here, I would like to turn to Mr. Hansen of Utah to introduce

Kathleen Clarke before we do break for a vote.

6

Mr. Hansen?

Mr. HANSEN. I thank you, Mr. Chairman.

Let me thank the witnesses for being here. It is always a pleasure to have Mr. Thompson of the Forest Service, and we have a

new person from BLM, Kathleen Clarke, who is with us.

I know Kathleen very well because she worked for me for a

while. She has a tremendous background. Did you go to the ‘‘Y’’ or

the ‘‘U’’? I can’t recall what it was. I was hoping it was the ‘‘U,’’

but it was probably the ‘‘Y,’’ but anyway—

Ms. CLARKE. It was Utah State, Congressman.

Mr. HANSEN. Good. I hope so. And a few years in law school, and

went to work for me in 1980 and did a super job for us. It was obvious that her talent was such that she would go to other places, and

then she went to the State of Utah and worked for now-Judge Ted

Stewart, who is a Federal judge, and then she became the first

woman to be the head of the Department of Natural Resources in

the State of Utah.

Kathleen is known for having the ability of bringing people together and doing a super job with solving tough problems. I have

seen Kathleen in situations which people were screaming and

bouncing off the walls, and her unflappable nature was able to

bring people together.

So it has been a great pleasure to work with her over the years.

I was thrilled when she was nominated to be the Director of BLM.

As I don’t know if a lot of our Western people realize that, but she

has more control than most Governors do in the West right now,

as there is a lot of acres out there. I don’t say anything against the

Forest Service, as they also seem to control it. I know your State

and my State, our Governors have an infinitesimal part that they

control compared to the Forest Service and BLM.

I think it is very fitting for the Bush administration to ask Kathleen to serve as Director of BLM. I understand she had no problem

at all going through the Senate. It is great to see them do something for a change and just getting you through there was great because this is the do-nothing term for the U.S. Senate. So it is a

pleasure to—

[Laughter.]

Mr. HANSEN. I am not kidding. You gentlemen know that. This

is such a great pleasure for us to—

Mr. KIND. They did pass finance reform, though, Mr. Chairman.

[Laughter.]

Mr. HANSEN. —to have Kathleen here. Kathleen, I think you will

find the Resources Committee and all our Subcommittees are always dedicated to getting to what a problem is, trying to solve it

in a reasonable way, and we hope in a bipartisan way. So we welcome you and thank you for the great years of service you have put

in for the State of Utah and now which we intend that you will put

in for the U.S. Government. It is a great pleasure to have you with

us today, and I thank you for being here.

Ms. CLARKE. Thank you.

Mr. GIBBONS. Thank you, Mr. Hansen.

Again, we welcome our witnesses. Ms. Clarke, that is very high

praise coming from the Chairman of the Committee, and we look

7

forward to your testimony after we return from this vote. So we

will adjourn subject to the call of the chair.

[Recess.]

Mr. GIBBONS. I call the Subcommittee back to order. At this

point in time, we will turn to the testimony of our witnesses. I am

not sure who has decided to lead off in this testimony, but I will

turn, first, to the Director, then, Ms. Kathleen Clarke of the Bureau of Land Management.

Ms. Clarke?

STATEMENT OF KATHLEEN CLARKE, DIRECTOR, BUREAU OF

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

WASHINGTON, D.C.

Ms. CLARKE. Thank you very much, Mr. Chairman.

Mr. Chairman and members of the Committee, first of all, let me

apologize for my voice this morning. I have some inside-the-Beltway bug that seems to be going around and around at the Department of Interior, and I apologize that I may be a bit gravely.

I appreciate the fact that I have our budget officer, Mr. Larry

Benna, with me, as well as Erick Kaarlela, who is in charge of

BLM’s National Energy Office, to assist me in testimony if I lose

my voice or if I am needing additional guidance.

Thank you.

It is really a privilege for me to be here. As you suggested, Mr.

Chairman, this is my first official hearing before a Committee as

the Director of the Bureau of Land Management. I am very privileged to serve for President Bush. We had a meeting with him last

night with all of the political appointees, and he reminded us all

that we are here to serve the people and that this Government will

be of the people, and by the people, and for the people. His sense

of values resonated so clearly with me that it was a privilege to

hear him remind us of what we are about as public servants.

I am also very proud to be a member of Secretary Norton’s team.

I believe that she has assembled a group of dedicated professionals

who will follow her in applying a philosophy of the four ‘‘C’s,’’ a philosophy that I intend to utilize in running the Bureau, and that is

to use communication, cooperation and consultation in the service

of conservation.

I intend to run the Bureau in a very open and inclusive way, respecting all points of view and interests, and engaging local communities in making decisions. I also want to assure you of my respect for the important role of this body in directing policy decisions that affect our Nation’s resources.

I would like you to know that I am an enthusiastic supporter of

FLPMA’s multiple-use mandate for the BLM. Our opportunities

and challenges at the BLM and every aspect of that mandate demand that we have balance in the things that we do. In particular,

meeting our challenge to respond to critical energy needs of this

country requires us to address those demands of growth and the

imperative for conservation.

Our Federal lands are major sources of coal, gas, oil and renewable energy and provide networks for their efficient distribution.

Through multiple use, we will address those needs, as well as the

Nation’s need for recreation, for areas of solitude that nurture our

8

spirits, for clean water and clean air. I am convinced that we can

do all of these things and we will rise to the challenge.

The subject of this hearing is of great importance, as the BLM

works to fulfill its critical responsibilities in implementing the

President’s national energy policy. That policy identifies a major

role for public lands in meeting our Nation’s energy needs— [Ms. Clarke coughing.]

Ms. CLARKE. I am going to get through this.

Mr. GIBBONS. Ms. Clarke, if you would prefer, the Committee

would receive your testimony, your written statement for the

record, and you may summarize and keep as brief as possible. Because, let me say as a member of the Committee, that a gravely

voice is absolutely appropriate for the mineral and energy Subcommittee.

Ms. CLARKE. That is good to hear. No voice is probably not.

Certainly, the BLM is producing some of the most significant energy resources for our country right now, thirty-five percent of our

Nation’s coal, 11-percent of our natural gas and 5-percent of its oil.

These resources are critical to our Nation and, in fact, generate

revenues, the highest revenues, $2.2 billion in 2001, of any uses of

our public lands.

In short, I think we have a major role to play and that the overall multiple use mission of the Bureau of Land Management relates

directly to the quality of life of our country, and one piece of that

quality of life is our ability to meet our own domestic energy needs.

The President’s 2003 budget proposes $1.88 billion for BLM. In- clusive in that is a request for $10.2 million in additional funds for

energy and mineral programs. This budget would provide, among

other things, increased funding for environmentally responsible resource production, including oil and gas on the North Slope of Alaska, coalbed methane development, further efforts related to implementation of the Energy Policy and Conservation Act and the studies directed therein, rights-of-way processing, development of renewable energy resources, and implementation of the Department’s

Indian trust responsibilities.

In addition, we will continue a wide array of other minerals programs that are also important to our country’s economy. An additional $1.5 million has been requested for the BLM to enhance its

oil and gas inspection and enforcement capabilities to ensure that

public resources are protected.

We are also requesting an additional almost half-a-million dollars to identify ways to expedite the processing of drilling permits,

with an emphasis right now on coalbed methane development.

We also need to continue the development and implementation of

common oil and gas reclamation standards. We are requesting an

additional half a million dollars for coal programs, in order to implement the President’s national energy policy, by processing an

additional four post-leasing actions, working to resolve conflicts between coalbed methane and coal development and expediting the

processing of coal lease applications.

An additional $350,000 in geothermal funding would be used to

work with users to define barriers to its development, to identify

opportunities for streamlining application processes and to make

additional lands available for geothermal leasing.

9

The BLM will support the development of other renewable energy resources, soil, wind, hydropower and biomass, from the public

lands. An additional $300,000 will be used to address hydropower

relicensing projects and another $100,000 will be directed to activities related to wind energy.

The BLM also issues approximately 6,000 rights-of-way actions

each year. It currently has a backlog of 1,700 applications, a majority of which are energy related. An additional $1.6 million requested in 2003 would be used in part to reduce this backlog by

processing 400 of those backlogged applications and approving

rights-of-way for the growing West. An additional $3 million is included to address preplanning requirements for leasing and development in the National Petroleum

Reserve-Alaska. These funds would cover new inspection and enforcement work, drilling permit processing and environmental resource protection. The budget request also includes an additional $4 million to update other high-priority land use critical plans so that we are able

to make decisions that will meet the Nation’s energy and mineral

needs.

One million dollars would be used in 2003 for the agencies involved in the EPCA effort to conduct additional studies, to inventory all on-shore oil and gas reserves, and to assess any restrictions

or impediments to the development of those resources.

As part of its Indian trust responsibilities, the BLM also provides

energy and minerals technical assistance to individual Indians and

tribes. An additional $150,000 is requested in funding to address

coal, technical assistance for tribes and an additional $750,000 for

oil and gas to carry out the national energy policy.

The budget maintains support of other key minerals programs,

including those related to locatable minerals such as gold, copper

and many industrial minerals that contribute to key sectors of our

economy and, again, to quality of life. The focus on energy does not

mean we will lose sight of other important programs at the Bureau.

Mr. Chairman, as you can see, the BLM anticipates a busy and

productive effort for its energy and mineral programs. As we continue to promote an environmentally sound recovery of our Nation’s

mineral resources and boost renewable energy development on public lands, we look forward to working with this Committee, as well

as the public, States, industries and our stakeholders.

I appreciate the opportunity to meet with you today to share

these comments and would welcome your questions.

[The prepared statement of Ms. Clarke follows:]

Statement of Kathleen Clarke, Director, Bureau of Land Management,

U.S. Department of the Interior

Madam Chairman and Members of the Subcommittee, thank you for the opportunity to appear here today to discuss the Fiscal Year 2003 budget request for energy and minerals programs administered by the Bureau of Land Management

(BLM). I am accompanied by Larry Benna, BLM’s Budget Officer, and Erick

Kaarlela, BLM’s National Energy Office Director.

NATIONAL ENERGY POLICY IMPLEMENTATION

The subject of this hearing is of great importance as the BLM works to fulfill its

critical responsibilities in implementing the President’s National Energy Policy.

That policy identifies a major role for public lands and resources in meeting our

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nation’s increasing energy needs. The BLM is a primary player in implementing the

President’s National Energy Policy goals of modernizing our energy infrastructure,

increasing our energy supplies, and protecting the environment. The BLM also plays

a major role in supporting the Secretary of the Interior’s Indian Trust responsibilities as they relate to energy.

The Bureau is focusing its efforts on increasing domestic production of traditional

energy resources, such as oil and gas and coal, as well as expanding our emphasis

on development of renewable energy sources, such as geothermal, hydropower, wind,

solar, and biomass. The BLM is currently working on more than 40 energy actions

to implement the President’s National Energy Policy. Taken together, these actions

will help provide both short-term and long-term solutions to increasing energy supplies while protecting our natural environment.

BACKGROUND ON BLM’S ENERGY & MINERALS PROGRAMS

Today, the BLM manages the resources on about 262 million acres of public land,

and more than 700 million acres of Federally-owned subsurface mineral estate.

These energy and mineral resources are an important asset to the Nation, and generate the highest revenues of any of the uses of the public lands. In 2001, energy

and minerals development generated $2.2 billion through royalties, rents, bonuses,

sales, and fees. The public lands produce 35 percent of the Nation’s coal, 11 percent

of its natural gas, and 5 percent of its oil. These lands also produce a large portion

of the Nation’s mineral materials, such as sand, gravel and stone. In 2001, the BLM

administered 311 coal leases and over 50,000 oil and gas leases, of which approximately 21,000 oil and gas leases were producing. Federal geothermal resources produced over $20 million of revenue and generated 630 megawatts of electric power

last year. The public lands are also currently being used to produce energy from

other renewable resources, such as wind and hydropower.

BLM’S PROPOSED FISCAL YEAR 2003 ENERGY & MINERALS BUDGET

The President’s 2003 budget proposes $1.9 billion for the BLM, including $63 million for the government-wide legislative proposal to shift to agencies the full cost

of the CSRS pension system and the Federal Employee Health Benefits Program for

current employees. Without the legislative proposal, the 2003 BLM request totals

$1.8 billion. The BLM is requesting $10.2 million in additional funds for the energy

and mineral programs it manages. The BLM’s 2003 energy and minerals budget request provides increased funding for environmentally-responsible resource production, including oil and gas on the North Slope of Alaska; coalbed methane development; implementation of the Energy Policy and Conservation Act (EPCA) study;

right-of-way processing; development of renewable energy resources; and the Department’s Indian Trust-related responsibilities. It also supports continued mining

law administration, as well as coal development and other mineral resource production. The BLM’s 2003 budget request also includes an additional $3 million to update high priority land use plans critical to meeting the nation’s energy and mineral

needs.

Oil & Gas/Coalbed Methane—Oil and gas operations on Federal and Indian lands generate more than $500 million in royalties each year, and in 2000, the Federal

lands produced over 108 million barrels of oil and over 2.1 trillion cubic feet of natural gas. Consistent with the President’s National Energy Policy, the BLM is enhancing its oil and gas inspection and enforcement capabilities to ensure that the

public resources are protected, and an additional $1.5 million has been requested

for these programs for 2003.

Because of industry’s interest in natural gas development, including coalbed

methane, the BLM continues to experience a significant increase in requests for oil

and gas leases and subsequently in drilling permit filings. In 2003, the BLM is requesting an additional $496,000 to identify ways to expedite the process of approving drilling permits, with an emphasis on coalbed methane development; review Bureau policies and practices to facilitate development of coal and coalbed methane in

areas of development conflict; and continue the development and implementation of

common reclamation standards for oil and gas leases.

Coal—the United States today. Of all the coal consumed for electric generation

in the United States, approximately one-third is mined from Federal land through

coal leases issued by the BLM—much of which originates in the Powder River Basin

in Wyoming and Montana.

With $500,000 in additional funding for coal programs, the Bureau will work to

implement the President’s National Energy Policy. With this funding, the BLM will

process four additional post-leasing actions. The BLM will also review current procedures, work to more effectively resolve the conflicts between coalbed methane and

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coal development, expedite the processing of coal lease applications, and, if warranted, revise royalty rate guidelines.

Renewable Resources—The BLM currently administers 55 producing geothermal

leases that generated over $20 million in revenues in Fiscal Year 2001. An additional $350,000 in geothermal funding will be used in 2003 to support the National

Energy Policy by working with users to define development barriers and identify opportunities for streamlining the geothermal application process and making additional lands available for geothermal leasing.

The BLM will also support the development of other renewable energy resources—including solar, wind, hydropower, and biomass—from the public lands in

2003. An additional $300,000 will be used to address hydropower relicensing

projects, while another $100,000 will be directed to activities related to wind energy

development that will be addressed through cooperation with the Department of Energy’s Renewable Energy Laboratory.

Rights-of–Way—Addressing national energy needs includes providing a means for

transportation and transmission of energy supplies. The BLM issues approximately

6,000 right-of-way (ROW) actions each year, including 2,700 ROW grants and

amendments. Currently, the BLM has a backlog of about 1,700 ROW applications,

of which about 1,000 are needed to support energy development. Because of increased energy demand, the need for energy-related ROWs also will increase. An additional $1.6 million requested in 2003 would be used, in part, to reduce the energy

ROW backlog by 40 percent by processing 400 more energy applications.

Alaska’s North Slope—The North Slope of Alaska is the nation’s best prospect for

substantial new oil and gas production, and the Bureau is working on 10 National

Energy Policy actions that are specific to oil and gas development and production

in that area. In the National Petroleum Reserve–Alaska (NPR–A), the BLM offered

leases in 1999 that generated $104 million in bids. Exploration in NPR–A is pioneering new technologies that minimize environmental impacts, and represent the

cleanest operations in the world. In 2001, industry announced a major new discovery in the area that could be the largest in the United States in the last ten

years. The BLM is continuing to pursue a biennial leasing strategy in the Northeast

sector of NPR–A. The BLM also is pursuing the expansion of the area offered for

lease to include the Northwest sector of NPR–A, and anticipates the completion of

the Northwest NPR–A plan and EIS in 2003 and a first sale in 2004.

An additional $3 million is included in the 2003 budget to address the pre-planning requirements and the coordination required between all involved agencies for

leasing and development in NPR–A. Funds would cover new inspection and enforcement work, drilling permit processing, and BLM’s partnership obligations with the

Minerals Management Service. Additionally, these funds would cover monitoring of

exploration activities, and protecting environmental, wildlife and subsistence resources.

Also, if Congress passes legislation that authorizes the leasing of oil and gas in

a portion of the Arctic National Wildlife Refuge (ANWR), the BLM would be responsible for conducting lease sales and oversight of exploration and development. If legislation does not provide that existing NEPA analyses are sufficient, the BLM will

work in coordination with the Fish and Wildlife Service to prepare a land activity

plan and an accompanying Environmental Impact Statement (EIS). The BLM will

be responsible for preparing operating and leasing regulations; developing stipulations to mitigate impacts; and conducting a tract delineation to determine the appropriate configuration for the lease sale.

Energy Policy & Conservation Act (EPCA) Study—The Energy Policy and Conservation Act Reauthorization of 2000 requires an inventory be completed of all onshore oil and gas reserves and any restrictions or impediments to the development

of those resources. The BLM, as lead agency of the EPCA study, is working closely

with the Department of Energy, Forest Service, and U.S. Geological Survey to expedite the EPCA study in support of the National Energy Policy. The initial study focuses on five priority areas within the Rocky Mountains, and is expected to be completed by the end of April 2002. Once this initial study is completed, the BLM will

initiate studies of other areas. The results of these studies will provide the Bureau

with a better basis to ensure timely planning on Federal lands, allowing for the development of oil and gas resources with minimal restrictions while providing for

sound environmental protection.

Indian Trust Responsibilities—As part of its Indian Trust responsibility, the BLM

provides energy and minerals technical assistance to individual Indians and Tribes

by conducting mineral resource evaluations; approving drilling permits, mining

plans, and production plans; inspecting operations; and enforcing conditions of approval. An additional $150,000 in funding is included in the Fiscal Year 2003 budget

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to address coal technical assistance, and an additional $750,000 is included for oil

and gas activities to carry out the National Energy Policy.

CONCLUSION

Madam Chairman, as you can see, the BLM anticipates a busy and productive

Fiscal Year 2003 for its energy and minerals programs. As we continue to promote

the environmentally-sound recovery of the nation’s mineral resources and boost renewable energy development on our public lands, we will continue to work with

Members of this Subcommittee, as well as the public, states and industry.

Thank you for the opportunity to testify before you today. I welcome any questions the Subcommittee may have.

Mr. GIBBONS. Thank you, Ms. Clarke. We look forward to having

your response to those questions as well.

We turn now to Mr. Thompson. Mr. Thompson, of course, is the

Deputy Chief, I believe, of the Forest Service. Mr. Thompson, I am

apologetic because I don’t know how long you have been in this position, but we look forward to hearing your remarks.

The floor is yours.

STATEMENT OF TOM THOMPSON, DEPUTY CHIEF, FOREST

SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE,

WASHINGTON, D.C.

Mr. THOMPSON. Thank you, Mr. Chairman, and thank you very

much for inviting me here today to discuss our 2003 Minerals and

Geology program.

I am pretty recent to Washington, D.C., as well. I have been here

4 months. I moved here from Denver, Colorado, where I have been

the deputy regional forester for the last 12 years in the Rocky

Mountain Region, and I have been with the Forest Service for 34

years.

Mr. GIBBONS. Well, I am not sure we should be congratulating

you on moving to Washington, D.C., but congratulations on your

promotion.

[Laughter.]

Mr. THOMPSON. With me today is Hank Kashdan. Hank is the

director of Program and Budget Analysis for the Agency.

Today, I would like to briefly describe the Forest Service minerals and geology program and management and how we are using

the available resources to implement the national energy policy.

The national forests and grasslands have historically provided

substantial benefits to the public through both exploration, development and production of energy and mineral resources. A significant part of that has been the coal resources. In particular, recently, in the Powder River Basin in Wyoming, coal has been a

very important resource in that part of the country and certainly

has been a major part of this country’s valuable energy resource.

Today, energy and minerals production from our national forest

and grasslands continues to provide valuable and often overlooked

benefits. This includes benefits to the environment, to the economy,

rural community stability, and increased revenues. These benefits

can be obtained in an environmentally sensitive manner and generally require only a small footprint on the land.

National forests contain a number of world-class mineral deposits. For example, the only platinum mine in the Western

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Hemisphere lies within a national forest, on the Custer. An environmental benefit, not widely known, is that platinum produced

from these national forest system lands is an essential component

to catalytic converters. These converters, required in almost every

gas-powered vehicle, are very important in reducing emissions and

increasing the quality of air that we breathe.

About 3 years ago, the Forest Service conducted some analysis,

economic analysis, which showed that, during the last 10 years, energy and minerals production from national forest system lands

have sustained over 100,000 jobs annually, while the total value of

all production is estimated to exceed $25 billion. In addition, the

Federal Government and states have shared in over $2 billion in

revenues collected from energy and minerals leasing on national

forest system lands.

The minerals and geology program emphasizes maintaining sustainable forest resources, protecting watershed health, providing

for public safety and managing significant geologic resources, while

also providing for thorough and timely environmental review of

proposed projects and monitoring inspection of ongoing projects.

In 2000 alone -- and we have a recent brochure called ‘‘Mineral

Facts: Minerals on the National Forest,’’ that was released last November. There are facts in there about the amount of coal, to put

it in simpler terms than maybe tons, the amount of coal that we

produced in Fiscal Year 2000 was about 750,000 rail cars and

enough natural gas to heat 1,200,000 homes. This came from

national forest system lands.

The major components of our program are the leasable minerals,

oil, gas and coal. We also produced geothermal, hard-rock minerals

from acquired lands, and certain other commodities specified in

law.

Prior to leasing, we involve other agencies in public and environmental reviews to determine if leasing is acceptable and whether

special measures are needed to protect the environment. If a lease

is issued, we conduct very site-specific environmental analysis and

closely monitor operations through the final reclamation of the site.

Another part of the program is our locatable minerals program.

In Fiscal Year 2000, we produced over 529,000 ounces of gold, 10

million ounces of silver, 178 million pounds of copper, 94,000

ounces of platinum, large quantities of zinc, and molybdenum and

other precious base and industrial minerals as well under the Mining Law of 1872.

The Forest Service reviews proposed operations in a timely manner to determine if mitigation measures are required to protect

other values. If proposals involve large mines or sensitive settings,

we ensure that Environmental Impact Statements are prepared

and that proper mitigation measures are incorporated.

Another part of our program is the saleable minerals program.

Produced in 2000 were 13 million tons of aggregate, 56,000 tons of

gypsum and 4 million tons of limestone, large quantities of sand,

gravel and other common-variety minerals.

These materials are usually made available to individuals, municipalities, Government agencies, nonprofit organizations at no

charge or sold at appraised value or by competitive sale if they are

used commercially. We also use large quantities of these materials

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in construction and maintenance of public access and facilities on

national forest system lands.

Another part of the program has to do with reserved and outstanding mineral rights which involve privately owned minerals

underlying national forest system land. For reserved minerals, the

Forest Service implements reserve mining regulations which are

appended to conveyance deeds at the time of acquisition.

The geologic program or part of the component of the program

involves acquiring and analyzing information on geologic conditions

and hazards for purposes of forest planning, project design, public

employee safety, managing the paleontological resources, caves and

other significant geologic features.

During Fiscal Year 2003, we will inspect and monitor 15,000 energy and mineral operations varying from small basic prospecting

activities to major mining developments. We will also complete environmental analyses and coordination with other agencies in processing almost 10,000 new proposed operations.

In each case, these numbers represent an increase of approximately 1,000 operations over what we will do this fiscal year. This

additional work is made possible because of the President’s Fiscal

Year 2003 budget of $56 million for our minerals and geology management program, and that includes $5 million that will be committed to new energy operations to implement the national energy

policy.

Of particular importance will be the development of the coalbed

methane in the Rocky Mountain States. The long-term value of

coalbed methane from national forest system land is potentially billions of dollars.

In response to the Executive Orders 13211 and 13212 and the

national energy policy, the Forest Service developed, and Secretary

Veneman approved, the Forest Service Energy Implementation

Plan. The Forest Service plan assigned responsibilities for specific

action items and examined all major energy resources of the

national forest system land, including hydroelectric, fossil fuels,

geothermal, biomass, and bioenergy and also considered infrastructure, research and technology transfer.

In an August 6th, 2001, follow-up memo to Forest Service line officers and staff, Chief Bosworth emphasized his commitment to

complete implementation of this plan within the Forest Service. Of

course, we know we’re not alone. We work very closely with other

Federal agencies, Indian tribes, State and local Governments, the

public and other interested parties to meet our Nation’s energy

needs while protecting the environment.

Mr. Chairman, that completes my formal statement, and I will

be glad to answer any questions.

[The prepared statement of Mr. Thompson follows:]

Statement of Tom Thompson, Deputy Chief, Forest Service,

U.S. Department of Agriculture

Madam Chairman, thank you for inviting me here today to discuss our 2003 minerals and geology program. I am Tom Thompson, Deputy Chief of the Forest Service. With me today is Hank Kashdan, Director of Program and Budget Analysis.

Today I would like to briefly describe the Forest Service Minerals and Geology

Management program and how we are using available resources to implement the

National Energy Policy.

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The National Forests and Grasslands have historically provided substantial benefits to the public through exploration and production of energy and mineral resources—not the least of which have been the prodigious quantities of coal from the

Powder River Basin in Wyoming. Coal began replacing wood as a primary fuel during the 1800’s and early 1900’s. This switch to using the concentrated energy found

in coal allowed us to not only maintain, but to make significant improvements, in

the many amenity values the public enjoys in our nation’s forests today.

Today, energy and minerals production from our National Forests and Grasslands

continues to provide valuable, but often overlooked benefits. This includes benefits

to the environment, the economy, rural community stability, and increased revenues. These benefits are obtained in an environmentally sensitive manner and require only a relatively small, short-term footprint on the land.

National forests contain a number of world-class mineral deposits. For example,

the only platinum mine in the western hemisphere lies within a national forest. An

environmental benefit, not widely known, is that platinum, produced from NFS

lands, is an essential component of catalytic converters. These converters, required

in almost every gas-powered vehicle, are used to reduce harmful emissions and increase the quality of the air we breathe.

In Fiscal Year 2000 alone, as stated in ‘‘Mineral Facts—Minerals on National Forest System Lands,’’ released in November 2001, coal that would fill 750,000 rail cars

and enough natural gas to heat 1,200,000 homes came from national forest system

lands.

About three years ago Forest Service economists conducted an analysis which

showed that during the last 10 years, energy and minerals production from national

forest system lands have sustained over 100,000 jobs annually while the total value

of all production is estimated to exceed $25 billion. In addition, the Federal Government and the States have shared in over $2 billion in revenues collected from energy and minerals leasing on national forest system lands.

The minerals and geology program emphasizes maintaining sustainable forest resources, protecting watershed health, providing for public safety, and managing significant geologic resources while providing thorough and timely environmental review of proposed projects and monitoring and inspection of ongoing operations.

Major components of the program are:

• Leasable minerals—including oil and gas, coal, geothermal, hardrock minerals

in acquired lands, and certain other commodities specified in law. Some minerals produced from NFS lands in Fiscal Year 2000 include:

*Coal—79 million tons

*Oil—8.3 million barrels

*CO2—12 billion cubic feet

*Natural Gas—101 billion cubic feet

Prior to leasing, environmental reviews that involve the public and other agencies

are completed to determine if leasing is acceptable and whether special measures

are needed to protect the environment. After lease issuance, site-specific environmental analyses are completed, and operations from beginning through final reclamation of the site are monitored.

• Locatable minerals—including gold, silver, copper, zinc, molybdenum, and other

precious, base, and industrial minerals made available under the Mining Law

of 1872. Some examples of locatable mineral production during Fiscal Year 2000

are:

*Gold—529,000 ounces

*Silver—10 million ounces

*Platinum—94,000 ounces

*Copper—178 million pounds

The Forest Service facilitates exploration, development, and production of these

resources by reviewing proposed operations in a timely manner to determine if mitigation measures are required to protect other values. If proposals involve large

mines or sensitive settings, the Forest Service ensures that environmental impact

statements are prepared and that proper mitigation measures are incorporated. Operations are inspected and monitored from beginning until final reclamation is completed.

• Saleable minerals—includes sand, gravel, pumice, cinders, building stone, and

other fairly common materials that are of considerable importance in meeting

community construction, road building, and landscaping needs. Examples of production levels of these minerals from NFS lands in Fiscal Year 2000 are:

*Aggregate—13 million tons

*Gypsum—56,000 tons

*Limestone—4 million tons

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These materials are made available, on a discretionary basis, in small quantities

to individuals at no charge, or sold at appraised value or by competitive sale if used

commercially. They are usually made available to municipalities, government agencies, and nonprofit organizations at no charge. The Forest Service also uses large

quantities of mineral materials in construction and maintenance of public access

and facilities.

• Reserved and outstanding mineral rights involve privately owned minerals underlying NFS lands. For reserved minerals, the Forest Service implements reserved mineral regulations which are appended to conveyance deeds at the time

of acquisition. For outstanding minerals the Forest Service cooperates with developers of private minerals to minimize effects on forest resources and users,

and to ensure proper reclamation;

• The geologic component of the program involves acquiring and analyzing information on geologic conditions and hazards for purposes of forest planning,

project design, public and employee safety, and managing fossils, caves, and

other significant geologic features. We are very active in protecting and managing these resources, especially paleontological resources, which often have

high commercial value in addition to their scientific, educational, and recreational value.

During Fiscal Year 2003 we expect to inspect and monitor over 15,000 energy and

mineral operations ranging in scale from basic prospecting activities to major mining developments. This is done to ensure operator compliance with permit terms

and to determine the effectiveness of measures developed during the NEPA process.

We will also complete necessary environmental analyses and coordination with

other agencies and the public in the processing of almost 10,000 new proposed operations.

In each case, these numbers represent an increase of approximately 1,000 operations over Fiscal Year 2002. This additional work is possible because the President’s Fiscal Year 2003 Budget of $56,049,000 for our minerals and geology management program includes $5 million that will be committed to new energy operations

to implement the National Energy Policy. Of particular importance will be the development of coal bed methane in the Rocky Mountain States. The long-term value

of coal bed methane from NFS lands is potentially worth billions of dollars.

In response to Executive Orders No. 13211 and 13212 and the National Energy

Policy, the Forest Service developed and Secretary Veneman approved the ‘‘Forest

Service Energy Implementation Plan’’. The Forest Service plan assigned responsibilities for specific action items and examined all major energy resources of the National Forest System including hydroelectric, fossil fuels, geothermal energy, and

biomass and bioenergy. Also considered were infrastructure, research, and technology transfer.

In an August 6, 2001 follow-up memo to all Forest Service line officers and staff,

Chief Bosworth emphasized his commitment to the complete implementation of this

plan within the Forest Service.

Of course we know we are not in this alone. We are working closely with other

Federal agencies, Indian Tribes, State and local governments, the public, and other

interested parties to meet our commitment to meet our Nation’s energy needs while

protecting the environment.

Madam Chairman, that completes my formal statement. I will be glad to answer

any questions you or Members of the Subcommittee may have.

Mr. GIBBONS. Thank you very much, Mr. Thompson.

For the members of the Committee, we are going to adhere to the

five-minute rule, and I will start off first with questioning.

Let me say that in a perfect world, and if we were all emperors

for the day, for the week, for the year, we could create a perfect

budget that each one of us, I am sure, would like to say meets

every need that we personally feel. So we can always second guess

the budgets, I am sure, and sit up here and speculate how it should

be spent or how much we each should be spending on every area,

but I am not going to do that. What I want to do is make sure that

the money and the resources that we are giving to you are adequate for the job we expect you to do and know how they are being

spent.

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I guess my first question would be just a generalized question if

you could help me out and better understand how much of the

United States’ energy needs are met by fossil fuel versus renewable

fuels today, in a percentage basis? Does anybody have that information?

Ms. CLARKE. I don’t have that information right now. I would be

happy to see if I can give you some answers for the record.

Mr. GIBBONS. I realize both of you have been on this job extremely short periods of time, so if you would answer that, and also

please help me better understand that by telling me what the

change has been over the last decade in the relationship between

the two. I would like to see where we are going as a Nation.

Let me talk a little bit about geothermal, if I may, because geothermal is an important renewable energy, in my mind and in the

United States, as well as it is important for the State of Nevada

as well. I want to ask Ms. Clarke how many geothermal leases does

the BLM plan to hold or lease sales does the BLM plan to hold in

the Fiscal Year 2003?

Ms. CLARKE. Let me consult with some of the folks who may

have the details.

We have plans for four of them in Nevada.

Mr. GIBBONS. And in the California and Northwest area, how

many would be the total geothermal?

Ms. CLARKE. I don’t think we have those figures. There are four

that are on our radar screen right now.

Mr. GIBBONS. I understand that there was a recent Interior

Board of Land Appeals’ decision that affirmed an appeal of the adequacy of the Medicine Lake Geothermal Environmental Impact

Statement. What are BLM’s plans in light of that decision and will

you be revisiting your previous decision after the IBLA decision?

Ms. CLARKE. Congressman Gibbons, I am not familiar with that

IBLA decision. I would be happy to look into that and get back to

you on that question.

Mr. GIBBONS. Let me turn to the Forest Service now, and it is

pretty much the same question. At a hearing on geothermal energy, witnesses testified that the Forest Service has never acted on

lease applications for thousands of acres in Northern California

and the Pacific Northwest for geothermal. Many of these applications were in known geothermal areas. Can you explain what the

problem has been with those applications and does the Forest Service in the Fiscal Year 2003 budget request include money to remedy the situation we just talked about or the inaction on these applications?

Mr. THOMPSON. Currently, we have 148 geothermal leases on

258,000 acres, and most of that is in the Pacific Northwest. We also

have 96 nominations or applications for geothermal leases on

139,000 acres. Most of those nominations are along the crest of the

Cascades, the Deschutes, the Gifford Pinchot, the Mount BakerSnoqualmie, Mount Hood, and the Willamette National Forest. In

Region V, California, Northern California, there are two development projects, the Four-Mile Hill and the Telephone Flats, in the

Medicine Lakes area, and both of those are being litigated. A lot

of the issue that is being debated and discussed, those two, in

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particular, have to do with Native American groups, cultural consultation.

With regard to the 2003, our tentative projections, there would be probably an additional $500,000 to each region, Region V and

Region VI, that would probably be allocated to the regional

forester, with the intent that they would use it for the highest priority mineral and geology work. Certainly, in the Pacific Northwest, geothermal is a very large part of their program.

Mr. GIBBONS. Let me ask one final question in the 1 second I

have remaining, which will only take a yes or no answer. Do you

believe the additional $500,000 that you are allocating in the budget for that is adequate to cover the permitting processes and speed

up the process?

Yes and no, I guess.

[Laughter.]

Mr. THOMPSON. I think it would be hard to just say yes or no.

It depends upon the priorities. My feeling, there will probably be

some things that will not get done.

Mr. GIBBONS. Welcome to Washington.

Mr. THOMPSON. Pardon?

Mr. GIBBONS. I said welcome to Washington. That is the answer

I would have expected.

Mr. Kind?

Mr. KIND. Thank you, Mr. Gibbons. Actually, this is an area that

I think we have a common interest in, how we can further explore

the development of geothermal potential in this country. Obviously,

the President and First Lady saw the merits of it, since they did

it themselves on their own private ranch down in Texas, relying on

geothermal power.

This Committee last August took a fact-finding tour of Iceland,

checking out the latest technology in geothermal development and

the use in that country. Kenya, I understand, is on a 10-year plan

on geothermal power to have 25 percent of their energy needs

based on geothermal. I think there is so much more potential in

this country in that area. Even in Wisconsin, there are private

companies, high schools being built now relying on geothermal as

an energy source for their energy needs as well.

That is why I kind of look at the budget, and you see the proposed increase from $350,000 to $700,000, a doubling of the geothermal budget, and I kind of look at it and shake my head and

think it is a very paltry sum, given the tremendous potential.

I know, Ms. Clarke, you are new to the position, and you are

coming up to speed on a lot of these issues, but perhaps you could

help me in your office, if your staff could supply some information

on just some preliminary estimates on the real potential that exists

out there for geothermal development on our public lands, what the

demand is like, the technology and whether we can ramp that program up to a much greater extent than what we are seeing reflected in the budget requests. I do believe it is not going to be the

panacea, but certainly could be a significant piece to the overall energy puzzle that we have to put together here.

Ms. CLARKE. Representative, as you are aware, Secretary Norton

held a national conference on renewable energy in I think it was

November. There was a follow-up at the end of this month, and we

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are working closely with the Department to develop the kinds of information you want and aggressive action plans. Certainly, it is an

area with untapped potential. I think, as we better understand

that potential and as we commit ourselves toward those ends, we

will have better proposals and probably more expansive opportunities for us to really look at the public lands as a siting for that type

of activity.

I would also welcome partnerships. I think that the conference

is intended to identify potential partners and create the future, so

to speak, defining what we can do and what we should be doing

in that arena. I think we need to maximize all of these opportunities in order to meet the demands of this country for energy resources.

Mr. GIBBONS. I think most of us, and those who have been somewhat critical of the President’s energy plan, and there is no shortage on this side of the aisle, understand that we are, by and large,

a fossil fuel-dependent Nation, and that is not going to change over

night, but we should be looking at some transition period to tap

into the latest technology and exploring the potential alternative

renewable energy sources.

We are just somewhat frustrated that it is not really reflected in

the budget. In fact, so much attention, and I think so much distraction has been given to the Arctic National Wildlife Refuge, the

golden goose up there, and the potential for oil reserves, but I just

have a couple of budgetary questions in that regard. Because I see,

again, in the budget that the administration is anticipating 2004

lease sales up in the Wildlife Refuge, anticipating $2.4 billion in

bonus payment bids that would come in, which is also consistent

with last year’s anticipation, even though the market price has

changed.

I am wondering, given the stalemate that exists right now in regards to the national debate on drilling in the Arctic National

Wildlife Refuge, what is the budgetary impact if, in fact, it doesn’t

become part of the national energy plan and these bids do not take

place, given the reliance on that in order to balance things out?

Ms. CLARKE. My understanding is that, for BLM, we will continue to roll ahead with the funds that are identified in the budget

for us to proceed with North Slope activities. We have many activities up in the National Petroleum Reserve-Alaska, and so much of

our effort is up there, and that is an area that has been identified,

and appropriately so, for drilling and lease activities at this time.

I commit that I will work with this Committee to build on all of

our opportunities to address the energy needs for this country, and

running a very open and accountable process with this Committee

on budget questions and challenges.

Mr. KIND. Given British Petroleum’s recent statements about the

additional cost of drilling up there and given the potential that already exists such as in the Gulf and the deeper water drilling, the

technology that that brings, and also the leaseholds that are already available on that, I guess, it just seems more logical to concentrate on where there is already common agreement rather than

focusing on something that can polarize the Nation, especially drilling up there.

20

Finally, again, in the administration’s budget, anticipating a $2.4

billion-bonus payment on drilling in the Wildlife Refuge, it appears

as if you are using a 50-50 split with the State of Alaska in regards

to what the administration, what the Federal Government would

receive. Whereas, under existing State law, and correct me if I am

wrong, Alaska is now entitled to a 90-10 split. How does the administration justify the 50-50 split, unless we intend to supersede

Alaska State law, and I imagine the Alaska delegation would cry

foul pretty quickly if that is the administration’s intent.

Ms. CLARKE. Representative, having not really been at the table

when so much of this budget was developed, I am not in a good

position to answer that question. I would be happy to get back to

you.

Did you hear me? I said having not been on board and at the

table when most of this budget was developed, I am not sure what

discussions and negotiations have been put into place that supported the budget as you now see it. I would be happy to get back

to you on that question.

Mr. KIND. Thank you very much. I see my time has expired.

Mr. GIBBONS. Thank you, Mr. Kind.

Mr. Inslee?

Mr. INSLEE. Thank you, Mr. Chairman.

I would like to ask Mr. Thompson and Ms. Clarke, both of you,

can you describe efforts that your agencies have or will be making

on the energy efficiency front with your own operations; for instance, efforts to improve efficiency of your vehicle mileage. Perhaps that is a place to start. The efficiency of your buildings, could

you describe what you have done and what perhaps you are considering in the future.

Ms. CLARKE. I am aware that there are efforts taking place within the Department of Interior, in general, about energy efficiency.

I cannot point to the specifics. I will share with you that in my position as director at the Department of Natural Resources in Utah,

we undertook a major energy overhaul of our existing buildings

and of our vehicles. We were able to reduce energy consumption

and became the model for the State.

So I think it is the responsibility of Government to set a high

standard, and while we are spending tax dollars, it is our duty to

make sure that we are not wasting those on energy inefficiency. So

I would certainly support that kind of effort because I know there

are things taking place in that vein, but I can’t share with you

those specifics. I would be happy to get back to you with more detail.

Mr. INSLEE. I am sorry. You referred to which agency you were

involved with?

Ms. CLARKE. When I was the director of the Utah Department

of Natural Resources, we took a very aggressive path in dealing

with energy efficiency, not just in our buildings, but trying to lead

the movement into all Government buildings as well. We were very

progressive in terms of using alternative energy sources and

partnered with other Agencies in providing solar energy to the National Park Service. We had some great partnerships. I think there

are a lot of opportunities we can and should tap into.

21

Mr. INSLEE. So, from what you have seen to date and looking at

the budget that we are looking at, does the Federal Department of

Interior’s efforts in those directions, as far as vehicle efficiency,

building energy use efficiency, use of alternative fuels, does the

Federal Department of Interior match the State of Utah’s Department of Natural Resources that you have just described?

Ms. CLARKE. Like I said, having just gotten my feet on the

ground in this arena, I can’t tell you exactly what efforts are underway, but I am privy to the fact that there are initiatives taking

place. We are measuring our reduction in energy consumption in

the building I work in. That is clear. There are employee incentives

and employee reminders.

So I know that there are activities that are in place right now

that are focused on reducing our energy consumption, both in vehicles and in buildings. I can’t give you the specifics of the programs

or their effectiveness to this date. I would be happy to check into

that and get back to you.

Mr. INSLEE. If you could, that would be appreciated. We would

like to know what budgetary efforts are being made in that regard.

The reason I say this is that the President is going to announce

a global climate change initiative today, I am told. It really seems

to many of us that a first place to start is in our own house and

try to have the Federal Government be a leader to show the way

for the whole economy and some of these things that are possible.

The Federal Government has been a leader when we went to the

moon. We did some things private enterprise didn’t do, and many

of us think we need to do that the same, and we can use our agencies to be leaders. So we would encourage that effort.

I would ask you if you can, perhaps, articulate to me in writing

what we are doing and what you are considering doing. I would appreciate that.

Mr. Thompson, do you want to take a stab at this?

Mr. THOMPSON. Yes. In our implementation plan, we have a

number of items in there that we have developed over the last year

which focus in that direction. One of them has to do with bioenergy, and we are committed to working with the EPA to encourage Forest Service field units, our co-operator State foresters and

other co-operators to consider using bioenergy, using that on a

small scale, wind power, that kind of thing.

We are also, in the Black Hills National Forest in South Dakota,

we are using and trying to convert vehicles to a soybean diesel fuel.

There are a lot of opportunities. A lot of our work would be done

with a forest products lab in Madison, Wisconsin, attempting to

work on housing designs and structures. Certainly, over the years,

Forest Service facilities, when we have a research and development

finding, one of the first places that we test it is in our own buildings.

So I think there is an awful lot of opportunity. There is a lot of

challenge in getting it. We have got a tremendous backlog of buildings and structures that are needing upgraded. Certainly, as we do

those, there will be every attempt to increase energy efficiency in

those places.

Mr. INSLEE. Ms. Clarke, could you, if you were going to contrast

your Agency’s expenditures on work associated with development of

22

fossil fuel-based resources on your property versus development of,

say, wind power on your property, how would those two numbers

stack up?

Ms. CLARKE. My understanding of the budget is that we have a

very small piece right now for development of wind energy resources. I, again, think that there is ample room for us to expand

on our understanding of those potentials and opportunities, but we

are starting out with partnerships and trying to envision what we

ought to be doing and where we ought to be going. It is, certainly,

an untapped opportunity.

Mr. INSLEE. Could you give me any flavor for the numbers there?

Is it 99-percent fossil and 1-percent wind? Could you give me any

feeling for— Ms. CLARKE. Let me see if I can—do you have that?

[Pause.]

Ms. CLARKE. It has been suggested to me that about 95 percent

of our funding is probably going to fossil fuel activities, 5 percent,

perhaps, to the alternative.

Mr. INSLEE. Well, we want to explore with you ways to change

those numbers. The reason I say that is that I think, and I don’t

think I am alone in saying that we are going to have to change our

usage, our percentage, our portfolio due to climate change considerations. Denmark is going to have 50 percent of their electricity generated by wind in the next 10 years. This is possible.

I believe there is enormous untapped energy potential on Federal

lands in this Nation, and if we continue to have 95 percent of last

century’s climate change gas-emitting industries and 5 percent in

clean, nonclimate change emission, we are never going to get to

where the President I think today will say you need to go.

So I am going to tell you I am going to commit myself to try to

change those numbers. What can you do to change those numbers?

Ms. CLARKE. Representative, I think we are obviously at a crossroads in this country where a lot of paradigms are changing and

where focuses are shifting as we start to recognize the incredible

growth in this country is butting up against a lot of other values

that we care about and cherish in this Nation.

When I was confirmed, I made a commitment that I saw that

conservation of our lands was an imperative. I do believe that. I

think we also need to deal realistically with the growth in this

country and the quality-of-life challenges. And I agree with you,

public lands are a place where we can turn to for all kinds of products and services that address that. I will look forward to working

with this Committee to come up with appropriate budgets to meet

those challenges and to balance the competing demands that we

have.

Mr. INSLEE. I haven’t seen the President’s proposal that he will

be announcing today, but it has some voluntary, I think—one more

question here?

Mr. GIBBONS. Sure.

Mr. INSLEE. I am sorry. I missed the light. My apologies.

Mr. GIBBONS. That is all right. You are only about 3.5 minutes

over.

[Laughter.]

Mr. INSLEE. Would you defer one more; is that OK, Mr. Chair?

23

Mr. GIBBONS. Yes.

Mr. INSLEE. Thank you. I appreciate that. I am enjoying the testimony.

Does the Department anticipate setting any internal limits for

itself on global climate change gas emissions from its lands? For instance, do you anticipate saying we are going to only have this

amount of emissions associated with energy production on our

lands and set a goal for nonclimate change emission standards? Is

that in your game plan at all?

Ms. CLARKE. I am not aware of any decisions that have been

made at the Department level or discussions with any bureau at

this time. I would appreciate the opportunity to go back and check

on that and report to you on the record.

Mr. INSLEE. We hope you will do that. I appreciate your time.

Thank you, Mr. Chair, for your indulgence.

Mr. GIBBONS. Mr. Inslee, we will probably come back for a wrapup question. I have a couple of extra ones, and we will certainly

grant you the courtesy to do that as well.

I wanted to ask the BLM a real simple question. I understand

that the BLM has requested an $800,000 budget item for an Environmental Impact Statement on the Black Leaf area of Western

Montana for proposed oil drilling and gas drilling, which was

turned down.

Wasn’t there an EIS prepared in the mid-nineties for that same

area? If there was, since that EIS was already completed, why does

the cost to update an existing EIS require so much money?

Ms. CLARKE. I probably need to check into that. I had a discussion this morning with folks on my staff about that. I was told that

there is an update and an active EIS in progress, but I have not

been able to verify that myself, nor did I have a chance to get a

call into the State director to find out what his intent was in requesting that additional money and what effect its not receiving

that had on those activities there.

So, like I say, I have had a brief conversation, but I am not real

confident of the details at my command right now, Representative,

and I would like to get back to you.

Mr. GIBBONS. What is the BLM doing right now with the nine

pending applications for drilling in the Missouri Breaks National

Monument area?

Ms. CLARKE. My understanding is that we are working in collaboration on better understanding what our opportunities are

there. I know that with the national monument that there are limits to the way we deal with those valid, existing rights, but that

we are trying to come up with some collaborative approaches to

move forward in ways that are acceptable.

Mr. GIBBONS. Maybe both of you could just tell me what the

process you are going through, both with the Forest Service and

with the BLM, to assist in reducing the United States’ dependency

on foreign, imported oil.

Ms. CLARKE. I know that when the President laid out the

national energy plan, the BLM identified over 20 items on his nearly 100-item list that we felt we were directly responsible for, that

we could make contributions toward their enactment.

24

We have translated that list of 20 into 43 action items and feel

that we have a direct impact on the reduction of our dependence

on foreign oil to the extent that we are able to move forward on

those items and to correct some of the deficiencies, the backlogs

that have been in place.

I think, as I stated in my opening testimony, the money that we

have requested for additional activities starts to address those challenges that we have to improve our processes. I think it is time

that we took a fresh look at things, that we need to improve the

way we do business, that process often gets in our way. We need

to look at results, and that is the deliverables. We need to really

see the effectiveness of our efforts.

So I would commit to you that this Agency will be working hard

to bring good business practices and good management practices to

the business of energy activity on the public lands.

Mr. GIBBONS. Mr. Thompson?

Mr. THOMPSON. Yes, in a very similar way, I would echo those

comments with regard to trying to be more efficient and effective

in responding to applications and more timely. There certainly has

been a tremendous, and we call it ‘‘analysis paralysis,’’ problem,

and I think trying to get on top of that is a top desire of the chief

of the Forest Service, and certainly it is reflected in the Department and also in this administration’s budget.

It goes to not just the energy minerals program, it goes to the

very essence of all of the programs that we do, trying to streamline

processes to figure out ways of moving through tremendously complex analysis and consultations so that we can produce decisions in

a timely way. That adds to efficiency. I think it also adds to confidence that people have and willingness to participate in programs. So that is one area that I think is a tremendous emphasis

at this point in time.

In addition to that, with regard to your question, we certainly

are looking at emphasizing small-diameter biomass, underutilized

material from other activities that go on with regard to fuels treatments and others, but there is a whole list of things that we would

be doing, and many of those are identified in our 31 action items

in our implementation plan. I think all of those are intended to implement the national energy policy.

Mr. GIBBONS. Thank you.

Mr. Kind, any wrap-up questions?

Mr. KIND. Yes, just real briefly.

Ms. Clarke, you have been a real trooper today, and thank you

for hanging in there with us.

Ms. CLARKE. Sure.

Mr. KIND. One more question and more directed toward you. We

had some hearings late last year and getting a lot of information

in regards to some of the problems with coalbed methane production in Wyoming and the owners of the land, and some of the concerns that are raised in terms of air quality, water quality, consent

and agreement issues and all of that.

How much will your Bureau or Department be devoting resources or time or personnel in order to deal with what has turned

out to be a real fire-bed issue out there for many of those individuals and landowners.

25

Ms. CLARKE. Coalbed methane is certainly a very important energy resource right now, and there is great demand for its availability and production.

Clearly, it has created conflicts, and we are working with all parties to improve our conflict resolution policy right now to make

sure that we are able to maximize recovery of those resources,

while minimizing conflict and disruption to the various parties.

We don’t have all of the answers. We are looking to the operators

and the owners to help provide us with insights and information

that will help us to come up with a policy that serves the needs

of all of those players in this important arena.

Mr. KIND. I wish you well on that endeavor because, obviously,

it is a very important issue. Like I said, we have looked into this

and had a hearing with Ms. Cubin and some of her constituents

last year. Hopefully, something can be worked out. It seems to be

a growing problem right now, and we need to take some affirmative

steps.

Ms. CLARKE. It is high on my radar screen. Thank you.

Mr. KIND. Great. Thank you.

Mr. Thompson, let me just conclude with you. I understand, in

your written statement, you indicated that the $5-million increase

in the energy and minerals program will be used mainly for coalbed methane operations in the Forest Service lands in the Rocky

Mountain States, of which you bring considerable expertise to.

My question is, for those NFS lands with reserve and outstanding mineral rights underlying the surface, can a mineral

owner simply just begin drilling in that area? What is the process

at the Forest Service in regards to how they go about drilling?

Mr. THOMPSON. In particular for the coalbed methane?

Mr. KIND. Right.

Mr. THOMPSON. There is a process of first determining whether

an area is available for leasing, and then once the lease request is

made and a decision made that an area is available, then the process moves along. At the time that there is a request for lease, it

is processed, and we work with the BLM very closely with that,

and then at the appropriate time we do analysis, very site-specific

analysis, it may be an Environmental Impact Statement or other

environmental analysis, to make the decision as to what environmental protection is needed to actually do the lease. So it is a fairly

involved process, and that is where we get into delays and a lot of

time involved.

With regard to coalbed methane, particularly in Wyoming, with

the kind of sudden change and increase in that use, we have had

to relook at our staff. We have hired new people to come in who

are able then to do the analysis, provide the expertise that is needed and to train those folks to be able to do a quality job of analysis

and also provide the expertise that is needed to carry out the work.

It is very specialized work, and I think we have some of the, working with the BLM, some of the most highly qualified leasing people

in the world trying to balance production versus the environment.

Mr. KIND. Is the process any different if the Forest Service has

fee-simple interest on the surface and subsurface rights to a particular land?

26

Mr. THOMPSON. If I understood your question, it is, is the process

any different if— Mr. KIND. If you are holding fee-simple interest in land.

Mr. THOMPSON. I am trying to think. I would probably have to

get back at you with the answer on that one. I think there are definitely some differences, but I couldn’t describe it exactly to you

right at this point in time.

Mr. KIND. Well, thank you. Thank you both again for coming in

and testifying, as well as your staff.

Thank you, Mr. Gibbons. That is all I have.

Mr. GIBBONS. Thank you, Mr. Kind.

And to our witnesses today, Director Clarke, Mr. Thompson, we

want to thank you for your appearance today and your testimony.

In the Committee’s oversight duties, of course, we will be submitting written questions that we would ask that you follow up in response, in addition to the questions that were asked that you promised to provide testimony and information to the Committee as

well.

It has been a pleasure to chair the meeting and have both of you

here. We know this is a new process for each of you, and we welcome you to the new process. I certainly hope that we have not

treated you harshly. We did, as I say, appreciate the fact that you

have arrived, Ms. Clarke, not feeling your best.

Ms. CLARKE. Thank you.

Mr. GIBBONS. With that, we are very thankful that you took your

day and your time, as well, to be here. We look forward to working

with you. It is always nice to have a warm, positive working relationship with the bureaucracies that we have our oversight duties

to. Like I said, it is going to be a very interesting few months in

the next few months as we move through the session.

So, with that, we will ask if there are any other questions.

[No response.]

Mr. GIBBONS. Seeing none, we will adjourn this hearing and call

it a day.

[Whereupon, at 11:25 a.m., the Subcommittee was adjourned.]

[The Department of the Interior’s response to questions submitted for the record follows:]

Responses to Questions Submitted for the Record to Kathleen Clarke,

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

QUESTIONS FROM CHAIRMAN BARBARA CUBIN

1. When doing land planning, what attempt is made to identify areas which are

favorable for minerals, oil and gas, geothermal energy, etc. During the scoping process do you consult with your own geologists, other federal agencies like the U.S. Geological Survey, state geological surveys, and industry to identify mineral and energy

resource rich areas so that they can be considered in the planning process as a ‘‘reasonably foreseeable development’’? If not, why?

During the scoping process, the Bureau of Land Management (BLM) works with

a variety of Tribal, Federal, State, and local government agencies, trade groups,

user groups, and local citizens to develop collaborative, inclusive, and effective land

use plans. The BLM works very closely with the U.S. Geological Survey, state geological surveys, academia, mineral industry, special interest groups, and individuals

to identify the potential for development of mineral and energy resources as well

as a wide variety of other important resource values. The BLM works especially

closely with the U.S. Geological Survey to obtain the latest resource assessment

data on mineral and energy resource potential areas. This information is incorVerDate 11-MAY-2000 16:16 Sep 23, 2002 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 77680.TXT HRESOUR1 PsN: HRESOUR1
27

porated into the planning process through the development of reasonably foreseeable development scenarios. The BLM then involves the public in the preparation

and review of planning documents which analyze the environmental impacts of alternative levels of resource use and protection.

2. There has been a great deal of concern voiced by the oil and gas industry over

delays in having drilling permits approved. A recent study by the Independent Petroleum Association of Mountain States using BLM data found that in fiscal year 2001

that it took BLM from 34 to a maximum of 197 days to approve a permit, with 84

days being the average. What is BLM doing to bring the approval times down to the

30 days as mandated in the regulations?

As part of the BLM’s National Energy Plan, the Bureau established a working

group to review and evaluate various reports and data concerning expediting the

Applications for Permit to Drill (APD) process. The group has identified several specific recommendations, which the BLM will evaluated and presented to its stakeholders for comment at a Bureau-wide APD summit in Denver on March 20 and 21,

2002. Examples of areas under review are cultural clearances, National Environmental Policy Act (NEPA) processes, consistency of lease stipulations, and automation of the APD process.

3. EPCA 604 inventory has been fast tracked, with reports on the five major Rocky

Mountain basins that produce oil and gas to be completed this spring. How will the

results of this study be used in the ‘‘Time Sensitive Plans’’ that are currently underway to update BLM management plans in energy producing field offices?

As the EPCA inventories become available, the BLM will review those findings

and incorporate the information as appropriate into the time sensitive land use

plans. This review will include evaluations of land use area designations, lease stipulations, and use terms and conditions associated with development activities. In

addition, consistent with the President’s National Energy Policy, the information

will be used to determine if alternatives are available to facilitate energy development while still providing necessary environmental protections. The EPCA findings

will also be used in specific environmental documents which will establish a variety

of multiple-use management goals as well as standards and objectives to guide management activities.

As a follow up, is the budget adequate to complete all dated plans in high

priority energy areas?

In 2001, the BLM embarked on a long-term project to update and revise the land

use plans for the public lands. The BLM has predicted that completion of this comprehensive effort will take 10 years at a cost of roughly $50 million per year. The

BLM identified the highest priority plans in 2000, which were started in 2001, and

are expected to be completed in the next two to five years. The President’s 2003

budget requests an additional $14 million for land use planning, which will bring

the total planning budget to $47 million in 2003 to implement this planning initiative.

In addition, in order to implement the President’s National Energy Policy, the

BLM has revisited land use planning priorities to ensure that the areas of greatest

industry interest for oil and gas development are being addressed. The BLM is currently revising plans in the National Petroleum Reserve Alaska; San Juan, Powder

River, Uinta, and Piceance basins; and in central Wyoming. These represent the

most critical of the energy-related land use plans for the BLM.

4. As you know, this Subcommittee strongly supports the Bureau of Land Management and the Forest Service budgets that provide adequate resources to ensure good

and timely permitting decisions and processes. But as we consider future needs, we

want to be sure that the agencies are spending current appropriations wisely. Along

those lines, we noted that a recent recommendation filed with the White House Energy Streamlining Task Force dealt with the processing of applications for permits

to drill (APDs) and other BLM permits. It called for a quick benchmarking study

to compare field offices permitting effectiveness, using available data. The recommendation then outlined an approach to find out why some offices appeared to

do better than others.

a. Finally, it called for a ‘‘best practices’’ approach to bringing all offices to

the level of performance of the best ones. Is such a benchmarking and best

practices program being implemented?

Developing a best practices approach for providing consistency among the various

BLM offices regarding APD processing is being considered by the APD working

group (as mentioned in the response to question 3). The BLM evaluated and preVerDate 11-MAY-2000 16:16 Sep 23, 2002 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6621 77680.TXT HRESOUR1 PsN: HRESOUR1
28

sented this approach to industry for comment at a Bureau-wide APD summit in

Denver on March 20 and 21.

b. If so, what measures of performance are being used? (APD permitting

time? Number of permits issued per dollar spent on processing? Number of

permits per employee assigned to process them?)

Currently, the BLM regulations have a 30-day performance goal for the processing

of APDs. An automated application process is also being considered in an attempt

to resolve the discrepancies between the submitted applications and the application

requirements in order to ensure that industry has submitted a complete application.

5. I am glad to see that the Powder River Basin Oil and Gas Draft EIS has been

completed and that the Final is expected in August. What is current backlog of CBM

APD’s and how long will it be before the backlog is eliminated?

The BLM is working diligently to complete the Powder River Basin (PRB) oil and

gas final EIS. The number of pending APDs in the Powder River Basin (PRB) is

approximately 2,500. Several hundred of the applications, however, have been returned to applicants due to incomplete data, or are returned when the operator notifies the BLM of a change in their plans to drill. The BLM receives 1,000 to 1,500

new applications for development in the PRB each year. The BLM is currently processing and approving of about 1,300 APDs per year. In addition, completion of the

EIS will help to expand the number of APDs that the BLM can process, a total that

is currently limited by existing NEPA documents.

6. Budget, aside, BLM Wyoming recently had a competitive coal lease sale, which brought in a bonus bid of $379.5 million dollars. I also understand that there was

more than one bidder and that there is a potential conflict between the coal and coalbed methane developers. The President’s budget states that one of the Administration’s high priority energy tasks is to resolve the conflicts that arise when the government leases coal rights to one producer and coalbed methane rights to another producer in the same land.

a. Will the Administration’s proposed resolution allow coal operators to purchase the conflicting coalbed methane rights at fair market value?

b. If not, what mechanism will the Administration use to optimize mineral

production from federal lands without giving the owner of one mineral lessee

undue leverage over another mineral lessee?

The BLM is in the process of clarifying and strengthening its existing conflict resolution policy. Various potential recommendations and approaches are being considered to resolve the conflict. The goal of the BLM’s existing policy is to ensure conservation of the coal resources while optimizing coalbed methane recovery, and to

optimize the return to the public while protecting public safety and the environment. The BLM is working to achieve this policy goal either by facilitating an agreement between the lessees, or by exercising authorities under the terms of the lease,

the Mineral Leasing Act, or the implementing regulations, including those concerning conservation of the natural resources.

7. What is the status of coal leasing activities in BLM. That is, are there any pending coal lease applications, and if so what is being done to expedite and streamline

the process?

There currently are 317 coal leases on Federal lands, of which 127 are producing.

In fiscal year 2001, production from Federal lands exceeded 393,500,000 tons. There

are currently 17 Federal coal lease applications pending nationwide. The BLM is

taking several actions to expedite and streamline the processing of pending coal

lease applications. In Wyoming, for example, the BLM is combining the NEPA documentation for four pending lease applications into one EIS, eliminating the need for

separate NEPA documents. The BLM has also hired additional staff in Wyoming to

support expediting pending lease applications. In addition, as part of the BLM’s responsibility under the President’s National Energy Policy, the Bureau is examining

the current leasing process for opportunities to improve the application process.

8. I understand that BLM Montana requested $800,000 for an EIS for the

Blackleaf area in western Montana for proposed oil and gas drilling, which was

turned down. Wasn’t there an EIS prepared in the mid 1990’s for that same area?

Since an EIS had already been completed why is the cost to update an existing EIS

so high?

The final EIS for the Blackleaf area was completed in June 1992. However, a

Record of Decision (ROD) was not issued. At the time there were no pending development proposals and the intent was to prepare a ROD following receipt of the first

drilling proposal for the Blackleaf area. The supporting data and analysis contained

29

in the EIS were assembled prior to the 1992 issue date, making it more than 10

years old. Since then, additional data and analysis needs have been identified including Native American consultation, potential historic properties data, cutthroat

trout data, threatened Canada lynx data, and threatened grizzly bear data along

with an updated socioeconomic analysis, air quality analysis, and biological assessment.

In 2001, three Notices of Staking (NOS) for natural gas wells were filed for the

Blackleaf area. Two of the locations were addressed in the 1992 EIS as possible exploration wells, not production wells with associated road and pipeline construction

as now proposed. Also, some of the alternatives in the 1992 final Blackleaf EIS do

not address the proposed well locations and therefore do not adequately address the

new proposed development activity. Because the current proposal differs from any

of the alternatives described in the 1992 EIS, and because of new data, our intent

is to prepare a new EIS addressing the proposed production wells and field development. Information from the 1992 final Blackleaf EIS would be updated with new

information, new viable alternatives, and new analysis. The new EIS would address

the three proposed wells with a level of specificity for a decision on the drilling proposals.

The BLM is outlining a strategy and schedule to update the EIS and complete

the Record of Decision. We expect this strategy to be completed by mid-year, and

it will form the basis for determining the necessary funding for the project.

9. What is the status of the oil and gas leases within the Missouri River Breaks

National Monument? What is BLM doing with the 9 drilling applications that are

pending approval?

The Presidential Proclamation establishing the Upper Missouri River Breaks National Monument protects valid existing rights including pre-existing oil and gas

leases. Six of the nine drilling applications are within the monument on leases

which predate the establishment of that monument. The other three are outside the

monument boundary and therefore not affected by the monument proclamation. The

BLM is currently reviewing public comments on an Environmental Assessment (EA)

that analyzes these applications. The comment review should be completed by April.

In addition, it should be noted that the area proposed for drilling is an area of historic gas development with hundreds of wells drilled since the 1950s.

10. There has been a lot of press and controversy surrounding Anschutz Petroleum’s proposed exploratory well in Weatherman Draw. It seems that several Native

American tribes object to the proposed well location because the area contains sacred

sites and have appealed the drilling permit approval to the Interior Board of Land

Appeals. What is the status of this controversy?

The BLM approved Anschutz’s application to drill an exploratory well in the area

on February 5, 2001. Several Native American tribes have identified the area as

containing sacred sites, and the approval is under appeal with the Interior Board

of Land Appeals. The company has voluntarily postponed drilling until at least June

1, 2002, while alternative solutions are pursued. The company and the appellants

have indicated a desire to find a mutually agreeable resolution to this issue including potential relinquishment of the two leases. The BLM and Anschutz have entered

into a Memorandum of Understanding to have the leases appraised by an independent appraisal company. Information from the appraisal will be included in any

analysis regarding potential compensation for termination of the leases.

11. Oil and gas exploration and development on Alaska’s North Slope, especially

opening up the 1002 area of ANWR, is a very controversial issue. It has been reported

that exploratory drilling in the National Petroleum Reserve Alaska resulted in a

major discovery of oil. What is BLM doing to promote oil and gas development in

the National Petroleum Reserve Alaska to decrease our dependence on foreign oil?

The President’s National Energy Policy identifies oil and gas development on the

North Slope of Alaska as a priority. As part of the BLM’s effort to implement that

policy, the Bureau is undertaking various actions. The BLM has announced plans

to hold a second lease sale in the Northeast sector of the National Petroleum Reserve–Alaska (NPR–A) on June 3, 2002. This will be a re-offering of those lease

tracts which did not receive bids in the first lease sale. The BLM also has initiated

a planning effort for the Northwest sector of NPk–A to identify those lands to be

offered for oil and gas leasing in a lease sale to be conducted in 2004. Once the

Northwest planning process is complete, the Southern NPR–A area planning effort

will be initiated. The BLM also is working closely with industry to provide for the

timely processing of applications for permits to drill. Finally, the BLM is continuing

its efforts to ensure the best technologies and practices are utilized to develop and

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produce oil and gas on the North Slope in an efficient and environmentally-sound

manner.

12. This Subcommittee sponsored enacted legislation, HR 1913, that directs the.

Secretary of Interior to acquire the private mineral rights of some 67,000 acres within

the Acoma Pueblo in New Mexico within three years. What is the status of acquiring

those mineral interests?

The recently enacted legislation (PL 107–138) requires the private mineral interests within the Acoma Pueblo be acquired by either land exchange, direct purchase,

or through the use of bidding credits in an amount equal to the value of the mineral

estate. The BLM is working with the Department and BIA to determine which acquisition option allowed under the law should be pursued in order to comply with

the law’s three-year deadline. As required by the law, appraisal of the property will

be initiated and completed by the Department, within the six month time-frame required by the legislation, to determine the value of the mineral estate for acquisition

purposes.

13. There was also controversy surrounding the Otero Mesa Oil and Gas EIS in

southern New Mexico, an area that has had a major natural gas discovery by Yates

Petroleum at their Bennett Ranch Unit. It seems that the majority of the lands available for leasing will be available with ‘‘no surface occupancy’’ stipulation. If this is

the case, it would adversely impact the development of natural gas. What is BLM

doing to assure that there is access to develop this very important resource and have

they looked to any ‘‘out of the box’’ creative solutions?

For the Otero Mesa Oil and Gas Environmental Impact Statement, the BLM is

looking at a new and innovative alternative to the ‘‘no surface occupancy’’ stipulation originally proposed in the Resource Management Plan amendment for the area.

The new alternative, if adopted, will permit the entire area to be open to leasing

with a limit on the amount of unreclaimed surface disturbance allowed at any one

time. The lessee or operator would have access to the entire lease, but could not

have more than five percent of the leasehold disturbed by exploration activities,

such as roads, well pads, and pipelines. This alternative would provide the operator

with flexibility in developing the lease, but would set specific limits on surface disturbance. As areas are rehabilitated and reclaimed, these areas would no longer be

counted in the five percent disturbance limitation.

14. What has BLM accomplished in streamlining the process for the development

of renewable energy resources on public lands since the November 2001 National

Conference on Renewable Energy that was hosted by Secretary Norton?

Consistent with the President’s National Energy Policy, the Department and the

BLM are working to expand renewable energy development opportunities on public

lands. The Department’s November National Conference on Renewable Energy was

a good first step in an ongoing effort to work with industry in a collaborative manner to reduce delays and bottlenecks in processing authorizations for renewable energy facilities on the public lands. The BLM is working closely with the Department

to develop a Renewable Energy Action Plan in response to the comments and recommendations from the conference. In addition, the Department and the BLM

hosted a second, follow-up meeting in California in February 2002 to clarify and discuss specific actions and recommendations that may be implemented by the Department and the BLM. As a follow-up to the meetings, the BLM is continuing to evaluate recommendations on how the BLM can best develop renewable resources on the

public lands. The 2003 budget includes an increase of $750,000 to expand the development of renewable energy sources.

15. How many geothermal lease sales does BLM plan to hold in fiscal year 2003?

The BLM does not currently have a nation-wide geothermal leasing schedule. As

part of the BLM’s responsibilities under the President’s National Energy Policy, it

has initiated the development of state specific geothermal action plans which will

expedite the leasing process and determine the appropriate need for geothermal

lease sales.

16. I understand that there was a recent Interior Board of Land Appeals that affirmed an appeal on the adequacy of the Medicine Lake Geothermal EIS. What are

BLM’s plans in light of the decision, will you be revisiting your previous decision?

To clarify the decision, on February 7, 2002, the Interior Board of Land Appeals

(IBLA) (IBLA 2000–94) dismissed the appeal. Specifically, the IBLA affirmed the

BLM’s ROD for the Calpine’s Plan of Operations for the Fourmile Hill Geothermal

Development Project. As part of the ROD, the BLM incorporated a Memorandum

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of Agreement (MOA) with the US Forest Service, State Historic Preservation Officer

and Advisory Council on Historic Preservation and adopted various mitigation

measures set forth in the final EIS to minimize the potential impacts of the proposed action. The BLM is working with all parties, including industry and the

tribes, to clarify the provisions of the MOA. In addition, the BLM will prepare the

necessary environmental documentation and development of specific mitigation

measures associated with the processing of the geothermal APD prior to the approval of any drilling activity.

17. The fiscal year 2003 budget assumes that Congress will authorize a lease sale in ANWR in 2004 that would raise $2.4 billion in bonus bids. Last year, the Administration proposed that ANWR be opened to leasing and used the same estimate to

justify its plan. Given the decrease in oil and gas prices over the past year or so,

which is reflected in the Department’s onshore and offshore oil and gas estimates,

why would you stick with the same estimate for bonus bids on a 2004 ANWR lease

sale?

The BLM’s bonus bid estimates are dependant on a number of factors, including

geology, reservoir engineering, potential for oil, economics, and the bidding results

from previous lease sales. Since many of these factors are not always certain, the

BLM uses its professional judgment to determine them, and reviews these factors

to decide if significant change$ warrant a new assessment of the bonus bid estimates. In particular, oil and gas price forecasts used in this process are not tied

to annual fluctuations, but rather to long-term projections. Long-term price projections and data related to other factors have not varied greatly; therefore, the BLM

believes there is not currently a need to revise the estimates. Furthermore, industry’s bidding history for similar tracts suggest that these estimates are within the

range of what should be expected for any ANWR lease sale.

18. Last year as part of the House-passed energy bill, the Congressional Budget Office estimated that leasing ANWR would generate gross receipts totaling about $3.3

billion in bonus bids on two sales to be held between 2004 and 2006. Those receipts

would be largely offset by payments to Alaska totaling $2.97 billion over the same

period. As you know, under the terms of the Alaska Statehood Act, the State is entitled to 90 percent of the leasing revenues that would be generated if ANWR were

leased. Therefore, CBO estimated that net receipts to the federal government would

total only $330 million over the next 10 years.

See question 19.

19. Your budget assumes that the split would be 50–50 even though that is not

current law and the State has said that it would sue Uncle Sam if Congress unilaterally amended the statehood act. How then, can the Administration justify its $1.2

billion split?

Congress has the authority to set a specific distribution for oil and gas revenues

from the ANWR. Congress provided a 50–50 split when it authorized the leasing of

the NPR–A. This authority was upheld in a 1996 U.S. Court of Claims decision in

which the Court stated that Alaska’s statehood compact did not bind the Federal

Government to a 90–10 revenue split and that Congress could lower the revenue

split without breaking the statehood compact. The gross receipts projection is based

on the assumption that Congress would designate a 50–50 split of revenue from

ANWR in legislation authorizing oil and gas leasing in the 1002 area of ANWR.

20. CBO used the Energy Information Administration’s price forecast for 2020 of

an average price of $20 per barrel (in 2000 dollars) during the 2012–2040 period to

prepare its $3.3 billion estimate for bonus bids from two ANWR lease sales in fiscal

year 2004 through 2006. CBO also used DOI’s estimates of economically recoverable

oil and gas and concluded that 2.4 billion barrels would be produced when the price

was set at $20 per barrel. That is the same figure the Clinton Administration used

in testimony before our committee in the year 2000 as well.

a. What estimate of economically recoverable oil and gas did OMB and DOI

use to support the $2.4 billion estimate for one lease sale in 2004 in the fiscal year 2003 budget?

The estimated $2.4 billion in bonus bids for one lease sale in 2004 was based on

the assumption that Congress would authorize the opening of the 1002 area early

in 2002 and the entire 1002 area would be offered in the first sale. The BLM utilized its professional judgment concerning geological, engineering, economic and historical evidence of industry’s bidding on such prospects. The BLM did not calculate

a single economically recoverable oil and gas estimate for the entire sale area. Rather, the BLM performed a prospect-by-prospect evaluation.

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21. In deciding whether to compete for a potential lease in ANWR, companies

would look at the cost of the leases-bonus bids, rentals and royalties-in totaling up

what the complete capital cost would be to develop that lease. It is generally understood that it would more expensive to operate in Alaska so oil companies would need

to earn a higher rate of return to make it worth their while to operate there. In light

of such economic realities, BP has already scaled back its operations in Alaska.

Given the enormous up-front infrastructure costs to find and deliver ANWR

oil to Prudhoe Bay, along with the lower world price of oil, on what factual

basis can the Administration conclude that industry remains sufficiently

eager to pay $2.4 billion in bonus bids for the right to explore for oil and

gas in ANWR?

The BLM’s bonus bid estimates are dependant on a number of factors, including

geology, reservoir engineering, potential for oil, economics, and the bidding results

from previous lease sales. Since many of these factors are not always certain, the

BLM uses its professional judgment to determine them, and reviews these factors

to decide if significant changes warrant a new assessment of the bonus bid estimates. In particular, oil and gas price forecasts used in this process are not tied

to annual fluctuations, but rather to long-term projections. Long-term price projections and data related to other factors have not varied greatly; therefore, the BLM

believes there is not currently a need to revise the estimates. Furthermore, industry’s bidding history for similar tracts suggest that these estimates are within the

range of what should be expected for any ANWR lease sale.

22. If Congress authorized a 2004 lease sale in ANWR, and if such a lease sale

was not enjoined by the Courts, and the sale actually took place in 2004 - when

would you expect oil production to begin? At the earliest?

Given the potential size of discoveries there, BLM anticipates that production

could occur as soon as 5 to 7 years after the first discovery. Of course, the ultimate

timing of production could also depend on things like the type of environmental stipulations that Congress places in the legislation and the location of producing wells

to existing infrastructure.

23. The fiscal year 2003 budget proposes an increase in funding for geothermal activity of $350,000 - essentially doubling the geothermal account to a total of

$700,000. While I am supportive of this enhancement, it seems a paltry sum in comparison to the $85 million total requested for the oil and gas program. Clearly, the

Administration is predisposed toward oil and gas to meet the Nation’s energy needs.

Even so, a greater emphasis on alternative fuels is needed if we are to achieve energy

security.

How can the Administration justify such a small expenditure for geothermal

leasing when it has such tremendous potential to reduce our dependence on

foreign oil?

The President’s Budget reflects an advanced approach to addressing the Nation’s

energy needs that is consistent with current energy demands. BLM is placing additional emphasis on enhancing opportunities to develop geothermal resources

through a Bureau-wide renewable energy strategy. The BLM’s increased geothermal

budget for fiscal year 2002 has already resulted in issuing over 50 leases and holding a competitive geothermal lease sale. Based on our experience in 2002, the BLM

is requesting additional funding in fiscal year 2003 to expand the opportunities for

geothermal power development. This additional geothermal funding is necessary to

help us resolve our leasing and permitting backlog, which will expedite the development of geothermal resources.

24. The President’s fiscal year 2003 [budget] proposes to ‘‘move’’ the geothermal

program into the oil and gas program within BLM. What assurances can you provide

that this will not result in a diminution of geothermal activity on public lands?

Development of geothermal resources on the public lands is an integral component

of the BLM’s responsibility under the President’s National Energy Policy. The administrative transfer of the geothermal program into the fluid minerals program

within the BLM and subsequent transfer of its accounting function is intended to

simplify and make more efficient the management of the geothermal program. The

funding and management transfer in no way will result in the diminishment of geothermal activity on public land. Overall, it will provide a more direct oversight on

how funding for the program will be managed.

25. What steps are BLM and the Forest Service taking to assure that oil and gas.

and coal operations on public and forest lands are secure from terrorist attacks?

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The BLM is working with other Federal agencies to provide adequate security to

protect the Federal lands, resources and associated facilities. All agency personnel,

whether on or off duty, are requested to report any unusual activity on the Federal

lands to law enforcement personnel. In addition, the oil and gas program’s on-theground Petroleum Engineering Technicians are being trained in security matters

and techniques and are becoming an important element in the BLM’s security force

on the public lands. The BLM- is also working with other agencies and states to

ensure coordination of efforts. Specific delegation of authorities and communication

methods have been established to ensure that appropriate law enforcement personnel respond to any incidents. In addition, the Department has strengthened its

capability to receive and transmit intelligence information, which assists in bureau

readiness with the creation of a Watch Office.

26. Coalbed methane development in Wyoming has generated not only natural gas

but a fair amount of local concern as well. A number of citizens who either own or

use the surface but not the natural gas, such as ranchers, have contacted this Committee to take issue with the conduct of certain CBM producers. They are seeking a

variety of protections, including a requirement that CBM operators secure the surface

owner’s consent prior to drilling. As it stands now, we’re told that some surface owners discover that a CBM operation is going into operation next door when the rigs

show up. This does not seem reasonable, does it? What steps is BLM taking to protect

surface owners affected by CBM development?

The BLM has specific regulations and procedures concerning CBM development

on split estate lands to protect the rights of surface owners. The BLM currently requests that operators, prior to onsite inspections, contact surface owners and notify

them of their proposed activity. In particular, the BLM asks operators to invite surface owners to on-site inspections. Operators must incorporate the landowner concerns or desires for mitigation, existing road use, and abandonment into the Surface

Use Plan (SUP) of the APD. When surface owners participate in the pre-drill onsite

inspection, a BLM representative discusses the concerns and mitigation with the

surface owners. Another important requirement is for the operator to submit as part

of the SUP one of the following - a copy of the signed surface owner agreement between the operator and the surface owner; a certification by the operator that an

agreement was reached with the surface owner; or a certification of compliance with

Federal regulations (43 CFR 3814) with respect to bonding requirements for use of

the surface. No surface disturbance is allowed by the BLM until the BLM approves

the APD and there is compliance with these requirements. Additionally, the BLM

periodically inspects and monitors the drilling and production operations to ensure

compliance with all permit requirements. Upon completion of operations, BLM officials also visit the site to ensure proper abandonment and reclamation.

27. Please provide the Subcommittee with a table showing for each fiscal year the

actual funds spent on Mining Law Administration from fiscal year 1991 through fiscal year 2002 and the actual revenue collected by the claim maintenance fee since

its inception through fiscal year 2002.

Following is a list of the funds appropriated for Mining Law Administration since

1991; the funds expended on the Mining Law Administration program by the BLM

since 1993 (the first year of its individual budget tracking by the BLM); and a list

of the funds collected from the mining claim maintenance fee by the BLM since

1993 (the first year of its collection).

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QUESTIONS FROM CONGRESSMAN RON KIND:

1. BLM is asking for $10.2 million to speed up the handling of oil, gas and coal

permits on public lands in Wyoming, New Mexico, Montana, Utah and Colorado,

and to remove barriers to energy production. If this money is appropriated, what will

be done to ensure environmental protection in the face of ‘‘speeding’’ production up?

A critical component of the President’s National Energy Policy is to ensure the

protection of the environment while expanding domestic energy production. The

BLM is committed to achieving this goal. Integral to the processing of these oil, gas,

and coal permits is the BLM’s preparation of the necessary environmental documentation and development of specific mitigation measures to reduce the impacts

of exploration and development activities. With the requested funding for permit

processing, the BLM will be able to complete more permits and associated environmental documentation, while maintaining sound environmental standards.

a. What protection measures have been or will be implemented to protect

Arches and Canyonlands National Parks in your agency’s search for oil?

The BLM closely coordinates with all land management agencies, including the

National Park Service (NPS), when proposed oil and gas development activities may

impact adjacent Federal lands. All NPS concerns and issues are considered during

the land use planning process and have resulted in removing parcels from lease consideration. When a lease is issued, the BLM continues to coordinate with the appropriate NPS unit when reviewing APDs and preparing NEPA documentation. The

NPS concerns are again taken into consideration and specific mitigation measures

are developed to reduce potential development impacts, such as low-profile equipment, strategic location of facilities, coloration and orientation of equipment, shielded lighting, and engine and compressor mufflers.

2. BLM has requested another $14 million to ‘‘speed up’’ work on amending outdated land use plans.

a. Can you provide an overview of the status of planning at this point? Can

you also break down for me the amount of planning funding being allocated

within each of the broad categories: oil & gas, mining, grazing, conservation,

recreation?

Increased appropriations in 2001 and 2002 have allowed the BLM to make

progress in updating existing plans and begin to develop 27 plans for newly designated conservation areas. The BLM has initiated a total of 81 new plans, revisions, and priority plan amendments. These projects focus on mandates from Congress, the Administration, and the courts, as well as high-priority national issues

such as energy development and newly-designated conservation areas. Each plan establishes management direction for roughly one to two million acres of public land.

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They are developed with extensive public involvement, take an average of three

years to compete, and are prepared in conjunction with an analysis of environmental impacts as required by NEPA. These planning efforts are done in close communication, cooperation, and consultation with local citizens, stakeholders, county,

State, and tribal agencies.

In 2001, the Bureau completed the El Malpais National Conservation Area Resource Management Plan; amended 33 plans; and initiated the development of 29

plans. In 2002, the Bureau expects to complete seven land use plans; amend 52

plans; and initiate the development of 18 new plans. These projects for 2002 include

21 expedited plans that will address critical issues focusing on energy development

and the newly-designated conservation areas. These high priority plans are all currently on schedule for planned completion in either 2002, 2003 or 2004. With increased funds requested in the President’s 2003 budget, the BLM proposes to complete eight plans and amend 51 existing plans. (See the attached appendix table

that displays the complete funding levels and status of the BLM land use plans by

state.)

It is not possible to break down the overall planning funding being allocated within each of the broad resource management categories. However, of the plans in

progress which will be funded in the President’s proposed fiscal year 2003 budget,

approximately one third involve National Landscape Conservation System (NLCS)

units; approximately one third are considered to have energy development as a

major issue; and approximately one third are located outside the NLCS and major

energy development areas. Of the $14 million requested program increase, approximately $3 million and $7 million, respectively, is allocated to plans being developed

or amended in the NLCS and energy-development areas.

b. BLM acknowledges that many of these land use plans - Resource Management Plans (RMP) - are out of date and do not account for heightened scenarios of oil and gas development, not to mention coal bed methane (CBM)

development. If this is true, then why is BLM leasing federal lands for oil

and gas during the interim? Shouldn’t leasing for oil and gas, and particularly CBM, await the final decisions of the amended RMPs?

The BLM is in the process of evaluating and updating its land use planning base.

Prior to completing new plans, the BLM will use existing plans to lease any oil and

gas resources. Lands that have been identified as open for leasing under an existing

Resource Management Plan/Environmental Impact Statement (RMP/EIS) may continue to be leased during a plan revision or amendment process unless development

impacts exceed the scope of the original EIS reasonably foreseeable development

scenario. In such cases, the BLM would likely defer a particular RMP leasing decision or complete additional environmental review prior to leasing.

While an RMP is being amended or revised, the BLM will continue to process site

specific permits, sundry notices, and related authorizations on existing leases while

ensuring compliance with NEPA and other laws, regulations, and policies. Prior to

authorizing an APD on an existing lease, a thorough environmental review is conducted in compliance with NEPA. This review will consider the effects of approving

the APD, including the cumulative effects on other resources. The BLM will then

place conditions on the approval of the APD, as necessary, to protect other resources.

c. Is the purpose of ‘‘speeding up’’ RMP amendments throughout the west to

accommodate the interests of the oil and gas industry? Shouldn’t the true

focus be on taking the necessary time to develop land use plans that properly

balance all natural resources, listen to the concerns of the public, and to the

best extent possible, develop mitigation measures and lease stipulations to

protect other multiple uses?

The BLM is using planning funds to expedite 21 land use plans and plan amendments critical to the interests of the Nation. Each plan and amendment considers

a broad array of resource issues and multiple uses. Nearly half of these expedited

plans (10) focus on units of the National Landscape Conservation System, which are

driven by legislatively- or administratively-required completion dates or by litigation. Oil and gas development is the major planning issue for seven expedited

multiple-use plans and amendments. In three other plans, environmental protection

issues and energy development issues are approximately equal in priority. The remaining plan was expedited because of significant population growth, and its effects

on the state and local communities warranted action to protect resources and manage changing uses on the public lands.

Even though the BLM is expediting these 21 plans and amendments while it

works on several dozen others, the BLM is also redesigning the planning process

to engage more actively the public’s participation. The BLM is more committed than

ever to a truly collaborative planning process. We believe the public will realize an

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advantage in an expedited process. In the past, it was difficult for the public to

maintain their interest in a process that took four or five, years or longer to complete. In the more streamlined planning process, the BLM works more closely with

the public, seeking their active participation in a more collaborative forum, thereby

balancing all affected interests.

3. How does BLM intend to balance its multiple-use mission to protect the rich diversity of its natural resources such as those found in Jack Morrow Hills?

As with all major plan amendments and new Resource Management Plans, the

BLM is undertaking an extensive planning and environmental impact statement

(EIS) process in the Jack Morrow Hills area that includes the consideration of all

interests and resources. The Jack Morrow Hills plan amendment to the Green River

RMP will assess all issues, including critical big game habitat, wilderness study

areas, recreation, scenic quality, and soil stability along with the possibilities for energy development. Public comments on this plan focused on collaboratively building

land use planning decisions. It is anticipated that the final Record of Decision for

this plan amendment will be issued in November 2002.

4. How much of the $14 million is allocated to the minerals extraction portion of

RMPs? Is there an appropriate balance of this requested money that will go to other

BLM programs such as wildlife, threatened and endangered species protection, watershed improvement, recreational use, and protecting historical and cultural resources?

Resource Management Plans are developed to guide the management of many resources, including minerals, energy, soil, water, air, cultural, wilderness, forage production, and others. (Also see response to question 2a.) It is not possible to break

down the planning funding being allocated within each of these resource management categories. Even a plan amendment with a primary issue such as ‘‘energy development’’ must consider the development of energy resources in the context of the

use and protection of all other important resources within the area.

5. Can you assure this committee that all areas protected within the National

Landscape Conservation System will be avoided?

Energy development within units of the National Landscape Conservation System

(NLCS) will be consistent with the provisions establishing each unit. For example,

many of the National Conservation Areas (NCAs) established by Congress withdrew

these areas from mining and mineral development, while respecting valid existing

rights. The BLM will, of course, follow those Congressional proscriptions. Likewise,

the Presidential Proclamations that established a number of BLM-managed national

monuments withdrew those areas from mining and mineral development subject to

valid existing rights. However, in the case of the Canyons of the Ancients National

Monument in Colorado, the Presidential Proclamation establishing the monument

specifically allows for new leasing within the Monument in particular circumstances. If development is authorized, the activities will be closely monitored to

ensure that all mitigation measures are implemented to protect the environment,

including reclamation after the development activity is completed.

6. In a recent New York Times article, one of your field supervisors was quoted

in a memo as saying, ‘‘Utah needs to ensure that existing staff understand that when

an oil and gas lease parcel or when an application for permission to drill comes in

the door, that this work is their No. 1 priority.’’

a. Can you tell me where in FLPMA does it state that managers should

overlook the agency’s other mandates in the name of energy development?

FLPMA directs the BLM to manage the public lands and natural resources using

the principle of multiple use, and mandates that no one resource or use of the public

lands should be primary. All BLM managers are required to adhere to the principles

of FLPMA when making their land use management decisions.

b. Can you share with this committee your plans to clearly direct state and

field managers to provide the necessary balance of uses - outlining an appropriate balance between conservation; recreation and extractive uses?

As noted above, FLPMA clearly establishes the direction for BLM - including state

and field managers - to provide a balance under its multiple-use mandate. This is

inherent in the BLM’s land use planning process, which provides for extensive public input to ensure this balance is achieved. The provisions of FLPMA are set forth

in the Bureau’s regulations, manuals, and handbooks, and they will continue to

serve as the guidance for our state and field managers to utilize when making land

use decisions.

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7. BLM just released a draft EIS for 51,000 coal bed methane wells in Wyoming’s

Powder River Basin.

a. The plan analyzes no new or developing technologies designed to lessen

impacts from the billions of gallons of produced water that will be dumped

onto the ground. How does this square with this Administration’s promise

to the American public to lessen the footprint of increased production of public resources by using the latest and best technologies?

Several water handling methods were analyzed in the draft EIS. All of the methods analyzed meet the requirements of the State of Wyoming water quality standards. The methods include surface discharge, passive and active treatment, infiltration, containment, land application and injection. Based on comments from the initial public scoping process and during the development of the alternatives, it was

determined that these water handling methods fully complied with the NBPA requirements of being reasonably foreseeable, as well as being both technically and

economically feasible. The surface disposal alternative was identified as preferred

because it would result in fewer surface disturbance impacts.

b. How does the preferred alternative’s call for dumping 90% of this water

onto the ground untreated square with BLM Onshore Order No. 7’s mandate

that the primary method for oil and gas produced water is through injection

back into the aquifers?

BLM’s Onshore Order No. 7 does not solely mandate injection of produced water.

The Order promotes injection of produced water; however, it allows for other methods of disposal, including discharging into pits, and other acceptable methods, such

as surface discharge via a National Pollution Discharge and Elimination System

permit. In the preferred alternative of the draft Powder River Basin EIS, the method of water handling varies by watershed, with approximately 50% being discharged

at the surface for beneficial use.

c. Why were the recommendations of a Citizen’s proposal submitted to BLM

not analyzed in the EIS? The citizen’s proposal added another alternative

to the mere two BLM analyzed in the DEIS - both of which allowed for the

full amount of wells asked for by industry and neither of which seriously

considered mitigation measures to reduce impacts. With CBM development

exploding all over the West, is this the type of analysis we should expect from

BLM in the future?

Regarding the Powder River Basin draft EIS, all reasonable alternatives submitted during the scoping period, which began in June 2000, was reopened in November 2000, and closed in January 2001, were considered. The Citizen’s proposal

was submitted to the BLM for consideration on October 9, 2001, after the closing

date. By October, the analysis of the alternatives for the draft EIS had already been

completed, and the preliminary draft was provided to cooperating agencies for review prior to completion of the draft EIS. At that time, the Citizen’s proposal was

reviewed and it was noted that it contained mostly mitigation measures which were

already incorporated into the draft EIS. However, there is another opportunity for

them to provide additional issues or concerns on the draft EIS during the comment

period which closes on April 18, 2002. All comments received on the draft EIS will

be considered, as appropriate, in the preparation of the final EIS.

The BLM is committed to meaningful collaboration with the public, local and national interest groups, state governments, and industry. The BLM will continue to

make concerted efforts to ensure that the public has an opportunity to participate

in all land use decision processes.

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ADDITIONAL SUBCOMMITTEE QUESTIONS DIRECTED TO DIRECTOR

CLARKE DURING 2/14 HEARING

1) Rep. Gibbons:

‘‘...I guess my first question would be just a generalized question if you could help

me out and better understand how much of the United States’ energy needs are met

by fossil fuel versus renewable fuels today, in a percentage basis?’’

The Department of Energy’s Energy Information Administration (EIA) maintains

the statistics for energy production and consumption within the United States. According to EIA’s Monthly Energy Review from January 2002 (Table 1.4; Energy

Consumption by Source), for the Year 2000, total fossil fuel consumption is 84.113

Quadrillion Btu (QBtu), or 85 percent of the total; and total renewable energy consumption is 6.9 Qbtu or 6 percent of total consumption.

The following is a detailed commodity list from EIA of consumption by source for

the Year 2000:

• Coal - 22.4QBtu (22.7%);

• Natural Gas - 23.1 QBtu (23.4%);

• Petroleum - 38.4 QBtu (38.9%);

• Nuclear Power - 8 QBtu (8% );

• Hydroelectric Power - 3.15 QBtu (3.2%);

• Biomass (wood, waste, alcohol) - 3.3 QBtu (3.3 %);

• Geothermal - 0.32 QBtu (<1%); and

• Solar, and Wind - 0.12 QBtu (<I%).

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2) Rep. Inslee: ‘‘...So, from what you have seen to date and looking at the budget that we are looking at, does the Federal Department of Interior’s efforts in those directions as far as

vehicle efficiency, building energy use efficiency, use of alternative fuels, does the Federal Department of Interior match the State of Utah’s Department of Natural Resources that you have just described?’’ Within the Federal government, the Department has played a significant role in

demonstrating the application and viability of renewable energy-related technologies. Solar-powered photovoltaic (PV) systems are successfully operating at National Parks and Refuges, Bureau of Land Management, Bureau of Reclamation, Geological Survey facilities, and Native American Schools. PV systems are used for facility power, lighting, water pumping and heating, electric fences and resource monitoring, particularly at remote off-grid locations and have become cost-effective power

sources. Currently, bureau facilities use approximately 600 PV systems and 40 solar

hot water systems to provide an off-grid power supply. These systems generate

about 1,000 megawatt hours of electricity annually (enough for about 90 houses).

Geothermal projects have also been successfully employed or are planned at several

National parks and refuges nationwide and native Americans schools.

In planning for renewable energy systems for their facilities, managers consider

the amount of energy generated, cost, environmental impact, and technical feasibility. The Department requires its engineers to implement the use of low-risk, passive solar strategies, as appropriate, in the design of new buildings.

Our facility managers nationwide continue to look for opportunities, seeking support through partnerships with the Department of Energy (DOE), State and regional governments, industry, utilities and other non-governmental organizations, to

apply innovative and unique renewable energy technologies in meeting facility energy management needs. An example of innovative partnerships is the Green Energy Parks Program, in which Interior’s partnering with DOE has resulted in the

implementation of and plans for PV and other solar energy projects in several national parks. Interior continues to work with DOE Energy Laboratories such as the

National Renewable Energy Laboratory (NREL), Sandia National Laboratory and

Lawrence Berkeley National Laboratory to identify opportunities to use solar energy

generating technologies at facilities nationwide and on Native American lands.

The Department has also been a successful contributor to the Federal government’s effort to acquire and use new energy efficient and environmentally sound

transportation technologies through cost-sharing public/private partnerships. Currently, Interior has 1,200 vehicles in the fleet that can be powered by natural gas,

LPG, ethanol, methanol, bio-diesel and electricity. Use of cleaner burning motor vehicles is important in Interior’s effort to be good stewards of the nation’s publicly

owned lands and resources. Interior has extensive experience with the use and application of alternative fueled vehicles (AFV) dating back to the 1970’s.

The Department continues to work and partner with the Department of Energy,

Department of Transportation, General Services Administration, State and local

governments, industry, manufacturers, and others to help expand the use of AFVs

and the availability of fueling and servicing infra-structure. Interior has established

a significant number of high profile AFV initiatives that demonstrate our commitment to the use of AFVs in light duty vehicles, as well as transit vehicles and medium and heavy duty vehicles.

In a broader endeavor, the Department has sought to use environmentally preferable practices and products in conducting mission-related activities. In response

to Executive Order 13101, the Department developed the Strategic Plan for Greening the Department of the Interior Through Waste Prevention, Recycling and Federal Acquisition. One of the identified objectives of this Strategic Plan is to reduce

energy use and greenhouse gas emissions associated with Interior operations. The

Plan outlines goals and strategies to be pursued by DOI facilities to reduce the generation of waste, to recycle resources, and to incorporate environmental considerations into acquisition actions. Sustainable design and construction principles guide

DOI facility managers to not only consider the energy efficiency of the building envelope, but also to consider the energy embodied in the construction products selected. That is, the associated energy used in all of the product’s lifecycle phases,

from manufacture, distribution, use, through disposal. Sustainable or environmentally preferable products and services, including those which have less associated consumed energy and greenhouse gas emissions, are to be given preference by

DOI facility managers.

Interior’s use of compostable food serviceware in the Main Interior Building’s cafeteria, composed of biobased starches instead of petroleum hydrocarbons, is another

example of an environmentally preferable product. Greenhouse gas emissions associated with the manufacture of these plates are lower by approximately 50% (includVerDate 11-MAY-2000 16:16 Sep 23, 2002 Jkt 000000 PO 00000 Frm 00046 Fmt 6633 Sfmt 6621 77680.TXT HRESOUR1 PsN: HRESOUR1
43

ing 30% less energy use) than a conventional equivalent foam polystyrene plate.

Working in conjunction with the Departments of Agriculture and Energy, Interior

is seeking to pilot test more biobased products that have the potential to reduce our

reliance on foreign oil while promoting the development and use of renewable domestic resources. Interior’s Annual Performance Plan submitted to Congress this

year identifies specifically the use of biobased lubricating and hydraulic oils as a

goal to be pursued at all DOI facilities. Using biolubricants in small equipment engines (such as marine engines, lawn mowers, snowmobiles, etc.) has the additional

benefit of reducing the emissions associated with petroleum combustion.

Energy use and greenhouse gas emissions are two environmental aspects that

should be considered in the analysis of a facility’s environmental performance. Interior is now framing its approach to promoting the development of environmental

management systems.

3) Rep. Inslee: ‘‘...Does the Department anticipate setting any internal limits for itself on global

climate change gas emissions from its lands? For instance, do you anticipate saying

we are going to only have this amount of emissions associated with energy production

on our lands and set a goal for nonclimate change emission standards? Is that in

your game plan at all?

The Department manages its lands for a multiplicity of purposes and uses, including conservation of habitat and species, maintenance of ecosystem health, public

recreation, meeting the nation’s Indian trust responsibilities, agricultural leasing,

logging as well as the extraction and development of mineral and renewable and

nonrenewable energy resources. All of these activities can positively or negatively

affect greenhouse gas (GHG) emissions. Activities such as reforestation, coal bed

methane capture, and clean power production (hydroelectric, geothermal, and wind)

reduce GHG emissions. Other activities, such as oil, gas, and coal extraction add to

our GHG emissions. Still other activities such as wetlands conservation have a more

complicated contribution to GHG emissions, serving as a carbon sink but also promoting anaerobic activities and the release of methane gas. Carbon sequestration

in soil is equally if not more complicated. These emissions vary significantly depending on: the type, depth, and composition of soil; the type of activity being undertaken and thus the nature of the disturbance; the frequency of the disturbance; the

age distribution of the vegetation on the land; and so on.

The Department feels quantifying the impact of all of these activities on emissions

is not practical and may not be possible given the current limitations of the science.

As the administration improves the voluntary emissions reduction registry, including the development of accounting rules and guidelines,for crediting sequestration

projects, we may examine whether keeping track of the changes in the quantity of

GHG emissions on the Department’s lands would be practical.

The Department of Agriculture’s response to questions submitted

for the record follows:]

Responses to Questions Submitted for the Record to Dale N. Bosworth,

Chief, Forest Service, U.S. Department of Agriculture

QUESTIONS FROM CHAIRMAN BARBARA CUBIN

1. When doing land planning, what attempt is made to identify areas that are favorable for minerals, oil and gas, geothermal energy, etc? During the scoping process

do you consult with your own geologists, other federal agencies like the U.S. Geological Survey, state geological surveys, and industry to identify mineral and energy resource rich areas so that they can be considered in the planning process as a ‘‘reasonably foreseeable development’’? If not, why?

Answer - During land management planning geologic maps and descriptions are

reviewed and interpreted. Favorable areas for mineral occurrence are described, and

areas of existing and potential activity identified. This is done using the best information available regardless of source. Reasonably foreseeable scenarios are not generally identified during the planning process because the nature and scale of activities that might occur are unknown.

2. At a hearing on geothermal energy, witnesses testified that the Forest Service

has never acted on lease applications for thousands of acres in northern California

and the Pacific Northwest. Many of these applications were in known geothermal

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areas. What is the problem, and does the Forest Service fiscal year 2003 budget request include money to remedy this situation?

Answer - With respect to the lease applications in northern California, we had determined that further environmental analyses was necessary, and funding has not

been available given other priorities within the Region. Subject to receiving the increased funding for energy requested in the President’s Budget for fiscal year 2003

the analyses will be undertaken. However, given the environmental settings it is

likely that the analyses will be multi-year and controversial. With respect to the Pacific Northwest applications, all are in spotted owl habitat. Before undertaking the

environmental analyses for those applications we would first verify that the applicants wish us to proceed. We would then undertake what would likely be multi-year

analyses in fiscal year 2003, subject to receiving the increase requested in the President’s Budget.

3. Regarding mineral and geothermal energy lease applications, what kind of coordination is there at the district level between the Forest Service and BLM? Is there

any sort of formal procedure for handling the application once it is received from

BLM and acting on the application in a timely manner?

Answer - Yes, we have a formal Memorandum of Understanding with the BLM

to facilitate processing of lease applications.

4. We have received numerous complaints over the past year that the Forest Service

usually takes even longer than BLM to process oil and gas drilling permits. What

are the reasons for this and how can you reduce the processing time to 30 days or

less.

Answer - In general applications for drilling permits on NFS lands involve more

controversy, which compels us to do additional environmental analyses and public

disclosure. However, as part of our Action Plan to implement the National Energy

Policy we are currently reviewing all aspects of oil and gas drilling permits with the

BLM to determine ways to streamline processing.

5. What is the status of the roadless area initiative?

Answer - The U.S. District Court of Idaho has enjoined us from implementing the

Roadless Area Conservation rule. That decision is currently under appeal to the

Ninth Circuit Court of Appeals. In total, nine lawsuits have been filed in six judicial

districts and four circuits. Five of the lawsuits were filed by states (Alaska, Idaho,

North Dakota, Utah, and Wyoming). Two other states (Colorado and Montana) have

submitted filings in the Idaho litigation.

6. We understand that there are cases where operating mines are bypassing coal

due to the Roadless Rule. Since coal bypassed in a mining operation is very rarely

recovered later, this would cause a significant loss in federal royalties. Is this the

case? If so, shouldn’t this situation be corrected so that federal revenue is protected?

Answer - We are not aware of any coal that has been bypassed. However, if the

rule were to be implemented without modification there would be substantial

amounts of coal, and oil, gas, phosphate, and other minerals that would not be developed.

7. During the rulemaking for the roadless rule, did the Forest Service make any

estimate of the lost federal royalty on minerals, coal and oil and gas resources included within roadless areas? If so, what is the estimate of the lost royalties? What

is the state share of these lost royalties itemized by state? If not, why wasn’t an analysis of state shares of lost royalty revenue made as part of the rule’s impact in compliance with Executive Order 12866, especially subparts (6), (9) and (11).

Answer - There were no estimates made of lost federal royalties. However, to the

extent that resources were classified as known reserves, certain estimates of total

values were included in the Regulatory Impact Analysis. The Regulatory Impact

Analysis also estimated that there were 11.3 trillion cubic feet of undiscovered natural gas and 550 million barrels of undiscovered petroleum that was potentially underlying inventoried roadless areas. The value of the natural gas resources was estimated at $23 - $34 billion. Eighty-three percent of the resources fall within nine

‘‘play’’ areas (as defined by USGS) within the Colorado Plateau/Basin and Range

and Rocky Mountain/Northern Great Plains. Since these were estimated undiscovered resources, lost royalties were not estimated. Estimates of the portion of federal royalties that would be distributed to States were made for selected states and

commodities. With respect to coal in the Grand Mesa, Uncompahgre, and Gunnison

National Forest, the reduction in payments to Colorado (and counties) was estimated at $2.1 million per year. With respect to phosphate in the Caribou National

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Forest, the reduction in payments to Idaho was estimated at $1.3 million per year.

We believe the Regulatory Impact Analysis to be in compliance with E.O. 12866.

8. What is the current status of prospecting for lead exploration in southeast Missouri?

Answer - A Decision Notice was signed by the Supervisor of the Mark Twain NF

(which produces over 60 percent of the nation’s lead) on February 14, 2002. The Decision Notice recommended the Regional Forester consent to BLM issuing seven

prospecting permits that could result in drilling of 231 exploration holes over a twoyear period on 8,756 acres. Given the controversy associated with these prospecting

permits it is likely the decision will be appealed.

9. Regarding the $5 million increase for implementing the National Energy Policy

in the President’s fiscal year 2003 budget, can you be more specific as to what the

Forest Service plans to use this money for?

Answer - Priority will be given to facilitating the orderly development of coal bed

methane (CBM). Environmental analyses of CBM development, particularly with respect to surface and ground water, will require extensive coordination between Forests, Regions, BLM, and other federal and State agencies. Trillions of cubic feet of

gas are at stake. We have already received hundreds of applications to drill wells

and construct facilities for CBM development. About 60 percent of the increased

funding in fiscal year 2003 will go toward CBM development. Approximately

$500,000 will be used to expedite geothermal leasing in California and the Pacific

Northwest, and the remainder will be used to ensure timely processing and proper

inspection and monitoring of additional energy operations nationwide, including operations involving private minerals within NFS lands.

10. EPCA 604 inventory has been fast tracked, with reports on the five major

Rocky Mountain basins that produce oil and gas to be completed this spring. How

will the results of this study be used by the USFS?

Answer - The results will be used to determine whether changes are needed to

existing Forest Plans and policy in light of the National Energy Policy.

11. In your statement, Mr. Thompson, you suggest that the $5 million increase to

the energy and mineral program will be used to increase the number of coal bed

methane (CBM) projects on National Forest Service (NFS) lands in the Rocky Mountain States. For NFS land with reserved and outstanding mineral rights underlying

the surface, can a mineral owner simply begin drilling without the Forest Service’s

permission?

Answer - No. In the case of ‘‘reserved’’ mineral rights we process the proposed development in accordance with the Secretarial Orders that were made part of the

deed reserving the mineral rights to the private owner. A NEPA analysis is done

and mitigation measures providing appropriate protection for Forest uses and users

are required. In the case of ‘‘outstanding’’ mineral rights we review the proposed activity, and negotiate appropriation mitigation measures with the private owner. The

activity does not require approval from the Forest Service; however, the operator

must still comply with the Endangered Species Act, the National Historical Preservation Act, and other relevant federal and State statutes.

12. Describe the process the Forest Service requires of mineral owners who want

to develop coal bed methane affecting the National Forest System lands.

Answer - Basically we require sufficient information to understand the proposed

activity. This information is either required as part of the requirements under a

Secretarial Order made part of deeds conveying reserved rights, or are required

under the various ‘‘reasonable accommodation’’ statutes of the States that define the

relationship between a surface owner/administrator and a minerals developer. The

Forest Service then proceeds as described above in answer to question 11.

13. Is this process different from what happens on lands where the Forest Service

has fee-simple title to both the surface and subsurface estates?

Answer - The process is very similar even though the authorities stem from very

different sources, e.g., regulations, deeds and Secretarial Orders, and State laws.

One important difference involves appeals. Because there is no decision being made

when outstanding mineral rights are involved, there is no instrument for the public

to appeal.

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14. Of the overall increase in your budget for energy and minerals, how much will

be allocated to the enforcement of existing stipulations and environmental standards

for oil and gas wells on National Forests?

Answer - Very little of the increase is needed to improve current enforcement for

existing wells. Other than short-term situations that will always arise, we have not

had much problem in this regard on oil and gas leases. In large part this is due

to the excellent cooperation from lessees and operators.

15. How much of the overall budget is needed to clean up idle and orphan wells

on the National Forests that have been left unclaimed?

Answer - None. The few orphaned wells on NFS lands are mostly in the East and

involve reserved or outstanding mineral rights. We do not have much information

on the number of these wells or the costs to reclaim. We have in the past relied

upon the assistance and cooperation of BLM (with authority and expertise for downhole problems), State agencies, and EPA for funding and assistance.

16. Since coal bed methane is considered a non-conventional fuel, how does the

Forest Service treat the analysis of coal bed methane development impacts differently

from conventional fuel sources?

Answer - Actually, CBM development is very similar to traditional oil and gas development except as to scale and the unique issues related to de-watering. The reservoirs (coal) are generally widespread, requiring a large number of shallow wells

over very large geographic areas. The large number of wells itself raises issues, particularly involving wildlife. But the bigger issue is the large quantities of water associated with the occurrence of methane gas in coal beds. This water must be produced in order to recover the methane. Although the quality, quantity, and disposal

methods vary from basin to basin, regardless of the characteristics of water production, it will be a major issue associated with all CBM projects. Also, large CBM

projects will necessarily require certain specialists and expertise to be available to

perform adequate and timely environmental analysis and to oversee and monitor operations once they are in place. Funding and staffing of these have not been able

to keep pace with project proposals. The increase for energy in the President’s Budget for fiscal year 2003 will go far in correcting this situation.

17. What steps are BLM and the Forest Service taking to assure that oil and gas

and coal operations on public and forest lands are secure from terrorist attacks?

Answer - We are not taking or requiring any special measures be taken at this

time. Lessees and operators are responsible for security of their operations, and for

protecting public health and safety.

18. The Wayne National Forest (WNF) has acquired land over the years, in which

the sellers reserved their mineral rights for extended periods and continue to receive

royalties in accordance with private lease agreements with the producers. When their

reservations expire, the oil and gas producers must work with BLM to convert to federal leases, with stipulations imposed by the surface management agency, in this instance, the WNF. Will you explain why the WNF has left those oil and gas producers

in a regulatory and legal limbo regarding their production operations and additional

development by their failure to review and apply reasonable surface occupancy stipulations in a timely manner.

Answer - The Wayne National Forest experienced a period of time during which

qualified personnel were not available to perform this particular type of technical

adjudication. People have been hired and trained, and are working with BLM to

process these reversionary interests.

19. It is our understanding that the Los Padres Oil and Gas Leasing Analysis and

Draft Environmental Impact Statement was released to the public in December 2001.

The Forest Plan direction (preferred alternative) would result in over 75 percent or

70 million barrels of oil being off limits. What is the rational that the total disturbance of 120 acres would preclude access to that 70 million barrels of oil, especially

considering that those lands do not qualify for wilderness, wild and scenic, or

roadless designations?

Answer - In fact, the preferred alternative is somewhat more restrictive than the

Forest Plan alternative. It includes restrictions needed to make leasing consistent

with the Plan, plus additional stipulations to further protect biological resources.

The combined restrictions are necessary to ensure protection of wildlife, scenic, recreational, and watershed resources.

20. In regards to minerals materials program:

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a. To what extent are mineral companies paying for NEPA?

b. Are there any situations that smaller operations, in particular stone quarries, are not being developed because the proponents can’t afford the NEPA

costs?

c. Is there a demand for new quarry sites, and if so, are you turning operators away?

d. Please provide a region by region summary of any problems or concerns

relative to making mineral materials available?

Answer - For the most part, we are paying for NEPA and related environmental

review costs. Exceptions occur for very large operations in which case operators will

volunteer to pay some or all of the costs rather than waiting for us to do the work

as funding becomes available. There are certainly instances when small operators

can neither afford to pay or wait. Concerning a demand not being met, that is a

frequent problem. With respect to sand and gravel, the primarily reason is environmental issues related to riparian, watershed, aquatic, or wildlife values. In the case

of new quarries, there are also environmental issues, but the problem seems to be

more one of funding. In general, the mineral materials component of the program

has difficulty competing for funds against higher priority components of the minerals program, which itself has to compete with other agency priorities. These concerns - environmental issues and funding - are common to all Regions.

21. The decision in the Finger Lakes EIS is to not allow oil and gas leasing because the Nation doesn’t need oil and gas now, but would lease at some future time

if needed. Don’t you think that the resources are needed now and will the Forest

Service be revisiting this decision, if so when, if not why?

Answer - In fact, the decision to not allow leasing was only indirectly tied to the

availability of oil and gas. As explained in the Record of Decision (ROD), the decision was made ‘‘by considering the land’s capability, legal requirements, public opinion and politics.’’ However, it was perceptions about the value of ‘‘place’’ involving

social values, and human needs and desires, and how they would be affected by oil

and gas development that was the deciding factor. As stated in the ROD, ‘‘The selection of Alternative 4 (No Action Alternative) is based entirely on public input, comments made on the DEIS, and is not based on environmental effects.

The FEIS shows that the environmental effects of oil and gas leasing on the Finger Lakes National Forest would be minimal especially when various measures are

taken to mitigate potential environmental harm.’’ The ROD further explains that

the No Action Alternative is not even best in terms of environmental effects. The

Environmentally Preferred Alternative, that is, the alternative with the least

amount of human-caused change to the biological and physical environment, would

actually allow all of the Forest to be leased and 34 percent of the surface to be available for operations.

In effect, the no leasing Alternative will result in more environmental disturbance

but is favored by the public because it will maintain the ‘‘special feeling’’ of the Forest. According to the Supervisor’s Statement to the Press of December 19, 2001, the

question of leasing will not be taken up again (except during revision of the Finger

Lakes National Forest Plan) unless substantive new information becomes available

which would include ‘‘a change in public attitude toward the need to access the natural gas under the Finger Lakes National forest. This may be in the form of a domestic energy crisis or other unforeseen event.’’

Æ